On November 21, 2022 Oncotelic Therapeutics, Inc (OTCQB:OTLC) ("Oncotelic", the "Company" or "We"), a developer of treatments for rare and orphan indications, including Parkinson’s Disease, PDAC, DIPG, and COVID-19, reported financial results for the three months ended September 30, 2022 ("Q3 2022") as compared to the three months ended September 30, 2021("Q3 2021") (Press release, Oncotelic, NOV 21, 2022, View Source [SID1234624295]). The financial results are based on the Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on November 18, 2022.
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Highlights for Q3 2022 and thereafter:
We are starting to see the benefits of the JV transaction, between Dragon Overseas Limited ("Dragon") and us through the formation of GMP Biotechnology Limited ("GMP Bio" or "JV") being reflected in our financial results. The JV has absorbed our R&D expenditures as related to OT-101 and a majority of our G&A expenditures as well. Going forward this should permit us to continue our development efforts of OT-101, mainly through the JV at a significantly lower cost to us, explore potential partnering of our remaining pipeline products, as well as expanding our effort on COVID-19 alongside BARDA. As previously reported, the JV, or a subsidiary thereof, is still being planned to be taken into an initial public offering in Hong Kong or another exchange at a future point in time.
As reported in October 2022, the creation of our animal health division is a strategic move to explore and evaluate how we could potentially utilize technology, such as blockchain and DAO’s, to help bring new treatments to market for animal health.
Further, as reported in October 2022, Biomedical Advanced Research and Development Authority (BARDA) approved a contract to conduct a study with us for the development of OT-101 against long-term effects of respiratory distress post COVID-19. The scope of the study includes collecting the long-term clinical data on COVID-19 patients in Peru and Argentina where our C001-2020-01 trial was conducted and to demonstrate potential effectiveness of OT-101 against the long-term effects of respiratory distress post COVID-19. The data will be used to design the next clinical trial aiming at demonstrating effectiveness of OT-101 against COVID-19 and long-term COVID-19 for its marketing approval.
Going into the final stretch of the year through the first quarter of 2023, we are accelerating our clinical programs in multiple indications supported by various stakeholders, including our JV and key opinion leaders. These include pancreatic cancer, gliomas, mesotheliomas, and others. We are optimistic at what the future holds for us and are happy with what we have accomplished so far this year.
"2022 has been a good nine months for us, starting with the culmination of the joint venture with Dragon. We are starting to see a significant reduction in our expenses due to the shift of our expenses over to the JV, especially related to the development of OT-101. This cost reduction has not come at the expense of our clinical programs; indeed, we are expanding our clinical programs related to OT-101 along multiple fronts and through the JV," opined Amit Shah, CFO, Oncotelic.
"We are singularly focused on building shareholder value. Our $22.6 million investment in GMP Bio, at fair value, has increased our total assets value from $23.6 million at December 31, 2021 to $40.2 million at September 30. 2022 We are looking to build on the positive impacts of the JV, hopefully with additional partnering deals as well as building out the DAO for animal health. We thank our shareholders, stakeholders, patients and investigators in their continuing support and looking forward to positive growth momentum in the coming years," said Dr. Vuong Trieu, CEO and Chairman, Oncotelic.
In comparing the Company’s operating results for the three months ended September 30, 2022, and 2021, respectively, our net loss reduced by approximately $1.0 million. This was primarily due to our reduced operating expenses of approximately $1.2 million and reimbursement of expenses by a related party of approximately $0.2 million; offset by higher interest expense by approximately $0.2 million and PPP loan forgiveness of approximately $0.3 million from the three months ended September 30, 2021.
Our research and development expenses decreased by approximately $0.6 million primarily due to lower personnel expenses of approximately $0.3 million and lower clinical trial expenses related to OT-101 of approximately $0.3 million. Further, our general and administrative expenses decreased by approximately $0.6 million primarily due to reduced compensation expense of approximately $0.6 million. Our operating expenses were lower as we have successfully transferred a significant portion of our development expenses to our JV specifically for activities related to OT-101, including the initiation of new clinical trials. We expect our R&D and G&A expense to remain steady or reduce for the remainder of the year 2022.