☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
11-3516358
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☑
|
||
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
||
Emerging growth company
|
☐
|
Page
|
|||
PART I
|
1
|
||
Item 1
|
1
|
||
1)
|
1
|
||
2)
|
2
|
||
3)
|
3
|
||
4)
|
4
|
||
5)
|
5
|
||
Item 2
|
26
|
||
Item 3
|
34
|
||
Item 4
|
34
|
||
PART II
|
35
|
||
Item 1A
|
35
|
||
Item 2
|
35
|
||
Item 6
|
36
|
||
37
|
September 30, 2018
|
December 31, 2017
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
4,591,722
|
$
|
8,899,154
|
||||
Marketable securities
|
7,974,010
|
17,931,941
|
||||||
Prepaid expenses and other current assets
|
1,154,898
|
1,304,541
|
||||||
Total Current Assets
|
13,720,630
|
28,135,636
|
||||||
Security Deposits
|
30,785
|
30,785
|
||||||
Equipment, Net
|
123,480
|
121,460
|
||||||
Total Assets
|
$
|
13,874,895
|
$
|
28,287,881
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$
|
3,331,646
|
$
|
3,233,926
|
||||
Deferred Research and Development Arrangement
|
-
|
375,000
|
||||||
Other Liabilities
|
29,850
|
56,724
|
||||||
Warrant Liabilities
|
4,101,504
|
7,853,635
|
||||||
Total Liabilities
|
7,463,000
|
11,519,285
|
||||||
Commitments
and Contingencies (note 14)
|
||||||||
Stockholders’ Equity:
|
||||||||
Preferred stock, par value $0.0001, 10,000,000 authorized shares, none issued and outstanding
|
-
|
-
|
||||||
Common stock, par value $0.0001, 75,000,000 and 50,000,000 authorized shares, 31,751,939 and
31,725,114 issued and outstanding
|
3,175
|
3,173
|
||||||
Additional paid-in capital
|
158,008,879
|
157,141,021
|
||||||
Accumulated other comprehensive loss
|
(29,487
|
)
|
(56,886
|
)
|
||||
Accumulated deficit
|
(151,570,672
|
)
|
(140,318,712
|
)
|
||||
Total Stockholders’ Equity
|
6,411,895
|
16,768,596
|
||||||
Total Liabilities and Stockholders’ Equity
|
$
|
13,874,895
|
$
|
28,287,881
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Revenues:
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Expenses:
|
||||||||||||||||
General and administrative
|
1,795,952
|
1,574,323
|
5,192,122
|
5,004,832
|
||||||||||||
Research and development
|
2,887,955
|
2,644,999
|
10,379,081
|
7,451,656
|
||||||||||||
Total Expenses
|
4,683,907
|
4,219,322
|
15,571,203
|
12,456,488
|
||||||||||||
Loss from Operations
|
(4,683,907
|
)
|
(4,219,322
|
)
|
(15,571,203
|
)
|
(12,456,488
|
)
|
||||||||
Other Income (Expense)
|
||||||||||||||||
Interest income
|
55,153
|
60,750
|
198,362
|
135,329
|
||||||||||||
Other income
|
-
|
-
|
368,750
|
-
|
||||||||||||
Unrealized (loss) gain on fair value of warrants
|
(710,065
|
)
|
3,120,500
|
3,752,131
|
(9,047,831
|
)
|
||||||||||
Financing expense
|
-
|
-
|
-
|
(333,050
|
)
|
|||||||||||
Total Other Income (Expense)
|
(654,912
|
)
|
3,181,250
|
4,319,243
|
(9,245,552
|
)
|
||||||||||
Net Loss Before Provision for Income Taxes
|
(5,338,819
|
)
|
(1,038,072
|
)
|
(11,251,960
|
)
|
(21,702,040
|
)
|
||||||||
Provision for income taxes
|
-
|
-
|
-
|
-
|
||||||||||||
Net Loss
|
$
|
(5,338,819
|
)
|
$
|
(1,038,072
|
)
|
$
|
(11,251,960
|
)
|
$
|
(21,702,040
|
)
|
||||
Net loss per share, basic and diluted
|
$
|
(0.17
|
)
|
$
|
(0.04
|
)
|
$
|
(0.35
|
)
|
$
|
(0.83
|
)
|
||||
Weighted average number of shares outstanding, basic and diluted
|
31,751,450
|
28,459,316
|
31,742,531
|
26,121,160
|
For the Three Months
Ended September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net Loss
|
$
|
(5,338,819
|
)
|
$
|
(1,038,072
|
)
|
$
|
(11,251,960
|
)
|
$
|
(21,702,040
|
)
|
||||
Unrealized gain (loss) on available-for-sale securities
|
35,468
|
11,740
|
27,399
|
(7,843
|
)
|
|||||||||||
Comprehensive Loss
|
$
|
(5,303,351
|
)
|
$
|
(1,026,332
|
)
|
$
|
(11,224,561
|
)
|
$
|
(21,709,883
|
)
|
For the Nine Months Ended
September 30,
|
||||||||
2018
|
2017
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net loss
|
$
|
(11,251,960
|
)
|
$
|
(21,702,040
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Compensatory stock
|
22,650
|
31,200
|
||||||
Depreciation and amortization
|
37,204
|
30,963
|
||||||
Amortization of premiums and discounts on marketable securities, net
|
35,110
|
40,578
|
||||||
Stock-based compensation
|
845,210
|
790,006
|
||||||
Amortization and termination of deferred research and development arrangement
|
(375,000
|
)
|
(56,250
|
)
|
||||
Unrealized (gain) loss on fair value of warrants
|
(3,752,131
|
)
|
9,047,831
|
|||||
Financing expense
|
-
|
333,050
|
||||||
Amortization of deferred lease incentive
|
(9,332
|
)
|
(9,333
|
)
|
||||
Deferred lease expenses
|
(17,542
|
)
|
(8,314
|
)
|
||||
Changes in assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
149,643
|
(669,087
|
)
|
|||||
Accounts payable and accrued expenses
|
97,720
|
456,277
|
||||||
Net Cash Used in Operating Activities
|
(14,218,428
|
)
|
(11,715,119
|
)
|
||||
Cash Flows from Investing Activities:
|
||||||||
Purchase of equipment
|
(39,224
|
)
|
(21,369
|
)
|
||||
Purchase of marketable securities
|
-
|
(15,008,660
|
)
|
|||||
Redemption of marketable securities
|
9,950,220
|
8,720,000
|
||||||
Net Cash Provided by (Used In) Investing Activities
|
9,910,996
|
(6,310,029
|
)
|
|||||
Cash Flows from Financing Activities:
|
||||||||
Issuance of common stock and units, net of issuance costs
|
-
|
9,241,271
|
||||||
Proceeds from exercise of stock warrants
|
-
|
5,354,093
|
||||||
Proceeds from exercise of stock options
|
-
|
77,500
|
||||||
Net Cash Provided by Financing Activities
|
-
|
14,672,864
|
||||||
Net Decrease in Cash and Cash Equivalents
|
(4,307,432
|
)
|
(3,352,284
|
)
|
||||
Cash and Cash Equivalents – beginning of period
|
8,899,154
|
11,578,473
|
||||||
Cash and Cash Equivalents - end of period
|
$
|
4,591,722
|
$
|
8,226,189
|
||||
Supplemental Cash Flow Information
|
||||||||
Non-cash financing and investing activities:
|
||||||||
Warrants issued
|
$
|
-
|
$
|
4,107,488
|
||||
Warrant liability extinguishment from exercise of warrants
|
$
|
-
|
$
|
8,052,594
|
1. |
Operations and Organization
|
2.
|
Recent Accounting Pronouncements Affecting the Company
|
3. |
Marketable Securities
|
September 30, 2018
|
||||||||||||||||
Cost
Basis
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
Corporate Bonds
|
$
|
8,003,497
|
$
|
-
|
$
|
(29,487
|
)
|
$
|
7,974,010
|
December 31, 2017
|
||||||||||||||||
|
Cost
Basis
|
Gross
Unrealized Gains
|
Gross
Unrealized Losses
|
Fair
Value
|
||||||||||||
Commercial Paper
|
$
|
3,241,005
|
$
|
-
|
$
|
(2,505
|
)
|
$
|
3,238,500
|
|||||||
Corporate Bonds
|
14,747,822
|
-
|
(54,381
|
)
|
14,693,441
|
|||||||||||
Total Marketable Securities
|
$
|
17,988,827
|
$
|
-
|
$
|
(56,886
|
)
|
$
|
17,931,941
|
4.
|
Prepaid Expenses and Other Current Assets
|
September 30,
2018
|
December 31,
2017
|
|||||||
Deposits on contracts
|
$
|
520,677
|
$
|
793,940
|
||||
Prepaid expenses and other current assets
|
634,221
|
510,601
|
||||||
$
|
1,154,898
|
$
|
1,304,541
|
5.
|
Equipment, Net
|
September 30,
2018
|
December 31,
2017
|
|||||||
Furniture and fixtures
|
$
|
82,686
|
$
|
82,686
|
||||
Office and computer equipment
|
159,489
|
171,724
|
||||||
Lab equipment
|
447,653
|
445,134
|
||||||
Leasehold improvements
|
131,762
|
133,762
|
||||||
Total equipment
|
821,590
|
833,306
|
||||||
Less: Accumulated depreciation and amortization
|
(698,110
|
)
|
(711,846
|
)
|
||||
Net carrying amount
|
$
|
123,480
|
$
|
121,460
|
6.
|
Accounts Payable and Accrued Expenses
|
September 30,
2018
|
December 31,
2017
|
|||||||
Trade payables
|
$
|
1,298,168
|
$
|
895,638
|
||||
Accrued expenses
|
103,000
|
95,416
|
||||||
Accrued research and development contract costs
|
1,252,445
|
1,435,109
|
||||||
Payroll liabilities
|
678,033
|
807,763
|
||||||
$
|
3,331,646
|
$
|
3,233,926
|
7.
|
Deferred Research and Development Arrangement
|
8.
|
Other Liabilities
|
September 30,
2018
|
December 31,
2017
|
|||||||
Deferred lease incentive
|
$
|
154,660
|
$
|
154,660
|
||||
Less accumulated amortization
|
(145,327
|
)
|
(135,995
|
)
|
||||
Balance
|
$
|
9,333
|
$
|
18,665
|
9.
|
Net Loss per Common Share
|
10.
|
Common Stock
|
11.
|
Stock-Based Compensation
|
For the Three Months
Ended
September 30,
|
For the Nine Months
Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Statement of operations line item:
|
||||||||||||||||
General and administrative
|
$
|
188,920
|
$
|
184,914
|
$
|
579,924
|
$
|
580,812
|
||||||||
Research and development
|
92,562
|
42,700
|
265,286
|
209,194
|
||||||||||||
Total
|
$
|
281,482
|
$
|
227,614
|
$
|
845,210
|
$
|
790,006
|
Nine Months Ended September 30,
|
||||||||
2018
|
2017
|
|||||||
Black-Scholes assumptions
|
||||||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
||||
Expected volatility
|
69-72
|
%
|
69-79
|
%
|
||||
Risk-free interest rate
|
2.3-2.8
|
%
|
1.8-2.0
|
%
|
||||
Expected term (in years)
|
5.5-6 years
|
5.5-6 years
|
Number of
Options
|
Weighted
Average
Exercise
Price
|
Weighted Average
Remaining
Contractual Term
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding, January 1, 2018
|
1,814,231
|
$
|
5.33
|
7.1 years
|
$
|
53,883
|
|||||||
Granted
|
860,307
|
$
|
1.96
|
||||||||||
Exercised
|
-
|
$
|
-
|
||||||||||
Expired
|
(25,000
|
)
|
$
|
21.78
|
|||||||||
Cancelled
|
(50,500
|
)
|
$
|
5.16
|
|||||||||
Outstanding, September 30, 2018
|
2,599,038
|
$
|
4.06
|
7.5 years
|
$
|
50,870
|
|||||||
Exercisable, September 30, 2018
|
1,345,721
|
$
|
5.71
|
6.1 years
|
$
|
-
|
2018
|
||||||||
Number of
Options
|
Weighted Average Fair
Value at Grant Date
|
|||||||
Unvested at January 1, 2018
|
727,543
|
$
|
2.39
|
|||||
Granted
|
860,307
|
$
|
1.27
|
|||||
Vested
|
(334,533
|
)
|
$
|
2.89
|
||||
Cancelled
|
-
|
$
|
-
|
|||||
Unvested at September 30, 2018
|
1,253,317
|
$
|
1.49
|
Number of RSUs
|
Weighted
Average Grant
Date Fair Value
|
|||||||
Outstanding, January 1, 2018
|
47,300
|
$
|
1.84
|
|||||
Granted
|
-
|
$
|
-
|
|||||
Vested and Released
|
(11,825
|
)
|
$
|
1.84
|
||||
Cancelled
|
-
|
$
|
-
|
|||||
Outstanding, September 30, 2018
|
35,475
|
$
|
1.84
|
12.
|
Warrants
|
2018
|
2017
|
|||||||||||||||
Number of
warrants
|
Weighted
average exercise
price
|
Number of
warrants
|
Weighted average
exercise price
|
|||||||||||||
Balance, January 1
|
7,099,609
|
$
|
4.55
|
5,452,691
|
$
|
4.92
|
||||||||||
Issued during the period
|
-
|
$
|
-
|
1,696,970
|
$
|
4.01
|
||||||||||
Exercised during the period
|
-
|
$
|
-
|
(1,861,195
|
)
|
$
|
3.51
|
|||||||||
Expired during the period
|
(200,000
|
)
|
$
|
5.90
|
-
|
$
|
-
|
|||||||||
Balance, September 30
|
6,899,609
|
$
|
4.51
|
5,288,466
|
$
|
5.13
|
Warrant Issuance:
|
Fair Value as of:
|
|||||||
September 30, 2018
|
December 31, 2017
|
|||||||
July 2013 Investor Warrants
|
$
|
-
|
$
|
8,762
|
||||
October 2013 Investor Warrants
|
-
|
26,288
|
||||||
January 2014 Investor Warrants
|
-
|
29,257
|
||||||
November 2015 Investor Warrants
|
399,278
|
1,260,050
|
||||||
November 2015 Placement Agent Warrants
|
591
|
2,936
|
||||||
March 2016 Investor Warrants
|
296,462
|
697,554
|
||||||
September 2016 Investor Warrants
|
592,513
|
1,054,083
|
||||||
June 2017 Investor Warrants
|
1,059,522
|
1,981,864
|
||||||
June 2017 Placement Agent Warrants
|
115,769
|
221,591
|
||||||
October 2017 Investor Warrants
|
1,476,646
|
2,305,552
|
||||||
October 2017 Placement Agent Warrants
|
160,723
|
265,698
|
||||||
Total:
|
$
|
4,101,504
|
$
|
7,853,635
|
Warrant Issuance
|
Number of Shares indexed as of:
|
|||||||
September 30, 2018
|
December 31, 2017
|
|||||||
July 2013 Investor Warrants
|
-
|
200,000
|
||||||
October 2013 Investor Warrants
|
231,732
|
231,732
|
||||||
January 2014 Investor Warrants
|
476,193
|
476,193
|
||||||
November 2015 Investor Warrants
|
1,250,001
|
1,250,001
|
||||||
November 2015 Placement Agent Warrants
|
3,334
|
3,334
|
||||||
March 2016 Investor Warrants
|
607,806
|
607,806
|
||||||
September 2016 Investor Warrants
|
805,000
|
805,000
|
||||||
June 2017 Investor Warrants
|
1,515,152
|
1,515,152
|
||||||
June 2017 Placement Agent Warrants
|
181,818
|
181,818
|
||||||
October 2017 Investor Warrants
|
1,632,654
|
1,632,654
|
||||||
October 2017 Placement Agent Warrants
|
195,919
|
195,919
|
||||||
Total:
|
6,899,609
|
7,099,609
|
September 30, 2018
|
December 31, 2017
|
|||||||
Trading market prices
|
$
|
1.78
|
$
|
2.02
|
||||
Estimated future volatility
|
101
|
%
|
104
|
%
|
||||
Dividend
|
-
|
-
|
||||||
Estimated future risk-free rate
|
3.02-3.04
|
%
|
2.14-2.45
|
%
|
||||
Equivalent volatility
|
49-76
|
%
|
85-104
|
%
|
||||
Equivalent risk-free rate
|
1.10-2.70
|
%
|
1.30-1.89
|
%
|
For the Three Months
Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Expired and Fully Exercised Warrants
|
$
|
-
|
$
|
7,306
|
$
|
-
|
$
|
(855,010
|
)
|
|||||||
July 2013 Investor Warrants
|
-
|
125,686
|
8,762
|
(55,362
|
)
|
|||||||||||
October 2013 Investor Warrants
|
-
|
135,683
|
26,288
|
(102,608
|
)
|
|||||||||||
January 2014 Investor Warrants
|
-
|
177,900
|
29,257
|
(125,148
|
)
|
|||||||||||
November 2015 Investor Warrants
|
5,971
|
797,688
|
860,772
|
(1,304,350
|
)
|
|||||||||||
November 2015 Placement Agent Warrants
|
211
|
1,691
|
2,345
|
(366,694
|
)
|
|||||||||||
March 2016 Investor Warrants
|
(38,943
|
)
|
356,472
|
401,092
|
(2,873,309
|
)
|
||||||||||
September 2016 Investor Warrants
|
(109,915
|
)
|
506,353
|
461,570
|
(4,807,246
|
)
|
||||||||||
June 2017 Investor Warrants
|
(178,869
|
)
|
894,076
|
922,342
|
1,277,485
|
|||||||||||
June 2017 Placement Agent Warrants
|
(22,518
|
)
|
117,645
|
105,822
|
164,411
|
|||||||||||
October 2017 Investor Warrants
|
(331,671
|
)
|
-
|
828,906
|
-
|
|||||||||||
October 2017 Placement Agent Warrants
|
(34,331
|
)
|
-
|
104,975
|
-
|
|||||||||||
Total:
|
$
|
(710,065
|
)
|
$
|
3,120,500
|
$
|
3,752,131
|
$
|
(9,047,831
|
)
|
13.
|
Income Taxes
|
September 30,
2018
|
December 31,
2017
|
|||||||
Net Operating Loss Carryforwards
|
$
|
39,897,000
|
$
|
35,805,000
|
||||
Stock Compensation Expense
|
1,558,000
|
1,458,000
|
||||||
Book tax differences on assets and liabilities
|
209,000
|
365,000
|
||||||
Valuation Allowance
|
(41,664,000
|
)
|
(37,628,000
|
)
|
||||
Net Deferred Tax Assets
|
$
|
-
|
$
|
-
|
14. |
Commitments and Contingencies
|
a) |
The Company has contracted with various vendors for services, with terms that require payments over the terms of the agreements, usually ranging from two to 36 months.
The costs to be incurred are estimated and are subject to revision. As of September 30, 2018, the total estimated cost to complete these agreements was approximately $6,980,000. All of these agreements may be terminated by either
party upon appropriate notice as stipulated in the respective agreements.
|
b) |
On June 22, 2009, the Company entered into a License Agreement with Korea Research Institute of Chemical Technology (“KRICT”) to acquire the rights to all intellectual
property related to quinoxaline-piperazine derivatives that were synthesized under a Joint Research Agreement. The initial license fee was $100,000, all of which was paid as of December 31, 2009. The agreement with KRICT calls for a
one-time milestone payment of $1,000,000 within 30 days after the first achievement of marketing approval of the first commercial product arising out of or in connection with the use of KRICT’s intellectual property. As of September
30, 2018, the milestone has not occurred.
|
c) |
Office Space Lease
|
For the remaining three months ending December 31:
|
2018
|
$
|
70,806
|
||
For the year ending December 31:
|
2019
|
176,080
|
|||
|
2020 |
34,468
|
|||
Total |
$
|
281,354
|
d) |
The Company has established a 401(k) plan for its employees. The Company has elected to match 100% of the
first 3% of an employee’s compensation plus 50% of an additional 2% of the employee’s deferral. Expense related to this matching contribution aggregated to $29,425
and $31,453 for the three months ended September 30, 2018 and 2017, respectively, and $99,702 and $92,203 for the nine months ended September 30, 2018 and 2017, respectively.
|
e) |
In July 2013, the Company entered into an exclusive license agreement with the University of Maryland, Baltimore for a novel drug delivery platform, Nano-Polymer Drug
Conjugate Systems. As of September 30, 2018, no development milestones have occurred.
|
f) |
In October 2013, the Company signed an exclusive license agreement with the Ohio State Innovation Foundation, for a novel oligonucleotide drug delivery platform,
Lipid-Coated Albumin Nanoparticle. The agreement requires the Company to make payments to the Ohio State Innovation Foundation if any products from the licensed delivery platform achieve development milestones. As of September 30,
2018, no development milestones have occurred.
|
g) |
On February 5, 2018, the Company and Next BT terminated the research collaboration agreement between the Company and Rexgene. In exchange for Next BT terminating its
rights to RX-0201 in Asia, the Company agreed to pay Next BT a royalty in the low single digits of any net sales of RX-0201 the Company makes in Asia and 50% of the Company’s licensing revenue related to licensing of RX-0201 in Asia,
up to an aggregate of $5,000,000.
|
15.
|
Fair Value Measurements
|
Level 1 Inputs
|
—
|
Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by the Company;
|
||
Level 2 Inputs
|
—
|
Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or
indirectly; and
|
||
Level 3 Inputs
|
—
|
Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants.
|
Fair Value Measurements at September 30, 2018
|
||||||||||||||||
Assets:
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Corporate Bonds
|
$
|
7,974,010
|
$
|
-
|
$
|
7,974,010
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Warrant Liabilities
|
$
|
4,101,504
|
$
|
-
|
$
|
-
|
$
|
4,101,504
|
Fair Value Measurements at December 31, 2017
|
||||||||||||||||
Assets:
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Commercial Paper
|
3,238,500
|
-
|
3,238,500
|
-
|
||||||||||||
Corporate Bonds
|
14,693,441
|
-
|
14,693,441
|
-
|
||||||||||||
Total Assets:
|
$
|
17,931,941
|
$
|
-
|
$
|
17,931,941
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Warrant Liabilities
|
$
|
7,853,635
|
$
|
-
|
$
|
-
|
$
|
7,853,635
|
Warrant Liabilities
|
||||
Balance at January 1, 2018
|
$
|
7,853,635
|
||
Additions
|
-
|
|||
Unrealized gains, net
|
(3,752,131
|
)
|
||
Transfers out of level 3
|
-
|
|||
Balance at September 30, 2018
|
$
|
4,101,504
|
Warrant Liabilities
|
||||
Balance at January 1, 2017
|
$
|
1,573,366
|
||
Additions
|
4,107,488
|
|||
Unrealized losses, net
|
9,047,831
|
|||
Transfers out of level 3
|
(8,052,594
|
)
|
||
Balance at September 30, 2017
|
$
|
6,676,091
|
16.
|
Collaboration Agreement
|
17.
|
Subsequent Event
|
· |
our understandings and beliefs regarding the role of certain biological mechanisms and
processes in cancer;
|
· |
our drug candidates being in early stages of development, including in pre-clinical
development;
|
· |
our ability to initially develop drug candidates for orphan indications to reduce the
time-to-market and take advantage of certain incentives provided by the U.S. Food and Drug Administration;
|
· |
our ability to transition from our initial focus on developing drug candidates for
orphan indications to candidates for more highly prevalent indications;
|
· |
our ability to successfully and timely complete clinical trials for our drug candidates
in clinical development;
|
· |
uncertainties related to the timing, results and analyses related to our drug
candidates in pre-clinical development;
|
· |
our ability to obtain the necessary U.S. and international regulatory approvals for our
drug candidates;
|
· |
our reliance on third-party contract research organizations and other investigators and
collaborators for certain research and development services;
|
· |
our ability to maintain or engage third-party manufacturers to manufacture, supply,
store and distribute supplies of our drug candidates for our clinical trials;
|
· |
our ability to form strategic alliances and partnerships with pharmaceutical companies
and other partners for sales and marketing of certain of our product candidates;
|
· |
demand for and market acceptance of our drug candidates;
|
· |
the scope and validity of our intellectual property protection for our drug candidates
and our ability to develop our candidates without infringing the intellectual property rights of others;
|
· |
our lack of profitability and the need for additional capital to operate our business;
|
· |
our ability to continue as a going concern; and
|
· |
other risks and uncertainties, including those set forth herein and in our Annual
Report on Form 10-K for the year ended December 31, 2017 under the caption “Risk Factors” and those detailed from time to time in our filings with the Securities and Exchange Commission.
|
· |
RX-3117 is a novel, oral, small molecule nucleoside compound. Once
intracellularly activated (phosphorylated) by the enzyme UCK2, it is incorporated into the DNA or RNA of cells and inhibits both DNA and RNA synthesis, which induces apoptotic cell death of tumor cells. Because UCK2 is overexpressed
in multiple human tumors, but has a very limited presence in normal tissues, RX-3117 offers the potential for a targeted anti-cancer therapy with an improved efficacy and safety profile, and we believe it has therapeutic potential in
a broad range of cancers, including pancreatic, bladder, colon, and lung cancer. In January 2018, we reported final data from a Phase 2a clinical trial of RX-3117 in patients with relapsed or refractory metastatic pancreatic cancer.
In this trial, encouraging progression free survival and evidence of tumor shrinkage were observed in patients with metastatic pancreatic cancer that was resistant to gemcitabine and who had failed on multiple prior treatments.
RX-3117 is currently the subject of a Phase 2a clinical trial in combination with Abraxane® (paclitaxel protein-bound) in patients newly diagnosed with metastatic pancreatic cancer. The second stage of this clinical trial began in
May 2018, and in October 2018, we released preliminary data illustrating the combined administration of RX-3117 and Abraxane, appears safe and well tolerated and showed evidence of clinical activity. In February 2018 updated safety and efficacy data from the ongoing two-stage Phase 2a clinical trial of RX-3117 in advanced
urothelial (bladder) cancer were reported. In this trial, encouraging progression free survival and evidence of tumor shrinkage were observed in patients with advanced bladder cancer who had failed on multiple prior treatments
including immunotherapy and gemcitabine. RX-3117 has received “orphan drug designation” from the U.S. Food and Drug Administration (“FDA”) and from the European Commission for pancreatic cancer. Orphan drug designation in
the U.S. provides tax incentives for clinical research and a waiver from user fees under certain circumstances. In addition, an orphan drug generally receives seven years of exclusivity in the U.S. after approval for a designated use,
during which time, the FDA generally cannot approve another product with the same active moiety for the same indication.
|
· |
RX-5902 is a potential first-in-class small molecule inhibitor of phosphorylated-p68, a protein that we believe plays a key role in cancer cell growth, progression and
metastasis through its interaction with beta-catenin. Phosphorylated p68, which is highly expressed in cancer cells, but not in normal cells, results in up-regulation of cancer-related genes and a subsequent proliferation of cancer
cells and tumor growth. RX-5902 selectively blocks the interaction of phosphorylated p68 with beta-catenin, thereby decreasing the proliferation or growth of cancer cells in preclinical models. In addition, multiple pre-clinical
models suggest that RX-5902 enhances the efficacy of immunotherapy. We have evaluated RX-5902 in a Phase 1 dose escalation study in patients with a diverse range of metastatic, treatment-refractory tumors, including breast, ovarian,
colorectal, and neuro-endocrine tumors. In February 2017, we initiated a Phase 2a clinical trial of RX-5902 in patients with metastatic triple negative breast cancer (“TNBC”). Preliminary data on this trial announced in June 2018
showed five of the first 10 evaluable patients exhibited clinical response and indicated that RX-5902 was well tolerated in the study. As of October 12, 2018, 17 patients have been enrolled in the trial, with 13 of these patients
evaluable and six showing a clinical response. In August 2018, we entered into a collaboration with Merck Sharp & Dohme B.V. (“Merck”) to evaluate the combination of RX-5902 and Merck’s anti-PD-1 therapy, Keytruda®
(pembrolizumab) in a Phase 2 trial in patients with metastatic triple negative breast cancer.
|
· |
RX-0201 is a potential best-in-class, potent inhibitor of the protein kinase Akt-1, which we believe plays a critical role in cancer cell proliferation, survival,
angiogenesis, metastasis and drug resistance. RX-0201 is the subject of a research and development collaboration with Zhejiang Haichang Biotechnology Co., Ltd (“Haichang”) for the development of RX-0201 to conduct certain
pre-clinical and clinical activities through completion of a Phase 2a proof-of-concept clinical trial in hepatocellular carcinoma (“HCC”) and pursuant to which the parties will share any downstream licensing fees and royalties paid by
third parties in connection with the further development and commercialization of RX-0201 for the treatment of HCC. RX-0201 has received orphan drug designation from the FDA for renal cell carcinoma (“RCC”), glioblastoma, ovarian
cancer, stomach cancer and pancreatic cancer. In February 2018, in response to the changing treatment landscape for metastatic RCC over the past two years with the approval of new therapies by the FDA, we announced plans to
discontinue the internally funded programs of RX-0201 and ceased enrolling patients in a Phase 2a proof-of-concept clinical trial of RX-0201 in patients with metastatic RCC.
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Project Candidates:
|
||||||||||||||||
RX-3117
|
$
|
1,405,900
|
$
|
1,245,500
|
$
|
5,002,800
|
$
|
3,134,000
|
||||||||
RX-5902
|
632,200
|
492,000
|
2,496,200
|
1,189,800
|
||||||||||||
RX-0201
|
82,100
|
123,200
|
399,100
|
422,000
|
||||||||||||
Preclinical, Personnel and Overhead
|
767,755
|
784,299
|
2,480,981
|
2,705,856
|
||||||||||||
Total Research and Development Expenses
|
$
|
2,887,955
|
$
|
2,644,999
|
$
|
10,379,081
|
$
|
7,451,656
|
· |
the progress of our product development activities;
|
· |
the number and scope of our product development programs;
|
· |
the progress of our pre-clinical and clinical trial activities;
|
· |
the progress of the development efforts of parties with whom we have entered into collaboration agreements;
|
· |
our ability to maintain current collaboration programs and to establish new collaboration arrangements;
|
· |
the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and
|
· |
the costs and timing of regulatory approvals.
|
Exhibit No.
|
Description
|
|
Form of Warrant, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 19, 2018 is herein incorporated by reference
|
||
Form of Securities Purchase Agreement, dated October 17, 2018, by and between Rexahn Pharmaceuticals, Inc. and the purchasers identified on the
signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 19, 2018, is incorporated herein by reference.
|
||
Clinical Trial Collaboration and Supply Agreement, dated August 13, 2018, by and between Merck Sharp & Dohme B.V., and Rexahn Pharmaceuticals,
Inc.*
|
||
Certification of Chief Executive Officer pursuant to Rules 13a-14(a) / 15d-14(a)
|
||
Certification of Chief Financial Officer pursuant to Rules 13a-14(a) / 15d-14(a)
|
||
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
101
|
The following materials from Rexahn Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q, formatted in Extensible Business Reporting Language
(“XBRL”): (i) Condensed Balance Sheet; (ii) Condensed Statement of Operations; (iii) Condensed Statement of Comprehensive Loss; (iv) Condensed Statement of Cash Flows; and (v) Notes to the Financial Statements.
|
*
|
Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the
Securities and Exchange Commission.
|
REXAHN PHARMACEUTICALS, INC.
|
||
(Registrant)
|
||
By:
|
/s/ Peter D. Suzdak
|
|
Date: November 2, 2018
|
Peter D. Suzdak
|
|
Chief Executive Officer
(principal executive officer)
|
||
By:
|
/s/ Douglas J. Swirsky
|
|
Date: November 2, 2018
|
Douglas J. Swirsky
|
|
President and Chief Financial Officer
(principal financial and accounting officer)
|