iBio(US:IBIO)2022-02-14 21:21PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) The unaudited financial statements for December 31, 2021, reflect decreased total assets, increased net losses, and significant cash usage from operations compared to prior periods Condensed Consolidated Balance Sheets The balance sheet as of December 31, 2021, shows a decline in total assets, primarily cash, and a corresponding decrease in total equity Balance Sheet Highlights (In Thousands) | Balance Sheet Highlights (In Thousands) | Dec 31, 2021 | June 30, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $39,205 | $77,404 | | Total Current Assets | $67,496 | $104,597 | | Total Assets | $126,448 | $146,968 | | Liabilities & Equity | | | | Total Current Liabilities | $8,346 | $6,645 | | Total Liabilities | $35,850 | $38,400 | | Total Equity | $90,598 | $108,568 | Condensed Consolidated Statements of Operations and Comprehensive Loss The statements of operations show a significant decline in revenues and a widening net loss for both the three and six months ended December 31, 2021 Statement of Operations (In Thousands, except per share) | Statement of Operations (In Thousands, except per share) | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Revenues | $168 | $705 | | Gross profit | $55 | $494 | | Research and development | $3,331 | $2,374 | | General and administrative | $8,362 | $5,665 | | Operating loss | $(11,638) | $(7,545) | | Net loss attributable to iBio, Inc. stockholders | $(11,942) | $(8,194) | | Loss per common share - basic and diluted | $(0.05) | $(0.04) | Statement of Operations (In Thousands, except per share) | Statement of Operations (In Thousands, except per share) | Six Months Ended Dec 31, 2021 | Six Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Revenues | $379 | $1,115 | | Gross profit | $226 | $797 | | Operating loss | $(20,612) | $(14,469) | | Net loss attributable to iBio, Inc. stockholders | $(20,947) | $(15,793) | | Loss per common share - basic and diluted | $(0.10) | $(0.09) | Condensed Consolidated Statements of Cash Flows Cash flow statements for the six months ended December 31, 2021, indicate increased cash usage across operating, investing, and financing activities Cash Flow Summary (In Thousands) | Cash Flow Summary (In Thousands) | Six Months Ended Dec 31, 2021 | Six Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(20,033) | $(15,489) | | Net cash used in investing activities | $(6,121) | $(19,556) | | Net cash provided by (used in) financing activities | $(6,105) | $71,185 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(32,259) | $36,140 | Notes to Condensed Consolidated Financial Statements These notes detail business segments, accounting policies, significant transactions including a facility acquisition, and management's liquidity outlook - The company operates in two segments: Biopharmaceuticals (developing therapeutics for fibrotic diseases, oncology, and vaccines) and Bioprocessing (providing CDMO services and research products)30 - Management believes its cash, cash equivalents, and investments in debt securities of approximately $57.4 million as of December 31, 2021, are adequate to support activities through at least September 30, 202343 - On November 1, 2021, the company acquired its 130,000 sq-ft cGMP manufacturing facility in Bryan, Texas, from affiliates of Eastern Capital Limited, terminated all related agreements, and made its subsidiary iBio CDMO wholly owned9092 - The facility acquisition was financed in part by a $22.375 million secured term loan from Woodforest National Bank, with principal due on November 1, 202395 - In August 2021, the company entered into a collaboration and license agreement with RubrYc Therapeutics to develop immuno-oncology antibodies and made a $5 million equity investment in RubrYc's Series A-2 preferred stock, with a commitment for an additional $2.5 million106119 - On July 21, 2021, the company was granted full forgiveness for its $600,000 Paycheck Protection Program (PPP) loan150 Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes the company's financial performance, highlighting decreased revenue, increased operating expenses, widened net losses, and strategic developments Recent Developments Recent developments include advancing vaccine and antibody candidates, expanding the oncology pipeline, and acquiring the Bryan, Texas manufacturing facility - The company plans to file an IND application for its IBIO-202 nucleocapsid-based COVID-19 vaccine candidate before the end of calendar 2022233 - The IL-2 sparing anti-CD25 antibody program, IBIO-101, is expected to move from lead optimization to the IND-enabling stage before mid-2022236 - On November 1, 2021, iBio purchased its manufacturing facility, which it had previously leased, for a total price of $28.75 million, paid with $28 million in cash and a warrant247 - The facility purchase was partly funded by a $22.375 million secured term loan from Woodforest National Bank, with principal due November 1, 2023247 Results of Operations Operating results show a significant decline in revenue and increased R&D and G&A expenses, leading to a widened net loss for the periods Financial Comparison (In Millions) | Financial Comparison (In Millions) | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Revenue | $0.2 | $0.7 | | Gross Profit | $0.1 | $0.5 | | R&D Expenses | $3.3 | $2.4 | | G&A Expenses | $8.4 | $5.7 | | Net Loss | $(12.0) | $(8.2) | Financial Comparison (In Millions) | Financial Comparison (In Millions) | Six Months Ended Dec 31, 2021 | Six Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Revenue | $0.4 | $1.1 | | Gross Profit | $0.2 | $0.8 | | R&D Expenses | $5.8 | $4.2 | | G&A Expenses | $15.0 | $11.0 | | Net Loss | $(20.9) | $(15.7) | Liquidity and Capital Resources The company's liquidity decreased to $57.4 million as of December 31, 2021, with management projecting sufficiency through September 2023 - The company's cash, cash equivalents, and debt securities totaled approximately $57.4 million as of December 31, 2021, excluding $5.9 million of restricted cash270 - Management believes the current cash position is sufficient to fund company activities through at least September 30, 2023270275 - For the six months ended Dec 31, 2021, cash usage was primarily driven by funding the net loss ($20.0 million from operations), asset purchases ($6.1 million from investing), and finance lease payments related to the facility purchase ($6.1 million from financing)271272273 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, iBio, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk282 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of December 31, 2021, with no material changes in internal control - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of December 31, 2021286 - No changes in internal control over financial reporting occurred during the quarter ended December 31, 2021, that have materially affected, or are reasonably likely to materially affect, internal controls287 PART II. OTHER INFORMATION Legal Proceedings The company is not currently subject to any material legal proceedings as of the filing date - As of the filing date, the company is not subject to any material legal proceedings289 Risk Factors Key risks include a history of significant losses, the need for additional capital, limited authorized shares, potential loan default, and dependence on license agreements - The company has a history of significant losses, with an accumulated deficit of approximately $194.5 million as of December 31, 2021, and expects to incur further losses291 - Additional capital is needed to fully implement the long-term business plan. Failure to raise funds could force delays or elimination of R&D programs and commercialization efforts295 - The limited number of authorized and unissued shares of common stock (approximately 21 million as of Dec 31, 2021) may be insufficient for future equity financing or strategic transactions299300 - The company faces risks related to its $22.375 million term loan, including the ability to make the principal payment and potential default, which could result in the loss of its sole manufacturing facility306 - The business depends on maintaining license agreements, such as with the University of Pittsburgh for IBIO-100, which requires meeting specific developmental milestones, including filing an IND by December 31, 2023309 Other Information The company amended its license agreement with the University of Pittsburgh, extending key clinical development and regulatory milestone deadlines - On February 2, 2022, the company amended its license agreement with the University of Pittsburgh, extending key milestone deadlines for its fibrosis program313 - The amended milestone deadlines include filing an IND by December 31, 2023, and enrolling the first patient in a Phase 1 trial by June 30, 2024314 Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate documents, loan agreements, and officer certifications