Cocrystal Pharma, Inc. (Nasdaq: COCP), (“Cocrystal” or the
“Company”), a clinical-stage biotechnology company discovering and
developing novel antiviral therapeutics that target the replication
machinery of influenza viruses, the SARS-CoV-2 virus, hepatitis C
viruses and noroviruses, reports financial results for the year
ended December 31, 2020 and provides updates on its antiviral
pipeline and business activities.
“We made across-the-board progress last year
with our pipeline of broad-spectrum antiviral drugs that feature a
high barrier to drug resistance, and we anticipate further
advancements in 2021,” said Sam Lee, Ph.D., President of Cocrystal.
“In just over a year since initiating our COVID-19 program, we
selected a broad-spectrum protease inhibitor, CDI-45205, as a lead
drug candidate and are conducting remaining preclinical studies.
This antiviral agent presents a novel approach to COVID-19 and
other coronaviruses with the potential as both a therapeutic for
infected patients and as a prophylactic to protect those who may
become exposed. We have also made strides in our norovirus program
and expect to complete a proof-of-concept study in norovirus in the
first half of this year.”
“Our influenza programs are also advancing
well,” stated Gary Wilcox, Ph.D., Chairman and Chief Executive
Officer of Cocrystal. “We successfully completed our obligations
under the exclusive worldwide licensing and collaboration agreement
with Merck for the discovery and development of influenza A/B drug
candidates, with Merck now assuming sole responsibility for further
program development. With our in-house influenza A program, we are
conducting the remaining preclinical studies with CC-42344 and plan
to initiate a Phase 1 study in the third quarter. Influenza
continues to be a major global health concern and our antiviral
agents are being developed to be effective against both seasonal
and pandemic influenza.
“We are employing our proprietary technology
platform to discover and develop antiviral drug candidates that
address major global medical concerns, such as influenza and
coronaviruses, that present significant market opportunities,” he
added. “We are well positioned to execute on our goals with the
guidance and support of our outstanding leadership team and our
scientific advisory board, which includes two Nobel laureates.
Following successful financings completed last year, we ended 2020
with more than $33 million of cash and have sufficient capital to
fund our current operations and development programs beyond
2022.”
Antiviral Development Pipeline
Milestones and Updates
COVID-19 Programs
|
● |
Advancing preclinical studies with CDI-45205. This compound,
obtained under an agreement with Kansas State University Research
Foundation (KSURF), demonstrated in vitro and in vivo activity in
animal models against the viral pathogens MERS and SARS and has
significant potential for delivery either by injection or
inhalation. |
|
● |
Applying the Company’s proprietary structure-based platform
technology to discover novel COVID-19 inhibitors with the potential
for oral administration. |
Influenza A Program
|
● |
Completing IND-enabling activities with CC-42344 and planning to
initiate a Phase 1 study during the third quarter of 2021. CC-42344
has demonstrated excellent preclinical antiviral activity against
influenza A strains, including avian pandemic strains and
oseltamivir-resistant and baloxavir-resistant strains, while also
showing favorable pharmacokinetic and safety profiles. |
|
|
|
|
|
Influenza remains a major global concern with cases approximating 1
billion annually. The World Health Organization estimates that
worldwide, annual influenza epidemics result in approximately 3-5
million cases of severe illness and about 250,000 to 500,000
deaths. Approved influenza therapies have major limitations due to
drug-resistant issues and emerging virus mutations. Cocrystal is
designing influenza drug candidates to be active against
drug-resistant strains, effective against future mutations, and
available for delivery through multiple routes of administration,
including oral, inhalation and injection. |
Hepatitis C Program
|
● |
Seeking a partner to advance the development of CC-31244. This
compound showed positive safety and preliminary efficacy data from
a triple regimen Phase 2a study in combination with Epclusa
(sofosbuvir/velpatasvir) for the ultra-short treatment of
individuals infected with the hepatitis C virus. |
Norovirus Therapy Program
|
● |
Expect to complete a proof-of-concept animal study in the first
half of 2021 with a potential first-in-class non-nucleoside
inhibitor with potent and broad-spectrum Noro polymerase
inhibitors. |
2020 and Recent Highlights
Licensing and Collaboration Agreements
|
● |
Completed all research obligations under the Merck exclusive
worldwide license and collaboration agreement for influenza A/B
antiviral compounds. As of mid-January 2021, Merck has assumed all
responsibility for further program development. |
|
● |
Entered into two exclusive, royalty-bearing license agreements with
KSURF to develop and commercialize therapeutic, diagnostic and
prophylactic products against coronaviruses, caliciviruses and
picornaviruses based on antivirals discovered by KSURF. |
|
● |
Extended a drug discovery collaboration with HitGen and InterX,
combining three independent platforms to discover and optimize
molecules that could lead to novel antiviral drug candidates. |
Scientific Publications and Presentations
|
● |
Announced the publication by collaborators of positive preclinical
animal data demonstrating potent inhibition of coronavirus
antiviral compounds in the prestigious medical journal Science
Translational Medicine. |
|
● |
Presented an overview of the Company’s drug discovery platform
technology, including its unique ability to develop broad-spectrum
antiviral therapeutics and its advantages compared with the
traditional drug discovery and development process, presented at
the “reimagine Health Research Symposium” in January 2021. |
Corporate Developments
|
● |
Appointed Nobel laureate Roger D. Kornberg, Ph.D. to the Cocrystal
Board of Directors, adding to his positions as Chief Scientist and
Chairman of the Scientific Advisory Board. |
|
● |
Received $2.0 million in Merck payments and $35.8 million in net
proceeds from common-stock financings. |
|
● |
Negotiated and executed approved settlement of the class-action
lawsuit, the derivative lawsuit and two related derivative actions
with agreement to pay $450,000 for its share of the total class
action settlement and make certain corporate governance
changes. |
2020 Financial Results
Revenues for the year ended December 31, 2020
were $2.0 million, which consisted entirely of research and
development (R&D) services performed by Cocrystal and
reimbursed program expenses paid by Merck for the influenza A/B
program. This compares with revenues of $6.6 million for the year
ended December 31, 2019, which included $4.4 million in exchange
for conveyance of intellectual property rights at the signing of
the Merck collaboration agreement, $1.8 million for R&D
services and $358,000 for program expense reimbursements.
In mid-January 2021 Merck assumed all activities
and expenses associated with the continued development of the
influenza A/B compounds. Cocrystal does not expect to report
revenues or offsetting R&D expenses related to this agreement
in 2021. Cocrystal is eligible to receive milestone payments
related to designated development, regulatory and sales milestones
with the potential to earn up to $156 million, as well as royalties
on product sales.
R&D expenses for 2020 were $6.3 million
compared with $4.0 million for 2019, with the increase primarily
due to costs related to advancing the coronavirus, influenza and
norovirus programs. General and administrative expenses for 2020
were $5.3 million compared with $4.9 million for the prior year,
with the increase primarily due to professional fees incurred as a
result of the now settled class action matter mentioned above in
Corporate Developments. The operating loss for 2020 was $9.6
million compared with an operating loss of $48.4 million in 2019,
which included a $46.1 million non-cash goodwill impairment charge
on an intangible asset in 2019.
Other expense for 2020 was $62,000, which was
primarily due to a $54,000 loss on the fair value of derivative
liabilities. This compares with other income for 2019 of $237,000,
that was primarily due to a $256,000 gain on derivative
liabilities.
The net loss for 2020 was $9.6 million, or $0.17
per share, compared with a net loss for 2019 of $48.2 million, or
$1.51 per share, which included the $46.1 million impairment.
The Company reported $33.1 million in cash and
cash equivalents as of December 31, 2020, compared with $7.4
million as of December 31, 2019. The Company reported working
capital of $32.6 million as of December 31, 2020.
About Cocrystal Pharma,
Inc.
Cocrystal Pharma, Inc. is a clinical-stage
biotechnology company discovering and developing novel antiviral
therapeutics that target the replication process of influenza
viruses, coronaviruses (including SARS-CoV-2), hepatitis C viruses
and noroviruses. Cocrystal employs unique structure-based
technologies and Nobel Prize-winning expertise to create first- and
best-in-class antiviral drugs. For further information about
Cocrystal, please visit www.cocrystalpharma.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including statements regarding the expected
further advancements in our programs, including the planned
initiation of the influenza A Phase 1 study during the third
quarter of 2021 and our plans regarding the expected completion of
a norovirus proof-of-concept animal study in the first half of
2021; our expectations and estimates regarding the future
applications and effectiveness of, and the market opportunities
for, our product candidates; our expectations regarding future
operating results; the expected results of Cocrystal’s
collaboration with Merck, including potential receipt of future
milestone payments of up to $156,000,000 and royalties; and future
liquidity. The words "believe," "may," "estimate," "continue,"
"anticipate," "intend," "should," "plan," "could," "target,"
"potential," "is likely," "will," "expect" and similar expressions,
as they relate to us, are intended to identify forward-looking
statements. We have based these forward-looking statements largely
on our current expectations and projections about future events.
Some or all of the events anticipated by these forward-looking
statements may not occur. Important factors that could cause actual
results to differ from those in the forward-looking statements
include, but are not limited to, the risks arising from the impact
of the COVID-19 pandemic on the national and global economy, on our
collaboration partners and on our Company, including supply chain
disruptions and our continued ability to proceed with our programs,
our reliance on Merck for further development in the influenza A/B
program under the license and collaboration agreement, , the
results of future preclinical and clinical studies, general risks
arising from clinical trials, receipt of regulatory approvals,
regulatory changes, and development of effective treatments and/or
vaccines by competitors, including as part of the programs financed
by the U.S. government. Further information on our risk factors is
contained in our filings with the SEC, including our Annual Report
on Form 10-K for the year ended December 31, 2020. Any
forward-looking statement made by us herein speaks only as of the
date on which it is made. Factors or events that could cause our
actual results to differ may emerge from time to time, and it is
not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by law.
Investor Contact:LHA Investor
RelationsJody Cain310-691-7100jcain@lhai.com
Financial Tables to follow
COCRYSTAL PHARMA, INC.
CONSOLIDATED BALANCE
SHEETS(in thousands)
|
|
December 31, 2020 |
|
|
December 31, 2019 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
33,010 |
|
|
$ |
7,418 |
|
Restricted cash |
|
|
50 |
|
|
|
50 |
|
Accounts receivable |
|
|
556 |
|
|
|
644 |
|
Prepaid expenses and other current assets |
|
|
399 |
|
|
|
169 |
|
Total current assets |
|
|
34,015 |
|
|
|
8,281 |
|
Property and equipment,
net |
|
|
591 |
|
|
|
431 |
|
Deposits |
|
|
46 |
|
|
|
50 |
|
Operating lease right-of-use
assets, net (including $39 to related party) |
|
|
498 |
|
|
|
677 |
|
Goodwill |
|
|
19,092 |
|
|
|
19,092 |
|
Total assets |
|
$ |
54,242 |
|
|
$ |
28,531 |
|
Liabilities and stockholders’
equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
1,080 |
|
|
$ |
1,999 |
|
Current maturities of finance lease liabilities |
|
|
39 |
|
|
|
103 |
|
Current maturities of operating lease liabilities (including $39 to
related party) |
|
|
178 |
|
|
|
177 |
|
Derivative liabilities |
|
|
61 |
|
|
|
7 |
|
Total current liabilities |
|
|
1,358 |
|
|
|
2,286 |
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
Finance lease liabilities |
|
|
34 |
|
|
|
14 |
|
Operating lease liabilities |
|
|
345 |
|
|
|
523 |
|
Total long-term
liabilities |
|
|
379 |
|
|
|
537 |
|
Total liabilities |
|
|
1,737 |
|
|
|
2,823 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, $0.001 par
value; 100,000 shares authorized as of December 31, 2020 and
December 31, 2019; 70,439 and 35,150 shares issued and outstanding
as of December 31, 2020 and December 31, 2019, respectively |
|
|
71 |
|
|
|
36 |
|
Additional paid-in
capital |
|
|
297,342 |
|
|
|
260,932 |
|
Accumulated deficit |
|
|
(244,908 |
) |
|
|
(235,260 |
) |
Total stockholders’
equity |
|
|
52,505 |
|
|
|
25,708 |
|
Total liabilities and
stockholders’ equity |
|
$ |
54,242 |
|
|
$ |
28,531 |
|
COCRYSTAL PHARMA, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share
data)
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
Collaboration revenue |
|
$ |
2,014 |
|
|
$ |
6,564 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
6,307 |
|
|
|
4,004 |
|
General and administrative |
|
|
5,293 |
|
|
|
4,863 |
|
Impairments |
|
|
- |
|
|
|
46,103 |
|
Total operating expenses |
|
|
11,600 |
|
|
|
54,970 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(9,586 |
) |
|
|
(48,406 |
) |
|
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(8 |
) |
|
|
(19 |
) |
Change in fair value of derivative liabilities |
|
|
(54 |
) |
|
|
256 |
|
Total other income (expense), net |
|
|
(62 |
) |
|
|
237 |
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(9,648 |
) |
|
|
(48,169 |
) |
|
|
|
|
|
|
|
|
|
Income tax |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(9,648 |
) |
|
$ |
(48,169 |
) |
|
|
|
|
|
|
|
|
|
Net loss per common
share: |
|
|
|
|
|
|
|
|
Loss per share, basic and
diluted |
|
$ |
(0.17 |
) |
|
$ |
(1.51 |
) |
Weighted average number of
common shares outstanding, basic and diluted |
|
|
55,217 |
|
|
|
31,859 |
|
# # #
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