Tonix Pharmaceuticals (US:TNXP)2021-11-08 21:34Product Development - Tonix's lead candidate for COVID-19, TNX-1800, is a live virus vaccine based on the recombinant pox vaccine platform, aiming to elicit a T cell response for long-lasting protection [145]. - The most advanced CNS product candidate, TNX-102 SL, is in mid-Phase 3 development for fibromyalgia, with positive results reported from the Phase 3 RELIEF study [152]. - TNX-2100, an in vivo diagnostic skin test for measuring SARS-CoV-2 exposure and T cell immunity, is expected to initiate a first-in-human clinical study in Q4 2021 [146]. - The company plans to develop TNX-102 SL as a potential treatment for Long COVID, with a Phase 2 study expected to begin in H1 2022 following IND clearance [154]. - Tonix has expanded its research collaboration with Columbia University to understand immune responses to SARS-CoV-2, which will aid in tailoring vaccines and therapeutics [151]. - TNX-1300, a treatment for cocaine intoxication, has received Breakthrough Therapy designation from the FDA and is expected to initiate a Phase 2 safety study in Q4 2021 [155]. - The Advanced Development Center in Dartmouth, Massachusetts, is under renovation and expected to be operational in H1 2022, focusing on clinical scale manufacturing of live-virus vaccines [160]. - Tonix's immunology portfolio includes a small molecule antiviral for acute COVID-19 and biologics for organ transplant rejection and autoimmune diseases [144]. Financial Performance - Research and development expenses for Q3 2021 were $13.1 million, a 49% increase from $8.8 million in Q3 2020 [164]. - General and administrative expenses for Q3 2021 were $5.5 million, a 72% increase from $3.2 million in Q3 2020 [165]. - Net loss for Q3 2021 was $18.5 million, compared to a net loss of $12 million in Q3 2020 [166]. - Research and development expenses for the nine months ended September 30, 2021, were $46.5 million, a 93% increase from $24.1 million in the same period of 2020 [167]. - General and administrative expenses for the nine months ended September 30, 2021, were $16.3 million, a 73% increase from $9.4 million in the same period of 2020 [168]. - Net loss for the nine months ended September 30, 2021, was $62.7 million, compared to a net loss of $33.4 million in the same period of 2020 [169]. - The company anticipates fluctuations in results of operations due to the progress of research and development efforts and regulatory submission outcomes [163]. Funding and Capital Management - As of September 30, 2021, the company had working capital of $183.1 million, primarily consisting of cash and cash equivalents of $183.0 million [191]. - For the nine months ended September 30, 2021, the company used approximately $53.1 million in operating activities, an increase from $34.7 million in the same period of 2020, primarily due to increased research and development activities [191]. - The company raised net proceeds of $168.7 million from financing activities for the nine months ended September 30, 2021, compared to $83.2 million in the same period of 2020 [191]. - The company has the ability to obtain additional funding through public or private financing or collaborative arrangements with strategic partners [193]. - The company sold approximately 42.8 million shares of common stock under the 2021 Purchase Agreement for gross proceeds of approximately $29.5 million during the nine months ended September 30, 2021 [200]. Milestone Payments and Agreements - The company entered into an exclusive License Agreement with OyaGen for an antiviral inhibitor of SARS-CoV-2, with a license fee in the low-seven digits and 2,752,294 shares valued at $3.0 million [171][172]. - The company has agreed to pay Columbia $4.1 million in milestone payments related to TFF2 Products upon achieving certain milestones [178]. - The company has agreed to pay approximately $3.4 million in milestone payments to WSU upon achieving specified development, regulatory, and sales milestones [189]. - As of September 30, 2021, no milestone payments have been accrued or paid in relation to the agreements with TRImaran or WSU [187][189]. Stock and Compensation - Stock-based compensation expense for the three-month period ended September 30, 2021, was $2.3 million, with $1.6 million related to General and Administration and $0.7 million to Research and Development [225]. - The company had approximately $16.5 million of total unrecognized compensation cost related to non-vested awards as of September 30, 2021, expected to be recognized over a weighted average period of 2.11 years [227]. - The company recognized stock-based compensation expense of $5.6 million for the nine-month period ended September 30, 2021, compared to $2.0 million for the same period in 2020 [226]. Operational Infrastructure - The company is establishing infrastructure to support pandemic preparedness, including an infectious disease R&D Center and a Commercial Manufacturing Center, with the R&D Center operational since October 2021 [160]. - The company has outstanding commitments of approximately $41.2 million for future work with various contract research organizations as of September 30, 2021 [231]. - A contingent non-binding Purchase and Sales Agreement for a property in Maryland was entered into for $17.5 million, closing on October 1, 2021 [231]. - The 2020 Employee Stock Purchase Plan allows eligible employees to purchase up to 300,000 shares, with 129,048 shares available for future sales as of September 30, 2021 [229]. Expense Trends - Total research and development expenses for the nine months ended September 30, 2021, were $46,542,000, an increase of $22,482,000 (93.5%) compared to $24,060,000 in 2020 [238]. - Direct expenses for TNX-1800 increased by $3,815,000 (166.9%) from $2,285,000 in 2020 to $6,100,000 in 2021 [238]. - Direct expenses for TNX-1300 increased by $4,011,000 (363.5%) from $1,105,000 in 2020 to $5,116,000 in 2021 [238]. - Direct expenses for TNX-1500 increased by $2,268,000 (422.0%) from $536,000 in 2020 to $2,804,000 in 2021 [238]. - Direct expenses for TNX-3500 increased by $4,986,000 (3640.1%) from $137,000 in 2020 to $5,123,000 in 2021 [238]. - Internal staffing, overhead, and other expenses rose by $4,764,000 (124.7%) from $3,820,000 in 2020 to $8,584,000 in 2021 [238]. Compliance and Controls - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended September 30, 2021 [248]. - The company concluded that its disclosure controls and procedures are effective as of September 30, 2021, providing reasonable assurance of compliance with SEC rules [247].