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Lipocine(LPCN) - 2021 Q3 - Quarterly Report
LipocineLipocine(US:LPCN)2021-11-10 13:00

Financial Performance - As of September 30, 2021, the company had an accumulated deficit of $185.3 million, with a net loss of $13.3 million for the nine months ended September 30, 2021, compared to $16.5 million for the same period in 2020[89]. - The company has not generated any revenues from product sales and does not expect to do so until regulatory approval is obtained for TLANDO or other products[88]. - The company recorded a litigation settlement expense of $4.0 million during the nine months ended September 30, 2021, related to the Global Agreement with Clarus[162]. - The company has generated $28.1 million in revenue from license fees, royalties, and government grants since inception through September 30, 2021[138]. - Cash used in operating activities for the nine months ended September 30, 2021, was $13.4 million, compared to $11.6 million for the same period in 2020[178]. - Cash used in investing activities increased significantly to $34.1 million in 2021 from $1.5 million in 2020[177]. - Financing activities provided $27.8 million in cash during the nine months ended September 30, 2021, compared to $16.3 million in 2020[177]. - The company anticipates needing to raise additional capital to support operations, including ongoing clinical studies and regulatory compliance[174]. Product Development and Regulatory Approvals - The company received tentative approval from the FDA for TLANDO on December 8, 2020, but final approval is contingent upon the expiration of Clarus Therapeutics' exclusivity period for JATENZO®, which ends on March 27, 2022[84][94]. - TLANDO's resubmission to the FDA will be a Class 1 resubmission, which includes a two-month review goal period[84][94]. - The FDA granted Fast Track Designation to LPCN 1144 for non-cirrhotic NASH, aimed at expediting its development and review[119]. - The FDA granted tentative approval for TLANDO as a testosterone replacement therapy (TRT) in adult males, but final approval is pending until March 27, 2022[140]. - The company plans to initiate a Phase 2 proof-of-concept study for LPCN 1148 in male cirrhotic subjects, targeting approximately 48 to 60 patients[126]. - LPCN 1107 aims to become the first oral product indicated for the reduction of preterm birth risk, addressing a significant unmet need as 11.7% of U.S. pregnancies result in preterm birth[129]. - The FDA has granted orphan drug designation to LPCN 1107, qualifying the company for various development incentives[134]. Clinical Trials and Research - LPCN 1144, currently in Phase 2 testing, showed robust liver fat reduction and improvement in liver injury markers in the LiFT clinical study, with positive results released in January and August 2021[87]. - The LiFT Phase 2 clinical study enrolled 56 male subjects with confirmed non-cirrhotic NASH, showing significant liver fat reduction at Week 12: Treatment A had a -7.7% change and Treatment B had a -9.2% change compared to placebo's -1.7%[106][110]. - In subjects with liver fat ≥ 5% at baseline, Treatment A and B showed a mean relative liver fat reduction of -40.0% and -46.9%, respectively, both statistically significant[111]. - 66.7% of subjects in Treatment A and 63.2% in Treatment B achieved over 30% relative reduction in liver fat at Week 12, compared to 15.8% in the placebo group[112]. - Both treatment arms of LPCN 1144 met the pre-specified regulatory endpoint of NASH resolution with no worsening of fibrosis, with 54% and 69% responders in Treatments A and B, respectively[114]. - A previous 16-week POC study showed that 48% of treated NAFLD subjects achieved resolution, with a mean liver fat reduction of 55% in this group[120]. - TLANDO XR, a next-generation oral testosterone product, completed a Phase 2b study, identifying the Phase 3 dose with good dose-response relationships observed[121]. - TLANDO XR was well tolerated in clinical studies, with no severe or serious drug-related adverse events reported[121]. Licensing and Agreements - The Antares License Agreement includes an initial payment of $11.0 million and potential milestone payments of up to $160.0 million, along with tiered royalty payments ranging from mid-teens to 20% of net sales of TLANDO in the U.S.[96]. - The company entered into the Antares License Agreement, granting Antares exclusive rights to develop and commercialize TLANDO, with an initial payment of $11.0 million and potential milestone payments of up to $160.0 million[165]. - The company is exploring licensing LPCN 1107 to a third party, although no agreements have been finalized[133]. Financial Position and Expenses - Research and development expenses totaled approximately $126.3 million since inception through September 30, 2021[139]. - Research and development expenses for the three months ended September 30, 2021, were $2,366,521, a decrease of $121,340 compared to $2,487,861 in 2020[149]. - Total research and development expenses for the nine months ended September 30, 2021, were $5,411,748, down from $7,268,599 in 2020, reflecting a decrease of $1,856,851[156]. - General and administrative expenses for the three months ended September 30, 2021, were $1,222,146, a decrease of $665,049 from $1,887,195 in 2020[149]. - The company expects research and development expenses to increase in the future as ongoing clinical studies are completed, including studies for LPCN 1144, LPCN 1148, LPCN 1154, and LPCN 1107[144]. - The company anticipates a decrease in general and administrative expenses due to reduced legal fees from the settlement with Clarus, although this may be offset by increases in other areas[147]. Cash Flow and Capital Management - As of September 30, 2021, the company had $38.7 million in unrestricted cash, cash equivalents, and marketable investment securities, compared to $19.7 million at December 31, 2020[164]. - The gross proceeds from the January 2021 public offering were approximately $28.7 million, after deducting underwriter fees and expenses of $1.9 million[166]. - The company had no capital expenditures for the nine months ended September 30, 2021, and 2020[180]. - The net proceeds from the sale of 16,428,571 shares of common stock in January 2021 generated $26.8 million[182]. - The company received a PPP loan of $234,000 at a 1.0% interest rate, which was fully forgiven by the Small Business Administration[167]. - The company received a PPP Loan of approximately $234,000, which was forgiven as per the terms of the CARES Act[185]. Risk Factors - The company is subject to various risks regarding the realization of milestone and royalty payments from the Antares License Agreement[165]. - The fair value of the investment portfolio is subject to interest rate risk, but a hypothetical ten percent increase in interest rates would have an insignificant impact on the consolidated financial statements[191]. - The company does not hedge interest rate exposures and invests in highly liquid, investment-grade securities[191]. - A one percent increase in the prime rate would result in a $10,000 increase in interest expense, while a one percent decrease would lead to an $11,000 decrease[192].