Diffusion Pharmaceuticals Inc. (NASDAQ:
DFFN) (“Diffusion” or the “Company”), an innovative
biopharmaceutical company developing novel therapies that enhance
the body’s ability to deliver oxygen to areas where it is needed
most, today announced financial results for 2020 and provided a
business update.
Business and financial highlights during 2020 and 2021
year-to-date include:
- Strengthened management
team: Appointed Robert Cobuzzi, Jr., Ph.D., President and
Chief Executive Officer and Director, Christopher Galloway, M.D.,
Chief Medical Officer, and William Elder, General Counsel. Also
added Jane H. Hollingsworth to the Company’s Board of
Directors
- Advanced development of trans sodium crocetinate
(“TSC”): During 2020, the Company initiated its Phase 1b
lead-in trial of 24 hospitalized COVID-19 patients. The trial was
designed to evaluate the safety and tolerability of TSC when
administered every six hours for up to 15 days, a previously
untested dosing regimen. The company completed dosing and reported
topline results from the study in February 2021. Results indicated
that no dose-limiting toxicities or serious adverse events were
observed in the trial• The Phase 1b represents the first major step
towards solidifying a redefined TSC development strategy that the
company announced in November 2020• In 2021, the company will
execute three oxygenation studies, described below
- Enhanced Financial Stability: As of
December 31, 2020, the Company had $18.5 million in cash and cash
equivalents. As of March 16, 2021, approximately $36.7 million in
additional, aggregate gross proceeds have been received by the
Company during the first quarter of 2021 through a common stock
offering in February 2021 and the cash exercise of certain
previously outstanding warrants
“There is no doubt that 2020 was a challenging year, but it was
also a transformational year for Diffusion. We formed a new
executive team, initiated and advanced our Phase 1b study of TSC in
hospitalized COVID-19 patients, and concurrently redefined the
clinical development pathway for TSC in an effort to maximize the
probability of clinical and regulatory success,” said Robert
Cobuzzi, President and Chief Executive Officer of Diffusion. “The
momentum we gained exiting 2020 has continued into 2021. We have
completed the study of TSC in hospitalized COVID-19 patients,
designed a series of three clinical trials to be conducted during
2021 to evaluate the effects of TSC on oxygenation, and secured the
company’s financial position by completing our $34.5 million equity
raise.”
Near Term Strategy
In an effort to support further, robust clinical development of
TSC, the Company intends to undertake a prospective exploration of
the relationship between the level of TSC exposure (dose) and
response (change in oxygenation) by conducting three short-term
clinical trials in the United States during 2021, all of which the
Company expects to be able to fund with cash-on-hand.
The Company believes positive data from any one or more of these
three Oxygenation Trials will provide evidence of a definitive
effect of TSC on oxygenation, whether through increased uptake in
the lungs, enhanced delivery, increased utilization at the tissue
level, or some combination thereof.
- TCOM
Trial: The first of the three Oxygenation Trials,
which we expect to initiate imminently, will evaluate the effects
of TSC on peripheral tissue oxygenation using a transcutaneous
oxygen monitoring (“TCOM”) device. The TCOM device directly
measures the release of oxygen from the blood vessels through the
skin and is commonly used to predict the likelihood of wound
healing, the potential for success with hyperbaric therapy, and to
map the appropriate location for limb amputation.The TCOM Trial is
designed to evaluate single, ascending, randomized doses of TSC to
establish the exposure-response relationship between TSC and
enhanced oxygen delivery. We anticipate this study will be
completed in the second quarter of 2021, with top line results
available within two months of study completion.
- Hypoxia Trial:
The second planned trial is the Hypoxia Trial, which we expect to
initiate in the third quarter of 2021. This trial will evaluate the
effects of TSC on maximal oxygen consumption (VO2), and partial
pressure of blood oxygen (PaO2), in normal healthy volunteers
exposed to conditions that induce hypoxia.Trial participants will
engage in incremental levels of physical exertion while exposed to
hypoxic and hypobaric conditions. The primary endpoints will be
change from baseline in VO2 and PaO2 after receiving a single
intravenous dose of TSC. We anticipate this study will be completed
in the second half of 2021, with topline results available within
two months of study completion.
- DLCO
Trial: The third trial is designed to evaluate the
effects of TSC on the diffusion of carbon monoxide through the
lungs (“DLCO”) in patients with previously diagnosed interstitial
lung disease who have a baseline DLCO test result that is abnormal.
We expect to initiate the DLCO Trial in the third quarter of 2021.
DLCO testing is commonly performed as part of standard pulmonary
function testing and aids in the diagnosis of dyspnea, also known
as shortness of breath, as well as to track improvement or
progression over time on prescribed treatments.In this trial, DLCO
will act as a surrogate measure of oxygen transfer efficiency, or
uptake, from the alveoli of the lungs, through the plasma, and onto
hemoglobin within red blood cells. The DLCO Trial will test single,
ascending doses of TSC in an attempt to establish the
exposure-response relationship between TSC and oxygen transfer
efficiency. We anticipate this study will be completed in the
second half of 2021, with top line results available within two
months of study completion.
Outcomes from one or each of these Oxygenation
Trials will inform the company’s go-forward TSC clinical
development path, focusing on the demonstration of clinical and
therapeutic benefits of TSC in relevant patient populations across
the hypoxia continuum. Assuming success in one or more of the three
Oxygenation Trials, the Company expects to identify and announce
the specific, hypoxia-related indication it will target, in the
fourth quarter of 2021. The Company then plans to initiate a Phase
2, controlled, clinical outcome study evaluating TSC in one or more
appropriate hypoxia-related indications in the first half of
2022.
2020 Financial Results
As of December 31, 2020, Diffusion had cash and cash equivalents
of $18.5 million as compared to $14.2 million as of December 31,
2019. Net cash used in operating activities during 2020 was $13.6
million, compared to $9.9 million used during 2019. During 2020,
the Company raised $12.0 million in gross proceeds through its May
2020 offering of common stock and an additional $8.0 million in
gross proceeds through the exercise of certain previously
outstanding warrants.
An additional $36.7 million in aggregate gross proceeds have
been received by the company thus far during the first quarter of
2021, through its common stock offering in February 2021 and the
exercise of certain previously outstanding warrants. As of March
16, 2021, the Company believes it has adequate cash resources to
continue operations through 2023, including expenditures related to
the three Oxygenation Trials and its planned Phase 2 trial in a
hypoxia-related indication.
Research and development expenses were $9.4 million for 2020,
compared to $6.6 million for 2019. The increase was primarily
attributable to the company’s clinical trial evaluating TSC in
hospitalized COVID-19 patients, which resulted in a $1.1 million
uptick in manufacturing costs and a $2.2 million increase in
clinical trial and other R&D related expenses.
General and administrative expenses were $6.4 million for 2020,
compared to $4.8 million for 2019. The Increase was largely driven
by a $0.7 million increase in professional fees and a $0.9 million
increase in salaries, wages, and stock-based compensation,
including certain non-recurring expenses related to the retirement
and separation of Diffusion’s former executives during 2020.
Diffusion reported a net loss of $14.2 million in 2020, compared to
a net loss of $11.8 million in 2019.
Additional information and financial statements can be
found in the 10K filed with the SEC on March 17, 2021, which can be
found on the Diffusion website at:
https://investors.diffusionpharma.com/sec-filings/,or on Edgar
at: https://www.sec.gov/edgar/browse/?CIK=1053691&owner=exclude
About Diffusion Pharmaceuticals
Inc.Diffusion Pharmaceuticals Inc. is an innovative
biopharmaceutical company developing novel therapies that enhance
the body’s ability to deliver oxygen to areas where it is needed
most. Diffusion’s lead product candidate, TSC, is being developed
to enhance the diffusion of oxygen to tissues with low oxygen
levels, also known as hypoxia, a serious complication of many of
medicine’s most intractable and difficult-to-treat conditions. In
addition to TSC, Diffusion’s product candidate DFN-529, a novel,
allosteric PI3K/Akt/mTOR Pathway inhibitor, is in early-stage
development. For more information, please visit us at
www.diffusionpharma.com.
Forward-Looking StatementsThis
press release includes express and implied forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, as amended, including regarding the Company’s
anticipated cash runway, its near-term strategic priorities, and
anticipated timelines for the initiation, completion, and
announcement of data from the Company’s [ongoing and] planned
oxygenation trials. The Company may, in some cases, use terms such
as “believes,” “estimates,” “anticipates,” “expects,” “plans,”
“intends,” “may,” “could,” “might,” “will,” “should,”
“approximately,” or other words that convey uncertainty of future
events or outcomes to identify these forward-looking statements.
Although the Company believes that it has a reasonable basis for
each forward-looking statement contained herein, forward-looking
statements by their nature involve risks and uncertainties, known
and unknown, many of which are beyond the Company’s control, and as
a result the Company’s actual results could differ materially from
those expressed or implied in any forward-looking statement.
Particular risk and uncertainties include, among other things,
those related to: the Company’s ability to design, initiate,
enroll, execute, and complete its ongoing and planned studies
evaluating TSC; general economic, political, business, industry,
and market conditions, including the ongoing COVID-19 pandemic; and
the other factors discussed under the heading “Risk Factors” in the
Company’s filings most recent Annual Report on Form 10-K and other
filings with the U.S. Securities and Exchange Commission. Any
forward-looking statements in this press release speak only as of
the date hereof (or such earlier date as may be identified) and,
except as required by applicable law, rule, or regulation, the
Company undertakes no obligation to update any such statements
after the date hereof.
ContactsInvestors:Tiberend
Strategic Advisors, Inc. Maureen McEnroe, CFA/Miriam Weber
Miller (212) 375-2664 / (212)
375-2694mmcenroe@tiberend.com / mmiller@tiberend.com
Media:Jeffrey Freedman RooneyPartners(646)
432-0191 jfreedman@rooneyco.com
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