What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-14 compared with 2024-08-14 · 109 added, 99 removed, 200 unchanged (51% of the section changed)

7 unchanged sentences

This management’s discussion and analysis

of financial condition as of June 30, 2024 and results of operations for the three and six months ended June 30, 2024 and 2023 should

be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31,

2023, which was filed with the Securities and Exchange Commission (the “ SEC ”) on April 1, 2024 (the “2023 Form

of financial condition as of September 30, 2024 and results of operations for the three and nine months ended September 30, 2024 and 2023

should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December

31, 2023, which was filed with the Securities and Exchange Commission (the “ SEC ”) on April 1, 2024 (the “2023

This report contains forward-looking statements

68 unchanged sentences

concentration.

The trial is open for the continued enrollment of patients and expects to complete enrollment of patients in the second

quarter of 2025.

Five (5) patients with cutaneous carcinomas have enrolled in Cohorts 1 and 2.

Intratumoral injection of PH-762 has been

well tolerated in all patients enrolled in the trial to date.

There were no related adverse events, no serious adverse events, and no

dose limiting toxicities or dose adjustments.

The trial is open for the continued enrollment of patients and expects to complete enrollment

of patients in the third quarter of 2025.

AgonOx Collaboration

10 unchanged sentences

positive” tumor infiltrating lymphocytes (“ DP TIL ”) with PH-762 increased their tumor killing activity by two-fold.

In February 2021, we entered

into a clinical co-development collaboration agreement (the “ Clinical Co-Development Agreement ”) with AgonOx to develop

a T cell-based therapy using PH-762 and AgonOx’s DP TIL.

Under the Clinical Co-Development Agreement, we and AgonOx were working

to develop a T cell-based therapy using the our lead product candidate, PH-762, and AgonOx’s DP TIL technology.

We had agreed to

reimburse AgonOx up to $4 million in expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced

melanoma and other advanced solid tumors.

In February 2021, we

entered into a clinical co-development collaboration agreement (the “ Clinical Co-Development Agreement ”) with AgonOx

to develop a T cell-based therapy using PH-762 and AgonOx’s DP TIL.

Under the Clinical Co-Development Agreement, we and AgonOx were

working to develop a T cell-based therapy using the our lead product candidate, PH-762, and AgonOx’s DP TIL technology.

We had agreed

to reimburse AgonOx up to $4 million in expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with

advanced melanoma and other advanced solid tumors.

We were also eligible to receive certain future development milestones and low single-digit

7 unchanged sentences

We will pay to AgonOx all payment obligations that accrued prior to the termination of the Clinical Co-Development Agreement.

payments to be made to AgonOx as of June 30, 2024 total $344,000, which primarily relate to accrued obligations for patient fees and other

miscellaneous costs as of the date of termination.

Pursuant to the terms of the Clinical Co-Development Agreement, we and AgonOx are coordinating the orderly wind-down of the Phase 1 clinical trial.

payments to be made to AgonOx as of September 30, 2024 total $35,000, which primarily relate to accrued obligations for patient fees and

other miscellaneous costs as of the date of termination.

Pursuant to the terms of the Clinical Co-Development Agreement, we and AgonOx

are coordinating the orderly wind-down of the Phase 1 clinical trial.

Each of us and AgonOx shall be responsible for its own costs and

expenses incurred in connection with the wind-down of the Phase 1 clinical trial.

Prior to the termination of

the Clinical Co-Development Agreement with AgonOx, PH-762 treated DP TIL were being evaluated in a Phase 1 clinical trial in the United

Prior to the termination

of the Clinical Co-Development Agreement with AgonOx, PH-762 treated DP TIL were being evaluated in a Phase 1 clinical trial in the United

States with up to 18 patients with advanced melanoma and other advanced solid tumors by AgonOx.

The primary trial objectives were to evaluate

the safety and to study the potential for enhanced therapeutic benefit from the administration of PH-762 treated DP TIL.

AgonOx had enrolled

three patients.

The first two patients were treated with DP TIL only and the third patient was treated with a combination of DP TIL and

The primary trial objectives were to

evaluate the safety and to study the potential for enhanced therapeutic benefit from the administration of PH-762 treated DP TIL.

had enrolled three patients.

The first two patients were treated with DP TIL only and the third patient was treated with a combination

of DP TIL and PH-762.

Critical Accounting Policies and Estimates

14 unchanged sentences

operations for the periods indicated, in thousands:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating expenses

Operating loss

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Comparison of the Three and Nine Months Ended September 30, 2024

Operating Expenses

2 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Research and development

11 unchanged sentences

Research and development expenses

for the three months ended June 30, 2024 decreased 37% as compared with the three months ended June 30, 2023.

The decrease in research

and development expenses was primarily driven by our cost rationalization measures in transitioning from a research company to a product

development company resulting in a decrease of $246,000 in salary-related costs, including stock-based compensation expense, and $74,000

in lab supplies associated with the reduction in headcount, in addition to a decrease in clinical consulting fees of $110,000 incurred

in connection with our IND filing for PH-762 in the prior period.

for the three months ended September 30, 2024 decreased 64% as compared with the three months ended September 30, 2023.

The decrease in

research and development expenses was primarily driven by our cost rationalization measures in transitioning from a research company to

a product development company resulting in a decrease of $286,000 in salary-related costs, including stock-based compensation expense,

and $85,000 due to the wind-down of preclinical studies, and $835,000 primarily related to our former Clinical Co-Development Agreement

from the prior year period.

Research and development expenses

for the six months ended June 30, 2024 decreased 43% as compared with the six months ended June 30, 2023.

The decrease in research and

development expenses was primarily driven by our cost rationalization measures in transitioning from a research company to a product development

company resulting in a decrease of $321,000 of expense due to the wind-down of preclinical studies, $470,000 in salary-related costs,

including stock-based compensation expense, and $182,000 in lab supplies associated with the reduction in headcount, in addition to a

decrease in clinical consulting fees of $335,000 incurred in connection with our IND filing for PH-762 in the prior period and a decrease

of $176,000 in manufacturing fees for PH-762.

for the nine months ended September 30, 2024 decreased 50% as compared with the nine months ended September 30, 2023.

The decrease in

research and development expenses was primarily driven by our cost rationalization measures in transitioning from a research company to

a product development company resulting in a decrease of $880,000 of expense due to the wind-down of preclinical studies, $1,108,000 in

salary-related costs, including stock-based compensation expense, and $204,000 in lab supplies associated with the reduction in headcount,

in addition to decreases in clinical consulting fees of $350,000 incurred in connection with our IND filing for PH-762 in the prior period,

decreases in clinical trial-related fees for our former PH-762 trials in ACT and European clinical trial, and a decrease of $208,000 in

manufacturing fees for PH-762.

We anticipate our research

4 unchanged sentences

legal and patent-related activities, audit, tax and consulting services, as well as other general corporate expenses.

General and administrative expenses

for the three months ended June 30, 2024 decreased 10% as compared with the three months ended June 30, 2023.

The decrease in general

and administrative expenses was primarily due to decreases in salary-related expenses for our President & CEO of $78,000 and in professional

fees of $60,000 related to consulting expenses as compared to the prior year period.

General and administrative expenses

for the six months ended June 30, 2024 decreased 20% as compared with the six months ended June 30, 2023.

The decrease in general and

administrative expenses was primarily due to decreases in salary-related expenses for our President & CEO of $120,000 and in professional

fees for a total of $364,000 related to consulting, legal and patent expenses as compared to the prior year period.

We anticipate our general and

administrative expenses will remain relatively consistent for the remainder of 2024.

General and administrative

expenses for the three months ended September 30, 2024 decreased 2% as compared with the three months ended September 30, 2023.

in general and administrative expenses was primarily due to a decrease in salary-related expenses.

administrative expenses for the nine months ended September 30, 2024 decreased 15% as compared with the nine months ended September

The decrease in general and administrative expenses was primarily due to decreases in salary-related expenses due to

reductions in headcount of $196,000, in professional fees for a total of $229,000 primarily related to legal and patent expenses,

and in our D&O insurance premium of $74,000 as compared to the prior year period.

We anticipate our general

and administrative expenses will remain relatively consistent for the remainder of 2024.

Liquidity and Capital Resources

6 unchanged sentences

the foreseeable future.

At June 30, 2024, we had cash of $4,698,000 as compared with $8,490,000 at December 31, 2023.

On May 16, 2024, we entered into

a purchase agreement (the “ Purchase Agreement ”) with Triton Funds LP (“ Triton ”), pursuant to which

we agreed to sell, and Triton agreed to purchase, upon our request in one or more transactions, up to 95,833 shares of our common stock

at a purchase of $6.48 per share (the “ Purchase Price ”), for aggregate gross proceeds of up to $621,000.

At September 30, 2024, we had cash of $5,390,000 as compared with $8,490,000 at December 31, 2023.

On May 16, 2024, we entered

into a purchase agreement (the “ Purchase Agreement ”) with Triton Funds LP (“ Triton ”), pursuant to

which we agreed to sell, and Triton agreed to purchase, upon our request in one or more transactions, up to 95,833 shares of our common

stock at a purchase of $6.48 per share (the “ Purchase Price ”), for aggregate gross proceeds of up to $621,000.

3, 2024, we terminated the Purchase Agreement with Triton effective immediately.

No shares of common stock were sold by us pursuant to the

Purchase Agreement prior to termination.

No shares of common stock were sold by us pursuant to

the Purchase Agreement prior to termination.

In July 2024, we entered into

9 unchanged sentences

The net proceeds

to us from the July 2024 Financing are approximately $2,600,000, after deducting placement agent fees and offering expenses.

to us from the July 2024 Financing were approximately $2,646,000, after deducting placement agent fees and offering expenses.

We have limited cash resources,

12 unchanged sentences

our cash flows for the periods indicated, in thousands:

Six Months Ended

Nine Months Ended

September 30,

Net cash used in operating activities

Net cash used in investing activities

Net cash used in (provided by) financing activities

Net cash provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Net Cash Flow from Operating Activities

Net cash used in operating activities

was $3,788,000 for the six months ended June 30, 2024 as compared with $5,479,000 for the six months ended June 30, 2023.

was primarily due to a decrease in net loss of $2,151,000, a decrease in non-cash related items of $214,000 primarily related to reduced

stock-based compensation expense, and a decrease in the changes in operating assets and liabilities of $246,000 primarily as a result

of liabilities owed for the completion of preclinical studies in the prior year period.

Net cash used in operating

activities was $5,741,000 for the nine months ended September 30, 2024 as compared with $8,379,000 for the nine months ended September

The decrease was primarily due to a decrease in net loss of $3,407,000, a decrease in non-cash related items of $298,000 primarily

related to reduced stock-based compensation expense, and a decrease in the changes in operating assets and liabilities of $472,000 primarily

as a result of liabilities owed for the completion of preclinical studies in the prior year period.

Net Cash Flow from Investing Activities

were no investing activities for the six months ended June 30, 2024 as compared with $5,000 for the six months ended June 30, 2023.

decrease in net cash used in investing activities was primarily due to laboratory and computer equipment purchases for our facility during

the prior year period .

were no investing activities for the nine months ended September 30, 2024 as compared with $5,000 for the nine months ended September

The decrease in net cash used in investing activities was primarily due to laboratory and computer equipment purchases for our

facility during the prior year period .

Net Cash Flow from Financing Activities

Net cash used in financing activities

was $4,000 for the six months ended June 30, 2024 as compared with net cash provided by financing activities of $5,010,000 for the six

months ended June 30, 2023.

The decrease was primarily due to the completion of our financing activities during the prior year period.

Net cash provided by financing

activities was $2,641,000 for the nine months ended September 30, 2024 as compared with $5,010,000 for the nine months ended September

The decrease was primarily due to the net proceeds from the completion of our financing activities during the prior year period

as compared with the current year period.

Contractual Obligations

4 unchanged sentences

Funding Requirements

June 30, 2024, we had cash and cash equivalents of $4,698,000 and received estimated net proceeds of $2,600,000 from our July 2024

We expect that our cash and cash equivalents will enable us to fund our current operating

plan into Q2 2025.

Due to the difficulty and uncertainty associated with the design and implementation of preclinical studies and clinical

trials, we will continue to assess our cash and cash equivalents and future funding requirements.

However, there is no assurance that

additional funding will be achieved and that we will succeed in our future operations.

We expect to continue to incur substantial additional

operating losses for at least the next several years as we continue to develop our product candidates and seek marketing approval and,

subject to obtaining such approval, the eventual commercialization of our product candidates.

If we obtain marketing approval for any

of our product candidates, we will incur significant sales, marketing and manufacturing expenses.

September 30, 2024, we had cash and cash equivalents of $5,390,000 and received estimated net proceeds of $2,646,000 from our July

2024 Financing .

We expect that our cash and cash equivalents will enable us to fund our current

operating plan into Q2 2025.

Due to the difficulty and uncertainty associated with the design and implementation of preclinical studies

and clinical trials, we will continue to assess our cash and cash equivalents and future funding requirements.

However, there is no assurance

that additional funding will be achieved and that we will succeed in our future operations.

We expect to continue to incur substantial

additional operating losses for at least the next several years as we continue to develop our product candidates and seek marketing approval

and, subject to obtaining such approval, the eventual commercialization of our product candidates.

If we obtain marketing approval for

any of our product candidates, we will incur significant sales, marketing and manufacturing expenses.

We also expect to continue to incur

5 unchanged sentences

opportunities.

We expect to seek additional funding to sustain our future operations and while we have successfully raised capital in

the past, the ability to raise capital in future periods is not assured.

We do not know if additional capital will be available when

needed or on terms favorable to us or our stockholders.

Collaboration, licensing or other agreements may not be available on favorable

terms, or at all.

If we seek to sell our equity securities, we do not know whether and to what extent we will be able to do so, or on

If available, additional equity financing may be dilutive to stockholders, debt financing may involve restrictive covenants

or other unfavorable terms and dilute our existing stockholders’ equity, and funding through collaboration, licensing or other

commercial agreements may be on unfavorable terms, including requiring us to relinquish rights to certain of our technologies or products.

If adequate financing is not available if and when needed, we may delay, reduce the scope of, or eliminate research or development programs,

if any, postpone or cancel the pursuit of product candidates, or otherwise significantly curtail our operations to reduce our cash requirements

and extend our capital.

expect to seek additional funding to sustain our future operations and while we have successfully raised capital in the past, the ability

to raise capital in future periods is not assured.

We do not know if additional capital will be available when needed or on terms favorable

to us or our stockholders.

Collaboration, licensing or other agreements may not be available on favorable terms, or at all.

to sell our equity securities, we do not know whether and to what extent we will be able to do so, or on what terms.

If available, additional

equity financing may be dilutive to stockholders, debt financing may involve restrictive covenants or other unfavorable terms and dilute

our existing stockholders’ equity, and funding through collaboration, licensing or other commercial agreements may be on unfavorable

terms, including requiring us to relinquish rights to certain of our technologies or products.

If adequate financing is not available

if and when needed, we may delay, reduce the scope of, or eliminate research or development programs, if any, postpone or cancel the pursuit

of product candidates, or otherwise significantly curtail our operations to reduce our cash requirements and extend our capital.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

2 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