Part I: Financial Information Financial Statements ESSA Pharma, a clinical-stage company, reported a net loss of $28.8 million for the nine months ended June 30, 2022, maintaining a strong liquidity position of $174.6 million in cash and investments Condensed Consolidated Balance Sheet (Unaudited) | Account | June 30, 2022 ($) | September 30, 2021 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $67,868,096 | $137,825,024 | | Short-term investments | $106,727,807 | $57,102,159 | | Total Current Assets | $175,184,445 | $197,598,077 | | Total Assets | $175,660,846 | $198,165,818 | | Liabilities & Equity | | | | Total Current Liabilities | $4,033,767 | $3,929,663 | | Total Liabilities | $4,145,040 | $4,160,266 | | Total Shareholders' Equity | $171,515,806 | $194,005,552 | | Total Liabilities and Shareholders' Equity | $175,660,846 | $198,165,818 | Condensed Consolidated Statements of Operations (Unaudited) | Account | Three Months Ended June 30, 2022 ($) | Nine Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | | Research and development | $6,394,534 | $20,063,752 | | General and administration | $2,895,542 | $9,775,082 | | Total operating expenses | ($9,293,221) | ($29,849,830) | | Net loss for the period | ($8,826,743) | ($28,779,266) | | Loss per common share (basic and diluted) | ($0.20) | ($0.65) | Condensed Consolidated Statements of Cash Flows (Unaudited, Nine Months Ended June 30) | Cash Flow Activity | 2022 ($) | 2021 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($20,848,215) | ($18,032,326) | | Net cash used in investing activities | ($49,379,260) | ($35,014,766) | | Net cash provided by financing activities | $287,374 | $141,977,430 | | Change in cash and cash equivalents | ($69,956,928) | $88,873,418 | Management's Discussion and Analysis (MD&A) ESSA Pharma, a clinical-stage company, is advancing EPI-7386 for CRPC in Phase 1/2 trials, with a slight increase in net loss to $28.8 million for the nine months ended June 30, 2022, while maintaining strong liquidity Overview and Strategy ESSA is a clinical-stage pharmaceutical company developing EPI-7386, a first-in-class AR-NTD inhibitor for CRPC, aiming to overcome treatment resistance through monotherapy and combination strategies - The company is focused on developing proprietary therapies for prostate cancer, specifically for patients whose disease is progressing despite standard-of-care treatments97 - EPI-7386 is designed to disrupt the androgen receptor (AR) signaling pathway by selectively binding to the N-terminal domain (NTD), a mechanism different from current antiandrogens that target the ligand-binding domain (LBD), which may bypass common resistance mechanisms9798 - The company's strategy includes pursuing clinical development of EPI-7386 as a monotherapy for CRPC, conducting clinical trials of EPI-7386 in combination with second-generation antiandrogens, and continuing preclinical development of next-generation compounds, including NTD degraders (ANITACs)115 Clinical Program and Recent Developments EPI-7386's Phase 1a trial demonstrated safety and initial anti-tumor activity, leading to advancement into Phase 1b expansion and combination studies, alongside positive preclinical data for ANITAC™ NTD degraders - The Phase 1 trial of EPI-7386 is actively enrolling patients, with protocol amendments focusing on less heavily pretreated mCRPC patients to increase the likelihood of response120124 - The company has established collaborations to test EPI-7386 in combination with other antiandrogens: apalutamide and abiraterone acetate (Janssen), enzalutamide (Astellas), and darolutamide (Bayer)130 - A June 2022 clinical update on the Phase 1a study (36 patients) showed EPI-7386 was well-tolerated with a favorable safety profile and demonstrated initial anti-tumor activity (tumor volume decrease, PSA stabilization) in a subset of patients136138141 - Preclinical data presented at AACR 2022 for the company's ANITAC™ NTD degraders demonstrated their potential to degrade multiple forms of the androgen receptor, including full-length, mutant, and splice variants, representing a new approach to AR pathway inhibition131146 Competition and Intellectual Property ESSA competes in the prostate cancer market with a unique AR-NTD inhibitor mechanism, supported by a strong intellectual property portfolio of 58 issued patents, including 5 for EPI-7386 Currently Approved Competing Therapies | BRAND NAME | COMPANY NAME(S) | | :--- | :--- | | Xtandi | Astellas and Pfizer | | Zytiga | Johnson & Johnson | | Erleada | Johnson & Johnson | | Nubeqa | Bayer | | Keytruda | Merck | | Lynparza | AstraZeneca | | Rubraca | Clovis Oncology | - ESSA's competitive position is based on its unique mechanism of action, targeting the AR-NTD, which has the potential to bypass resistance pathways affecting current LBD-targeting therapies; to its knowledge, no other AR-NTD antagonist is in clinical trials165 - As of July 2022, ESSA owns rights to 58 issued patents, with five patents covering the EPI-7386 compound expected to provide protection lasting from 2036 to 2041173 Results of Operations The company's comprehensive loss for the nine months ended June 30, 2022, increased slightly to $28.8 million, primarily due to higher R&D expenses for the EPI-7386 clinical trial R&D Expense Breakdown (Nine Months Ended June 30) | Expense Category | 2022 ($) | 2021 ($) | | :--- | :--- | :--- | | Clinical | $3,731,044 | $4,213,305 | | Preclinical and data analysis | $6,045,555 | $3,231,017 | | Manufacturing (CMC) | $3,970,564 | $5,516,377 | | Share-based payments | $3,253,741 | $2,323,185 | | Salaries and benefits | $1,516,507 | $1,209,060 | | Total R&D Expense | $20,063,752 | $17,985,937 | G&A Expense Breakdown (Nine Months Ended June 30) | Expense Category | 2022 ($) | 2021 ($) | | :--- | :--- | :--- | | Share-based payments | $2,700,703 | $4,329,428 | | Salaries and benefits | $3,021,159 | $2,567,566 | | Insurance | $1,448,983 | $698,158 | | Professional fees | $724,153 | $925,174 | | Total G&A Expense | $9,775,082 | $9,942,149 | - The increase in R&D expenses for the nine-month period was driven by ongoing activities for the EPI-7386 clinical trial, which commenced in July 2020, with preclinical and data analysis costs nearly doubling year-over-year210212 Liquidity and Capital Resources As of June 30, 2022, ESSA maintains a strong liquidity position with $174.6 million in cash and investments, deemed sufficient to fund operations for over twelve months - As of June 30, 2022, the company had available cash reserves and short-term investments of $174.6 million and working capital of $171.2 million227 - Management believes that its current capital is sufficient to fund operations and planned expenditures for more than twelve months from the reporting date227 Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of June 30, 2022, with no material changes during the quarter - Based on an evaluation as of June 30, 2022, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level240 - Management concluded that the company's internal control over financial reporting was effective as of June 30, 2022, based on the COSO 2013 framework242 - There were no changes in internal control over financial reporting during the quarter ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, internal controls243 Part II: Other Information Summary of Other Information The company reported no material legal proceedings, no material changes to risk factors, and no unregistered equity sales or senior security defaults as of June 30, 2022 - The company is not a party to any legal proceedings that would be reasonably expected to have a material adverse effect on its business246 - There have been no material changes in risk factors from those disclosed in the company's 2021 Annual Report on Form 10-K247 - The company reported no unregistered sales of equity securities during the quarter248
ESSA Pharma (EPIX) - 2022 Q3 - Quarterly Report