- R&D cost reduced in excess of 95% while continuing expansion of our OT-101 clinical programs through our joint venture
- G&A cost reduced by approximately 50%
- Net loss reduced by approximately $1.0 million for the three months ended September 30, 2022, compared to the same period of 2021
- Operating expenses reduced by approximately $1.2 million when comparing Q3 2022 versus Q3 2021
AGOURA HILLS, Calif., Nov. 21, 2022 (GLOBE NEWSWIRE) — Oncotelic Therapeutics, Inc (OTCQB:OTLC) (“Oncotelic”, the “Company” or “We”), a developer of treatments for rare and orphan indications, including Parkinson’s Disease, PDAC, DIPG, and COVID-19, today announced financial results for the three months ended September 30, 2022 (“Q3 2022”) as compared to the three months ended September 30, 2021(“Q3 2021”). The financial results are based on the Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on November 18, 2022.
Highlights for Q3 2022 and thereafter:
We are starting to see the benefits of the JV transaction, between Dragon Overseas Limited (“Dragon”) and us through the formation of GMP Biotechnology Limited (“GMP Bio” or “JV”) being reflected in our financial results. The JV has absorbed our R&D expenditures as related to OT-101 and a majority of our G&A expenditures as well. Going forward this should permit us to continue our development efforts of OT-101, mainly through the JV at a significantly lower cost to us, explore potential partnering of our remaining pipeline products, as well as expanding our effort on COVID-19 alongside BARDA. As previously reported, the JV, or a subsidiary thereof, is still being planned to be taken into an initial public offering in Hong Kong or another exchange at a future point in time.
As reported in October 2022, the creation of our animal health division is a strategic move to explore and evaluate how we could potentially utilize technology, such as blockchain and DAO’s, to help bring new treatments to market for animal health.
Further, as reported in October 2022, Biomedical Advanced Research and Development Authority (BARDA) approved a contract to conduct a study with us for the development of OT-101 against long-term effects of respiratory distress post COVID-19. The scope of the study includes collecting the long-term clinical data on COVID-19 patients in Peru and Argentina where our C001-2020-01 trial was conducted and to demonstrate potential effectiveness of OT-101 against the long-term effects of respiratory distress post COVID-19. The data will be used to design the next clinical trial aiming at demonstrating effectiveness of OT-101 against COVID-19 and long-term COVID-19 for its marketing approval.
Going into the final stretch of the year through the first quarter of 2023, we are accelerating our clinical programs in multiple indications supported by various stakeholders, including our JV and key opinion leaders. These include pancreatic cancer, gliomas, mesotheliomas, and others. We are optimistic at what the future holds for us and are happy with what we have accomplished so far this year.
“2022 has been a good nine months for us, starting with the culmination of the joint venture with Dragon. We are starting to see a significant reduction in our expenses due to the shift of our expenses over to the JV, especially related to the development of OT-101. This cost reduction has not come at the expense of our clinical programs; indeed, we are expanding our clinical programs related to OT-101 along multiple fronts and through the JV,” opined Amit Shah, CFO, Oncotelic.
“We are singularly focused on building shareholder value. Our $22.6 million investment in GMP Bio, at fair value, has increased our total assets value from $23.6 million at December 31, 2021 to $40.2 million at September 30. 2022 We are looking to build on the positive impacts of the JV, hopefully with additional partnering deals as well as building out the DAO for animal health. We thank our shareholders, stakeholders, patients and investigators in their continuing support and looking forward to positive growth momentum in the coming years,” said Dr. Vuong Trieu, CEO and Chairman, Oncotelic.
Results of Operations
Q3 2022 compared to Q3 2021 Financial Results Overview
ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
|September 30, 2022||September 30, 2021||Variance|
|Research and development||1,700||621,927||(620,227||)|
|General and administrative||593,739||1,187,035||(593,296||)|
|Total operating expense||595,439||1,808,962||(1,213,523||)|
|Loss from operations||(595,439||)||(1,808,962||)||1,213,523|
|Reimbursement for expenses – related party||237,165||–||237,165|
|Interest expense, net||(606,824||)||(445,363||)||(161,461||)|
|PPP loan forgiveness||–||253,347||(253,347||)|
|Change in the value of derivatives on debt||105,662||145,449||(39,787||)|
|Net income (loss) before controlling interests||$||(859,436||)||$||(1,855,529||)||$||996,093|
In comparing the Company’s operating results for the three months ended September 30, 2022, and 2021, respectively, our net loss reduced by approximately $1.0 million. This was primarily due to our reduced operating expenses of approximately $1.2 million and reimbursement of expenses by a related party of approximately $0.2 million; offset by higher interest expense by approximately $0.2 million and PPP loan forgiveness of approximately $0.3 million from the three months ended September 30, 2021.
Our research and development expenses decreased by approximately $0.6 million primarily due to lower personnel expenses of approximately $0.3 million and lower clinical trial expenses related to OT-101 of approximately $0.3 million. Further, our general and administrative expenses decreased by approximately $0.6 million primarily due to reduced compensation expense of approximately $0.6 million. Our operating expenses were lower as we have successfully transferred a significant portion of our development expenses to our JV specifically for activities related to OT-101, including the initiation of new clinical trials. We expect our R&D and G&A expense to remain steady or reduce for the remainder of the year 2022.
Oncotelic (f/k/a Mateon Therapeutics, Inc.), was formed in the State of New York in 1988 as OXiGENE, Inc., was reincorporated in the State of Delaware in 1992, and changed its name to Mateon Therapeutics, Inc. in 2016, and Oncotelic Therapeutics, Inc. in November 2020. Oncotelic is seeking to leverage its deep expertise in oncology drug development to improve treatment outcomes and survival of cancer patients with a special emphasis on rare pediatric cancers. Oncotelic has rare pediatric designation for ///Diffuse Intrinsic Pontine Glioma “DIPG” (through OT-101) through its 45% joint venture, melanoma (through CA4P), and Acute Myeloid Leukemia “AML” (through OXi 4503). Oncotelic also acquired PointR Data Inc. in November 2019.
Oncotelic acquired AL-101, during the 4th quarter of 2021, for the intranasal delivery of apomorphine. We intend to develop AL-101 for the treatment of Parkinson Disease (“PD”). Over 60,000 new patients are being diagnosed with PD in the United States and currently there are over 1 million patients in the US and expected to increase to over 1.2 million by 2030. In addition, approximately 10 million suffer from this disease globally. https://www.parkinson.org/Understanding-Parkinsons/Statistics. AL-101 is also being developed for Erectile Dysfunction (“ED”). ED is the most prevalent male sexual disorder globally. The percentages of men affected by ED are as follows: 14.3-70% of men aged 60 years, 6.7-48% of men aged 70 years, and 38% of men aged 80 years (Geerkens MJM et al. (2019). Eur Urol Focus. pii: S2405-4569(19)30079-3). However, with the increasing administration of PDE5 inhibitors in clinical practice, it was found that approximately 30-35% of ED patients are treatment failures (McMahon CN et al. (2006). BMJ, 332: 589-92). AL-101 is designed to target treatment failure ED patients who do not respond to PDE5 inhibitors. Through similar mechanism of action, AL-101 is being developed for Female Sexual Dysfunction (“FSD”). Female sexual dysfunction is a prevalent problem, afflicting approximately 40% of women and there are few treatment options. FSD is more typical as women age and is a progressive and widespread condition. (Allahdadi, KJ et al. (2009) Cardiovascular & hematological agents in medicinal chemistry, 7(4), 260-269). There is no available drug for the treatment of FSD. In June 2019, the U.S. Food and Drug Administration approved Vyleesi (bremelanotide) to treat acquired, generalized hypoactive sexual desire disorder (“HSDD”) in premenopausal women. This is the only available drug treatment. Vyleesi has essentially replaced the only other drug for HSDD – however, it has a long list of drug-drug interactions, including commonly used antidepressants, such as fluoxetine and sertraline. In addition, it has a black box warning regarding its use with alcohol, a combination that has been associated with hypotension and syncopal episodes. Therefore, there is an urgent need for effective therapy against FSD and HSDD.
Oncotelic’s Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this communication regarding strategy, future operations, future financial position, prospects, plans and objectives of management are forward-looking statements. Words such as “may”, “expect”, “anticipate” “hope”, “vision”, “optimism”, “design”, “exciting”, “promising”, “will”, “conviction”, “estimate,” “intend,” “believe”, “quest for a cure of cancer”, “innovation-driven”, “paradigm-shift”, “high scientific merit”, “impact potential” and similar expressions are intended to identify forward-looking statements. Forward looking statements contained in this press release include, but are not limited to, statements about future plans related to the operations of the JV, taking the JV into an initial public offering or the success thereof, the possibility of partnering for the development of our other products in the pipeline, any further partnerships with BARDA, the progress, timing of clinical development, scope and success of future clinical trials, the reporting of clinical data for the company’s product candidates and the potential use of the company’s product candidates to treat various cancer indications as well as obtaining required regulatory approval to conduct clinical trials and upon granting of approval by the regulatory agencies, the successful marketing of the products. Each of these forward-looking statements involves risks and uncertainties, and actual results may differ materially from these forward-looking statements or may not occur at all. Many factors may cause differences between current expectations and actual results, including unexpected safety or efficacy data observed during preclinical or clinical studies, clinical trial site activation or enrollment rates that are lower than expected, changes in expected or existing competition, changes in the regulatory environment, failure of collaborators to support or advance collaborations or product candidates and unexpected litigation or other disputes, taking the Company or its affiliates through initial public offerings. These risks are not exhaustive, the company faces known and unknown risks, including the risk factors described in the Company’s annual report on Form 10-K filed with the SEC on April 15, 2022 and in the company’s other periodic filings. Forward-looking statements are based on expectations and assumptions as of the date of this press release. Except as required by law, the company does not assume any obligation to update forward-looking statements contained herein to reflect any change in expectations, whether as a result of new information, future events, or otherwise.
For Oncotelic Therapeutics, Inc.:
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