On August 14, 2019 Cardax, Inc. (OTCQB:CDXI) reported filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 (Press release, Cardax Pharmaceuticals, AUG 14, 2019, View Source [SID1234538743]).
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Recent developments include:
CHASE Clinical Trial Update
Cardax plans a pre-specified interim review in September 2019 of the aggregate data by treatment group from its CHASE human clinical trial. The CHASE trial is evaluating the effect of ZanthoSyn on cardiovascular inflammatory health, as measured by C-Reactive Protein or "CRP," as a primary endpoint. Other data collected includes secondary inflammatory health markers as well as safety parameters. Positive results could not only support ZanthoSyn marketing but serve as an important proof-of-concept for the Company’s pharmaceutical program and provide additional intellectual property protection.
Interim Financing Update
Cardax also announced today that it raised $1,675,000 in additional capital since the beginning of Q2 2019 ($750,000 in Q2 2019 and $925,000 in Q3 2019 to date), using a combination of convertible notes, equity units (stock and warrants), and loans, the proceeds of which are being used for general corporate purposes.
ZanthoSyn Update
As reported previously, in Q1 2019 retail "sell-through," defined as retail sales of ZanthoSyn to customers at General Nutrition Corporation ("GNC") stores, surpassed all previous periods and Q2 2019 continued at strong levels as the third best performing quarter since launch. In addition, ZanthoSyn is the top-selling product nationwide in GNC’s antioxidant category for 2019 year-to-date as well as the top-selling overall product in GNC’s Hawaii stores. Notwithstanding, GNC continued to trim the inventory sell-in substantially in Q2 2019. "Sell-in" is defined as wholesale orders of ZanthoSyn by GNC less sales incentives, promotions, discounts, and refunds. As a result, Cardax net revenues were $45,391 and $210,363 for the 3 and 6 months ended June 30, 2019 compared to $272,049 and $585,359 for the 3 and 6 months ended June 30, 2018.
While ZanthoSyn sell-in to GNC in Q3 2019 to date has already exceeded the total Q2 2019 sell-in, Cardax provided notice to GNC that its "U.S. brick-and-mortar retail store" exclusivity contract with GNC for ZanthoSyn would not automatically renew in October 2019. Cardax may expand ZanthoSyn distribution to mass market retailers, other specialty nutrition stores, pharmacies, and other retailers.
Cardax plans to expand its direct-to-consumer e-commerce efforts by capitalizing on one of the most important lessons learned from its sales and marketing program: "Conversations Create Customers." Whether at GNC stores, directly with Cardax personnel, or at conferences for healthcare professionals, thousands of ZanthoSyn customers have been created by understanding and experiencing the benefits of ZanthoSyn firsthand. Cardax plans to implement strategies that it believes may create a similar customer experience more broadly, with fulfillment online, where margins are greater than retail stores.
"As inflammatory health becomes ever more important to the scientific, medical, and financial communities, we look forward to the interim review of our CHASE clinical trial," said David G. Watumull, Cardax President and CEO. "We are also pleased to see ZanthoSyn’s strong retail sales at GNC drive an increase in wholesale orders in Q3 and look forward to expanding our ZanthoSyn marketing and distribution more broadly."