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Virpax Pharmaceuticals Reports 2023 Year-End Results

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Virpax Pharmaceuticals, Inc. announced its financial results for the twelve months ended December 31, 2023, highlighting regained compliance with Nasdaq, settlement agreements, and progress in developing non-addictive pain management products. The company reported positive initial results from a pilot study of Probudur™ by the U.S. Army Institute of Surgical Research, with plans for further studies. Virpax also emphasized its focus on non-addictive product candidates, government grants, and partnerships to advance pain assets.
Positive
  • Virpax regained compliance with Nasdaq's minimum bid price requirement, settling agreements with Plaintiffs.
  • Positive initial results from a pilot study of Probudur™ by the U.S. Army Institute of Surgical Research.
  • Virpax highlighted in a Forbes.com article for its lead pain products and grants from NIH and Pentagon.
  • Approval of a reverse stock split to regain Nasdaq compliance.
  • Change in leadership with Gerald W. Bruce appointed as CEO.
  • Extension of the CRADA with USAISR to evaluate Probudur until September 2024.
  • Financial results showed decreased operating expenses and cash position of $9.1 million as of December 31, 2023.
Negative
  • None.

The financial results reported by Virpax Pharmaceuticals indicate a reduction in both general and administrative expenses and research and development expenses year-over-year. This suggests a streamlined operational focus, especially in the context of decreased legal defense costs and a reduction in preclinical activities for certain projects. However, this must be balanced against the significant decrease in cash holdings from $19.0 million to $9.1 million, which could impact the company's ability to fund ongoing research and operations without seeking additional capital.

Furthermore, the successful completion of a reverse stock split to regain compliance with Nasdaq's minimum bid price requirement could be seen as a positive step towards stabilizing the company's stock performance. Yet, such corporate actions can also be a sign of underlying financial challenges and may affect investor perception in the short term.

The strategic focus on non-addictive pain management products, as highlighted by the CEO, taps into the growing demand for alternatives to opioids. The collaboration with the U.S. Army Institute of Surgical Research (USAISR) for the development of Probudur™ and the anticipation of a head-to-head study with existing pain management solutions, positions Virpax to potentially capture market share in this segment, pending successful trial outcomes and regulatory approvals.

Virpax's approach to securing non-dilutive funding through government grants and the ongoing evaluation of sublicensing options are critical for sustaining its product pipeline development without excessively diluting shareholder equity. As the biotech industry is highly competitive and capital-intensive, Virpax's ability to secure such funding could provide a strategic advantage.

The resolution of litigation and regaining compliance with Nasdaq listing requirements are key developments that can restore investor confidence and potentially reduce future legal risks and associated costs. The approval of the litigation settlement with Sorrento Therapeutics and Scilex Pharmaceuticals by the Bankruptcy Court is a noteworthy event as it eliminates a degree of uncertainty surrounding Virpax's operations.

However, the long-term implications of these legal developments on Virpax's operational strategy and financial health will depend on the company's ability to capitalize on its current product pipeline and bring its candidates to market successfully, navigating the complex regulatory environment that governs pharmaceuticals.

BERWYN, Pa.--(BUSINESS WIRE)-- Virpax® Pharmaceuticals, Inc. (“Virpax” or the “Company”) (NASDAQ: VRPX), a company specializing in developing non-addictive products for pain management, post-traumatic stress disorder, central nervous system (CNS) disorders and viral barrier indications, today announced its financial results for the twelve months ended December 31, 2023, and other recent developments.

“We are off to a strong start in 2024 and are pleased to have regained compliance with Nasdaq. Additionally, we have executed a settlement agreement with the Plaintiffs, and can now focus on developing our non-addictive product candidates for pain management,” commented Gerald W. Bruce, Chief Executive Officer of Virpax.

“Recently we reported the initial results from the pilot study of Probudur performed by the U.S. Army Institute of Surgical Research (USAISR). The findings were in line with our expectations and support our earlier studies of Probudur. We are excited for the USAISR’s next study which as planned would be a head-to-head comparison with free bupivacaine and EXPAREL® and expect it to start mid-year,” continued Mr. Bruce. “As of today, we are still on track to file the IND later in 2024.”

“We are continuing to develop Envelta, our non-addictive pain product candidate for acute and chronic pain, with the NIH under our NCATS in-kind grant and are making progress towards filing the IND,” added Mr. Bruce.

“Virpax has developed a core competency in identifying, applying for and winning government grants. We continue to apply for funding when we believe we have a strong chance of success. Currently, there are a number of applications that we continue to work on while we await decisions on those that have been previously submitted. This strategy has proven to be an excellent source of non-dilutive funding and we will continue to pursue it.

“We are also continuing to work with our partners identifying and evaluating sublicensing options. Together, we are making progress with our lead pain assets in both the global animal healthcare market as well as assessing potential geographical opportunities.

“We expect to achieve some significant milestones this year and look forward to sharing them. Our team is committed to the important and potentially game-changing product candidates that are under development, and their efforts are greatly appreciated,” concluded Mr. Bruce.

RECENT DEVELOPMENTS

  • On March 18, 2024, Virpax filed an 8K announcing that it had regained compliance with Nasdaq’s minimum bid price requirement.

  • The litigation settlement and mutual release agreement between the Company and Sorrento Therapeutics, Inc. (Sorrento) and Scilex Pharmaceuticals, Inc. was approved by the United States Bankruptcy Court for the Southern District of Texas which is overseeing the Sorrento Bankruptcy filing. As a result, Virpax made its initial payment under the agreement on March 18, 2024.

  • On February 7, 2024, Virpax announced the initial results from the pilot study for Probudur™ performed by the U.S. Army Institute of Surgical Research (USAISR) under an existing Cooperative Research and Development Agreement (CRADA). This study was designed to determine if Probudur reduces pain behaviors in a rat model of incisional pain. Two concentrations of Probudur were injected into the tissue around the incision site as well as a saline solution for the control group. Both doses of Probudur showed reduction in incision-induced pain behaviors. The Company expects that the next step by the USAISR would be a full powered study comparing Probudur with free bupivacaine and EXPAREL®.

  • Virpax was highlighted in a Forbes.com article on January 14, 2024, entitled, “Virpax: A Promising Stock in A Sickly Biotech Market.” The article discussed the Company’s lead pain products as well as mentioning grants from both the National Institutes of Health and the Pentagon.

  • On December 29, 2023, Virpax announced that at a Special Meeting of Shareholders on December 28th, stockholders approved an amendment to the certificate of incorporation, at the discretion of the Board of Directors of the Company, to undertake a reverse stock split. Subsequently, On February 27, 2024, the Company announced that it would execute a 1-for-10 reverse stock split of its common stock effective March 1, 2024, to regain compliance with Nasdaq’s minimum bid price.

  • On November 17, 2023, Virpax announced the resignation of Anthony P. Mack as CEO and Chairman effective immediately. The Board appointed Gerald W. Bruce as CEO and Dr. Eric Floyd as Chairman.

  • On October 12, 2023, Virpax announced that the Cooperative Research and Development Agreement (CRADA) with the U.S. Army Institute of Surgical Research (USAISR) to evaluate Virpax’s Probudur, an injectable long-acting liposomal bupivacaine formulation that is injected at the wound site, has been extended to September of 2024. The USAISR is the U.S. Department of Defense’s primary laboratory for developing solutions for trauma and critical care challenges in combat casualties.

FINANCIAL RESULTS FOR THE YEARS ENDED DECEMBER 31, 2023, AND 2022

Twelve Months Ended December 31, 2023

Operating Expenses

General and administrative expenses were $10.6 million for the year ended December 31, 2023, compared to $11.1 million for the same period in 2022. The decrease was primarily due to lower legal defense costs related to litigation, net of litigation accrual, and was partially offset by an increase in salaries and wages, severance, and professional fees.

Research and development expenses were $5.1 million for the year ended December 31, 2023, compared to $10.8 million for the same period in 2022. The decrease was primarily attributable to a milestone payment in 2022 related to AnQlar and decreases in preclinical activities for AnQlar, NobrXiol, and Epoladerm. This was partially offset by an increase in preclinical activity for Probudur.

The operating loss for the year ended December 31, 2023, was $15.2 million, compared to an operating loss of $21.7 million for the same period in 2022.

As of December 31, 2023, Virpax had cash of approximately $9.1 million, compared to $19.0 million as of December 31, 2022.

About Virpax Pharmaceuticals

Virpax is developing branded, non-addictive pain management products candidates using its proprietary technologies to optimize and target drug delivery. Virpax is initially seeking FDA approval for two prescription drug candidates that employ two different patented drug delivery platforms. Probudur™ is a single injection liposomal bupivacaine formulation being developed to manage post-operative pain and Envelta™ is an intranasal molecular envelope enkephalin formulation being developed to manage acute and chronic pain, including pain associated with cancer. Virpax is also using its intranasal Molecular Envelope Technology (MET) to develop one other prescription product candidate, NobrXiol™, which is being developed for the nasal delivery of a pharmaceutical-grade cannabidiol (CBD) for the management of rare pediatric epilepsy. Virpax has competitive cooperative research and development agreements (CRADAs) for two of its prescription drug candidates, one with the National Institutes of Health (NIH) and one with the Department of Defense (DOD). Virpax is also seeking approval of two nonprescription product candidates: AnQlar, which is being developed to inhibit viral replication caused by influenza or SARS-CoV-2, and Epoladerm™, which is a topical diclofenac spray film formulation being developed to manage pain associated with osteoarthritis. For more information, please visit virpaxpharma.com and follow us on Twitter, LinkedIn and YouTube.

Forward-Looking Statement

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and Private Securities Litigation Reform Act, as amended, including those relating to the Company’s planned clinical trials, product development, clinical and regulatory timelines, market opportunity, competitive position, possible or assumed future results of operations, business strategies, potential growth opportunities and other statements that are predictive in nature. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate and management’s current beliefs and assumptions.

These statements may be identified by the use of forward-looking expressions, including, but not limited to, “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “potential,” “predict,” “project,” “should,” “continue,” “would” and similar expressions and the negatives of those terms and include statements such as the planned head-to-head comparison with free bupivacaine and EXPAREL®, USAISR’s next study expected to start mid-year, the Company being on track to file an Investigational New Drug (IND) Application in 2024, continuing to develop Envelta, continuing to apply for funding, continuing to work with the Company’s partners identifying and evaluating sublicensing options, begin Phase 2 trials of Probudur in 2024 upon completion of a few ongoing and planned additional studies, submitting an IND for Envelta in mid-2024 and initiating first in human trials in 2024, pursuing additional grant funding where the Company believes it has a strong chance of winning the grant and continuing to make progress across the board and achieving significant milestones this year. These statements relate to future events or the Company’s financial performance and involve known and unknown risks, uncertainties, and other factors, including the Company’s ability to successfully complete research and further development, including reporting results from additional pre-IND studies in advance of entering the clinic in 2024 and starting the USAISR’s study mid year, and commercialization of Company drug candidates in current or future indications; the Company’s ability to obtain additional grant funding, the uncertainties inherent in clinical testing; the Company’s ability to manage and successfully complete clinical trials and the research and development efforts for multiple product candidates at varying stages of development; the timing, cost and uncertainty of obtaining regulatory approvals for the Company’s product candidates; the Company’s ability to protect its intellectual property; the loss of any executive officers or key personnel or consultants and the ability of such executives to make valuable contributions to the Company; competition; changes in the regulatory landscape or the imposition of regulations that affect the Company’s product candidates; the Company’s ability to continue to obtain capital to meet its short and long-term liquidity needs on acceptable terms, or at all, including the additional capital which will be necessary to fulfill contractual obligations of its settlement, continue operations and commence and complete clinical trials that the Company plans to initiate; and other factors listed under “Risk Factors” in our annual report on Form 10-K and quarterly reports on Form 10-Q that the Company files with the U.S. Securities and Exchange Commission. Prospective investors are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

CONSOLIDATED BALANCE SHEETS

 

 

December 31,
2023

 

 

December 31,
2022

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash

 

$

9,141,512

 

 

$

18,995,284

 

Prepaid expenses and other current assets

 

 

486,833

 

 

 

678,365

 

Total current assets

 

 

9,628,345

 

 

 

19,673,649

 

Total assets

 

$

9,628,345

 

 

$

19,673,649

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

1,694,024

 

 

$

1,094,590

 

Litigation liability

 

 

6,000,000

 

 

 

2,000,000

 

Total current liabilities

 

 

7,694,024

 

 

 

3,094,590

 

Total liabilities

 

 

7,694,024

 

 

 

3,094,590

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Preferred stock, par value $0.00001, 10,000,000 shares authorized; no shares issued and outstanding as of the years ended December 31, 2023 and 2022

 

 

 

 

 

 

Common stock, $0.00001 par value; 100,000,000 shares authorized, 1,171,233 shares issued and outstanding as of the years ended December 31, 2023 and 2022

 

 

12

 

 

 

12

 

Additional paid-in capital

 

 

61,478,444

 

 

 

60,933,674

 

Accumulated deficit

 

 

(59,544,135

)

 

 

(44,354,627

)

Total stockholders’ equity

 

 

1,934,321

 

 

 

16,579,059

 

Total liabilities and stockholders’ equity

 

$

9,628,345

 

 

$

19,673,649

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

For the Year Ended
December 31,

 

 

 

2023

 

 

2022

 

OPERATING EXPENSES

 

 

 

 

 

 

General and administrative (net of insurance reimbursement of $1,250,000 during the year ended December 31, 2023 – See Note 5)

 

$

10,572,181

 

 

$

11,082,463

 

Research and development

 

 

5,117,608

 

 

 

10,762,670

 

Total operating expenses

 

 

15,689,789

 

 

 

21,845,133

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(15,689,789

)

 

 

(21,845,133

)

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

 

 

 

 

 

 

Other income

 

 

500,281

 

 

 

194,413

 

Loss before income taxes

 

 

(15,189,508

)

 

 

(21,650,720

)

Income taxes

 

 

 

 

 

 

Net loss

 

$

(15,189,508

)

 

$

(21,650,720

)

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 

$

(12.97

)

 

$

(18.49

)

Basic and diluted weighted average common stock outstanding

 

 

1,171,233

 

 

 

1,171,020

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

For the Year Ended
December 31,

 

 

 

2023

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Net loss

 

$

(15,189,508

)

 

$

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FAQ

What are some recent developments announced by Virpax Pharmaceuticals, Inc.?

Recent developments include regaining compliance with Nasdaq, settlement agreements, positive results from a pilot study of Probudur™, and focus on developing non-addictive pain management products.

What were the findings of the pilot study of Probudur™ by the U.S. Army Institute of Surgical Research?

The study showed reduction in incision-induced pain behaviors with both doses of Probudur compared to a saline solution control group.

What was the purpose of the CRADA with the U.S. Army Institute of Surgical Research (USAISR)?

The CRADA was to evaluate Virpax's Probudur, an injectable long-acting liposomal bupivacaine formulation, with an extension until September 2024.

What was the financial performance of Virpax Pharmaceuticals for the year ended December 31, 2023?

Operating expenses decreased, with an operating loss of $15.2 million, and cash position of approximately $9.1 million as of December 31, 2023.

Who was appointed as the CEO of Virpax Pharmaceuticals after the resignation of Anthony P. Mack?

Gerald W. Bruce was appointed as CEO after the resignation of Anthony P. Mack.

Virpax Pharmaceuticals, Inc.

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