☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
Delaware
|
11-3516358
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
|
☐ |
Accelerated filer
|
☐ |
Non-accelerated filer
|
☑ |
Smaller reporting company
|
☑ |
Emerging growth company
|
☐ |
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Common Stock, $.0001 par value
|
RNN
|
NYSE American
|
Page
|
||
PART I
|
1
|
|
Item 1
|
1
|
|
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
Item 2
|
23
|
|
Item 3
|
30
|
|
Item 4
|
30
|
|
PART II
|
31
|
|
Item 1A
|
31
|
|
Item 6
|
31
|
|
32
|
March 31, 2019
|
December 31, 2018
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
6,122,787
|
$
|
8,744,301
|
||||
Marketable securities
|
11,892,819
|
5,981,520
|
||||||
Prepaid expenses and other current assets
|
976,878
|
1,173,847
|
||||||
Total Current Assets
|
18,992,484
|
15,899,668
|
||||||
Security Deposits
|
30,785
|
30,785
|
||||||
Operating Lease Right-of-Use Assets
|
303,096
|
-
|
||||||
Equipment, Net
|
99,027
|
112,473
|
||||||
Total Assets
|
$
|
19,425,392
|
$
|
16,042,926
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$
|
2,246,200
|
$
|
3,152,550
|
||||
Deferred revenue
|
150,000
|
-
|
||||||
Operating lease liabilities, current
|
113,531
|
-
|
||||||
Total Current Liabilities
|
2,509,731
|
3,152,550
|
||||||
Operating Lease Liabilities, non-current
|
181,490
|
-
|
||||||
Warrant Liabilities
|
794,215
|
2,307,586
|
||||||
Other Liabilities
|
-
|
19,900
|
||||||
Total Liabilities
|
3,485,436
|
5,480,036
|
||||||
Commitments and
Contingencies (note 14)
|
||||||||
Stockholders’ Equity:
|
||||||||
Preferred stock, par value $0.0001, 10,000,000 authorized shares, none issued and outstanding
|
-
|
-
|
||||||
Common stock, par value $0.0001, 75,000,000 authorized shares, 4,019,141 and 3,122,843 issued and
outstanding
|
402
|
312
|
||||||
Additional paid-in capital
|
172,982,394
|
165,267,656
|
||||||
Accumulated other comprehensive loss
|
(12,602
|
)
|
(17,836
|
)
|
||||
Accumulated deficit
|
(157,030,238
|
)
|
(154,687,242
|
)
|
||||
Total Stockholders’ Equity
|
15,939,956
|
10,562,890
|
||||||
Total Liabilities and Stockholders’ Equity
|
$
|
19,425,392
|
$
|
16,042,926
|
For the Three Months Ended March 31,
|
||||||||
2019
|
2018
|
|||||||
Revenues:
|
$
|
-
|
$
|
-
|
||||
Expenses:
|
||||||||
General and administrative
|
1,695,523
|
1,827,322
|
||||||
Research and development
|
2,242,229
|
4,058,533
|
||||||
Total Expenses
|
3,937,752
|
5,885,855
|
||||||
Loss from Operations
|
(3,937,752
|
)
|
(5,885,855
|
)
|
||||
Other Income
|
||||||||
Interest income
|
81,385
|
75,736
|
||||||
Other income
|
-
|
368,750
|
||||||
Unrealized gain on fair value of warrants
|
1,513,371
|
3,366,496
|
||||||
Total Other Income
|
1,594,756
|
3,810,982
|
||||||
Net Loss Before Provision for Income Taxes
|
(2,342,996
|
)
|
(2,074,873
|
)
|
||||
Provision for income taxes
|
-
|
-
|
||||||
Net Loss
|
$
|
(2,342,996
|
)
|
$
|
(2,074,873
|
)
|
||
Net loss per share, basic and diluted
|
$
|
(0.62
|
)
|
$
|
(0.79
|
)
|
||
Weighted average number of shares outstanding, basic and diluted
|
3,779,953
|
2,639,849
|
For the Three Months Ended March 31,
|
||||||||
2019
|
2018
|
|||||||
Net Loss
|
$
|
(2,342,996
|
)
|
$
|
(2,074,873
|
)
|
||
Unrealized gain (loss) on available-for-sale securities
|
5,234
|
(32,490
|
)
|
|||||
Comprehensive Loss
|
$
|
(2,337,762
|
)
|
$
|
(2,107,363
|
)
|
Common Stock
|
||||||||||||||||||||||||
Number of
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Accumulated
Other
Comprehensive
Loss
|
Total
Stockholders’
Equity
|
|||||||||||||||||||
Balances at January 1, 2019
|
3,122,843
|
$
|
312
|
$
|
165,267,656
|
$
|
(154,687,242
|
)
|
$
|
(17,836
|
)
|
$
|
10,562,890
|
|||||||||||
Issuance of common stock and units, net of issuance costs
|
895,834
|
90
|
7,553,738
|
-
|
-
|
7,553,828
|
||||||||||||||||||
Common stock issued from vested restricted stock units
|
464
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Stock-based compensation
|
-
|
-
|
161,000
|
-
|
-
|
161,000
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(2,342,996
|
)
|
-
|
(2,342,996
|
)
|
||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
5,234
|
5,234
|
||||||||||||||||||
Balances at March 31, 2019
|
4,019,141
|
$
|
402
|
$
|
172,982,394
|
$
|
(157,030,238
|
)
|
$
|
(12,602
|
)
|
$
|
15,939,956
|
|||||||||||
Balances at January 1, 2018
|
2,639,319
|
264
|
157,143,930
|
(140,318,712
|
)
|
(56,886
|
)
|
16,768,596
|
||||||||||||||||
Common stock issued in exchange for services
|
625
|
-
|
12,150
|
-
|
-
|
12,150
|
||||||||||||||||||
Stock-based compensation
|
-
|
-
|
296,577
|
-
|
-
|
296,577
|
||||||||||||||||||
Common stock issued from vested restricted stock units
|
983
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(2,074,873
|
)
|
-
|
(2,074,873
|
)
|
||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
(32,490
|
)
|
(32,490
|
)
|
||||||||||||||||
Balances at March 31, 2018
|
2,640,927
|
$
|
264
|
$
|
157,452,657
|
$
|
(142,393,585
|
)
|
$
|
(89,376
|
)
|
$
|
14,969,960
|
For the Three Months Ended
March 31,
|
||||||||
2019
|
2018
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net loss
|
$
|
(2,342,996
|
)
|
$
|
(2,074,873
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Compensatory stock
|
-
|
12,150
|
||||||
Depreciation and amortization
|
11,533
|
14,600
|
||||||
Loss on sale of equipment
|
9,594
|
-
|
||||||
Amortization of premiums and discounts on marketable securities, net
|
(18,499
|
)
|
14,907
|
|||||
Stock-based compensation
|
161,000
|
296,577
|
||||||
Amortization and termination of deferred research and development arrangement
|
-
|
(375,000
|
)
|
|||||
Unrealized gain on fair value of warrants
|
(1,513,371
|
)
|
(3,366,496
|
)
|
||||
Amortization of deferred lease incentive
|
-
|
(3,111
|
)
|
|||||
Deferred rent
|
-
|
(5,463
|
)
|
|||||
Changes in assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
73,367
|
73,276
|
||||||
Accounts payable and accrued expenses
|
(906,350
|
)
|
(184,905
|
)
|
||||
Deferred revenue
|
150,000
|
-
|
||||||
Other, net
|
(4,373
|
)
|
-
|
|||||
Net Cash Used in Operating Activities
|
(4,380,095
|
)
|
(5,598,338
|
)
|
||||
Cash Flows from Investing Activities:
|
||||||||
Purchase of equipment
|
(13,181
|
)
|
(2,520
|
)
|
||||
Sale of equipment
|
5,500
|
-
|
||||||
Purchase of marketable securities
|
(8,887,566
|
)
|
-
|
|||||
Redemption of marketable securities
|
3,000,000
|
3,000,000
|
||||||
Net Cash (Used In) Provided by Investing Activities
|
(5,895,247
|
)
|
2,997,480
|
|||||
Cash Flows from Financing Activities:
|
||||||||
Issuance of common stock and units, net of issuance costs
|
7,653,828
|
-
|
||||||
Net Cash Provided by Financing Activities
|
7,653,828
|
-
|
||||||
Net Decrease in Cash and Cash Equivalents
|
(2,621,514
|
)
|
(2,600,858
|
)
|
||||
Cash and Cash Equivalents – beginning of period
|
8,744,301
|
8,899,154
|
||||||
Cash and Cash Equivalents - end of period
|
$
|
6,122,787
|
$
|
6,298,296
|
||||
Supplemental Cash Flow Information
|
||||||||
Operating cash flows paid for amounts included in the measurement of lease liabilities
|
$
|
84,651
|
$
|
-
|
||||
Non-cash financing and investing activities:
|
||||||||
Warrants issued
|
$
|
4,735,913
|
$
|
-
|
||||
Operating right of use assets obtained in exchange for lease obligations:
|
$
|
380,935
|
$
|
-
|
1. |
Operations and Organization
|
2. |
Recent Accounting Pronouncements Affecting the Company
|
3. |
Marketable Securities
|
March 31, 2019
|
||||||||||||||||
CostBasis
|
Gross
Unrealized
Gains |
Gross
Unrealized
Losses |
Fair
Value
|
|||||||||||||
Commercial Paper
|
$
|
5,902,433
|
$
|
-
|
$
|
(5,414
|
)
|
$
|
5,897,019
|
|||||||
Corporate Bonds
|
6,002,988
|
-
|
(7,188
|
)
|
5,995,800
|
|||||||||||
Total Marketable Securities
|
$
|
11,905,421
|
$
|
-
|
$
|
(12,602
|
)
|
$
|
11,892,819
|
December 31, 2018
|
||||||||||||||||
CostBasis
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
Corporate Bonds
|
$
|
5,999,356
|
$
|
-
|
$
|
(17,836
|
)
|
$
|
5,981,520
|
4. |
Prepaid Expenses and Other Current Assets
|
March 31,
2019
|
December 31,
2018
|
|||||||
Deposits on contracts
|
$
|
566,721
|
$
|
618,417
|
||||
Prepaid expenses and other current assets
|
410,157
|
555,430
|
||||||
$
|
976,878
|
$
|
1,173,847
|
5. |
Equipment, Net
|
March 31,
2019
|
December 31,
2018
|
|||||||
Furniture and fixtures
|
$
|
78,094
|
$
|
82,686
|
||||
Office and computer equipment
|
172,670
|
159,489
|
||||||
Lab equipment
|
-
|
447,653
|
||||||
Leasehold improvements
|
131,762
|
131,762
|
||||||
Total equipment
|
382,526
|
821,590
|
||||||
Less: Accumulated depreciation and amortization
|
(283,499
|
)
|
(709,117
|
)
|
||||
Net carrying amount
|
$
|
99,027
|
$
|
112,473
|
6. |
Accounts Payable and Accrued Expenses
|
March 31,
2019
|
December 31,
2018
|
|||||||
Trade payables
|
$
|
927,020
|
$
|
547,519
|
||||
Accrued expenses
|
202,068
|
140,637
|
||||||
Accrued research and development contract costs
|
923,809
|
1,782,131
|
||||||
Payroll liabilities
|
193,303
|
682,263
|
||||||
$
|
2,246,200
|
$
|
3,152,550
|
7. |
Collaboration Agreement
|
8. |
Leases
|
Right-of-Use Assets
|
$
|
303,096
|
||
Operating Lease Liabilities
|
||||
Current
|
$
|
113,531
|
||
Long Term
|
181,490
|
|||
Total Operating Lease Liabilities
|
$
|
295,021
|
Year Ending December 31:
|
||||
2019 (excluding the three months ended March 31, 2019)
|
$
|
99,819
|
||
2020
|
154,961
|
|||
2021
|
78,437
|
|||
Minimum lease payments
|
333,217
|
|||
Less: Imputed interest
|
(38,196
|
)
|
||
Present value of minimum lease payments
|
295,021
|
|||
Less: current maturities of lease obligations
|
(113,531
|
)
|
||
Long-term lease obligations
|
$
|
181,490
|
9. |
Net Loss per Common Share
|
10. |
Common Stock
|
11. |
Stock-Based Compensation
|
For the Three Months Ended
March 31,
|
||||||||
2019
|
2018
|
|||||||
Statement of operations line item:
|
||||||||
General and administrative
|
$
|
116,679
|
$
|
216,415
|
||||
Research and development
|
44,321
|
80,162
|
||||||
Total
|
$
|
161,000
|
$
|
296,577
|
For the Three Months Ended March 31,
|
||||||||
2019
|
2018
|
|||||||
Black-Scholes assumptions
|
||||||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
||||
Expected volatility
|
74
|
%
|
69-72
|
%
|
||||
Risk-free interest rate
|
2.5-2.6
|
%
|
2.3-2.7
|
%
|
||||
Expected term (in years)
|
6 years
|
6 years
|
Number of
Options
|
Weighted
Average
Exercise Price
|
Weighted Average
Remaining
Contractual Term
|
Aggregate
Intrinsic Value
|
||||||||||
Outstanding, January 1, 2019
|
255,922
|
$
|
41.88
|
7.8 years
|
$
|
-
|
|||||||
Granted
|
31,243
|
$
|
7.20
|
||||||||||
Exercised
|
-
|
$
|
-
|
||||||||||
Expired
|
(1,000
|
)
|
$
|
44.40
|
|||||||||
Cancelled
|
(34,730
|
)
|
$
|
22.89
|
|||||||||
Outstanding, March 31, 2019
|
251,435
|
$
|
40.15
|
7.6 years
|
$
|
-
|
|||||||
Exercisable, March 31, 2019
|
138,292
|
$
|
60.45
|
6.2 years
|
$
|
-
|
2019
|
||||||||
Number of
Options
|
Weighted Average Fair
Value at Grant Date
|
|||||||
Unvested at January 1, 2019
|
131,531
|
$
|
13.19
|
|||||
Granted
|
31,243
|
$
|
4.78
|
|||||
Vested
|
(16,531
|
)
|
$
|
20.16
|
||||
Cancelled
|
(33,100
|
)
|
$
|
12.73
|
||||
Unvested at March 31, 2019
|
113,143
|
$
|
9.99
|
Number of RSUs
|
Weighted
Average Grant
Date Fair Value
|
|||||||
Outstanding, January 1, 2019
|
1,394
|
$
|
22.08
|
|||||
Granted
|
-
|
$
|
-
|
|||||
Vested and Released
|
(464
|
)
|
$
|
22.08
|
||||
Cancelled
|
(659
|
)
|
$
|
22.08
|
||||
Outstanding, March 31, 2019
|
271
|
$
|
22.08
|
12. |
Warrants
|
Number of Warrants:
|
|||||||||||||
Warrant Issuance
|
March 31, 2019
|
December 31,
2018
|
Exercise Price
|
Expiration
Date
|
|||||||||
Liability-classified Warrants
|
|||||||||||||
January 2014 Investor Warrants
|
-
|
39,683
|
$
|
153.60
|
Jan. 2019
|
||||||||
November 2015 Investor Warrants
|
104,168
|
104,168
|
$
|
63.60
|
May 2021
|
||||||||
November 2015 Placement Agent Warrants
|
279
|
279
|
$
|
63.60
|
Nov. 2020
|
||||||||
March 2016 Investor Warrants
|
50,651
|
50,651
|
$
|
50.40
|
Sept. 2021
|
||||||||
September 2016 Investor Warrants
|
67,084
|
67,084
|
$
|
36.00
|
Mar. 2022
|
||||||||
June 2017 Investor Warrants
|
126,264
|
126,264
|
$
|
48.00
|
Dec. 2022
|
||||||||
June 2017 Placement Agent Warrants
|
15,153
|
15,153
|
$
|
49.50
|
Jun. 2022
|
||||||||
October 2017 Investor Warrants
|
136,058
|
136,058
|
$
|
34.20
|
Apr. 2023
|
||||||||
October 2017 Placement Agent Warrants
|
16,327
|
16,327
|
$
|
36.72
|
Oct. 2022
|
||||||||
Total liability classified warrants
|
515,984
|
555,667
|
|||||||||||
Equity-classified Warrants
|
|||||||||||||
October 2018 Investor Warrants
|
480,771
|
480,771
|
$
|
20.04
|
Apr. 2024
|
||||||||
October 2018 Placement Agent Warrants
|
28,848
|
28,848
|
$
|
19.50
|
Oct. 2023
|
||||||||
January 2019 Investor Warrants
|
895,886
|
-
|
$
|
9.60
|
Jan. 2024
|
||||||||
Total equity-classified warrants
|
1,405,505
|
509,619
|
|||||||||||
Total outstanding warrants
|
1,921,489
|
1,065,286
|
Number of Warrants
|
||||||||||||||||
Liability-
classified
|
Equity-
classified
|
Total
|
Weighted
average
exercise price
|
|||||||||||||
Balance, January 1, 2019
|
555,667
|
509,619
|
1,065,286
|
$
|
37.52
|
|||||||||||
Issued during the period
|
-
|
895,886
|
895,886
|
$
|
9.60
|
|||||||||||
Exercised during the period
|
-
|
-
|
-
|
$
|
-
|
|||||||||||
Expired during the period
|
(39,683
|
)
|
-
|
(39,683
|
)
|
$
|
153.60
|
|||||||||
Balance, March 31, 2019
|
515,984
|
1,405,505
|
1,921,489
|
$
|
22.10
|
Fair Value as of:
|
||||||||
Warrant Issuance:
|
March 31, 2019
|
December 31, 2018
|
||||||
November 2015 Investor Warrants
|
37,834
|
234,918
|
||||||
November 2015 Placement Agent Warrants
|
55
|
435
|
||||||
March 2016 Investor Warrants
|
45,300
|
160,099
|
||||||
September 2016 Investor Warrants
|
115,965
|
333,834
|
||||||
June 2017 Investor Warrants
|
234,933
|
623,324
|
||||||
June 2017 Placement Agent Warrants
|
23,238
|
65,149
|
||||||
October 2017 Investor Warrants
|
305,050
|
801,551
|
||||||
October 2017 Placement Agent Warrants
|
31,840
|
88,276
|
||||||
Total:
|
$
|
794,215
|
$
|
2,307,586
|
March 31, 2019
|
December 31, 2018
|
|||||||
Trading market prices
|
$
|
6.12
|
$
|
11.16
|
||||
Estimated future volatility
|
103
|
%
|
105
|
%
|
||||
Dividend
|
-
|
-
|
||||||
Estimated future risk-free rate
|
2.09-2.20
|
%
|
2.35-2.53
|
%
|
||||
Equivalent volatility
|
91-101
|
%
|
99-104
|
%
|
||||
Equivalent risk-free rate
|
2.31-2.40
|
%
|
2.51-2.55
|
%
|
||||
Fundamental transaction likelihood, at end of warrant term
|
5
|
%
|
5
|
%
|
For the Three Months Ended March 31,
|
||||||||
2019
|
2018
|
|||||||
Expired Warrants
|
$
|
-
|
$
|
64,281
|
||||
November 2015 Investor Warrants
|
197,084
|
640,954
|
||||||
November 2015 Placement Agent Warrants
|
380
|
1,578
|
||||||
March 2016 Investor Warrants
|
114,799
|
327,454
|
||||||
September 2016 Investor Warrants
|
217,869
|
434,375
|
||||||
June 2017 Investor Warrants
|
388,391
|
823,171
|
||||||
June 2017 Placement Agent Warrants
|
41,911
|
97,309
|
||||||
October 2017 Investor Warrants
|
496,501
|
872,346
|
||||||
October 2017 Placement Agent Warrants
|
56,436
|
105,028
|
||||||
Total:
|
$
|
1,513,371
|
$
|
3,366,496
|
13. |
Income Taxes
|
March 31,
2019
|
December 31,
2017
|
|||||||
Net Operating Loss Carryforwards
|
$
|
42,300,000
|
$
|
41,184,000
|
||||
Stock Compensation Expense
|
1,618,000
|
1,608,000
|
||||||
Book tax differences on assets and liabilities
|
109,000
|
195,000
|
||||||
Valuation Allowance
|
(44,027,000
|
)
|
(42,987,000
|
)
|
||||
Net Deferred Tax Assets
|
$
|
-
|
$
|
-
|
14. |
Commitments and Contingencies
|
a) |
The Company has contracted with various vendors for services, with terms that require payments over the terms of the agreements, usually ranging from two to 36 months.
The costs to be incurred are estimated and are subject to revision. As of March 31, 2019, the total estimated cost to complete these agreements was approximately $4,790,000. All of these agreements may be terminated by either party
upon appropriate notice as stipulated in the respective agreements.
|
b) |
On June 22, 2009, the Company entered into a License Agreement with Korea Research Institute of Chemical Technology (“KRICT”) to acquire the rights to all intellectual
property related to quinoxaline-piperazine derivatives that were synthesized under a Joint Research Agreement. The agreement with KRICT calls for a one-time milestone payment of $1,000,000 within 30 days after the first achievement
of marketing approval of the first commercial product arising out of or in connection with the use of KRICT’s intellectual property. As of March 31, 2019, the milestone has not occurred.
|
c) |
The Company has established a 401(k) plan for its employees. The Company has elected to match 100% of the
first 3% of an employee’s compensation plus 50% of an additional 2% of the employee’s deferral. Expense related to this matching contribution aggregated to $27,879
and $35,809 for the three months ended March 31, 2019 and 2018, respectively.
|
d) |
On February 5, 2018, the Company and NEXT BT Co. Ltd (“Next BT”) terminated a research collaboration agreement between the Company and Rexgene Biotech Co., Ltd, a
predecessor in interest to Next BT. In exchange for Next BT terminating its rights to RX-0201 in Asia, the Company agreed to pay Next BT a royalty in the low single digits of any net sales of RX-0201 the Company makes in Asia and 50%
of the Company’s licensing revenue related to licensing of RX-0201 in Asia, up to an aggregate of $5,000,000. As of March 31, 2019, the Company has not made any royalty payments to Next BT.
|
15. |
Fair Value Measurements
|
Level 1 Inputs
|
—
|
Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by the Company;
|
Level 2 Inputs
|
—
|
Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or
indirectly; and
|
Level 3 Inputs
|
—
|
Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants.
|
Fair Value Measurements at March 31, 2019
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
Commercial Paper
|
5,897,019
|
-
|
5,897,019
|
-
|
||||||||||||
Corporate Bonds
|
5,995,800
|
-
|
5,995,800
|
-
|
||||||||||||
Total Assets:
|
$
|
11,892,819
|
$
|
-
|
$
|
11,892,819
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Warrant Liabilities
|
$
|
794,215
|
$
|
-
|
$
|
-
|
794,215
|
Fair Value Measurements at December 31, 2018
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
Corporate Bonds
|
$
|
5,981,520
|
$
|
-
|
$
|
5,981,520
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Warrant Liabilities
|
$
|
2,307,586
|
$
|
-
|
$
|
-
|
$
|
2,307,586
|
Warrant Liabilities
|
||||
Balance at January 1, 2019
|
$
|
2,307,586
|
||
Unrealized gains, net
|
(1,513,371
|
)
|
||
Balance at March 31, 2019
|
$
|
794,215
|
16. |
Subsequent Events
|
• |
our understandings and beliefs regarding the role of certain biological mechanisms and
processes in cancer;
|
• |
our drug candidates being in early stages of development, including in preclinical
development;
|
• |
our ability to initially develop drug candidates for orphan indications to reduce the
time-to-market and take advantage of certain incentives provided by the U.S. Food and Drug Administration;
|
• |
our ability to successfully and timely complete clinical trials for our drug candidates
in clinical development;
|
• |
uncertainties related to the timing, results and analyses related to our drug
candidates in preclinical development;
|
• |
our ability to obtain the necessary U.S. and international regulatory approvals for our
drug candidates;
|
• |
our reliance on third-party contract research organizations and other investigators and
collaborators for certain research and development services;
|
• |
our ability to maintain or engage third-party manufacturers to manufacture, supply,
store and distribute supplies of our drug candidates for our clinical trials;
|
• |
our ability to form strategic alliances and partnerships with pharmaceutical companies
and other partners for development, sales and marketing of certain of our product candidates;
|
• |
demand for and market acceptance of our drug candidates;
|
• |
the scope and validity of our intellectual property protection for our drug candidates
and our ability to develop our candidates without infringing the intellectual property rights of others;
|
• |
our lack of profitability and the need for additional capital to operate our business;
|
• |
other risks and uncertainties, including those set forth herein and in our Annual
Report on Form 10-K for the year ended December 31, 2018 under the caption “Risk Factors” and those detailed from time to time in our filings with the Securities and Exchange Commission.
|
• |
RX-3117 is a novel, investigational oral, small molecule nucleoside compound.
Once intracellularly activated (phosphorylated) by the enzyme UCK2, it is incorporated into the DNA or RNA of cells and inhibits both DNA and RNA synthesis, which induces apoptotic cell death of tumor cells. Because UCK2 is
overexpressed in multiple human tumors, but has a very limited presence in normal tissues, RX-3117 offers the potential for a targeted anti-cancer therapy with an improved efficacy and safety profile, and we believe it has therapeutic
potential in a broad range of cancers, including pancreatic, bladder, colon, lung and cervical cancer. RX-3117 is currently being evaluated in a Phase 2a clinical trial in combination with Celgene’s Abraxane® (paclitaxel
protein-bound particles for injectable suspension) as a first-line treatment in patients newly diagnosed with metastatic pancreatic cancer. Preliminary safety and efficacy data from this trial reported in January 2019 showed a 38%
overall response rate in the 24 patients who had at least one scan on treatment and were included in the preliminary evaluation of overall response. The trial began dosing patients in November 2017 and reached the target enrollment
of 40 patients in February 2019. RX-3117 has received “orphan drug designation” from the U.S. Food and Drug Administration (“FDA”) and from the European Commission for pancreatic cancer. RX-3117 is also being evaluated in a Phase
2a clinical trial in advanced bladder cancer. We presented updated preliminary safety and efficacy data from this trial in February 2019.
|
• |
RX-5902 is a potential first-in-class small molecule modulator of the Wnt/beta-catenin pathway which plays a key role in cancer cell proliferation and tumor growth.
RX-5902 modulates the pathway through inhibition of phosphorylated p68, a protein that helps to transport beta-catenin from the cytoplasm into the cell nucleus. Once inside the nucleus, beta-catenin turns on various oncogenes,
thereby promoting cancer cell proliferation and tumor growth. We believe that by inhibiting phosphorylated p68, RX-5902 hinders the transport of beta-catenin into the nucleus and reduces the activation of cancer genes. In addition,
multiple preclinical models have shown that RX-5902 activates the immune system against cancer and enhances the ability of immune cells to infiltrate the tumor and kill tumor cells. In preclinical models of colorectal and triple
negative breast cancer (“TNBC”), the effects of RX-5902 were observed to be synergistic with other immunotherapy agents such as checkpoint inhibitors. We have evaluated RX-5902 in a Phase 1 dose escalation study in patients with a
diverse range of metastatic, treatment-refractory tumors, including breast, ovarian, colorectal, and neuro-endocrine tumors. In February 2017, we initiated a Phase 2a clinical trial of RX-5902 in patients with metastatic TNBC. In
August 2018, we entered into a collaboration with Merck Sharp & Dohme B.V. (“Merck”) to evaluate the combination of RX-5902 and Merck’s anti-PD-1 therapy, KEYTRUDA® (pembrolizumab) in a Phase 2 trial in patients with
metastatic TNBC. In December 2018, we ceased enrollment in the ongoing Phase 2a monotherapy trial of RX-5902 in TNBC to focus RX-5902 development activities on planning the proposed combination trial with KEYTRUDA. We are currently
evaluating the development strategy for RX-5902 and may or may not proceed with this trial.
|
• |
RX-0301 is a potential best-in-class, potent inhibitor of the protein kinase Akt-1, which we believe plays a critical role in cancer cell proliferation, survival,
angiogenesis, metastasis and drug resistance. RX-0301 is the subject of a research and development collaboration with Zhejiang Haichang Biotechnology Co., Ltd (“Haichang”) for the development of RX-0301 to conduct certain preclinical
and clinical activities through completion of a Phase 2a proof-of-concept clinical trial in hepatocellular carcinoma. RX-0301 is being developed as a nano-liposomal formulation of RX-0201 (Archexin®) using Haichang’s
proprietary QTsome™ technology. Rexahn was previously developing RX-0201 for the treatment of renal cell carcinoma (“RCC”). In February 2018, in response to the changing treatment landscape for metastatic RCC over the prior two years
with the approval of new therapies by the FDA, we announced plans to discontinue the internally funded programs of RX-0201 and ceased enrolling patients in a Phase 2a proof-of-concept clinical trial of RX-0201 in patients with
metastatic RCC. RX-0301 is currently in preclinical development.
|
For the Three Months Ended
March 31,
|
||||||||
2019
|
2018
|
|||||||
Clinical Candidates:
|
||||||||
RX-3117
|
$
|
1,078,400
|
$
|
2,111,600
|
||||
RX-5902
|
342,400
|
914,400
|
||||||
RX-0201
|
115,800
|
152,800
|
||||||
|
||||||||
Preclinical, Personnel and Overhead
|
705,629
|
879,733
|
||||||
Total Research and Development Expenses
|
$
|
2,242,229
|
$
|
4,058,533
|
• |
the progress of our product development activities;
|
• |
the number and scope of our product development programs;
|
• |
the progress of our preclinical and clinical trial activities;
|
• |
the progress of the development efforts of parties with whom we have entered into collaboration agreements;
|
• |
our ability to maintain current collaboration programs and to establish new collaboration arrangements;
|
• |
the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and
|
• |
the costs and timing of regulatory approvals.
|
Exhibit No.
|
Description
|
|
Amended and Restated Certificate of Incorporation, filed
as Appendix G to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 29, 2005, is incorporated herein by reference.
|
||
Certificate of Amendment to Amended and Restated
Certificate of Incorporation, filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 30, 2018, is incorporated herein by reference.
|
||
Certificate of Amendment of Amended and Restated
Certificate of Incorporation, filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 12, 2019, is incorporated herein by reference.
|
||
Form of Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on January 25, 2019, is incorporated herein by reference.
|
||
Sixth Amendment to Lease Agreement, dated as of March
18, 2019, by and between the registrant and SG Plaza Holdings, LLC.
|
||
Certification of Chief Executive Officer pursuant to Rules 13a-14(a) / 15d-14(a)
|
||
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
101
|
The following materials from Rexahn Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q, formatted in Extensible Business Reporting Language
(“XBRL”): (i) Condensed Balance Sheet; (ii) Condensed Statement of Operations; (iii) Condensed Statement of Comprehensive Loss; (iv) Condensed Statement of Stockholders’ Equity; (v) Condensed Statement of Cash Flows; and (vi) Notes to
the Financial Statements.
|
REXAHN PHARMACEUTICALS, INC.
|
||
(Registrant)
|
||
By:
|
/s/ Douglas J. Swirsky
|
|
Date: May 10, 2019
|
Douglas J. Swirsky
|
|
Chief Executive Officer and President
(principal executive, financial and accounting officer)
|