On February 9, 2022 Purple Biotech Ltd. ("Purple Biotech", or the "Company") (NASDAQ/TASE: PPBT), a clinical-stage company developing first-in-class, effective and durable therapies by overcoming tumor immune evasion and drug resistance, reported financial results for the year and the six months ended December 31, 2021 (Press release, Purple Biotech, FEB 9, 2022, View Source [SID1234607877]).

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"We achieved significant progress in the advancement of our promising oncology pipeline during this year with notable data releases in both of our lead candidates," said Gil Efron, President and Chief Financial Officer of Purple Biotech. "For NT219, we are currently treating patients in the fourth dose cohort monotherapy arm of the ongoing Phase 1/2 clinical trial and have initiated the first dose level in the combination arm of the study together with cetuximab for patients with squamous cell carcinoma of head and neck (SCCHN). For CM24, we are about to complete dose escalation of the phase 1b/2 of the study and will soon initiate the expansion arms of the study in non-small-cell lung cancer (NSCLC) and pancreatic cancer. We are encouraged by the preliminary data reported from the first patients treated in each of the studies released in 2021 and are planning to expand both programs to additional promising indications in 2022."

"We continue to be focused on development of our robust oncology programs, supported by a strong balance sheet. With $47.4 million in cash, cash equivalent, short and long-term deposits at the end of December 2021, our cash runway extends into 2024," concluded Mr. Efron.

Financial Results for the Year Ended December 31, 2021

Research and Development Expenses were $11.8 million, an increase of $4.6 million, or 64%, compared to $7.2 million in the same period of 2020. The increase was due to expenses related to the ongoing NT219 and CM24 clinical trials, including the manufacturing of drug for the studies.

Selling, General and Administrative Expenses were $6.1 million, compared to $6.0 million in the same period of 2020, an increase of $0.1 million.

Operating Loss was $17.9 million, an increase of $4.7 million, or 36%, compared to $13.2 million in the same period of 2020. The increase was mainly due to the increase in research and development expenses.

On a non-IFRS basis (as reconciled below), adjusted operating loss was $15.8 million, an increase of $5.2 million, compared to $10.6 million in the same period of 2020, mainly due to the increased expenses for clinical studies and manufacturing of drug for these studies.

Net Loss for 2021 was $18.5 million, or $1.05 per basic and diluted share, compared to a net loss of $28 million, or $2.45 per basic and diluted share, in 2020. The decrease in net loss was mainly due to $15.7 million in expenses related to a change in the fair value of derivatives, offset by an increase of $4.7 million in operating expenses. Adjusted net loss for the year was $15.7 million, an increase from $10.4 million in the full year of 2020.

As of December 31, 2021, Purple Biotech had cash and cash equivalents and short- and long-term deposits of $47.4 million, compared to $60.8 million on December 31, 2020. The Company believes that its cash position will provide sufficient resources to support its currently anticipated ongoing needs into 2024.

Discontinued Operation. As previously reported, COVID-19 adversely impacted the launch of Consensi in the United States. In October 2021, the Company agreed, together with its then U.S distributor for Consensi, Coeptis Pharmaceuticals Inc., to terminate the distribution agreement. Despite our efforts to identify an alternative distributor for Consensi in the U.S., we concluded that commercialization of Consensi, both in the U.S market and elsewhere, is not likely to generate significant revenue and achieve profitability in the near term. In order to reduce the expenses involved in maintaining the product, it was concluded to discontinue Consensi activities and to allocate the funds to our core oncology activities. In parallel, the agreements with Kuhnil Pharmaceuticals Inc.’s for the territory of South Korea and Hebei Changshan Biochemical Pharmaceutical Co., Ltd. for the territory of China were terminated. Consequently, the Company is reporting Consensi as a discontinued operation. Loss from discontinued operation in 2021 was $0.6 million compared to profit from discontinued operation of $0.6 million in 2020. The decrease in profit is mainly due to a decrease in Consensi revenues of $1.0 million generated in 2020.

Financial Results for the Six Months Ended June 30, 2021

Research and Development Expenses were $4.9 million, an increase of $0.6 million, or 14%, compared to $4.3 million in the same period of 2020. The increase was due to expenses related to the CM24 clinical trials that started in the first half of 2021.

Selling, General and Administrative Expenses were $2.9 million, compared to $3.9 million in the same period of 2020, a decrease of $1 million. The decrease was mainly due to a $0.9 million decrease in employee equity-based compensation (ESOP) costs.

Operating Loss was $7.8 million, a decrease of $0.5 million, or 6%, compared to $8.3 million in the same period of 2020.

On a non-IFRS basis (as reconciled below), adjusted operating loss was $7.1 million, a decrease of $0.7 million, compared to $6.4 million in the same period of 2020, mainly to decrease in Selling, General and Administrative Expenses offset by increase in R&D expenses.

Net Loss for the second half of 2021 was $8.3 million, or $0.47 per basic and diluted share, compared to a net loss of $0.2 million, or $0.01 per basic share and $0.47 per diluted share, in the second half of 2020. The increase in net loss was mainly due to decrease of $7.9 million in income related to a change in the fair value of derivatives, offset by an increase of $0.5 million in operating expenses and decrease of $1 million in revenues. Adjusted net loss for the second half of 2021 was $7.0 million, an increase from $6.3 million in the second half of 2020.