Diffusion Pharmaceuticals Inc. (Nasdaq: DFFN), a
cutting-edge biotechnology company developing new treatments for
life-threatening medical conditions by improving the body’s ability
to bring oxygen to the areas where it is needed most, today
reported financial results for the three months ended March 31,
2019 and provided a business update.
During the first quarter of 2019, Diffusion
Pharmaceuticals continued preparations to enroll patients in an
on-ambulance Phase 2 clinical trial testing trans sodium
crocetinate (TSC) for the treatment of acute stroke. The
Company expects enrollment of 160 patients to begin during the
third quarter with approximately 150 emergency medical transport
groups. The 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, working closely with researchers at the
University of California Los Angeles (UCLA) and the University of
Virginia (UVA). Local ambulance companies have been engaged.
Results from the trial will potentially be available in just
under two years, subject to Diffusion receiving the necessary
funding.
The Company continues to make progress in its
Phase 3 INTACT (INvestigation of TSC Against Cancerous Tumors)
trial. It has completed the eight-patient open label
dose-escalation run-in cohort and, with enrollment for this phase
now closed, expects data on this group to be available this summer.
In Phase 2 testing, TSC demonstrated a nearly four-fold improvement
in overall survival at two years for the subset of inoperable GBM
patients compared with the control group of GBM patients.
Commenting on recent developments, David
Kalergis, chairman and chief executive officer of Diffusion, said,
“We are excited to begin enrolling in our PHAST-TSC Phase 2 study
by early summer. We also are pleased with the response from
investigators and other key opinion leaders regarding the potential
for TSC in the treatment of acute stroke, and the opportunity for
success given the trial’s unique design. We continue to be excited
about the potential for TSC to bring new hope to patients with
life-threatening unmet medical needs and making TSC a commercial
success.”
First Quarter Financial
Results
Research and development expenses were $1.7
million for the first quarter of 2019, compared with $1.8 million
for the first quarter of 2018. The slight decrease was mainly
attributable to a $0.5 million decline in expenses related to the
Company’s Phase 3 GBM trial, offset by a $0.4 million increase in
expense related to the commencement of its Phase 2 stroke
trial.
General and administrative expenses were $1.2
million for the first quarter of 2019, compared with $1.5 million
for the first quarter of 2018. The decline was due to lower salary
and wages and stock-compensation expense.
Net cash used in operating activities during the
first quarter of 2019 was $2.7 million, compared with $3.3 million
during the prior-year period.
Diffusion had cash and cash equivalents of $5.3
million as of March 31, 2019. The Company believes its cash
and cash equivalents are sufficient to fund operations into July
2019.
About Diffusion Pharmaceuticals
Inc.
Diffusion Pharmaceuticals Inc. is an innovative
biotechnology company developing new treatments that improve the
body’s ability to bring oxygen to the areas where it is needed
most, offering new hope for the treatment of life-threatening
medical conditions.
Diffusion’s lead drug TSC was originally
developed in conjunction with the Office of Naval Research, which
was seeking a way to treat hemorrhagic shock caused by massive
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 stroke and
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 the target for TSC’s
novel mechanism.
In January 2018 the Company began enrolling
patients in the lead-in phase to its Phase 3 INTACT program, using
TSC to target inoperable GBM brain cancer. In September 2018 its
on-ambulance PHAST-TSC acute stroke protocol was granted FDA
clearance to proceed. Additional preclinical data supports
the potential use of TSC as a treatment for other conditions where
hypoxia plays a major role, such as myocardial infarction,
respiratory diseases such as COPD, 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, the anticipated timing of future clinical trials, 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
difficulty of developing pharmaceutical products, obtaining
regulatory and other approvals and achieving market acceptance;
general business and economic conditions; 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 Sheets
|
March 31, 2019 |
December 31, 2018 |
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ |
5,333,714 |
|
$ |
7,991,172 |
|
Prepaid expenses, deposits and other current assets |
|
1,050,008 |
|
|
923,059 |
|
Total current assets |
|
6,383,722 |
|
|
8,914,231 |
|
Property and equipment,
net |
|
332,009 |
|
|
350,281 |
|
Intangible asset |
|
8,639,000 |
|
|
8,639,000 |
|
Right of use asset |
|
313,364 |
|
|
— |
|
Other assets |
|
319,724 |
|
|
298,480 |
|
Total assets |
$ |
15,987,819 |
|
$ |
18,201,992 |
|
Liabilities and
Stockholders’ Equity |
|
|
Current liabilities: |
|
|
Accounts payable |
|
480,016 |
|
|
198,818 |
|
Accrued expenses and other current liabilities |
|
603,448 |
|
|
605,226 |
|
Current operating lease liability |
|
110,001 |
|
|
— |
|
Total current liabilities |
|
1,193,465 |
|
|
804,044 |
|
Deferred income taxes |
|
1,636,037 |
|
|
1,786,389 |
|
Noncurrent operating lease
liability |
|
203,363 |
|
|
— |
|
Total liabilities |
|
3,032,865 |
|
|
2,590,433 |
|
Commitments and
Contingencies |
|
|
Stockholders’ Equity: |
|
|
Common stock, $0.001 par
value: |
|
|
1,000,000,000 shares authorized; 3,376,230 issued and outstanding
at March 31, 2019 and December 31, 2018 |
|
3,377 |
|
|
3,377 |
|
Additional paid-in capital |
|
95,624,085 |
|
|
95,532,881 |
|
Accumulated deficit |
|
(82,672,508 |
) |
|
(79,924,699 |
) |
Total stockholders' equity |
|
12,954,954 |
|
|
15,611,559 |
|
Total liabilities and
stockholders' equity |
$ |
15,987,819 |
|
$ |
18,201,992 |
|
Diffusion Pharmaceuticals
Inc.Consolidated Statements of
Operations
|
|
Three Months ended March 31, |
|
|
2019 |
|
2018 |
Operating expenses: |
|
|
|
|
Research and development |
|
$ |
1,699,845 |
|
|
$ |
1,825,568 |
|
General and administrative |
|
|
1,200,728 |
|
|
|
1,497,839 |
|
Depreciation |
|
|
18,272 |
|
|
|
28,018 |
|
Loss from operations |
|
|
2,918,845 |
|
|
|
3,351,425 |
|
Other income: |
|
|
|
|
Interest income |
|
|
(20,684 |
) |
|
|
(37,464 |
) |
Loss from operations before
income tax benefit |
|
|
(2,898,161 |
) |
|
|
(3,313,961 |
) |
Income tax benefit |
|
|
(150,352 |
) |
|
|
— |
|
Net loss |
|
$ |
(2,747,809 |
) |
|
$ |
(3,313,961 |
) |
Accretion of Series A
cumulative preferred dividends |
|
|
— |
|
|
|
(85,993 |
) |
Deemed dividend related to the
make-whole provision for the conversion of Series A preferred stock
into common |
|
|
— |
|
|
|
(8,167,895 |
) |
Net loss attributable to
common stockholders |
|
$ |
(2,747,809 |
) |
|
$ |
(11,567,849 |
) |
Per share information: |
|
|
|
|
Net loss per share of common
stock, basic and diluted |
|
$ |
(0.81 |
) |
|
$ |
(4.11 |
) |
Weighted average shares
outstanding, basic and diluted |
|
|
3,376,230 |
|
|
|
2,814,316 |
|
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