What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-08-13 · 98 added, 110 removed, 211 unchanged (50% of the section changed)

14 unchanged sentences

our plans to develop our proposed drug

our expectations regarding the nature, timing and extent of clinical trials and proposed clinical trials;

our expectations

regarding the timing for proposed submissions of regulatory filings;

our expectations regarding the nature, timing and extent of collaboration

arrangements;

the expected results pursuant to collaboration arrangements, including the receipts of future payments that may arise pursuant

to collaboration arrangements;

the outcome of our plans to obtain regulatory approval of our drug candidates;

the outcome of our plans

for the commercialization of our drug candidates;

our plans to address certain markets, engage third party manufacturers, and evaluate

additional drug candidates for subsequent commercial development along with the likelihood and extent of competition to our drug candidates;

our expectations regarding the nature, timing and extent of collaboration arrangements;

the expected results pursuant to collaboration

arrangements, including the receipts of royalty and other future payments that may arise pursuant to collaboration arrangements;

of our plans to obtain regulatory approval of our drug candidates;

the outcome of our plans for the commercialization of our drug candidates;

our plans to advance innovative immune-oncology technologies addressing hard to treat oncology indications;

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and our expectations regarding our PolyXen ®

platform, including concerning our plans to leverage the platform.

platform and any partnerships with respect thereto.

In some cases, these statements

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general economic and business conditions, as well as inflationary trends and financial market instability or disruptions to the banking system due to bank failures;

the impact of natural disasters or public health emergencies, such as the COVID-19 global pandemic, and geopolitical events, such as the Russian invasion of Ukraine and conflict in the Middle East, and related sanctions and other economic disruptions or concerns, on our financial condition and results of operations;

the impact of natural disasters or public health emergencies, such as the COVID-19 global pandemic, and geopolitical events, such as the conflicts in the Ukraine and the Middle East, and related sanctions and other economic disruptions or concerns, on our financial condition and results of operations;

other factors set forth in the Risk Factors section of our Annual Report on Form 10-K and in subsequent filings with the Securities and Exchange Commission (“SEC”).

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Although we hold a broad patent portfolio, the focus of our internal efforts during the three

and six months ended June 30, 2024, was on the advancement of our DNase technology.

and nine months ended September 30, 2024, was on the advancement of our DNase technology.

Impact of the Global Conflicts on Our Operations

The short and long-term implications of Russia’s

invasion of Ukraine and conflict in the Middle East are difficult to predict at this time.

The imposition of current and future sanctions

and counter sanctions may have an adverse effect on the economic markets generally and could impact our business, financial condition,

and results of operations.

The short and long-term implications of conflicts

in the Ukraine and the Middle East are difficult to predict at this time.

The imposition of current and future sanctions and counter sanctions

may have an adverse effect on the economic markets generally and could impact our business, financial condition, and results of operations.

RESULTS OF OPERATIONS

Comparison of Quarter Ended June 30, 2024

Comparison of Quarter Ended September 30,

2024 and 2023

The comparison of our historical results of operations

for the fiscal quarter ended June 30, 2024 to the fiscal quarter ended June 30, 2023 is as follows:

for the fiscal quarter ended September 30, 2024 to the fiscal quarter ended September 30, 2023 is as follows:

Quarter Ended

June 30, 2024

September 30, 2024

Quarter Ended

June 30, 2023

September 30, 2023

Royalty revenue

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Loss from operations

Total other income, net:

Other income (expense)

Other (expense) income

Interest income, net

$ (1,055,555 )

$ (1,050,963 )

Revenue for the three months ended June 30, 2024

increased by approximately $0.1 million, or 11.6%, to approximately $0.7 million from approximately $0.7 million for the three months

ended June 30, 2023.

This increase represents an increase in royalty revenue related to our sublicense agreement with Takeda Pharmaceuticals

(“Takeda”) as compared to the same period in 2023.

Revenue for the three months ended September 30,

2024 was relatively flat with that of the three months ended September 30, 2023.

Research and Development Expenses

Research & development

(“R&D”) expenses for the three months ended June 30, 2024 was relatively flat with the comparable quarter in 2023.

The table below sets forth the R&D costs incurred by the Company by category of expense for the quarters ended June 30, 2024 and

Research & development (“R&D”)

expenses for the three months ended September 30, 2024 decreased by approximately $0.7 million, or 63.9%, to approximately $0.4 million

from approximately $1.0 million in the comparable quarter in 2023.

The table below sets forth the R&D costs incurred by the Company

by category of expense for the quarters ended September 30, 2024 and 2023:

Quarter Ended,

Category of Expense

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

Outside services and contract research organizations

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The decrease in outside

services and contract research organizations expense was primarily due to decreased spending in connection with our pre-clinical and process

development efforts related to our DNase platform.

The increase in personnel costs is due to certain severance and benefits expensed in

connection with a separation agreement entered into during the second quarter of 2024 with our former Chief Scientific Officer.

services and contract research organizations expense was primarily due to decreased spending in connection with our process development

efforts related to our DNase platform.

The decrease in personnel costs during the three months ended September 30, 2024 as compared to

the three months ending September 30, 2023 is due to the departure of our former Chief Scientific Officer during the second quarter of

General and Administrative Expenses

General and administrative expenses for the three

months ended June 30, 2024 increased by approximately $0.2 million, or 19.5%, to approximately $1.1 million from approximately $0.9 million

in the comparable quarter in 2023.

The increase was primarily due to certain severance and benefits expensed in connection with a separation

agreement entered into during the second quarter of 2024 with our former Chief Executive Officer.

This increase was partially offset by

general decreases in accounting and legal fees during the three months ended June 30, 2024 compared to the same period in 2023.

Other (Expense) Income

Other expense was $21 for the three months ended

June 30, 2024 compared to approximately $21,000 of other income for the comparable quarter in 2023.

This decrease in other income was

primarily related to fees associated with the Pharmsynthez Loan recognized during the three months ended June 30, 2023.

There were no

similar fees received in the same period in 2024.

months ended September 30, 2024 was relatively flat with that of the three months ended September 30, 2023.

Increases in legal fees during

the three months ended September 30, 2024 compared to the same period in 2023 were offset by decreases is personnel costs during the third

quarter of 2024 due to the departure of our former Chief Executive Officer in the second quarter of 2024.

Other Income (Expense)

Other income was approximately $1,500 for the

three months ended September 30, 2024 compared to approximately $700 of other expense for the comparable quarter in 2023.

This increase

in other income was primarily related to favorable changes in foreign currency exchange rates during the three months ended September

30, 2024 as compared to the same period in 2023.

Interest Income

Interest income, net decreased to approximately

$63,000 during the three months ended June 30, 2024 as compared to approximately $126,000 for the same period in the prior year.

decrease was primarily due to lower average invested funds during the three months ended June 30, 2024 compared to the same period in

2023 as well as a decrease in interest income on the Pharmsynthez Loan.

Comparison of Six Months Ended June 30,

$61,000 during the three months ended September 30, 2024 from approximately $92,000 for the same period in the prior year.

This decrease

was primarily due to lower average invested funds during the three months ended September 30, 2024 compared to the same period in 2023.

Comparison of Nine Months Ended September

30, 2024 and 2023

The comparison of our historical results of operations

for the six months ended June 30, 2024 to the six months ended June 30, 2023 is as follows:

for the nine months ended September 30, 2024 to the nine months ended September 30, 2023 is as follows:

September 30,

Royalty revenue

4 unchanged sentences

Loss from operations

Other income (expense):

Total other income, net:

Interest income, net

1 unchanged sentence

$ (2,963,072 )

Revenue for the six months ended June 30, 2024

was relatively flat with the six months ended June 30, 2023.

Revenue for the nine months ended September 30,

2024 was relatively flat with that of the nine months ended September 30, 2023.

Research and Development Expenses

R&D expenses for the six months ended June

30, 2024 increased by approximately $0.4 million, or 25.3%, to approximately $1.9 million from approximately $1.5 million in the comparable

R&D expenses for the nine months ended September

30, 2024 decreased by approximately $0.3 million, or 10.8%, to approximately $2.2 million from approximately $2.5 million in the comparable

period in 2023.

The table below sets forth the R&D costs incurred by the Company by category of expense for the six months ended June

30, 2024 and 2023:

Six Months Ended,

The table below sets forth the R&D costs incurred by the Company by category of expense for the nine months ended

September 30, 2024 and 2023:

Nine Months Ended,

Category of Expense

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

Outside services and contract research organizations

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Total research and development expense

The increase in outside services and contract research organizations

expense was primarily due to increased spending in connection with our pre-clinical development efforts offset by lower process development

efforts related to our DNase platform.

The increase in personnel costs is due to certain severance and benefits expensed in connection

with a separation agreement entered into during the second quarter of 2024 with our former Chief Scientific Officer.

The decrease in outside services and contract

research organizations expense was primarily due to decreased spending in connection with our process development efforts, partially offset

by increased pre-clinical development efforts related to our DNase platform.

The increase in personnel costs is due to certain severance

and benefits expensed in connection with a separation agreement entered into during the second quarter of 2024 with our former Chief Scientific

General and Administrative Expenses

General and administrative expenses for the six

months ended June 30, 2024 increased by approximately $0.1 million, or 5.0%, to approximately $2.0 million from approximately $1.9 million

in the comparable period in 2023.

The increase was primarily due to certain severance and benefits expensed in connection with a separation

agreement entered into during the second quarter of 2024 with our former Chief Executive Officer.

This increase was partially offset by

general decreases in accounting and legal fees during the six months ended June 30, 2024 compared to the same period in 2023.

Other income was $31 for the six months ended

June 30, 2024 compared to approximately $26,000 of other income for the six months ended June 30, 2023.

This decrease in other income

was primarily related to fees associated with the Pharmsynthez Loan recognized during the six months ended June 30, 2023 for which there

were no similar fees received in the same period in 2024.

General and administrative expenses for the nine

months ended September 30, 2024 increased by approximately $0.1 million, or 3.9%, to approximately $2.7 million from approximately $2.6

million in the comparable period in 2023.

The increase was primarily due to certain severance and benefits expensed in connection with

a separation agreement entered into during the second quarter of 2024 with our former Chief Executive Officer.

This increase was partially

offset by general decreases in accounting fees during the nine months ended September 30, 2024 compared to the same period in 2023.

Other income was approximately $1,500 for the

nine months ended September 30, 2024 compared to approximately $25,000 of other income for the nine months ended September 30, 2023.

decrease in other income was primarily related to fees associated with the Pharmsynthez Loan recognized during the nine months ended September

30, 2023 for which there was no similar fees received in the same period in 2024.

Interest Income

Interest income decreased to approximately $198,000

during the six months ended June 30, 2024 as compared to approximately $180,000 for the same period in the prior year.

This decrease was

primarily due to lower average invested funds during the six months ended June 30, 2024 compared to the same period in 2023 as well as

a decrease in interest income received on the Pharmsynthez Loan.

during the nine months ended September 30, 2024 as compared to approximately $272,000 for the same period in the prior year.

This decrease

was primarily due to lower average invested funds during the nine months ended September 30, 2024 compared to the same period in 2023,

as well as a decrease in interest income received on the Pharmsynthez Loan.

Liquidity and Capital Resources

We incurred a net loss

of approximately $2.5 million for the six months ended June 30, 2024.

We had an accumulated deficit of approximately $195.7 million at

June 30, 2024, as compared to an accumulated deficit of approximately $193.2 million at December 31, 2023.

Working capital was approximately

$6.4 million at June 30, 2024, and approximately $8.8 million at December 31, 2023.

During the six months ended June 30, 2024, our working

capital decreased by approximately $2.3 million primarily due to our net loss for the six months ended June 30, 2024.

of approximately $2.9 million for the nine months ended September 30, 2024.

We had an accumulated deficit of approximately $196.1 million

at September 30, 2024, as compared to an accumulated deficit of approximately $193.2 million at December 31, 2023.

Working capital was

approximately $6.0 million at September 30, 2024, and approximately $8.8 million at December 31, 2023.

During the nine months ended September

30, 2024, our working capital decreased by approximately $2.8 million primarily due to our net loss for the nine months ended September

Our principal source

of liquidity consists of cash.

At June 30, 2024, we had approximately $7.3 million in cash and approximately $1.6 million in current liabilities.

At September 30, 2024, we had approximately $6.8 million in cash and approximately $1.0 million in current

At December 31, 2023, we had approximately $9.0 million in cash and approximately $0.8 million in current liabilities.

We have historically

relied upon sales of our equity securities to fund our operations.

have historically relied upon sales of our equity securities to fund our operations.

We evaluate whether there

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Cash flows used in operating activities for the

six months ended June 30, 2024 totaled approximately $1.7 million, which was primarily due to our net loss for the period, partially offset

by non-cash charges associated with share-based expense and an increase in current liabilities during the period.

Cash flows used in operating

activities for the six months ended June 30, 2023 totaled approximately $2.4 million, which was primarily due to our net loss for the

period as well as advance payments made in accordance with our statement of work with Catalent, partially offset by cash received from

the repayment of the Pharmsynthez Loan.

In addition, current liabilities decreased during the six months ended June 30, 2023.

nine months ended September 30, 2024 totaled approximately $2.1 million, which was primarily due to our net loss for the period, partially

offset by non-cash charges associated with share-based expense.

In addition, prepaid expenses and other decreased approximately $0.4 million

and current liabilities increased approximately $0.2 million during the period.

Cash flows used in operating activities for the nine months

ended September 30, 2023 totaled approximately $3.3 million, which was primarily due to our net loss for the period as well as advance

payments made in accordance with our statement of work with Catalent, partially offset by cash received from the repayment of the Pharmsynthez

Cash Flows from Investing Activities

There were no cash flows from investing activities

for the six months ended June 30, 2024 and 2023.

for the nine months ended September 30, 2024 and 2023.

Cash Flow from Financing Activities

There were no cash flows from financing activities

for the six months ended June 30, 2024 and 2023.

for the nine months ended September 30, 2024 and 2023.

Contractual Obligations and Commitments

As of June 30, 2024, there were no material changes

in our contractual obligations and commitments from those disclosed in our Annual Report on Form 10-K for the year ended December 31,

As of September 30, 2024, there were no material

changes in our contractual obligations and commitments from those disclosed in our Annual Report on Form 10-K for the year ended December

31, 2023, filed with the SEC on March 21, 2024, as amended on April 26, 2024.

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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