- R&D cost remains essentially unchanged, while continuing expansion of our OT-101 clinical programs through our joint venture ("JV")
- G&A cost significantly lower by over approximately $0.5 million.
- Net loss reduced by approximately $0.9 million
- Operating expenses reduced by approximately $0.5 million when comparing Q3 2023 versus Q3 2022
AGOURA HILLS, Calif., Nov. 15, 2023 (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, 2023 ("Q3 2023") as compared to the three months ended September 30, 2022 ("Q3 2022"). The financial results are based on the Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on November 14, 2023.
Highlights for Q3 2023 and thereafter:
We have been enjoying the effects of 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. As previously stated, the JV has absorbed most of our R&D and G&A expenditures related to OT-101, which are primarily compensation related and other operational expenses. Going forward, this should permit us to continue our development efforts of OT-101, through the JV, at no cash cost to us, thereby freeing up valuable cash resources for exploring potential partnering of our remaining pipeline products. 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.
Going into the final stretch of the year through the first quarter of 2024, we are planning on 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 about what the future holds for us and are happy with what we have accomplished so far this year.
"Commencing April 2022, with the culmination of the JV with Dragon, and continuing into 2023 till date, have been a good eighteen months for us. We have seen a significant reduction in our operational expenses, thanks to the shift of our operational expenses over to the JV, specifically related to the development of OT-101. This cost reduction has not come at the expense of any of our other clinical programs; indeed, we are continuing on expanding our clinical programs related to OT-101 along multiple fronts through the JV," stated Amit Shah, CFO, Oncotelic.
"We are singularly focused on building shareholder value. The JV has experienced growth, which we plan to disclose in the near future. We are looking to build on the positive impacts of the JV, hopefully with additional partnering deals as well as building out PDAO and our artificial intelligence platform. 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 2023 compared to Q3 2022
ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
| September 30, 2023 | September 30, 2022 | Variance | ||||||||||
| Service revenue | 70,000 | - | 70,000 | |||||||||
| Total revenue | 70,000 | - | 70,000 | |||||||||
| Operating expense: | ||||||||||||
| Research and development | 21,221 | 1,700 | 19,521 | |||||||||
| General and administrative | 34,301 | 593,739 | (559,438 | ) | ||||||||
| Total operating expense | 55,522 | 595,439 | (539,917 | ) | ||||||||
| Income (loss) from operations | 14,478 | (595,439 | ) | 609,917 | ||||||||
| Interest expense, net | (185,424 | ) | (606,824 | ) | 421,400 | |||||||
| Reimbursement for expenses - related party | - | 237,165 | (237,165 | ) | ||||||||
| Change in the value of derivatives on debt | 306,836 | 105,662 | 201,174 | |||||||||
| Loss on debt conversion | (94,829 | ) | - | (94,829 | ) | |||||||
| Net income (loss) before controlling interests | $ | 41,061 | $ | (859,436 | ) | $ | 900,497 | |||||
In comparing the Company's operating results for the three months ended September 30, 2023 and 2022, respectively, our net loss reduced by approximately $0.9 million. This was primarily due to our reduced operating expenses of approximately $0.6 million, lower interest expense of approximately $0.4 million, increase in the value of the derivatives on convertible debt of approximately $0.2 million; offset by lower reimbursement of expenses from related parties of approximately $0.2 million and higher loss on conversion of debt of approximately $0.1 million.
During the three months ended September 30, 2023, we reported service revenues of $70,000 as received from BARDA for services related to our work on their long COVID research. R&D expenses remained essentially the same, slightly higher by approximately $20 thousand, primarily due to slightly higher operational expenses of approximately $20 thousand. G&A expenses decreased by approximately $0.6 million. This reduction was primarily due to lower stock-based compensation expense of approximately $0.6 million incurred during the three months ended September 30, 2022 as compared no expense during the same period in 2023.
About Oncotelic
Oncotelic Therapeutics, Inc. ("Oncotelic"), 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 conducts business activities through itself and its wholly owned subsidiaries, Oncotelic, Inc., a Delaware corporation, PointR Data, Inc. ("PointR"), a Delaware corporation; Pet2DAO, Inc ("Pet2DAO"), a Delaware corporation and EdgePoint AI, Inc. ("Edgepoint"), a Delaware corporation for which there are non-controlling interests, (Oncotelic, Oncotelic Inc., PointR, Pet2DAO and Edgepoint are collectively called the "Company" or "We"). The Company completed a reverse merger with Oncotelic Inc in April 2019, a merger with PointR in November 2019, formed Pet2DAO in 2022 and a minority owned consolidated subsidiary - Edgepoint in February 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 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.
Contact Information:
For Oncotelic Therapeutics, Inc.:
Investor Relations
ir@oncotelic.com
