Purple Biotech Reports Second Quarter 2023 Financial Results

Financial results represent clinical trials progress with recruitment at a pace faster than expected in CM24 Phase 2 study

Clinical data from both studies expected in the coming months
Cash runway extended into H1 2025

REHOVOT, Israel, Aug. 22, 2023 (GLOBE NEWSWIRE) -- Purple Biotech Ltd. (“Purple Biotech” or “the Company”) (NASDAQ/TASE: PPBT), a clinical-stage company developing first-in-class therapies that harness the power of the tumor microenvironment to overcome tumor immune evasion and drug resistance, today announced financial results for the second quarter and six months ended June 30, 2023.

“During the second quarter of 2023 we continued to advance our lead clinical programs, CM24 in the treatment of pancreatic cancer and NT219 for head and neck cancer, while prudently managing our development and operating expenses. Our financial results in the first half of 2023 represent our clinical trials’ progress with recruitment at a pace faster than expected in our CM24 study. As we reprioritize our objectives from time to time, we have extended our cash runway into the first half of 2025,” stated Purple Biotech CEO, Gil Efron.

“In the coming months, we look forward to announcing milestones including interim data from our randomized Phase 2 CM24 study as well as results from our Phase 1 NT219 dose escalation study. In addition, we are excited to commence work on IM1240, our newly acquired tri-specific antibody.”

“I am excited to return to working with our dedicated team after my medical leave. I would like to thank Isaac Israel, the management, and our employees for their great work during my absence,” Gil Efron added.

Financial Results for the three Months Ended June 30, 2023

Research and Development Expenses were $3.7 million, an increase of $1.7 million or 85%, compared to $2 million in the same period of 2022 mainly due to higher enrollment rate to our clinical trials.

Selling, General and Administrative Expenses were $1.4 million, a decrease of $0.1 million or 7%, compared to $1.5 million in the same period of 2022.

Operating Loss was $5.1 million, an increase of $1.5 million or 42% compared to $3.6 million in the same period of 2022 mainly due to higher research and development expenses.

On a non-IFRS basis (as reconciled below), adjusted operating loss was $4.6 million, an increase of $1.6 million or 53%, compared to $3 million in the same period of 2022 mainly due to higher research and development expenses.

Net Loss for the three months ended June 30, 2023 was $5.2 million, or $0.25 loss per basic and diluted ADS, compared to a net loss of $3.6 million, or $0.2 loss per basic and diluted ADS, in the three months ended June 30, 2022. Adjusted net loss for the three months ended June 30, 2023 was $4.7 million, an increase of $1.7 million or 57% compared to $3 million in the three months ended June 30, 2022.

Financial Results for the Six Months Ended June 30, 2023

Research and Development Expenses were $7.2 million, a decrease of $0.8 million, or 10%, compared to $8 million in the same period of 2022. The decrease was mainly due to a decrease of $3.4 million in chemistry, manufacturing, and controls (CMC) expenses representing batch manufacturing in 2022, offset by an increase of $2 million in clinical expenses and $0.6 million in other research and development expenses in support of our growing clinical and development activities.

Sales, General and Administrative Expenses were $3.0 million, compared to $2.9 million in the same period of 2022, an increase of $0.1 million.

Operating Loss was $10.3 million, a decrease of $0.6 million, or 6%, compared to $10.9 million in the same period of 2022.

On a non-IFRS basis (as reconciled below), adjusted operating loss was $9 million, a decrease of $1 million, compared to $10 million in the same period of 2022, mainly due to a decrease in research and development expenses.

Net Loss for the six months ended June 30, 2023 was $10.0 million, or $0.49 loss per basic and diluted ADS, compared to a net loss of $10.9 million, or $0.61 loss per basic and diluted ADS, in the same period of 2022. The decrease in net loss was mainly due to a decrease of $0.6 million in operating expenses. Adjusted net loss for the six months ended June 30, 2023 was $8.8 million, a decrease from $10.0 million in the six months ended June 30, 2022.

As of June 30, 2023, Purple Biotech had cash and cash equivalents and short-term deposits of $18.0 million. This cash position provides a cash runway into the first half of 2025.

During the six months ended June 30, 2023, the Company sold, under the Open Market Sale Agreement^sm with Jefferies LLC, approximately 479,000 ADSs, at an average price of $1.83 per ADS. Net proceeds to the Company were approximately $0.85 million, net of direct issuance expenses.

Non-IFRS Financial Measures.

This press release includes information about certain financial measures that are not prepared in accordance with International Financial Reporting Standards (“IFRS”), including adjusted operating loss and adjusted net loss. These non-IFRS measures are not based on any standardized methodology prescribed by IFRS and are not necessarily comparable to similar measures presented by other companies. Adjusted operating loss and adjusted net loss adjust for share-based compensation expenses. The Company’s management and board of directors utilize these non-IFRS financial measures to evaluate the Company’s performance. The Company provides these non- IFRS measures of the Company’s performance to investors because its management believes that these non- IFRS financial measures, when viewed with the Company’s results under IFRS and the accompanying reconciliations, are useful in identifying underlying trends in ongoing operations. However, these non- IFRS measures are not measures of financial performance under IFRS and, accordingly, should not be considered as alternatives to IFRS measures as indicators of operating performance. Further, these non-IFRS measures should not be considered measures of the Company’s liquidity. A reconciliation of certain IFRS to non-IFRS financial measures has been provided in the tables included in this press release.

About Purple Biotech

Purple Biotech Ltd. (NASDAQ/TASE: PPBT) is a clinical-stage company developing first-in-class therapies that seek to overcome tumor immune evasion and drug resistance. The Company’s oncology pipeline includes NT219, CM24 and IM1240. NT219 is a dual inhibitor, novel small molecule that simultaneously targets IRS1/2 and STAT3. In a Phase 1/2 study of NT219, the Company is currently advancing it in a dose escalation as a monotherapy treatment of solid tumors, and in a dose escalation in combination with cetuximab for the treatment of recurrent and metastatic squamous cell carcinoma of the head and neck (SCCHN) or colorectal adenocarcinoma (CRC). These studies will be followed by an expansion phase of NT219 at its recommended Phase 2 level in combination with cetuximab in patients with recurrent and metastatic SCCHN. CM24 is a humanized monoclonal antibody that blocks CEACAM1, an immune checkpoint protein that supports tumor immune evasion and survival through multiple pathways. The Company is advancing CM24 as a combination therapy with anti-PD-1 checkpoint inhibitors in a Phase 2 study for the treatment of pancreatic ductal adenocarcinoma (PDAC). The Company has entered into a clinical collaboration agreement with Bristol Myers Squibb for the Phase 2 clinical trials to evaluate the combination of CM24 with the PD-1 inhibitor nivolumab in addition to chemotherapy. IM1240 is a preclinical, conditionally-activated tri-specific antibody that engages both T cells and NK cells to mount a strong, localized immune response within the tumor microenvironment. The third arm specifically targets the Tumor Associated Antigen (TAA) 5T4 that is expressed in a variety of solid tumors and is correlated with advanced disease, increased invasiveness and poor clinical outcomes. IM1240 has a cleavable capping technology that confines the compound’s therapeutic activity to the local tumor microenvironment, and thereby potentially increases the anticipated therapeutic window in patients. The Company’s corporate headquarters are located in Rehovot, Israel. For more information, please visit https://purple-biotech.com/.

Forward-Looking Statements and Safe Harbor Statement

Certain statements in this press release that are forward-looking and not statements of historical fact are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements that are not statements of historical fact, and may be identified by words such as “believe”, “expect”, “intend”, “plan”, “may”, “should”, “could”, “might”, “seek”, “target”, “will”, “project”, “forecast”, “continue” or “anticipate” or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. You should not place undue reliance on these forward-looking statements, which are not guarantees of future performance. Forward-looking statements reflect our current views, expectations, beliefs or intentions with respect to future events, and are subject to a number of assumptions, involve known and unknown risks, many of which are beyond our control, as well as uncertainties and other factors that may cause our actual results, performance or achievements to be significantly different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause or contribute to such differences include, among others, risks relating to: the plans, strategies and objectives of management for future operations; product development for NT219, CM24 and IM1240; the process by which such early stage therapeutic candidates could potentially lead to an approved drug product is long and subject to highly significant risks, particularly with respect to a joint development collaboration; the fact that drug development and commercialization involves a lengthy and expensive process with uncertain outcomes; our ability to successfully develop and commercialize our pharmaceutical products; the expense, length, progress and results of any clinical trials; the impact of any changes in regulation and legislation that could affect the pharmaceutical industry; the difficulty in receiving the regulatory approvals necessary in order to commercialize our products; the difficulty of predicting actions of the U.S. Food and Drug Administration or any other applicable regulator of pharmaceutical products; the regulatory environment and changes in the health policies and regimes in the countries in which we operate; the uncertainty surrounding the actual market reception to our pharmaceutical products once cleared for marketing in a particular market; the introduction of competing products; patents obtained by competitors; dependence on the effectiveness of our patents and other protections for innovative products; our ability to obtain, maintain and defend issued patents; the commencement of any patent interference or infringement action against our patents, and our ability to prevail, obtain a favorable decision or recover damages in any such action; and the exposure to litigation, including patent litigation, and/or regulatory actions, and other factors that are discussed in our Annual Report on Form 20-F for the year ended December 31, 2022 and in our other filings with the U.S. Securities and Exchange Commission (“SEC”), including our cautionary discussion of risks and uncertainties under “Risk Factors” in our Registration Statements and Annual Reports. These are factors that we believe could cause our actual results to differ materially from expected results. Other factors besides those we have listed could also adversely affect us. Any forward-looking statement in this press release speaks only as of the date which it is made. We disclaim any intention or obligation to publicly update or revise any forward-looking statement or other information contained herein, whether as a result of new information, future events or otherwise, except as required by applicable law. You are advised, however, to consult any additional disclosures we make in our reports to the SEC, which are available on the SEC’s website, https://www.sec.gov.

CONTACTS:

Company Contact:

Lior Fhima
Chief Financial Officer
[e-mail]
  
Purple Biotech Ltd.

Consolidated Unaudited Statements of Financial Position as of:

		June 30,				December 31,
		2023				2022
		USD thousand				USD thousand
Assets
Cash and cash equivalents			17,202				15,030
Short term deposits			846				16,652
Other investments			352				431
Other current assets			984				1,143
Total current assets			19,384				33,256
Non-current assets
Right of use assets			392				467
Fixed assets, net			179				215
Intangible assets			28,044				20,684
Total non–current assets			28,615				21,366
Total assets			47,999				54,622
Liabilities
Lease liability - short term			184				194
Accounts payable			1,572				2,132
Other payables			3,120				4,732
Total current liabilities			4,876				7,058
Non-current liabilities
Lease liability			237				321
Post-employment benefit liabilities			141				145
Total non-current liabilities			378				466
Equity
Share capital, no par value			-				-
Share premium			132,245				126,407
Receipts on account of warrants			28,017				28,017
Capital reserve for share-based payments			10,032				10,164
Capital reserve from transactions with related parties			761				761
Capital reserves from hedging			(2	)			(6	)
Capital reserve from transactions with non-controlling interest			(859	)			(859	)
Accumulated loss			(127,589	)			(117,573	)
Equity attributable to owners of the Company			42,605				46,911
Non-controlling interests			140				187
Total equity			42,745				47,098
Total liabilities and equity			47,999				54,622

Purple Biotech Ltd.

Consolidated Unaudited Statement of Operations for the six and three months ended June 30, 2023

		For the six months ended June 30,								For the three months ended June 30,
		2023				2022				2023				2022
		USD thousand				USD thousand				USD thousand				USD thousand
Research and development expenses			7,203				8,035				3,705				2,083
Sales, general and administrative expenses			3,054				2,886				1,430				1,507
Operating loss			10,257				10,921				5,135				3,590
Finance expense			207				92				148				51
Finance income			(401	)			(145	)			(123	)			(89	)
Finance expense (income), net			(194	)			(53	)			25				(38	)
Loss for the period			10,063				10,868				5,160				3,552
Other Comprehensive Loss:
Items that will be transferred to profit or loss:
Loss (Profit) on cash flow hedges			(4	)			21				(5	)			21
Total comprehensive loss for the period			10,059				10,889				5,155				3,573
Loss attributable to:
Owners of the Company			10,016				10,833				5,138				3,536
Non-controlling interests			47				35				22				16
			10,063				10,868				5,160				3,552
Total comprehensive loss attributable to
Owners of the Company			10,012				10,854				5,133				3,557
Non-controlling interests			47				35				22				16
			10,059				10,889				5,155				3,573
Loss per share data
Basic and diluted loss per ADS - USD			0.49				0.61				0.25				0.2
Number of ADSs used in calculation			20,425,638				17,897,681				21,006,218				17,981,754

Reconciliation of Adjusted Operating Loss

		For the six months ended June 30,								For the three months ended June 30,
		2023				2022				2023				2022
		USD thousand				USD thousand				USD thousand				USD thousand
Operating loss for the period			10,257				10,921				5,135				3,590
Less ESOP expenses			(1,245	)			(866	)			(493	)			(557	)
			9,012				10,055				4,642				3,033

Reconciliation of Adjusted Net Loss

		For the six months ended June 30,								For the three months ended June 30,
		2023				2022				2023				2022
		USD thousand				USD thousand				USD thousand				USD thousand
Loss for the period			10,063				10,868				5,160				3,552
Less ESOP expenses			(1,245	)			(866	)			(493	)			(557	)
			8,818				10,002				4,667				2,995

Consolidated Unaudited Statements of Cash Flow

		For the six months ended June 30,
		2023				2022
		USD thousand				USD thousand
Cash flows from operating activities:
Loss for the period			(10,063	)			(10,868	)
Adjustments:
Depreciation			99				104
Finance expenses (income), net			(194	)			(53	)
Share-based payments			1,245				866
			(8,913	)			(9,951	)
Changes in assets and liabilities:
Changes in other investments and other current assets			(118	)			(286	)
Changes in accounts payables			(628	)			(90	)
Changes in other payables			(1,467	)			1,427
Changes in post-employment benefit liabilities			(161	)			-
			(2,374	)			1,051
Net cash used in operating activities			(11,287	)			(8,900	)
Cash flows from investing activities:
Acquisition of subsidiary, net of cash acquired			(3,549	)			-
Acquisition of intangible asset			-				(203	)
Interest received			548				143
Decrease in short-term deposits			15,806				14,300
Increase in long-term deposits			-				(2,482	)
Acquisition of fixed assets			(4	)			(20	)
Net cash provided by investing activities			12,801				11,738
Cash flows from financing activities:
Proceeds from issuance ADSs			881				653
ADS issuance expenses paid			(137	)			(81	)
Repayment of lease liability			(84	)			(83	)
Interest paid			(29	)			(33	)
Net cash provided by financing activities			631				456
Net increase (decrease) in cash and cash equivalents			2,145				3,294
Cash and cash equivalents at the beginning of the period			15,030				10,890
Effect of translation adjustments on cash and cash equivalents			27				(178	)
Cash and cash equivalents at the end of the period			17,202				14,006