ESSA Pharma (EPIX) - 2024 Q2 - Quarterly Report

Financial Performance - As of March 31, 2024, ESSA Pharma Inc. reported cash and cash equivalents of $91,683,074, an increase from $33,701,912 as of September 30, 2023, representing a growth of approximately 172%[26] - For the three months ended March 31, 2024, the company incurred a net loss of $8,989,535, compared to a net loss of $7,060,239 for the same period in 2023, reflecting an increase in loss of approximately 27%[28] - The company reported a basic and diluted loss per common share of $0.20 for the three months ended March 31, 2024, compared to $0.16 for the same period in 2023, an increase of 25%[28] - Cash flows from operating activities for the six months ended March 31, 2024, were $(13,604,966), compared to $(10,387,656) for the same period in 2023, indicating a worsening cash flow situation[29] - Comprehensive loss for the six months ended March 31, 2024, was $14,934,482, compared to a loss of $13,831,809 for the same period in 2023, reflecting an increase of approximately 8%[215] - The company has never been profitable and expects to incur losses for the foreseeable future as it continues product development and seeks regulatory approvals[215] Research and Development - Research and development expenses for the six months ended March 31, 2024, were $11,554,751, up from $9,825,113 in the same period of 2023, indicating a rise of about 17.6%[28] - The Company reported research and development expenses of $3.2 million for the three months ended March 31, 2024, compared to $754,000 for the same period in 2023, indicating a significant increase[61] - Clinical costs related to the Phase 1 clinical trial of masofaniten (EPI-7386) amounted to $4,840,408 for the six months ended March 31, 2024, compared to $2,003,198 in 2023, representing a significant increase of approximately 142%[216] - The company is focused on developing small molecule drugs for the treatment of prostate cancer, with no products currently in commercial production or use as of March 31, 2024[33] - The company is focused on developing novel therapies for prostate cancer, specifically targeting the androgen receptor's N-terminal domain with its investigational compound masofaniten (EPI-7386)[81] Assets and Liabilities - Total assets decreased to $137,896,175 from $149,122,131, a decline of about 7.5%[26] - As of March 31, 2024, the accumulated deficit increased to $(194,415,216) from $(179,461,359) as of September 30, 2023, reflecting a rise of approximately 8.3%[26] - Total accounts payable and accrued liabilities increased to $4.1 million as of March 31, 2024, from $3.4 million as of September 30, 2023[48] - The balance of prepaid expenses rose to $1.2 million as of March 31, 2024, compared to $585,420 as of September 30, 2023[47] - Working capital as of March 31, 2024, was $133,123,568, down from $140,337,994 at the end of December 2023, indicating a decrease of about 5%[214] Investments and Financing - The company generated net cash provided by investing activities of $70,741,345 for the six months ended March 31, 2024, compared to $(2,371,351) in the same period of 2023, showing a significant improvement[29] - The Company filed a prospectus supplement to sell up to $50 million in Common Shares under an ATM Sales Agreement with Jefferies LLC[143] - The Company has recognized share-based payments expense totaling $1,922,124 for the six months ended March 31, 2024[65] Clinical Trials and Efficacy - The Company is advancing masofaniten (EPI-7386) through two clinical trials, including a combination trial with enzalutamide, to assess safety and drug-drug interactions[108] - The combination study of masofaniten with enzalutamide is ongoing, with initial results showing 88% of evaluable patients achieving PSA50 and 63% achieving PSA <0.2 ng/mL[132] - The Phase 1 clinical trial of masofaniten (EPI-7386) has completed enrollment for the monotherapy component and is actively enrolling for the combination component with abiraterone acetate and apalutamide[109] - The Phase 1/2 study evaluating masofaniten in combination with enzalutamide is currently enrolling patients, with updated dose escalation data presented at ESMO 2023[140] - The Company presented initial clinical data showing masofaniten's favorable safety profile and preliminary anti-tumor activity in heavily pretreated mCRPC patients[149] Regulatory Environment - The regulatory environment requires compliance with stringent safety, efficacy, and quality standards, which necessitates substantial time and financial resources for drug approval[187] - The FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of the drug, with a single trial potentially sufficient in rare cases[199] - The cost of preparing and submitting a New Drug Application (NDA) exceeds $2,500,000, with significant annual user fees applicable[204] - The FDA conducts a preliminary review of an NDA within 60 days and aims for most applications to be reviewed within ten months from the date of filing[201] Intellectual Property - ESSA's competitive position is strengthened by its unique approach to prostate cancer treatment, targeting AR-NTD, which may bypass resistance pathways associated with current therapies[177] - The Company has a strong intellectual property position with 72 issued patents, including 20 U.S. patents, covering multiple structural classes of compounds[184]