Benitec Biopharma(BNTC) - 2025 Q4 - Annual Report

FORM 10-K Filing Information Identifies the filing as an Annual Report on Form 10-K for FY2025, noting Benitec is a non-accelerated, smaller reporting company with $152.96 million in non-affiliate common equity market value - Benitec Biopharma Inc. is filing its Annual Report on Form 10-K for the fiscal year ended June 30, 2025[2] Filer Status | Filer Status | | |---|---| | Large Accelerated Filer | ☐ | | Accelerated Filer | ☐ | | Non-Accelerated Filer | ☒ | | Smaller Reporting Company | ☒ | | Emerging Growth Company | ☐ | - The aggregate market value of the Registrant's common equity held by non-affiliates was approximately $152,964,292 as of December 31, 2024[6] Restatement Explanatory Note Benitec is restating financial information for Q4 2024 and Q1 2025 due to understated non-cash share-based compensation expenses, resulting from an incorrectly configured system and identifying a material weakness in internal controls - The Company is restating financial information for the Non-Reliance Periods (quarters ended December 31, 2024, and March 31, 2025) due to inappropriate recording of certain non-cash share-based compensation expenses[10][11][12] - The errors stemmed from an incorrectly configured information recording system after an equity awards data migration in November 2023, leading to understatements of share-based compensation expense, additional paid-in capital, accumulated deficit, net loss, and loss per share[13] - A material weakness exists in the Company's internal control over financial reporting as of June 30, 2025, which management is actively remediating[15] Part I - Business and Risk Factors This part covers the company's business operations, product development, competitive landscape, regulatory environment, and a comprehensive analysis of associated risk factors About This Annual Report This section defines key terms, specifies U.S. dollars as the currency, sets the fiscal year-end as June 30, and notes the impact of a 1-for-17 reverse stock split - The terms 'Benitec,' the 'Company,' 'we,' 'us,' 'our' refer to Benitec Biopharma Inc. and its subsidiaries[20] - All dollar references are to U.S. dollars, and the fiscal year-end is June 30[21][22] - All share and earnings per share amounts reflect the impact of the 1-for-17 reverse stock split effective July 26, 2023[22] Industry and Market Data This section states that the Annual Report includes market and industry data from third-party sources or estimates, which the company believes are reasonable and reliable - The report includes market and industry data from third-party sources or estimates, which the company believes are reasonable and reliable[24] - The company has not independently verified third-party data, and internal research is based on its understanding of industry conditions[24] Trademarks and Tradenames Benitec Biopharma Inc. holds proprietary and licensed rights to several important trademarks, including 'BENITEC BIOPHARMA®' and 'GIVING DISEASE THE SILENT TREATMENT®' - Benitec Biopharma Inc. has proprietary and licensed rights to trademarks important to its business[26] - BENITEC BIOPHARMA® - BENITEC® - GIVING DISEASE THE SILENT TREATMENT® - SILENCING GENES FOR LIFE® Special Note Regarding Forward-Looking Statements This section highlights that the Annual Report contains forward-looking statements subject to risks and uncertainties, many beyond the company's control, and disclaims any obligation to update them - The Annual Report contains forward-looking statements regarding strategy, future operations, financial position, projected costs, prospects, plans, and objectives, which are subject to known and unknown risks and uncertainties[29] - Success of product candidates development and commercialization plans - Timing and completion of preclinical studies and clinical trials, including patient enrollment and data availability - Timing and outcome of regulatory filings and approvals - Intellectual property position and patent portfolio duration - Expenses, ongoing losses, future revenue, capital needs, and ability to access additional financing - Impact of, and ability to remediate, identified material weakness in internal controls over financial reporting - The company disclaims any obligation to revise or update forward-looking statements, except as required by law[31] Item 1. Business Benitec is a clinical-stage biotechnology company developing novel genetic medicines using ddRNAi and 'silence and replace' platforms, with BB-301 for OPMD as its lead candidate - Benitec Biopharma Inc. is a clinical-stage biotechnology company focused on novel genetic medicines using its proprietary DNA-directed RNA interference (ddRNAi) and 'silence and replace' platforms[34] - The lead product candidate, BB-301, is an AAV-based gene therapy for Oculopharyngeal Muscular Dystrophy (OPMD), designed to permanently silence disease-causing genes and simultaneously replace mutant genes with wildtype genes[35][38] - BB-301 has been granted Orphan Drug Designation in the United States and the European Union[35][60] Company Overview Benitec is a clinical-stage biotechnology company developing genetic medicines using its proprietary ddRNAi and 'silence and replace' platforms, with BB-301 for OPMD as its lead candidate - Benitec Biopharma Inc. is a clinical-stage biotechnology company focused on novel genetic medicines using DNA-directed RNA interference (ddRNAi) and 'silence and replace' platforms[34] - The 'silence and replace' approach combines RNAi with gene therapy to facilitate sustained silencing of disease-causing genes and simultaneous delivery of wildtype replacement genes following a single administration[34][38] - BB-301, a lead therapeutic for OPMD, has received Orphan Drug Designation in the United States and the European Union[35][60] Overview of RNAi and the siRNA Approach RNA interference (RNAi) uses siRNAs to temporarily reduce disease-causing proteins, but traditional siRNA approaches have limitations like repeat administration, unstable concentrations, and inability to replace defective genes - RNA interference (RNAi) utilizes small interfering RNAs (siRNAs) to temporarily reduce disease-causing protein production by cleaving target mRNA[40][44] - Requires repeat administration for sustained efficacy - Therapeutic concentrations are not stably maintained - Often requires novel chemical modifications or delivery materials - Potential for adverse immune responses - Cannot replace defective genes with normally functioning genes - Many genetic disorders are not suitable for traditional gene silencing if selective targeting of mutant proteins without affecting vital wild type proteins is difficult[45] Our Approach: ddRNAi and Silence and Replace Benitec's 'silence and replace' approach combines ddRNAi with classical gene therapy using AAV vectors to permanently silence disease-causing genes and simultaneously restore functional wild type genes after a single administration - Benitec's 'silence and replace' approach combines ddRNAi with classical gene therapy using AAV vectors for permanent silencing of disease-causing genes and concomitant restoration of functional wild type genes via a single administration[49][50][52] - This technology utilizes proprietary DNA expression cassettes to continuously produce gene silencing shRNAs and wild type proteins, addressing limitations of siRNA-based methods[50][52] - The company's strategy is to discover, develop, and commercialize these treatments, potentially through collaborations or out-licensing, with cash deployed for BB-301 advancement and other product candidates[55][56][57] Oculopharyngeal Muscular Dystrophy (OPMD) OPMD is a rare, autosomal-dominant, late-onset degenerative muscle disorder caused by a PABPN1 gene mutation, characterized by dysphagia and ptosis, with BB-301 as a gene therapy candidate - OPMD is a rare, autosomal-dominant, late-onset degenerative muscle disorder characterized by progressive dysphagia and ptosis, caused by a mutation in the PABPN1 gene[58][67] - BB-301 is an AAV-based gene therapy designed to silence the disease-causing gene and replace it with a wildtype gene, and has been granted Orphan Drug Designation in the United States and the European Union[59][60] - The commercial opportunity for a safe and efficacious therapeutic agent for OPMD is estimated to exceed $1 billion over the product's commercial life[70] Our Pipeline Benitec's pipeline focuses on BB-301 for OPMD-related dysphagia, with its IND cleared by the FDA in June 2023 and Phase 1b/2a clinical trial dosing commenced in November 2023 - Benitec's pipeline currently features BB-301 for Oculopharyngeal Muscular Dystrophy (OPMD)-related dysphagia[63] - The IND for BB-301 was approved by the FDA in June 2023, and the Phase 1b/2a clinical trial (NCT06185673) commenced dosing in November 2023, with six subjects safely treated by April 2025[63] - BB-301 is a first-in-class genetic medicine employing the 'silence and replace' approach for OPMD, targeting the PABPN1 gene mutation[67] BB-301: Design and Mechanism of Action BB-301 is engineered to silence two distinct regions of PABPN1 mRNA via shmiR molecules and simultaneously express a codon-optimized, siRNA-resistant wild type PABPN1 gene to correct the genetic defect with a single localized administration - BB-301 targets two distinct regions of PABPN1 mRNA for gene silencing via two shmiR molecules from a single DNA construct[73] - It simultaneously drives the expression of a codon-optimized, siRNA-resistant wild type PABPN1 gene[73] - BB-301 is designed to correct the genetic defect underlying OPMD following a single localized administration[72] Operational Updates The BB-301 clinical development program in the US includes a 6-month OPMD Natural History Study and a Phase 1b/2a dose-escalation cohort study, with direct administration to pharyngeal muscles and 52 weeks of follow-up - The BB-301 clinical development program in the US includes a 6-month OPMD Natural History (NH) Study and a Phase 1b/2a single-arm, open-label, sequential, dose-escalation cohort study[78][81] - BB-301 is administered directly to the pharyngeal muscles, with 52 weeks of post-dosing follow-up for safety and efficacy evaluation[78][81] - The NH Study characterizes baseline dysphagia and its progression using quantitative radiographic measures (e.g., VFSS), clinical measures, and patient-reported outcomes, which serve as baseline for comparative assessments in the treatment study[81] Intellectual Property Benitec actively protects its intellectual property, including patents, know-how, and trade secrets, related to its ddRNAi and 'silence and replace' technologies and product candidates, with patent terms generally 20 years from filing - Benitec actively procures and protects intellectual property, including patents, know-how, and trade secrets, for its ddRNAi and 'silence and replace' technologies and product candidates[80][91] - The OPMD patent portfolio comprises five active families covering shRNA/shmiRs targeting PABPN1, the BB-301 'silence and replace' construct, treatment strategies, proprietary AAV vectors, and specialized injection devices/methods[82] - Patent terms are generally 20 years from filing, with potential for Patent Term Adjustment (PTA) and Patent Term Extension (PTE) for FDA-approved drugs, extending up to five years[92][93][94] Manufacturing Benitec relies on contract manufacturing organizations (CMOs) for product candidate production and is exploring long-term alliances to ensure cGMP-compliant materials at reasonable scale and cost - Benitec does not own manufacturing facilities and relies on third-party contract manufacturing organizations (CMOs) for the production of its product candidates[96] - The company is exploring long-term manufacturing alliances to produce materials at reasonable scale and cost for future commercialization efforts[96] - Manufacturing is subject to extensive cGMP regulations, which CMOs must comply with[97] Sales and Marketing Benitec has not yet established its own sales and marketing operations, intending to commercialize products through strategic alliances or direct sales upon approval, depending on clinical results and funding - Benitec has not established sales, marketing, or product distribution operations due to its product candidates being in preclinical or clinical development[98] - Upon approval, the company intends to market products through strategic alliances and distribution agreements with third parties, or directly in selected geographical segments[98] - The commercialization strategy depends on clinical trial results, funding availability, and acceptable commercial terms with third parties[98] Competition The biopharmaceutical industry is highly competitive, with Benitec facing larger, better-funded competitors and intense competition based on efficacy, safety, convenience, price, and reimbursement - The biopharmaceutical industry is intensely competitive, with Benitec facing larger, better-funded pharmaceutical and biotechnology companies, as well as academic and governmental entities[99][100][102] - Benitec's ddRNAi technology provides competitive advantages, but it competes with existing and new therapies, including other gene therapy and gene silencing approaches, though no direct gene therapy competitors for OPMD are currently known[100][101] - Competition is expected to intensify based on efficacy, safety, convenience, price, and reimbursement, potentially leading to reduced commercial opportunity if competitors offer superior or less expensive products[103][104] Government Regulation Benitec is subject to extensive and evolving government regulations by the FDA and international agencies across all stages of product development, approval, and commercialization, with non-compliance leading to severe sanctions - Benitec is subject to extensive regulation by the FDA and other agencies in the US, and similar regulations internationally, covering all aspects of product development, approval, and commercialization[107][108] - Non-compliance can lead to severe sanctions, including clinical trial suspension, refusal of marketing applications, product recalls, and civil or criminal penalties[107] - The regulatory process for gene therapy products is complex and evolving, involving nonclinical testing, IND submission, multi-phase clinical trials, and BLA approval, with potential for Orphan Drug Designation and expedited programs like RMAT[110][111][116][117][121][122][123][128][135][137] Pharmaceutical Coverage, Pricing and Reimbursement Commercial success depends on adequate coverage and reimbursement from third-party payers, who are increasingly implementing cost-containment measures, potentially limiting product usage and sales - Sales of approved products depend on coverage and adequate reimbursement from third-party payers (federal, state, foreign government healthcare programs, commercial insurance, managed healthcare organizations)[157] - Increasing efforts by payers to reduce reimbursements and implement cost-containment measures could limit net revenue and results[157] - If products are not considered cost-effective or receive insufficient payment, physician usage could decrease, materially affecting sales and financial condition[158] Royalties, Milestone Payments and Other License Fees Benitec is obligated to pay royalties, milestone payments, and other license fees for in-licensed intellectual property, with unpredictable future amounts and potential negative impacts from calculation errors - Benitec is required to pay royalties, milestone payments, and other license fees for in-licensed intellectual property from third parties[159] - The amount of future royalties is unpredictable, and calculation errors could negatively affect results of operations[159] - Future license agreements may also include royalty, milestone, and other payment obligations[159] Foreign Currency Translation and Other Comprehensive Income (Loss) Benitec's functional currency is the U.S. dollar, while its Australian subsidiary uses the Australian dollar, with translation adjustments recorded in 'Accumulated other comprehensive loss' and gains/losses in the consolidated statements of operations - The Company's functional and reporting currency is the U.S. dollar; its Australian subsidiary (BBL) uses the Australian dollar[160] - Assets and liabilities are translated at the balance sheet date exchange rate, and expenses at the average rate[160] - Translation adjustments are included in 'Accumulated other comprehensive loss' in stockholders' equity, while foreign currency translation gains/losses are in consolidated statements of operations and comprehensive loss[160] Capital Raises Benitec conducted several capital raises in FY2023-2025, including public and PIPE offerings, generating significant net proceeds through the issuance of common stock and warrants, with some warrant exercise prices reset Capital Raise Summary | Date | Type of Offering | Gross Proceeds (USD) | Net Proceeds (USD) | Key Securities Issued | |---|---|---|---|---| | August 11, 2023 | Underwritten Public Offering | N/A | $27.9 million | Common Stock, Pre-funded Warrants, Common Warrants | | April 22, 2024 | Private Investment in Public Equity (PIPE) | $40.0 million | $37.1 million | Common Stock, Pre-funded Warrants | | March 25, 2025 | Underwritten and Registered Direct Offering | $30.5 million | $28.2 million | Common Stock, Pre-funded Warrants | - The August 2023 public offering resulted in the exercise price of Series 2 Warrants being automatically reset to $1.9299 due to an exercise price adjustment mechanism[164] Employees As of June 30, 2025, Benitec had 19 full-time employees, with 14 in R&D and 5 in general management, all located in the US and not represented by a labor union - As of June 30, 2025, Benitec had 19 full-time employees, with 13 possessing post-graduate degrees[167] - 14 employees are dedicated to research and development, while 5 are in finance, legal, human resources, facilities, and general management[167] - All employees are in the United States and are not represented by any labor union[167] Corporate Information Benitec Biopharma Inc. was incorporated in Delaware in 2019, re-domiciled from Australia in 2020, has its principal offices in Hayward, California, and its common stock trades on Nasdaq under 'BNTC' - Benitec Biopharma Inc. was incorporated in Delaware on November 22, 2019, and re-domiciled from Australia to the U.S. on April 15, 2020[168] - The company's common stock trades on The Nasdaq Capital Market under the symbol 'BNTC'[170] - A 1-for-17 reverse stock split was effected on July 26, 2023, with proportional adjustments to outstanding stock options, pre-funded warrants, and common warrants[170] Item 1A. Risk Factors This section outlines significant risks, including financial condition, product development, reliance on third parties, commercialization, business operations, intellectual property, and common stock investment - Benitec has incurred significant losses since inception ($228.2 million as of June 30, 2025) and anticipates continued losses, requiring additional funding which may not be available on acceptable terms[174][176][184] - The company's product candidates are based on novel ddRNAi and 'silence and replace' technologies, which are early in development and have no approved commercial products, posing risks to safety, efficacy, and marketability[175][189][191][193] - Significant risks include challenges in obtaining regulatory approvals, difficulties in patient enrollment for clinical trials, reliance on third-party manufacturing and collaborations, intense competition, and uncertainties regarding market acceptance and reimbursement for novel gene therapies[175][193][208][243][251][265][273][281] Risk Factor Summary This section provides a concise overview of the primary risks and uncertainties that could negatively impact Benitec Biopharma Inc.'s business, financial condition, or operating results - Significant losses since inception and anticipated future losses, impacting market value - Need for additional funding, with potential going concern implications - Product candidates based on unapproved ddRNAi and silence and replace technology - Early stage of product development and challenges in obtaining regulatory approvals - Potential issues with therapeutic delivery to cells - Competition from entities developing similar and novel treatments - Inability to obtain or protect sufficient intellectual property rights Risks Related to Financial Condition and Capital Requirements Benitec has accumulated $228.2 million in losses as of June 30, 2025, expects continued significant losses, and requires substantial additional capital, which may not be available on acceptable terms, potentially impacting its ability to continue as a going concern - As of June 30, 2025, Benitec had accumulated losses of $228.2 million and expects to incur significant operating losses for the foreseeable future due to R&D costs[174][176] - The company has never generated revenue from product sales and its ability to achieve profitability depends on successful development, regulatory approvals, manufacturing, and commercialization[178] - Additional capital will be required, and failure to obtain it on acceptable terms could lead to curtailment of programs, dilution of stockholders, restrictive covenants, or impact the company's ability to continue as a going concern[184][186][187][188] Risks Related to Product Development and Regulatory Approval Benitec's product candidates, based on novel ddRNAi and 'silence and replace' technologies, are in early clinical stages, and their development and regulatory approval are highly uncertain, expensive, and time-consuming - Product candidates are based on ddRNAi and 'silence and replace' technologies, with no approved commercial products, making their safety, efficacy, and marketability uncertain[189][191] - Development and regulatory approval are expensive, lengthy, and uncertain, with preclinical results not necessarily predictive of clinical success, and potential for undesirable side effects from gene therapy vectors (e.g., AAV)[193][205][221] - Difficulty enrolling patients in clinical trials, leading to delays or increased costs - Regulatory agencies may delay, limit, or deny marketing approval, or impose significant post-approval restrictions - Inability to successfully develop related diagnostics could hinder marketing approval or commercial potential - Failure to develop a pipeline of additional product candidates or obtain orphan drug exclusivity in all markets Risks Related to Reliance on Third Parties Benitec's success heavily depends on third-party collaborators for research, development, commercialization, and manufacturing, with limited control and risks of delays, program discontinuation, or loss of intellectual property rights - Benitec relies heavily on third-party collaborators for research, development, commercialization, and marketing, with limited control over their resources and efforts, posing risks of delays or program discontinuation[243][244][245] - Reliance on third parties for preclinical studies, clinical trials, and manufacturing means any failures or interruptions could extend, delay, or terminate clinical development programs and impact product quality[246][248][249][251][253] - Sharing trade secrets with third parties increases the risk of disclosure, and dependence on in-licensed intellectual property means reliance on licensors for patent protection, with potential loss of rights if license obligations are not met[260][261][321][323] Risks Related to Commercialization Commercialization depends on securing third-party manufacturing and establishing sales/marketing capabilities, facing market acceptance uncertainty, intense competition, international operational risks, and compliance with complex healthcare laws - Commercialization depends on securing third-party manufacturing and establishing sales/marketing capabilities, which may be difficult to achieve on reasonable terms[262][265] - Market acceptance is uncertain due to potential hesitancy towards novel ddRNAi/silence and replace treatments by physicians, patients, and payers, and intense competition from established companies[267][268][273][277] - Uncertainty regarding insurance coverage and adequate reimbursement, especially for novel products and orphan drugs - International operations expose the company to diverse regulatory requirements, intellectual property protection challenges, economic instability, and compliance risks - Relationships with healthcare professionals and payers are subject to strict anti-kickback, fraud and abuse, and privacy laws, with potential for significant penalties for non-compliance - Negative public opinion and increased regulatory scrutiny of gene therapy could damage public perception and hinder business operations or approvals Risks Related to Business Operations Benitec faces risks from strategic transactions, reliance on key personnel, managing growth, potential misconduct, product liability claims, and vulnerabilities in IT systems and hazardous material handling - Difficulties in engaging in strategic transactions (collaborations, acquisitions) could divert management, increase expenses, or disrupt business[291][292][293] - Success depends on attracting and retaining key management and technical personnel; loss of these individuals could harm R&D programs and business[294] - Misconduct by employees or third parties (e.g., non-compliance, fraud) could lead to regulatory sanctions, lawsuits, and reputational harm - Exposure to product liability claims from clinical trials and commercial sales, potentially resulting in substantial liability and costs - Reliance on biological and hazardous materials, concentrated laboratory operations, and investment of cash and cash equivalents are subject to risks - Internal computer and IT systems are vulnerable to security breaches, potentially disrupting product development and incurring liabilities Risks Related to Intellectual Property Benitec's success hinges on protecting IP through patents, know-how, and trade secrets, but the patent process is expensive, uncertain, and vulnerable to third-party claims, changes in law, and enforcement challenges - Benitec relies on patents, know-how, and trade secrets to protect its IP, but the patent process is expensive, time-consuming, and uncertain, with risks of failure to obtain broad claims or invalidation[312][313][314][316] - Reliance on in-licensed IP means dependence on licensors for patent prosecution and enforcement, with potential loss of rights if license obligations are breached[321][322][323] - Third-party claims of infringement could prevent or delay commercialization, leading to substantial damages or licensing costs - Risks of claims challenging inventorship or ownership of patents and other IP - Non-compliance with governmental patent agency requirements could lead to loss of patent rights - Changes in U.S. patent law (e.g., Leahy-Smith Act, Supreme Court rulings) have diminished patent value and increased uncertainty - Protecting IP outside the United States is challenging due to less extensive legal protections and enforcement difficulties in foreign jurisdictions Risks Related to Common Stock Investment Investing in Benitec's common stock carries risks including significant stockholder influence, high price volatility, potential for dilution from future equity issuances, lack of dividends, and corporate governance structures that may prevent acquisitions - Significant stockholders, such as Suvretta Capital, hold substantial common stock and warrants, potentially exerting significant influence that may not align with other stockholders' interests[355][357][358] - The market price and trading volume of common stock are highly volatile, influenced by clinical trial results, regulatory actions, financial performance, and broader market conditions, potentially leading to significant price declines[359][360][361] - Failure to establish and maintain proper internal financial reporting controls, including a material weakness in share-based compensation calculation, has led to prior financial restatements and could impair future financial statement accuracy and investor confidence - The company has never declared or paid dividends and does not anticipate doing so, making stock appreciation the sole source of investment return - Future sales and issuances of common stock or rights to purchase common stock could result in substantial dilution to existing stockholders - Corporate governance structure may prevent acquisitions at a premium, and a limited number of unreserved authorized shares may hinder future capital raises without stockholder approval Item 1B. Unresolved Staff Comments This section states that there are no unresolved staff comments from the SEC regarding the company's filings - There are no unresolved staff comments[377] Item 1C. Cybersecurity Benitec has implemented an information security program to manage cybersecurity risks to its critical networks and data, with Audit Committee oversight, and no material risks identified to date Risk Management and Strategy Benitec has implemented an information security program to identify, assess, and manage material cybersecurity risks to its critical computer networks, systems, and data, including intellectual property and clinical trial participant information - Benitec maintains an information security program to identify, assess, and manage cybersecurity risks to its critical computer networks, systems, and data, including intellectual property and patient information[378] - Mechanisms, controls, and technologies designed to prevent or mitigate system intrusion or data loss, theft, misuse, or other security incidents or vulnerabilities and maintain a stable and secure information technology environment - Information security policies, network and device security, encryption standards, risk management, as well as security tools such as malware protection and secure authentication tools - Regular trainings for employees and senior management on cyber and information security Governance The Audit Committee oversees Benitec's cybersecurity risks, with periodic reports from senior leadership, and no material risks from known cybersecurity threats or incidents have been identified to date - The Audit Committee of the Board of Directors oversees and reviews the Company's cybersecurity risks[379] - Senior leadership, including the CFO and CEO, provides periodic reports to the Board and Audit Committee[379] - To date, no material risks from known cybersecurity threats or incidents have been identified[380] Item 2. Properties Benitec's corporate headquarters and R&D facility are in Hayward, California, with a lease expiring in December 2027, and a new office in Los Angeles, California, with a lease expiring in July 2026 - Benitec's corporate headquarters and R&D facility are in Hayward, California (7,295 sq ft, lease expires Dec 2027)[381] - A new office space in Los Angeles, California, has a lease expiring in July 2026[381] - Management believes these facilities are suitable and adequate for anticipated needs[381] Item 3. Legal Proceedings Benitec Biopharma Inc. is not currently a party to any material legal proceedings and is unaware of any material pending or threatened litigation - Benitec is not currently a party to any material legal proceedings[382] Item 4. Mine Safety Disclosures This item is not applicable to Benitec Biopharma Inc - This item is not applicable[383] Part II - Financial Information This part presents Benitec's financial condition, results of operations, and related disclosures, including a restatement of prior period financial statements and management's discussion and analysis Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Benitec's common stock trades on Nasdaq under 'BNTC', with a closing price of $13.99 on September 18, 2025, and approximately 1,128 record holders, but the company has never paid dividends and does not anticipate doing so - Benitec's common stock trades on Nasdaq under the symbol 'BNTC'[386] - The closing sale price on September 18, 2025, was $13.99 per share[386] - As of September 15, 2025, there were approximately 1,128 record holders of common stock[387] - The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future, retaining funds for operations and growth[388] Item 6. Reserved This item is reserved and contains no information - This item is reserved[392] Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's discussion and analysis of Benitec's financial condition and operating results, including a restatement of prior period financial statements due to an error in share-based compensation calculation - The company restated prior period financial statements (Q3 2025 and Q4 2024) due to an error in share-based compensation expense calculation[394] - Benitec is a clinical-stage biotechnology company focused on ddRNAi and 'silence and replace' genetic medicines, with BB-301 for OPMD as its lead candidate[395][396][397] - The company incurred cumulative losses of $218 million as of June 30, 2025, and expects continued operating losses, relying on capital financing[422][429] Restatement of Prior Period Financial Statements Benitec has restated its unaudited condensed consolidated financial statements for the quarterly periods ended March 31, 2025, and December 31, 2024, to correct misstatements related to share-based compensation expense - Benitec has restated its unaudited condensed consolidated financial statements for the quarterly periods ended March 31, 2025, and December 31, 2024[394] - The restatement corrects misstatements related to accounting for share-based compensation expense[394] Overview Benitec is a clinical-stage biotechnology company focused on developing novel genetic medicines using its proprietary 'silence and replace' ddRNAi platform, with BB-301 for OPMD as its lead product - Benitec is a clinical-stage biotechnology company focused on developing novel genetic medicines using its proprietary DNA-directed RNA interference (ddRNAi) and 'silence and replace' platforms[395][396] - The 'silence and replace' platform combines RNAi with gene therapy to facilitate sustained silencing of disease-causing genes and simultaneous delivery of wildtype replacement genes following a single administration[396][398] - BB-301, the lead therapeutic for OPMD, has been granted Orphan Drug Designation in the United States and the European Union, offering potential for robust and durable clinical activity[397][398] Financing and Financing-Related Transactions (FY2025) During FY2025, Benitec entered into an 'at-the-market' offering agreement for up to $75 million in common stock and completed an underwritten and registered direct offering, generating $28.2 million net proceeds - On October 11, 2024, Benitec entered into a Sales Agreement for an 'at-the-market offering' of up to $75 million in common stock, but no shares were sold under this agreement as of June 30, 2025[402] - On March 25, 2025, the company completed an underwritten and registered direct offering, issuing common stock and pre-funded warrants, generating gross proceeds of approximately $30.5 million and net proceeds of approximately $28.2 million[403] Results of Operations Benitec reported no revenue for FY2025 and FY2024, with total operating expenses significantly increasing to $41.765 million in FY2025, primarily due to a $14.5 million increase in share-based compensation within G&A expenses - Benitec generated no revenue for the years ended June 30, 2025, and 2024[409] Operating Expenses (US$'000) | Expense Category | Year Ended June 30, 2025 | Year Ended June 30, 2024 | Change (YoY) | |---|---|---|---| | Royalties and license fees | $0 | $(108) | $108 | | Research and development | $18,332 | $15,609 | +$2,723 | | General and administrative | $23,433 | $6,989 | +$16,444 | | Total operating expenses | $41,765 | $22,490 | +$19,275 | - The increase in General and administrative expenses for FY2025 was primarily due to a $14.5 million increase in share-based compensation, along with higher legal fees, consulting fees, travel expenses, and salaries and wages[418] Other Income (Loss), Net (US$'000) | Category | Year Ended June 30, 2025 | Year Ended June 30, 2024 | |---|---|---| | Foreign currency transaction gain (loss) | $(71) | $40 | | Interest income, net | $3,286 | $904 | | Other expense, net | $(131) | $(204) | | Gain on extinguishment of liabilities | $764 | $0 | | Unrealized loss on investment | $0 | $(1) | | Total other income (loss), net | $3,848 | $739 | Liquidity and Capital Resources Benitec incurred cumulative losses of $218 million as of June 30, 2025, and negative cash flows from operations, but estimates its $97.7 million cash and cash equivalents will fund operations for at least the next twelve months, relying on capital financing - Benitec had accumulated losses of $218 million as of June 30, 2025, and expects continued operating losses[422] - As of June 30, 2025, cash and cash equivalents were approximately $97.7 million[423] Net Cash Flow Activity (US$'000) | Activity | Year Ended June 30, 2025 | Year Ended June 30, 2024 | |---|---|---| | Operating activities | $(23,588) | $(19,403) | | Investing activities | $(18) | $(179) | | Financing activities | $70,485 | $68,029 | | Effects of exchange rate changes | $49 | $(8) | | Net increase in cash, cash equivalents, and restricted cash | $46,928 | $48,439 | | Cash, cash equivalents, and restricted cash, end of period | $97,857 | $50,929 | - The company estimates its cash and cash equivalents will be sufficient to fund operations for at least the next twelve months[430] Contractual Obligations and Commercial Commitments Benitec has operating leases for office spaces in Hayward and Los Angeles, but contracts with third-party service providers are generally cancellable and not considered contractual obligations, with no off-balance sheet arrangements - Benitec has operating leases for office space in Hayward, California (expires Dec 2027) and Los Angeles, California (expires July 2026)[434] - Contracts with third-party service providers (CROs, CDMOs) are generally cancellable and not considered contractual obligations[436] - The company does not have any off-balance sheet arrangements[435] Critical Accounting Policies and Significant Accounting Estimates Benitec's critical accounting policies involve significant judgments and estimates, particularly for research and development expense accruals and share-based compensation, which are determined using the Black-Scholes Option Pricing Model - Critical accounting policies require significant judgments, assumptions, and estimates that materially affect financial condition or results of operations[438] - Research and development expenses are accrued based on estimates of work completed and agreements with third-party service providers[441] - Share-based compensation expense is determined using the Black-Scholes Option Pricing Model based on grant-date fair value and recognized over the service/vesting period using the graded vesting attribution method[442] Recent Accounting Pronouncements Benitec adopted ASU No. 2023-07, Segment Reporting, in FY2025 and is currently evaluating the impact of ASU No. 2023-09, Income Taxes, and ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures - Benitec adopted ASU No. 2023-07, Segment Reporting, during the fiscal year ended June 30, 2025, enhancing disclosures about significant segment expenses[514][517] - The company is evaluating ASU No. 2023-09, Income Taxes (effective after Dec 15, 2024), and assessing ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (effective after Dec 15, 2026)[515][516] Item 7A. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Benitec Biopharma Inc. is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Benitec is not required to provide quantitative and qualitative disclosures about market risk[444] Item 8. Financial Statements and Supplementary Data This section presents Benitec Biopharma Inc.'s audited consolidated financial statements for FY2025 and FY2024, prepared in accordance with GAAP, reflecting a restatement of prior interim periods due to a share-based compensation error - The section includes audited consolidated financial statements for fiscal years ended June 30, 2025 and 2024, prepared in accordance with GAAP[449] - The financial statements reflect a restatement of prior interim periods due to an error in share-based compensation calculation[519] Key Financial Statements Included | Document | |---| | Report of Independent Registered Public Accounting Firm | | Consolidated Balance Sheets | | Consolidated Statements of Operations and Comprehensive Loss | | Consolidated Statements of Stockholders' Equity | | Consolidated Statements of Cash Flows | | Notes to Consolidated Financial Statements | Report of Independent Registered Public Accounting Firm Baker Tilly US, LLP issued an unqualified opinion on Benitec's consolidated financial statements for FY2025 and FY2024, affirming fair presentation in accordance with GAAP, without auditing internal control over financial reporting or identifying critical audit matters - Baker Tilly US, LLP issued an unqualified opinion on the consolidated financial statements for FY2025 and FY2024, affirming fair presentation in accordance with GAAP[449] - The firm did not audit internal control over financial reporting and identified no critical audit matters[451][453] Consolidated Balance Sheets As of June 30, 2025, Benitec reported total assets of $99.592 million, driven by an increase in cash and cash equivalents to $97.744 million, with total liabilities decreasing and stockholders' equity significantly increasing to $97.295 million Consolidated Balance Sheet Highlights (US$'000) | Category | June 30, 2025 | June 30, 2024 | Change | |---|---|---|---| | Cash and cash equivalents | $97,744 | $50,866 | +$46,878 | | Total assets | $99,592 | $52,210 | +$47,382 | | Total liabilities | $2,297 | $4,962 | -$2,665 | | Total stockholders' equity | $97,295 | $47,248 | +$50,047 | - The significant increase in total assets and stockholders' equity is primarily due to capital raises and warrant exercises during the fiscal year[427][462] Consolidated Statements of Operations and Comprehensive Loss Benitec reported a net loss of $37.917 million for FY2025, an increase from $21.751 million in FY2024, driven by higher operating expenses, resulting in a loss per share of $(1.05) despite increased shares outstanding Consolidated Statements of Operations Highlights (US$'000) | Category | Year Ended June 30, 2025 | Year Ended June 30, 2024 | |---|---|---| | Total operating expenses | $41,765 | $22,490 | | Loss from operations | $(41,765) | $(22,490) | | Total other income (loss), net | $3,848 | $739 | | Net loss | $(37,917) | $(21,751) | | Total comprehensive loss | $(37,864) | $(21,813) | Per Share Data | Metric | Year Ended June 30, 2025 | Year Ended June 30, 2024 | |---|---|---| | Net loss per share (Basic and Diluted) | $(1.05) | $(1.22) | | Weighted average shares outstanding (Basic and Diluted) | 36,209,271 | 18,364,386 | - The increase in net loss was primarily driven by higher research and development and general and administrative expenses[417][418] Consolidated Statements of Stockholders' Equity Benitec's total stockholders' equity significantly increased to $97.295 million at June 30, 2025, primarily due to $28.208 million from equity offerings, $2.999 million from Series 2 warrant exercises, and $39.278 million from common warrant exercises, partially offset by a net loss of $37.917 million Changes in Stockholders' Equity (US$'000) | Category | Year Ended June 30, 2025 | |---|---| | Balance at June 30, 2024 | $47,248 | | Issuance of common stock and pre-funded warrants (net) | $28,208 | | Exercise of Series 2 warrants | $2,999 | | Exercise of common warrants (net) | $39,278 | | Share-based compensation | $17,426 | | Foreign currency translation gain | $53 | | Net loss | $(37,917) | | Balance at June 30, 2025 | $97,295 | - Total stockholders' equity increased by $50.047 million, primarily due to proceeds from equity offerings and warrant exercises, partially offset by the net loss[462] Consolidated Statements of Cash Flows For FY2025, Benitec used $23.588 million in operating activities, while financing activities provided $70.485 million from equity issuances and warrant exercises, resulting in a net increase in cash of $46.928 million to a year-end total of $97.857 million Consolidated Statements of Cash Flows (US$'000) | Activity | Year Ended June 30, 2025 | Year Ended June 30, 2024 | |---|---|---| | Net cash used in operating activities | $(23,588) | $(19,403) | | Net cash used in investing activities | $(18) | $(179) | | Net cash provided by financing activities | $70,485 | $68,029 | | Effects of exchange rate changes | $49 | $(8) | | Net increase in cash, cash equivalents, and restricted cash | $46,928 | $48,439 | | Cash, cash equivalents, and restricted cash, end of period | $97,857 | $50,929 | - Net cash used in operating activities increased due to higher net loss, partially offset by non-cash expenses[425] - Financing activities were the primary source of cash, driven by equity issuances and warrant exercises[427] Notes to Consolidated Financial Statements This section provides detailed notes to Benitec's consolidated financial statements, covering business overview, basis of presentation, significant accounting policies, and the restatement of prior period financial statements - The notes detail Benitec's business as a developer of novel genetic medicines using 'Silence and Replace' ddRNAi platform[468] - Significant accounting policies include foreign currency translation, fair value measurements, cash and cash equivalents, property and equipment, leases, and basic/diluted net loss per share[480][483][485][490][494][500] - The notes explain the restatement of prior period financial statements due to an error in share-based compensation calculation, impacting additional paid-in capital, accumulated deficit, net loss, and loss per share[518][519] Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Benitec Biopharma Inc. reports no changes in or disagreements with its accountants on accounting and financial disclosure matters - There are no changes in or disagreements with accountants on accounting and financial disclosure[631] Item 9A. Controls and Procedures Benitec's management concluded that its disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in internal control over financial reporting related to share-based compensation calculation, leading to prior restatements, but remediation steps are underway - Benitec's disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in internal control over financial reporting[632][634] - The material weakness is related to inadequate design and implementation of controls over the share-based compensation calculation review process, leading to the restatement of prior interim financial statements[635] - Remediation steps include updating equity system configuration and enhancing management's quarterly share-based compensation review process - A previously reported material weakness concerning complex, non-routine transactions was remediated as of June 30, 2025, through enhanced financial reporting controls, formalizing transaction flow, hiring additional accounting personnel, and engaging accounting advisory firms Item 9B. Other Information During the three-month period ended June 30, 2025, none of Benitec's directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three-month period ended June 30, 2025[644] Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This section states that there are no disclosures regarding foreign jurisdictions that prevent inspections for Benitec Biopharma Inc - No disclosures regarding foreign jurisdictions that prevent inspections[645] Part III - Directors, Executive Officers, and Corporate Governance This part incorporates by reference information regarding Benitec's directors, executive officers, corporate governance, executive compensation, security ownership, related transactions, and principal accountant fees from the upcoming 2025 Proxy Statement Item 10. Directors, Executive Officers and Corporate Governance Information on Benitec's directors, executive officers, and corporate governance, including the Code of Ethics and Business Conduct, is incorporated by reference from the Proxy Statement to be filed for the 2025 Annual Meeting of Stockholders - Information on directors, executive officers, and corporate governance is incorporated by reference from the Proxy Statement[647] - The company has adopted a written Code of Ethics and Business Conduct applicable to all officers, directors, and employees[648] Item 11. Executive Compensation Information regarding executive compensation and director compensation for Benitec Biopharma Inc. is incorporated by reference from the Proxy Statement to be filed for the 2025 Annual Meeting of Stockholders - Information on executive compensation and director compensation is incorporated by reference from the Proxy Statement[649] Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Details on the security ownership of certain beneficial owners and management, as well as related stockholder matters, are incorporated by reference from the Proxy Statement to be filed for Benitec's 2025 Annual Meeting of Stockholders - Information on security ownership of certain beneficial owners and management is incorporated by reference from the Proxy Statement[650] Item 13. Certain Relationships and Related Transactions, and Director Independence Information concerning certain relationships and related party transactions, along with director independence, is incorporated by reference from the Proxy Statement to be filed for Benitec's 2025 Annual Meeting of Stockholders - Information on certain relationships, related party transactions, and director independence is incorporated by reference from the Proxy Statement[651] Item 14. Principal Accountant Fees and Services Information regarding principal accountant fees and services is incorporated by reference from the Proxy Statement to be filed for Benitec's 2025 Annual Meeting of Stockholders, specifically under the caption 'Ratification of Appointment of Independent Registered Public Accounting Firm' - Information on principal accountant fees and services is incorporated by reference from the Proxy Statement under 'Ratification of Appointment of Independent Registered Public Accounting Firm'[652] Part IV - Exhibits, Financial Statement Schedules, and Signatures This part lists all exhibits and financial statement schedules included in or incorporated by reference into the Form 10-K, and includes the duly signed report by the company's executive officers and directors Item 15. Exhibits and Financial Statement Schedules This section lists all exhibits and financial statement schedules included in or incorporated by reference into the Form 10-K, referencing Item 8 for financial statements and providing a comprehensive Exhibit Index of corporate documents - This section lists all exhibits and financial statement schedules included in or incorporated by reference into the Form 10-K[656] - Financial statements are referenced from Item 8, and required schedule information is within the notes to the consolidated financial statements[654][655] - The Exhibit Index includes various corporate documents, such as amendments to the Certificate of Incorporation, forms of warrants, employment agreements, and the 2020 Equity and Incentive Compensation Plan[656][657][658] Item 16. Form 10-K Summary This item indicates that a Form 10-K Summary is not applicable for Benitec Biopharma Inc - Form 10-K Summary is not applicable[661] Signatures The Form 10-K report is duly signed on behalf of Benitec Biopharma Inc. by its Chief Executive Officer, Dr. Jerel Banks, and Chief Financial Officer, Megan Boston, along with other directors, on September 22, 2025 - The Form 10-K report is signed by Dr. J