Diffusion Pharmaceuticals Inc. (Nasdaq: DFFN)
(“Diffusion” or “the Company”), a cutting-edge biotechnology
company developing new treatments for life-threatening medical
conditions by improving the body’s ability to deliver oxygen to the
areas where it is needed most, today reported financial results for
the three months ended March 31, 2020 and provided a business
update.
Highlights from the first quarter of 2020 and
recent weeks include:
- Notified by the U.S. Food and Drug Administration (FDA) of
accelerated review for the Company’s Investigational New Drug (IND)
application to study trans sodium crocetinate (TSC) in COVID-19
related Acute Respiratory Distress Syndrome (ARDS) and multiple
organ failure. The program is a cooperative research effort with
University of Virginia Health (UVA) and the Integrated
Translational Research Institute of Virginia (iTHRIV). Development
of ARDS is common in patients hospitalized with COVID-19 due to
lack of sufficient oxygen to vital organs as a consequence of
impedance in the lungs. Diffusion believes that TSC’s novel
oxygen-enhancing mechanism of action could provide an important new
treatment option for this life-threatening condition. The
three-part program will focus on enhanced blood oxygenation in
patients admitted to an intensive care unit (ICU) and on reduction
in patient progression to the ICU.
- Following commencement of enrollment during the fourth quarter
of 2019 in its Phase 2 on-ambulance clinical trial testing TSC for
the treatment of acute stroke, enrollment in the study was delayed
as the LA County Fire Department suspended future training of first
responders who had been scheduled to participate in the trial
protocol, in order to focus on COVID-19 patients. This
160-patient trial, named PHAST-TSC (Pre-Hospital Administration of
Stroke Therapy-TSC), will involve 23 hospitals across urban,
suburban and rural areas in Los Angeles County and Central
Virginia.
- Continued partnership efforts to advance the Phase 3 INTACT
(INvestigating Tsc Against Cancerous Tumors) trial with TSC plus
standard of care (SOC) for patients with inoperable glioblastoma
multiforme (GBM), following completion of the 19-patient
open-label, dose-escalation lead-in portion with encouraging
results from patients who completed the study per protocol.
- Increased global intellectual property with the issuance of a
patent in Europe that relates to pharmaceutical compositions of TSC
and a cyclodextrin for use in therapy. Specifically claimed
are TSC compositions for use in conjunction with radiation or
chemotherapy. Secondary claims relate to various compositions
of TSC. This patent has claims to TSC compositions for use in
therapy generally and has claims to compositions for use in
treating brain cancer.
- Expanded the Company’s board of directors with the appointment
of Robert Cobuzzi, Jr., Ph.D. Dr. Cobuzzi is an accomplished
life sciences professional with 25 years of cross-functional
leadership experience including more than a decade with Endo
International, Plc.
“The ability of TSC to oxygenate hypoxic tissues
has been studied in a number of indications, including preclinical
work in pulmonary indications,” said David Kalergis, chairman and
chief executive officer of Diffusion. “This body of knowledge
supports our belief that TSC might play an important role in
treating patients stricken with COVID-19 at risk for ARDS.
The FDA has announced its intention to significantly shorten review
times for select COVID-19 submissions under its Coronavirus
Treatment Acceleration Program, and separately notified us that
Diffusion would be a recipient of such accelerated review. Clinical
trial preparations at multiple potential sites in the U.S. are
continuing as we await the FDA’s response to our submission. In
parallel, we are in discussions with institutions located in areas
of severe COVID-19 incidence in Eastern Europe, where certain
health authorities have implemented emergency policies to compress
regulatory review cycles.
“When our program with TSC in stroke was delayed
by the pandemic, TSC’s novel hypoxia-treating mechanism of action
allowed us to quickly pivot to treat ARDS in COVID-19 patients,”
Mr. Kalergis added. “I hold deep appreciation for the first
responders who were to study TSC in acute stroke as they battle
this coronavirus, and I am proud of our hardworking employees and
scientific advisors who have so quickly moved to provide a
potential treatment. While the course of the pandemic and the
pace of future enrollment in the PHAST-TSC study are unknown, our
current cash position allows us to fund operations for at least the
next 12 months.”
First Quarter Financial
Results
Research and development expenses were $1.5
million for the first quarter of 2020, compared with $1.7 million
for first quarter of 2019. The decrease was mainly
attributable to a $0.4 million decline in expense related to the
Company’s Phase 3 GBM trial, the lead-in portion of which was
completed in December 2019, partially offset by a $0.1 million
increase in manufacturing costs and a $0.1 million increase in
expense related to our Phase 2 stroke trial.
General and administrative expenses were $1.3
million for the first quarter of 2020, compared with $1.2 million
for the first quarter of 2019. The slight increase was mainly due
to higher professional fees, salaries and wages.
Diffusion had cash and cash equivalents of $10.8
million as of March 31, 2020, compared with $14.2 million as of
December 31, 2019. Subsequent to the close of the quarter, in April
and May the Company received gross proceeds of $4.8 million from
the exercise of 6,385,496 warrants and the exchange and exercise of
another 5,000,000 warrants. Diffusion believes its cash and cash
equivalents as of March 31, 2020, along with the warrant exercise
proceeds, are sufficient to fund operating expenses and capital
expenditure, including clinical trials, into the third quarter of
2021.
About Diffusion Pharmaceuticals
Inc.
Diffusion Pharmaceuticals Inc. is an innovative
biotechnology company developing new treatments that improve the
body’s ability to deliver oxygen to the areas where it is needed
most, offering new hope for the treatment of life-threatening
medical conditions. Diffusion’s lead drug trans sodium crocetinate
(TSC) was originally developed in conjunction with the Office of
Naval Research, which was seeking a way to treat multiple organ
failure and its resulting mortality caused by the systemic
hypoxemia from blood loss on the battlefield. Evolutions in
research have led to Diffusion’s focus today: Fueling Life by
taking on some of medicine’s most intractable and
difficult-to-treat diseases, including multiple organ failure,
stroke and glioblastoma multiforme (GBM) brain cancer. In each of
these diseases, hypoxia – oxygen deprivation of essential tissue in
the body – has proved to be a significant obstacle for medical
providers and is the target for TSC’s novel mechanism.
In July 2019 the Company reported favorable
safety data in a 19-patient dose-escalation run-in study to its
Phase 3 INTACT program, using TSC to target inoperable GBM. Further
findings from the dose-escalation run-in study, released in
December 2019, also showed possible signals of enhanced survival
and patient performance. Diffusion’s in-ambulance PHAST-TSC trial
for acute stroke began enrolling patients last year. Given the
heightened responsibilities of the Company’s emergency medical
services providers, enrollment in this trial is expected to be
minimal until the COVID-19 pandemic abates. The Company is also
currently partnering with the University of Virginia and iTHRIV in
a research program to develop its novel small molecule TSC as a
treatment for Acute Respiratory Distress Syndrome (ARDS) from
COVID-19, specifically targeting the associated multiple organ
failure.
Preclinical data supports the potential for TSC
as a treatment for other conditions where hypoxia plays a major
role, such as myocardial infarction, peripheral artery disease, and
neurodegenerative conditions such as Alzheimer’s and Parkinson’s
disease. In addition, RES-529, the Company’s PI3K/AKT/mTOR
pathway inhibitor that dissociates the mTORC1 and mTORC2 complexes,
is in preclinical testing for GBM.
Diffusion is headquartered in Charlottesville,
Virginia – a hub of advancement in the life science and
biopharmaceutical industries – and is led by CEO David Kalergis, a
30-year industry veteran and company co-founder.
Forward-Looking Statements
To the extent any statements made in this news
release deal with information that is not historical, these are
forward-looking statements under the Private Securities Litigation
Reform Act of 1995. Such statements include, but are not limited
to, statements about the company's plans, objectives, expectations
and intentions with respect to future operations and products, the
potential of the company's technology and product candidates, and
other statements that are not historical in nature, particularly
those that utilize terminology such as "would," "will," "plans,"
"possibility," "potential," "future," "expects," "anticipates,"
"believes," "intends," "continue," "expects," other words of
similar meaning, derivations of such words and the use of future
dates. Forward-looking statements by their nature address matters
that are, to different degrees, uncertain. Uncertainties and risks
may cause the Diffusion’s actual results to be materially different
than those expressed in or implied by such forward-looking
statements. Particular uncertainties and risks include: the
uncertainty as to whether the protocol described above, which is a
pre-IND submission, will be ultimately acceptable to the FDA for an
IND submission or that the FDA will not require significant changes
that might take significant time to implement, if at all, or that
any such required changes will be financially feasible; moreover,
if this or a revised protocol is acceptable to the FDA for an IND
submission, there can be no assurance as to when the FDA might
provide such guidance or when the program might be able to
commence, if at all; the uncertainty that as of yet the FDA
has no approved a trial evaluating TSC for the treatment of ARDS,
or if approved, such a trial possibly entailing significant
additional time, effort and expense, particularly in light of the
difficulty of doing business during the COVID-19 pandemic;
Diffusion’s ability to maintain its Nasdaq listing, market
conditions, the difficulty of developing pharmaceutical products,
obtaining regulatory and other approvals and achieving market
acceptance; general business and economic conditions; the
sufficiency of the company’s cash, the company's need for and
ability to obtain additional financing or partnering arrangements;
and the various risk factors (many of which are beyond Diffusion’s
control) as described under the heading “Risk Factors” in
Diffusion’s filings with the United States Securities and Exchange
Commission. All forward-looking statements in this news release
speak only as of the date of this news release and are based on
management's current beliefs and expectations. Diffusion undertakes
no obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or
otherwise.
Contacts:David Kalergis,
CEODiffusion Pharmaceuticals Inc.(434)
220-0718dkalergis@diffusionpharma.com
LHA Investor RelationsKim Sutton Golodetz(212)
838-3777kgolodetz@lhai.com
(Tables to follow)
Diffusion
Pharmaceuticals Inc. |
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance
Sheet |
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2020 |
December 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
10,828,228 |
|
$ |
14,177,349 |
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses, deposits and other current assets |
|
888,234 |
|
|
472,464 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
11,716,462 |
|
|
14,649,813 |
|
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net |
|
225,346 |
|
|
252,366 |
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
asset |
|
8,639,000 |
|
|
8,639,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Right of use
asset |
|
223,757 |
|
|
247,043 |
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets |
|
252,561 |
|
|
322,301 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
21,057,126 |
|
$ |
24,110,523 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
655,298 |
|
|
1,251,412 |
|
|
|
|
|
|
|
|
|
|
|
|
Accrued expenses and other current liabilities |
|
519,552 |
|
|
358,532 |
|
|
|
|
|
|
|
|
|
|
|
|
Current operating lease liability |
|
111,970 |
|
|
111,477 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
1,286,820 |
|
|
1,721,421 |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
income taxes |
|
1,756,894 |
|
|
2,119,274 |
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent
operating lease liability |
|
111,787 |
|
|
135,566 |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
3,155,501 |
|
|
3,976,261 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000,000 shares authorized; 34,604,436 and 33,480,365 shares
issued and outstanding at March 31, 2020 and December 31, 2019,
respectively |
|
34,605 |
|
|
33,481 |
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital |
|
112,149,913 |
|
|
111,824,859 |
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated deficit |
|
(94,282,893 |
) |
|
(91,724,078 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
17,901,625 |
|
|
20,134,262 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity |
$ |
21,057,126 |
|
$ |
24,110,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diffusion
Pharmaceuticals Inc. |
|
|
|
|
Consolidated
Statement of Operations |
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended March 31, |
|
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
$ |
1,534,467 |
|
|
$ |
1,699,845 |
|
|
|
|
|
General and administrative |
|
|
1,393,808 |
|
|
|
1,200,728 |
|
|
|
|
|
Depreciation |
|
|
27,020 |
|
|
|
18,272 |
|
|
|
|
|
Loss from operations |
|
|
2,955,295 |
|
|
|
2,918,845 |
|
|
|
|
|
Other
income: |
|
|
|
|
|
|
|
|
Interest income |
|
|
(34,100 |
) |
|
|
(20,684 |
) |
|
|
|
|
Loss from operations before income tax benefit |
|
|
(2,921,195 |
) |
|
|
(2,898,161 |
) |
|
|
|
|
Income tax
benefit |
|
|
(362,380 |
) |
|
|
(150,352 |
) |
|
|
|
|
Net
loss |
|
$ |
(2,558,815 |
) |
|
$ |
(2,747,809 |
) |
|
|
|
|
Per share
information: |
|
|
|
|
|
|
|
|
Net loss per
share of common stock, basic and diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.81 |
) |
|
|
|
|
Weighted
average shares outstanding, basic and diluted |
|
|
34,507,496 |
|
|
|
3,376,230 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diffusion Pharmaceuticals (NASDAQ:DFFN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Diffusion Pharmaceuticals (NASDAQ:DFFN)
Historical Stock Chart
From Apr 2023 to Apr 2024