On May 12, 2022 iBio, Inc. (NYSEA:IBIO) ("iBio" or the "Company"), a developer of next-generation biopharmaceuticals and pioneer of the sustainable FastPharming Manufacturing System, reported its financial results for the fiscal quarter ended March 31, 2022 and provides a corporate update (Press release, iBioPharma, MAY 12, 2022, View Source [SID1234614339]).

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"In this quarter, we took multiple steps forward towards becoming a clinical-stage company – a potentially major value inflection point," said Tom Isett, Chairman & CEO of iBio. "We anticipate there may be a notable medical and business opportunity for our nucleocapsid-based COVID-19 vaccine candidate, as the durability and efficacy of the existing spike-based vaccines are called into question at the same time as new waves of variants are forecasted to arrive. Concurrently, we are rapidly advancing our lead immuno-oncology asset, the IL-2-sparing anti-CD25 antibody IBIO-101, with plans to be in the clinic in calendar 2023. In addition, our early-stage drug discovery programs are all advancing well, and we also continue to demonstrate the quality of our FastPharming System and potency-enhancing capability of our GlycaneeringSM Technology. Altogether, we believe that we are well-positioned to continue executing our growth strategy."

Third Quarter and Recent Business Developments:

BIOPHARMACEUTICALS

Vaccines

Investigational New Drug ("IND")-Enabling challenge studies of IBIO-202, the Company’s second-generation vaccine candidate for multi-variant COVID-19 disease, are underway and proceeding as planned. Assuming favorable study outcomes, iBio plans to file an IND application with the U.S. Food and Drug Administration ("FDA") before the end of calendar 2022.
Separately, iBio continues to evaluate the feasibility of intradermal delivery of its vaccine candidates, including its SARS-CoV-2 nucleocapsid antigen, through its work with a leading innovator of microarray patch systems.
Data analysis from the immunogenicity study of IBIO-400 has confirmed intramuscular injection is the preferred route of administration for the Company’s vaccine candidate for Classical Swine Fever. Updated efficacy protocols, manufacturing processes, and validation plans were submitted to the U.S. Department of Agriculture ("USDA") during the quarter to enable manufacturing clearance of pre-license lots for studies material to licensure. Given that regulatory review can be extended for first time applicants, iBio is estimating a response from the USDA on the submission within approximately 12 months.
Therapeutics

iBio continues to develop its IL-2 sparing anti-CD25 antibody, IBIO-101, on the FastPharming Platform. Comparability studies have demonstrated that by applying the Company’s Glycaneering Technology, the FastPharming System produces a potent, high-quality, afucosylated molecule that is equivalent to the same version of the antibody produced with traditional mammalian cell culture manufacturing methods.
The Company announced today that it has completed the Lead Optimization stage in the development of IBIO-101 and has entered the IND-Enabling stage. An IND for IBIO-101 is expected before the end of Q2 of calendar 2023.
RubrYc Therapeutics ("RubrYc") achieved a technology validation milestone with a third party during the quarter. As a result, iBio acquired approximately 1.0 million additional shares of RubrYc for $2.5 million per the existing Stock Purchase Agreement.
Initial data from the evaluation of the potential anti-cancer effects of the Company’s endostatin E4 molecule in combination with other cancer treatments upon fibrotic tumors is expected in the second half of calendar year 2022.
BIOPROCESS

Pursuant to a second Statement of Work ("SOW") under an existing Master Joint Development Agreement between iBio and Safi Biosolutions, Inc., iBio will assist Safi in its efforts related to the USU 4D Bio3 On-Demand Blood program, funded by the Defense Health Program (DHP), by utilizing the FastPharming system to make one of the most critical reagents used in the production of Safi’s manufactured Red Blood Cells (mRBCs).
iBio recognized $1.8 million in royalty revenue from the license of its plant-based drug manufacturing intellectual property to Fraunhofer USA, Inc. ("Fraunhofer USA"). It also received the first of two $5.1 million payments from Fraunhofer USA related to the settlement of the intellectual property dispute.
Third Quarter and Recent Corporate Developments:

On January 31, 2022, the Company reconvened its 2021 Annual Meeting to allow more of its stockholders to consider and vote on Proposal 4 (Reverse Stock Split) and Proposal 5 (Change in Authorized Shares). Although approximately 65% and 68% of the votes received were in favor of Proposal 4 and Proposal 5, respectively, the total number of shares voting in favor were insufficient for them to pass.
Today, the Company filed its preliminary proxy materials with the U.S. Securities and Exchange Commission ("SEC") in connection with a Special Meeting of Stockholders (the "Special Meeting") to approve two similar proposals (Reverse Stock Split and Change in Authorized Shares) (the "Proposals").
The Company has entered into a securities purchase agreement with a certain accredited investor for the issuance and sale of 1,000 shares of Series 2022 Convertible Preferred Stock, $0.001 par value per share (the "Preferred Stock"), at a price of $0.27 per share. The Preferred Stock permits the holder to vote at the Special Meeting, on the Reverse Stock Split proposal, with the holders of the common stock as a single class, with each share of Preferred Stock being entitled to 5,000,000 votes per share, provided that any votes cast by the Preferred Stock with respect to the Proposal must be voted in the same proportion as the aggregate shares of common stock are voted on the Proposal. At its sole discretion, the Company’s Board of Directors may convert the Preferred Stock to common stock at a conversion ratio of 1:1.
"The increasing prevalence of brokerage firms opting to forego discretionary or proportionate voting of the shares held by them in street name has made it significantly more difficult for companies like iBio with a large retail stockholder base, to secure affirmative votes from a majority of the outstanding shares entitled to vote," said Mr. Isett. "Over the past few weeks, we have been exploring ways to overcome that structural impediment to implementing the will of our voting stockholders and believe that the Preferred Stock placement provides an elegant and validated solution; serving to amplify, but not fundamentally alter, the underlying vote."

Financial Results:

Revenues for the third quarter ended March 31, 2022, were approximately $1.9 million, an increase of approximately $1.1 million, or 154%, compared to $0.8 million in the fiscal quarter ended March 31, 2021. As is commonplace for early-stage Pharma Services companies, the Company experiences significant quarter-to-quarter revenue variability, driven by factors such as the number and size of customer contracts, as well as the timing of revenue recognition.

R&D and G&A expenses for the third quarter of fiscal 2022 increased 157% and 60%, respectively, over the comparable period in fiscal 2021. This reflects the Company’s growing investments in its pipeline, platform technologies, employees, and related infrastructure. iBio anticipates this trend continuing, however, the rate of growth is expected to moderate over time.

The Company’s consolidated net loss for the third quarter ended March 31, 2022, was approximately $12.4 million, or $0.06 per share, compared to a net loss of approximately $7.7 million, or $0.04 per share, in the same period of 2021.

As of March 31, 2022, the Company had cash and cash equivalents plus debt securities of approximately $48.6 million, excluding $5.9 million of restricted cash. Based on management assumptions, including assumptions regarding the sale-leaseback of the facility in Bryan, we continue to believe that we have adequate cash to support our activities through September 30, 2023.

Webcast and Conference Call

iBio management will host a webcast and conference call at 4:30 p.m. Eastern Time today, May 12, 2022, to discuss these results and provide a corporate update.

The live and archived webcast may be accessed on the Company’s website at www.ibioinc.com under "News and Events" in the Investors section. The live call can be accessed by dialing (833) 672-0651 (domestic) or (929) 517-0227 (international) and referencing conference code: 2392536.