What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-11 compared with 2025-05-14 · 139 added, 96 removed, 392 unchanged (37% of the section changed)

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(“VCN”, formerly named VCN Biosciences, S.L.), described in more detail below (the “Acquisition”), we transitioned our strategic focus to oncology through the development of VCN’s new oncolytic adenovirus platform designed for intravenous and intravitreal delivery to trigger tumor cell death, to improve access of co-administered cancer therapies to the tumor, and to promote a robust and sustained anti-tumor response by the patient’s immune system.

Our lead product candidate, VCN-01, a clinical stage oncolytic human adenovirus that is modified for tumor-selective replication and to express an enzyme, PH20 hyaluronidase, is currently being evaluated in a Phase 2b clinical study for the treatment of pancreatic cancer (“VIRAGE”), and has recently been used to treat patients in a Phase 1 clinical study for the treatment of retinoblastoma, and Phase 1 clinical studies for the treatment of other solid tumors including head and neck squamous cell carcinoma.

Our lead product candidate, VCN-01, a clinical stage oncolytic human adenovirus that is modified for tumor-selective replication and to express an enzyme, PH20 hyaluronidase, that has been evaluated in a Phase 2b clinical study for the treatment of pancreatic cancer (“VIRAGE”), and has recently been used to treat patients in a Phase 1 clinical study for the treatment of retinoblastoma, and Phase 1 clinical studies for the treatment of other solid tumors including head and neck squamous cell carcinoma.

Prior to the Acquisition, our focus was on developing therapeutics designed to treat gastrointestinal (GI) diseases which included our clinical development candidates:

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Financial Developments

On May 8, 2025 we consummated a public offering (the “Offering”) of an aggregate of (i) 1,990,900 shares (the “Shares”) of Common Stock, par value $0.001 per share (the “Common Stock”), (ii) pre-funded warrants (“Pre-Funded Warrants”) to purchase up to 4,827,280 shares of Common Stock (the “Pre-Funded Warrant Shares”), and (iii) Common Stock purchase warrants (“Common Warrants”) to purchase up to 6,818,180 shares of common stock (the “Common Warrant Shares”).

On June 20, 2025, we filed a prospectus supplement (the “Prospectus Supplement”) to our Registration Statement on Form S-3, as amended (File No.

333-279077), which Form S-3 was declared effective by the Securities and Exchange Commission (the “SEC”) on September 25, 2024 (the “Registration Statement”), relating to the offer and sale of up to $2,534,352 shares of our common stock, par value $0.001 per share (the “Common Stock”), from time to time through or directly to A.G.P./Alliance Global Partners (the “Sales Agent”) pursuant to the terms of that certain Amended and Restated At Market Issuance Sales Agreement, dated February 9, 2021, as amended by Amendment No.

1 thereto, dated May 3, 2021, as further amended by Amendment No.

2 thereto, dated May 2, 2024 (the “ATM Sales Agreement”).

Sales of Common Stock, if any, under the Prospectus Supplement will be made by any method permitted that is deemed an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act.

The Sales Agent is not required to sell any specific amount, but will act as our Sales Agent using commercially reasonable efforts consistent with its normal trading and sales practices.

The Sales Agent will be entitled to compensation at a commission rate equal to up to 3.0% of the gross sales price per share of Common Stock sold.

On May 8, 2025 we consummated a public offering (the “May 2025 Offering”) of an aggregate of (i) 1,990,900 shares (the “Shares”) of Common Stock, (ii) pre-funded warrants (“Pre-Funded Warrants”) to purchase up to 4,827,280 shares of Common Stock (the “Pre-Funded Warrant Shares”), and (iii) common stock purchase warrants (“Common Warrants”) to purchase up to 6,818,180 shares of common stock (the “Common Warrant Shares”).

Each Share and associated Common Warrant to purchase one (1) Common Warrant Share was sold at a combined public offering price of $1.10.

Each Pre-Funded Warrant and associated Common Warrant to purchase one (1) Common Warrant Share was sold at a combined public offering price of $1.099.

We received aggregate gross proceeds from the Offering of approximately $7.5 million, before deducting placement agent fees and other offering expenses.

We intend to use the proceeds of the Offering primarily for working capital and general corporate purposes, including for research and development and manufacturing scale-up and may use a portion of the proceeds to invest in or acquire other products, businesses or technologies.

Each Pre-Funded Warrant is immediately exercisable for one (1) Pre-Funded Warrant Shares at an exercise price of $0.001 per share and will remain exercisable until such Pre-Funded Warrant is exercised in full.

Each Common Warrant has an exercise price of $1.10 per Common Warrant Share, is immediately exercisable, and expires five (5) years from its issuance date.

We received aggregate gross proceeds from the May 2025 Offering of approximately $7.5 million, before deducting placement agent fees and other offering expenses.

Each Pre-Funded Warrant was immediately exercisable for one (1) Pre-Funded Warrant Shares at an exercise price of $0.001 per share and will remain exercisable until such Pre-Funded Warrant is exercised in full.

Each Common Warrant has an exercise price of $1.10 per Common

Warrant Share, is immediately exercisable, and expires five (5) years from its issuance date.

The exercise price of the Common Warrants and the Pre-Funded Warrants and number of shares of Common Stock issuable upon exercise will be adjusted in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events.

In the event of a fundamental transaction, as described in each of the Common Warrants and the Pre-Funded Warrants, the holders of the such warrants will be entitled to receive upon exercise of their respective warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised their warrants immediately prior to such fundamental transaction.

In the event of a fundamental transaction, as described in each of the Common Warrants and the Pre-Funded Warrants, the holders of such warrants will be entitled to receive upon exercise of their respective warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised their warrants immediately prior to such fundamental transaction.

In addition, in certain circumstances, upon a fundamental transaction, a holder of Common Warrants will have the right to require us to repurchase its Common Warrants at the Black Scholes Value;

provided, however, that, if the fundamental transaction is not within the our control, including not approved by our board of directors, then the holder shall only be entitled to receive the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of the Common

Warrant, that is being offered and paid to the holders of Common Stock in connection with the fundamental transaction.

provided, however, that, if the fundamental transaction is not within our control, including not approved by our board of directors, then the holder shall only be entitled to receive the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of the Common Warrant, that is being offered and paid to the holders of Common Stock in connection with the fundamental transaction.

The Common Warrants may be exercised on a cashless basis if at the time of exercise thereof there is no effective registration statement registering, or the prospectus contained therein is not available for, the issuance of the Common Warrant Shares to the holder.

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A holder of the Common Warrants and the Pre-Funded Warrants (together with its affiliates) may not exercise any portion of the Common Warrant or Pre-Funded Warrant to the extent that the holder would own more than 4.99% (or 9.99%, at the election of the holder) of the outstanding shares of Common Stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to our, the holder may increase the amount of beneficial ownership of outstanding shares after exercising the holder’s Common Warrants or Pre-Funded Warrants up to 9.99% of the number of our shares of Common Stock outstanding immediately after giving effect to the exercise.

On February 3, 2025, we received $1.7 million for the 2023 Research and Development rebate program sponsored by the Spanish government.

The program provides for reimbursement of certain expenses incurred in research and development efforts we incur in Spain.

The reimbursements can be through either tax credits or direct refunds.

On September 16, 2024, we issued a press release noting that our THERICEL project had been awarded €2.28 million (approximately $2.54 million) from the National Knowledge Transfer Program of the Spanish government’s Ministry of Science, Innovation & Universities to support a collaboration between us and the Universitat Autònoma de Barcelona (“UAB”) to advance the our suspension cell platform for the clinical manufacture of adenovirus- and adeno-associated virus (“AAV”) therapies.

Under the award, we (via our wholly owned subsidiary, Theriva Biologics SL) will receive an unsecured loan (the “Loan”) of €1.3 million (approximately $1.4 million) as a lump sum payment in Q1 2025 which shall bear interest at a rate of 4.015% and be repaid over 7 years commencing three years from the date of award and UAB will receive a grant of €0.95 million (approximately $1.06 million) dedicated to the THERICEL project and paid in annual installments over the next 3 years.

The loan was funded on January 17, 2025.

Our Current Product Pipeline

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Recent Clinical Developments

On May 7, 2025, we announced positive topline outcomes from the VIRAGE Phase 2b clinical trial evaluating the Company’s lead product candidate VCN-01 (zabilugene almadenorepvec) plus standard-of-care (SoC) chemotherapy gemcitabine/nab-paclitaxel as a first line therapy for patients with metastatic pancreatic ductal adenocarcinoma (PDAC) for whom gemcitabine/nab-paclitaxel is the recommended first-line treatment option.

On May 27, 2025, we announced a poster presentation by Dr.

Jaume Català-Mora, Pediatric Ophthalmologist, Sant Joan de Déu-Barcelona Children’s Hospital of results from investigator-sponsored Phase 1 study of VCN-01 in refractory retinoblastoma patients, which was presented on May 31, 2025 at the 2025 American Society of Clinical Oncology (ASCO) annual meeting, which took place from May 30, 2025 -June 3, 2025 in Chicago, Illinois.

Based on the study results it was concluded that VCN-01 (zabilugene almadenorepvec) was well tolerated, after 2 intravitreal administrations at 2E10 vp/eye.

The most frequently reported treatment-related adverse events were uveitis.

8,333 did not receive the second dose because of medical decision and also experienced glaucoma requiring treatment.

No systemic toxicities occurred.

There were no dose limiting toxicities and no ocular or systemic toxicities greater than Grade 3 during the evaluation period.

● Some degree of ocular inflammation and associated turbidity was observed after VCN-01 injection.

Inflammation was managed, and vitreous haze improved in some cases, using pre-emptive oral and/or topical steroids.

● VCN-01 did not cause retinal toxicity, and selective VCN-01 replication in retinoblastoma cells has been observed by immunohistochemical analysis.

VCN-01 caused reversible changes in electroretinograms associated to turbidity.

● Replication of VCN-01 was detected over time within retinoblastoma tumors but was not observed in healthy tissue

● Intravitreal VCN-01 demonstrated promising antitumor activity:

o Five patients presented a partial response, three presented stable disease and one, progressive disease

o The eyes of 3 out of 5 patients with partial response are preserved with vision after receiving eye-conservative therapy (follow-up 12-49 months)

On May 7, 2025, we announced positive topline outcomes from the VIRAGE Phase 2b clinical trial evaluating our lead product candidate VCN-01 (zabilugene almadenorepvec) plus standard-of-care (SoC) chemotherapy gemcitabine/nab-paclitaxel as a first line therapy for patients with metastatic pancreatic ductal adenocarcinoma (PDAC) for whom gemcitabine/nab-paclitaxel is the recommended first-line treatment option.

VCN-01 is a systemically-administered, tumor selective, stroma-degrading oncolytic adenovirus that has been granted Orphan Drug Designation and Fast Track Designation by the U.S.

Food and Drug Administration (FDA) for the treatment of pancreatic cancer.

The analysis of the VIRAGE trial (see “About VIRAGE” below) includes data for first-line treatment of 96 newly-diagnosed metastatic PDAC patients:

The analysis of the VIRAGE trial includes data for first-line treatment of 96 newly-diagnosed metastatic PDAC patients:

● In the primary endpoint analysis, the 48 patients treated with at least one dose of gemcitabine/nab-paclitaxel SoC had a median overall survival (OS) of 8.6 months, while the 48 patients treated with VCN-01 followed by at least one dose of gemcitabine/nab-paclitaxel SoC had a median OS of 10.8 months [Hazard Ratio (HR) = 0.57, 95% CI 0.34-0.96, p=0.0546].

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0.21-0.92, p=0.046], suggesting that the second dose of VCN-01 (administered 3 months after the first dose) provides a meaningful additional benefit in this treatment subgroup.

On March 31, 2025, we announced that a second Independent Data Monitoring Committee (IDMC) review of data from the VIRAGE Phase 2b clinical trial in newly-diagnosed metastatic pancreatic ductal adenocarcinoma (PDAC) found that VCN-01 was well tolerated in combination with standard-of-care chemotherapy (gemcitabine/nab-paclitaxel) and the adverse event (AE) profile was as expected for the patient population and the medications being studied.

The VCN-01 AE profile was consistent with that observed in prior clinical trials.

The most common VCN-01 related AEs (pyrexia, flu-like illness, vomiting, nausea, and elevated transaminases) were transient and reversible.

These AEs were observed to be less frequent and of reduced CTCAE grade after the second VCN-01 dose (administered on day 92) compared to the first VCN-01 dose (administered on day 1).

The IDMC noted that the overall type and number of AEs in the VCN-01 treatment group was as expected for the pancreatic cancer population, the duration of treatment, and the administration of an oncolytic virus.

Our Current Oncology-Focused Pipeline

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Our OV product candidates are engineered to efficiently infect and selectively replicate to a high extent in tumor cells versus normal host cells, which enables intravenous delivery.

By contrast, many other oncolytic viruses in clinical development today are administered

by direct injection into the tumor.

By contrast, many other oncolytic viruses in clinical development today are administered by direct injection into the tumor.

Intravenous delivery has the potential to expand the therapeutic effect of OVs because the virus can infect both the primary tumor and tumor metastases throughout the body.

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Current clinical update

We are currently conducting a Phase 2b clinical trial of intravenous VCN-01 with nab-paclitaxel plus gemcitabine in patients with PDAC.

Additional investigator sponsored studies comprise a Phase 1 trial evaluating the intravenous administration of VCN-01 in patients prior to surgical resection of high-grade brain tumors.

Additionally, the Clinical Study Reports (CSRs) are being prepared for the Phase 1 Trial of intravenous VCN-01 in combination with durvalumab in subjects with recurrent/ metastatic squamous cell carcinoma of the head and neck (mSCCHN) and the Phase 1 trial evaluating intravitreal VCN-01 in patients with retinoblastoma.

We have recently completed patient treatment and follow-up in a Phase 2b clinical trial of intravenous VCN-01 with nab-paclitaxel plus gemcitabine in patients with PDAC and the clinical study report (CSR) is being prepared.

Similarly, the CSR is being finalized for the Phase 1 investigator sponsored trial evaluating intravitreal VCN-01 in patients with retinoblastoma.

A protocol amendment has recently been submitted in an additional investigator sponsored Phase 1 trial evaluating the intravenous administration of VCN-01 in patients prior to surgical resection of high-grade brain tumors.

The CSR has been completed for the Phase 1 Trial of intravenous VCN-01 in combination with durvalumab in subjects with recurrent/ metastatic squamous cell carcinoma of the head and neck (mSCCHN) and.

Phase 1 Clinical Trials in PDAC

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Thirty - six patients received their second doses of intravenous VCN-01, which were well tolerated and demonstrated the expected VCN-01 adverse event profile.

Topline data for the VIRAGE Phase 2b clinical trial are anticipated for Q2 2025.

Topline data for the VIRAGE Phase 2b clinical trial was announced Q2 2025.

On January 30, 2024, the accumulated clinical data from patients enrolled across 6 sites open in the U.S.

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The poster discussed the objectives, endpoints and key inclusion and exclusion criteria included in the trial protocol, together with the treatment schedule for each arm of the study.

On December 5, 2024 we announced the outcomes of a Type D meeting with the FDA to obtain guidance on the design of a Phase 3 clinical study of VCN-01 in combination with standard-of-care chemotherapy for the treatment of PDAC.

On December 5, 2024 we announced the outcomes of a Type D meeting with the FDA to obtain guidance on the design of a potential Phase 3 clinical study of VCN-01 in combination with standard-of-care chemotherapy for the treatment of PDAC.

FDA advised that the optimal path forward for the VCN-01 PDAC program is to conduct a stand-alone Phase 3 study of VCN-01 with gemcitabine/nab-paclitaxel.

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The FDA meeting also highlighted the FDA’s preferences regarding certain statistical elements of confirmatory clinical studies, including methods for sample size estimation and the study population(s) used for data analysis

On February 4, 2025, we received Scientific Advice from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) on the design of a Phase 3 clinical study of VCN-01 in combination with standard-of-care chemotherapy for the treatment of metastatic PDAC.

On February 4, 2025, we received Scientific Advice from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) on the design of a potential Phase 3 clinical study of VCN-01 in combination with standard-of-care chemotherapy for the treatment of metastatic PDAC.

Consistent with feedback from the FDA, CHMP advised that a marketing authorization application (MAA) for VCN-01 in metastatic PDAC could be supported by positive results from a randomized, controlled, stand-alone Phase 3 study comparing VCN-01 combined with gemcitabine/nab-paclitaxel to gemcitabine/nab-paclitaxel standard-of-care alone.

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Topline outcomes are detailed above under “Recent Clinical Developments”.

Retinoblastoma

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On April 23, 2024, we announced positive topline data from this study, with agreement by the study Monitoring Committee that the study had a positive outcome.

VCN-01 was well tolerated after intravitreal administration at the 2 doses and the most frequently reported treatment-related adverse events were Grade 1 or 2.

There were no dose limiting toxicities and no ocular or systemic toxicities equal to or greater than Grade 3 during the evaluation period.

● Some degree of ocular inflammation and associated turbidity was observed after VCN-01 injection.

Inflammation was managed, and vitreous haze improved in some cases, by local and systemic administration of anti-inflammatory drugs.

● VCN-01 does not appear to change the retinal function, and selective VCN-01 replication in retinoblastoma cells has been observed by immunohistochemical analysis.

● Replication within retinoblastoma tumors over time was detected

● Intravitreal VCN-01 demonstrated promising antitumor activity:

o Four patients presented a response characterized by unequivocal improvement in vitreous seed density.

o Eye enucleation was avoided in 3 patients to date, one of whom has retained their eye after 4 years of follow-up.

Per the terms of the clinical trial agreement, the determination by the study Monitoring Committee that the study had a positive outcome means we received an exclusive, worldwide technology license, and related patents from Hospital Sant Joan de Déu for the treatment of pediatric patients with advanced retinoblastoma and we will pay to Hospital Sant Joan de Déu the amount of three hundred twenty thousand, two hundred and sixty five Euros (€320,265) or approximately $334,000, upon receipt by us of the final clinical study report.

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On October 11, 2024, the European Commission adopted the European Medicines Agency (EMA) recommendation to grant Orphan Medicinal Product Designation to VCN-01 for the treatment of retinoblastoma.

On May 27, 2025, the Company announced the definitive data from investigator-sponsored Phase 1 study of VCN-01 (zabilugene almadenorepvec) in refractory retinoblastoma patients in a poster presented by Dr.

Jaume Català-Mora, Pediatric Ophthalmologist, Sant Joan de Déu-Barcelona Children’s Hospital at the 2025 American Society of Clinical Oncology (ASCO) annual meeting.

Topline outcomes are detailed above under “Recent Clinical Developments” section.

Phase 1 Trial of intravenous VCN-01 in Combination with Durvalumab in Subjects with Recurrent/ Metastatic SCCHN

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and downregulation of matrix-related pathways after VCN-01 administration.

The study has been completed and the clinical study report is being prepared.

The study has been completed and the clinical study report has been completed.

On October 16, 2023, we presented additional data from this study in a poster at the European Society for Medical Oncology (ESMO) 2023 Congress held virtually and in Madrid, Spain from October 20-24, 2023.

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The peak and duration of huCART-meso T cells in the peripheral blood as well as duration of stable disease in evaluable patients showed encouraging trends.

On October 16, 2024, at the 2024 Advancing Gene Therapy and Cell Therapies for Cancer conference by the American Society for Gene and Cell Therapy in Philadelphia, University of Pennsylvania investigators presented results from the Phase 1 trial of huCART-meso cells administered in combination with VCN-01 in patients with pancreatic and serous epithetlial ovarian cancer.

Safety was in line with expectations from monotherapy studies and 3.3x10 12 was defined as the dose for further development.

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On January 9, 2023, we issued a press release announcing that the first patient was dosed in this study and recruitment is on-going.

On May 12, 2025, a protocol amendment was submitted for this trial to MHRA (UK Regulatory Authorities).

Our Current Gastrointestinal (GI) and Microbiome-Focused Pipeline

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On April 10, 2025, we announced the presentation of the previously disclosed blinded safety and pharmacokinetic (PK) data from the ongoing Phase 1b/2a randomized, double - blinded, placebo - controlled clinical trial of SYN - 004 (ribaxamase) in allogeneic hematopoietic cell transplant (HCT) recipients for the prevention of acute graft - versus - host - disease (aGVHD) at the Congress of the European Society of Clinical Microbiology and Infectious Diseases (ESCMID Global), taking place in Vienna, Austria from April 11 - 15, 2025.

These data have been featured in an ePoster Flash Session oral presentation.

This data was featured in an ePoster Flash Session oral presentation.

SYN-020 — Oral Intestinal Alkaline Phosphatase (IAP)

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Based on the known mechanisms as well as our own supporting animal model data, we intended to initially develop SYN-020 to mitigate the intestinal damage caused by radiation therapy that is routinely used to treat pelvic cancers.

While we believe SYN-020 may play a pivotal role in addressing acute and long-term complications associated with radiation exposure to the GI tract, we have also begun planning for

potential development of SYN-020 in large market indications with significant unmet medical needs.

While we believe SYN-020 may play a pivotal role in addressing acute and long-term complications associated with radiation exposure to the GI tract, we have also begun planning for potential development of SYN-020 in large market indications with significant unmet medical needs.

Such indications include celiac disease, non-alcoholic fatty liver disease (“NAFLD”), and indications to treat and prevent metabolic and inflammatory disorders associated with aging.

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With our transition to an oncology focused Company, we are exploring strategic opportunities to enable advancement of this potentially valuable asset.

Future Potential Regulatory Strategy for Prevention of Primary CDI

As part of our strategic transformation into an oncology focused company, we are exploring value creation options for our SYN - 004 and SYN - 020 assets, including out - licensing or partnering.

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In parallel with VCN-01 clinical development, we are developing next-generation oncolytic adenoviruses (termed VCN-X) with novel therapeutic payloads and structural modifications designed to increase tumor cell killing and improve systemic virus pharmacokinetics.

Preclinical proof-of-concept has been established with VCN-11, which has been engineered to contain all of the features of VCN-01 as well as an additional modification to include an albumin binding domain (ABD) in the virus capsid.

Preclinical proof-of-concept has been established with VCN-11, which has been engineered to contain all the features of VCN-01 as well as an additional modification to include an albumin binding domain (ABD) in the virus capsid.

The virus capsid is the target for neutralizing antibodies (NAbs) that are generated by the host immune system to destroy circulating viruses.

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and foreign patents pending.

The SYN-004 (ribaxamase) program is supported by IP that is assigned to Theriva Biologics, namely U.S.

The SYN-004 (ribaxamase) program is supported by intellectual property (“IP”) that is assigned to Theriva Biologics, namely U.S.

and foreign patents (in most major markets, e.g.

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These patents and patent applications, which cover various formulations, medical uses and manufacture of SYN-020, are expected to expire in 2038-2040, without taking potential patent term extensions or patent term adjustment into account.

The VCN-01 and VCN-11 programs are supported by U.S.

The VCN-01 and Albumin Shield programs are supported by U.S.

and foreign patents and patent applications that are assigned to VCN or exclusively licensed from Fundació Privada Institut d’Investigacio Biomedica de Bellvitge (IDIBELL), Institut Catala d’Oncologia (ICO), and Hospital Sant Joan de Déu in Barcelona.

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There are accounting policies, each of which requires significant judgments and estimates on the part of management, that we believe are significant to the presentation of our consolidated financial statements.

The most significant accounting estimates relate to goodwill and IPR&D, research and development costs, contingent consideration, and impairment of long-lived assets.

The most significant accounting estimates relate to goodwill and IPR&D, research and development costs, and contingent consideration.

Goodwill and IPR&D

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The impairment test for indefinite-lived intangibles, other than goodwill, consists of a comparison of the fair value of the intangible asset with their carrying amount.

If the carrying amount

exceeds the fair value, an impairment charge is recognized in an amount equal to that excess.

If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess.

Indefinite-lived intangible assets, such as goodwill, are not amortized.

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Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded under long term liabilities in the consolidated balance sheets.

Long-Lived Assets

Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset.

Recoverability measurement and estimating of undiscounted cash flows is done at the lowest possible level for which we can identify assets.

If such assets are considered to be impaired, impairment is recognized as the amount by which the carrying amount of assets exceeds the fair value of the assets.

Research and Development Costs

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Accrued CRO costs are subject to revisions as such studies progress to completion.

At March 31, 2025 and 2024, we have accrued CRO expenses of $3.2 million and $2.4 million, respectively, that are included in accrued expenses.

As of March 31, 2025 and 2024, we have prepaid CRO costs of $0.1 million and $0.4 million, respectively, that are included in prepaid expenses.

At June 30, 2025 and 2024, we have accrued CRO expenses of $2.5 million, that are included in accrued expenses.

As of June 30, 2025 and 2024, we have prepaid CRO costs of $0.05 million and $0.2 million, respectively, that are included in prepaid expenses.

Results of Operations

Three Months Ended March 31, 2025 and 2024

Three Months Ended June 30, 2025 and 2024

General and Administrative Expenses

General and administrative expenses decreased to $1.4 million for the three months ended March 31, 2025, from $1.9 million for the three months ended March 31, 2024.

This decrease of 25% is primarily comprised of the decrease in salary costs, travel, lower director and officer insurance, and a decrease in fair value of the contingent consideration adjustment.

The charge related to stock-based compensation expense was $54,000 for the three months ended March 31, 2025, compared to $101,000 for the three months ended March 31, 2024.

General and administrative expenses increased to $11.2 million for the three months ended June 30, 2025, from $1.5 million for the three months ended June 30, 2024.

This increase of 662% is primarily comprised of the increase in fair value of the contingent consideration adjustment of $9.2 million due to the VIRAGE Phase 2b clinical trial of VCN-01 in PDAC achieving its primary survival and safety endpoints and increased registration fees.

The charge related to stock-based compensation expense was $97,000 for the three months ended June 30, 2025, compared to $114,000 for the three months ended June 30, 2024.

Research and Development Expenses

Research and development expenses decreased to $3.0 million for the three months ended March 31, 2025, from approximately $3.5 million for the three months ended March 31, 2024.

This decrease of 14% is primarily the result of lower indirect cost related to decreased VCN-01 manufacturing costs and lower clinical trial expenses related to our Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients, offset by slightly higher clinical trial expenses related to our VIRAGE Phase 2b clinical trial of VCN-01 in PDAC and higher patent expenses related to SYN-020.

We anticipate research and development expense to increase as we complete our VIRAGE Phase 2b clinical trial of VCN-01and plan for our Phase 3 clinical trial of VCN-01 in PDAC, advance our VCN-01 program in retinoblastoma, expand GMP scale-up manufacturing activities for VCN-01, and continue supporting our other preclinical and discovery initiatives.

The charge related to stock-based compensation expense was $46,000 for the three months ended March 31, 2025, compared to $58,000 related to stock-based compensation expense for the three months ended March 31, 2024.

The following table sets forth our research and development expenses directly related to our product candidates for the three months ended March 31, 2025 and 2024.

Research and development expenses decreased to $2.0 million for the three months ended June 30, 2025, from approximately $3.0 million for the three months ended June 30, 2024.

This decrease of 34% is primarily the result of lower clinical trial expenses related to our VIRAGE Phase 2b clinical trial of VCN-01 in PDAC, lower indirect cost related to decreased VCN-01 manufacturing costs and lower clinical trial expenses related to our Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients, offset by higher patent expenses related to SYN-020.

We anticipate research and development expense to increase as we complete our VIRAGE Phase 2b clinical trial of VCN-01and plan for a potential Phase 3 clinical trial of VCN-01 in PDAC, advance our VCN-01 program in retinoblastoma, expand GMP scale-up manufacturing activities for VCN-01, and continue supporting our other preclinical and discovery initiatives.

The charge related to stock-based compensation expense was $76,000 for the three months ended June 30, 2025, compared to $58,000 related to stock-based compensation expense for the three months ended June 30, 2024.

The following table sets forth our research and development expenses directly related to our product candidates for the three months ended June 30, 2025 and 2024.

These direct expenses were external costs associated with preclinical studies and clinical trials.

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Total Research and Development

Goodwill Impairment

During the quarter ended June 30, 2024, we experienced a sustained decline in the quoted market price of our common stock and we deemed this to be a triggering event for impairment.

The Company performed an interim impairment analysis using the “Income approach” that requires significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post-launch cash flows and a risk-adjusted weighted average cost of capital.

We concluded that the IPR&D was not impaired as of June 30, 2024, however, goodwill with a carrying value of $5.5 million was written down to its estimated fair value of $1.5 million and an impairment charge of $4.0 million was recorded during the quarter ended June 30, 2024.

The decrease in the valuation was primarily driven by an increase in the discount rate which was impacted by an increase in the company specific risk premium, and not by material changes to the clinical and administrative operations of the business.

Goodwill was fully impaired during 2024.

Other Income/Expense

Other income was $93,000 for the three months ended March 31, 2025 compared to other income of $227,000 for the three months ended March 31, 2024.

Other income for the three months ended March 31, 2025 is primarily comprised of interest income of $96,000 and an exchange loss of $3,000.

Other income for the three months ended March 31, 2024 is primarily comprised of interest income of $228,000 and exchange loss of $1,000.

Our net loss for the three months ended March 31, 2025 was $4.3 million, or ($1.55) per common share, compared to $5.2 million, or ($7.53) per common share for the three months ended March 31, 2024.

Other income was $74,000 for the three months ended June 30, 2025 compared to other income of $172,000 for the three months ended June 30, 2024.

Other income for the three months ended June 30, 2025 is primarily comprised of interest income of $54,000 and an exchange gain of $20,000.

Other income for the three months ended June 30, 2024 is primarily comprised of interest income of $173,000 and exchange loss of $1,000.

Our net loss for the three months ended June 30, 2025 was $13.1 million, or ($1.93) per common share, compared to $8.3 million, or ($10.72) per common share for the three months ended June 30, 2024.

Six Months Ended June 30, 2025 and 2024

General and Administrative Expenses

General and administrative expenses increased to $12.6 million for the six months ended June 30, 2025, from $3.4 million for the six months ended June 30, 2024.

This increase of 271% is primarily comprised of the increase in fair value of the contingent consideration adjustment of $9.2 million due to the VIRAGE Phase 2b clinical trial of VCN-01 in PDAC achieving its primary survival and safety endpoints and increased registration fees.

The charge related to stock-based compensation expense was $151,000 for the six months ended June 30, 2025, compared to $215,000 for the six months ended June 30, 2024.

Research and Development Expenses

Research and development expenses decreased to $4.9 million for the six months ended June 30, 2025, from approximately $6.4 million for the six months ended June 30, 2024.

This decrease of 23% is primarily the result of lower clinical trial expenses related to our VIRAGE Phase 2b clinical trial of VCN-01 in PDAC, lower indirect cost related to decreased VCN-01 manufacturing costs and lower clinical trial expenses related to our Phase 1b/2a clinical trial of SYN-004 (ribaxamase) in allogeneic HCT recipients, offset by higher and higher patent expenses related to SYN-020.

The charge related to stock-based compensation expense was $122,000 for the six months ended June 30, 2025, compared to $116,000 related to stock-based compensation expense for the six months ended June 30, 2024.

The following table sets forth our research and development expenses directly related to our product candidates for the six months ended June 30, 2025 and 2024.

These direct expenses were external costs associated with preclinical studies and clinical trials.

Indirect research and development expenses related to employee costs, facilities, stock-based compensation and research and development support services that are not directly allocated to specific product candidates.

Therapeutic Areas

Other therapeutic areas

Total direct costs

Total indirect costs

Total Research and Development

Goodwill Impairment

During the six months ended June 30, 2024, we experienced a sustained decline in the quoted market price of our Common Stock and we deemed this to be a triggering event for impairment.

Goodwill was fully impaired during 2024.

Other Income/Expense

Other income was $167,000 for the six months ended June 30, 2025 compared to other income of $400,000 for the six months ended June 30, 2024.

Other income for the six months ended June 30, 2025 is primarily comprised of interest income of $150,000 and an

exchange gain of $17,000.

Other income for the six months ended June 30, 2024 is primarily comprised of interest income of $402,000 and exchange loss of $2,000.

Net Loss Attributable to Common Stockholders

Our net loss attributable to common stockholders was approximately $17.4 million, or $3.64 per basic and diluted common share for the six months ended June 30, 2025, compared to a net loss of approximately $13.5 million, or $18.45 per basic common share and diluted common share for the six months ended June 30, 2024.

Liquidity and Capital Resources

As of March 31, 2025, the Company has a significant accumulated deficit, and with the exception of the three months ended June 30, 2010 and the three months ended December 31, 2017, the Company has experienced significant losses and incurred negative cash flows since inception.

We have incurred an accumulated deficit of $339.3 million as of March 31, 2025, and expect to continue to incur losses in the foreseeable future with the recognition of revenue being contingent on successful phase 3 clinical trials and requisite approvals by the FDA or foreign equivalents.

Our cash and cash equivalents totaled $10.0 million as of March 31, 2025, a decrease of $1.6 million from December 31, 2024.

During the year ended December 31, 2024 and quarter ended March 31, 2025, the primary use of cash was for working capital requirements and operating activities which resulted in a net loss of $25.6 million and $4.3 million for the year ended December 31, 2024 and the quarter ended March 31, 2025, respectively.

With our cash position of $14.1 million as of early May 2025, we believe we will be able to fund our operations into the first quarter of 2026.

Based on our current plans, our cash and cash equivalents will be sufficient to cover overhead costs, manufacturing costs for near-term clinical supply, and limited research efforts, including our ongoing Phase 1 and Phase 2 clinical trials for VCN-01, preclinical studies supporting VCN-01, our ongoing discovery initiatives, and to fund our committed obligations under the terms of the VCN Share Purchase Agreement (the “VCN Purchase Agreement”) related to the VCN Acquisition, but will not be sufficient for additional trials of VCN-01, SYN-020 or SYN-004, or to complete the last cohort of the Phase 1b/2a clinical trial of SYN-004, which are expected to require significant cash expenditures.

Following the anticipated completion of our ongoing Phase 1 and Phase 2b clinical trials for VCN-01, and preclinical studies supporting VCN-01 and our discovery initiatives, we will need to obtain additional funds for future clinical trials.

As of June 30, 2025, we had a significant accumulated deficit, and with the exception of the three months ended June 30, 2010 and the three months ended December 31, 2017, we have experienced significant losses and incurred negative cash flows since inception.

We have incurred an accumulated deficit of $352.4 million as of June 30, 2025, and expect to continue to incur losses in the foreseeable future with the recognition of revenue being contingent on successful phase 3 clinical trials and requisite approvals by the FDA or foreign equivalents.

Our cash and cash equivalents totaled $12.1 million as of June 30, 2025, an increase of $0.5 million from December 31, 2024.

During the year ended December 31, 2024 and six months ended June 30, 2025, the primary use of cash was for working capital requirements and operating activities which resulted in a net loss of $25.6 million and $17.4 million for the year ended December 31, 2024 and the six months ended June 30, 2025, respectively.

With our cash position of $9.5 million as of early August 2025, we believe we will be able to fund our operations into the first quarter of 2026.

Based on our current plans, our cash and cash equivalents will be sufficient to cover overhead costs, manufacturing costs for near-term clinical supply, and limited research efforts, including our ongoing Phase 1 and Phase 2 clinical trials for VCN-01, preclinical studies supporting VCN-01, our ongoing discovery initiatives, and to fund our committed obligations under the terms of the VCN share purchase agreement (the “VCN Purchase Agreement”) related to the Acquisition, but will not be sufficient for additional trials of VCN-01, SYN-020 or SYN-004, or to complete the last cohort of the Phase 1b/2a clinical trial of SYN-004, which are expected to require significant cash expenditures.

Following the completion of our ongoing Phase 1 and Phase 2b clinical trials for VCN-01, and preclinical studies supporting VCN-01 and our discovery initiatives, we will need to obtain additional funds for future clinical trials.

We anticipate that our future clinical trials will be much larger in size and require larger cash expenditures than the aforementioned clinical programs.

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However, the amount of additional capital needed by us will also depend upon the costs to advance our VCN-01 clinical programs.

If necessary, we may attempt to utilize the at the market sales facility (the “ATM”) or seek to raise additional capital in other financing transactions, neither of which is guaranteed.

Use of the ATM is limited by certain restrictions and management’s plan does not rely on additional capital from either of these sources.

If necessary, we may attempt to utilize the ATM Sales Agreement or seek to raise additional capital in other financing transactions, neither of which is guaranteed.

Use of the ATM Sales Agreement is limited by certain restrictions and management’s plan does not rely on additional capital from any sources.

If we are not able to obtain additional capital (which is not assured at this time), our long-term business plan may not be accomplished, and we may be forced to cease certain development activities.

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Historically, we have financed our operations primarily through public and private sales of our securities, and we expect to continue to seek and obtain additional capital in a similar manner.

During the year ended December 31, 2024, our only source of cash was from sales of our Common Stock through the Amended and Restated ATM Sales Agreement pursuant to which we sold 569,000 shares of our Common Stock for net proceeds of $3.6 million and from the sale of our securities in our public offering of 918,600 shares of Common Stock in combination with accompanying warrants to purchase an aggregate of 1,428,600 shares of the Common Stock for gross proceeds of $2.5 million (net proceeds of $2.0 million, after deducting underwriting discounts and estimated expenses).

During the three months ended March 31, 2025, the only source of cash was from the $1.7 million received for the Research and Development rebate program and $1.4 million for the THERICEL project loan from the National Knowledge Transfer Program of the Spanish government’s Ministry of Science.

In May 2025, we closed our public offering of 6,8180,180 shares of Common Stock (or Pre-Funded Warrants in lieu thereof) in combination with accompanying Common Warrants to purchase an aggregate of 6,818,180 shares of the Common Stock for gross proceeds of $7.5 million (net proceeds of $6.6 million, after deducting underwriting discounts and estimated expenses)

There can be no assurance that we will be able to continue to raise funds through the sale of shares of Common Stock through the ATM or other equity financings.

During the year ended December 31, 2024, our only source of cash was from sales of our Common Stock through the ATM Sales Agreement pursuant to which we sold 569,000 shares of our Common Stock for net proceeds of $3.6 million and from the sale of our securities in our public offering of 918,600 shares of Common Stock in combination with accompanying warrants to purchase an aggregate of 1,428,600 shares of the Common Stock for gross proceeds of $2.5 million (net proceeds of $2.0 million, after deducting underwriting discounts and estimated expenses).

During the six months ended June 30, 2025, the only source of cash was from the $1.7 million received for the Research and Development rebate program, $1.4 million for the THERICEL project loan from the National Knowledge Transfer Program of the Spanish government’s Ministry of Science and, in May 2025, we closed our May 2025 Offering of 6,818,180 shares of Common Stock (or Pre-Funded Warrants in lieu thereof) in combination with accompanying Common Warrants to purchase an aggregate of 6,818,180 shares of the Common Stock for gross proceeds of $7.5 million (net proceeds of $6.9 million, after deducting underwriting discounts and estimated expenses).

There can be no assurance that we will be able to continue to raise funds through the sale of shares of Common Stock through the ATM Sales Agreement or other equity financings.

If we raise funds by selling additional shares of Common Stock or other securities convertible into Common Stock, the ownership interest of our existing stockholders will be diluted.

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We will be required to obtain additional funding in order to continue the development of certain product candidates within the anticipated time periods (including initiation of planned clinical trials), if at all, and to continue to fund operations at the current cash expenditure levels.

We do anticipate that our current cash of approximately $14.1 million as of early May 2025 will allow us to cover overhead costs, manufacturing costs for near-term clinical supply, and limited research efforts, including our ongoing Phase 1 and Phase 2 clinical trials for VCN-01, preclinical studies supporting VCN-01, our ongoing discovery initiatives, and to fund our committed obligations under the terms of the VCN Share Purchase Agreement (the “VCN Purchase Agreement”) related to the VCN Acquisition into the first quarter of 2026.

We do anticipate that our current cash of approximately $9.5 million as of early August 2025 will allow us to cover overhead costs, manufacturing costs for near-term clinical supply, and limited research efforts, including our ongoing Phase 1 and Phase 2 clinical trials for VCN-01, preclinical studies supporting VCN-01, our ongoing discovery initiatives, and to fund our committed obligations under the terms of the VCN Share Purchase Agreement (the “VCN Purchase Agreement”) related to the Acquisition into the first quarter of 2026.

Our ability to continue as a going concern is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies, reduce expenditures, and, ultimately, to generate revenue.

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However, we do not currently have commitments from any third parties to provide us with capital.

Potential sources of financing that we are pursuing include strategic relationships, licensing arrangements, public or private sales of our equity (including through the ATM) or debt and other sources.

Such additional financing opportunities might not be available to us when and if needed, on acceptable terms or at all.

We cannot assure that we will meet the requirements for use of the ATM especially in light of the fact that we are currently limited by rules of the Securities and Exchange Commission (the “SEC”) as to the number of shares of Common Stock that we can sell pursuant to the ATM due to the market value of our Common Stock held by non-affiliates.

Even if we meet the requirements for use of the ATM, there can be no assurance that we will be able to raise funds through the sale of shares of Common Stock through the ATM.

We cannot assure that we will meet the requirements for use of the ATM Sales Agreement especially in light of the fact that we are currently limited by rules of the Securities and Exchange Commission (the “SEC”) as to the number of shares of Common Stock that we can sell pursuant to the ATM Sales Agreement due to the market value of our Common Stock held by non-affiliates.

Even if we meet the requirements for use of the ATM Sales Agreement, there can be no assurance that we will be able to raise funds through the sale of shares of Common Stock through the ATM Sales Agreement.

Additionally, we may seek to access the public or private equity markets when conditions are favorable due to our long-term capital requirements.

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If we are not able to obtain funding for future clinical trials when needed, we will be unable to carry out our business plan and we will be forced to delay the initiation of future clinical trials until such time as we obtain adequate financing and our operating results and prospects will be adversely affected.

The following table summarizes our cash flows for the periods presented:

Six Months Ended June 30,

Cash used in operating activities

Net cash used in operating activities was $4.8 million and $4.9 million during the three months ended March 31, 2025 and 2024, respectively, which was primarily due to the use of funds in our operations related to the development of VCN-01 our product candidate.

Cash used in operating activities for the three months ended March 31, 2025 decreased compared to the same period in 2024 due primarily to lower research and development expenses and a decrease in interest income, which led to a decrease in net loss.

Cash used in investing activities

There was no cash used in investing activities during the three months ended March 31, 2025 and 2024.

Cash Used in Financing Activities

Cash provided by financing activities during the three months ended March 31, 2025 included payments of loans payable of $56,000, $1.7 million received for the research and development tax credit and $1.4 million in loan proceeds from the THERICEL project loan.

There was no cash used in or provided by activities during the three months ended March 31, 2024.

Cash provided by financing activities

Effects of exchange rate changes on cash and cash equivalents

Net increase(decrease) increase in cash

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Cash Used in Operating Activities

Net cash used in operating activities was $9.5 million and $8.3 million during the six months ended June 30, 2025 and 2024, respectively, which was primarily due to the use of funds in our operations related to the development of VCN-01 our product candidate.

Cash Used in Investing Activities

Cash used in investing activities during the six months ended June 30, 2025 and 2024 was $16,000 and $1,000, respectively, for equipment purchases.

Cash Provided By Financing Activities

Cash provided by financing activities during the six months ended June 30, 2025 included $1.8 million received for the research and development tax credit, $1.4 million in loan proceeds from the THERICEL project loan and $6.9 million in net proceeds from the sale of Common Stock, offset by payments of loans in the amount of $67,000.

Cash provided by financing activities during the six months ended June 30, 2024 included at the market offering proceeds of $1.8 million from sales of 4.4 million shares of our Common Stock offset by payments related to loans extended by certain Spanish institutions of $67,000.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2025, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

During the three months ended June 30, 2025, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

Contractual Obligations

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We have made certain accounting policy elections whereby we (i) do not recognize ROU assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) combine lease and non-lease elements of our operating leases.

As of March 31, 2025, we did not have any material finance leases.

As of June 30, 2025, we did not have any material finance leases.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis