Cocrystal Pharma, Inc. (Nasdaq: COCP) (Cocrystal or the
Company) reports financial results for the three months ended March
31, 2023 and provides updates on its antiviral pipeline, upcoming
milestones and business activities.
“Recent progress in advancing our pipeline of
antiviral drug candidates keeps us on pace to meet our 2023
milestones,” said Sam Lee, Ph.D., President and co-CEO of
Cocrystal. “In our COVID-19 program, we submitted an application to
the Australian regulatory agency to begin a first-in-human clinical
trial with our novel, broad-spectrum oral protease inhibitor
CDI-988. We are prepared to begin this trial in the current
quarter, subject to regulatory clearance.
“We are working diligently to meet the strict UK
regulatory filing standards to begin a Phase 2a human challenge
study with our novel oral PB2 inhibitor CC-42344 for pandemic and
seasonal influenza A. Pending regulatory approval, this trial is
set to begin in the second half of this year,” he added. “In our
norovirus program, we are completing additional preclinical studies
and expect to announce a lead oral candidate for further
development in the very near future.”
“We are well positioned to advance our programs
with cash resources that we believe are sufficient for planned
operating activities for the coming year, while also pursuing
non-dilutive funding to further support the development of our
promising antiviral programs,” said James Martin, CFO and
co-CEO.
“During the second quarter, we completed a $4
million private placement financing in which we received
investments from our co-founder and director Dr. Phillip Frost and
Mr. Fred Hassan, a highly accomplished industry veteran. Subsequent
to the fundraise, we were pleased to welcome Mr. Hassan to our
Board of Directors,” he added. “Last week we filed a registration
statement on Form S-3, known as a shelf registration statement,
with the Securities and Exchange Commission, as a normal course of
business to replace our current shelf registration statement which
was due to expire. While we do not have any immediate plans to
raise funds under this filing, we deem it prudent to have a shelf
registration statement in place which once effective will allow us
greater flexibility to pursue additional financing opportunities in
the future.”
Antiviral
Product Pipeline
Overview
We are developing antiviral therapeutics that
inhibit the essential viral replication function of RNA viruses
that cause acute and chronic diseases. Our drug discovery process
focuses on the highly conserved regions of the viral enzymes and
inhibitor-enzyme interactions at the atomic level. It differs from
traditional, empirical medicinal chemistry approaches that often
require iterative high-throughput compound screening and lengthy
hit-to-lead processes. By designing and selecting drug candidates
that interrupt the viral replication process and have specific
binding characteristics, we seek to develop drugs that are
effective against both the virus and possible mutants of the virus,
and also have reduced off-target interactions that may cause
undesirable clinical side effects.
Influenza ProgramsInfluenza is a severe
respiratory illness caused by either the influenza A or B virus
that results in disease outbreaks mainly during the winter months.
The global seasonal influenza market was valued at $6.5 billion in
2021 and is projected to reach up to $27.95 billion by 2029,
according to Data Bridge Market Research.
- Pandemic and Seasonal Influenza A
- Our novel oral PB2 inhibitor,
CC-42344, has shown excellent antiviral activity against influenza
A strains including pandemic and seasonal strains, as well as
strains resistant to Tamiflu® and Xofluza®.
- In March 2022 we initiated
enrollment in a randomized, double-controlled, dose-escalating
Phase 1 clinical trial to evaluate the safety, tolerability and
pharmacokinetics (PK) of orally administered CC-42344 in healthy
adults.
- In April 2022 we announced
preliminary Phase 1 clinical trial data demonstrating a favorable
safety and PK profile in the first two cohorts in the
single-ascending dose portion of the study.
- In July 2022 we reported PK results
from the single-ascending dose of the study supporting once-daily
dosing.
- In December 2022 we reported
favorable safety and tolerability results from the Phase 1 trial
with CC-42344 for influenza A.
- We entered into an agreement with a
UK-based clinical research organization to conduct a Phase 2a human
challenge study evaluating safety, and viral and clinical measures
of orally administered CC-42344 in influenza A-infected subjects.
Under the human challenge model, healthy adults will be infected
with the influenza A virus under carefully controlled conditions,
which we believe will hasten trial enrollment.
- We expect to submit an application
with the United Kingdom Medicines and Healthcare Products
Regulatory Agency in the first half of 2023 to conduct this study
and, pending clearance, we expect to initiate the study in the
second half of 2023.
- Preclinical development is underway
with an inhaled formulation of CC-42344 as a treatment and
prophylaxis for influenza A. We expect to begin a Phase 1 clinical
trial in the first half of 2024.
- Pandemic and Seasonal Influenza A/B
Program
- In January 2019 we entered into an
Exclusive License and Research Collaboration Agreement with Merck
Sharp & Dohme Corp. (Merck) to discover and develop certain
proprietary influenza antiviral agents that are effective against
both influenza A and B strains. This agreement includes milestone
payments of up to $156 million plus royalties on sales of products
discovered under the agreement.
- In January 2021 we announced
completion of all research obligations under the agreement, making
Merck solely responsible for further preclinical and clinical
development of these compounds.
- In early 2023 Merck notified us of
its intent to continue development of the proprietary compounds
discovered under this agreement and that they have filed multiple
U.S. and international patent applications associated with these
compounds on behalf of both companies. Merck continues to be
responsible for managing the patents.
COVID-19 and Other Coronavirus ProgramsBy
targeting viral replication enzymes and protease, we believe it is
possible to develop an effective treatment for all coronavirus
diseases including COVID-19, Severe Acute Respiratory Syndrome
(SARS) and Middle East Respiratory Syndrome (MERS). Our main
SARS-CoV-2 protease inhibitors showed potent in vitro pan-viral
activity against common human coronaviruses, rhinoviruses and
respiratory enteroviruses that cause the common cold, as well as
against noroviruses that can cause symptoms of acute
gastroenteritis.
- Oral Protease Inhibitor CDI-988
- We selected CDI-988 as our lead
candidate for development as a potential oral treatment for
SARS-CoV-2. Designed and developed using our proprietary
structure-based drug discovery platform technology, CDI-988 targets
a highly conserved region in the active site of SARS-CoV-2 3CL
(main) protease required for viral RNA replication.
- CDI-988 exhibited superior in vitro
potency against SARS-CoV-2 with activity maintained against
variants of concern, and demonstrated a safety profile and PK
properties that are supportive of daily dosing.
- We submitted an application to the
Australian regulatory agency for a planned randomized,
double-blind, placebo-controlled Phase 1 clinical trial. Pending
regulatory clearance, we expect to initiate the study in the first
half of 2023. We believe the FDA’s guidance for further development
of our antiviral candidate CDI-45205 (described below) also
provides us with a clearer pathway for this planned study, as well
as directives for designing a subsequent Phase 2 clinical
trial.
- Intranasal/Pulmonary Protease
Inhibitor CDI-45205
- An IND-enabling study is ongoing
with CDI-45205, our novel SARS-CoV-2 3CL (main) protease inhibitor
being developed as a potential treatment for SARS-CoV-2 and its
variants.
- We received guidance from the FDA
regarding further preclinical and clinical development of CDI-45205
that provides a clearer pathway for future development.
- CDI-45205 and several analogs
showed potent in vitro activity against the main SARS-CoV-2
variants to date, surpassing the activity observed with the
original Wuhan strain.
- CDI-45205 demonstrated good
bioavailability in mouse and rat PK studies via intraperitoneal
injection, and no cytotoxicity against a variety of human cell
lines. CDI-45205 also demonstrated a strong synergistic effect with
the FDA-approved COVID-19 medicine remdesivir.
- An IND-enabling study with
CDI-45205 is ongoing.
- CDI-45205 was among the
broad-spectrum viral protease inhibitors we obtained from Kansas
State University Research Foundation (KSURF) under an exclusive
license agreement announced in April 2020. We believe the protease
inhibitors obtained from KSURF have the ability to inhibit the
inactive SARS-CoV-2 polymerase replication enzymes into an active
form.
- Replication Inhibitors
- We are using our proprietary
structure-based drug discovery platform technology to discover
replication inhibitors for orally administered therapeutic and
prophylactic treatments for SARS-CoV-2. Replication inhibitors hold
potential to work with protease inhibitors in a combination therapy
regimen.
Norovirus Program
- We are developing proprietary
broad-spectrum, non-nucleoside polymerases for the treatment of
human norovirus infections using our proprietary structure-based
drug design technology platform. We also hold exclusive rights to
norovirus protease inhibitors for use in humans under the KSURF
license.
- We are targeting the selection of
an oral preclinical lead in the first half of 2023.
- Norovirus is a global public health
problem that’s responsible for nearly 90% of epidemic,
non-bacterial outbreaks of gastroenteritis around the world.
Hepatitis C Program
- We are seeking a partner to advance
the development of CC-31244 following the successful completion of
a Phase 2a clinical trial. This compound has shown favorable safety
and preliminary efficacy in a triple-regimen Phase 2a clinical
trial in combination with Epclusa (sofosbuvir/velpatasvir) for the
ultra-short duration treatment of individuals infected with the
hepatitis C virus (HCV).
- HCV is a viral infection of the
liver that causes both acute and chronic infection. In June 2022
the World Health Organization estimated that 58 million people
worldwide have chronic HCV infection.
Corporate Updates
- On May 12, 2023, we filed a
registration statement on Form S-3 with Securities and Exchange
Commission to replace our previous Form S-3, which was expiring.
The replacement shelf registration statement is subject to
potential review and comment from, and must be declared effective
by, the Securities and Exchange Commission before it can be used
for new offerings.
- On April 24, 2023, we announced the
appointment of Fred Hassan to our Board of Directors. Mr. Hassan’s
distinguished 40-year career includes serving in senior executive
and director positions at global pharmaceutical companies and
leading investment firms. He currently is Chairman of the
investment firm Caret Group and a Director of Warburg Pincus LLC, a
global private equity firm.
- On April 4, 2023, we completed a $4
million private placement offering of our common stock with Mr.
Hassan and Phillip Frost, M.D., a Company cofounder and director,
who serves as Chairman and CEO of OPKO Health.
- On March 29, 2023, the United
States Court of Appeals for the Third Circuit ruled in favor of our
previously disclosed litigation with an insurance company, thereby
vacating the trial court’s prior grant of summary judgment in favor
of the insurer. As a result of this ruling, the case will be
remanded to the District Court for trial on the merits of our
coverage claims for defense costs. We intend to file a motion to
seek the return of the $1.6 million that we paid to the District
Court to stay the judgment. We are evaluating all options,
including potential settlement with the insurance company.
First Quarter Financial
Results
Research and development expenses for the first
quarter of 2023 were $3.9 million, compared with $2.9 million for
the first quarter of 2022. The increase was primarily due to
preparations for a Phase 2a clinical trial with CC-42344 for
pandemic and seasonal influenza A and a Phase 1 clinical trial with
CDI-988 for COVID-19, and advancing the preclinical norovirus
program, partially offset by a reduction in R&D tax credits.
General and administrative expenses for the first quarter of 2023
were $1.2 million, compared with $1.3 million for the first quarter
of 2022. The decrease was primarily due to lower stock option,
litigation, financial/listing and insurance expenses.
The net loss for the first quarter of 2023 was
$5.2 million, or $0.64 per share, compared with the net loss for
the first quarter of 2022 of $4.2 million, or $0.52 per share.
Cocrystal reported unrestricted cash as of March
31, 2023 of $34.0 million, compared with $37.1 million as of
December 31, 2022. The net cash used in operating activities for
the first quarter of 2023 was $3.1 million. The Company had working
capital of $33.8 million and 8.1 million common shares outstanding
as of March 31, 2023. Subsequent to the close of the first quarter,
the Company raised $4 million in a private placement offering of
common stock which was priced “at-the-market” under Nasdaq Listing
Rules.
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 our plans for the future development of preclinical and
clinical drug candidates, our expectations regarding future
characteristics of the product candidates we develop, the expected
time of achieving certain value driving milestones in our programs,
including, preparation, commencement and advancement of clinical
studies for certain product candidates in 2023 and beyond, the
viability and efficacy of potential treatments for coronavirus and
other diseases, expectations for the markets for certain
therapeutics, our ability to execute our clinical and regulatory
goals and deploy regulatory guidance towards future studies, the
expected sufficiency of our cash balance to advance our programs
and fund our planned operations, our liquidity, and our continued
pursuit of non-dilutive funding. 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 and uncertainties arising from the risks arising from
inflation, interest rate increases, the recent banking crisis, the
possibility of a recession and the Ukraine war on our Company, our
collaboration partners, and on the U.S., U.K., Australia and global
economies, including manufacturing and research delays arising from
raw materials and labor shortages, supply chain disruptions and
other business interruptions including any adverse impacts on our
ability to obtain raw materials and test animals as well as similar
problems with our vendors and our current and any future CROs and
contract manufacturing organizations (CMOs), the ability of our
CROs to recruit volunteers for, and to proceed with, clinical
studies, our reliance on Merck for further development in the
influenza A/B program under the license and collaboration
agreement, our and our collaboration partners’ technology and
software performing as expected, financial difficulties experienced
by certain partners, the results of any current and future
preclinical and clinical trials, general risks arising from
clinical trials, receipt of regulatory approvals, regulatory
changes, development of effective treatments and/or vaccines by
competitors, including as part of the programs financed by the U.S.
government, potential mutations in a virus we are targeting which
may result in variants that are resistant to a product candidate we
develop, and the outcome of the ongoing litigation with the
insurance company. 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, 2022. 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
Media Contact:JQA PartnersJules
Abraham917-885-7378Jabraham@jqapartners.com
COCRYSTAL PHARMA,
INC.CONSOLIDATED BALANCE SHEETS
(in thousands)
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
|
|
(unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
33,981 |
|
|
|
$ |
37,144 |
|
Restricted cash |
|
|
75 |
|
|
|
|
75 |
|
Tax credit receivable |
|
|
956 |
|
|
|
|
716 |
|
Prepaid expenses and other current assets |
|
|
2,224 |
|
|
|
|
2,243 |
|
Total current assets |
|
|
37,236 |
|
|
|
|
40,178 |
|
Property and equipment,
net |
|
|
338 |
|
|
|
|
342 |
|
Deposits |
|
|
46 |
|
|
|
|
46 |
|
Operating lease right-of-use
assets, net (including $87 and $99 respectively, to related
party) |
|
|
221 |
|
|
|
|
274 |
|
Total assets |
|
$ |
37,841 |
|
|
|
$ |
40,840 |
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’
equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
2,937 |
|
|
|
$ |
976 |
|
Current maturities of finance lease liabilities |
|
|
- |
|
|
|
|
7 |
|
Current maturities of operating lease liabilities (including $60
and $59 respectively, to related party) |
|
|
208 |
|
|
|
|
233 |
|
Total current liabilities |
|
|
3,145 |
|
|
|
|
1,216 |
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities (including $26 and 42 respectively, to
related party) |
|
|
27 |
|
|
|
|
57 |
|
Total long-term
liabilities |
|
|
27 |
|
|
|
|
57 |
|
Total liabilities |
|
|
3,172 |
|
|
|
|
1,273 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, $0.001 par
value; 150,000 shares authorized as of March 31, 2023, and December
31, 2022; 8,143 shares issued and outstanding as of March 31, 2023
and December 31, 2022 |
|
|
8 |
|
|
|
|
8 |
|
Additional paid-in
capital |
|
|
337,780 |
|
|
|
|
337,489 |
|
Accumulated deficit |
|
|
(303,119 |
) |
|
|
|
(297,930 |
) |
Total stockholders’
equity |
|
|
34,669 |
|
|
|
|
39,567 |
|
Total liabilities and
stockholders’ equity |
|
$ |
37,841 |
|
|
|
$ |
40,840 |
|
COCRYSTAL PHARMA,
INC.CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
|
|
Three months ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
3,907 |
|
|
|
|
2,872 |
|
General and administrative |
|
|
1,204 |
|
|
|
|
1,333 |
|
Total operating expenses |
|
|
5,111 |
|
|
|
|
4,205 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(5,111 |
) |
|
|
|
(4,205 |
) |
Other (expense) income: |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
- |
|
|
|
|
(1 |
) |
Foreign exchange loss |
|
|
(78 |
) |
|
|
|
(13 |
) |
Change in fair value of derivative liabilities |
|
|
- |
|
|
|
|
11 |
|
Total other (expense) income, net |
|
|
(78 |
) |
|
|
|
(3 |
) |
Net loss |
|
$ |
(5,189 |
) |
|
|
$ |
(4,208 |
) |
Net loss per common share,
basic and diluted |
|
$ |
(0.64 |
) |
|
|
$ |
(0.52 |
) |
Weighted average number of
common shares outstanding, basic and diluted |
|
|
8,143 |
|
|
|
|
8,143 |
|
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