On November 15, 2023 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, 2023 ("Q3 2023") as compared to the three months ended September 30, 2022 ("Q3 2022") (Press release, Oncotelic, NOV 15, 2023, View Source [SID1234637716]). The financial results are based on the Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on November 14, 2023.
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Highlights for Q3 2023 and thereafter:
We have been enjoying the effects of 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. As previously stated, the JV has absorbed most of our R&D and G&A expenditures related to OT-101, which are primarily compensation related and other operational expenses. Going forward, this should permit us to continue our development efforts of OT-101, through the JV, at no cash cost to us, thereby freeing up valuable cash resources for exploring potential partnering of our remaining pipeline products. 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.
Going into the final stretch of the year through the first quarter of 2024, we are planning on 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 about what the future holds for us and are happy with what we have accomplished so far this year.
"Commencing April 2022, with the culmination of the JV with Dragon, and continuing into 2023 till date, have been a good eighteen months for us. We have seen a significant reduction in our operational expenses, thanks to the shift of our operational expenses over to the JV, specifically related to the development of OT-101. This cost reduction has not come at the expense of any of our other clinical programs; indeed, we are continuing on expanding our clinical programs related to OT-101 along multiple fronts through the JV," stated Amit Shah, CFO, Oncotelic.
"We are singularly focused on building shareholder value. The JV has experienced growth, which we plan to disclose in the near future. We are looking to build on the positive impacts of the JV, hopefully with additional partnering deals as well as building out PDAO and our artificial intelligence platform. 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.
Results of Operations
Q3 2023 compared to Q3 2022
ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
September
30, 2023 September
30, 2022 Variance
Service revenue 70,000 - 70,000
Total revenue 70,000 - 70,000
Operating expense:
Research and development 21,221 1,700 19,521
General and administrative 34,301 593,739 (559,438 )
Total operating expense 55,522 595,439 (539,917 )
Income (loss) from operations 14,478 (595,439 ) 609,917
Interest expense, net (185,424 ) (606,824 ) 421,400
Reimbursement for expenses – related party - 237,165 (237,165 )
Change in the value of derivatives on debt 306,836 105,662 201,174
Loss on debt conversion (94,829 ) - (94,829 )
Net income (loss) before controlling interests $ 41,061 $ (859,436 ) $ 900,497
In comparing the Company’s operating results for the three months ended September 30, 2023 and 2022, respectively, our net loss reduced by approximately $0.9 million. This was primarily due to our reduced operating expenses of approximately $0.6 million, lower interest expense of approximately $0.4 million, increase in the value of the derivatives on convertible debt of approximately $0.2 million; offset by lower reimbursement of expenses from related parties of approximately $0.2 million and higher loss on conversion of debt of approximately $0.1 million.
During the three months ended September 30, 2023, we reported service revenues of $70,000 as received from BARDA for services related to our work on their long COVID research. R&D expenses remained essentially the same, slightly higher by approximately $20 thousand, primarily due to slightly higher operational expenses of approximately $20 thousand. G&A expenses decreased by approximately $0.6 million. This reduction was primarily due to lower stock-based compensation expense of approximately $0.6 million incurred during the three months ended September 30, 2022 as compared no expense during the same period in 2023.