HCW Biologics Inc. (the “Company” or “HCW Biologics”) (NASDAQ:
HCWB), a clinical-stage biopharmaceutical company focused on
discovering and developing novel immunotherapies to lengthen
healthspan by disrupting the link between chronic, low-grade
inflammation and age-related diseases, today reported financial
results and recent business highlights for its fourth quarter ended
December 31, 2022.
Hing C. Wong, Ph.D., Founder and CEO of HCW
Biologics, stated, “We had a productive year in 2022, and our
cancer program met or exceeded key milestones. In the fall, a
preliminary first-in-human clinical data readout was presented at
the SITC annual conference by Dr. Melissa Geller, the principal
investigator for the University of Minnesota (“UMN”) sponsored
Phase 1 clinical trial to evaluate HCW9218 in solid tumors. We are
encouraged by data gathered in this study and believe that it shows
the potential of HCW9218 in the treatment of solid tumors,
especially ovarian cancer. Our data indicates that HCW9218 is
functioning as it was intended – activating the immune system and
capturing TGF-β 1, 2 and 3 with no evidence of mucosal
bleeding.”
Dr. Wong continued, “UMN has been a terrific
sponsor and partner for the Phase 1 solid tumor clinical study.
With Dr. Geller’s expertise and focus, along with the support of
the co-principal investigator, Dr. Jeff Miller, the Phase 1 portion
of this trial is on track to be completed within a year of its
initiation, which is fortunate in the times of prolonged
COVID-related delays. Because of this, we are poised to complete
the Phase 1 study in 2023 and, if our studies are successful,
potentially advance into Phase 2 clinical trials in 2023.”
In the fourth quarter of 2022, the Company also
initiated a Company-sponsored Phase 1b/2 clinical trial to evaluate
HCW9218 in advanced pancreatic cancer. Dr. Wong stated,
“With respect to HCW9218, we believe cancer is our gateway
indication to other age-related diseases. As and to the extent we
advance the clinical development to evaluate HCW9218 in cancer
indications, we intend to focus on two of the most
difficult-to-treat cancers that have no therapeutic remedy today:
ovarian cancer and pancreatic cancer.” He added, “If we can
establish safety and dosage of HCW9218 in cancer indications, we
plan to expand to other age-related diseases promoted by
inflammaging.”
One of the pillars of the Company’s strategy is
its commitment to documenting its work in high-impact scientific
journals. Two scientific papers were submitted in 2022, one has
been published, and the other has been accepted for publication.
Dr. Wong stated, “We devote significant resources to publishing
scientific papers, because we believe in the value of sharing our
discoveries and inventions with the broader scientific
community.”
Dr. Wong continued, “Our most recent paper
published in Frontiers in Immunology illustrates the potential for
HCW9302 as a therapeutic agent to expand and activate Treg cells
indicating it might be effective in treating inflammatory and
autoimmune diseases. HCW9302 is a unique fusion protein with two
IL-2 domains linked by an extracellular tissue factor domain that
has been shown in preclinical research to exhibit a more favorable
pharmacokinetic profile than recombinant IL-2, with longer
half-life, greater affinity to IL-2 receptor α and no
toxicity. The results of our research included in this
publication show the potential of HCW9302 in the treatment of
age-related inflammatory diseases, such as atherosclerosis.”
Fourth Quarter and Other Recent Business
Highlights:
- On November 11,
2022, there was a preliminary human data readout at the 37th Annual
Meeting of the Society for Immunotherapy of Cancer from an ongoing
Phase 1 clinical trial to evaluate HCW9218 in patients with
chemo-refractory/chemo-resistant solid tumors, sponsored by the
Masonic Cancer Center, University of Minnesota. The poster was
presented by Melissa A. Geller, M.D., M.S., Principal Investigator,
who is a Professor and Division Director of Gynecologic Oncology in
the Department of Obstetrics, Gynecology and Women’s Health at the
University of Minnesota.
- On December 3,
2022, under a Cooperative Research and Development Agreement
(“CRADA”), the National Cancer Institute and HCW Biologics agreed
to collaborate to perform a Phase 1b/2 clinical study to evaluate
the safety and tolerability of HCW Biologics’ lead product
candidate, HCW9218, in patients with advanced/metastatic pancreatic
cancer. The CRADA is entitled, “A Phase 1b/2 Study of HCW9218, a
Bifunctional TGF-β Antagonist/IL-15 Protein Complex, for Advanced
Pancreatic Cancer.”
- HCW Biologics
initiated a Company-sponsored Phase 1b/2 clinical study to evaluate
HCW9218 in patients with advanced pancreatic cancer. With four
clinical sites up and running, if patient enrollment continues at
the current pace, the Company expects to complete the Phase 1b
portion of this study in 2023.
- In January 2023, a
pivotal scientific paper authored by members of the Company’s
scientific research team was published in the high-impact,
peer-reviewed journal, Frontiers in Immunology, entitled, “A Novel
Interleukin-2-Based Fusion Molecule, HCW9302, Differentially
Promotes Regulatory T Cell Expansion to Treat Atherosclerosis in
Mice.”
- The Company has
been invited to present a poster at the American Association of
Cancer Research to be held from April 14-19, 2023. Dr. Varghese
George, one of the Company's scientists, will be presenting a
poster entitled, "Bifunctional Immunotherapeutic HCW9218
Facilitates Recruitment of Immune Cells from Tumor Draining Lymph
Nodes to Promote Antitumor Activity and Enhance Checkpoint Blockade
Efficacy in Solid Tumors." This research is intended to support the
understanding of the mechanism of action for HCW9218 for solid
tumors.
Fourth Quarter and Full Year 2022
Financial Results:
- Cash and cash
equivalents: As of December 31, 2022, the Company
held $22.3 million in cash and cash equivalents, including money
market investments, and $9.7 million in U.S. government backed
securities presented as short-term investments. Money market
investments are held in a federal money market fund with an
investment focus on liquidity and stability.
-
Revenues: Revenues for the fourth quarter
ended December 31, 2021 and 2022 were nil and $1.3 million,
respectively. Revenues for the year ended December 31, 2021 and
2022 were nil and $6.7 million, respectively. Revenues were derived
exclusively from the sale of licensed molecules to the Company’s
licensee, Wugen.
- Research and development
(R&D) expenses: R&D expenses for the fourth
quarter ended December 31, 2021 and 2022 were $1.5 million and $2.9
million, respectively. The $1.4 million increase, or 98%, resulted
from increased clinical trial expenses and manufacturing costs.
R&D expenses for the year ended December 31, 2021 and 2022 were
$8.2 million and $9.3 million, respectively. The $1.1 million
increase, or 14%, resulted from increases in salaries,
performance-based bonuses, and clinical trial expenses.
- General and administrative
(G&A) expenses: G&A expenses for the fourth
quarter ended December 31, 2021 and 2022 were $1.6 million and $3.0
million, respectively. The $1.4 million increase, or 84%, was
attributable to increases in salaries and stock-based compensation
and professional fees related primarily to legal fees. G&A
expenses for the year ended December 31, 2021 and 2022 were $5.2
million and $8.3 million, respectively. The $3.1 million increase,
or 60%, resulted from increases in stock-based compensation expense
for officers and directors, legal fees, and additional costs of
operating as a public company.
- Net loss: Net loss
for the fourth quarter ended December 31, 2021 and 2022 was $3.2
million and $5.4 million, respectively. Net loss for the year ended
December 31, 2021 and 2022 was $12.9 million and $14.9 million,
respectively.
Financial Guidance
HCW Biologics believes its cash and cash
equivalents and investments will be sufficient to fund its
operations through at least the next 12 months. This cash runway
guidance is based on the Company’s current operational plans and
buildout of its new headquarters building, and it excludes any
additional capital infusion resulting from bank loans, joint
ventures, out-licenses, or other business development transactions.
Relocation to the new headquarters is anticipated during 2024,
although the Company may choose to delay the completion date to
extend its cash runway. In the year ended December 31, 2022, the
Company incurred significant legal expenses on its own behalf and
on behalf of Dr. Wong, as required by the indemnification agreement
between the Company and Dr. Wong. In the year ahead, the Company
expect to continue to incur legal expenses on its own behalf in
connection with the legal proceedings brought against it by
Altor/NantCell. However, now that the arbitration against Dr. Wong
was initiated by Altor/NantCell, Dr. Wong’s legal expenses will be
covered by the provisions of his advancement agreement with
Altor/NantCell in connection with the arbitration.
About HCW Biologics:HCW
Biologics is a clinical-stage biopharmaceutical company focused on
discovering and developing novel immunotherapies to lengthen
healthspan by disrupting the link between chronic, low-grade
inflammation, and age-related diseases, such as cancer,
cardiovascular diseases, diabetes, neurodegenerative diseases, and
autoimmune diseases. The Company has combined deep understanding of
disease-related immunology with its expertise in advanced protein
engineering to develop the TOBI™ (Tissue factOr-Based fusIon)
discovery platform. The Company uses its TOBITM discovery platform
to generate designer, novel multi-functional fusion molecules with
immunotherapeutic properties. The invention of HCW Biologics’ two
lead molecules, HCW9218 and HCW9302, was made via the TOBI™
discovery platform. The Masonic Cancer Center, University of
Minnesota, has initiated a Phase 1 clinical trial to evaluate
HCW9218 in chemo-refractory/chemo-resistant solid tumors that have
progressed after prior chemotherapies. The Company has initiated a
Company-sponsored Phase 1b/2 clinical trial to evaluate HCW9218 in
chemo-refractory/chemo-resistant advanced pancreatic cancer. The
Company’s lead molecule for its regulatory T cell expansion
program, HCW9302, is currently undergoing IND-enabling studies for
an autoimmune indication.
Forward Looking Statements:
Statements in this press release contain “forward-looking
statements” that are subject to substantial risks and
uncertainties. These statements are made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements contained in this press release
may be identified by the use of words such as “anticipate,”
“expect,” “believe,” “will,” “may,” “should,” “estimate,”
“project,” “outlook,” “forecast” or other similar words and
include, without limitation, statements regarding completion of
Phase 1/1b clinical studies in cancer; initiation of Phase 2
clinical trials; the ability to meet a proposed timeframe to
provide preliminary clinical results from the Phase 1 clinical
study to evaluate HCW9218 in pancreatic cancer; the ability to
protect our intellectual property through issued patents or
otherwise; and the ability to project that cash and cash
equivalents and investments are sufficient to fund operations for
at least the next 12 months, and the impact of any indemnification
or advancement of expenses obligations may have on such
projections. Forward-looking statements are based on the
Company’s current expectations and are subject to inherent
uncertainties, risks and assumptions that are difficult to predict.
Further, certain forward-looking statements are based on
assumptions as to future events that may not prove to be accurate.
Factors that could cause actual results to differ include, but are
not limited to, potential delays in clinical and pre-clinical
trials and IND-enabling studies; other potential adverse impacts
due to the COVID-19 pandemic, geopolitical or macroeconomic factors
such as delays in regulatory review, market volatility,
manufacturing and supply chain interruptions, staffing shortages,
and our ability to enroll patients in our ongoing and future
clinical trials; the success of our current and future licensing
arrangements; our reliance on third parties for the manufacture and
supply of our product candidates for clinical trials; our reliance
on third parties to conduct our clinical trials; adverse impacts of
litigation or other proceedings, including expenses incurred to
defend against third-party claims as well as to indemnify or
advance expenses of our officers and directors in connection
therewith; the possibility that the Company may be required to
advance legal fees of Dr. Wong despite his agreement with
Altor/NantCell; and those other risks and uncertainties that are
described in the section titled “Risk Factors” in the annual report
on Form 10-K filed with the United States Securities and Exchange
Commission (the “SEC”) on March 28, 2023 and in other filings filed
from time to time with the SEC. Forward-looking statements
contained in this press release are made as of this date, and the
Company undertakes no duty to update such information except as
required under applicable law.
Company
Contact:Rebecca ByamCFOHCW Biologics
Inc.rebeccabyam@hcwbiologics.com |
HCW Biologics
Inc.Statements of Operations
|
|
For the Three Months EndedDecember
31, |
|
Years Ended December 31, |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
Revenues: |
|
Unaudited |
|
Audited |
Revenues |
|
$ |
— |
|
|
$ |
1,341,520 |
|
|
$ |
— |
|
|
$ |
6,722,090 |
|
Cost of revenues |
|
|
— |
|
|
|
(1,073,216 |
) |
|
|
— |
|
|
|
(4,135,712 |
) |
Net revenues |
|
|
— |
|
|
|
268,304 |
|
|
|
— |
|
|
|
2,586,378 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
$ |
1,483,307 |
|
|
$ |
2,930,013 |
|
|
$ |
8,173,624 |
|
|
$ |
9,338,365 |
|
General and administrative |
|
|
1,629,197 |
|
|
|
3,005,529 |
|
|
|
5,194,210 |
|
|
|
8,326,791 |
|
Total operating expenses |
|
|
3,112,504 |
|
|
|
5,935,542 |
|
|
|
13,367,834 |
|
|
|
17,665,156 |
|
Loss from operations |
|
|
(3,112,504 |
) |
|
|
(5,667,238 |
) |
|
|
(13,367,834 |
) |
|
|
(15,078,778 |
) |
Interest expense |
|
|
(60,902 |
) |
|
|
248,496 |
|
|
|
— |
|
|
|
(126,660 |
) |
Other income |
|
|
— |
|
|
|
— |
|
|
|
505,366 |
|
|
|
304,735 |
|
Net loss |
|
$ |
(3,173,406 |
) |
|
$ |
(5,418,742 |
) |
|
$ |
(12,862,468 |
) |
|
$ |
(14,900,703 |
) |
Net loss per share, basic and
diluted |
|
$ |
(0.09 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.69 |
) |
|
$ |
(0.42 |
) |
Weighted average shares
outstanding, basic and diluted |
|
|
35,750,496 |
|
|
|
35,861,348 |
|
|
|
18,770,935 |
|
|
|
35,822,249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HCW Biologics Inc.
Audited Balance Sheets
|
|
December 31, |
|
December 31, |
|
|
2021 |
|
|
|
2022 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
11,730,677 |
|
|
$ |
22,326,356 |
|
Short-term investments |
|
|
24,983,520 |
|
|
|
9,735,930 |
|
Accounts receivable, net |
|
|
133,000 |
|
|
|
417,695 |
|
Prepaid expenses |
|
|
2,196,557 |
|
|
|
1,394,923 |
|
Other current assets |
|
|
1,436,617 |
|
|
|
196,015 |
|
Total current assets |
|
|
40,480,371 |
|
|
|
34,070,919 |
|
Investments |
|
|
11,522,050 |
|
|
|
1,599,751 |
|
Property, plant and equipment,
net |
|
|
1,119,090 |
|
|
|
10,804,610 |
|
Other assets |
|
|
393,318 |
|
|
|
333,875 |
|
Total assets |
|
$ |
53,514,829 |
|
|
$ |
46,809,155 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
223,664 |
|
|
$ |
1,226,156 |
|
Accrued liabilities and other current liabilities |
|
|
2,097,925 |
|
|
|
1,730,325 |
|
Total current liabilities |
|
|
2,321,589 |
|
|
|
2,956,481 |
|
Debt, net |
|
|
— |
|
|
|
6,409,893 |
|
Other liabilities |
|
|
— |
|
|
|
14,275 |
|
Total liabilities |
|
|
2,321,589 |
|
|
|
9,380,649 |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Common stock: |
|
|
|
|
Common, $0.0001 par value; 250,000,000 shares authorized and
35,768,264 shares issued at December 31, 2021; 250,000,000 shares
authorized and 35,876,440 shares issued at December 31, 2022 |
|
|
3,577 |
|
|
|
3,588 |
|
Additional paid-in capital |
|
|
81,827,006 |
|
|
|
82,962,964 |
|
Accumulated deficit |
|
|
(30,637,343 |
) |
|
|
(45,538,046 |
) |
Total stockholders’ equity |
|
|
51,193,240 |
|
|
|
37,428,506 |
|
Total liabilities and stockholders’ equity |
|
$ |
53,514,829 |
|
|
$ |
46,809,155 |
|
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