HCW Biologics(US:HCWB)2024-05-15 20:45HCW Biologics First Quarter 2024 Report Overview and Business Highlights HCW Biologics completed HCW9218 Phase 1/1b enrollment, advancing to Phase 2 for ovarian cancer, expanding into age-related skin diseases, while preparing an HCW9302 IND and securing financing - Enrollment completed for two HCW9218 clinical trials in solid tumors and pancreatic cancer, establishing the recommended Phase 2 dose (RP2D)35 - HCW9218 is planned to advance into a sponsored Phase 2 trial for advanced ovarian cancer with UPMC, with enrollment anticipated in H2 20245 - The company plans to expand its clinical focus to age-related indications, including skin diseases, for potentially faster data readouts3 - An Investigational New Drug (IND) application for HCW9302 in an autoimmune disease is being prepared, with submission planned for Q3 20245 - $6.1 million raised in 2024 through private placements and senior secured notes, with management planning a bridge financing of up to $10.0 million via Secured Notes5 First Quarter 2024 Financial Results Q1 2024 revenues significantly increased, R&D expenses decreased, while G&A expenses surged due to legal costs, resulting in a higher net loss Q1 2024 vs. Q1 2023 Financial Performance | Financial Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Revenues | $1.1 million | $41,883 | +2550% | | R&D Expenses | $2.1 million | $2.3 million | -6% | | G&A Expenses | $6.0 million | $3.1 million | +94% | | Net Loss | ($7.5 million) | ($5.1 million) | +47% | - Revenues were exclusively from licensed molecule sales to Wugen, reflecting recovery from prior program changes and manufacturing delays7 - The 94% increase in G&A expenses was primarily due to higher legal costs from the ongoing Altor/NantCell arbitration7 - R&D expenses decreased by 6% due to a shift in preclinical activities, with lower IND-enabling study costs for HCW9302 partially offset by increased HCW9101 manufacturing costs7 Financial Guidance and Contingencies The company faces going concern doubts without additional funding, plans bridge financing, and manages significant legal expenses from ongoing arbitration - Substantial doubt exists regarding the company's ability to continue as a going concern for at least 12 months without additional funding8 - Management is pursuing a bridge financing of up to $10.0 million in Secured Notes, with $3.6 million already issued in 2024, to fund clinical development9 - The company is involved in a consolidated arbitration with Altor/NantCell concerning trade secret misappropriation, incurring significant and material legal expenses expected through Q3 20241012 - A reasonable estimate of possible loss from the Altor/NantCell arbitration cannot be made, thus no accrual has been recorded10 Financial Statements Unaudited Statements of Operations Q1 2024 operations resulted in a $7.5 million net loss, or ($0.20) per share, driven by $614,747 net revenues and $8.1 million in operating expenses, an increase from the prior year Q1 2024 Statement of Operations Summary | Line Item | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net Revenues | $614,747 | $12,533 | | Total Operating Expenses | $8,108,410 | $5,373,103 | | Loss from Operations | ($7,493,663) | ($5,360,570) | | Net Loss | ($7,468,061) | ($5,070,686) | | Net Loss Per Share | ($0.20) | ($0.14) | Condensed Balance Sheets As of March 31, 2024, total assets were $30.4 million including $4.1 million cash, total liabilities increased to $21.7 million, and total stockholders' equity decreased to $8.7 million Balance Sheet Summary | Account | March 31, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,084,076 | $3,595,101 | | Total Current Assets | $6,208,650 | $6,404,187 | | Total Assets | $30,427,656 | $28,513,660 | | Total Current Liabilities | $13,412,606 | $8,747,625 | | Total Liabilities | $21,687,055 | $15,051,943 | | Total Stockholders' Equity | $8,740,601 | $13,461,717 |