What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-02-10 compared with 2022-11-04 · 172 added, 130 removed, 19 unchanged (94% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, and Section 27A

of the Securities Act of 1933.

Any statements contained in this report that are not statements of historical fact may be forward-looking

When we use the words “intends,” “estimates,” “predicts,” “potential,” “continues,”

“anticipates,” “plans,” “expects,” “believes,” “should,” “could,”

“may,” “will” or the negative of these terms or other comparable terminology, we are identifying forward-looking

Forward-looking statements involve risks and uncertainties, which may cause our actual results, performance or achievements

to be materially different from those expressed or implied by forward-looking statements.

These factors among others, include our;

and development activities and, distributor channel;

compliance with regulatory impositions requirements;

and our capital needs Although

we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels

of activity, performance or achievements.

as may be required by applicable law, we do not undertake or intend to update or revise our forward-looking statements, and we assume

no obligation to update any forward-looking statements contained in this report as a result of new information or future events or developments.

Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking

You should carefully review and consider the various disclosures we make in this report and our other reports filed with

the Securities and Exchange Commission (the “SEC”) that attempt to advise interested parties of the risks, uncertainties

and other factors that may affect our business.

This report contains forward-looking statements within the meaning of Section

21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended.

Any statements contained

in this report that are not statements of historical fact may be forward-looking statements.

When we use the words “intends,”

“estimates,” “predicts,” “potential,” “continues,” “anticipates,” “plans,”

“expects,” “believes,” “should,” “could,” “may,” “will” or the

negative of these terms or other comparable terminology, we are identifying forward-looking statements.

Forward-looking statements involve

risks and uncertainties, which may cause our actual results, performance or achievements to be materially different from those expressed

or implied by forward-looking statements.

These factors include, among others:

our research and development activities and distributor

compliance with regulatory requirements;

and our ability to satisfy our capital needs Although we believe that the expectations

reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

You are cautioned not to place undue reliance on the forward-looking statements

in this report, which speak only as of the date of this report.

Except as may be required by applicable law, we do not undertake or intend

to update or revise our forward-looking statements, and we assume no obligation to update any forward-looking statements contained in

this report as a result of new information or future events or developments, except as required by law.

Thus, you should not assume that

our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements.

carefully review and consider the various disclosures we make in this report and our other reports filed with the Securities and Exchange

Commission (the “SEC”) that attempt to advise interested parties of the risks, uncertainties and other factors that may affect

our business.

following discussion of the Company’s financial condition and the results of operations should be read in conjunction with the

Financial Statements and Notes thereto appearing elsewhere in this report.

is a clinical-stage company developing innovative drug therapies to overcome unmet medical needs in chronic debilitating conditions.

neurodegenerative disease, BioVie acquired the biopharmaceutical assets of NeurMedix, Inc., a related party privately held

clinical-stage pharmaceutical company and related party affiliate, in June 2021.

The acquired assets include NE3107, a potentially

selective inhibitor of inflammatory ERK signaling that, based on animal studies, is believed to reduce neuroinflammation.

a novel orally administered small molecule that is thought to inhibit inflammation-driven insulin resistance and major pathological

inflammatory cascades with a novel mechanism of action.

There is emerging scientific consensus that both inflammation and insulin

resistance may play fundamental roles in the development of Alzheimer’s and Parkinson’s Disease, and NE3107 could, if

approved, represent an entirely new medical approach to treating these devastating conditions affecting an estimated 6 million

Americans suffering from Alzheimer’s and 1 million from Parkinson’s.

The FDA has authorized a potentially pivotal Phase

3 randomized, double-blind, placebo-controlled, parallel group, multicenter study to evaluate NE3107 in subjects who have mild to

moderate Alzheimer’s disease (NCT04669028).

We initiated this trial on August 5, 2021 and are targeting primary completion in

mid-calendar year 2023.

January 20, 2022, the Company initiated a study by treating the first patient, in its Phase 2 study assessing NE3107’s safety and

tolerability and potential pro-motoric impact in Parkinson’s disease patients.

The NM201 study (NCT05083260) is a double-blind,

placebo-controlled, safety, tolerability, and pharmacokinetics study in Parkinson’s Disease (PD).

Participants will be treated

with carbidopa/levodopa and NE3107 or placebo.

Forty patients with a defined PD medication “off state” will be randomized

1:1 placebo to active NE3107 20 mg twice daily for 28 days.

Safety assessments will look at standard measures of patient health and potential

for drug-drug interactions affecting L-dopa pharmacokinetics and activity.

Exploratory efficacy assessments will use the Motor Disease

Society Unified Parkinson’s Disease Rating (MDS-UPDRS) parts 1-3, ON/OFF Diary, and Non-Motor Symptom Scale.

Topline results are

expected for the NM201 study in December 2022.

liver disease , our Orphan Drug candidate BIV201 (continuous infusion terlipressin) is being developed as a future treatment option

for patients suffering from ascites and other life-threatening complications of advanced liver cirrhosis caused by NASH, hepatitis, and

The initial target for BIV201 therapy is refractory ascites.

These patients suffer from frequent life-threatening complications,

generate more than $5 billion in annual treatment costs, and have an estimated 50% mortality rate within 6 to 12 months.

and Drug Administration (FDA) has not approved any drug to treat refractory ascites.

A Phase 2a clinical trial of BIV201 was completed

in 2019, and a multi-center, randomized 30-patient Phase 2b trial is currently underway.

Top-line results from this trial are expected

in mid-calendar year 2023.

of the three months ended September 30, 2022 to the three months ended September 30, 2021

income (loss)

net loss for the three months ended September 30, 2022 was approximately $10.4 million as compared $5.5 million for the three months

ended September 30, 2021.

The increase in net loss of approximately $4.9 million was primarily due to increased losses from operations

of $3.3 million from increased activities in our clinical studies, increase in interest expense of $1.1 million from the notes payable

financing obtained in November 2021 and a change in fair value of derivative liabilities of approximately $567,000.

operating expenses for the three months ended September 30, 2022 were approximately $8.8 million as compared to $5.5 million for the

three months ended September 30, 2021.

The net increase of approximately $3.3 million during the three months ended September

30, 2022 was primarily due to an increase in research and development expenses of approximately $3.7 million from the increased activities

of our clinical studies;

offset by decline selling general and administrative expenses of approximately $388,000.

(the “Company” or “we” or “our”) is a clinical-stage company developing innovative drug therapies

to treat chronic debilitating conditions including neurological and neuro-degenerative disorders and liver disease.

In neurodegenerative disease, the Company acquired the biopharmaceutical

assets of NeurMedix, Inc.

(“NeurMedix”), a privately held clinical-stage pharmaceutical company, in June 2021 (See Note 5

Related Party Transactions ).

The acquired assets included NE3107, a potentially selective inhibitor of inflammatory extracellular

single-regulated kinase (“ERK”) signaling that, based on animal studies, is believed to reduce neuroinflammation.

a novel orally administered small molecule that is thought to inhibit inflammation-driven insulin resistance and major pathological inflammatory

cascades with a novel mechanism of action.

There is emerging scientific consensus that both inflammation and insulin resistance may play

fundamental roles in the development of Alzheimer’s Disease (AD) and Parkinson’s Disease (PD), and NE3107 could, if approved,

represent an entirely new medical approach to treating these devastating conditions affecting an estimated 6 million Americans suffering

from AD and 1 million Americans suffering from PD.

In August 2021, the Company initiated the FDA authorized potentially pivotal Phase

3 randomized, double-blind, placebo-controlled, parallel group, multicenter study to evaluate NE3107 in subjects who have mild to moderate

Alzheimer’s disease (NCT04669028).

The Company is targeting primary completion of this study in the third quarter of calendar year

In December 2022, the Company released topline

results from its Phase 2 study assessing NE3107’s safety and tolerability and potential pro-motoric impact in PD patients.

study (NCT05083260) was a double-blind, placebo-controlled, safety, tolerability, and pharmacokinetics study in PD participants treated

with carbidopa/levodopa and NE3107.

Forty-five patients with a defined L-dopa “off state” were randomized 1:1 to placebo:NE3107

20 mg twice daily for 28 days.

The trial was launched with two design objectives:

1) the primary objectives are safety and a drug-drug

interaction study (as requested by the FDA) to demonstrate the absence of adverse interactions of NE3107 with levodopa;

and 2) the secondary

objective is to determine if preclinical indications of promotoric activity and apparent enhancement of levodopa activity can be seen

Both objectives of the study were met.

The Company continues to process its findings from its completed NM201 study as it prepares

for the next round of clinical studies in PD.

liver disease, the Company’s Orphan drug candidate BIV201 (continuous infusion terlipressin), with FDA Fast Track status, is being

evaluated in a US Phase 2b study for the treatment of refractory ascites due to liver cirrhosis with top-line results anticipated in

BIV201 is administered as a patent-pending liquid formulation.

The active agent is approved in the U.S.

and in about 40 countries

for related complications of advanced liver cirrhosis.

of the three months ended December 31, 2022 to the three months ended December 31, 2021

The net loss for the three months ended December 31, 2022 was approximately

$15.7 million as compared $5.4 million for the three months ended December 31, 2021.

The increase in net loss of approximately $10.3

million was primarily due to increased losses from operations of $4.8 million due to increased clinical activities, an increase in interest

expense of approximately $737,000 million from the notes payable financing obtained in November 2021 and a change in fair value of derivative

liabilities of approximately $4.8 million.

Total operating expenses for the three months ended December 31, 2022

were approximately $11.5 million as compared to $6.7 million for the three months ended December 31, 2021.

increase of approximately $4.8 million for the three months ended December 31, 2022 was due to an increase in research and

development expenses of approximately $2.3 million due to increased clinical activities and an increase in selling general and

administrative expenses of approximately $2.5 million.

and Development Expenses

and development expenses were approximately $6.8 million and $3.1 million for the three months ended September 30, 2022 and 2021, respectively.

The net increase of approximately $3.7 million, consisted of an increase of approximately $4.1 million primarily attributed to the increased

activities in our clinical studies offset by $446,000 from a net decrease in the clinical team’s compensation expense.

Neuroscience NE3107 studies accounted for approximately $3.9 million of the net increase in research and development expenses as both

studies were significantly more active during the three months ended September 30, 2022 over the three months ended September 30, 2021,

as the Parkinson’s Phase 2 study initiated in January 2022, became fully enrolled and with the top-line data read expected in December

2022 and the Alzheimer Phase 3 study nears full enrollment.

Our Orphan Drug candidates BIV201’s Phase 2b study initiated in June

2021 accounted for approximately $159,000 of the net increase for three months ended September 30, 2022.

total increase in the clinical studies expenses of $4.1 million was offset by a net decline in clinical team’s total compensation

expense of approximately $446,000.

The net decline in the clinical team’s compensation consisted of an increase of approximately

$1.1 million in the clinical team’s compensation from expansion of the clinical team, offset by $1.6 million representing declines

in stock compensation expense of approximately $578,000 from stock options awarded and the retention compensation of $1.0 million accrued

in the three months ended September 30, 2021.

Research and development expenses were approximately $7.0 million and $4.7

million for the three months ended December 31, 2022 and 2021, respectively.

The net increase of approximately $2.3 million, was comprised

of a net increase in clinical study activities of approximately $1.4 million, offset by a decline in other development activities of approximately

and increase in Chemistry, Manufacturing and Control of approximately $542,000, and an increase in compensation expense of

approximately $973,000 related to the Company’s expansion of the clinical team and consultants supporting its increased clinical

activities over the three months ended December 31, 2021.

The increase in research and development expenses of $1.3 million was primarily

due to the Neuroscience NE3107 studies, which were significantly more active during the three months ended December 31, 2022 compared

to the three months ended December 31, 2021.

The Parkinson’s Phase 2 study initiated in January 2022, became fully enrolled with

the top-line data read reported in December 2022 and the Alzheimer Phase 3 study is approaching full enrollment.

Our Orphan drug candidate

BIV201’s Phase 2b study, which was initiated in June 2021, accounted for approximately $100,000 of the net increase in research

and development expenses for three months ended December 31, 2022.

General and Administrative Expenses

general and administrative expenses were approximately $2.0 million and $2.4 million for the three months ended September 30, 2021 and

2020, respectively.

The net decrease of approximately $388,000 was primarily attributed to decline in compensation expense of approximately

$641,000, representing a decline stock-based compensation expense of approximately $828,000 representing restricted stock

units and stock options awarded to the executive management team in the three months ended September 30, 2021 and increase of approximately

$187,000 related to increase in staff from two to four and annual salary increases.

The remaining net increase of approximately $239,000

was attributed to increased expenses related to being listed on a national exchange including listing fees and investor relations and

advisory $197,000, increase in directors stock compensation of approximately $162,000 stock options awarded and other net increases totaling

approximately $54,000 representing insurance and office and website development expenses offset by a decline in other legal and professional

fees of approximately $174,000.

Selling, general and administrative expenses were approximately $4.4 million

and $1.9 million for the three months ended December 31, 2022 and 2021, respectively.

The net increase of approximately $2.5 million was

primarily attributed to increased stock compensation expense of approximately $1.7 million related to the board of directors’ annual

compensation, a net increase in management compensation expenses of approximately $342,000, due to an increase in staff from 2 to 4 persons,

and equity awards granted in the three months ended December 31, 2022, and increased legal, investor advisory and other professional fees

totaling approximately $478,000.

Income and Expense

expense, net was $1.6 million for the three months ended September 30, 2022 compared nearly nil for the three months ended September

Interest expense of $1.1 million recognized during the three months ended September 30, 2022 was attributed to the $15 million

debt financing obtained in November 2021 and the change in fair value of the related derivative liabilities recognized for the three

months ended September 30, 2022 was approximately $567,000.

Other expense, net was $4.2 million for the three months ended December

31, 2022 compared to other income of $1.3 million for the three months ended December 31, 2021.

The net increase in other expense of $5.5

million was due to an increase in interest expense of approximately $737,000, which was attributed to the $15 million debt financing obtained

in November 2021 and the change in fair value of the related derivative liabilities recognized for the three months ended December 31,

2022 was approximately $4.8 million.

of the six months ended December 31, 2022 to the six months ended December 31, 2021

The net loss for the six months ended December 31, 2022 was approximately

$26.1 million as compared to $11.0 million for the six months ended December 31, 2021.

The increase in net loss of approximately $15.1

million was primarily due to increased losses from operations of $8.1 million due to increased clinical activities, an increase in interest

expense of approximately $1.8 million from the notes payable financing obtained in November 2021, and a change in fair value of derivative

liabilities of approximately $5.3 million.

Total operating expenses for the six months ended December 31, 2022 were

approximately $20.3 million as compared to $12.2 million for the six months ended December 31, 2021.

The net increase of approximately

$8.1 million during the six months ended December 31, 2022 was due to an increase in research and development expenses of approximately

$6.0 million due to our increased clinical activities, and an increase in selling general and administrative expenses of approximately

$2.0 million.

and Development Expenses

Research and development expenses were approximately $13.8 million and

$7.8 million for the six months ended December 31, 2022 and 2021, respectively.

The net increase of approximately $6.0 million, was comprised

of a net increase of $5.4 million from increased clinical activities, offset by a decline in other development activities of approximately

$543,000, an increase in Chemistry, Manufacturing and Control expense of approximately $542,000, and an increase in compensation expense

of approximately $537,000 due to the Company’s expansion of the clinical team and consultants supporting our increased clinical

activities over the six months ended December 31, 2021.

The increase in research and development expenses of $5.3 million was

primarily due to the Neuroscience NE3107 studies, which were significantly more active during the six months ended December 31, 2022

compared to the six months ended December 31, 2021.

The Parkinson’s Phase 2 study initiated in January 2022, became fully enrolled,

with the top-line data read reported in December 2022, and the Alzheimer Phase 3 study is approaching full enrollment.

Our Orphan drug

candidate BIV201’s Phase 2b study, which was initiated in June 2021, accounted for approximately $100,000 of the net increase in

research and development expenses for six months ended December 31, 2022.

General and Administrative Expenses

Selling, general and administrative expenses were approximately $6.4 million

and $4.3 million for the six months ended December 31, 2022 and 2021, respectively.

The net increase of approximately $2.1 million was

primarily attributed to increased stock compensation expense of approximately $1.8 million related to the board of directors’ annual

compensation;

a net increase in legal, investor relations and other professional fees totaling approximately $462,000, an increase in

management compensation expense of approximately $477,000 due to an increase in staff from two to four persons, offset by stock compensation

expense of approximately $758,000.

Income and Expense

Other expense, net was $5.8 million for the six months ended December 31,

2022 compared to other income of $1.3 million.

The net increase in other expense of $7.1 million represented an increase in interest

expense of approximately $1.8 million attributed to the $15 million debt financing obtained in November 2021 and the change in fair value

of the related derivative liabilities recognized for the six months ended December 31, 2022 of approximately $5.3 million.

Resources and Liquidity

of September 30, 2022, the Company had working capital of approximately $17.5 million, cash of approximately $21.2 million, stockholders’

equity of approximately $6.0 million, and an accumulated deficit of approximately $261.4 million.

In addition, the Company has not generated

any revenues and no revenues are expected in the foreseeable future.

The Company’s future operations are dependent on the success

of the Company’s ongoing development and commercialization efforts, as well as its ability to secure additional financing as needed.

future viability of the Company is largely dependent upon its ability to raise additional capital to finance its operations.

expects that future sources of funding may include sales of equity, obtaining loans, or other strategic transactions.

duration and spread of the COVID-19 pandemic and the long-term impact of COVID-19 and its variants on the financial markets and the overall

economy are highly uncertain and cannot be predicted at this time.

If the financial markets and/or the overall economy are impacted for

an extended period, the Company’s ability to raise funds may be materially adversely affected.

In addition, the COVID-19 pandemic

has created a widespread labor shortage, including a shortage of medical professionals, and has impacted and may continue to impact the

potential patient participation in our studies, which may adversely impact our ability to continue or complete our clinical trials in

the planned timeline.

As of December 31, 2022, the Company had cash of approximately $45.7 million,

working capital of approximately $38.2 million, stockholders’ equity of approximately $26.1 million, and an accumulated deficit

of approximately $277.1 million.

In the three months ended December 31, 2022, the Company sold 4.3 million shares of its common stock

under its Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co and B.

Riley Securities, Inc.

for total net proceeds

of $32.5 million after 3% commissions and cost totaling approximately $1.2 million.

The Company has not generated any revenues and no revenues are expected

in the foreseeable future.

The Company’s future operations are dependent on the success of the Company’s ongoing development

and commercialization efforts, as well as its ability to secure additional financing.

Management expects that future sources

of funding may include sales of equity, obtaining loans, or other strategic transactions.

The duration and spread of the COVID-19 pandemic and the long-term impact

of COVID-19 and its variants on the financial markets and the overall economy continue to be highly uncertain and cannot be predicted

at this time.

If the financial markets and/or the overall economy are impacted for an extended period, the Company’s ability to

raise funds may be materially adversely affected.

In addition, the COVID-19 pandemic has created a widespread labor shortage, including

a shortage of medical professionals, and has impacted and may continue to impact the potential patient participation in our studies, which

may adversely impact our ability to continue or complete our clinical trials in the planned timeline.

management continues to pursue the Company’s strategic plans, there is no assurance that the Company will be successful in obtaining

4 unchanged sentences

result from the outcome of this uncertainty.

Sheet Arrangements

Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the

Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources

that are material to investors.

The term “off-balance sheet arrangement” generally means any transaction, agreement or other

contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation

arising under a guarantee contract, derivative instrument or variable interest;

or (ii) a retained or contingent interest in assets transferred

to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Accounting Policies and Estimates

the three-month period ended September 30, 2022, there were no significant changes to the Company’s critical accounting policies

as identified in the Annual Report Form 10-K for the fiscal year ended June 30, 2022.

the six-month period ended December 31, 2022, there were no significant changes to the Company’s critical accounting policies as

identified in the Annual Report Form 10-K for the fiscal year ended June 30, 2022.

Accounting Pronouncements

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis