What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-15 compared with 2023-11-14 · 107 added, 128 removed, 189 unchanged (55% of the section changed)

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Based on limited clinical data, we believe Berubicin is the first anthracycline that appears to cross the blood brain barrier

in significant concentrations targeting brain cancer cells.

While our focus is currently on the development of Berubicin, we are also

in the process of attempting to secure intellectual property rights to additional compounds that we plan to develop into drugs to treat

CNS and other cancers.

(“BBB”) in significant concentrations targeting brain cancer cells.

While our focus is currently on the development of Berubicin,

we are also in the process of attempting to secure intellectual property rights to additional compounds that we plan to develop into drugs

to treat CNS and other cancers.

Berubicin was discovered at UTMDACC by Dr.

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We initiated this trial for patient enrollment during the second quarter of 2021 with the first patient dosed during the third

quarter of 2021 to investigate the efficacy of Berubicin in adults with Glioblastoma Multiforme who have failed first-line therapy.

first patient on the trial was treated during the third quarter of 2021.

Correspondence between the Company and the FDA resulted in modifications

to our initial trial design, including designating overall survival (OS) as the primary endpoint of the study.

OS is a rigorous endpoint

that the FDA has recognized as a basis for approval of oncology drugs when a statistically significant improvement can be shown relative

to a randomized control arm.

current trial being conducted will evaluate the efficacy of Berubicin in patients with Glioblastoma Multiforme who have failed primary

treatment for their disease, and results will be compared to the efficacy of Lomustine, a current standard of care in this setting, with

a 2 to 1 randomization of the estimated 243 patients to Berubicin or Lomustine.

Patients receiving Berubicin will be administered a 2-hour

IV infusion of 7.5 mg/m2 berubicin hydrochloride daily for three consecutive days followed by 18 days off (a 21-day cycle).

is administered orally once every six weeks.

The trial will include a pre-planned, non-binding interim futility analysis which will be

conducted by an independent Data Safety Monitoring Board (DSMB) to recommend whether this study should continue as planned based on Berubicin

showing statistically significant value as a second-line treatment for patients with glioblastoma compared with Lomustine.

We will conduct

this analysis after at least 50% of the patients in the interim analysis population (30-50% of total expected patients for the trial)

can be evaluated as having failed the primary efficacy endpoint (death).

recommendation will review the number of deaths on each arm to ensure that the overall survival of patients receiving Berubicin shows

a statistically significant comparability to or is even higher than those receiving Lomustine.

The median survival of patients receiving

second-line treatment for glioblastoma has historically been shown to be approximately 6 months.

We have historically used 6 months as

an estimate for the median time to a 50% mortality rate.

Taking into account the recent rate of enrollment and the number of patients

that can be adequately assessed for their follow-up outcomes, we are anticipating that the DSMB will be able to perform this interim analysis

and we can release the data during the fourth quarter of 2023.

Additional analyses that will be provided based on this data will be comparisons

of secondary endpoints, including progression-free survival (PFS), response rates, and safety assessments.

Even if Berubicin is approved,

there is no assurance that patients will choose an infusion treatment, as compared to the current standard of care, which requires oral

administration.

quarter of 2021 to investigate the safety and efficacy of Berubicin in adults with Glioblastoma Multiforme who have failed first-line

The first patient on the trial was treated during the third quarter of 2021.

Correspondence between the Company and the FDA resulted

in modifications to our initial trial design, including designating overall survival (OS) as the primary endpoint of the study.

a rigorous endpoint that the FDA has recognized as a basis for approval of oncology drugs when a statistically significant improvement

can be shown relative to a randomized control arm.

The current trial being conducted will evaluate

the safety and efficacy of Berubicin in patients with Glioblastoma Multiforme who have failed primary treatment for their disease, and

results will be compared to the safety and efficacy of Lomustine, a current standard of care in this setting, with a 2 to 1 randomization

of the 252 patients to Berubicin or Lomustine.

Patients receiving Berubicin are administered a 2-hour IV infusion of 7.5 mg/m2 berubicin

hydrochloride daily for three consecutive days followed by 18 days off (a 21-day cycle).

Lomustine is administered orally once every six

The trial design included a pre-planned, non-binding interim futility analysis.

We reached the criteria required by the study protocol

to conduct this interim futility analysis, which an independent Data Safety Monitoring Board (“DSMB”) is responsible for conducting.

The DSMB’s charter mandated that they review the primary endpoint, Overall Survival, as well as secondary endpoints and safety data

to determine whether the efficacy data for the risk-benefit profile warrants modification or discontinuation of the study.

18, 2023, we released the DSMB’s recommendation which was to continue the study without modification.

Management remains blinded

to the data underlying the recommendation of the DSMB.

Even if Berubicin is approved, there is no assurance that patients will choose

an infusion treatment, as compared to the current standard of care, which requires oral administration.

We do not have manufacturing facilities and all

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HPI is affiliated with Dr.

Priebe, our founder.

Under the HPI License we obtained the exclusive right to develop

certain chemical compounds for use in the treatment of cancer anywhere in the world.

In the HPI License we agreed to pay HPI:

(i) development

fees of $750,000 over a three-year period beginning November 2019;

Priebe, who controls a majority of our shares.

Under the HPI License we obtained the

exclusive right to develop certain chemical compounds for use in the treatment of cancer anywhere in the world.

In the HPI License we

agreed to pay HPI:

(i) development fees of $750,000 over a three-year period beginning November 2019;

(ii) a 2% royalty on net sales;

(iii) a $50,000 per year license fee;

(iv) milestone payments of $100,000 upon the commencement of a Phase II trial and $1.0 million upon the approval of a New Drug Application

(“NDA”) for Berubicin;

(iv) milestone payments of $100,000 upon the commencement of a Phase II trial and $1.0 million upon

the approval of a New Drug Application (“NDA”) for Berubicin;

and (v) 6,667 shares of our common stock.

The patents we licensed from HPI expired in March 2020.

The patents we licensed

from HPI expired in March 2020.

On May 14, 2024, the Company provided notice to HPI of its intent to terminate the HPI License effective

on or about July 14, 2024.

On June 10, 2020, the FDA granted Orphan Drug Designation

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that could be filed related to Berubicin to extend additional protections.

With the Reata Agreement and the HPI License, we

believe we have obtained all rights and intellectual property necessary to develop Berubicin.

As stated earlier, it is our plan to obtain

additional intellectual property covering other compounds which, subject to the receipt of additional financing, may be developed into

drugs for brain and other cancers.

We believe we have obtained all rights and intellectual

property necessary to develop Berubicin.

As stated earlier, it is our plan to obtain additional intellectual property covering other compounds

which, subject to the receipt of additional financing, may be developed into drugs for brain and other cancers.

On January 10, 2020, we entered into a Patent and

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that UTMDACC has the right to terminate the WP1244 Agreement in the event that we fail to meet certain commercial diligence milestones.

We have not met the commercial diligence milestones required as of the date hereof.

As such, UTMDACC has the right to terminate the WP1244

Agreement upon notice to us.

As of the date of this report, UTMDACC has not notified us of its intention to terminate the WP1244 Agreement.

have not met the commercial diligence milestones and have not paid the annual maintenance fee required as of the date hereof.

25, 2024, UTMDACC provided notice to us if its intent to terminate the WP1244 Agreement if we fail to pay the annual maintenance fee of

$50,000, as well as $1,300 in expenses.

As of the date hereof, the we have not determined whether to cure the foregoing defaults.

fail to cure the defaults, on May 25, 2024, the WP1244 Agreement will terminate.

On May 7, 2020, pursuant to the WP1244 portfolio

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salt may increase its ability to be formulated for use in an IV infusion, while maintaining similar potency and toxicity characteristics.

As such, WP1874 will be the primary focus in our development efforts of the WP1244 portfolio.

As such, WP1874 will be the primary focus in any development efforts of the WP1244 portfolio.

This agreement was extended and expired

on March 31, 2023.

of Operations for the Three Months Ended September 30, 2023 Compared to the Three Months Ended September 30, 2022

Results of Operations for the Three Months Ended March 31, 2024

Compared to the Three Months Ended March 31, 2023

General and Administrative Expense

General and administrative expense was approximately

$1,123,000 for the three months ended September 30, 2023 compared to approximately $1,211,000 for the comparable period in 2022.

$1,114,000 for the three months ended March 31, 2024 compared to approximately $1,359,000 for the comparable period in 2023.

in general and administrative expense was mainly attributable to decreases of approximately $118,000 in legal and professional expenses,

$29,000 in insurance expenses and $68,000 in stock compensation and $6,000 in other general and administrative expenses, which were offset

by increases of approximately $15,000 in marketing and advertising, $28,000 in board compensation and $45,000 in travel expenses.

Research and Development Expense

Research and development expense was approximately

$3,411,000 for the three months ended September 30, 2023 compared to approximately $2,208,000 for the comparable period in 2022.

in research and development expenses during the period was mainly attributed to the timing of research organization (CRO) expenses and

patient treatment costs related to continued progress with our clinical trial for Berubicin.

Our CRO expenditures are primarily for labor

related to activating selected trial sites, managing patient enrollment processes, collecting and managing data from patient treatments

throughout the trial, processing reimbursement to the sites for patient treatment, and assisting with necessary submissions to amend the

CRO expenditures are expected to remain relatively consistent with the current quarter throughout the remainder of the trial as site

activation efforts and the associated costs thereof transition into reimbursing clinical trial sites for patient treatment costs as site

and patient enrollment increases.

We expect to incur increased research and development costs in the future as we continue our clinical

trial for Berubicin primarily due to higher patient enrollment and the associated cost of treating these patients.

The net loss for the three months ended September

30, 2023 was approximately $4,523,000 compared to approximately $3,420,000 for the comparable period in 2022.

The change in net loss is

attributable to an increase in CRO expenses and patient treatment costs related to continued progress with our clinical trial for Berubicin,

a credit to research and development expense in the prior year period for the funds collected from WPD Pharmaceuticals related to their

purchase of Berubicin drug product for their clinical trials, as well as increases in legal and professional fees and other expenses.

of Operations for the Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022

General and Administrative Expense

General and administrative expense was approximately

$3,662,000 for the nine months ended September 30, 2023 compared to approximately $3,815,000 for the comparable period in 2022.

in general and administrative expense was mainly attributable to decreases of approximately $175,000 for employee compensation and

taxes, $111,000 in stock-based compensation, $117,000 in legal and professional expenses, and $69,000 in insurance expenses, which were

offset by increases of approximately $112,000 in marketing and advertising, $70,000 in board compensation and $118,000 in travel expenses,

and $19,000 in other expenses.

$20,000 in insurance expenses and $58,000 in stock compensation, $39,000 in travel expenses and $29,000 in other general and administrative

expenses, which were offset by increases of approximately $19,000 in marketing and advertising expenses.

Research and Development Expense

Research and development expense was approximately

$9,824,000 for the nine months ended September 30, 2023 compared to approximately $6,318,000 for the comparable period in 2022.

in research and development expenses during the period was mainly attributed to the timing of research organization (CRO) expenses and

patient treatment costs related to continued progress with our clinical trial for Berubicin.

Our CRO expenditures are primarily for labor

related to activating selected trial sites, managing patient enrollment processes, collecting and managing data from patient treatments

throughout the trial, processing reimbursement to the sites for patient treatment, and assisting with necessary submissions to amend the

CRO expenditures are expected to remain relatively consistent with the current quarter throughout the remainder of the trial as site

activation efforts and the associated costs thereof transition into reimbursing clinical trial sites for patient treatment costs as site

and patient enrollment increases.

We expect to incur increased research and development costs in the future as we continue our clinical

trial for Berubicin primarily due to higher patient enrollment and the associated cost of treating these patients.

The net loss for the nine months ended September

30, 2023 was approximately $13,476,000 compared to approximately $10,137,000 for the comparable period in 2022.

The change in net loss

is attributable to an increase in CRO expenses related to continued progress with our clinical trial for Berubicin, a credit to research

and development expense in the prior year period for the funds collected from WPD Pharmaceuticals related to their purchase of Berubicin

drug product for their clinical trials.

$2,430,000 for the three months ended March 31, 2024 compared to approximately $3,568,000 for the comparable period in 2023.

in research and development expenses during the period were mainly attributed to the timing of research organization (CRO) expenses related

to continued progress with our Phase II clinical trial.

Our CRO expenditures are primarily for labor related to activating selected trial

sites, managing patient enrollment processes, collecting and managing data from patient treatments throughout the trial, processing reimbursement

to the sites for patient treatment, and assisting with necessary submissions to amend the IND.

CRO expenditures are expected to remain

relatively consistent with the current quarter throughout the remainder of the trial as site activation efforts and the associated costs

thereof transition into reimbursing clinical trial sites for patient treatment costs as site and patient enrollment increases.

to incur increased research and development costs in the future as we continue our Phase II clinical trial.

The net loss for the three months ended March 31, 2024 was approximately

$3,545,000 compared to approximately $4,932,000 for the comparable period in 2023.

The change in net loss is attributable to an decrease

in CRO expenses related to continued progress with our Phase II clinical trial, as well as decreases in legal and professional fees and

other expenses.

Liquidity and Capital Resources

On September 30, 2023, we had cash of approximately

On March 31, 2024, we had cash of approximately

$815,000 and we had a working capital deficit of approximately $4,490,000.

We fund our operations from proceeds from equity sales.

believe that our cash on hand is sufficient to fund our planned operations into, but not beyond, the fourth quarter of 2023, and with

the cash received subsequent to September 30, 2023 for the Inducement Warrant Shares, is sufficient to fund our planned operations through

the end of the fourth quarter of 2023.

Our plan of operations is primarily focused on

completing a clinical trial for Berubicin.

We estimate that we will require additional financing of approximately $9.4 to $13.4 million

to complete the clinical trial for Berubicin (taking into account our cash on hand as of September 30, 2023 of approximately $0.9 million),

approximately $5.0 million to support near-term WP1244/WP1874 preclinical work, plus such additional working capital to fund our operations

during the pendency of the trial.

The timing and costs of clinical trials are difficult to predict and trial plans may change in response

to evolving circumstances and as such the foregoing estimates may prove to be inaccurate.

We will need to raise additional capital in order

to meet our obligations and execute our business plan.

If we are unable to raise sufficient funds, we will be required to develop and

implement an alternative plan to further extend payables, reduce overhead or scale back our business plan until sufficient additional

capital is raised to support further operations.

There can be no assurance that such a plan will be successful.

On January 29, 2024, we entered into a placement

agency agreement with A.G.P./Alliance Global Partners (“AGP”) and Maxim Group LLC (“Maxim”) for the public offering

of (i) 2,215,667 shares of our common stock;

(ii) pre-funded warrants to purchase 11,117,667 shares of common stock;

(iii) Series A Warrants

to purchase up to an aggregate of 13,333,334 shares of common stock;

and (iv) Series B Warrants to purchase up to an aggregate of 13,333,334

shares of common stock.

The combined purchase price of one share of common stock and accompanying Series A & B common warrants was

$0.30 and the combined purchase price of one pre-funded warrant and accompanying Series A & B common warrants was $0.299 (with the

pre-funded warrants having an exercise price of $0.001).

The closing of the sales of these securities occurred on February 1, 2024.

gross proceeds from the offering were approximately $4.0 million, before deducting the placement agent’s fees and other offering

Our plan of operations is

primarily focused on completing a clinical trial for Berubicin.

We estimate that we will require additional financing of approximately

$13 to $15 million to complete the potentially pivotal Phase 2 trial for Berubicin (taking into account our cash on hand as of March 31,

2024 of approximately $0.8 million) plus such additional working capital to fund our operations during the pendency of the trial (with

such operations estimated at $4.5 to $5.0 million per annum).

If capital is available to fund WP1244/WP1874 preclinical work to prepare

for a Phase 1 trial, we would need to raise an additional $5.0 million to support near-term development of that program.

Our current expectation

is that our cash on hand is sufficient to fund our operations into the latter half of the second quarter of 2024.

The timing and costs

of clinical trials are difficult to predict and trial plans may change in response to evolving circumstances and as such the foregoing

estimates may prove to be inaccurate.

We will need to raise very

significant additional capital in the near term in order to meet our past due and future obligations and execute our business plan.

we are unable to raise sufficient funds, we will be required to develop and implement an alternative plan to further extend payables,

reduce overhead or scale back our business plan until sufficient additional capital is raised to support further operations.

be no assurance that such a plan will be successful and if it is not successful we may need to cease operations entirely.

Summary of Cash Flows

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Net cash used in operating activities was approximately

$11,604,000 and $8,252,000 for the nine months ended September 30, 2023 and 2022, respectively, and mainly included payments made for

clinical trial preparation, officer compensation, insurance, marketing and professional fees to our consultants, attorneys and accountants.

$3,192,000 and $4,825,000 for the three months ended March 31, 2024 and 2023, respectively, and mainly included payments made for clinical

trial preparation, officer compensation, insurance, marketing and professional fees to our consultants, attorneys and accountants.

Cash provided by financing activities

Net cash provided by financing activities was approximately

$2,460,000 for the nine months ended September 30, 2023, related to the sale of common stock and exercise of warrants, which were offset

$3,459,000 for the three months ended March 31, 2024, related to the sale of common stock and exercise of warrants, which were offset

by the repayment of notes payable.

Net cash provided by financing activities was approximately $10,280,000 for the nine months ended September

30, 2022, related to the sale of common stock and exercise of warrants, which were offset by the repayment of notes payable.

Net cash used in financing activities was approximately $120,000 for the three months ended March 31,

2023, related to the repayment of notes payable, which were offset by the exercise of warrants.

Off-balance Sheet Arrangements

As of September 30, 2023, we did not have any relationships

As of March 31, 2024, we did not have any relationships

with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities,

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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