Cocrystal Pharma Reports Second Quarter 2022 Financial Results and Provides Updates on its Antiviral Development Programs
BOTHELL, Wash., Aug. 15, 2022 (GLOBE NEWSWIRE) -- Cocrystal Pharma, Inc. (Nasdaq: COCP) reports financial results for the three and six months ended June 30, 2022, and provides updates on its antiviral pipeline, upcoming milestones and business activities.
“This quarter we advanced our compounds in the clinic and announced a significant research collaboration. We were excited to announce the design of our Phase 2a human challenge study with our oral PB2 inhibitor CC-42344, enabling us to quickly evaluate antiviral efficacy and tolerability of influenza-infected healthy volunteers. Human influenza challenge studies have proven important in advancing the development of approved influenza antivirals. Additionally, due to the small sample size, a human challenge study can be completed quickly,” said Sam Lee, Ph.D., President and co-interim CEO of Cocrystal. “Later this year we expect to report results from our Phase 1 study in healthy volunteers that is underway in Australia. Our plan is to then file with the UK regulatory agency in early 2023 to proceed with the Phase 2a study.
“We have initiated API synthesis and process chemistry development with our novel, broad-spectrum COVID-19 intranasal/pulmonary and oral protease inhibitors, as we prepare data to support Investigational New Drug (IND) applications with the goal of initiating two Phase 1 healthy volunteer studies evaluating these inhibitors for COVID-19 this year,” he added.
“We continue to be well positioned to execute on our clinical and regulatory goals given our clean capital structure, cost-efficient business model and a cash balance we believe is sufficient to fund planned operations into 2024,” said James Martin, CFO and co-interim CEO. “We chose to conduct the Phase 2a influenza A trial with PB2 inhibitor CC-42344 in the UK due to the efficiency and data we expect from a human challenge model, as opposed to a traditional clinical trial model. Under the human challenge model healthy adults will be deliberately infected with influenza virus under carefully controlled conditions, which we believe will hasten trial enrollment and ensure subjects are infected with influenza A. Our niche contract research partner, Open Orphan, is one of the premier specialists in providing this unique clinical model.”
Antiviral Pipeline Overview
Many antiviral drugs are effective only against certain strains of a virus and are less effective or not effective at all against other strains or variants. Cocrystal is developing drug candidates that specifically target proteins involved in viral replication. Despite the numerous strains that may exist or emerge, these enzymes are required for viral replication and are essentially similar (highly conserved) across all strains. By targeting these highly conserved regions of the replication enzymes, our antiviral compounds are designed and tested to be effective against major virus strains.
COVID-19 and Other Coronavirus Programs
In April 2022 we announced a collaboration with the NIAID to evaluate the potential of our COVID-19 3CL protease inhibitors for the treatment of COVID-19, with the NIAID responsible for in vitro and in vivo studies evaluating the antiviral activity of the compounds. In June 2022 we expanded this collaboration by providing our proprietary process chemistry information for oral 3CL protease inhibitors to the NIAID to support scale-up synthesis of a key intermediate of these compounds.
Hepatitis C Program
Second Quarter 2022 Financial Results
Research and development (R&D) expenses for the second quarter of 2022 were $2.4 million compared with $2.6 million for the second quarter of 2021, with the decrease primarily due to the influenza A program transitioning from the preclinical discovery stage into a clinical trial. The Company is anticipating increased R&D expenses during the second half of 2022 as it prepares for additional clinical trials.
General and administrative (G&A) expenses for the second quarter of 2022 were $1.4 million compared with $1.3 million for the second quarter of 2021, with the increase primarily due to legal expenses and higher insurance costs.
The Company’s litigation with an insurer resulted in the insurance company obtaining a summary judgment during the second quarter of 2022 and accounted for a potential $1.6 million adverse award by expensing this amount in the second quarter of 2022. The Company filed an appeal in July 2022. Pending the outcome of the appeal, the Company paid $1.6 million into the registry of the court which stayed execution of the Judgment.
During the six months ended June 30, 2022, the Company saw a significant decrease in the price of its common stock resulting in an overall reduction in market capitalization and our recorded net book value exceeded its market capitalization as of June 30, 2022. The Company concluded that goodwill was impaired in its entirety and recorded a $19.1 million non-cash impairment during the second quarter of 2022.
The net loss for the second quarter of 2022 was $24.4 million, or $0.25 per share, and included a non-cash impairment charge of $19.1 million resulting from the significant decrease in the price of the Company’s common stock price and market capitalization. The net loss for the second quarter of 2021 of $3.8 million, or $0.04 per share.
Six Month Financial Results
R&D expenses for the six months ended June 30, 2022 were $5.2 million compared with $4.0 million for the first six months of 2021. G&A expenses for the six months ended June 30, 2022 were $2.7 million compared with $2.6 million for the six months ended June 30, 2021.
As stated above, the Company accounted for a potential $1.6 million legal settlement by expensing this amount during the six months ended June 30, 2022 and the Company concluded that goodwill was impaired in its entirety and recorded a $19.1 million non-cash impairment during six months ended June 30, 2022.
The net loss for the six months ended June 30, 2022 was $28.6 million, or $0.29 per share, and reflected the non-cash impairment charge described above. The net loss for the six months ended June 30, 2021 was $6.6 million, or $0.08 per share.
The Company reported unrestricted cash of $51.0 million as of June 30, 2022 compared with $58.7 million as of December 31, 2021. Net cash used in operating activities for the first half of 2022 was $7.6 million. The Company reported working capital of $48.8 million as of June 30, 2022.
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 goals of initiating two Phase 1 studies for our COVID-19 programs in 2022, our expectations of reporting data from the Phase 1 clinical study of our Influenza A product candidate later in 2022 and timeline for filing with the UK regulatory agency for a Phase 2a study in 2023, the viability and efficacy of potential treatments for coronavirus and other diseases, expectations for the global market for therapeutics, our attempts to discover replication inhibitors, our ability to execute our clinical and regulatory goals, our development of antiviral treatments for norovirus including our plan to conduct a proof-of-concept animal study and select a preclinical lead in 2022 or 2023, our expectationsconcerning R&D expenses, the expected sufficiency of our cash balance to fund our planned operations and our 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 and the Ukraine war on our Company, our collaboration partners, and on the national and global economy, including manufacturing and research delays arising from raw materials and labor shortages, supply chain disruptions and other business interruptions including and adverse impacts on our ability to obtain raw materials and test animals as well as similar problems with our vendors and our current Contract Research Organization (CRO) and any future CROs and Contract Manufacturing Organizations, the impact of inflation and Federal Reserve interest rate increases in response thereto on the economy, the ability of our current CRO to recruit volunteers for, and to proceed with, clinical studies, the results of our collaboration with NIAID relating to our 3CL protease inhibitors for the treatment of COVID-19, 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 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 our appeal of the summary judgment. 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, 2021. 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.
COCRYSTAL PHARMA, INC.
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COCRYSTAL PHARMA, INC.
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