BioVie(BIVI) - 2025 Q4 - Annual Report

PART I Business BioVie Inc. is a clinical-stage biopharmaceutical company developing treatments for neurological, neurodegenerative, and advanced liver diseases, with key drug candidates bezisterim (NE3107) and BIV201 Neurodegenerative Disease Program This program focuses on bezisterim (NE3107), an orally administered small molecule targeting inflammation-driven insulin resistance for Alzheimer's, Parkinson's, and Long COVID - Bezisterim (NE3107) is an investigational, orally administered small molecule targeting inflammation and insulin resistance for Alzheimer's, Parkinson's, and Long COVID treatment[20][21] - A Phase 3 trial for bezisterim in mild-to-moderate Alzheimer's Disease (NCT04669028) was completed, but data was significantly impacted by protocol violations at 15 study sites, rendering the trial underpowered for its primary endpoints[32][33][34] - A Phase 2 study in Parkinson's Disease (NCT05083260) showed significant improvements in motor control, with a new Phase 2b study for new onset PD commencing in April 2025[22][26][27] - The company was awarded a $13.1 million grant from the U.S. Department of Defense (DOD) to fund a Phase 2 study (ADDRESS-LC) of bezisterim for neurological symptoms in Long COVID, which began in May 2025[30][31] Liver Cirrhosis Program The company is developing BIV201 for ascites in advanced liver cirrhosis, holding FDA Fast Track and Orphan Drug designations, and is finalizing a Phase 3 study protocol - BIV201 is an investigational drug for ascites in advanced liver cirrhosis, granted both FDA Fast Track and Orphan Drug status[35] - Following a Phase 2 study showing ascites fluid reduction, the company is finalizing a Phase 3 study protocol with a composite primary endpoint for cirrhosis and ascites patients who recovered from acute kidney injury (AKI)[36][37][40] - BIV201 features a proprietary, room-temperature stable liquid formulation, with patents granted in the U.S., China, Japan, Chile, and India[36][38] Intellectual Property BioVie protects its drug candidates, BIV201 and bezisterim (NE3107), through a combination of issued and pending patents in the U.S. and foreign jurisdictions - For BIV201, the company holds Orphan Drug Designations and has been granted patents for its novel liquid formulation in the U.S., India, Chile, China, and Japan[44] - As of July 31, 2025, the bezisterim (NE3107) portfolio includes 12 issued U.S. patents, 6 pending U.S. patent applications, and multiple foreign patents and applications, with some patents expiring as late as 2031[45][46] Government Regulation The company's operations are subject to extensive FDA regulation, involving a lengthy and costly drug approval process with preclinical studies and three phases of clinical trials - The FDA drug approval process involves preclinical tests, an Investigational New Drug (IND) application, and three sequential phases of human clinical trials (Phase 1, 2, and 3)[54][61] - The FDA offers expedited programs like Fast Track, priority review, and accelerated approval for drugs treating serious conditions and unmet medical needs, with BIV201 having Fast Track designation[35][67][68] - Orphan Drug Designation, granted to BIV201 for ascites, can provide seven years of market exclusivity in the U.S. if it is the first FDA-approved product for the specified rare disease[65][66] Risk Factors The company faces significant risks including reliance on third parties, drug development uncertainty, ongoing litigation, lack of revenue, capital needs, and intellectual property challenges Risks Relating to Our Business and Industry Operational risks include reliance on third-party CROs, financial instability due to no revenue and capital dependence, and ongoing securities litigation related to trial disclosures - The company's reliance on third parties for clinical trials is a major risk, exemplified by significant protocol and cGCP violations at 15 study sites in the Phase 3 AD trial for bezisterim, rendering it underpowered[80] - BioVie is subject to a securities class action lawsuit alleging material misrepresentations regarding its Phase 3 AD study, posing financial and reputational risks[85][86] - The company has no approved products, no revenue, and a limited operating history, raising substantial doubt about its ability to continue as a going concern without significant additional funding[88][91][100] Risks Relating to Our Intellectual Property Commercial success depends on intellectual property protection, facing risks of patent challenges, invalidation, circumvention, limited global protection, and costly litigation - The company's ability to compete relies on maintaining proprietary technologies, but patents can be challenged, invalidated, or circumvented, and pending applications may not result in issued patents[136][137][138] - Patent lifespans are limited and may expire before or shortly after product commercialization, exposing the company to generic competition[157] - The company may face expensive, time-consuming, and unsuccessful lawsuits to protect its patents or defend against third-party infringement claims[165][174] Risks Relating to Our Common Stock Common stock investors face significant price volatility, future dilution from equity offerings and warrant exercises, and potential negative impacts from a 1-for-10 reverse stock split - The company's stock price is highly volatile and may fluctuate significantly based on clinical results, analyst recommendations, and market conditions[183] - Stockholders may experience significant future dilution from potential equity offerings, the exercise of outstanding warrants and options, and share issuances upon achieving clinical and regulatory milestones[185][186][187] - The company effected a 1-for-10 reverse stock split on July 7, 2025, which has caused and could further cause stock price decline and reduced common stock liquidity[189] Cybersecurity BioVie's cybersecurity program, managed by an external vendor and overseen by the Audit Committee, protects information systems, with no material threats identified in the last fiscal year - The company's cybersecurity program is managed by an outside vendor, supervised by the CFO, and overseen by the Board's Audit Committee[205][206] - No risks from known cybersecurity threats have materially affected the company in the last fiscal year[206] Properties The company leases its corporate headquarters in Carson City, Nevada, and an additional office in San Diego, California, under separate agreements Properties Leased | Location | Lease Details | | :--- | :--- | | Carson City, NV (HQ) | Annual rent of $2,200, one-year term commenced Oct 2022, renewed annually | | San Diego, CA | 60-month term commenced Feb 2024, current monthly rent of $10,024 with 4% annual increase | Legal Proceedings BioVie is defending against a consolidated shareholder class action and two derivative lawsuits alleging material misrepresentations regarding its Phase 3 Alzheimer's trial - A consolidated shareholder class action lawsuit alleges material misrepresentations related to the Phase 3 AD trial of bezisterim for securities purchased between December 7, 2022, and November 28, 2023, with the court denying the company's motion to dismiss[210] - Two shareholder derivative lawsuits making similar allegations have been filed, with one stayed pending the class action suit's motion to dismiss resolution[211][212] PART II Management's Discussion and Analysis of Financial Condition and Results of Operations For FY2025, BioVie reported a net loss of $17.5 million, a significant reduction from $32.1 million in FY2024, primarily due to decreased R&D expenses, but faces going concern doubts Results of Operations Net loss decreased by $14.6 million year-over-year to $17.5 million in FY2025, driven by a $13.8 million reduction in R&D expenses as clinical trials concluded Selected Statement of Operations Data | Metric | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :--- | :--- | :--- | | Net Loss | $17.5 million | $32.1 million | | Research & Development Expenses | $9.3 million | $23.1 million | | Selling, General & Administrative Expenses | $8.6 million | $8.8 million | - The $13.8 million decrease in R&D expenses was primarily due to clinical study completion in the prior fiscal year, leading to a net decrease in clinical trial expenses of approximately $10.8 million[236][237] Capital Resources and Liquidity As of June 30, 2025, the company held $17.5 million in cash, but recurring losses and negative operating cash flow of $19.0 million raise substantial doubt about its going concern ability Selected Financial Position and Cash Flow Data | Metric | As of June 30, 2025 | | :--- | :--- | | Cash and cash equivalents | $17.5 million | | Working capital | $18.4 million | | Accumulated deficit | $352.1 million | | Net cash used in operating activities (FY2025) | $19.0 million | - The company's financial condition raises substantial doubt about its ability to continue as a going concern, with future operations dependent on securing additional financing[241][243] - The company raised capital through a $3.0 million public offering in September 2024 and $15.9 million from three registered direct offerings in October 2024[244][245] Controls and Procedures As of June 30, 2025, management concluded that both disclosure controls and internal control over financial reporting were effective, with no material changes identified - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[252] - Management concluded that internal control over financial reporting was effective as of June 30, 2025[253] PART III Directors, Executive Compensation, Security Ownership, and Other Matters Information for Items 10 through 14, covering directors, executive compensation, security ownership, related transactions, and accountant fees, is incorporated by reference from the 2025 proxy statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's 2025 Proxy Statement[259][260][261] PART IV Exhibits and Financial Statement Schedules This section lists all financial statements and exhibits filed with the Form 10-K report, including corporate governance documents, material contracts, and certifications - This item lists the financial statements and exhibits filed with the report, including agreements, bylaws, and certifications[265][266] Financial Statements and Notes Report of Independent Registered Public Accounting Firm The independent auditor's report includes a 'Going Concern' paragraph due to recurring losses and negative cash flows, and identifies 'Research and development expenses and related accruals' as a Critical Audit Matter - The auditor's report contains a 'Going Concern' paragraph, citing recurring losses and negative cash flows from operations as raising substantial doubt about the company's ability to continue[281] - The audit identified 'Research and development expenses and related accruals' as a Critical Audit Matter due to the high degree of management judgment and subjectivity required[286][287] Financial Statements Financial statements show cash and cash equivalents decreased to $17.5 million in FY2025, with net loss improving to $17.5 million from $32.1 million in FY2024 Selected Balance Sheet Data | Selected Balance Sheet Data (As of June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $17,544,547 | $23,843,798 | | Total Assets | $21,562,199 | $25,208,345 | | Total Liabilities | $2,550,214 | $9,702,130 | | Total Stockholders' Equity | $19,011,985 | $15,506,215 | Selected Statement of Operations Data | Selected Statement of Operations Data (Year Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Loss from Operations | $(18,066,200) | $(32,179,585) | | Net Loss | $(17,542,120) | $(32,120,533) | | Net Loss Per Share (Basic & Diluted)** | $(12.12) | $(73.05) | Selected Cash Flow Data | Selected Cash Flow Data (Year Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(19,025,205) | $(27,945,024) | | Net cash provided by financing activities | $12,725,954 | $17,802,939 | Notes to Financial Statements Notes detail accounting policies, clinical programs, and financial items, including 'Going Concern' uncertainty, related party transactions, equity financings, litigation, and subsequent events - Note 2 reiterates that recurring losses and the need for additional capital raise substantial doubt about the Company's ability to continue as a going concern[316][318] - Note 5 discloses that capital raises triggered down-round features in warrants held by Acuitas, resulting in deemed dividends of $369,465 in FY2025 and $886,423 in FY2024[349] - Note 8 details several equity offerings, including a September 2024 offering that raised approximately $3.0 million gross and three October 2024 offerings that raised approximately $15.9 million gross[367][368] - Note 14 discloses a subsequent event: on August 11, 2025, the company closed an underwritten public offering, raising net proceeds of approximately $10.4 million[407]