AIM ImmunoTech(AIM) - 2021 Q2 - Quarterly Report

markdown PART I- FINANCIAL INFORMATION [Financial Statements](index=2&type=section&id=ITEM%201%3A%20Financial%20Statements) AIM ImmunoTech reported a **$9.46 million** net loss for H1 2021, driven by a one-time charge, with strong liquidity Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $41,142 | $38,501 | | Marketable securities, long term | $16,135 | $15,376 | | Total current assets | $41,325 | $40,310 | | Total assets | $66,722 | $64,584 | | **Liabilities & Equity** | | | | Total current liabilities | $876 | $1,102 | | Financing obligation | $0 | $1,876 | | Total stockholders' equity | $65,532 | $61,294 | | Total liabilities and stockholders' equity | $66,722 | $64,584 | Consolidated Statement of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $23 | $40 | $52 | $85 | | Research and development | $1,317 | $1,463 | $2,742 | $2,343 | | General and administrative | $2,145 | $1,717 | $4,256 | $3,986 | | Operating loss | ($3,718) | ($3,340) | ($7,463) | ($6,648) | | Net Loss | ($5,876) | ($3,370) | ($9,455) | ($7,160) | | Basic and diluted loss per share | ($0.12) | ($0.11) | ($0.20) | ($0.19) | Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($4,763) | ($4,525) | | Net cash (used in) provided by investing activities | ($629) | $601 | | Net cash provided by financing activities | $8,033 | $36,362 | | **Net increase in cash and cash equivalents** | **$2,641** | **$32,438** | [Notes to Financial Statements](index=6&type=section&id=Notes%20to%20Financial%20Statements) Notes detail immuno-pharma business, key products, **$2.7 million** loss from facility repurchase, and warrant valuation - The company is an immuno-pharma company focused on R&D for therapeutics to treat cancers, viruses, and immune-deficiency disorders. Its main products are Ampligen® (rintatolimod) and Alferon N Injection®[14](index=14&type=chunk) - In May **2021**, the company repurchased its New Brunswick manufacturing facility for **$4.73 million**, extinguishing the financing obligation from a **2018** sale-leaseback transaction. This resulted in a loss on extinguishment of **$2.7 million** for the quarter[25](index=25&type=chunk)[82](index=82&type=chunk) - Stock-based compensation expense was **approximately $1,006,000** for the six months ended June **30**, **2021**, a significant increase from **$346,000** in the same period of **2020**[32](index=32&type=chunk) - The fair value of redeemable warrants is calculated using a Monte Carlo Simulation, with key assumptions including expected volatility, holding period, and a **5.0% probability** of a 'Fundamental Transaction' that would trigger a put right[63](index=63&type=chunk)[73](index=73&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=ITEM%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights Ampligen® development, increased net loss from a one-time charge, and liquidity for two years [Overview and Products](index=23&type=section&id=Overview%20and%20Products) Overview details AIM ImmunoTech as an immuno-pharma company focused on Ampligen® and Alferon N Injection® - The company's flagship product is Ampligen® (rintatolimod), a first-in-class macromolecular RNA drug being developed for cancers, viral diseases, and immune-deficiency disorders. It is not yet approved by the FDA in the US[108](index=108&type=chunk) - The company's other key product is Alferon N Injection®, the only natural-source, multi-species alpha interferon approved for sale in the U.S. for treating refractory genital warts[114](index=114&type=chunk)[126](index=126&type=chunk) - AIM is actively investigating Ampligen® as a potential early-onset treatment and prophylaxis for SARS-CoV-2 (COVID-19), based on promising preclinical data against SARS-CoV-1[109](index=109&type=chunk) [Clinical Development and Pipeline](index=27&type=section&id=Clinical%20Development%20and%20Pipeline) Clinical development focuses on Ampligen® for oncology, ME/CFS ('Long Haulers'), and a **Q4 2021** COVID-19 trial - Multiple clinical trials for Ampligen® are underway in oncology, including for advanced recurrent ovarian cancer, metastatic triple-negative breast cancer, colorectal cancer, and prostate cancer[131](index=131&type=chunk) - Following positive survival data from an Early Access Program (EAP) in the Netherlands, the company plans to seek FDA 'fast-track' and 'breakthrough' designations for Ampligen as a therapy for pancreatic cancer[132](index=132&type=chunk)[135](index=135&type=chunk) - The AMP-511 Expanded Access Program for ME/CFS has been expanded to include patients with post-COVID chronic fatigue-like symptoms, also known as 'Long Haulers'[156](index=156&type=chunk)[347](index=347&type=chunk) - The company plans to sponsor a Phase **2a** Human Challenge Trial with hVIVO, expected to commence in **Q4 2021**, to test Ampligen as a potential intranasal antiviral therapy against common cold and influenza viruses[160](index=160&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Net loss increased significantly in Q2 and H1 2021, primarily due to a **$2.7 million** financing obligation loss Q2 Financial Performance Comparison (in thousands) | Metric | Q2 2021 | Q2 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Net Loss | ($5,876) | ($3,370) | 74% Increase | | Research & Development Costs | $1,317 | $1,463 | 10% Decrease | | General & Administrative Expenses | $2,145 | $1,717 | 25% Increase | Six-Month Financial Performance Comparison (in thousands) | Metric | H1 2021 | H1 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Net Loss | ($9,455) | ($7,160) | 32% Increase | | Research & Development Costs | $2,742 | $2,343 | 17% Increase | | General & Administrative Expenses | $4,256 | $3,986 | 7% Increase | - The primary driver for the increased net loss in Q2 and H1 **2021** was a **$2.7 million** loss on the extinguishment of a financing obligation related to the repurchase of the company's manufacturing facility[192](index=192&type=chunk)[204](index=204&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Strong liquidity with **$57.3 million** in cash and marketable securities is sufficient for **24 months** of operations - The company held **approximately $57.3 million** in cash, cash equivalents, and marketable securities as of June **30**, **2021**[206](index=206&type=chunk) - Net cash used in operating activities for the six months ended June **30**, **2021**, was **$4.8 million**[12](index=12&type=chunk)[206](index=206&type=chunk) - Cash provided by financing activities decreased to **$8.0 million** in H1 **2021** from **$36.4 million** in H1 **2020**, due to lower proceeds from the sale of common stock[207](index=207&type=chunk) - Management believes that current funds are adequate to meet operational cash needs and fund current clinical trials for **approximately the next twenty-four months**[211](index=211&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=ITEM%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk is managed through conservative investment of **$57.3 million** in cash and marketable securities - The company's market risk is managed through a conservative investment strategy for its **$57.3 million** in cash, cash equivalents, and marketable securities, focusing on money market accounts and high-grade bonds[213](index=213&type=chunk) [Controls and Procedures](index=39&type=section&id=ITEM%204%3A%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls were effective as of June **30**, **2021**, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June **30**, **2021**[214](index=214&type=chunk) - No material changes were made to the company's internal controls over financial reporting during the six months ended June **30**, **2021**[215](index=215&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings & Risk Factors](index=40&type=section&id=ITEM%201%3A%20Legal%20Proceedings%20%26%20ITEM%201A%3A%20Risk%20Factors) No new legal proceedings reported, but COVID-19 pandemic poses significant risks to business and clinical trials - There were no new legal proceedings during the quarter ended June **30**, **2021**[216](index=216&type=chunk) - The COVID-19 pandemic is highlighted as a major risk factor that could adversely impact business and clinical trials through delays in patient enrollment, regulatory approvals, and supply chain interruptions[217](index=217&type=chunk) - The commercial launch of Ampligen in Argentina has been specifically delayed due to the pandemic's strain on the nation's healthcare system and regulators[218](index=218&type=chunk)