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What changed in Phio Pharmaceuticals Corp.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Phio Pharmaceuticals Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+212 added−174 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-01)

Top changes in Phio Pharmaceuticals Corp.'s 2024 10-K

212 paragraphs added · 174 removed · 130 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

48 edited+22 added−6 removed54 unchanged
Biggest changeIn November 2023, we announced the dosing of the first patient and the trial is currently open for the continued enrollment of patients. 3 Given our intention to focus our efforts and resources on our U.S. clinical trial with PH-762, we have completed the winding down process for our first-in-human clinical trial for PH-762 in France, which was limited to the treatment of patients with metastatic melanoma.
Biggest changeIn November 2023, we announced the dosing of the first patient under a previously cleared Investigational New Drug (“ IND ”) application by the U.S. Food and Drug Administration, and the trial is currently open for the continued enrollment of patients.
In September 2011, the Company entered into an agreement with Advanced RNA Technologies, LLC (“ Advirna ”), pursuant to which Advirna assigned to us its existing patent and technology rights related to the INTASYL technology in exchange for an annual maintenance fee, a one-time milestone payment upon the future issuance of the first patent with valid claims covering the assigned patent and technology rights and the issuance of shares of common stock of the Company equal to 5% of the Company’s fully-diluted shares outstanding at the time of issuance.
In September 2011, the Company entered into an agreement with Advanced RNA Technologies, LLC (“ Advirna ”), pursuant to which Advirna assigned to us its existing patent and technology rights related to the INTASYL technology in exchange for an annual maintenance fee, a one-time milestone payment upon the future issuance of the first patent with valid claims covering the assigned patent and technology rights and the issuance of shares of Common Stock equal to 5% of the Company’s fully-diluted shares outstanding at the time of issuance.
Further, the Company also granted back to Advirna a license under the assigned patent and technology rights for fields of use outside human therapeutics. Manufacturing and Supply We do not have any manufacturing capability and therefore we currently rely on and intend to continue to rely on contract manufacturing organizations to produce our product candidates in accordance with regulatory requirements.
Further, the Company also granted back to Advirna a license under the assigned patent and technology rights for fields of use outside human therapeutics. 5 Manufacturing and Supply We do not have any manufacturing capability and therefore we currently rely on and intend to continue to rely on contract manufacturing organizations to produce our product candidates in accordance with regulatory requirements.
Guidance developed at both EU level and at the national level in individual EU Member States concerning implementation and compliance practices are often updated or otherwise revised. 8 There is, moreover, a growing trend towards required public disclosure of clinical trial data in the EU which adds to the complexity of obligations relating to processing health data from clinical trials.
Guidance developed at both EU level and at the national level in individual EU Member States concerning implementation and compliance practices are often updated or otherwise revised. There is, moreover, a growing trend towards required public disclosure of clinical trial data in the EU which adds to the complexity of obligations relating to processing health data from clinical trials.
The amount of time taken by the FDA to approve a NDA or BLA will depend upon a number of factors, including whether the product candidate has received priority review, the quality of the submission and studies presented, the potential contribution that the compound will make in improving the treatment of the disease in question and agency resources.
The amount of time taken by the FDA to approve an NDA or BLA will depend upon a number of factors, including whether the product candidate has received priority review, the quality of the submission and studies presented, the potential contribution that the compound will make in improving the treatment of the disease in question and agency resources.
In 2012, we issued shares of common stock of the Company to Advirna equal to 5% of our fully-diluted shares outstanding at the time of issuance and paid $350,000 to Advirna upon the issuance of the first patent in 2014.
In 2012, we issued shares of Common Stock to Advirna equal to 5% of our fully-diluted shares outstanding at the time of issuance and paid $350,000 to Advirna upon the issuance of the first patent in 2014.
The SEC’s website address is http://www.sec.gov . The contents of this website, and our website, are not incorporated by reference into this report and should not be considered to be part of this report.
The SEC’s website address is http://www.sec.gov . The contents of this website, and our website, are not incorporated by reference into this report and should not be considered to be part of this report. 9
Following approval, the FDA and certain state agencies periodically inspects drug and biologic manufacturing facilities to ensure continued compliance with the cGMP. Our manufacturers will have to continue to comply with those requirements. Failure to comply with these requirements subjects the manufacturer to possible legal or regulatory action, such as suspension of manufacturing or recall or seizure of product.
Following approval, the FDA and certain state agencies periodically inspect drug and biologic manufacturing facilities to ensure continued compliance with the cGMP. Our manufacturers will have to continue to comply with those requirements. Failure to comply with these requirements subjects the manufacturer to possible legal or regulatory action, such as suspension of manufacturing or recall or seizure of product.
PH-894 PH-894 is an INTASYL compound that is designed to silence BRD4, a protein that controls gene expression in both T cells and tumor cells, thereby effecting the immune system as well as the tumor. Intracellular and/or commonly considered “undruggable” targets, such as BRD4, represent a challenge for small molecule and antibody therapies.
PH-894 PH-894 is an INTASYL compound that is designed to silence BRD4, a protein that controls gene expression in both T cells and tumor cells, thereby affecting the immune system as well as the tumor. Intracellular and/or commonly considered “undruggable” targets, such as BRD4, represent a challenge for small molecule and antibody therapies.
Furthermore, there are 40 patent applications, encompassing what we believe to be important new RNAi compounds and their use as therapeutics, chemical modifications of RNAi compounds that improve the compounds’ suitability for therapeutic uses (including delivery) and compounds directed to specific targets ( i.e. , that address specific disease states).
Furthermore, there are 26 patent applications, encompassing what we believe to be important new RNAi compounds and their use as therapeutics, chemical modifications of RNAi compounds that improve the compounds’ suitability for therapeutic uses (including delivery) and compounds directed to specific targets ( i.e. , that address specific disease states).
Our rights under the Advirna agreement will expire upon the later of: (i) the expiration of the last-to-expire of the “patent rights” (as defined therein) included in the Advirna agreement or (ii) the abandonment of the last-to-be abandoned of such patents, unless earlier terminated in accordance with the provisions of the Advirna agreement.
Our rights under the Advirna agreement will expire upon the later of: (i) the expiration of the last-to-expire of the “patent rights” (as defined therein) included in the Advirna agreement and (ii) the abandonment of the last-to-be abandoned of such patents, unless earlier terminated in accordance with the provisions of the Advirna agreement.
The trial is designed to evaluate the safety and tolerability of neoadjuvant use of intratumorally injected PH-762, assess the tumor response, and determine the dose or dose range for continued study of PH-762 and is expected to enroll up to 30 patients.
The trial (NCT 06014086) is designed to evaluate the safety and tolerability of neoadjuvant use of intratumorally injected PH-762, assess the tumor response, and determine the dose or dose range for continued study of PH-762 and is expected to enroll up to 30 patients.
The combination of INTASYL with antibodies may also increase the number of addressable drug targets. Unlike other antibody combination approaches, INTASYL can target multiple protein drug targets in a specific therapeutic dose, thereby enhancing potency while maintain a favorable tolerability and safety profile. 4 We have demonstrated preclinical efficacy with INTASYL in ACT applications.
The combination of INTASYL with antibodies may also increase the number of addressable drug targets. Unlike other antibody combination approaches, INTASYL can target multiple protein drug targets in a specific therapeutic dose, thereby enhancing potency while maintaining a favorable tolerability and safety profile. We have demonstrated preclinical efficacy with INTASYL in ACT applications.
Below we provide important information and context regarding each compound. PH-762 PH-762 is an INTASYL compound designed to reduce the expression of cell death protein 1 (“ PD-1 ”). PD-1 is a protein that inhibits T cells’ ability to kill cancer cells and is a clinically validated target in immunotherapy.
Below we provide important information and context regarding each compound. 2 PH-762 PH-762 is an INTASYL compound designed to reduce the expression of PD-1. PD-1 is a protein that inhibits T cells’ ability to kill cancer cells and is a clinically validated target in immunotherapy.
RNAi offers a novel approach to drug development because RNAi compounds can be designed to silence any one of the thousands of human genes, many of which are considered “undruggable” by traditional therapeutics. Our development efforts are based on our proprietary INTASYL self-delivering RNAi technology platform. It is a patented platform from which specific patented compounds are developed.
RNAi offers a novel approach to drug development because RNAi compounds can be designed to silence any one of the thousands of human genes, many of which are considered “undruggable” by traditional therapeutics. Our development efforts are based on our proprietary INTASYL small interfering RNA technology. It is a patented technology from which specific patented compounds are developed.
By treating T cells with our INTASYL compounds while they are being grown in the laboratory, we believe our INTASYL compounds can improve these immune cells to make them more effective in killing cancer. Preclinical data generated in collaboration with AgonOx, Inc.
By treating a patient’s T cells with our INTASYL compounds while they are being grown outside the body, we believe our INTASYL compounds can improve these immune cells to make them more effective in killing cancer. Preclinical data generated in collaboration with AgonOx, Inc.
These preclinical data indicate that PH-894 can reprogram T cells and other cells in the tumor microenvironment to provide enhanced immunotherapeutic activity. We have completed the investigational new drug application (“ IND ”)-enabling studies and are in the process of continuing to finalize the study reports required for an IND submission with PH-894.
These preclinical data indicate that PH-894 can reprogram T cells and other cells in the tumor microenvironment to provide enhanced immunotherapeutic activity. We have completed the IND-enabling studies and are in the process of finalizing the study reports required for an IND submission with PH-894.
Our efforts are focused on developing immuno-oncology therapeutics using our INTASYL platform. We have demonstrated preclinical activity against multiple gene targets including PD-1, BRD4, CTLA-4, TIGIT and CTGF and have demonstrated preclinical efficacy in both direct-to-tumor injection and adoptive cell therapy (“ ACT ”) applications with our INTASYL compounds. The following table summarizes our product pipeline.
We have demonstrated preclinical activity against multiple gene targets including PD-1, BRD4, CTLA-4, TIGIT and CTGF and have demonstrated preclinical efficacy in both direct-to-tumor injection and adoptive cell therapy (“ ACT ”) applications with our INTASYL compounds. The following table summarizes our product pipeline.
ITEM 1. BUSINESS Overview Phio Pharmaceuticals Corp. (“ Phio ,” “ we ,” “ our ” or the “ Company ”) is a clinical stage biotechnology company whose proprietary INTASYL™ self-delivering RNAi technology platform is designed to make immune cells more effective in killing tumor cells.
ITEM 1. BUSINESS Overview Phio Pharmaceuticals Corp. (“ Phio ,” “ we ,” “ our ” or the “ Company ”) is a clinical stage biotechnology company whose proprietary INTASYL® small interfering RNA gene silencing technology is designed to make immune cells more effective in killing tumor cells.
There are 13 patent families broadly covering both the composition and methods of use of our self-delivering INTASYL platform technology and uses of our INTASYL compounds targeting immune checkpoint, cellular differentiation and metabolism targets for ex vivo cell-based cancer immunotherapies. The INTASYL platform patents are scheduled to expire between 2029 and 2038.
There are 19 patent families broadly covering both the composition and methods of use of our self-delivering INTASYL platform technology and uses of our INTASYL compounds targeting immune checkpoints for cancer therapy, as well as cellular differentiation and metabolism targets for Adoptive Cell Therapy cancer immunotherapies. The INTASYL technology patents are scheduled to expire between 2029 and 2038.
Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning safety or efficacy of the product occur following approval. 7 The labeling, advertising, promotion, marketing and distribution of a drug or biologic product also must be in compliance with FDA and Federal Trade Commission requirements which include, among others, standards and regulations for off-label promotion, industry sponsored scientific and educational activities, promotional activities involving the internet, and direct-to-consumer advertising.
The labeling, advertising, promotion, marketing and distribution of a drug or biologic product also must be in compliance with FDA and Federal Trade Commission requirements which include, among others, standards and regulations for off-label promotion, industry sponsored scientific and educational activities, promotional activities involving the internet, and direct-to-consumer advertising.
European Union Data Laws For Review and Approval of Drugs in the European Union Including France The collection and use of personal health data and other personal information in the European Union (“ EU ”) is governed by the provisions of the General Data Protection Regulation (“ GDPR ”), which came into force in May 2018, and related implementing laws in individual EU Member States.
In the European Union, the United Kingdom, Canada and Australia, regulatory requirements and approval processes are similar, in principle, to those in the U.S. 7 European Union Data Laws for Review and Approval of Drugs in the European Union Including France The collection and use of personal health data and other personal information in the European Union (“ EU ”) is governed by the provisions of the General Data Protection Regulation (“ GDPR ”), which came into force in May 2018, and related implementing laws in individual EU Member States.
We believe that our INTASYL platform provides the following benefits including, but not limited to: · Ability to target a broad range of cell types and tissues; · Ability to target both intracellular and extracellular protein targets; · Efficient uptake by target cells, avoiding the need for assisted delivery; · Sustained, or long-term, effect in vivo ; · Ability to target multiple genes in one drug product; · Favorable clinical safety profile with local administration; and · Readily manufactured under current good manufacturing practices. 2 Our Pipeline INTASYL compounds are designed to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems, and are designed to make immune cells more effective in killing tumor cells.
We believe that our INTASYL technology provides the following benefits including, but not limited to: · Ability to target a broad range of cell types and tissues; · Ability to target both intracellular and extracellular protein targets; · Efficient uptake by target cells, avoiding the need for assisted delivery; · Sustained, or long-term, effect in vivo ; · Ability to target multiple genes in one drug product; · Favorable clinical safety profile with local administration; and · Readily manufactured under current good manufacturing practices.
The FDA also may require post-marketing testing to monitor the safety and efficacy of approved products or place conditions on any approvals that could restrict the therapeutic claims and commercial applications of these products.
The collection of these data, as well as the preparation of applications for review by the FDA involve significant time and expense. The FDA also may require post-marketing testing to monitor the safety and efficacy of approved products or place conditions on any approvals that could restrict the therapeutic claims and commercial applications of these products.
To obtain FDA marketing authorization, a company must submit to the FDA the results of the preclinical and clinical testing, together with, among other things, detailed information on the manufacture and composition of the product candidate, in the form of a new drug application (“ NDA ”), or, in the case of a biologic, a biologics license application (“ BLA ”).
A company must submit to the FDA a clinical protocol, accompanied by the approval of the Institutional Review Board (“ IRB ”) at the institutions participating in the trials, prior to commencement of each clinical trial. 6 To obtain FDA marketing authorization, a company must submit to the FDA the results of the preclinical and clinical testing, together with, among other things, detailed information on the manufacture and composition of the product candidate, in the form of a new drug application (“ NDA ”), or, in the case of a biologic, a biologics license application (“ BLA ”).
The cost of compliance with these laws and regulations could be significant and may adversely affect capital expenditures to the extent we are required to procure expensive capital equipment to meet regulatory requirements. However, to date, compliance with such environmental laws and regulations has not had a material impact on our capital expenditures.
The cost of compliance with these laws and regulations could be significant and may adversely affect capital expenditures to the extent we are required to procure expensive capital equipment to meet regulatory requirements.
Our executive offices are located at 257 Simarano Drive, Suite 101, Marlborough, MA 01752, and our telephone number is (508) 767-3861. 9 The Company’s website address is http://www.phiopharma.com .
Our executive offices are located at 11 Apex Drive, Suite 300A PMB 2006, Marlborough, Massachusetts 01752 and our telephone number is (508) 767-3861. The Company’s website address is http://www.phiopharma.com .
Since the initial discovery of RNAi, drug delivery has been the primary challenge in developing RNAi-based therapeutics. Other siRNA technologies require cell targeting chemical conjugates which limit delivery to specific cell types.
The compounds are designed to effectively silence genes that tumors use to evade the immune system. 1 Since the initial discovery of RNAi, drug delivery has been the primary challenge in developing RNAi-based therapeutics. Other siRNA technologies require cell targeting chemical conjugates which limit delivery to specific cell types.
INTASYL compounds are comprised of a unique sequence of chemically modified nucleotides (modified small interfering RNA, or siRNAs) that target a broad range of cell types and tissues. The compounds are designed to effectively silence genes that tumors use to evade the immune system.
INTASYL compounds are comprised of a unique sequence of chemically modified nucleotides (modified small interfering RNA, or siRNAs) that target a broad range of cell types and tissues.
A combined summary of these patents and patent applications is set forth below in the following table: Pending Applications Issued Patents United States 14 33 Canada 3 2 Europe 6 26 Japan 7 12 Other Markets 10 8 Our portfolio includes 81 issued patents, 73 of which cover our INTASYL platform.
A combined summary of these patents and patent applications is set forth below in the following table: Pending Applications Issued Patents United States 11 32 Canada 2 3 Europe 7 25 Japan 5 10 Other Markets 1 7 Our portfolio includes 77 issued patents, 69 of which cover our INTASYL technology.
The patents that may issue from these pending patent applications will, if issued, be set to expire between 2029 and 2042, not including any patent term extensions that may be afforded under the Federal Food, Drug, and Cosmetic Act (“ FFDCA ”) (and the equivalent provisions in foreign jurisdictions) for any delays incurred during the regulatory approval process relating to human drug products (or processes for making or using human drug products). 5 Key Intellectual Property License Agreements As we develop our own proprietary compounds, we continue to evaluate our in-licensed portfolio as well as the field for new technologies that could be in-licensed to further enhance our intellectual property portfolio and unique intellectual property position.
The patents that may issue from these pending patent applications will, if issued, be set to expire between 2029 and 2044, not including any patent term extensions that may be afforded under the Federal Food, Drug, and Cosmetic Act (“ FFDCA ”) (and the equivalent provisions in foreign jurisdictions) for any delays incurred during the regulatory approval process relating to human drug products (or processes for making or using human drug products).
RNA interference, or RNAi, is a biological process that inhibits the expression of genes or the production of proteins. Diseases are often related to the incorrect protein being made, excessive amounts of a specific protein being made, or the correct protein being made, but at the wrong location or time.
Diseases are often related to the incorrect protein being made, excessive amounts of a specific protein being made, or the correct protein being made, but at the wrong location or time.
Under the Clinical Co-Development Agreement, we agreed to reimburse AgonOx up to $4 million in expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and other advanced solid tumors. As of December 31, 2023, there was approximately $2.8 million of remaining costs not yet incurred under the Clinical Co-Development Agreement.
Under the Clinical Co- Development Agreement, we had agreed to reimburse AgonOx up to $4 million in expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and other advanced solid tumors. In May 2024, we terminated the Clinical Co-Development Agreement with AgonOx, which such termination was effective immediately.
The approval process varies from one regulatory authority to another and the time may be longer or shorter than that required for FDA approval. In the European Union, Canada and Australia, regulatory requirements and approval processes are similar, in principle, to those in the U.S.
The approval process varies from one regulatory authority to another and the time may be longer or shorter than that required for FDA approval.
We assess our license agreements on an ongoing basis and may from time to time terminate licenses to technology that we do not intend to employ in our technology platforms, or in our product discovery or development activities.
We assess our license agreements on an ongoing basis and may from time to time terminate licenses to technology that we do not intend to employ in our technology platforms, or in our product discovery or development activities. 4 Patents and Patent Applications We are actively seeking protection for our intellectual property and are prosecuting a number of patents and pending patent applications covering our compounds and technologies.
Adverse patient experiences with the product must be reported to the FDA and could result in the imposition of marketing restrictions through labeling changes or market removal.
Adverse patient experiences with the product must be reported to the FDA and could result in the imposition of marketing restrictions through labeling changes or market removal. Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning safety or efficacy of the product occur following approval.
Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility. Actual bonus payouts are based on performance. A majority of Phio’s employees have obtained advanced degrees in their professions and we support our employees’ further development with individualized development plans, mentoring, coaching, group training, conference attendance and financial support including tuition reimbursement.
A majority of Phio’s employees have obtained advanced degrees in their professions and we support our employees’ further development with individualized development plans, mentoring, coaching, group training, and conference attendance.
We were incorporated in the state of Delaware in 2011 as RXi Pharmaceuticals Corporation. On November 19, 2018, we changed our name to Phio Pharmaceuticals Corp., to reflect our transition from a platform company to one that is fully committed to developing groundbreaking immuno-oncology therapeutics.
On November 19, 2018, we changed our name to Phio Pharmaceuticals Corp., to reflect our transition from a platform company to one that is fully committed to developing groundbreaking immuno-oncology therapeutics. In 2023, we implemented a cost rationalization program driven by our transition from discovery research to product development.
The primary trial objectives are to evaluate the safety and to study the potential for enhanced therapeutic benefit from the administration of PH-762 treated DP TIL. We announced the first patient was dosed in August 2023 and the trial is open for the continued enrollment of patients.
The primary trial objectives were to evaluate the safety and to study the potential for enhanced therapeutic benefit from the administration of PH-762 treated DP TIL. AgonOx had enrolled three patients. The first two patients were treated with DP TIL only and a third patient was treated with a combination of DP TIL and PH-762.
Due to INTASYL’s ease of administration, we have shown that our compounds can easily be incorporated into current ACT manufacturing processes. In ACT, T cells are usually taken from a patient's own blood or tumor tissue, grown in large numbers in a laboratory, and then given back to the patient to help the immune system fight cancer.
In ACT, immune cells such as T cells, natural killer cells or dendritic cells are taken from a patient’s or donor’s blood or tumor tissue, grown in large numbers in a laboratory, and then given back to the patient to help the immune system fight cancer.
Food and Drug Administration (“ FDA ”) regulates pharmaceutical and biologic products under the FFDCA, the Public Health Service Act and other federal statutes and regulations. 6 To obtain approval of our future product candidates from the FDA, we must, among other requirements, submit data supporting safety and efficacy for the intended indication as well as detailed information on the manufacture and composition of the product candidate.
To obtain approval of our future product candidates from the FDA, we must, among other requirements, submit data supporting safety and efficacy for the intended indication as well as detailed information on the manufacture and composition of the product candidate. In most cases, this will require extensive laboratory tests, preclinical studies and clinical trials.
We believe these data further support the potential for PH-762 to provide a strong local immune response without the dose immune-related adverse effects seen with systemic antibody therapy.
We believe these data further support the potential for PH-762 to provide a strong local immune response without the dose immune-related adverse effects seen with systemic antibody therapy.PH-762 is currently being evaluated in a U.S. multi-center Phase 1b dose-escalating clinical trial through the intratumoral injection of PH-762 for the treatment of patients with cutaneous squamous cell carcinoma, melanoma and Merkel cell carcinoma.
Phase 3 trials typically involve additional testing for safety and clinical efficacy in an expanded population at multiple test sites. A company must submit to the FDA a clinical protocol, accompanied by the approval of the Institutional Review Board (“ IRB ”) at the institutions participating in the trials, prior to commencement of each clinical trial.
Phase 3 trials typically involve additional testing for safety and clinical efficacy in an expanded population at multiple test sites.
Corporate Information Effective January 26, 2023, the Company completed a 1-for-12 reverse stock split of the Company’s outstanding common stock. The reverse stock split did not reduce the number of authorized shares of the Company’s common or preferred stock. All share and per share amounts have been adjusted to give effect to the reverse stock split.
Corporate Information Effective July 5, 2024, the Company completed a 1-for-9 reverse stock split of the Company’s outstanding Common Stock, including reclassifying an amount equal to the reduction in par value to additional paid-in capital. The reverse stock split did not reduce the number of authorized shares of the Company’s common or preferred stock.
We are also eligible to receive certain future development milestones and low single-digit sales-based royalty payments from AgonOx’s licensing of its DP TIL technology. PH-762 treated DP TIL are being evaluated in a Phase 1 clinical trial in the U.S. with up to 18 patients with advanced melanoma and other advanced solid tumors by AgonOx.
Pursuant to the terms of the Clinical Co-Development Agreement, each of the Company and AgonOx shall be responsible for its own costs and expenses incurred in connection with the wind-down of the Phase 1 clinical trial. 3 Prior to the termination of the Clinical Co-Development Agreement with AgonOx, PH-762 treated DP TIL were being evaluated in a Phase 1 clinical trial in the U.S. with up to 18 patients with advanced melanoma and other advanced solid tumors by AgonOx.
Our ability to identify, attract, retain and integrate additional qualified key personnel is also critical to our success and the competition for skilled research, product development, regulatory and technical personnel is intense. To attract qualified applicants, we offer a total rewards package consisting of base salary and cash target bonus, a comprehensive benefit package and equity compensation for every employee.
We currently outsource substantially all preclinical and clinical trial work to third party contract research organizations and drug manufacturing contractors. Our ability to identify, attract, retain and integrate additional qualified key personnel is also critical to our success and the competition for skilled research, product development, regulatory and technical personnel is intense.
In 2023, the Company implemented a cost rationalization program driven by its transition from discovery research to product development. This resulted in a decision not to renew the lease for office and laboratory space in Marlborough, Massachusetts, which will expire on March 31, 2024.
This resulted in a decision not to renew the lease for office and laboratory space in Marlborough, Massachusetts, which expired on March 31, 2024. Beginning in April 2024, we have continued operations as a remote business with a laboratory facility in Worcester, Massachusetts.
We continually evaluate our business needs and weigh the use of in-house expertise and capacity with outsourced expertise and capacity. We currently outsource substantially all preclinical and clinical trial work to third party contract research organizations and drug manufacturing contractors.
None of our employees are represented by a labor union or covered by a collective bargaining agreement, nor have we experienced any work stoppages. We continually evaluate our business needs and weigh the use of in-house expertise and capacity with outsourced expertise and capacity. We currently outsource the functions of our accounting and finance department to a third-party consulting organization.
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Beginning in April of 2024, we expect to continue operations as a remote business with a small laboratory facility in Worcester, Massachusetts for 321 square feet of space that commenced on March 1, 2024. Additionally, we rationalized discovery research personnel resulting in headcount reduction by approximately 36%.
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The Company operates with a single operating segment and a single reporting segment – the Clinical segment. PH-762 is an INTASYL compound designed to reduce the expression of cell death protein 1 (“PD-1”).
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Expense reductions have been redirected to funding the Phase 1b clinical trial with PH-762 directed toward skin cancer. INTASYL Platform Overall, RNA is involved in the synthesis, regulation and expression of proteins. RNA takes the instructions from DNA and turns those instructions into proteins within the body’s cells.
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In May and December 2024, respectively, a Safety Monitoring Committee (SMC) reviewed data from the first and second dose cohorts treated with PH-762, and in both instances recommended escalation to the next dose concentration. A total of 7 patients with cutaneous carcinomas have been enrolled in dose cohorts 1 and 2.
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Safety data from the initial cohort of three patients in the French clinical trial were evaluated by a data monitoring committee in the first quarter of 2023. The safety data review disclosed no dose-limiting toxicity, and no drug-related severe or serious adverse events.
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The second cohort enrolled a total of 4 patients who were diagnosed with cutaneous squamous cell carcinoma. At Day 36 (tumor excision), while patients in the first cohort had stable disease, a complete response (100% tumor clearance) was reported for 2 patients with cutaneous squamous cell carcinoma.
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Patents and Patent Applications We are actively seeking protection for our intellectual property and are prosecuting a number of patents and pending patent applications covering our compounds and technologies.
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Partial response (90% tumor clearance) was reported for 1 patient with cutaneous squamous cell carcinoma and 1 patient had stable disease, having not progressed. In this trial to date, intratumoral injection of PH-762 has been well tolerated in all enrolled patients and there were no dose-limiting toxicities or clinically relevant treatment-emergent adverse effects in the patients receiving intratumoral PH-762.
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In most cases, this will require extensive laboratory tests, preclinical studies and clinical trials. The collection of these data, as well as the preparation of applications for review by the FDA involve significant time and expense.
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The third dose cohort is fully enrolled and patients in this cohort are currently in the treatment or follow-up phase of the study. We expect to complete enrollment of all patients in the study in the third quarter of 2025. INTASYL Technology Overall, RNA is involved in the synthesis, regulation and expression of proteins.
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Human Capital Management As of December 31, 2023, we had eight full-time employees and one part-time employee at our facility in Marlborough, Massachusetts. None of our employees are represented by a labor union or covered by a collective bargaining agreement, nor have we experienced any work stoppages.
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RNA takes the instructions from DNA and turns those instructions into proteins within the body’s cells. RNA interference, or RNAi, is a biological process that inhibits the expression of genes or the production of proteins.
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Our Pipeline INTASYL compounds are designed to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems, and are designed to make immune cells more effective in killing tumor cells. Our efforts are focused on developing immuno-oncology therapeutics using our INTASYL technology.
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The trial (NCT 06014086) is designed to evaluate the safety and tolerability of neoadjuvant use of intratumorally injected PH-762, assess the tumor response, and determine the dose or dose range for continued study of PH-762 and is expected to enroll up to 30 patients.
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In May and December 2024, respectively, a Safety Monitoring Committee (SMC) reviewed data from the first and second dose cohorts treated with PH-762, and in both instances recommended escalation to the next dose concentration. A total of 7 patients with cutaneous carcinomas have been enrolled in dose cohorts 1 and 2.
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The second cohort enrolled a total of 4 patients who were diagnosed with cutaneous squamous cell carcinoma. At Day 36 (tumor excision), while patients in the first cohort had stable disease, a complete response (100% tumor clearance) was reported for 2 patients with cutaneous squamous cell carcinoma.
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Partial response (90% tumor clearance) was reported for 1 patient with cutaneous squamous cell carcinoma and 1 patient had stable disease, having not progressed. Intratumoral injection of PH-762 has been well tolerated in all patients enrolled in the trial to date. There were no dose-limiting toxicities or clinically relevant treatment-emergent adverse effects in the patients receiving intratumoral PH-762.
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The third dose cohort is fully enrolled and patients in this cohort are currently in the treatment or follow-up phase of the study. We expect to complete enrollment of all patients in the study in the third quarter of 2025.
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Due to INTASYL’s ease of administration, we have shown that our compounds can easily be incorporated into current ACT manufacturing processes.
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Effective as of the date of termination, the Clinical Co-Development Agreement and our continuing obligations and those of AgonOx thereunder were terminated in their entirety.
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We are no longer required to provide financial support for the development of costs incurred under the Clinical Co-Development Agreement and we are no longer entitled to future development milestones or royalty payments from AgonOx’s licensing of its DP TIL technology.
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We agreed to pay to AgonOx all monetary obligations that accrued prior to the termination of the Clinical Co-Development Agreement. Remaining payments to be made to AgonOx as of December 31, 2024 totaled $34,320, which primarily relate to accrued obligations for patient fees and other miscellaneous costs as of the date of termination.
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Clinical results for the single patient who received a combination of DP TIL and PH-762 showed tumor size reductions of 65%, 100% and 81%, respectively, in three melanoma lesions.
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Key Intellectual Property License Agreements As we develop our own proprietary compounds, we continue to evaluate our in-licensed portfolio as well as the field for new technologies that could be in-licensed to further enhance our intellectual property portfolio and unique intellectual property position.
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The U.S. Food and Drug Administration (“ FDA ”) regulates pharmaceutical and biologic products under the FFDCA, the Public Health Service Act and other federal statutes and regulations.
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However, to date, compliance with such environmental laws and regulations has not had a material impact on our capital expenditures. 8 Human Capital Management As of December 31, 2024, we had five full-time employees. One employee utilizes a rented lab space, and the other four employees are primarily remote.
Added
To attract qualified applicants, we offer a total rewards package consisting of base salary and cash target bonus, a comprehensive benefit package and equity compensation. Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility. Actual bonus payouts are based on performance.
Added
All share and per share amounts have been adjusted to give effect to the reverse stock split. We were incorporated in the state of Delaware in 2011 as RXi Pharmaceuticals Corporation.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

40 edited+25 added−18 removed117 unchanged
Biggest changeThe patent granting authorities have upheld stringent standards for the RNAi patents that have been prosecuted so far and, consequently, pending patents that we have licensed and those that we own may continue to experience long and difficult prosecution challenges and may ultimately issue with much narrower claims than those in the pending applications.
Biggest changeThe patent granting authorities have upheld stringent standards for the RNAi patents that have been prosecuted so far and, consequently, pending patents that we have licensed and those that we own may continue to experience long and difficult prosecution challenges and may ultimately issue with much narrower claims than those in the pending applications. 16 In addition, others may challenge the patents or patent applications that we currently license or may license in the future or that we own and, as a result, these patents could be narrowed, invalidated or rendered unenforceable, which would negatively affect our ability to exclude others from using the technologies described in these patents.
ITEM 1A. RISK FACTORS Risks Relating to Our Business and Industry We are dependent on the success of our INTASYL technology platform, and our product candidates based on this platform, which is unproven and may never lead to approved and marketable products. Our efforts have been focused on the development of product candidates based on our INTASYL technology platform.
ITEM 1A. RISK FACTORS Risks Relating to Our Business and Industry We are dependent on the success of our INTASYL technology, and our product candidates based on this platform, which is unproven and may never lead to approved and marketable products. Our efforts have been focused on the development of product candidates based on our INTASYL technology.
These requirements are enforced by the FDA through periodic inspections of the manufacturing facilities and can result in enforcement action, such as warning letters, fines and suspension of production if they are found to not be in compliance with the regulations.
These requirements are enforced by the FDA through periodic inspections of the manufacturing facilities and can result in enforcement action, such as warning letters, fines and suspension of production if they are found not to be in compliance with the regulations.
Even if claims asserted against us are unsuccessful, they may divert management’s attention from our operations and we may have to incur substantial costs to defend such claims. Any of these outcomes could materially impact our business and financial condition. 14 We rely upon third parties for the manufacture of the clinical supply for our product candidates.
Even if claims asserted against us are unsuccessful, they may divert management’s attention from our operations and we may have to incur substantial costs to defend such claims. Any of these outcomes could materially impact our business and financial condition. We rely upon third parties for the manufacture of the clinical supply for our product candidates.
If an ownership change occurs and our ability to use our net operating loss and tax credit carryforwards is materially limited, it could harm our future operating results by effectively increasing our future tax obligations. Risks Relating to Our Securities The price of our common stock has been and may continue to be volatile.
If an ownership change occurs and our ability to use our net operating loss and tax credit carryforwards is materially limited, it could harm our future operating results by effectively increasing our future tax obligations. 19 Risks Relating to Our Securities The price of our Common Stock has been and may continue to be volatile.
Therefore, it is difficult to accurately predict challenges we may face with our product candidates as they move through the discovery, preclinical and clinical development stages. We will spend large amounts of money developing our INTASYL platform technology and may never succeed in obtaining regulatory approval.
Therefore, it is difficult to accurately predict challenges we may face with our product candidates as they move through the discovery, preclinical and clinical development stages. We will spend large amounts of money developing our INTASYL technology and may never succeed in obtaining regulatory approval.
We have completed multiple assessments of the available net operating loss and tax credit carryforwards under Sections 382 and 383 of the Code through the year ended December 31, 2023 and determined that we underwent multiple ownership changes during the period from inception to 2023.
We have completed multiple assessments of the available net operating loss and tax credit carryforwards under Sections 382 and 383 of the Code through the year ended December 31, 2024 and determined that we underwent multiple ownership changes during the period from inception to 2024.
If we are not successful in bringing an INTASYL product candidate to market, it could negatively impact our business and financial condition and we may not be able to identify and successfully implement an alternative product development strategy.
If we are not successful in bringing an INTASYL product candidate to market, it will negatively impact our business and financial condition and we may not be able to identify and successfully implement an alternative product development strategy.
If we are unable to derive value from our licensed or owned intellectual property, it may have a materially and adverse impact on our business, results of operations and financial condition.
If we are unable to derive value from our licensed or owned intellectual property, it may have a material and adverse impact on our business, results of operations and financial condition.
Our efforts to enforce and maintain our intellectual property rights may not be successful and may result in substantial costs and diversion of management and key employee’s time. If we are unable to defend our licensed or owned intellectual property, it may have a materially and adverse impact on our business, results of operations and financial condition.
Our efforts to enforce and maintain our intellectual property rights may not be successful and may result in substantial costs and diversion of management and key employees’ time. If we are unable to defend our licensed or owned intellectual property, it may have a material and adverse impact on our business, results of operations and financial condition.
Any such inability to continue as a going concern may result in our common stockholders losing their entire investment. There is no guarantee that we will become profitable or secure additional financing. 18 Our ability to utilize net operating loss carryforwards and other tax benefits may be limited.
Any such inability to continue as a going concern may result in our common stockholders losing their entire investment. There is no guarantee that we will become profitable or secure additional financing. Our ability to utilize net operating loss carryforwards and other tax benefits may be limited. We have historically incurred net losses and may never achieve or sustain profitability.
We anticipate that we will need to raise substantial amounts of money to fund a variety of future activities integral to the development of our business, which may include but is not limited to the following: · To conduct research and development to successfully develop our product candidates; · To obtain regulatory approval for our product candidates; · To file and prosecute patent applications and to defend and assess patents to protect our technologies; · To retain qualified employees, particularly in light of intense competition for qualified personnel; · To manufacture products ourselves or through third parties; · To market our products, either through building our own sales and distribution capabilities or relying on third parties; and · To acquire new technologies, licenses or products. 17 We are dependent on obtaining funding from third parties, such as proceeds from the issuance of debt, sale of equity or strategic opportunities, in order to maintain our operations.
We anticipate that we will need to raise substantial amounts of money to fund a variety of future activities integral to the development of our business, which may include but is not limited to the following: · To conduct research and development to successfully develop our product candidates; · To obtain regulatory approval for our product candidates; · To file and prosecute patent applications and to defend and assess patents to protect our technologies; · To retain qualified employees, particularly in light of intense competition for qualified personnel; · To manufacture products ourselves or through third parties; · To market our products, either through building our own sales and distribution capabilities or relying on third parties; and · To acquire new technologies, licenses or products.
Because we are at an early stage of development and in the absence of product revenue as a measure of operating performance, we anticipate that the market price for our common stock may be influenced by, but not limited to, such factors as: · Announcements regarding the initiation or completion, and the results of preclinical studies and clinical trials of our product candidates; · Announcements regarding clinical trial results or development announcements concerning our competitors product candidates; · Regulatory or legal developments in the United States; · The recruitment or departure of key personnel; · The issuance of competitive patents or disallowance or loss of our patent rights; · Our ability to raise additional capital and the terms on which additional capital is raised; · To acquire new technologies, licenses or products; and · General economic, industry and market conditions. 19 The stock markets, in general, and the markets for drug delivery and pharmaceutical company stocks, in particular, have experienced extreme volatility, that has often been unrelated to the operating performance of these particular companies.
Because we are at an early stage of development and in the absence of product revenue as a measure of operating performance, we anticipate that the market price for our Common Stock may be influenced by, but not limited to, such factors as: · Announcements regarding the initiation or completion, and the results of preclinical studies and clinical trials of our product candidates; · Announcements regarding clinical trial results or development announcements concerning our competitors’ product candidates; · Regulatory or legal developments in the United States; · The recruitment or departure of key personnel; · The issuance of competitive patents or disallowance or loss of our patent rights; · Our ability to raise additional capital and the terms on which additional capital is raised; · To acquire new technologies, licenses or products; and · General economic, industry and market conditions.
It is possible that we may become a party to such proceedings. 16 If a claim should be brought against us and we are found to infringe the rights of others, we may be required to pay substantial damages, be forced to stop the development of product candidates affected by the claim, and/or establish licenses or similar arrangements.
If a claim should be brought against us and we are found to infringe the rights of others, we may be required to pay substantial damages, be forced to stop the development of product candidates affected by the claim, and/or establish licenses or similar arrangements.
The biotechnology and pharmaceutical industries are intensely competitive, contain a high degree of risk and there are many other companies actively engaged in the discovery, development and commercialization of products that may compete with our product candidates.
We are subject to significant competition and may not be able to compete successfully. The biotechnology and pharmaceutical industries are intensely competitive, contain a high degree of risk and there are many other companies actively engaged in the discovery, development and commercialization of products that may compete with our product candidates.
This could be difficult, costly or impossible, and our preclinical studies or clinical trials may need to be extended, delayed, terminated or repeated, and we may not be able to obtain regulatory approval in a timely fashion, or at all, for the applicable drug or biologic candidate, or to commercialize such drug or biologic candidate being tested in such studies or trials.
This could be difficult, costly or impossible, and our preclinical studies or clinical trials may need to be extended, delayed, terminated or repeated, and we may not be able to obtain regulatory approval in a timely fashion, or at all, for the applicable drug or biologic candidate, or to commercialize such drug or biologic candidate being tested in such studies or trials. 11 Changes in U.S. and international trade policies may adversely impact our business and operating results.
To the extent that we are required and are able to obtain multiple licenses from third parties to develop or commercialize a product candidate, the aggregate licensing fees and milestones and royalty payments made to these parties may materially reduce our economic returns or even cause us to abandon development or commercialization of a product candidate.
To the extent that we are required and are able to obtain multiple licenses from third parties to develop or commercialize a product candidate, the aggregate licensing fees and milestones and royalty payments made to these parties may materially reduce our economic returns or even cause us to abandon development or commercialization of a product candidate. 17 Risks Relating to Our Financial Condition We will require substantial additional funds to complete our research and development activities.
In addition, global credit and financial markets have experienced extreme volatility and disruptions in the past several years and the foregoing factors have led to and may continue to cause diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, uncertainty about economic stability and increased inflation. 15 There can be no assurance that deterioration in credit and financial markets and confidence in economic conditions will not occur.
In addition, global credit and financial markets have experienced extreme volatility and disruptions in the past several years and the foregoing factors have led to and may continue to cause diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, uncertainty about economic stability and increased inflation.
If we are required to switch suppliers or manufacturers, we will be required to verify that the new supplier or manufacturer maintains facilities and processes in line with cGMP regulations, which may result in delays, additional expenses, and may have a material adverse effect on our ability to complete the development of our product candidates.
If we are required to switch suppliers or manufacturers, we will be required to verify that the new supplier or manufacturer maintains facilities and processes in line with cGMP regulations, which may result in delays, additional expenses, and may have a material adverse effect on our ability to complete the development of our product candidates. 15 Unstable market and economic conditions, including elevated and sustained inflation, may have serious adverse consequences on our business, financial condition and stock price.
Alternatively, it may be necessary for us to raise additional funds through public or private financings. Additional funds may not be available on terms that are favorable to us and, in the case of equity financings, may result in dilution to our stockholders.
Additional funds may not be available on terms that are favorable to us and, in the case of equity financings, may result in dilution to our stockholders.
We cannot assure you that additional financing will be available to us on acceptable terms, or at all. If we cannot, or are limited in the ability to, issue equity, incur debt or enter into strategic collaborations, we may be unable to fund the discovery and development of our product candidates or improve our technology.
If we cannot, or are limited in the ability to, issue equity, incur debt or enter into strategic collaborations, we may be unable to fund the discovery and development of our product candidates or improve our technology.
We are subject to potential liabilities from clinical testing and future product liability claims. The use of our product candidates in clinical trials and, if any of our product candidates receive regulatory approval, the sale of our product candidates for commercial use expose us to the risk of product liability claims.
The use of our product candidates in clinical trials and, if any of our product candidates receive regulatory approval, the sale of our product candidates for commercial use exposes us to the risk of product liability claims.
If we are not able to successfully develop our product candidates, we may be forced to abandon or delay our development efforts, which may materially and adversely affect our business, financial condition, and results of operations. 10 Further, the FDA may not accept the results of our preclinical studies or clinical trials and may require us to complete additional studies or impose stricter approval conditions than we expect, which could impact the value of a particular program, the approvability or commercialization of the particular product candidate or product and our Company in general.
Further, the FDA may not accept the results of our preclinical studies or clinical trials and may require us to complete additional studies or impose stricter approval conditions than we expect, which could impact the value of a particular program, the approvability or commercialization of the particular product candidate or product and our Company in general.
Further, many patents in the fields we are pursuing have already been exclusively licensed to third-parties, including our competitors.
Further, many patents in the fields we are pursuing have already been exclusively licensed to third-parties, including our competitors. It is possible that we may become a party to such proceedings.
We may not be able to regain compliance with the continued listing requirements of The Nasdaq Capital Market.
We may not be able to maintain compliance with the continued listing requirements of The Nasdaq Capital Market. To maintain continued listing on The Nasdaq Capital Market, we must satisfy minimum financial and other requirements.
Integration of an acquired company requires management resources that otherwise would be available for ongoing development of our existing business. We may not realize the anticipated benefits of any acquisition, technology license or strategic alliance.
Integration of an acquired company requires management resources that otherwise would be available for ongoing development of our existing business. We may not realize the anticipated benefits of any acquisition, technology license or strategic alliance. There is no assurance that we will be successful in developing such assets, and a failure to successfully develop such assets could diminish our prospects.
If we raise funds through the issuance of additional equity, whether through private placements or public offerings, such an issuance would dilute current stockholders’ ownership in us, perhaps substantially. The issuance of a significant amount of shares of common stock could cause the market price of our common stock to decline or become highly volatile.
If we raise funds through the issuance of additional equity, whether through private placements or public offerings, such an issuance would dilute current stockholders’ ownership in us, perhaps substantially.
We expect to continue to incur significant research and development expenses, which may make it difficult for us to attain profitability, and may lead to uncertainty as to our ability to continue as a going concern.
The issuance of a significant amount of shares of Common Stock could cause the market price of our Common Stock to decline or become highly volatile. 18 We expect to continue to incur significant research and development expenses, which may make it difficult for us to attain profitability, and may lead to uncertainty as to our ability to continue as a going concern.
Additionally, preclinical studies and clinical trials are lengthy and expensive and if our cash resources become limited we may not be able to commence, continue or complete our clinical trials, which could have a material impact on our business, financial condition, and results of operations. 13 We are subject to significant competition and may not be able to compete successfully.
Additionally, preclinical studies and clinical trials are lengthy and expensive and if our cash resources become limited we may not be able to commence, continue or complete our clinical trials, which could have a material impact on our business, financial condition, and results of operations. 13 Disruptions at the FDA, including due to a reduction in the FDA’s workforce and/or inadequate funding for the FDA, could prevent the FDA from performing normal functions on which our business relies, which could negatively impact our business.
Our future capital requirements and the period for which our existing resources are able to support our operations may vary significantly from what we expect.
We have used substantial funds to develop our product candidates and will need to raise additional substantial funds to continue our drug development efforts and support our operations. Our future capital requirements and the period for which our existing resources are able to support our operations may vary significantly from what we expect.
Any future acquisitions by us also could result in large and immediate write-offs, the incurrence of contingent liabilities or amortization of expenses related to acquired intangible assets, any of which could harm our operating results.
Any future acquisitions by us also could result in large and immediate write-offs, the incurrence of contingent liabilities or amortization of expenses related to acquired intangible assets, any of which could harm our operating results. 21 Provisions of our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change of control of the Company or changes in our management and, as a result, depress the trading price of our Common Stock.
If the topline data we report differs from future analysis of results, or if others, including regulatory authorities, disagree with the conclusions reached, our business, financial condition, and results of operations could be materially and adversely affected. 11 We rely upon third-parties to conduct our clinical trials and other studies for our product candidates, and if they do not successfully fulfill their obligations, the development of our product candidates may be materially impacted.
If the topline data we report differs from future analysis of results, or if others, including regulatory authorities, disagree with the conclusions reached, our business, financial condition, and results of operations could be materially and adversely affected.
If we experience delays or difficulties in identifying and enrolling patients in clinical trials, it may lead to delays in generating clinical data and the receipt of necessary regulatory approvals.
Additionally, preclinical studies and clinical trials are lengthy and expensive and if our cash resources become limited, we may not be able to commence, continue or complete such preclinical studies or clinical trials. 10 If we experience delays or difficulties in identifying and enrolling patients in clinical trials, it may lead to delays in generating clinical data and the receipt of necessary regulatory approvals.
Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, or do not improve, it may make any necessary debt or equity financings more difficult, more costly, and more dilutive.
If the current equity and credit markets deteriorate, or do not improve, it may make any necessary debt or equity financings more difficult, more costly, and more dilutive.
Competition for skilled research, product development, regulatory and technical personnel is intense, and we may not be able to recruit and retain the personnel we need. The loss of the services of any key personnel, or our inability to hire new personnel with the requisite skills, could restrict our ability to develop our product candidates.
Competition for skilled research, product development, regulatory and technical personnel is intense, and we may not be able to recruit and retain the personnel we need.
Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days.
If our compliance plan is not accepted or we are otherwise unable to evidence compliance within Nasdaq’s allotted timeframe, Nasdaq may take steps to delist our Common Stock. 20 In addition, Nasdaq Listing Rule 5550(a)(2) requires a minimum bid price of at least $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days.
Under that provision, we can carryforward our net operating losses to offset our future taxable income, if any, until such net operating losses are used or expire. Net operating losses incurred in tax years beginning after December 31, 2017 may be carried forward indefinitely, but are limited to offset up to 80% of future taxable income.
Net operating losses incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but are limited to offsetting up to 80% of future taxable income. Certain net operating loss carryforwards predating December 31, 2017, could expire unused before offsetting potential future income tax liabilities.
We have historically incurred net losses and may never achieve or sustain profitability. Under the Internal Revenue Code of 1986, as amended (the “ Code ”), a corporation is generally allowed a deduction for net operating losses carried forward from a prior taxable year.
Under the Internal Revenue Code of 1986, as amended (the “ Code ”), a corporation is generally allowed a deduction for net operating losses carried forward from a prior taxable year. Under that provision, we can carry forward our net operating losses to offset our future taxable income, if any, until such net operating losses are used or expire.
There is no assurance that we will be successful in developing such assets, and a failure to successfully develop such assets could diminish our prospects. 20 To finance future acquisitions, we may choose to issue shares of our common stock or preferred stock as consideration, which would dilute current stockholders’ ownership interest in us.
To finance future acquisitions, we may choose to issue shares of our Common Stock or preferred stock as consideration, which would dilute current stockholders’ ownership interest in us. Alternatively, it may be necessary for us to raise additional funds through public or private financings.
If we fail to negotiate these agreements, we may not be able commence clinical trials with our ACT product candidates or we may be required to obtain licenses from cell therapy companies and our business, financial condition, and results of operations could be materially and adversely affected.
If we are not able to successfully develop our product candidates, we may be forced to abandon or delay our development efforts, which may materially and adversely affect our business, financial condition, and results of operations.
Removed
Additionally, preclinical studies and clinical trials are lengthy and expensive and if our cash resources become limited we may not be able to commence, continue or complete such preclinical studies or clinical trials. We are dependent on our collaboration partner for the successful development of our adoptive cell therapy product candidate.
Added
We rely upon third-parties to conduct our clinical trials and other studies for our product candidates, and if they do not successfully fulfill their obligations, the development of our product candidates may be materially impacted.
Removed
We are dependent on third parties that have direct access to the patient or donor cells used in cell therapy and expect to depend on our third-party collaborator to support the clinical development of our ACT product candidate.
Added
From time to time, proposals are made to significantly change existing trade agreements and relationships between the U.S. and other countries. In recent years, the U.S. government has implemented substantial changes to U.S. trade policies, including import restrictions, increased import tariffs and changes in U.S. participation in multilateral trade agreements.
Removed
We have entered into a clinical co-development collaboration agreement with AgonOx, Inc. to conduct a Phase 1 clinical trial of the evaluation of PH-762 treated “double positive” tumor infiltrating lymphocytes in patients with advanced melanoma and other advanced solid tumors.
Added
Because some of our vendors, manufactures and suppliers are located in other foreign countries, we are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies, laws, rules and regulations of the United States or foreign governments, as well as political unrest or unstable economic conditions in foreign countries.
Removed
The success of our collaboration depends upon the efforts of our collaboration partner, and their performance in achieving the development activities to the extent they are responsible under our collaboration agreement.
Added
The U.S. government has indicated its intent to adopt a new approach to trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements.
Removed
Our partner may not be successful in performing these activities, including completing the required preclinical studies and other information to be included in an IND application (or foreign equivalent), obtaining approval to initiate clinical trials, conducting the necessary clinical trials and arranging for the manufacturing or contract research organization (“ CRO ”) relationships and obtaining marketing authorization.
Added
For example, on February 1, 2025, President Donald Trump signed executive orders imposing a 25% tariff on certain imports from Mexico and Canada, and a 10% tariff on certain imports from China, which were to take effect on February 4, 2025. President Donald Trump also announced a plan for reciprocal tariffs which are to take effect on April 2.
Removed
Our partner works with other companies, potentially including some of our competitors, their corporate objectives may not align with ours, and they may change their strategic focus or pursue alternative technologies. If our collaboration is not successful or our partner terminates our collaboration agreement, our business, financial condition, and results of operations could be materially and adversely affected.
Added
Our supply may in the future be subject to these tariffs, which could increase our manufacturing costs and could make our products, if successfully developed and approved, less competitive than those of our competitors whose inputs are not subject to these tariffs.
Removed
Further, we may not be successful in negotiating agreements with this collaborator or with future collaborators for the development and commercialization of our ACT product candidates through collaborations such as joint development or licensing agreements.
Added
We may otherwise experience supply disruptions or delays, and our suppliers may not continue to provide us with clinical supply in our required quantities, to our required specifications and quality levels or at attractive prices. Such disruption could have adverse effects on the development of our product candidates and our business operations.
Removed
Our ability to successfully negotiate such agreements will depend on, among other things, potential partners’ evaluation of the superiority of our technology over competing technologies, the quality of preclinical data that we have generated, the perceived risks specific to developing our product candidates and our partners’ own strategic and corporate objectives.
Added
The ability of the FDA to review and approve new products or review other regulatory submissions can be affected by a variety of factors, including statutory, regulatory and policy changes, inadequate government budget and funding levels, a reduction in the FDA’s workforce and its ability to hire and retain key personnel.
Removed
Unstable market and economic conditions, including elevated and sustained inflation, may have serious adverse consequences on our business, financial condition and stock price.
Added
Disruptions at the FDA and other agencies may also increase the time to meet with and receive agency feedback, review and/or approve our submissions, conduct inspections, issue regulatory guidance, or take other actions that facilitate the development, approval and marketing of regulated products, which would adversely affect our business.
Removed
In addition, others may challenge the patents or patent applications that we currently license or may license in the future or that we own and, as a result, these patents could be narrowed, invalidated or rendered unenforceable, which would negatively affect our ability to exclude others from using the technologies described in these patents.
Added
In addition, government proposals to reduce or eliminate budgetary deficits may include reduced allocations to the FDA and other related government agencies.
Removed
Risks Relating to Our Financial Condition We will require substantial additional funds to complete our research and development activities. We have used substantial funds to develop our product candidates and will need to raise additional substantial funds to continue our drug development efforts and support our operations.
Added
For example, the current President Trump administration (the “ Trump Administration ”) recently established the Department of Government Efficiency, which implemented a federal government hiring freeze and announced certain additional efforts to reduce federal government employee headcount and the size of the federal government.
Removed
Certain of our net operating loss carryforwards predating December 31, 2017 could expire unused before offsetting potential future income tax liabilities.
Added
It is unclear how these executive actions or other potential actions by the Trump Administration or other parts of the federal government will impact the FDA or other regulatory authorities that oversee our business. These budgetary pressures may reduce the FDA’s ability to perform its responsibilities.
Removed
On January 24, 2024, we received notice (the “ Notification Letter ”) from Nasdaq notifying us that we are not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market.
Added
If a significant reduction in the FDA’s workforce occurs, the FDA’s budget is significantly reduced or a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions or take other actions critical to the development or marketing of our products, if approved, which could have a material adverse effect on our business.
Removed
Based on the closing bid price of our common stock for the 30 consecutive business days prior to the date of the Notification Letter, we no longer meet the minimum bid price requirement. The Notification Letter does not impact our listing on The Nasdaq Capital Market at this time.
Added
The loss of the services of any key personnel, or our inability to hire new personnel with the requisite skills, could restrict our ability to develop our product candidates. 14 We are subject to potential liabilities from clinical testing and future product liability claims.
Removed
The Notification Letter states that we have 180 calendar days, or until July 22, 2024, to regain compliance. To regain compliance, the bid price of our common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days at any time prior to July 22, 2024.
Added
There can be no assurance that deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions.
Removed
In the event that we do not regain compliance by July 22, 2024, we may be eligible for additional time to reach compliance with the minimum bid price requirement.
Added
We are dependent on obtaining funding from third parties, such as proceeds from the issuance of debt, sale of equity or strategic opportunities, in order to maintain our operations. We cannot assure you that additional financing will be available to us on acceptable terms, or at all.
Removed
However, if we fail to regain compliance with the minimum bid price listing requirement or fail to maintain compliance with all other applicable continued listing requirements and Nasdaq determines to delist our common stock, the delisting could adversely impact us by, among other things, reducing the liquidity and market price of our common stock; reducing the number of investors willing to hold or acquire our common stock; limiting our ability to issue additional securities in the future; and limiting our ability to fund our operations.
Added
The stock market, in general, and the markets for drug delivery and pharmaceutical company stocks, in particular, have experienced extreme volatility, that has often been unrelated to the operating performance of these particular companies.
Removed
Provisions of our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change of control of the Company or changes in our management and, as a result, depress the trading price of our common stock.
Added
For example, Nasdaq Listing Rule 5550(b)(1) requires companies listed on the Nasdaq Capital Market to maintain stockholders’ equity of at least $2.5 million for continued listing. As of December 31, 2024, our stockholders’ equity was $4.7 million and there can be no assurance that we will be able to maintain or increase our stockholders’ equity in the future.
Added
If our stockholders’ equity falls below $2.5 million, as a result of operating losses or for other reasons, or if we are unable to demonstrate to Nasdaq’s satisfaction that we subsequently regained compliance with this requirement, Nasdaq will notify us of such non-compliance.
Added
If we receive such notice from Nasdaq, in accordance with the Nasdaq Listing Rules, we will have 45 calendar days from the date of the notification to submit a plan to regain compliance with Nasdaq Listing Rule 5550(b)(1).
Added
If our compliance plan is accepted, we may be granted up to 180 calendar days from the date of the initial notification to evidence compliance.
Added
Although the Company is currently in compliance with this requirement, there can be no assurance that we will be able to maintain compliance. We have in the past effected reverse stock splits of our Common Stock in order to regain or maintain compliance with this requirement (most recently on July 5, 2024).

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+1 added−1 removed6 unchanged
Biggest changeThis program includes a number of safeguards, such as: continuous monitoring for internal and external threats; regular evaluations of our cybersecurity program, including periodic external reviews; and industry benchmarking. We also require cybersecurity trainings when onboarding new employees, as well as cybersecurity awareness training for our employees.
Biggest changeCybersecurity Program Given the importance of cybersecurity to our business, we maintain a robust cybersecurity program to support both the effectiveness of our systems and our preparedness for information security risks. This program includes a number of safeguards, such as: continuous monitoring for internal and external threats; regular evaluations of our cybersecurity program, including periodic external reviews; and industry benchmarking.
Our program leverages standard industry frameworks to strengthen our program effectiveness and reduce cybersecurity risks. We use a risk-based approach with respect to our use and oversight of third-party service providers, tailoring processes according to the nature and sensitivity of the data accessed, processed, or stored by such third-party service provider.
Our program leverages standard industry frameworks to strengthen our program effectiveness and reduce cybersecurity risks. 22 We use a risk-based approach with respect to our use and oversight of third-party service providers, tailoring processes according to the nature and sensitivity of the data accessed, processed, or stored by such third-party service provider.
While we maintain a robust cybersecurity program, the techniques used to infiltrate information technology systems continue to evolve. Accordingly, we may not be able to timely detect threats or anticipate and implement adequate security measures. For additional information, see “Item 1A—Risk Factors.”
While we maintain a robust cybersecurity program, the techniques used to infiltrate information technology systems continue to evolve. Accordingly, we may not be able to timely detect threats or anticipate and implement adequate security measures. For additional information, see “Item 1A—Risk Factors.” 23
As of December 31, 2023, we are not aware of any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected the business strategy, results of operations or financial condition of the Company or are reasonably likely to have such a material effect.
As of December 31, 2024, we are not aware of any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected the business strategy, results of operations or financial condition of the Company or are reasonably likely to have such a material effect.
Our consultant has over 20 years of experience in information technology matters and is responsible for the day-to-day management of the cybersecurity program, including the prevention, detection, investigation, response to, and recovery from cybersecurity threats and incidents, and are regularly engaged to help ensure the cybersecurity program functions effectively in the face of evolving cybersecurity threats.
Our consultants have over 20 years of experience in information technology matters and are responsible for the day-to-day management of the cybersecurity program, including the prevention, detection, investigation, response to, and recovery from cybersecurity threats and incidents, and are regularly engaged to help ensure the cybersecurity program functions effectively in the face of evolving cybersecurity threats.
The Board is responsible for discussing with management the Company’s data privacy, information technology and security and cybersecurity risk exposures, including: (i) the potential impact of those exposures on the Company’s business, financial results, operations and reputation; (ii) the programs implemented by management to monitor and mitigate any exposures; and (iii) major legislative and regulatory developments that could materially impact the Company’s data privacy and cybersecurity risk exposure. 22 Cybersecurity Risks Our cybersecurity risk management processes are integrated into our overall information technology (“ IT ”) processes.
The Board is responsible for discussing with management the Company’s data privacy, information technology and security and cybersecurity risk exposures, including: (i) the potential impact of those exposures on the Company’s business, financial results, operations and reputation; (ii) the programs implemented by management to monitor and mitigate any exposures; and (iii) major legislative and regulatory developments that could materially impact the Company’s data privacy and cybersecurity risk exposure.
As part of our IT process, we identify, assess and evaluate risks impacting our operations across the Company, including those risks related to cybersecurity.
Cybersecurity Risks Our cybersecurity risk management processes are integrated into our overall information technology (“ IT ”) processes. As part of our IT process, we identify, assess and evaluate risks impacting our operations across the Company, including those risks related to cybersecurity.
ITEM 1C. CYBERSECURITY We are increasingly dependent on sophisticated software applications and computing infrastructure to conduct key operations.
ITEM 1C. CYBERSECURITY Risk management and strategy We are increasingly dependent on sophisticated software applications and computing infrastructure to conduct key operations. We depend on both our own systems, networks, and technology as well as the systems, networks and technology of our contractors, consultants, vendors and other business partners.
Removed
We depend on both our own systems, networks, and technology as well as the systems, networks and technology of our contractors, consultants, vendors and other business partners. 21 Cybersecurity Program Given the importance of cybersecurity to our business, we maintain a robust cybersecurity program to support both the effectiveness of our systems and our preparedness for information security risks.
Added
We are implementing cybersecurity awareness trainings for all employees.

Item 2. Properties

Properties — owned and leased real estate

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Removed
PROPERTIES On December 17, 2013, we entered into a lease (the “ Lease ”), as subsequently amended on January 22, 2019, with 257 Simarano Drive, LLC, Brighton Properties, LLC, Robert Stubblebine 1, LLC and Robert Stubblebine 2, LLC to lease office and laboratory space in the building known as the “Main Building” located at 257 Simarano Drive, Marlborough, Massachusetts, covering 7,581 square feet.
Added
ITEM 2. PROPERTIES The Company’s lease for its corporate headquarters and primary research facility in Marlborough, Massachusetts expired on March 31, 2024.
Removed
The premises are used by the Company for office and laboratory space. The term of the Lease commenced on April 1, 2014 and expires on March 31, 2024, for a total of a ten year lease term. The base rent for the premises is $124,865 per annum, payable on a monthly basis.
Added
The Company has continued operations as a primarily remote business with a rented lab space and has contracted a private mailbox with an address of 11 Apex Drive, Suite 300A, PMB 2006, Marlborough, MA 01752, to use as its principal mailing address for SEC and other purposes.
Removed
Each year thereafter, the base rent shall increase by approximately 3% over the base rent from the prior year. The Company does not intend to renew the Lease, which will expire on March 31, 2024.
Added
The Company has also contracted with LifeSciences PA located at 411 Swedeland Road, King of Prussia, PA 19406 for access to full working space for normal hours of operations at a fee for $300 per month, cancellable at any time. The Company entered into a lease for a laboratory facility located at 17 Briden Street, Worcester, Massachusetts.
Removed
Beginning in April of 2024, we expect to continue operations as a remote business with a laboratory facility located at 17 Briden Street, Worcester, Massachusetts, covering 321 square feet. The term of the laboratory facility commenced on March 1, 2024 and expires on September 1, 2024.
Added
The lease had an original expiration date of August 31, 2024, and was subsequently extended through February 28, 2025. The Company continues to lease the space on a month-to-month basis. Monthly rent is approximately $2,500.
Removed
The total base rent for the premises over the term is expected to be $15,000.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, the Company may become a party to various legal proceedings and complaints arising in the ordinary course of business. To our knowledge, we are not currently a party to any actual or threatened material legal proceedings of which we are aware.
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, the Company may become a party to various legal proceedings and complaints arising in the ordinary course of business. To our knowledge, we are not currently a party to any actual or threatened material legal proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRecent Sales of Unregistered Sales of Securities No sales or issues of unregistered securities occurred that have not previously been disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
Biggest changeRecent Sales of Unregistered Sales of Securities No sales or issuances of unregistered securities occurred that have not previously been disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K for the year ended December 31, 2024.
Purchases of Equity Securities by the Issuer and Affiliated Purchases We did not repurchase any shares of our common stock during the years ended December 31, 2023 or 2022. ITEM 6. RESERVED
Purchases of Equity Securities by the Issuer and Affiliated Purchases We did not repurchase any shares of our Common Stock during the years ended December 31, 2024 or 2023. ITEM 6. RESERVED
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on The Nasdaq Capital Market under the symbol “PHIO.” Holders At March 15, 2024, there were approximately 19 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock is listed on The Nasdaq Capital Market under the symbol “PHIO.” Holders At March 20, 2025, there were approximately 14 holders of record of our Common Stock.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. RESERVED 24 Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 24 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 31 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 31 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 32 Item 9A. CONTROLS AND PROCEDURES 32 Item 9B.
Biggest changeItem 6. RESERVED 2 5 Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 25 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 33 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 33 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 34 Item 9A. CONTROLS AND PROCEDURES 34 Item 9B.
OTHER INFORMATION 33 Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 33 PART III. Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 34 Item 11. EXECUTIVE COMPENSATION 36 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 41 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 43 Item 14.
OTHER INFORMATION 35 Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 35 PART III. Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 36 Item 11. EXECUTIVE COMPENSATION 3 8 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 44 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 46 Item 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES 44 PART IV. Item 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES 45
PRINCIPAL ACCOUNTANT FEES AND SERVICES 4 7 PART IV. Item 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES 4 8

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

27 edited+30 added−14 removed37 unchanged
Biggest changeThe following table summarizes our cash flows for the periods indicated, in thousands: Years Ended December 31, 2023 2022 Net cash used in operating activities $ (10,749 ) $ (12,129 ) Net cash used in investing activities (5 ) (121 ) Net cash provided by (used in) financing activities 7,413 (26 ) Net decrease in cash and restricted cash $ (3,341 ) $ (12,276 ) 29 Net Cash Flow from Operating Activities Net cash used in operating activities for the year ended December 31, 2023 decreased 11% as compared to the year ended December 31, 2022, primarily due to decreased cash outflows from changes in operating assets and liabilities of $720,000 as a result of liabilities owed for the payments related to the IND-enabling studies with PH-894 and clinical supply manufacturing of PH-762 and PH-894 in the prior year period and a decrease in net loss of $654,000.
Biggest changeThe following table summarizes our cash flows for the periods indicated, in thousands: Years Ended December 31, 2024 2023 Net cash used in operating activities $ (7,112 ) $ (10,749 ) Net cash provided by (used in) investing activities 8 (5 ) Net cash provided by financing activities 3,996 7,413 Net decrease in cash and cash equivalents $ (3,108 ) $ (3,341 ) Net Cash Flow from Operating Activities Net cash used in operating activities for the year ended December 31, 2024 decreased 34% as compared with the year ended December 31, 2023.
Under the Clinical Co-Development Agreement, we agreed to reimburse AgonOx up to $4 million in expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and other advanced solid tumors.
Under the Clinical Co-Development Agreement, we had agreed to reimburse AgonOx up to $4 million in expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and other advanced solid tumors.
If we or any future partner fails to develop product candidates in a timely manner or obtain regulatory approval for them, then our ability to generate future revenue and our results of operations and financial position would be adversely affected.
If we or any future partner fail to develop product candidates in a timely manner or obtain regulatory approval for them, then our ability to generate future revenue and our results of operations and financial position would be adversely affected.
The trial is designed to evaluate the safety and tolerability of neoadjuvant use of intratumorally injected PH-762, assess the tumor response, and determine the dose or dose range for continued study of PH-762 and is expected to enroll up to 30 patients.
The trial (NCT 06014086) is designed to evaluate the safety and tolerability of neoadjuvant use of intratumorally injected PH-762, assess the tumor response, and determine the dose or dose range for continued study of PH-762 and is expected to enroll up to 30 patients.
These preclinical data indicate that PH-894 can reprogram T cells and other cells in the tumor microenvironment to provide enhanced immunotherapeutic activity. We have completed the IND-enabling studies and are in the process of continuing to finalize the study reports required for an IND submission with PH-894.
These preclinical data indicate that PH-894 can reprogram T cells and other cells in the tumor microenvironment to provide enhanced immunotherapeutic activity. We have completed the IND-enabling studies and are in the process of finalizing the study reports required for an IND submission with PH-894.
During the years ended December 31, 2023 and 2022, we did not trigger any milestone payments. Our contractual license obligations that will require future cash payments as of December 31, 2023 are $600,000, which result from payments expected in connection with annual license fees.
During the years ended December 31, 2024 and 2023, we did not trigger any milestone payments. Our contractual license obligations that will require future cash payments as of December 31, 2024 are $500,000, which result from payments expected in connection with annual license fees.
Overview Phio Pharmaceuticals Corp. (“ Phio ,” “ we ,” “ our ” or the “ Company ”) is a clinical stage biotechnology company whose proprietary INTASYL™ self-delivering RNAi technology platform is designed to make immune cells more effective in killing tumor cells.
Overview Phio Pharmaceuticals Corp. (“ Phio ,” “ we ,” “ our ” or the “ Company ”) is a clinical stage biotechnology company whose proprietary INTASYL™ self-delivering RNAi® small interfering RNA gene silencing technology is designed to make immune cells more effective in killing tumor cells.
For further information regarding the April 2023 Financing, June 2023 Financing and December 2023 Financing, see Note 9 to our consolidated financial statements included elsewhere in this Annual Report. We have limited cash resources, have reported recurring losses from operations since inception, negative operating cash flows and have not yet received product revenues.
For further information regarding the financings, see Note 13 to our consolidated financial statements included elsewhere in this Annual Report. We have limited cash resources, have reported recurring losses from operations since inception, negative operating cash flows and have not yet received product revenues.
We are developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems. Our efforts are focused on developing immuno-oncology therapeutics using our INTASYL platform.
We are developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems.
Impairment of Property and Equipment Loss on impairment of property and equipment for the year ended December 31, 2023 increased 100% as compared to the year ended December 31, 2022. The impairment charge to our long-lived assets was associated with our non-renewal of our office lease to operate as a remote business.
Impairment of Property and Equipment The Company did not record loss on impairment in the year ended December 31, 2024. The impairment charge to our long-lived assets in the year ended December 31, 2023 was associated with our non-renewal of our office lease to operate as a remote business.
This resulted in a decision not to renew the lease for office and laboratory space in Marlborough, Massachusetts, which will expire on March 31, 2024. Beginning in April of 2024, we expect to continue operations as a remote business with a small laboratory facility in Worcester, Massachusetts for 321 square feet of space that commenced on March 1, 2024.
This resulted in a decision not to renew the lease for office and laboratory space in Marlborough, Massachusetts, which expired on March 31, 2024. Beginning in April 2024, we have continued operations as a remote business with a laboratory facility in Worcester, Massachusetts.
Results of Operations The following table summarizes our results of operations for the periods indicated, in thousands: Years Ended December 31, Dollar 2023 2022 Change Operating expenses $ 10,824 $ 11,462 $ (638 ) Operating loss $ (10,824 ) $ (11,462 ) $ 638 Net loss $ (10,826 ) $ (11,480 ) $ 654 Comparison of the Years Ended December 31, 2023 and 2022 Operating Expenses The following table summarizes our total operating expenses, for the periods indicated, in thousands: Years Ended December 31, Dollar 2023 2022 Change Research and development $ 6,332 $ 7,012 $ (680 ) General and administrative 4,366 4,450 (84 ) Impairment of property and equipment 126 – 126 Total operating expenses $ 10,824 $ 11,462 $ (638 ) Research and Development Expenses Research and development expenses for the year ended December 31, 2023 decreased 10% as compared to the year ended December 31, 2022.
Results of Operations The following table summarizes our results of operations for the periods indicated, in thousands: Years Ended December 31, Dollar 2024 2023 Change Operating expenses $ 7,387 $ 10,824 $ (3,437 ) Operating loss $ (7,387 ) $ (10,824 ) $ 3,437 Net loss $ (7,150 ) $ (10,826 ) $ 3,676 29 Comparison of the Years Ended December 31, 2024 and 2023 Operating Expenses The following table summarizes our total operating expenses, for the periods indicated, in thousands: Years Ended December 31, Dollar 2024 2023 Change Research and development $ 3,643 $ 6,332 $ (2,689 ) General and administrative 3,744 4,366 (622 ) Impairment of property and equipment – 126 (126 ) Total operating expenses $ 7,387 $ 10,824 $ (3,437 ) Research and Development Expenses Research and development expenses for the year ended December 31, 2024 decreased 42% as compared with the year ended December 31, 2023.
Additionally, we rationalized discovery research personnel resulting in headcount reduction by approximately 36%. Expense reductions have been redirected to funding the Phase 1b clinical trial with PH-762 directed toward skin cancer. 24 PH-762 PH-762 is an INTASYL compound designed to reduce the expression of cell death protein 1 (“ PD-1 ”).
Beginning in January 2024, we rationalized discovery research personnel resulting in an overall headcount reduction by greater than 50%. Expense reductions have been redirected to funding the Phase 1b clinical trial with PH-762. PH-762 PH-762 is an INTASYL compound designed to reduce the expression of PD-1.
The primary trial objectives are to evaluate the safety and to study the potential for enhanced therapeutic benefit from the administration of PH-762 treated DP TIL. We announced the first patient was dosed in August 2023 and the trial is open for the continued enrollment of patients.
The primary trial objectives were to evaluate the safety and to study the potential for enhanced therapeutic benefit from the administration of PH-762 treated DP TIL. AgonOx had enrolled three patients. The first two patients were treated with DP TIL only and a third patient was treated with a combination of DP TIL and PH-762.
PH-762 Phase 1 clinical trials as compared to the prior year period. 28 General and Administrative Expenses General and administrative expenses for the year ended December 31, 2023 decreased 2% as compared to the year ended December 31, 2022.
General and Administrative Expenses General and administrative expenses for the year ended December 31, 2024 decreased 14% as compared to the year ended December 31, 2023.
During the year ended December 31, 2023, we completed the April 2023 Financing, June 2023 Financing and December 2023 Financing (each as defined in Note 9 to our consolidated financial statements included elsewhere in this Annual Report) and received total net proceeds of $7,452,000 after deducting placement agent fees and offering expenses.
For further information regarding the financings, see Note 8 to our consolidated financial statements included elsewhere in this Annual Report. 30 Subsequent to year-end, we completed financings and received total net proceeds of $6,800,000 after deducting placement agent fees and offering expenses.
We are also eligible to receive certain future development milestones and low single-digit sales-based royalty payments from AgonOx’s licensing of its DP TIL technology. PH-762 treated DP TIL are being evaluated in a Phase 1 clinical trial in the United States with up to 18 patients with advanced melanoma and other advanced solid tumors by AgonOx.
Prior to the termination of the Clinical Co-Development Agreement with AgonOx, PH-762 treated DP TIL were being evaluated in a Phase 1 clinical trial in the U.S. with up to 18 patients with advanced melanoma and other advanced solid tumors by AgonOx.
Contractual Obligations Commitments In February 2021, we entered into a Clinical Co-Development Agreement with AgonOx to develop a T cell-based therapy using PH-762 and AgonOx’s DP TIL. Details of our obligations under the Clinical Co-Development Agreement as of December 31, 2023 can be found in Note 2 of the consolidated financial statements included elsewhere in this Annual Report.
Details of our obligations under the Clinical Co-Development Agreement as of December 31, 2024 can be found in Note 2 of the consolidated financial statements included elsewhere in this Annual Report. In May 2024, we terminated the Clinical Co-Development Agreement with AgonOx, which such termination was effective immediately.
Since we commenced operations, research and development expenses have been a significant portion of our total operating expenses and are expected to constitute the majority of our spending for the foreseeable future. 27 General and Administrative Expenses General and administrative expenses relate to compensation and benefits for general and administrative personnel, facility-related expenses, professional fees for legal and patent-related activities, audit, tax and consulting services, as well as other general corporate expenses.
General and Administrative Expenses General and administrative expenses relate to compensation and benefits for general and administrative personnel, facility-related expenses, professional fees for legal and patent-related activities, audit, tax and consulting services, as well as other general corporate expenses. Interest Income (Expense), net Interest Income (Expense) consists of interest income and expense.
Our research and development programs are focused on the development of immuno-oncology therapeutics based on our INTASYL therapeutic platform.
Our research and development programs are focused on the development of immuno-oncology therapeutics based on our INTASYL therapeutic platform. Since we commenced operations, research and development expenses have been a significant portion of our total operating expenses and are expected to constitute the majority of our spending for the foreseeable future.
Financial Operations Overview Revenues To date, we have primarily generated revenues through government grants. We have not generated any commercial product revenue and do not expect to do so in the foreseeable future.
Due to the nature of estimates, we cannot provide assurance that we will not make changes to our estimates in the future as we become aware of additional information about the conduct of our research activities. 28 Financial Operations Overview Revenues We have not generated any commercial product revenue and do not expect to do so in the foreseeable future.
As of December 31, 2023, there is approximately $2,757,000 of remaining costs not yet incurred under the Clinical Co-Development Agreement. 25 PH-894 PH-894 is an INTASYL compound that is designed to silence BRD4, a protein that controls gene expression in both T cells and tumor cells, thereby effecting the immune system as well as the tumor.
Clinical results for the single patient who received a combination of DP TIL and PH-762 showed tumor size reductions of 65%, 100% and 81%, respectively, in three melanoma lesions. 27 PH-894 PH-894 is an INTASYL compound that is designed to silence BRD4, a protein that controls gene expression in both T cells and tumor cells, thereby affecting the immune system as well as the tumor.
In November 2023, we announced the dosing of the first patient under a previously cleared Investigational New Drug application (“ IND ”) application by the Food and Drug Administration and the trial is currently open for the continued enrollment of patients.
In November 2023, we announced the dosing of the first patient under a previously cleared Investigational New Drug (“ IND ”) application by the U.S. Food and Drug Administration. In May and December 2024, respectively, a Safety Monitoring Committee (SMC) reviewed data from the first and second dose cohorts treated with PH-762 and recommended escalation to the next dose concentration.
Net Cash Flow from Investing Activities Net cash used in investing activities for the year ended December 31, 2023 decreased 96% as compared to the year ended December 31, 2022, primarily due to changes in laboratory and computer equipment purchases for our facility over the comparative period.
Net Cash Flow from Investing Activities Net cash provided by investing activities for the year ended December 31, 2024 was approximately $8,000 as compared to the year ended December 31, 2023 where net cash used in investing activities was $5,000.
As of December 31, 2023, there is approximately $2,757,000 of remaining costs not yet incurred under the Clinical Co-Development Agreement. License Commitments We enter into licensing agreements with third parties that often require milestone and royalty payments based on the progress of the asset through development stages.
Clinical results for the single patient who received a combination of DP TIL and PH-762 showed tumor size reductions of 65%, 100% and 81% respectively, in three melanoma lesions. License Commitments We enter into licensing agreements with third parties that often require milestone and royalty payments based on the progress of the asset through development stages.
Lease Commitments Future lease payments under our non-cancellable operating lease are expected to be approximately $35,000 over the remaining duration of our lease, or through March 31, 2024. We do not intend to renew the lease for our corporate headquarters and primary research facility in Marlborough, Massachusetts, which will expire on March 31, 2024.
Lease Commitments We did not renew the lease for our corporate headquarters and primary research facility in Marlborough, Massachusetts, which expired on March 31, 2024. Beginning in April 2024, we have continued operations as a remote business with a laboratory facility in Worcester, Massachusetts.
For further information regarding our future cash commitments see Note 7 to our consolidated financial statements included elsewhere in this Annual Report. 30
The new lease had an original expiration date of August 31, 2024, and was subsequently extended through February 28, 2025. The Company continues to lease the space on a month-to-month basis. Monthly rent is approximately $2,500. For further information regarding our future cash commitments see Note 6 to our consolidated financial statements included elsewhere in this Annual Report. 32
Removed
We have demonstrated preclinical efficacy in both direct-to-tumor injection and adoptive cell therapy (“ ACT ”) applications with our INTASYL compounds. In 2023, the Company implemented a cost rationalization program driven by its transition from discovery research to product development.
Added
We are committed to discovering and developing innovative cancer treatments for patients by creating new pathways toward a cancer-free future. 25 PH-762 is an INTASYL compound designed to reduce the expression of cell death protein 1 (“ PD-1 ”).
Removed
Due to the nature of estimates, we cannot provide assurance that we will not make changes to our estimates in the future as we become aware of additional information about the conduct of our research activities. 26 Collaborative Arrangements We follow the provisions of the Financial Accounting Standards Board (the “ FASB ”) Accounting Standards Codification (“ ASC ”) Topic 808, “ Collaborative Arrangements ,” (“ Topic 808 ”) when collaboration agreements involve joint operating activities in which both parties are active participants and that are also both exposed to significant risks and rewards.
Added
In May and December 2024, respectively, a Safety Monitoring Committee (SMC) reviewed data from the first and second dose cohorts treated with PH-762, and in both instances recommended escalation to the next dose concentration. A total of 7 patients with cutaneous carcinomas have been enrolled in dose cohorts 1 and 2.
Removed
We also consider the guidance in the FASB ASC Topic 606, “ Revenue from Contracts with Customers ,” (“ Topic 606 ”) in determining the appropriate treatment for activities between us and our collaborative partners that are more reflective of a vendor-customer relationship and therefore, within the scope of Topic 606, as well as other accounting literature.
Added
The second cohort enrolled a total of 4 patients who were diagnosed with cutaneous squamous cell carcinoma. At Day 36 (tumor excision), while patients in the first cohort had stable disease, a complete response (100% tumor clearance) was reported for 2 patients with cutaneous squamous cell carcinoma.
Removed
Under Topic 808, we determine an appropriate recognition method, either by analogy to appropriate accounting literature or by applying a reasonable accounting policy election. Generally, the classification of transactions under the collaborative arrangement is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants.
Added
Partial response (90% tumor clearance) was reported for 1 patient with cutaneous squamous cell carcinoma and 1 patient had stable disease, having not progressed. In this trial to date, intratumoral injection of PH-762 has been well tolerated in all enrolled patients and there were no dose-limiting toxicities or clinically relevant treatment-emergent adverse effects in the patients receiving intratumoral PH-762.
Removed
We recognize our share of costs arising from research and development activities performed by collaborators in the period our collaborators incur such expense. Reimbursements that are the result of a collaborative relationship instead of a customer relationship, such as co-development activities, are evaluated on a quarterly basis and recorded as an offset to research and development expense incurred.
Added
The third dose cohort is fully enrolled and patients in this cohort are currently in the treatment or follow-up phase of the study. Phio expects to complete enrollment of all patients in the study in the third quarter of 2025. In 2023, the Company implemented a cost rationalization program driven by its transition from discovery research to product development.
Removed
Payments in excess of our collaboration expense will be recorded as revenue. Derivative Financial Instruments During the normal course of business we may issue warrants as part of a debt or equity financing. Warrants and other derivative financial instruments are accounted for either as equity or as an asset or liability, depending on the characteristics of each derivative financial instrument.
Added
PH-762 is currently being evaluated in a U.S. multi-center Phase 1b dose-escalating clinical trial through the intratumoral injection of PH-762 for the treatment of patients with cutaneous squamous cell carcinoma, melanoma and Merkel cell carcinoma.
Removed
Financial instruments that do not meet the definition of a derivative are classified as equity and measured at fair value and recorded as additional paid in capital in stockholders’ equity at the date of issuance. No further adjustments to their valuation are made.
Added
The trial (NCT 06014086) is designed to evaluate the safety and tolerability of neoadjuvant use of intratumorally injected PH-762, assess the tumor response, and determine the dose or dose range for continued study of PH-762 and is expected to enroll up to 30 patients.
Removed
Financial instruments that meet the definition of a derivative are classified as an asset or liability are measured at fair value on the issuance date and are revalued on each subsequent balance sheet date. The changes in the fair value are recognized as current period income or loss.
Added
A total of 7 patients with cutaneous carcinomas have enrolled in Cohorts 1 and 2. The second cohort enrolled a total of 4 patients who were diagnosed with cutaneous squamous cell carcinoma.
Removed
Other (Expense) Income, net Other (expense) income consists primarily of interest income and expense and various income or expense items of a non-recurring nature.
Added
At Day 36 (tumor excision), while patients in the first cohort had stable disease, the a complete response (100% tumor clearance) was reported for 2 patients with cutaneous squamous cell carcinoma.
Removed
The decrease was primarily due to a decrease in costs related to the completion of our IND-enabling preclinical studies for PH-894 of approximately $1,979,000 and reduced lab supplies of approximately $298,000 as a result of a decrease in lab personnel and a shift in focus on clinical development and, partially offset by an increase in clinical-related costs of approximately $1,580,000 for the two U.S.
Added
A partial response (90% tumor clearance) was reported for 1 patient with cutaneous squamous cell carcinoma and 1 patient had stable disease, having not progressed. 26 Intratumoral injection of PH-762 has been well tolerated in all patients enrolled in the trial to date. There were no dose-limiting toxicities or clinically relevant treatment-emergent adverse effects in the patients receiving intratumoral PH-762.
Removed
The decrease was primarily due to decreases in personnel-related expenses of approximately $230,000 due to departmental organizational changes and one-time executive search-related fees of approximately $78,000 for the Company’s President & CEO and reduced D&O insurance premiums of $92,000, partially offset by increased legal fees of approximately $302,000.
Added
The third dose cohort is fully enrolled and patients in this cohort are currently in the treatment or follow-up phase of the study. We expect to complete enrollment of all patients in the study in the third quarter of 2025.
Removed
At December 31, 2023, we had cash of $8,490,000 as compared with $11,781,000 at December 31, 2022.
Added
We were also eligible to receive certain future development milestones and low single-digit sales-based royalty payments from AgonOx’s licensing of its DP TIL technology. In May 2024, we terminated the Clinical Co-Development Agreement with AgonOx, which such termination was effective immediately.
Removed
Net Cash Flow from Financing Activities Net cash provided by financing activities for the year ended December 31, 2023 increased as compared to the net cash used in financing activities for the year ended December 31, 2022, primarily due to the Company’s capital raise activities over the comparative period (see Note 9 to our consolidated annual consolidated financial statements included elsewhere in this Annual Report).
Added
Effective as of the date of termination, the Clinical Co-Development Agreement and our continuing obligations and those of AgonOx thereunder were terminated in their entirety.
Removed
Beginning in April of 2024, we expect to continue operations as a remote business with a small laboratory facility. The term of the laboratory facility commenced on March 1, 2024 and has a 6-month term, with lease payments expected to be $15,000 over the term of the lease.
Added
We are no longer required to provide financial support for the development of costs incurred un the Clinical Co-Development Agreement and we are no longer entitled to future development milestones or royalty payments from AgonOx’s licensing of its DP TIL technology.
Added
We agreed to pay to AgonOx all payment obligations that accured prior to the termination of the Clinical Co-Development Agreement. Remaining payments to be made to AgonOx as of December 31, 2024 totaled $34,320, which primarily relate to accrued obligations for patient fees and other miscellaneous costs as of the date of termination.
Added
Pursuant to the terms of the Clinical Co-Development Agreement, each of the Company and AgonOx shall be responsible for its own costs and expenses incurred in connection with the wind-down of the Phase 1 clinical trial.
Added
The decrease in research and development expenses was primarily driven by our cost rationalization measures in transitioning from a research company to a product development company.
Added
These actions resulted in a decrease of $1,044,000 of expense due to the wind-down of preclinical studies, a reduction of $804,000 in salary-related costs including stock-based compensation expense, and $198,000 in lab supplies associated with the reduction in headcount.
Added
Additionally, we experienced a reduction in clinical consulting fees and clinical trial-related fees of $350,000 incurred in connection with our IND filing for PH-762 and our former PH-762 trials in ACT and European clinical trial, as well as a decrease of $245,000 in manufacturing fees for PH-762 compared with 2023.
Added
The decrease in general and administrative expenses was primarily due to decreases in professional fees for a total of $430,000 primarily related to legal and patent expenses and in our D&O insurance premium of $88,000 as compared to the prior year period.
Added
At December 31, 2024, we had cash of $5,382,000 as compared with $8,490,000 at December 31, 2023. During the year ended December 31, 2024, we completed multiple financings and received total net proceeds of $4,001,000 after deducting placement agent fees and offering expenses.
Added
This change of approximately $3,600,000 reflects a reduction in net loss before subtracting non-cash items of $3,200,000 and a concurrent reduction of approximately $400,000 of cash outflows driven by the reduction of outstanding accounts payable and liquidation of various current assets primarily as a result of liabilities owed for the completion of preclinical studies in the prior year.
Added
The increase in net cash provided by investing activities was primarily due to laboratory and computer equipment purchases for our facility during the prior year and proceeds from the disposition of fixed assets in the current year.
Added
Net Cash Flow from Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 decreased by 46% as compared to the year ended December 31, 2023, primarily due to the lower net proceeds from the completion of our securities offerings during the prior year as compared with the current year. 31 Contractual Obligations Commitments In February 2021, we entered into a Clinical Co-Development Agreement with AgonOx to develop a T cell-based therapy using PH-762 and AgonOx’s DP TIL.
Added
Effective as of the date of termination, the Clinical Co-Development Agreement and our continuing obligations and those of AgonOx thereunder were terminated in their entirety.
Added
We are no longer required to provide financial support for the development costs incurred under the Clinical Co-Development Agreement and we are no longer entitled to future development milestones or royalty payments from AgonOx’s licensing of its DP TIL technology. We will pay to AgonOx all payment obligations that occurred prior to the termination of the Clinical Co-Development Agreement.
Added
Remaining payments to be made to AgonOx as of December 31, 2024 totaled $34,320, which primarily relate to accrued obligations for patient fees and other miscellaneous costs as of the date of termination.
Added
Pursuant to the terms of the Clinical Co-Development Agreement, each party shall be responsible for their own costs and expenses incurred in connection with the wind-down of the Phase 1 clinical trial.
Added
Prior to the termination of the Clinical Co-Development Agreement with AgonOx, PH-762 treated DP TIL was being evaluated in a Phase 1 clinical trial in the U.S. with up to 18 patients with advanced melanoma and other advanced solid tumors by AgonOx.
Added
The primary trial objectives were to evaluate the safety and to study the potential for enhanced therapeutic benefit from the administration of PH-762 treated DP TIL. AgonOx had enrolled three patients. The first two patients were treated with DP TIL only and a third patient was treated with a combination of DP TIL and PH-762.