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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ocuphire Pharma Inc | NASDAQ:OCUP | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.71 | 1.63 | 1.90 | 1.7475 | 1.64 | 1.7261 | 67,796 | 05:00:09 |
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number)
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Large accelerated filer
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☐ |
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☒ |
Accelerated filer
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☐ |
Smaller reporting company
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Emerging growth company
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Page
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3 |
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Item 1.
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3 |
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3 |
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4 |
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5 |
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6 |
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7 |
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Item 2.
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20 |
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Item 3.
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30 |
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Item 4.
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30 |
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30 |
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Item 1.
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30 |
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Item 1A.
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30 |
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Item 2.
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31 |
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Item 3.
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31 |
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Item 4.
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31 |
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Item 5.
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31 |
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Item 6.
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31 |
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32 |
Item 1. |
Financial Statements
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As of
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||||||||
March 31,
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December 31,
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|||||||
2024 | 2023 | |||||||
Assets
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(unaudited) | |||||||
Current assets:
|
||||||||
Cash and cash equivalents
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$
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$
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|
||||
Accounts receivable |
||||||||
Contract assets and unbilled receivables (Note 9) |
||||||||
Prepaids and other assets
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||||||||
Short-term investments
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||||||
Total current assets
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||||||
Property and equipment, net
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||||||
Total assets
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$
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$
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||||
Liabilities and stockholders’ equity
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||||||||
Current liabilities:
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||||||||
Accounts payable
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$
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$
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||||
Accrued expenses
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|
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||||||
Derivative liability | ||||||||
Total current liabilities
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|
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||||||
Total liabilities
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||||||
Commitments and contingencies (Note 3 and Note 8)
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||||||
Stockholders’ equity:
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||||||||
Preferred stock, par value $
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||||||
Common stock, par value $
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||||||
Additional paid-in capital
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||||||
Accumulated deficit
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(
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)
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(
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)
|
||||
Total stockholders’ equity
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|
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||||||
Total liabilities and stockholders’ equity
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$
|
|
$
|
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Three Months Ended
March 31,
|
||||||||
2024
|
2023
|
|||||||
License and collaborations revenue |
$ | $ | ||||||
Operating expenses:
|
||||||||
General and administrative
|
|
|
||||||
Research and development
|
|
|
||||||
Total operating expenses
|
|
|
||||||
Loss from operations |
(
|
)
|
(
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)
|
||||
Fair value change in derivative liabilities |
||||||||
Other income, net
|
|
|
||||||
Loss before income taxes
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(
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)
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(
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)
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||||
Benefit (provision) for income taxes
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||||||
Net loss |
(
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)
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(
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)
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||||
Other comprehensive loss, net of tax |
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||||||
Comprehensive loss |
$
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(
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)
|
$
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(
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)
|
||
Net loss per share: | ||||||||
Basic and diluted (Note 10)
|
$
|
(
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)
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$
|
(
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)
|
||
Number of shares used in per share calculations:
|
||||||||
Basic and diluted
|
|
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Common Stock
|
Additional
Paid–In
|
Accumulated
|
Total
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||
Balance at December 31, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Issuance costs | — | ( |
) | ( |
) | |||||||||||||||
Stock–based compensation
|
|
|
|
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|
|||||||||||||||
Exercise of warrants |
||||||||||||||||||||
Net and comprehensive loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance at March 31, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Common Stock |
Additional
Paid–In
|
Accumulated | Total | |||||||||||||||||
Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
Balance at December 31, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Issuance
of common stock in connection with the at-the-market program and purchase agreement |
||||||||||||||||||||
Issuance costs
|
( |
) | ( |
) | ||||||||||||||||
Stock–based compensation
|
|
|
|
|
|
|||||||||||||||
Share repurchases for the payment of employee taxes |
( |
) | ( |
) | ( |
) | ||||||||||||||
Net and comprehensive loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance at March 31, 2024
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Three Months Ended
March 31,
|
||||||||
2024
|
2023
|
|||||||
Operating activities
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Stock-based compensation
|
|
|
||||||
Depreciation
|
|
|
||||||
Fair value change in derivative liabilities
|
||||||||
Unrealized loss from short-term investments
|
||||||||
Change in assets and liabilities:
|
||||||||
Accounts receivable
|
( |
) | ( |
) | ||||
Contract assets and unbilled receivables
|
||||||||
Prepaid expenses and other assets
|
(
|
)
|
|
|||||
Accounts payable
|
(
|
)
|
|
|||||
Accrued expenses
|
|
|
||||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Investing activities
|
||||||||
Net cash used in investing activities
|
|
|
||||||
Financing activities
|
||||||||
Proceeds from issuance of common stock in connection with the at-the-market program and purchase agreement
|
||||||||
Issuance costs | ( |
) | ||||||
Share repurchases for the payment of employee taxes |
( |
) | ||||||
Net cash provided by financing activities
|
|
|
||||||
Net decrease in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for income taxes
|
$
|
|
$
|
|
||||
Cash paid for interest
|
$
|
|
$
|
|
||||
Supplemental non-cash financing transactions:
|
||||||||
Unpaid issuance costs |
$
|
|
$
|
|
1. |
Company Description and Summary of Significant Accounting Policies
|
● |
Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets;
|
● |
Level 2 inputs: Quoted prices for similar assets and liabilities in active markets, quoted prices in
markets that are not active, or inputs which are observable, whether directly or indirectly, for substantially the full term of the asset or liability; and
|
● |
Level 3 inputs: Unobservable inputs in which there is little or no market data available, which
requires management to develop its own assumptions in pricing the asset or liability.
|
As of March 31, 2024
|
||||||||||||||||
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
||||||||||||||||
Short-term investments |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total assets at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities: | ||||||||||||||||
Derivative liability | $ |
$ |
$ |
$ |
||||||||||||
Total liabilities at fair value | $ |
$ |
$ |
$ |
As of December 31, 2023
|
||||||||||||||||
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
||||||||||||||||
Short-term investments
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total assets at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities: |
||||||||||||||||
Derivative liability |
$ |
$ |
$ |
$ |
||||||||||||
Total liabilities at fair value |
$ |
$ |
$ |
$ |
Three Months Ended
March 31,
|
||||||||
2024
|
2023
|
|||||||
Short-term investments
|
||||||||
Balance as of beginning of period
|
$
|
|
$
|
|
||||
Unrealized loss
|
(
|
)
|
(
|
)
|
||||
Balance as of end of period
|
$
|
|
$
|
|
Three Months Ended March 31,
|
||||||||
2024
|
2023
|
|||||||
Derivative liabilities
|
||||||||
Balance as of beginning of period
|
$
|
|
$
|
|
||||
Change in fair value of derivative liabilities
|
|
|
||||||
Balance as of end of period
|
$ |
$
|
|
2. |
Merger
|
● |
|
● |
|
● |
|
3.
|
Commitments and Contingencies
|
4. |
Supplemental Balance Sheet Information
|
March 31,
2024
|
December 31,
2023
|
|||||||
Prepaids
|
$
|
|
$
|
|
||||
Other
|
|
|
||||||
Total prepaids and other assets
|
$
|
|
$
|
|
March 31,
2024
|
December 31,
2023
|
|||||||
Equipment
|
|
|
$
|
|
||||
Furniture
|
|
|
||||||
Total property and equipment
|
|
|
|
|
||||
Less accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Property and equipment, net
|
$
|
|
$
|
|
March 31,
|
December 31,
|
|||||||
2024
|
2023
|
|||||||
Payroll
|
$ |
|
$ |
|
||||
Professional services
|
|
|
||||||
Research and development services and supplies
|
||||||||
Other
|
|
|
||||||
Total
|
$ |
|
$
|
|
5. |
Related Party Transactions
|
6. |
Stockholders’ Equity
|
• |
the lowest sale price for the Company’s common stock on Nasdaq
on the purchase date of such shares; and
|
• |
the average of the three lowest closing sale prices for the
Company’s common stock on Nasdaq during the
consecutive business days prior to the purchase date of such shares. |
• |
|
• |
|
• |
the closing sale price of the Company’s common stock on Nasdaq
on the applicable Accelerated Purchase date; and
|
• |
the volume-weighted average price of the Company’s common
stock on Nasdaq during the applicable Accelerated Purchase Measurement Period on the applicable Accelerated Purchase date.
|
7. |
Stock-based Compensation
|
March 31,
|
||||||||
2024
|
2023
|
|||||||
General and administrative
|
$
|
|
$
|
|
||||
Research and development
|
|
|
||||||
Total stock-based compensation
|
$
|
|
$
|
|
2024
|
2023
|
|||||||
Expected stock price volatility
|
|
%
|
|
%
|
||||
Expected life of options (years)
|
|
|
||||||
Expected dividend yield
|
|
% |
|
%
|
||||
Risk free interest rate
|
|
%
|
|
%
|
8. |
Apexian Sublicense Agreement
|
9.
|
License and Collaboration Agreements
|
Three Months Ended
March 31,
|
||||||||
2024 | 2023 |
|||||||
Contract
Assets and Unbilled Receivables
|
||||||||
Balance as of beginning of three-month period
|
$
|
|
$ |
|||||
Revenue recognized
|
|
|||||||
Reclassification to accounts receivable related to costs billed under the Viatris License Agreement
|
(
|
)
|
( |
) | ||||
Balance as of end of three-month period
|
$
|
|
$ |
10. |
Net loss per share
|
March 31,
|
||||||||
2024
|
2023
|
|||||||
Series A and RDO warrants
|
|
|
||||||
Stock options
|
|
|
||||||
RSUs | ||||||||
Former Rexahn warrants
|
|
|
11.
|
Income Taxes
|
12.
|
Deferred Compensation Plan
|
13. |
Subsequent Events
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
The success and timing of regulatory submissions and pre-clinical and clinical trials, including enrollment and data readouts;
|
• |
Regulatory requirements or developments;
|
• |
Changes to or unanticipated events in connection with clinical trial designs and regulatory pathways;
|
• |
Delays or difficulties in the enrollment of patients in clinical trials;
|
• |
Substantial competition and rapid technological change;
|
• |
Our development of sales and marketing infrastructure;
|
• |
Future revenue losses and profitability;
|
• |
Our relatively short operating history;
|
• |
Changes in capital resource requirements;
|
• |
Risks related to the inability of Ocuphire to obtain sufficient additional capital to continue to advance its product candidates and its preclinical programs;
|
• |
Domestic and worldwide legislative, regulatory, political and economic developments;
|
• |
Employee misconduct;
|
• |
Changes in market opportunities and acceptance;
|
• |
Reliance on third-parties;
|
• |
Future, potential product liability and securities litigation;
|
• |
System failures, unplanned events, or cyber incidents;
|
• |
The substantial number of shares subject to potential issuance associated with our Equity Line of Credit arrangement with Lincoln Park Capital Fund, LLC;
|
• |
Risks that our partnership with Viatris, or our other licensing arrangements, may not facilitate the commercialization or market acceptance of Ocuphire’s product candidates;
|
• |
Future fluctuations in the market price of our common stock;
|
• |
The success and timing of commercialization of any of Ocuphire’s product candidates; and
|
• |
Obtaining and maintaining Ocuphire’s intellectual property rights.
|
• |
continue clinical trials for APX3330, PS and for any other product candidate in our future pipeline;
|
• |
continue nonclinical studies for APX3330, APX2009 and APX2014, PS and for any other product candidate in our future pipeline;
|
• |
develop additional product candidates that we identify, in-license or acquire;
|
• |
seek regulatory approvals for any product candidates that successfully complete clinical trials;
|
• |
contract to manufacture our product candidates;
|
• |
maintain, expand and protect our intellectual property portfolio;
|
• |
hire additional staff, including clinical, scientific, operational and financial personnel, to execute our business plan;
|
• |
add operational, financial and management information systems and personnel to support our product development and potential future commercialization efforts;
|
• |
continue to operate as a public company; and
|
• |
establish on our own or with partners, a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval.
|
For the Three Months Ended
March 31,
|
||||||||||||
2024
|
2023
|
Change | ||||||||||
License and collaborations revenue
|
$
|
1,711
|
$
|
1,749
|
$
|
(38
|
)
|
|||||
Operating expenses:
|
||||||||||||
General and administrative
|
4,670
|
2,285
|
2,385
|
|||||||||
Research and development
|
4,749
|
5,595
|
(846
|
)
|
||||||||
Total operating expenses
|
9,419
|
7,880
|
1,539
|
|||||||||
Loss from operations
|
(7,708
|
) |
(6,131
|
) |
(1,577
|
)
|
||||||
Fair value change in derivative liabilities
|
—
|
—
|
—
|
|||||||||
Other income, net
|
602
|
340
|
262
|
|||||||||
Loss before income taxes
|
(7,106
|
) |
(5,791
|
) |
(1,315
|
)
|
||||||
Provision for income taxes
|
—
|
—
|
—
|
|||||||||
Net loss
|
$
|
(7,106
|
) |
$
|
(5,791
|
) |
$
|
(1,315
|
)
|
For the Three Months Ended
March 31,
|
||||||||||||
2024
|
2023
|
Change
|
||||||||||
External costs:
|
||||||||||||
Phentolamine Ophthalmic Solution 0.75% (“PS”)
|
$
|
1,065
|
$
|
3,801
|
$
|
(2,736
|
)
|
|||||
APX 3330
|
2,663
|
886
|
1,777
|
|||||||||
Unallocated
|
67
|
198
|
(131
|
)
|
||||||||
Total external cost
|
3,795
|
4,885
|
(1,090
|
)
|
||||||||
Internal costs:
|
||||||||||||
Employee related expenses
|
937
|
707
|
230
|
|||||||||
Facilities, supplies and other
|
17
|
3
|
14
|
|||||||||
Total internal costs
|
954
|
710
|
244
|
|||||||||
Total research and development expenses
|
$
|
4,749
|
$
|
5,595
|
$
|
(846
|
)
|
For the Three Months Ended
March 31,
|
||||||||
2024
|
2023 | |||||||
Net cash used in operating activities
|
$
|
(5,716
|
)
|
$
|
(3,646
|
)
|
||
Net cash provided by (used in) investing activities
|
—
|
—
|
||||||
Net cash provided by financing activities
|
2,376
|
—
|
||||||
Net decrease in cash and cash equivalents
|
$
|
(3,340
|
)
|
$
|
(3,646
|
)
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3. |
Defaults Upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Other Information
|
Item 6. |
Exhibits
|
EXHIBIT
|
||
NUMBER
|
|
DESCRIPTION OF DOCUMENT
|
Third Amendment to the Consulting Agreement, dated as of January 1, 2024, by and between the Company and Jay Pepose, M.D.
|
||
Employment Agreement, dated as of February 13, 2024, by and between the Company and Nirav Jhaveri (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on February 16, 2024).
|
||
First Amendment to Employment Agreement, dated as of February 16, 2024, by and between the Company and Nirav Jhaveri (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed on February 16, 2024).
|
||
Consulting Agreement, dated as of April 11, 2024, by and between the Company and Jay Pepose, M.D. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on April 17, 2024).
|
||
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
101.INS**
|
Inline XBRL Instance Document.
|
|
101.SCH**
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
101.CAL**
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.DEF**
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
101.LAB**
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
101.PRE**
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
104**
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
+
|
Indicates management contract or compensatory plan.
|
*
|
Documents are furnished not filed.
|
**
|
Filed herewith. |
By:
|
/s/ George Magrath
|
|
George Magrath
|
||
Chief Executive Officer and Director
|
||
(Principal Executive Officer)
|
||
By:
|
/s/ Nirav Jhaveri
|
|
Nirav Jhaveri
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
By:
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/s/ Amy Rabourn
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Amy Rabourn
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Senior Vice President of Finance
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(Principal Accounting Officer)
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CONSULTANT: |
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THE COMPANY: |
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Ocuphire Pharma, Inc.
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By: |
/s/ Jay S. Pepose, M.D.
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By: |
/s/ Bernhard Hoffmann
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Jay S. Pepose, M.D. |
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Bernhard Hoffmann |
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4/2/2024
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SVP - Corporate Development |
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4/2/2024
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Date: May 10, 2024
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/s/ George Magrath
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Name:
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George Magrath
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Title:
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Chief Executive Officer
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(Principal Executive Officer)
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Date: May 10, 2024
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/s/ Nirav Jhaveri
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Name:
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Nirav Jhaveri |
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Title:
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Chief Financial Officer |
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(Principal Financial Officer) |
/s/ George Magrath
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George Magrath
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Chief Executive Officer
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(Principal Executive Officer)
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/s/ Nirav Jhaveri
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Nirav Jhaveri
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Chief Financial Officer
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(Principal Financial Officer)
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Dated: May 10, 2024
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Condensed Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 25,085,592 | 23,977,491 |
Common stock, shares outstanding (in shares) | 25,085,592 | 23,977,491 |
Condensed Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Condensed Statements of Comprehensive Loss [Abstract] | ||
License and collaborations revenue | $ 1,711 | $ 1,749 |
Operating expenses: | ||
General and administrative | 4,670 | 2,285 |
Research and development | 4,749 | 5,595 |
Total operating expenses | 9,419 | 7,880 |
Loss from operations | (7,708) | (6,131) |
Fair value change in derivative liabilities | 0 | 0 |
Other income, net | 602 | 340 |
Loss before income taxes | (7,106) | (5,791) |
Benefit (provision) for income taxes | 0 | 0 |
Net loss | (7,106) | (5,791) |
Other comprehensive loss, net of tax | 0 | 0 |
Comprehensive loss | $ (7,106) | $ (5,791) |
Net loss per share: | ||
Basic (in dollars per share) | $ (0.29) | $ (0.28) |
Diluted (in dollars per share) | $ (0.29) | $ (0.28) |
Number of shares used in per share calculations: | ||
Basic (in shares) | 24,520,475 | 20,939,607 |
Diluted (in shares) | 24,520,475 | 20,939,607 |
Company Description and Summary of Significant Accounting Policies |
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Company Description and Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Description and Summary of Significant Accounting Policies |
Nature of Business
Ocuphire Pharma, Inc. (the “Company” or “Ocuphire”) is a clinical-stage biopharmaceutical company with one FDA-approved product currently marketed by Viatris, Inc. Headquartered in
Farmington Hills, Michigan, the Company is focused on developing novel therapies for the treatment of unmet needs of patients with retinal and refractive eye disorders.
The Company’s lead retinal product candidate, APX3330, is a small-molecule inhibitor of Ref-1 (reduction oxidation effector factor-1 protein). Ref-1 is a regulator of transcription factors such as HIF-1α
and NF-kB. Inhibiting Ref-1 reduces levels of vascular endothelial growth factor (“VEGF”) and inflammatory cytokines which are known to play key roles in ocular angiogenesis and inflammation. APX3330 is an oral tablet
administered twice per day in development for the treatment of diabetic retinopathy (“DR”). A Phase 2 study in subjects with DR or diabetic macular edema was completed and results were reported in January 2023. An End-of-Phase 2
(“EOP2”) meeting with the U.S. Food and Drug Administration (the “FDA”) was held in October 2023 at which the Company obtained agreement on the registration endpoint supporting the advancement of APX3330 into future clinical
trials. Ocuphire submitted a Special Protocol Assessment (“SPA”) to the FDA in February 2024 to seek agreement on the clinical trial protocol and statistical analysis plan.
The Company has also in-licensed APX2009 and APX2014, which are second-generation analogs of APX3330. The unique mechanism of action
of this family of Ref-1 inhibitors of reducing angiogenesis and inflammation could potentially be beneficial in treating other retinal diseases such as age-related macular degeneration, geographic atrophy, and non-ophthalmic
diseases.
In
November 2022, the Company entered into a license and collaboration agreement (the “Viatris License Agreement”) with FamyGen Life Sciences, Inc. (“Famy”) (acquired by and now known as Viatris, Inc. (“Viatris”) in January 2023)
pursuant to which it granted Viatris an exclusive license to develop, manufacture, import, export and commercialize its refractive product candidate Phentolamine Ophthalmic Solution 0.75% (initially known as Nyxol) (“PS”). PS
is a once-daily eye drop formulation of phentolamine mesylate designed to reduce pupil diameter and improve visual acuity. PS was approved by the FDA for the treatment for pharmacologically-induced mydriasis under the brand
name RYZUMVITM in September 2023 and was launched commercially in April 2024. The VEGA-2 Phase 3 study in presbyopia achieved its primary endpoint. PS is currently in an additional Phase 3 clinical trial for presbyopia
(age-related blurry near vision). On December 5, 2023, the Company received FDA Agreement Under Special Protocol Assessment for LYNX-2, a Phase 3 Trial of PS for the treatment of decreased Visual Acuity under dim (mesopic)
light conditions following keratorefractive surgery. The first patient enrolled in LYNX-2 in April 2024.
Basis of Presentation
The accompanying condensed financial statements have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S.
generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.
The December 31, 2023 condensed balance sheet was derived from audited financial statements,
and may not include all disclosures required by GAAP; however, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in
conjunction with the audited financial statements and the notes thereto for the fiscal year ended December 31, 2023.
In the opinion of management, all adjustments, consisting of only normal recurring adjustments
that are necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, have been made. The results of operations for the interim periods are not necessarily indicative of the operating
results for the full fiscal year or any future periods.
Liquidity
The accompanying financial statements have been prepared on the basis that the Company will continue as a going concern. From its
inception, the Company has devoted substantially all of its efforts to drug development and conducting clinical trials.
As of March 31, 2024, the Company had $47.2
million in cash and cash equivalents. The Company believes its current available cash and cash equivalents will be sufficient to fund the Company’s planned expenditures and meet its obligations for at least twelve months from the date
of issuance of these financial statements.
In the future, the Company may need to raise additional funds until it is able to generate sufficient revenues to fund its
development activities. The Company’s future operating activities, coupled with its plans to raise capital or issue debt financing, may provide additional liquidity in the future, however these actions are not solely within the control
of the Company and the Company is unable to predict the outcome of these actions to generate the liquidity ultimately required.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Segment Information
Operating segments are components of an enterprise for which separate financial information
is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer or such
person functioning in such role. The Company’s Chief Executive Officer views the Company’s operations and manages its business in one
operating segment, which is the business of development of products related to vision performance and health. Accordingly, the Company has a single reporting segment.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of deposit to be cash equivalents.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. Management follows approved policies established by its Board of Directors to reduce credit risk associated with
the Company’s cash deposit and investment accounts. Pursuant to these policies, the Company limits its exposure through the kind, quality and concentration of its investments. The Company’s cash and cash equivalents are held or managed by two financial institutions in the United States. As of March 31, 2024, the Company had
cash equivalents of $46.7 million that were not eligible for coverage by Federal Deposit Insurance Corporation. These balances are invested in funds whose assets consist almost entirely of securities issued by the U.S. Treasury or
guaranteed by the U.S. government.
Short-term Investments
The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and
records them on a settlement date basis. The Company’s short-term investments are comprised of equity securities, which in accordance with the fair value hierarchy described below are recorded at fair value using Level l inputs on the
balance sheets. Subsequent changes in fair values are recorded in other income (expense), net on the statements of comprehensive loss. The Company classifies investments available to fund current operations as current assets on its
balance sheets. The Company did not recognize any impairments on its investments to date through March 31, 2024.
Revenue Recognition
The Company follows the provisions of Accounting Standards Codification (“ASC”) 606, Revenue
from Contracts with Customers. The guidance provides a five-step model to determine how revenue is recognized. The Company has entered into license agreements which have revenue recognition implications (See Note 9 – License
and Collaboration Agreements).
In determining the appropriate amount of revenue to be recognized, the Company performs the following steps: (i) identification of
the contracts with a customer; (ii) determination of the performance obligations in the contract; (iii) measurement of the transaction price, including potential constraints on variable consideration; (iv) allocation of the transaction
price to the performance obligations based on estimated stand-alone selling prices; and (v) recognition of revenue when (or as) the Company satisfies a performance obligation.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. Performance obligations may include license rights, development
and other services. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the
arrangement. If the Company cannot reasonably estimate when its performance obligations are either completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue
is then recognized over the remaining estimated period of performance using the cumulative catch-up method.
As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the
stand-alone selling price of each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines,
reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company allocates the total transaction price to each performance obligation based on the relative standalone selling
prices of the promised goods or service underlying each performance obligation.
Licenses of intellectual property and research and development services: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues
from non-refundable, up-front fees allocated to the license when the license is transferred to the customer, and the customer can use and benefit from the license. For licenses that are bundled with other obligations, such as research
and development services, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over
time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. For research and development services
that are distinct from a license transfer obligation, the Company determines whether the services are satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of
recognizing revenue from such services. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.
Milestone payments: At the
inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most
likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission) is included in the transaction price. Milestone payments that are not
within the control of the Company, such as approvals from regulators, are not considered probable of being achieved until such contingency occurs (such as receipt of those approvals).
Royalties: For arrangements that
include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the
related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
Contract Assets and Unbilled Receivables
The Company recognizes contract assets and unbilled receivables when goods or services are transferred to the customer before the
customer pays or before reimbursement for payment is billed or due, excluding any amounts presented as an account receivable. The Company recorded contract assets and unbilled receivables in connection with a license and collaboration
agreement (See Note 9 – License and Collaboration Agreements).
Accounts Receivable and Allowances for Credit Losses
The Company records a provision for credit losses, when appropriate, based
on historical experience, current conditions and reasonable supportable forecasts. The Company estimates credit losses over the remaining expected life of an asset by, among other things, primarily using historical experience and
current economic conditions that could affect the collectability of the balances in the future. Account balances are charged off against the allowance when the Company believes that it is probable that the receivable will not be
recovered. Actual write-offs may be in excess of the Company’s estimated allowance. The Company has not incurred any bad
debt expense to date and no allowance for credit losses has been recorded during the periods presented.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based
compensation costs, for personnel in functions not directly associated with research and development activities. Other significant costs include insurance coverage for directors and officers and other property and liability exposures,
legal fees relating to intellectual property and corporate matters, professional fees for accounting and tax services, other services provided by business consultants, and legal settlements.
Research and Development
Research and development expenses consist of costs incurred in performing research and development activities, including
compensation, benefits and stock-based compensation costs for research and development employees and costs for consultants, costs associated with nonclinical studies and clinical trials, regulatory activities, manufacturing activities to
support clinical activities, license fees, nonlegal patent costs, fees paid to external service providers that conduct certain research and development, and an allocation of overhead expenses. Research
and development expenses include costs that are reimbursed under the Viatris License Agreement (See Note 9 – License and Collaboration Agreements).
Other Income, net
Other income, net includes interest
earned from cash and cash equivalent investments, realized and unrealized gains (losses) from equity investments and reimbursements in connection with grants and other sources when they occur. In addition, this line item would include
payments when made by the Company in connection with the Contingent Value Rights Agreement (the “CVR Agreement”) discussed further below with former Rexahn shareholders.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with the provisions of the Financial Accounting Standards Board
(“FASB”) ASC 718, Compensation — Stock Compensation. Accordingly, compensation costs related to equity instruments granted are recognized at the grant date fair value. The Company records
forfeitures when they occur. Stock-based compensation arrangements to non-employees are accounted for in accordance with the applicable provisions of ASC 718.
Derivative Liability
The Company evaluates all features contained in financing agreements to determine if
there are any embedded derivatives that require separation from the underlying agreement under ASC 815 – Derivatives and Hedging. An embedded derivative that requires separation is accounted
for as a separate liability from the host agreement. The separated embedded derivative is accounted for separately on a fair market value basis. The Company records the fair value change of a separated embedded derivative at each
reporting period in the statements of comprehensive loss under the fair value change in derivative liability line item. The Company determined that certain features under an equity line financing (See Note 6 — Stockholders’ Equity)
collectively qualified as an embedded derivative. The derivative was accounted for separately from the underlying equity line financing agreement.
Fair Value Measurements
The Company follows accounting guidance that emphasizes that fair value is a market-based
measurement, not an entity-specific measurement. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
Fair value measurements are defined on a three-level hierarchy:
As of March 31, 2024 and December 31, 2023, the fair values of cash and cash equivalents, accounts receivable, contract assets and
unbilled receivables, prepaid and other assets, accounts payable, and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The fair value of the short-term investments, while
outstanding, were based on observable Level 1 inputs in the form of quoted market prices from a major stock exchange. The fair value of the derivative liability associated with the equity line financing facility (See Note 6 – Stockholders’ Equity) was based on cash flow models discounted at
current implied market rates representing expected returns by market participants for similar instruments and are based on Level 3 inputs as well the Company’s underlying stock price and associated volatility, expected term of the
financing and market interest rates. The fair value of the warrant liabilities, while
outstanding, were based on a Black-Scholes option model using Level 3 inputs. There were no transfers between fair value
hierarchy levels during the three months ended March 31, 2024 and 2023.
The fair value of financial instruments measured on a
recurring basis is as follows (in thousands):
The following table provides a roll-forward of
short-term investments measured at fair value on a recurring basis using observable level 1 inputs for the three months ended March 31, 2024 and 2023 (in thousands):
The following table
provides a roll-forward of the derivative liabilities measured at fair value on a recurring basis using unobservable level 3 inputs for the three months ended March 31, 2024 and 2023 (in thousands):
Rexahn Warrants
The fair value of the warrant liabilities associated with the Rexahn Pharmaceuticals, Inc. (“Rexahn”) warrants was de minimis during the periods presented. The last of the Rexahn warrants classified as liabilities expired in April 2023 unexercised. See Note 2 – Merger for additional background.
There were no
financial instruments measured on a non-recurring basis for any of the periods presented.
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07 - Segment Reporting (Topic 280): Improvements to
Reportable Segment Disclosures, which enhances reportable segment disclosure requirements, primarily through disclosures of significant segment expenses. This ASU is effective for fiscal years beginning after December 15, 2023,
including interim periods within those fiscal years, with early adoption permitted. The guidance must be applied retrospectively to all prior periods presented. The Company is currently evaluating the impact of adoption of this guidance
on its financial statements.
In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income
Tax Disclosures, which enhances income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance also includes certain other amendments to improve the effectiveness of income
tax disclosures. This ASU is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years and should be applied on a prospective basis, with retrospective application permitted. The
Company is currently evaluating the impact of adoption of this guidance on its financial statements.
|
Merger |
3 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||
Merger [Abstract] | ||||||||||||
Merger |
On November 5, 2020, the Company completed the Merger transaction with Rexahn (the “Merger”).
In connection with the Merger, the Company, Shareholder Representatives Services LLC, as representative of the Rexahn stockholders prior to the Merger, and Olde Monmouth Stock Transfer Co., Inc., as the rights agent, entered into the CVR
Agreement.
Pursuant to the terms of the Merger and the CVR Agreement,
Rexahn stockholders of record as of immediately prior to the effective time of the Merger received one contingent value right
(“CVR”) for each share of Rexahn common stock held.
Each CVR entitles such holders to
receive, for each calendar quarter (each, a “CVR Payment Period”) during the 15-year period after the closing (the “CVR Term”),
an amount equal to the following:
The CVRs are not transferable, except in certain limited circumstances, will not be
certificated or evidenced by any instrument, will not accrue interest and will not be registered with the SEC or listed for trading on any exchange. The CVR Agreement will continue in effect until the later of the end of the CVR Term and
the payment of all amounts payable thereunder. For the periods presented, no payments subject to the CVR Agreement were made.
In addition, no milestones had been accrued as there were no potential milestones yet considered probable beyond those previously reported.
Former Rexahn Warrants
As of March 31, 2024, none of the Rexahn warrants classified as equity remained outstanding. The remaining warrants in the amount of 58,597 with an exercise price of $38.40
per share expired unexercised in January 2024.
|
Commitments and Contingencies |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 | |||
Commitments and Contingencies [Abstract] | |||
Commitments and Contingencies |
Apexian Sublicense Agreement
On January 21, 2020, the Company entered into a sublicense agreement with Apexian Pharmaceuticals, Inc., pursuant to which it obtained exclusive worldwide patent and other intellectual property rights.
In exchange for the patent and other intellectual rights, the Company agreed to certain milestone payments and royalty payments on future sales (See Note 8 — Apexian Sublicense Agreement). As of March 31, 2024, there was sufficient
uncertainty with regard to any future cash milestone payments under the sublicense agreement that no liabilities were recorded related to the sublicense agreement.
Facility Leases
The Company has a short-term, non-cancellable facility lease (the “HQ Lease”) for its headquarters. The HQ Lease qualified for the
short-term lease exception under ASC 842, Leases. The monthly base rent for the HQ Lease is approximately $3,000. The rent expense associated with the HQ Lease amounted to $9,000 during each of the three-month periods ended March 31, 2024 and 2023. The total remaining expected rental payments under the HQ Lease amount to $27,000 through its current expiration date of December 31, 2024.
Other
In the ordinary course of business, from time to time, the Company may be subject to a broad range of claims and legal proceedings that relate to contractual
allegations, patent infringement and other claims. In addition, the Company from time to time may be potentially committed to reimburse third parties for costs incurred associated with business development related transactions upon the
achievement of certain milestones. The Company establishes accruals when applicable for matters and commitments which it believes losses are probable and can be reasonably estimated. To date, no loss contingency for such matters and
potential commitments have been recorded. Although it is not possible to predict with certainty the outcome of these matters or potential commitments, the Company is of the opinion that the ultimate resolution of these matters and
potential commitments will not have a material effect on its results of operations or financial position.
|
Supplemental Balance Sheet Information |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Supplemental Balance Sheet Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Information |
Prepaid and Other Assets
Prepaid and other assets consist of the following (in
thousands):
Property and Equipment, net
Property and equipment held for use by category are presented in the
following table (in thousands):
Depreciation
expense was zero and $1,000
during three months ended March 31, 2024 and 2023, respectively.
Accrued Expenses
Accrued expenses consist of the following (in thousands):
|
Related Party Transactions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 | |||
Related Party Transactions [Abstract] | |||
Related Party Transactions |
On April 8, 2022, Ocuphire entered into a consulting agreement (as amended, the “2022 Consulting Agreement”) with Jay Pepose, M.D., a director of the Company. The consulting agreement originally provided for $10,000
a month in cash payments and a stock option grant for 50,000 options, of which 25% vested on
March 31, 2023, with the remainder vesting in equal monthly installments over 36 months. The consulting agreement was
amended on September 19, 2022 to provide for vesting acceleration for stock-based awards in the event of a change in control. The consulting agreement was also amended effective December 1, 2022 to increase the cash payment to $25,000 per month and amended effective January 1, 2024 to extend the expiration to March 31, 2024 and to increase the retainer for March
2024 to $49,000. See also Note 13 – Subsequent Events for a description of Dr. Pepose’s new consulting agreement.
The Company incurred related consulting expenses of $99,000 and $75,000 during the three months ended
March 31, 2024 and 2023, respectively, in connection with related parties. As of March 31, 2024 and December 31, 2023, $99,000
and $25,000 of the related consulting expenses were unpaid, respectively.
|
Stockholders' Equity |
3 Months Ended | ||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||
Stockholders' Equity [Abstract] | |||||||||||||||||||||
Stockholders' Equity |
Lincoln Park
Purchase Agreement
On
August 10, 2023, the Company entered into a common stock purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) for an equity line financing (the “Purchase Agreement”). The Purchase Agreement provides that, subject to
the terms and conditions set forth therein, the Company has the sole right, but not the obligation, to direct Lincoln Park to purchase up to $50
million of shares of the Company’s common stock from time to time over the 30-month term of the Purchase Agreement.
Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Lincoln Park (the “Registration Rights Agreement”), pursuant to which the Company agreed to register the resale
of the shares of the Company’s common stock that have been and may be issued to Lincoln Park under the Purchase Agreement pursuant to a registration statement. Lincoln Park has agreed not to cause or engage in any manner whatsoever in
any direct or indirect short selling or hedging of the Company’s common stock.
In addition to the commitment shares referenced above, a total of 1,450,000 shares (150,000
shares during the three months ended March 31, 2024) of the Company’s common stock were sold under the Purchase Agreement for net proceeds through March 31, 2024 in the amount of $4.8 million ($0.3 million during the three months ended March 31,
2024). Lastly, the Company incurred issuance costs of $152,000, consisting of investor expense reimbursement and legal costs,
through March 31, 2024 with de minimis costs incurred during the three months ended March 31, 2024. No
shares of the Company’s common stock were sold under the Purchase Agreement prior to the third quarter of 2023. See Note 13 – Subsequent Events.
Under
the Purchase Agreement, on any business day selected by the Company, the Company may direct Lincoln Park to purchase up to 50,000
shares of its common stock on such business day (or the purchase date) (a “Regular Purchase”), provided that the closing sale price of the Company’s common stock on Nasdaq on the applicable purchase date is not below $0.25 and subject to other adjustments. A Regular Purchase may be increased to up to (i) 60,000 shares if the closing sale price of the Company’s common stock on Nasdaq is not below $5.00 on the applicable purchase date and (ii) 70,000
shares if the closing sale price of the Company’s common stock on Nasdaq is not below $7.50 on the applicable purchase
date. The Company may direct Lincoln Park to purchase shares in Regular Purchases as often as every business day. The purchase price per share for each such Regular Purchase will be equal to the lesser of:
In addition, the Company may also direct Lincoln Park, on any business
day on which the Company has submitted a Regular Purchase notice for the maximum amount allowed for such Regular Purchase, to purchase an additional amount of the Company’s common stock (an “Accelerated Purchase”) of up to the lesser
of:
The purchase price per share for each such Accelerated Purchase will
be equal to 96.5% of the lower of:
The Company may also direct Lincoln Park, on any business day on which
an Accelerated Purchase has been completed and all of the shares to be purchased thereunder have been delivered to Lincoln Park in accordance with the Purchase Agreement, to purchase an additional amount of the Company’s common stock
(an “Additional Accelerated Purchase”) as described in the Purchase Agreement.
The
pricing and settlement provisions in the Purchase Agreement result in the recognition of a derivative liability accounted for on a fair value basis under the provisions of ASC 815 - Derivatives
and Hedging. A Monte Carlo simulation model is used to estimate future stock pricing and purchase activity to determine the fair value of the derivative liability. As of March 31, 2024, the change in the derivative liability
from December 31, 2023 was de minimis. The fair value change in the derivative liability is recorded in the fair value change in derivative liabilities line item in the accompanying
condensed statements of comprehensive loss during periods with valuation changes.
At-The-Market Program
On February 4, 2021, Ocuphire filed a Form S-3 shelf registration under the Securities Act of 1933 which was declared effective by the SEC on February 12, 2021 (the “2021 Shelf”) under
which the Company may offer and sell, from time to time in its sole discretion, securities having an aggregate offering price of up to $125
million. In connection with the 2021 Shelf, on March 11, 2021, Ocuphire entered into a sales agreement with JonesTrading Institutional Services LLC (“JonesTrading”) under which the Company may offer and sell, from time to time at its
sole discretion, to or through JonesTrading, acting as agent and/or principal, shares of its common stock having an aggregate offering price of up to $40 million (the “2021 ATM”). During the three months ended March 31, 2024, 850,550 shares of common stock were sold under the ATM for aggregate
gross proceeds in the amount of $2.2 million, before deducting issuance expenses, including the placement agent’s fees, legal
and accounting expenses, in the amount of $165,000. There were no sales of common stock under the 2021 ATM during the three-month period ended March 31, 2023. See Note 13 – Subsequent Events.
Registered Direct Offering
On June 4, 2021, the Company entered into a placement agency agreement for a registered direct offering (“RDO”) with A.G.P./Alliance Global Partners (“AGP”). Pursuant to the terms of the placement agency agreement,
AGP on June 8, 2021 sold an aggregate of 3,076,923 shares of the Company’s common stock and warrants to purchase 1,538,461 shares of the Company’s common stock (the “RDO Warrants”) at an offering price of $4.875 per one share and per 2021 shelf registration. of each RDO
Warrant. The RDO was made pursuant to the Company’s
The RDO Warrants have an exercise
price of $6.09 per share, are exercisable from the initial issuance date of June 8, 2021, and will expire five years following the initial issuance date. As of March 31, 2024, 1,538,461
RDO Warrants were outstanding and none have been exercised since issuance.
Subject
to limited exceptions, a holder of a RDO Warrant will not have the right to exercise any portion of its RDO Warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of a holder prior to the date of issuance, 9.99%) of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise; provided that upon prior notice to the Company, the
holder may increase or decrease the beneficial ownership limitation, provided further that in no event shall the beneficial ownership limitation exceed 9.99%.
Pre-Merger Financing
On June 17,
2020, Ocuphire, Rexahn and certain investors entered into a Securities Purchase Agreement, which was amended and restated in its entirety on June 29, 2020 (as amended and restated, the “Securities Purchase Agreement”). Pursuant to the
Securities Purchase Agreement, the investors invested a total of $21.15 million in cash, including $300,000 invested by five
directors of Ocuphire Pharma, Inc., prior to the Merger and one director of Rexahn upon closing of the Merger (the “Pre-Merger
Financing”). The Pre-Merger Financing also included the issuance of Series A Warrants and Series B Warrants discussed further below.
Series A Warrants
The Series A
Warrants were issued on November 19, 2020 at an initial exercise price of $4.4795 per share, were immediately exercisable upon
issuance and have a term of five years from the date of issuance. The Series A Warrants are exercisable for 5,665,838 shares of common stock in the aggregate (without giving effect to any limitation on exercise contained therein) and were outstanding
as of March 31, 2024. The Series A Warrants were accounted for and classified as equity on the accompanying balance sheets.
Series B Warrants
The Series B
Warrants had an exercise price of $0.0001, were exercisable upon issuance and would have expired on the day following the later
to occur of (i) the Reservation Date (as defined therein) or (ii) the date on which the investor’s Series B Warrants would have been exercised in full (without giving effect to any limitation on exercise contained therein). None of the Series B Warrants were outstanding as of March 31, 2024. During the three months ended March 31, 2023, the last of the Series B
Warrants were exercised for 17,869 shares of common stock. The Series B Warrants were accounted for and classified as equity
on the accompanying condensed balance sheets while outstanding.
|
Stock-based Compensation |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation |
Stock-based
compensation expense was included in general and administrative and research and development costs as follows in the accompanying condensed statements of comprehensive loss for the three-month periods indicated below (in thousands):
Ocuphire Stock Options
Inducement
Plan
On February 22, 2021, the Company
adopted the Ocuphire Pharma, Inc. 2021 Inducement Plan (as amended, the “Inducement Plan”), which was amended on November 1, 2023, pursuant to which the Company reserved 2,325,258 shares of
its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the
meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.
2020 Equity
Incentive Plan
In November 2020, the stockholders of the Company
approved the 2020 Equity Incentive Plan (the “2020 Plan”) for stock-based awards. Under the 2020 Plan, (i) 1,000,000 new shares
of common stock were reserved for issuance and (ii) up to 70,325 additional shares of common stock may be issued, consisting of
(A) shares that remain available for the issuance of awards under prior equity plans and (B) shares of common stock subject to outstanding stock options or other awards covered by prior equity plans that have been cancelled or expire on or
after the date that the 2020 Plan became effective. Under the 2020 Plan, the shares reserved automatically increase on January 1 of each year, for a period of not more than ten years from the date the 2020 Plan is approved by the stockholders of the Company, commencing on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal
to 5% of the shares of common stock outstanding as of December 31st of the preceding calendar year. The 2020 Plan permits the
grant of incentive and nonstatutory stock options, appreciation rights, restricted stock, restricted stock units, performance stock and cash awards, and other stock-based awards. On January 1, 2024, 1,198,875 shares were added to the 2020 Plan as a result of its evergreen provision.
2018 Equity Incentive Plan
Prior to the 2020 Plan, the Company had adopted a 2018
Equity Incentive Plan (the “2018 Plan”) in April 2018 under which 1,175,000 shares of the Company’s common stock were reserved
for issuance to employees, directors and consultants. Upon the effective date of the 2020 Plan, no additional shares were
available for issuance under the 2018 Plan.
Stock Options
During the three months ended March 31, 2024 and 2023, 762,080 and 665,383 options were
granted to officers, employees and consultants, respectively, generally vesting over a five (5) to forty-eight (48) month period. The Company recognized $447,000
and $500,000 in stock-based compensation expense related to stock options during the three months ended March 31, 2024 and 2023,
respectively. As of March 31, 2024 and December 31, 2023, 4,827,433 and 4,410,258 stock options were outstanding, respectively.
The weighted average fair value per share of options
granted during the three months ended March 31, 2024 and 2023 was $2.16 and $2.75, respectively. The Company measures the fair value of stock options with service-based vesting criteria to employees, directors, consultants and directors on the
date of grant using the Black-Scholes option pricing model. The Company does not have sufficient share trading history to support an internal calculation of volatility and expected term. As such, the Company has used a weighted average
volatility considering the volatilities of several guideline companies.
For purposes of identifying similar entities, the
Company considered characteristics such as industry, length of trading history, and stage of life cycle. The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The average
expected life of the options was based on the contractual term for agreements that allow for exercise of vested options through the end of the contractual term upon termination of continuous service, and for all other agreements, was based
on the midpoint between the vesting date and the end of the contractual term according to the “simplified method” as described in Staff Accounting Bulletin 110. The risk-free interest rate is determined by reference to implied yields
available from U.S. Treasury securities with a remaining term equal to the expected life assumed at the date of grant. The Company records forfeitures when they occur.
The weighted average assumptions used in the
Black-Scholes option pricing model are as follows during the three months ended March 31, 2024 and 2023:
During the three months ended March 31, 2024 and 2023, 164,555 and 246,068 stock options vested, respectively. The weighted average fair value per share of options vesting during the three months ended March 31, 2024 and 2023 was $2.82 and $2.44, respectively.
During the three months ended March 31, 2024 and 2023, no stock options were exercised. During the three months ended
March 31, 2024 and 2023, 344,905 and zero options were forfeited, respectively.
Restricted
Stock Units
During the three months ended March 31, 2024 and 2023, the Company granted an aggregate of 313,364
and 291,584 restricted stock units (“RSUs”), respectively, to certain officers and employees under the 2020 Plan. The
weighted average grant date fair value of the RSUs granted during the three months ended March 31, 2024 and 2023 was $2.69
and $3.50 per unit, respectively. The RSUs vest over a four-year period with 25 percent vesting annually on each anniversary of the grant date, subject to the recipient’s continued service on such dates. As of March 31, 2024 and December 31,
2023, 993,112 and 801,700
RSUs were outstanding, respectively.
During the
three months ended March 31, 2024 and 2023, 39,282 and zero RSUs vested, respectively, and 82,670 and no RSUs were forfeited during these periods, respectively. The total expense for the three months ended March 31, 2024 and 2023 related to
the RSUs was $293,000 and $57,000,
respectively.
Common Stock Issued for Services
The Company
granted stock for services in the amount of 81,234 and 68,646 common shares during the three months ended March 31, 2024 and 2023, respectively, to four board members during these periods who elected to receive their board retainers in the form of stock for services. The stock-based compensation related to these services
amounted to $245,000 and $247,000
during the three months ended March 31, 2024 and 2023, respectively.
General
As of March
31, 2024, 2,010,740 shares were available for future issuance under the 2020 Plan and Inducement Plan in the aggregate. No shares were available for future issuance under the 2018 Plan. Unrecognized stock-based compensation cost was $7.3 million as of March 31, 2024. The unrecognized stock-based expense is expected to be recognized over a weighted average period of 1.9 years.
|
Apexian Sublicense Agreement |
3 Months Ended | ||
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Mar. 31, 2024 | |||
Apexian Sublicense Agreement [Abstract] | |||
Apexian Sublicense Agreement |
On January
21, 2020, the Company entered into a sublicense agreement (as amended on June 4, 2020, the “Apexian Sublicense Agreement”) with Apexian, pursuant to which it obtained exclusive worldwide patent and other intellectual property rights that
constitute a Ref-1 Inhibitor program relating to therapeutic applications to treat disorders related to ophthalmic and diabetes mellitus conditions. The lead compound in the Ref-1 Inhibitor program is APX3330, which the Company intends to
develop as an oral tablet therapeutic to treat diabetic retinopathy initially, and potentially later to treat diabetic macular edema, geographic atrophy and age-related macular degeneration. In connection with the Apexian Sublicense
Agreement, the Company issued a total of 891,422 shares of its common stock to Apexian and to certain affiliates of Apexian in
calendar year 2020. As a result of the common stock issued pursuant to the Apexian Sublicense Agreement, Apexian is considered by Ocuphire to be a related party.
The Company
also agreed to make one-time milestone payments under the Apexian Sublicense Agreement for each of the first ophthalmic indication and the first diabetes mellitus indication for the development and regulatory milestones, and once for each
of several sales milestones. These milestone payments include (i) payments for specified developmental and regulatory milestones (including completion of the first Phase 2 trial and the first Phase 3 pivotal trial in the United States, and
filing and achieving regulatory approval from the FDA for the first New Drug Application for a compound) totaling up to $11
million in the aggregate and (ii) payments for specified sales milestones of up to $20 million in the aggregate, which net sales
milestone payments are payable once, upon the first achievement of such milestone. Lastly, the Company also agreed to make a royalty payment equal to a single-digit percentage of its net sales of products associated with the covered patents
under the Apexian Sublicense Agreement. If it is not terminated pursuant to its terms, the Apexian Sublicense Agreement shall remain in effect until expiration of the last to expire of the covered patents.
None of the milestone or royalty payments
were triggered or deemed probable as of March 31, 2024.
|
License and Collaboration Agreements |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
License and Collaboration Agreements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
License and Collaboration Agreements |
Viatris License Agreement
On
November 6, 2022, the Company entered into the Viatris License Agreement, pursuant to which it granted Viatris (as successor to Famy) an exclusive, perpetual, sub-licensable license to develop, manufacture, import, export and
commercialize (i) PS, for treating (a) reversal of mydriasis, (b) night vision disturbances or dim light vision, and (c) presbyopia, and (ii) PS and low dose pilocarpine for treating presbyopia (together, the “PS Products”) worldwide
except for certain countries and jurisdictions in Asia (the “Viatris Territory”). The Company retains the exclusive right to develop, manufacture, have manufactured, import, export and commercialize the PS Products outside of the Viatris
Territory.
Under the terms of the Viatris License Agreement, the Company in partnership with Viatris, will develop the PS Products in the United States. Viatris will reimburse the Company for agreed-to budgeted costs related to the development of the PS Products through FDA approval, and then share costs above the agreed upon threshold amount. Viatris will be responsible for developing the PS Products in countries and jurisdictions in the Viatris Territory outside of the United States. Pursuant to the Viatris License Agreement, the Company received a one-time non-refundable cash payment of $35 million in November 2022 for the exclusive, perpetual, sub-licensable license to develop, manufacture, import, export and commercialize the PS Products in the Viatris Territory. In addition, with respect to the PS Products, the Company will be eligible to receive potential additional payments of up to $130 million in the aggregate upon achieving certain specified regulatory or net sales milestones, with the first milestone payment of $10 million to be made following approval by the FDA of PS, for reversal of mydriasis which occurred during the third quarter of 2023. The Company will also receive tiered royalties, starting at low double-digit royalties up to low 20% royalties, based on the aggregate annual net sales of all PS Products in the United States, and will receive low double-digit royalties based on all annual net sales in the Viatris Territory outside of the United States. The royalty payments will continue on a country-by-country basis from the date of the first commercial sale of the first PS Product in a country of the Viatris Territory until December 31, 2040. The Viatris
License Agreement was accounted for under the provisions of ASC 606. In accordance with the provisions under ASC 606, the Company identified two
distinct performance obligations at the effective date: (1) the license to its intellectual property (“license transfer”) and (2) research and development services.
The aggregate transaction price associated with the Viatris License Agreement, as adjusted for variable consideration subsequent to December 31, 2022, was $40.0 million which comprised the initial license transfer fee of $35.0 million and the $5.0 million payment anticipated under the research and development services that were not subject to cancellation. The transaction price was allocated between performance obligations based on their relative standalone selling price (“SSP”). The performance obligations for research and development services through the non-cancellation period were fully met by the Company as of the first quarter of 2023. The SSP for the license transfer and for the research and development services was determined to be $ 287.8 million and $5.0 million, respectively. The SSP for the license transfer was determined based on a discounted royalty cash flow approach, taking into consideration assumptions, including projected worldwide net profit for each of the respective programs based on probability assessments, projections based on internal forecasts, industry data, and information from other guideline companies within the same industry and other relevant factors. The SSP for the research and development services was determined using a cost-plus margin approach, based on anticipated expenditure outlays within the first 120-day non-cancellation window. On a relative SSP basis, $39.3 million and $0.7 million of the transaction price was allocated to the license transfer and to the research and development services obligations, respectively. The
Company determined that the licenses transferred represented functional intellectual property. As such, the revenue related to the licenses was recognized at the point in time in which the license/know-how was delivered to Viatris which
occurred during the fourth quarter of 2022. The Company determined that revenue related to the research and development services constrained to the 120-day non-cancellation period was to be recognized over time as the services are rendered based on an estimated percentage of completion input model.
Recognition
of Revenue
Revenue
recognized under the Viatris License Agreement during each of the three months ended March 31, 2024 and 2023 was $1.7 million.
Regulatory Milestones under the Viatris License Agreement
The Company has
evaluated the regulatory milestones that may be received in connection with the Viatris License Agreement. There is uncertainty that the events to obtain the remaining regulatory milestones (aside from the approval by the FDA of PS, for
reversal of mydriasis) will be achieved given the nature of clinical development and the stage of the development of the PS Products. These remaining regulatory milestones will be constrained until it is probable that a significant revenue
reversal will not occur.
Sales Milestone and Royalty Payments
Sales
milestones and royalties relate predominantly to a license of intellectual property granted to Viatris and are determined by sales or usage-based thresholds. The sales milestones and royalties are accounted for under the royalty
recognition constraint and are accounted for as constrained variable consideration. The Company applies the royalty recognition constraint for each commercial milestone and only recognize revenues for each once a sale of a licensed
product (achievement of each) occurs. Royalty payments in the amount of $3,000 were recognized related to the sale of RYZUMVI
by Viatris in late March 2024.
Each of the
remaining regulatory and sales milestone performance obligations (aside from the $10 million milestone payment related to the FDA’s
approval of PS in the third quarter of 2023) were constrained as of March 31, 2024 and no revenue was recognized related to these
milestones.
A reconciliation of the closing balance of the contract assets and unbilled receivables
associated with the Viatris License Agreement is as follows as of March 31, 2024 and 2023 (in thousands):
The remaining
amounts in contract assets and unbilled receivables as of March 31, 2024 attributed to the research and development services are expected to be settled during the second quarter of 2024.
BioSense License and Assignment Agreement
On March 10, 2020, prior to the Merger, Rexahn entered into an amendment to its collaboration and license agreement, (as amended, the
“BioSense License and Assignment Agreement”) with BioSense to advance the development and commercialization of the Rexahn RX-3117 drug compound (“RX-3117”) for all human uses in the Republic of Singapore, China, Hong Kong, Macau, and Taiwan
(the “BioSense Territory”).
Under the BioSense License and Assignment Agreement, the
Company is eligible to receive additional milestone payments in an aggregate of up to $84,500,000 upon the achievement of development, regulatory and commercial goals and will also be eligible to receive tiered royalties at
low double-digit rates on annual net sales in the BioSense Territory. The Company determined that none of the milestone payments under the BioSense License and Assignment Agreement were probable of payment as of March 31, 2024, and as a
result, no revenue related to the milestones was recognized as the achievement of events entitling the Company to any milestone payments were
highly susceptible to factors outside of the Company’s control. Future sales-based royalties related to the exclusive license to develop RX-3117 will be recognized in the period the underlying sales transaction occurs.
Payments received under the BioSense License and Assignment Agreement are subject to the CVR Agreement described in Note 2
– Merger.
Processa License Agreement
On June 16, 2021, the
Company entered into a license agreement (the “Processa License Agreement”) with Processa Pharmaceuticals, Inc. (“Processa”), pursuant to which the Company has agreed to grant Processa an exclusive license to develop, manufacture and
commercialize RX-3117 globally, excluding the BioSense Territory.
Processa will make future payments to the Company upon the achievement of certain
development and regulatory milestones, which primarily consist of dosing a patient in pivotal trials or having a drug indication approved by a regulatory authority in the United States or another country. In addition, Processa will pay the
Company mid-single-digit percentage royalties based on annual sales under the license and will make one-time
sales milestone payments based on the achievement during a calendar year of certain thresholds for annual sales. Processa is also required to give the Company 32% of any milestone payments received based on any sub-license agreement Processa may enter into with respect to the Processa License Agreement. The Company
determined that none of the milestone payments under the Processa License Agreement were probable of payment as of March 31, 2024, and as a result, no revenue related to the milestones was recognized, as the achievement of events entitling the Company to any milestone payments
were highly susceptible to factors outside of the Company’s control.
Future payments received under the Processa License Agreement will be subject to the CVR Agreement described in Note 2 – Merger.
|
Net loss per share |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss per share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss per share |
Basic loss per
share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings or loss per share of common stock is computed similarly to basic earnings or
loss per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive. The Company’s warrants, stock options and RSUs outstanding,
are considered common stock equivalents for this purpose. Diluted earnings is computed utilizing the treasury method for the warrants, stock options and RSUs. No incremental common stock equivalents were included in calculating diluted loss
per share because such inclusion would be anti-dilutive given the net loss reported for the periods presented.
The following potential common shares were not considered in the computation of diluted
net loss per share as their effect would have been anti-dilutive for the three-month periods ended presented below:
|
Income Taxes |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 | |||
Income Taxes [Abstract] | |||
Income Taxes |
The effective
tax rate for the three months ended March 31, 2024 and 2023 was zero percent. As of March 31, 2024, a full valuation
allowance has been established to reduce the Company’s net deferred income tax assets. As such, no tax benefit related to
the Company’s pre-tax loss was recognized for any of the periods presented.
The Company’s corporate returns are subject to examination for tax years beginning in 2020 for federal income tax purposes and subject to examination in various state jurisdictions. The Company does not have any reserves for
income taxes that represent the Company’s potential liability for uncertain tax positions.
|
Deferred Compensation Plan |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 | |||
Deferred Compensation Plan [Abstract] | |||
Deferred Compensation Plan |
Effective October 1st, 2021, the Company began offering a 401(k) plan (“401K Plan”) to its employees. All employees
are eligible to participate in the 401K Plan. The Company makes
matching contributions equal to 100% on the first 3% of compensation that is deferred as an elective deferral and an additional 50% on the next 2% of compensation. The Company’s matching
contributions are made on a payroll-by-payroll basis. During the three
months ended March 31, 2024 and 2023, the Company contributed $58,000 and $34,000 to the 401K Plan, respectively.
|
Subsequent Events |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 | |||
Subsequent Events [Abstract] | |||
Subsequent Events |
On April 11, 2024, the Company
entered into a Consulting Agreement (the “2024 Consulting Agreement”), pursuant to which Dr. Pepose, a director of the Company, agreed to continue to serve as a consultant of the Company following the expiration of the 2022
Consulting Agreement. Pursuant to the 2024 Consulting Agreement, Dr. Pepose will be paid a monthly consulting fee of $39,583.
Additionally, Dr. Pepose received an award of 32,000 RSUs, as well as stock options to purchase 48,000 shares of the Company’s common stock. The RSUs awarded under the 2024 Consulting Agreement will vest on April 11, 2025, subject
to Dr. Pepose’s continued service over that period. The options granted under the 2024 Consulting Agreement will vest in 12
equal monthly installments beginning on May 11, 2024, subject to Dr. Pepose’s continued service over that period. The 2024 Consulting Agreement is scheduled to terminate on April 11, 2025.
Subsequent to March 31, 2024, 538,566 shares of common stock were sold under the ATM for gross proceeds through
May 6, 2024 in the amount of $1.1 million, before deducting issuance expenses, including the placement agent’s fees and
legal and accounting expenses, in the amount of $28,000.
Subsequent to March 31, 2024, a total of 250,000 shares of the Company’s common stock were sold under the Purchase Agreement for net proceeds through May 6, 2024 in the amount of
$460,000.
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Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Company Description and Summary of Significant Accounting Policies (Policies) |
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Nature of Business |
Nature of Business
Ocuphire Pharma, Inc. (the “Company” or “Ocuphire”) is a clinical-stage biopharmaceutical company with one FDA-approved product currently marketed by Viatris, Inc. Headquartered in
Farmington Hills, Michigan, the Company is focused on developing novel therapies for the treatment of unmet needs of patients with retinal and refractive eye disorders.
The Company’s lead retinal product candidate, APX3330, is a small-molecule inhibitor of Ref-1 (reduction oxidation effector factor-1 protein). Ref-1 is a regulator of transcription factors such as HIF-1α
and NF-kB. Inhibiting Ref-1 reduces levels of vascular endothelial growth factor (“VEGF”) and inflammatory cytokines which are known to play key roles in ocular angiogenesis and inflammation. APX3330 is an oral tablet
administered twice per day in development for the treatment of diabetic retinopathy (“DR”). A Phase 2 study in subjects with DR or diabetic macular edema was completed and results were reported in January 2023. An End-of-Phase 2
(“EOP2”) meeting with the U.S. Food and Drug Administration (the “FDA”) was held in October 2023 at which the Company obtained agreement on the registration endpoint supporting the advancement of APX3330 into future clinical
trials. Ocuphire submitted a Special Protocol Assessment (“SPA”) to the FDA in February 2024 to seek agreement on the clinical trial protocol and statistical analysis plan.
The Company has also in-licensed APX2009 and APX2014, which are second-generation analogs of APX3330. The unique mechanism of action
of this family of Ref-1 inhibitors of reducing angiogenesis and inflammation could potentially be beneficial in treating other retinal diseases such as age-related macular degeneration, geographic atrophy, and non-ophthalmic
diseases.
In
November 2022, the Company entered into a license and collaboration agreement (the “Viatris License Agreement”) with FamyGen Life Sciences, Inc. (“Famy”) (acquired by and now known as Viatris, Inc. (“Viatris”) in January 2023)
pursuant to which it granted Viatris an exclusive license to develop, manufacture, import, export and commercialize its refractive product candidate Phentolamine Ophthalmic Solution 0.75% (initially known as Nyxol) (“PS”). PS
is a once-daily eye drop formulation of phentolamine mesylate designed to reduce pupil diameter and improve visual acuity. PS was approved by the FDA for the treatment for pharmacologically-induced mydriasis under the brand
name RYZUMVITM in September 2023 and was launched commercially in April 2024. The VEGA-2 Phase 3 study in presbyopia achieved its primary endpoint. PS is currently in an additional Phase 3 clinical trial for presbyopia
(age-related blurry near vision). On December 5, 2023, the Company received FDA Agreement Under Special Protocol Assessment for LYNX-2, a Phase 3 Trial of PS for the treatment of decreased Visual Acuity under dim (mesopic)
light conditions following keratorefractive surgery. The first patient enrolled in LYNX-2 in April 2024.
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Basis of Presentation |
Basis of Presentation
The accompanying condensed financial statements have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S.
generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.
The December 31, 2023 condensed balance sheet was derived from audited financial statements,
and may not include all disclosures required by GAAP; however, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in
conjunction with the audited financial statements and the notes thereto for the fiscal year ended December 31, 2023.
In the opinion of management, all adjustments, consisting of only normal recurring adjustments
that are necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, have been made. The results of operations for the interim periods are not necessarily indicative of the operating
results for the full fiscal year or any future periods.
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Liquidity |
Liquidity
The accompanying financial statements have been prepared on the basis that the Company will continue as a going concern. From its
inception, the Company has devoted substantially all of its efforts to drug development and conducting clinical trials.
As of March 31, 2024, the Company had $47.2
million in cash and cash equivalents. The Company believes its current available cash and cash equivalents will be sufficient to fund the Company’s planned expenditures and meet its obligations for at least twelve months from the date
of issuance of these financial statements.
In the future, the Company may need to raise additional funds until it is able to generate sufficient revenues to fund its
development activities. The Company’s future operating activities, coupled with its plans to raise capital or issue debt financing, may provide additional liquidity in the future, however these actions are not solely within the control
of the Company and the Company is unable to predict the outcome of these actions to generate the liquidity ultimately required.
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Use of Estimates |
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
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Segment Information |
Segment Information
Operating segments are components of an enterprise for which separate financial information
is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer or such
person functioning in such role. The Company’s Chief Executive Officer views the Company’s operations and manages its business in one
operating segment, which is the business of development of products related to vision performance and health. Accordingly, the Company has a single reporting segment.
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Cash and Cash Equivalents |
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of deposit to be cash equivalents.
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Concentration of Credit Risk |
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. Management follows approved policies established by its Board of Directors to reduce credit risk associated with
the Company’s cash deposit and investment accounts. Pursuant to these policies, the Company limits its exposure through the kind, quality and concentration of its investments. The Company’s cash and cash equivalents are held or managed by two financial institutions in the United States. As of March 31, 2024, the Company had
cash equivalents of $46.7 million that were not eligible for coverage by Federal Deposit Insurance Corporation. These balances are invested in funds whose assets consist almost entirely of securities issued by the U.S. Treasury or
guaranteed by the U.S. government.
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Short-term Investments |
Short-term Investments
The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and
records them on a settlement date basis. The Company’s short-term investments are comprised of equity securities, which in accordance with the fair value hierarchy described below are recorded at fair value using Level l inputs on the
balance sheets. Subsequent changes in fair values are recorded in other income (expense), net on the statements of comprehensive loss. The Company classifies investments available to fund current operations as current assets on its
balance sheets. The Company did not recognize any impairments on its investments to date through March 31, 2024.
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Revenue Recognition |
Revenue Recognition
The Company follows the provisions of Accounting Standards Codification (“ASC”) 606, Revenue
from Contracts with Customers. The guidance provides a five-step model to determine how revenue is recognized. The Company has entered into license agreements which have revenue recognition implications (See Note 9 – License
and Collaboration Agreements).
In determining the appropriate amount of revenue to be recognized, the Company performs the following steps: (i) identification of
the contracts with a customer; (ii) determination of the performance obligations in the contract; (iii) measurement of the transaction price, including potential constraints on variable consideration; (iv) allocation of the transaction
price to the performance obligations based on estimated stand-alone selling prices; and (v) recognition of revenue when (or as) the Company satisfies a performance obligation.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. Performance obligations may include license rights, development
and other services. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the
arrangement. If the Company cannot reasonably estimate when its performance obligations are either completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue
is then recognized over the remaining estimated period of performance using the cumulative catch-up method.
As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the
stand-alone selling price of each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines,
reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company allocates the total transaction price to each performance obligation based on the relative standalone selling
prices of the promised goods or service underlying each performance obligation.
Licenses of intellectual property and research and development services: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues
from non-refundable, up-front fees allocated to the license when the license is transferred to the customer, and the customer can use and benefit from the license. For licenses that are bundled with other obligations, such as research
and development services, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over
time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. For research and development services
that are distinct from a license transfer obligation, the Company determines whether the services are satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of
recognizing revenue from such services. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.
Milestone payments: At the
inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most
likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission) is included in the transaction price. Milestone payments that are not
within the control of the Company, such as approvals from regulators, are not considered probable of being achieved until such contingency occurs (such as receipt of those approvals).
Royalties: For arrangements that
include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the
related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
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Contract Assets and Unbilled Receivables |
Contract Assets and Unbilled Receivables
The Company recognizes contract assets and unbilled receivables when goods or services are transferred to the customer before the
customer pays or before reimbursement for payment is billed or due, excluding any amounts presented as an account receivable. The Company recorded contract assets and unbilled receivables in connection with a license and collaboration
agreement (See Note 9 – License and Collaboration Agreements).
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Accounts Receivable and Allowances for Credit Losses |
Accounts Receivable and Allowances for Credit Losses
The Company records a provision for credit losses, when appropriate, based
on historical experience, current conditions and reasonable supportable forecasts. The Company estimates credit losses over the remaining expected life of an asset by, among other things, primarily using historical experience and
current economic conditions that could affect the collectability of the balances in the future. Account balances are charged off against the allowance when the Company believes that it is probable that the receivable will not be
recovered. Actual write-offs may be in excess of the Company’s estimated allowance. The Company has not incurred any bad
debt expense to date and no allowance for credit losses has been recorded during the periods presented.
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General and Administrative Expenses |
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based
compensation costs, for personnel in functions not directly associated with research and development activities. Other significant costs include insurance coverage for directors and officers and other property and liability exposures,
legal fees relating to intellectual property and corporate matters, professional fees for accounting and tax services, other services provided by business consultants, and legal settlements.
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Research and Development |
Research and Development
Research and development expenses consist of costs incurred in performing research and development activities, including
compensation, benefits and stock-based compensation costs for research and development employees and costs for consultants, costs associated with nonclinical studies and clinical trials, regulatory activities, manufacturing activities to
support clinical activities, license fees, nonlegal patent costs, fees paid to external service providers that conduct certain research and development, and an allocation of overhead expenses. Research
and development expenses include costs that are reimbursed under the Viatris License Agreement (See Note 9 – License and Collaboration Agreements).
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Other Income, net |
Other Income, net
Other income, net includes interest
earned from cash and cash equivalent investments, realized and unrealized gains (losses) from equity investments and reimbursements in connection with grants and other sources when they occur. In addition, this line item would include
payments when made by the Company in connection with the Contingent Value Rights Agreement (the “CVR Agreement”) discussed further below with former Rexahn shareholders.
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Stock-Based Compensation |
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with the provisions of the Financial Accounting Standards Board
(“FASB”) ASC 718, Compensation — Stock Compensation. Accordingly, compensation costs related to equity instruments granted are recognized at the grant date fair value. The Company records
forfeitures when they occur. Stock-based compensation arrangements to non-employees are accounted for in accordance with the applicable provisions of ASC 718.
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Derivative Liability |
Derivative Liability
The Company evaluates all features contained in financing agreements to determine if
there are any embedded derivatives that require separation from the underlying agreement under ASC 815 – Derivatives and Hedging. An embedded derivative that requires separation is accounted
for as a separate liability from the host agreement. The separated embedded derivative is accounted for separately on a fair market value basis. The Company records the fair value change of a separated embedded derivative at each
reporting period in the statements of comprehensive loss under the fair value change in derivative liability line item. The Company determined that certain features under an equity line financing (See Note 6 — Stockholders’ Equity)
collectively qualified as an embedded derivative. The derivative was accounted for separately from the underlying equity line financing agreement.
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Fair Value Measurements |
Fair Value Measurements
The Company follows accounting guidance that emphasizes that fair value is a market-based
measurement, not an entity-specific measurement. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
Fair value measurements are defined on a three-level hierarchy:
As of March 31, 2024 and December 31, 2023, the fair values of cash and cash equivalents, accounts receivable, contract assets and
unbilled receivables, prepaid and other assets, accounts payable, and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The fair value of the short-term investments, while
outstanding, were based on observable Level 1 inputs in the form of quoted market prices from a major stock exchange. The fair value of the derivative liability associated with the equity line financing facility (See Note 6 – Stockholders’ Equity) was based on cash flow models discounted at
current implied market rates representing expected returns by market participants for similar instruments and are based on Level 3 inputs as well the Company’s underlying stock price and associated volatility, expected term of the
financing and market interest rates. The fair value of the warrant liabilities, while
outstanding, were based on a Black-Scholes option model using Level 3 inputs. There were no transfers between fair value
hierarchy levels during the three months ended March 31, 2024 and 2023.
The fair value of financial instruments measured on a
recurring basis is as follows (in thousands):
The following table provides a roll-forward of
short-term investments measured at fair value on a recurring basis using observable level 1 inputs for the three months ended March 31, 2024 and 2023 (in thousands):
The following table
provides a roll-forward of the derivative liabilities measured at fair value on a recurring basis using unobservable level 3 inputs for the three months ended March 31, 2024 and 2023 (in thousands):
|
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Rexahn Warrants |
Rexahn Warrants
The fair value of the warrant liabilities associated with the Rexahn Pharmaceuticals, Inc. (“Rexahn”) warrants was de minimis during the periods presented. The last of the Rexahn warrants classified as liabilities expired in April 2023 unexercised. See Note 2 – Merger for additional background.
There were no
financial instruments measured on a non-recurring basis for any of the periods presented.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements |
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07 - Segment Reporting (Topic 280): Improvements to
Reportable Segment Disclosures, which enhances reportable segment disclosure requirements, primarily through disclosures of significant segment expenses. This ASU is effective for fiscal years beginning after December 15, 2023,
including interim periods within those fiscal years, with early adoption permitted. The guidance must be applied retrospectively to all prior periods presented. The Company is currently evaluating the impact of adoption of this guidance
on its financial statements.
In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income
Tax Disclosures, which enhances income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance also includes certain other amendments to improve the effectiveness of income
tax disclosures. This ASU is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years and should be applied on a prospective basis, with retrospective application permitted. The
Company is currently evaluating the impact of adoption of this guidance on its financial statements.
|
Company Description and Summary of Significant Accounting Policies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Description and Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments Measured on a Recurring Basis |
The fair value of financial instruments measured on a
recurring basis is as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Investments Measured on a Recurring Basis |
The following table provides a roll-forward of
short-term investments measured at fair value on a recurring basis using observable level 1 inputs for the three months ended March 31, 2024 and 2023 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Liabilities Measured at Fair Value on a Recurring Basis |
The following table
provides a roll-forward of the derivative liabilities measured at fair value on a recurring basis using unobservable level 3 inputs for the three months ended March 31, 2024 and 2023 (in thousands):
|
Supplemental Balance Sheet Information (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid and Other Current Assets |
Prepaid and other assets consist of the following (in
thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net |
Property and equipment held for use by category are presented in the
following table (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses |
Accrued expenses consist of the following (in thousands):
|
Stock-based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense |
Stock-based
compensation expense was included in general and administrative and research and development costs as follows in the accompanying condensed statements of comprehensive loss for the three-month periods indicated below (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average Assumptions Used in Black-Scholes Option-pricing Model |
The weighted average assumptions used in the
Black-Scholes option pricing model are as follows during the three months ended March 31, 2024 and 2023:
|
License and Collaboration Agreements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
License and Collaboration Agreements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Contract Asset assets and Unbilled Receivables |
A reconciliation of the closing balance of the contract assets and unbilled receivables
associated with the Viatris License Agreement is as follows as of March 31, 2024 and 2023 (in thousands):
|
Net loss per share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss per share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Anti-dilutive Securities Excluded from Computation of Net Loss per Share |
The following potential common shares were not considered in the computation of diluted
net loss per share as their effect would have been anti-dilutive for the three-month periods ended presented below:
|
Company Description and Summary of Significant Accounting Policies, Liquidity (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Liquidity [Abstract] | ||
Cash and cash equivalents | $ 47,161 | $ 50,501 |
Company Description and Summary of Significant Accounting Policies, Segment Information (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
Segment
| |
Segment Information [Abstract] | |
Number of operating segments | 1 |
Company Description and Summary of Significant Accounting Policies, Concentration of Credit Risk (Details) $ in Millions |
Mar. 31, 2024
USD ($)
|
---|---|
Concentration of Credit Risk [Abstract] | |
Cash equivalents not eligible for coverage | $ 46.7 |
Company Description and Summary of Significant Accounting Policies, Short-term Investments (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Other than Temporary Impairment Losses, Investments [Abstract] | |
Impairment on investments | $ 0 |
Company Description and Summary of Significant Accounting Policies, Accounts Receivable and Allowances for Credit Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Accounts Receivable and Allowances for Credit Losses [Abstract] | ||
Bad debt expense | $ 0 | |
Allowance for credit losses | $ 0 | $ 0 |
Company Description and Summary of Significant Accounting Policies, Equity Investments Measured at Fair Value (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Equity Investments [Abstract] | ||
Unrealized loss | $ (10) | $ (27) |
Recurring Basis [Member] | Level 1 [Member] | Short-Term Investments [Member] | ||
Equity Investments [Abstract] | ||
Balance as of beginning of period | 15 | 49 |
Unrealized loss | (10) | (27) |
Balance as of end of period | $ 5 | $ 22 |
Company Description and Summary of Significant Accounting Policies, Derivative Liabilities Measured at Fair Value (Details) - Level 3 [Member] - Derivative Liabilities [Member] - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance as of beginning of period | $ 74 | $ 0 |
Change in fair value of derivative liabilities | 0 | 0 |
Balance as of end of period | $ 74 | $ 0 |
Company Description and Summary of Significant Accounting Policies, Rexahn Warrants (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Nonrecurring [Member] | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Financial instruments liabilities at fair value | $ 0 | $ 0 |
Merger, Contingent Value Rights Agreement (Details) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2024
USD ($)
Milestone
|
Sep. 30, 2021
Milestone
|
Jun. 30, 2021
Milestone
|
Nov. 05, 2020
Right
|
|
Contingent Value Rights Agreement [Abstract] | ||||
Contingent value rights payment period | 15 years | |||
Sum of cash consideration paid by a third party | 75.00% | |||
Parent IP deal period | 10 years | |||
Number of milestones accrued | 0 | |||
Number of potential milestones | 0 | 0 | ||
Payments for CVR | $ | $ 0 | |||
Rexahn [Member] | ||||
Contingent Value Rights Agreement [Abstract] | ||||
Number of contingent value right received per common stock | Right | 1 | |||
Rexahn [Member] | BioSense Global LLC [Member] | ||||
Contingent Value Rights Agreement [Abstract] | ||||
Percentage of payments received by Rexahn or its affiliates | 90.00% | |||
Rexahn [Member] | Zhejiang HaiChang Biotechnology Co., Ltd [Member] | ||||
Contingent Value Rights Agreement [Abstract] | ||||
Percentage of payments received by Rexahn or its affiliates | 90.00% |
Merger, Former Rexahn Warrants (Details) - Rexahn [Member] - $ / shares |
Mar. 31, 2024 |
Jan. 31, 2024 |
---|---|---|
Former Rexahn Warrants [Abstract] | ||
Number of warrants outstanding (in shares) | 0 | 58,597 |
Exercise price (in dollars per share) | $ 38.4 |
Commitments and Contingencies (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Facility Lease [Abstract] | ||
Monthly base rent | $ 3,000 | |
Rent expense | 9,000 | $ 9,000 |
Expected rent payment for the year end 2024 | $ 27,000 |
Supplemental Balance Sheet Information, Prepaid and Other Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Prepaid and Other Current Assets [Abstract] | ||
Prepaids | $ 1,471 | $ 997 |
Other | 89 | 102 |
Total prepaids and other assets | $ 1,560 | $ 1,099 |
Supplemental Balance Sheet Information, Property and Equipment, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Property and Equipment, net [Abstract] | |||
Total property and equipment | $ 25 | $ 25 | |
Less accumulated depreciation | (25) | (25) | |
Property and equipment, net | 0 | 0 | |
Depreciation expense | 0 | $ 1 | |
Equipment [Member] | |||
Property and Equipment, net [Abstract] | |||
Total property and equipment | 20 | 20 | |
Furniture [Member] | |||
Property and Equipment, net [Abstract] | |||
Total property and equipment | $ 5 | $ 5 |
Supplemental Balance Sheet Information, Accrued Expenses (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Accrued Expenses [Abstract] | ||
Payroll | $ 427 | $ 753 |
Professional services | 1,630 | 591 |
Research and development services and supplies | 1,497 | 400 |
Other | 95 | 71 |
Total | $ 3,649 | $ 1,815 |
Related Party Transactions (Details) - Jay Pepose [Member] - USD ($) |
3 Months Ended | ||||
---|---|---|---|---|---|
Apr. 08, 2022 |
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 01, 2022 |
|
Pre-Merger Financing and Waiver Agreements [Abstract] | |||||
Consulting fee payable in cash | $ 10,000 | $ 49,000 | $ 25,000 | ||
Number of stock option granted (in shares) | 50,000 | ||||
Vesting period | 36 months | ||||
Consulting expenses | $ 99,000 | $ 75,000 | |||
Consulting expenses unpaid | $ 99,000 | $ 25,000 | |||
Vested on March 31, 2023 [Member] | |||||
Pre-Merger Financing and Waiver Agreements [Abstract] | |||||
Vesting percentage | 25.00% |
Stockholders' Equity, At-The-Market Program (Details) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 11, 2021 |
Feb. 12, 2021 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
At-The-Market Program [Abstract] | ||||
Issuance costs | $ 61,000 | $ 0 | ||
2021 Shelf [Member] | Maximum [Member] | ||||
At-The-Market Program [Abstract] | ||||
Aggregate offering price | $ 125,000,000 | |||
ATM [Member] | ||||
At-The-Market Program [Abstract] | ||||
Shares sold (in shares) | 850,550 | 0 | ||
Aggregate gross proceeds | $ 2,200,000 | |||
Issuance costs | $ 165,000 | |||
ATM [Member] | Maximum [Member] | ||||
At-The-Market Program [Abstract] | ||||
Aggregate offering price | $ 40,000,000 |
Stockholders' Equity, Registered Direct Offering (Details) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Jun. 08, 2021 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Common Stock [Member] | |||
Registered Direct Offerings [Abstract] | |||
Warrants exercised (in shares) | 17,869 | ||
Registered Direct Offering [Member] | Warrants [Member] | |||
Registered Direct Offerings [Abstract] | |||
Number of RDO warrants sold at offering price (per unit) | 0.50 | ||
Exercise price (in dollars per share) | $ 6.09 | ||
Expiration period | 5 years | ||
Warrants outstanding (in shares) | 1,538,461 | ||
Warrants exercised (in shares) | 0 | ||
Minimum percentage of beneficial ownership | 4.99% | ||
Maximum percentage of beneficial ownership limitation | 9.99% | ||
Registered Direct Offering [Member] | Common Stock [Member] | |||
Registered Direct Offerings [Abstract] | |||
Shares sold (in shares) | 3,076,923 | ||
Warrants issued (in shares) | 1,538,461 | ||
Offering price (in dollars per share) | $ 4.875 |
Stock-based Compensation, Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Stock-based Compensation Expense [Abstract] | ||
Stock-based compensation | $ 985 | $ 804 |
General and Administrative [Member] | ||
Stock-based Compensation Expense [Abstract] | ||
Stock-based compensation | 775 | 468 |
Research and Development [Member] | ||
Stock-based Compensation Expense [Abstract] | ||
Stock-based compensation | $ 210 | $ 336 |
Stock-based Compensation, Weighted Average Assumptions Used in Black-Scholes Option-pricing Model (Details) - 2018 Equity Incentive Plan [Member] - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Weighted Average Assumptions Used in Black-Scholes Option-pricing Model [Abstract] | ||
Expected stock price volatility | 97.50% | 95.40% |
Expected life of options | 6 years 1 month 6 days | 6 years 1 month 6 days |
Expected dividend yield | 0.00% | 0.00% |
Risk free interest rate | 4.10% | 3.70% |
Share-based Compensation Arrangement by Share-based Payment Award [Abstract] | ||
Stock options vested (in shares) | 164,555 | 246,068 |
Weighted average fair value per share of options vesting (in dollars per share) | $ 2.82 | $ 2.44 |
Stock option exercised (in shares) | 0 | 0 |
Stock options forfeited (in shares) | 344,905 | 0 |
Stock-based Compensation, Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Restricted Stock Units [Abstract] | ||
Stock based compensation | $ 985 | $ 804 |
Restricted Stock Units [Member] | ||
Restricted Stock Units [Abstract] | ||
RSUs outstanding (in shares) | 993,112 | 801,700 |
Vested (in shares) | 39,282 | 0 |
Forfeited (in shares) | 82,670 | 0 |
Stock based compensation | $ 293 | $ 57 |
Restricted Stock Units [Member] | 2020 Equity Incentive Plan [Member] | ||
Restricted Stock Units [Abstract] | ||
Granted (in shares) | 313,364 | 291,584 |
Weighted average grant date fair value of RSUs granted (in dollars per share) | $ 2.69 | $ 3.5 |
Restricted Stock Units [Member] | 2020 Equity Incentive Plan [Member] | Maximum [Member] | ||
Restricted Stock Units [Abstract] | ||
Vesting period | 4 years | |
Restricted Stock Units [Member] | 2020 Equity Incentive Plan [Member] | Vesting Annually [Member] | ||
Restricted Stock Units [Abstract] | ||
Vesting percentage | 25.00% |
Stock-based Compensation, Common Stock Issued for Services (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024
USD ($)
BoardMember
shares
|
Mar. 31, 2023
USD ($)
shares
|
|
Common Stock Issued for Services [Abstract] | ||
Granted stock awards for services performed (in shares) | shares | 81,234 | 68,646 |
Number of board members granted stock for services | BoardMember | 4 | |
Share based compensation for services | $ | $ 245,000 | $ 247,000 |
Stock-based Compensation, General (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
shares
| |
General [Abstract] | |
Unrecognized stock-based compensation cost | $ | $ 7.3 |
Weighted average period to recognized stock-based compensation | 1 year 10 months 24 days |
2020 Plan Evergreen Provision [Member] | |
General [Abstract] | |
Common stock available for future issuance (in shares) | 2,010,740 |
2018 Equity Incentive Plan [Member] | |
General [Abstract] | |
Common stock available for future issuance (in shares) | 0 |
Apexian Sublicense Agreement (Details) - Apexian Sublicense Agreement [Member] - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2020 |
|
Sublicense Agreement [Abstract] | ||
Common stock issued (in shares) | 891,422 | |
Development and Regulatory Milestones [Member] | Maximum [Member] | ||
Sublicense Agreement [Abstract] | ||
Milestone payments | $ 11 | |
Sales Milestones [Member] | Maximum [Member] | ||
Sublicense Agreement [Abstract] | ||
Milestone payments | $ 20 |
License and Collaboration Agreements, BioSense License and Assignment Agreement (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
Milestone
| |
BioSense License and Assignments Agreement [Member] | |
Collaboration and License Agreement [Abstract] | |
Maximum amount of payments receivable for development, regulatory and commercial milestones | $ 84,500,000 |
Milestone payments received | 0 |
Processa License Agreement [Member] | |
Collaboration and License Agreement [Abstract] | |
Milestone payments received | $ 0 |
Number of times sales milestone payments | Milestone | 1 |
Percentage of milestone payments eligible to receive on sub-license agreement | 32.00% |
Net loss per share, Anti-dilutive Securities Excluded from Computation of Net Income (Loss) per Share (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Series A and RDO Warrants [Member] | ||
Net Loss Per Share [Abstract] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 7,204,299 | 7,204,299 |
Stock Options [Member] | ||
Net Loss Per Share [Abstract] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 4,827,433 | 3,601,427 |
Restricted Stock Units [Member] | ||
Net Loss Per Share [Abstract] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 993,112 | 291,584 |
Former Rexahn Warrants [Member] | ||
Net Loss Per Share [Abstract] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 0 | 60,713 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Taxes [Abstract] | ||
Effective tax rate | 0.00% | 0.00% |
Pre-tax income tax benefit | $ 0 | $ 0 |
Deferred Compensation Plan (Details) - 401K Plan [Member] - USD ($) |
3 Months Ended | ||
---|---|---|---|
Oct. 01, 2021 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Deferred Compensation Plan [Abstract] | |||
Employer matching contribution, first match | 100.00% | ||
Deferred compensation matched by employer, first match | 3.00% | ||
Additional employer matching contribution | 50.00% | ||
Additional deferred compensation matched by employer | 2.00% | ||
Employer contribution | $ 58,000 | $ 34,000 |
1 Year Ocuphire Pharma Chart |
1 Month Ocuphire Pharma Chart |
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