
PART I Business iBio, Inc, a biopharmaceutical company, develops biologics using its plant-based FastPharming Manufacturing System® and operates through Biopharmaceuticals and Bioprocessing segments Business Overview and Segments iBio develops biopharmaceuticals using its sustainable FastPharming Manufacturing System® and operates through its Biopharmaceuticals and Bioprocessing segments - The company is structured into two main operating segments: Biopharmaceuticals and Bioprocessing10 - The Biopharmaceuticals segment includes Therapeutics (oncology, fibrotic, infectious diseases) and Vaccines (human and animal health)10 - The Bioprocessing segment includes Services (FastPharming, Process Development, Manufacturing) and Products (growth factors, lectins, antibodies for research)10 Biopharmaceutical Segment The Biopharmaceutical segment advances a proprietary pipeline including candidates for fibrosis (IBIO-100), oncology (IBIO-101), COVID-19 (IBIO-202), and Classical Swine Fever (IBIO-400) - The lead anti-fibrotic candidate, IBIO-100, has been granted orphan drug designation by the FDA for the treatment of systemic scleroderma18 - In August 2021, the company licensed RTX-003 from RubrYc Therapeutics, an anti-CD25 monoclonal antibody for oncology, which will be advanced as IBIO-1012023 - The company is developing IBIO-202, a subunit vaccine candidate for COVID-19 that targets the Nucleocapsid (N) protein, which is more conserved than the Spike (S) protein30 - IBIO-400 is a DIVA-capable subunit vaccine candidate for Classical Swine Fever that has shown complete protection in challenged pigs after a single dose3435 Bioprocess Segment The Bioprocess segment provides contract development and manufacturing (CDMO) services and sells research and bioprocess products, with CDMO revenue growing 50% in fiscal 2021 CDMO Service Revenue | Fiscal Year | Revenue (in millions) | Year-over-Year Growth | | :--- | :--- | :--- | | 2021 | $2.4 | 50% | | 2020 | $1.6 | - | - The company launched its Research & Bioprocess Products (RBP) business during the fiscal year, offering recombinant proteins through a new e-shop38 FastPharming Technology FastPharming is a proprietary, plant-based protein production system offering advantages in speed, cost, quality, scalability, safety, and sustainability over traditional methods - The FastPharming System uses transiently-transfected Nicotiana benthamiana plants for protein production41 - Key advantages of FastPharming include speed (weeks vs months), cost-effectiveness, quality, scalability, safety (no mammalian virus risk), and sustainability43 - The system is established in iBio's 130,000 square foot facility in Bryan, Texas, which houses automated hydroponic systems capable of growing over four million plants4271 Strategic Alliances, Collaborations, and Joint Ventures The company leverages strategic alliances, including a key collaboration with RubrYc Therapeutics for its oncology pipeline and an exclusive license with the University of Pittsburgh - Entered into a series of agreements with RubrYc Therapeutics in August 2021, including an exclusive license for RTX-003, a collaboration for antibody discovery, and a $5 million stock purchase in RubrYc515560 - Holds an exclusive worldwide license from the University of Pittsburgh for endostatin peptides used in its IBIO-100 anti-fibrosis program, with specific development milestones required6465 - The company's Bryan, Texas manufacturing facility is operated through iBio CDMO, a joint venture in which iBio holds a 99.99% interest, with an affiliate of Eastern Capital Limited holding the remaining interest and acting as the sublandlord6869 - Terminated its partnership with Planet Biotechnologies for the development of a recombinant ACE2-Fc protein for COVID-1967 Intellectual Property The company's intellectual property portfolio consists of 102 patents, with expiration dates ranging from 2023 to 2036, covering its core technologies and product candidates Patent Portfolio Summary | Category | Count | | :--- | :--- | | Total Patents | 102 | | - Owned | 96 | | - Licensed | 6 | | U.S. Patents | 24 | | International Patents | 72 | - Patents expire between 2023 and 203672 - Patented technologies include methods for transient gene expression in plants, recombinant carrier molecules, and specific antigens and vaccine compositions for various diseases77 Competition iBio faces intense competition from large pharmaceutical companies, specialized biotech firms, and other contract manufacturers in its therapeutic and CDMO markets - The company competes with commercial pharmaceutical and biotech enterprises, academic institutions, and research institutions80 - In the CDMO market, competition comes from full-service contract manufacturers and large pharmaceutical companies with excess capacity81 - Key competitors in oncology and fibrosis include large, multinational biopharmaceutical companies such as Roche, Boehringer Ingelheim, Gilead, and Bristol-Myers Squibb8586 - In the COVID-19 space, the company faces competition from established vaccine manufacturers like Pfizer, Moderna, and AstraZeneca, with over 231 vaccines and 612 therapeutics in development globally87 Government Regulation and Product Approval The company's products and services are subject to extensive regulation by the FDA and similar authorities, requiring a lengthy and rigorous approval process - Pharmaceutical products require rigorous preclinical testing and multi-phase clinical trials before they can be marketed, a process overseen by the FDA9394 - The clinical trial process typically involves three sequential phases: Phase 1 (safety), Phase 2 (preliminary efficacy and dosage), and Phase 3 (large-scale efficacy and safety)98101105 - The company's CDMO facility is subject to FDA regulation and must comply with cGMPs, as well as environmental, health, and safety laws118120 - The Orphan Drug Act may provide benefits like market exclusivity for products treating rare diseases affecting fewer than 200,000 individuals in the U.S112 Human Capital As of June 30, 2021, the company had 75 employees and plans to expand its workforce in Fiscal 2022 to support growth objectives Employee Headcount as of June 30, 2021 | Entity | Employee Count | | :--- | :--- | | iBio, Inc. | 18 | | iBio CDMO | 57 | | Total | 75 | - The company plans to hire additional staff in Fiscal 2022 to meet growth objectives for its therapeutic, vaccine, and RBP product development121 - Compensation programs include competitive wages, incentive pay, and a 401(k) plan with a 100% match on employee contributions up to 5% of compensation130 Risk Factors The company faces substantial risks including a history of financial losses, the need for additional capital, uncertainties in product development, and reliance on third parties - The company has a history of significant losses, with a net loss of $23.2 million in FY 2021 and an accumulated deficit of $173.6 million as of June 30, 2021142 - The business depends on the success of its four product candidates, which are all in early stages of pre-clinical development and require significant testing before seeking regulatory approval165 - The company's license agreement with the University of Pittsburgh for its lead fibrosis candidate, IBIO-100, contains specific milestone deadlines that it may not meet, potentially jeopardizing the license247 - Operations are reliant on a single manufacturing facility in Texas, making the company vulnerable to disruptions from natural disasters, equipment failure, or other unforeseen events265 - The company may not have a sufficient number of authorized shares of common stock for future equity financings or strategic transactions, which could impede growth155156 Property iBio's primary operations are conducted at a 130,000-square-foot leased manufacturing facility in Texas and a newly leased R&D facility in California - The main facility is a 130,000 sq. ft. Class A life sciences building in Bryan, Texas, leased until 2050302 - The Bryan facility lease requires an annual base rent of $2.1 million, plus a tiered percentage of gross sales, with minimums applicable if sales targets are not met303306 - A new lease was signed in September 2021 for approximately 11,383 sq. ft. of lab and office space in San Diego, CA, to be used for R&D307 Legal Proceedings In May 2021, iBio settled its litigation with Fraunhofer USA, Inc, resulting in a total cash payment of $28 million to the company - On May 4, 2021, the company entered into a settlement agreement with Fraunhofer USA, Inc. to resolve all claims in a lawsuit initiated in March 2015308 - The settlement terms include cash payments to iBio totaling $28 million, with an estimated net cash recovery of approximately $10.2 million after legal fees and expenses309 PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on the NYSE American under the symbol "IBIO", and the company has never paid cash dividends on its common stock - The company's common stock trades on the NYSE American under the symbol 'IBIO'314 - No cash dividends have ever been declared or paid on common stock315 - Accrued dividends on the Preferred Tracking Stock totaled approximately $1,131,000 at June 30, 2021316 Management's Discussion and Analysis of Financial Condition and Results of Operations For fiscal year 2021, revenue increased 50% to $2.4 million, but a sharp rise in operating expenses led to a net loss of $23.2 million, while the cash position strengthened to $97.0 million Results of Operations In fiscal 2021, revenue grew 50%, but surging R&D and G&A expenses widened the operating loss, partially offset by a significant legal settlement Fiscal Year 2021 vs. 2020 Results of Operations (in millions) | Metric | FY 2021 | FY 2020 | Change | | :--- | :--- | :--- | :--- | | Revenue | $2.4 | $1.6 | +50% | | R&D Expenses | $10.0 | $3.6 | +$6.4 | | G&A Expenses | $22.0 | $11.4 | +$10.6 | | Other Income (Expense) | $7.9 | ($2.4) | +$10.3 | - The increase in Other Income was primarily attributable to $10.2 million in settlement income from the Fraunhofer IP litigation327 Liquidity and Capital Resources As of June 30, 2021, the company had $97.0 million in cash and investments, which is deemed sufficient to fund operations through the first quarter of calendar year 2023 - Cash and investments in debt securities totaled approximately $97.0 million as of June 30, 2021330 - Management believes current cash is sufficient to support operations through the first quarter of calendar year 2023330 Cash Flow Summary (in millions) | Activity | FY 2021 | FY 2020 | | :--- | :--- | :--- | | Net Cash Used in Operating | ($30.1) | ($13.3) | | Net Cash Used in Investing | ($26.5) | ($1.1) | | Net Cash Provided by Financing | $78.8 | $65.2 | - During fiscal 2021, the company raised approximately $68.8 million through an "At-The-Market" facility with UBS and approximately $41.5 million through offerings with Cantor Fitzgerald334 Controls and Procedures Management concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective as of June 30, 2021 - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2021346 - Based on an assessment using the 2013 COSO Framework, management concluded that internal control over financial reporting was effective as of June 30, 2021350351 - As a smaller reporting company, this report does not include an attestation report from the independent registered public accounting firm regarding internal control over financial reporting353 Other Information On September 23, 2021, the Board of Directors approved a significant cash bonus and stock option grant for the Chairman and CEO - On September 23, 2021, the Board awarded CEO Thomas Isett a cash bonus of $509,000 and an option to purchase 2,000,000 shares of common stock at an exercise price of $1.17 per share354 PART III Information required for Part III is incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders - Information for Items 10 through 14 is incorporated by reference from the definitive proxy statement for the 2021 Annual Meeting of Stockholders356 PART IV This part contains the list of exhibits filed with the Form 10-K, including governance documents, material contracts, and certifications Exhibits and Financial Statement Schedules This section provides an index of all exhibits filed with or incorporated by reference into the Annual Report, including material contracts and governance documents - Lists all exhibits filed with the Form 10-K, including corporate governance documents, material agreements, and management compensation plans368372375 Financial Statements Consolidated Financial Statements For fiscal year 2021, total assets grew significantly to $147.0 million, while the net loss widened to $23.2 million due to higher operating expenses Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $77,404 | $55,112 | | Total Assets | $146,968 | $94,189 | | Total Liabilities | $38,400 | $37,582 | | Total Stockholders' Equity | $108,568 | $56,607 | Consolidated Statement of Operations Highlights (in thousands) | Account | FY 2021 | FY 2020 | | :--- | :--- | :--- | | Revenues | $2,371 | $1,638 | | Gross Profit | $909 | $935 | | Operating Loss | ($31,111) | ($14,003) | | Net Loss Attributable to iBio, Inc. | ($23,207) | ($16,439) | | Loss Per Share | ($0.12) | ($0.61) | Consolidated Statement of Cash Flows Highlights (in thousands) | Account | FY 2021 | FY 2020 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($30,064) | ($13,345) | | Net Cash Used in Investing Activities | ($26,478) | ($1,154) | | Net Cash Provided by Financing Activities | $78,835 | $65,192 | | Net Increase in Cash | $22,292 | $50,691 | Notes to Consolidated Financial Statements The notes detail the company's accounting policies, segment information, lease obligations, significant equity transactions, and the financial impact of a major legal settlement - The company's revenue is primarily from fixed-fee contracts, recognized at a point in time upon completion of deliverables; in FY2021, $2.371 million was recognized at a point in time432434 - The company's finance lease for its Bryan, TX facility has a remaining term of 28.58 years with a weighted average discount rate of 7.606%; total future minimum lease payments amount to $79.2 million494495 - In May 2021, the company settled litigation with Fraunhofer USA, resulting in a settlement income of $10.2 million and a total settlement receivable of the same amount575577 - Subsequent to year-end, in August 2021, the company entered into a collaboration, license, and stock purchase agreement with RubrYc Therapeutics, investing $5 million612621