Delaware
|
11-3516358
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, $0.0001 par value per share
|
NYSE American
|
Large Accelerated Filer
|
☐
|
Accelerated Filer
|
☐
|
Non-Accelerated Filer
|
☐
|
Smaller reporting company
|
☑
|
Emerging growth company
|
☐
|
Class
|
Outstanding as of March 7, 2019
|
|
Common Stock, $0.0001 par value per share
|
48,282,995 shares
|
· |
our understandings and beliefs regarding the role of certain biological mechanisms and processes in cancer;
|
· |
our product candidates being in early stages of development, including in preclinical development;
|
· |
our ability to develop product candidates for orphan indications to take advantage of certain incentives provided by the U.S. Food and Drug Administration;
|
· |
our ability to transition from our initial focus on developing product candidates for orphan indications to candidates for more highly prevalent indications;
|
· |
our ability to successfully and timely complete clinical trials for our product candidates in clinical development;
|
· |
uncertainties related to the timing, results and analyses related to our product candidates in preclinical development;
|
· |
our ability to obtain the necessary U.S. and foreign regulatory approvals for our product 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 product candidates for our clinical trials;
|
· |
our ability to form strategic alliances and partnerships with pharmaceutical companies and other partners for sales and marketing of our product candidates, if approved;
|
· |
demand for and market acceptance of our product candidates, if approved;
|
· |
the scope and validity of our intellectual property protection for our product 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; and
|
· |
other risks and uncertainties, including those set forth herein under the caption “Risk Factors” and those detailed from time to time in our filings with the Securities
and Exchange Commission.
|
Page
|
|||
PART I
|
1
|
||
Item 1
|
1
|
||
Item 1A
|
22
|
||
Item 1B
|
46
|
||
Item 2
|
46
|
||
Item 3
|
46
|
||
Item 4
|
46
|
||
PART II
|
47
|
||
Item 5
|
47
|
||
Item 6
|
48
|
||
Item 7
|
49
|
||
Item 7A
|
57
|
||
Item 8
|
57
|
||
Item 9
|
57
|
||
Item 9A
|
57
|
||
Item 9B
|
59
|
||
PART III
|
60
|
||
Item 10
|
60
|
||
Item 11
|
60
|
||
Item 12
|
60
|
||
Item 13
|
60
|
||
Item 14
|
60
|
||
Item 15
|
61
|
||
Item 16
|
61
|
||
66
|
· |
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. In January 2018, we reported final data from a Phase 2a clinical trial of RX-3117 in patients with relapsed or refractory
metastatic pancreatic cancer. In this trial evidence of tumor shrinkage was observed in some patients with metastatic pancreatic cancer that was resistant to gemcitabine and who had failed on multiple prior treatments. In this
study, 31% of patients experienced progression free survival for two months or more and five patients, or 12%, had disease stabilization for greater than four months. 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 this study 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 (“EC”) 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 (“HCC”). 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.
|
· |
Effective treatments for metastatic cancer: There is a need for better
treatments to prolong life and improve survival in patients diagnosed with late-stage cancers. In many cases, early stage cancer can be effectively treated with surgery and/or radiation and adjuvant drug treatment. However, once the
tumor has metastasized, current treatments are usually not curative.
|
· |
Long-term management of cancers: Surgery, radiation therapy or chemotherapy may
not result in long-term remission, although surgery and radiation therapies are considered effective methods for some cancers. There is a need for more effective drugs and adjuvant therapies to treat relapsed and refractory cancers.
|
· |
Multi-drug resistance: Multi-drug resistance is a major obstacle to effectively
treating various cancers with chemotherapy.
|
· |
Debilitating toxicity by chemotherapy: Chemotherapy as a mainstay of cancer treatment can induce severe adverse reactions and toxicities, adversely affecting quality of life or life itself.
|
· |
Expedited Regulatory or Commercialization Pathways. Drugs for life-threatening
diseases such as cancer are often candidates for fast track designation, breakthrough therapy designation, priority review and accelerated approval, each of which may lead to approval sooner than would otherwise be the case.
|
· |
Favorable Environment for Formulary Access and Reimbursement. We believe cancer
drugs with proven efficacy would gain rapid market uptake, formulary listing and third-party payor reimbursement. Drugs with orphan designations are generally reimbursed by third-party payors because there are few, if any,
alternatives.
|
· |
Low Marketing Costs. We believe the marketing of new drugs to oncologists can
be accomplished with a smaller sales force and lower related costs than a sales force that markets widely to primary care physicians and general practitioners.
|
· |
Advance our existing product candidates through late-stage clinical trials, generating meaningful clinical results;
|
· |
Work with U.S. and foreign regulatory authorities for expeditious, efficient development pathways toward registration;
|
· |
Use our industry relationships and experience to source, evaluate and in-license well-characterized product candidates to continue pipeline development; and
|
· |
Identify potential commercial or distribution partners for our products in relevant territories.
|
· |
developing drugs;
|
· |
undertaking preclinical testing and human clinical trials;
|
· |
obtaining FDA and other regulatory approvals of drugs;
|
· |
formulating and manufacturing drugs; and
|
· |
launching, marketing and selling drugs.
|
· |
The federal Anti-Kickback Law, which prohibits, among other things, knowingly or willingly offering, paying, soliciting or receiving remuneration, directly or indirectly,
in cash or in kind, to induce or reward the purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any health care items or service for which payment may be made, in whole or in part, by federal
healthcare programs such as Medicare and Medicaid. This statute has been interpreted to apply to arrangements between pharmaceutical companies on one hand and prescribers, purchasers and formulary managers on the other. Liability
may be established under the federal Anti-Kickback Law without proving actual knowledge of the statute or specific intent to violate it. In addition, the government may assert that a claim including items or services resulting from a
violation of the federal Anti-Kickback Law constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. Although there are a number of statutory exemptions and regulatory safe harbors to the federal
Anti-Kickback Law protecting certain common business arrangements and activities from prosecution or regulatory sanctions, the exemptions and safe harbors are drawn narrowly, and practices that do not fit squarely within an exemption
or safe harbor, or for which no exception or safe harbor is available, may be subject to scrutiny.
|
· |
The federal civil False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, a false or
fraudulent claim for payment of government funds or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly concealing or knowingly and
improperly avoiding, decreasing or concealing an obligation to pay money to the federal government. Many pharmaceutical and other healthcare companies have been investigated and have reached substantial financial settlements with the
federal government under the civil False Claims Act for a variety of alleged improper marketing activities, including: providing free product to customers with the expectation that the customers would bill federal programs for the
product; providing sham consulting fees, grants, free travel and other benefits to physicians to induce them to prescribe the company’s products; and inflating prices reported to private price publication services, which are used to
set drug payment rates under government healthcare programs. In addition, in recent years the government has pursued civil False Claims Act cases against a number of pharmaceutical companies for causing false claims to be submitted as
a result of the marketing of their products for unapproved, and thus non-reimbursable, uses. Pharmaceutical and other healthcare companies also are subject to other federal false claim laws, including, among others, federal criminal
healthcare fraud and false statement statutes that extend to non-government health benefit programs.
|
· |
Analogous state and local laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving
healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance
guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; and state and foreign laws that require drug manufacturers to report
information related to clinical trials, or information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;
|
· |
The federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, which requires manufacturers of drugs, devices, biologics, and medical
supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of
value to physicians and teaching hospitals, as well as ownership and investment interests held in the company by physicians and their immediate family members. Beginning in 2022, applicable manufacturers also will be required to
report information regarding payments and transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives.
|
· |
The federal Foreign Corrupt Practices Act of 1997 and other similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from
providing money or anything of value to officials of foreign governments, foreign political parties or international organizations with the intent to obtain or retain business or seek a business advantage. Recently, there has been a
substantial increase in anti-bribery law enforcement activity by U.S. regulators, with more frequent and aggressive investigations and enforcement proceedings by both the Department of Justice and the U.S. Securities and Exchange
Commission (the “SEC”). Violations of United States or foreign laws or regulations could result in the imposition of substantial fines, interruptions of business, loss of supplier, vendor or other third-party relationships,
termination of necessary licenses and permits and other legal or equitable sanctions. Other internal or government investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as
a consequence.
|
· |
continued preclinical development and clinical trials for our current and new product candidates;
|
· |
finding and maintaining suitable partnerships to help us research, develop and commercialize product candidates;
|
· |
efforts to seek regulatory approvals for our product candidates;
|
· |
implementing additional internal systems and infrastructure;
|
· |
in-licensing additional technologies to develop; and
|
· |
hiring additional personnel or entering into relationships with third parties to perform functions that we are unable to perform on our own.
|
· |
successfully conducting preclinical and clinical trials;
|
· |
obtaining regulatory approval;
|
· |
formulating and manufacturing products; and
|
· |
conducting sales and marketing activities.
|
· |
the cost of preclinical studies and clinical trials may be greater than we anticipate;
|
· |
delay or failure in reaching agreement with the FDA or a foreign regulatory authority on the design of a given trial, or in obtaining authorization to commence a trial;
|
· |
delay or failure in reaching agreement on acceptable terms with prospective CROs and clinical trial sites;
|
· |
delay or failure in obtaining approval of an IRB to conduct a clinical trial at a given site;
|
· |
withdrawal of clinical trial sites from our clinical trials, including as a result of changing standards of care or the ineligibility of a site to participate;
|
· |
delay or failure in recruiting and enrolling study subjects;
|
· |
delay or failure in having subjects complete a clinical trial or return for post-treatment follow up;
|
· |
clinical sites or investigators deviating from trial protocol, failing to conduct the trial in accordance with applicable regulatory requirements, or dropping out of a
trial;
|
· |
inability to identify and maintain a sufficient number of trial sites;
|
· |
failure of third-party CROs to meet their contractual obligations or deadlines;
|
· |
the need to modify a study protocol;
|
· |
negative or inconclusive results during clinical trials, including the emergence of dosing issues, unforeseen safety issues or lack of effectiveness;
|
· |
changes in the standard of care of the indication being studied;
|
· |
reliance on third-party suppliers for the clinical trial supply of product candidates;
|
· |
inability to monitor patients adequately during or after treatment;
|
· |
lack of sufficient funding to finance the clinical trials; and
|
· |
changes in governmental regulations or administrative action.
|
· |
disagreement with the design or implementation of our clinical trials;
|
· |
failure to demonstrate to the authority’s satisfaction that the product candidate is safe and effective for the proposed indication;
|
· |
failure of clinical trial results to meet the level of statistical significance required for approval;
|
· |
failure to demonstrate that the product’s benefits outweigh its risks;
|
· |
disagreement with our interpretation of preclinical or clinical data; and
|
· |
inadequacies in the manufacturing facilities or processes of third-party manufacturers.
|
· |
we may suspend marketing of such product;
|
· |
regulatory authorities may withdraw their approvals of such product;
|
· |
regulatory authorities may require additional warnings on the label that could diminish the usage or otherwise limit the commercial success of such products;
|
· |
we may be required to develop a REMS for such product or, if a REMS is already in place, to incorporate additional requirements under the REMS, or to develop a similar
strategy as required by a comparable foreign regulatory authority;
|
· |
we may be required to conduct post-market studies;
|
· |
we could be sued and held liable for harm caused to subjects or patients; and
|
· |
our reputation may suffer.
|
· |
awareness of a drug’s availability and benefits;
|
· |
perceptions by members of the health care community, including physicians, about the safety and effectiveness of our drugs;
|
· |
pharmacological benefit and cost-effectiveness of our products relative to competing products;
|
· |
availability of reimbursement for our products from government or other third-party payors;
|
· |
effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any; and
|
· |
the price at which we sell our products.
|
· |
the federal Anti-Kickback Law prohibits persons from, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or
indirectly, in cash or in kind, to induce or reward, or in return for, the referral of an individual for the furnishing or arranging for the furnishing, or the purchase, lease or order, or arranging for or recommending purchase, lease
or order, any good or service for which payment may be made under a federal healthcare program such as Medicare and Medicaid;
|
· |
the federal civil False Claims Act imposes penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things,
knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement material to an obligation to pay money to the government or knowingly concealing
or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government;
|
· |
HIPAA imposes criminal liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, knowingly and willfully embezzling or stealing
from a health care benefit program, willfully obstructing a criminal investigation of a health care offense, or knowingly and willfully making false statements relating to healthcare matters;
|
· |
HIPAA and its implementing regulations also impose obligations on certain covered entity health care providers, health plans and health care clearinghouses as well as
their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and
transmission of individually identifiable health information;
|
· |
the federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, which requires manufacturers of drugs, devices, biologics, and medical
supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of
value to physicians and teaching hospitals (and certain other practitioners beginning in 2022), as well as ownership and investment interests held in the company by physicians and their immediate family members; and
|
· |
analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims
involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary
compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to certain healthcare providers; state and foreign laws that require drug manufacturers
to report information related to clinical trials, or information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws that govern the
privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
|
· |
developing drugs;
|
· |
undertaking preclinical testing and human clinical trials;
|
· |
obtaining FDA and other regulatory approvals of drugs;
|
· |
formulating and manufacturing drugs; and
|
· |
launching, marketing and selling drugs.
|
· |
We may be unable to contract with third-party manufacturers on acceptable terms, or at all, because the number of potential manufacturers is limited. Potential
manufacturers of any product candidate that is approved will be subject to FDA compliance inspections and any new manufacturer would have to be qualified to produce our products;
|
· |
Our third-party manufacturers might be unable to formulate and manufacture our drugs in the volume and of the quality required to meet our clinical and commercial needs,
if any;
|
· |
Our third-party manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our clinical trials
through completion or to successfully produce, store and distribute our commercial products, if approved;
|
· |
Drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA and other government agencies to ensure compliance with cGMP and other government
regulations and corresponding foreign standards. We do not have direct control over third-party manufacturers’ compliance with these regulations and standards, but we may ultimately be responsible for any of their failures;
|
· |
If any third-party manufacturer makes improvements in the manufacturing process for our products, we may not own, or may have to share, the intellectual property rights
to such improvements; and
|
· |
A third-party manufacturer may gain knowledge from working with us that could be used to supply one of our competitors with a product that competes with ours.
|
· |
the degree and range of protection any patents will afford us against competitors, including whether third parties find ways to invalidate or otherwise circumvent our
licensed patents;
|
· |
if and when patents will issue in the United States or any other country;
|
· |
whether or not others will obtain patents claiming aspects similar to those covered by our licensed patents and patent applications;
|
· |
whether we will need to initiate litigation or administrative proceedings to protect our intellectual property rights, which may be costly whether we win or lose;
|
· |
whether any of our patents will be challenged by our competitors alleging invalidity or unenforceability and, if opposed or litigated, the outcome of any administrative
or court action as to patent validity, enforceability or scope;
|
· |
whether a competitor will develop a similar compound that is outside the scope of protection afforded by a patent or whether the patent scope is inherent in the claims
modified due to interpretation of claim scope by a court;
|
· |
whether there were activities previously undertaken by a licensor that could limit the scope, validity or enforceability of licensed patents and intellectual property; or
|
· |
whether a competitor will assert infringement of its patents or intellectual property, whether or not meritorious, and what the outcome of any related litigation or
challenge may be.
|
· |
obtain licenses, which may not be available on commercially reasonable terms, if at all;
|
· |
redesign our products or processes to avoid infringement;
|
· |
stop using the subject matter claimed in patents held by others, which could cause us to lose the use of one or more of our product candidates;
|
· |
pay damages; or
|
· |
defend litigation or administrative proceedings that may be costly whether we win or lose and that could result in a substantial diversion of our management resources.
|
· |
the announcement of new products or product enhancements by us or our competitors;
|
· |
changes in our relationships with our licensors or other strategic partners;
|
· |
developments concerning intellectual property rights and regulatory approvals;
|
· |
variations in our and our competitors’ results of operations;
|
· |
changes in earnings estimates or recommendations by securities analysts;
|
· |
changes in the structure of healthcare payment systems; and
|
· |
developments and market conditions in the pharmaceutical and biotechnology industries.
|
For the Year Ended December 31,
|
||||||||||||||||||||
Statement of Operations Data:
|
2018
|
2017
|
2016
|
2015
|
2014
|
|||||||||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Expenses:
|
||||||||||||||||||||
General and administrative
|
7,428,615
|
6,639,421
|
6,324,236
|
6,115,210
|
6,253,328
|
|||||||||||||||
Research and development
|
13,109,058
|
10,715,296
|
10,089,149
|
12,148,226
|
7,015,901
|
|||||||||||||||
Total expenses
|
20,537,673
|
17,354,717
|
16,413,385
|
18,263,436
|
13,269,229
|
|||||||||||||||
Loss from operations
|
(20,537,673
|
)
|
(17,354,717
|
)
|
(16,413,385
|
)
|
(18,263,436
|
)
|
(13,269,229
|
)
|
||||||||||
Other Income (Expense), net
|
6,169,143
|
(7,939,786
|
)
|
7,106,040
|
3,878,880
|
(5,252,372
|
)
|
|||||||||||||
Net Loss
|
$
|
(14,368,530
|
)
|
$
|
(25,294,503
|
)
|
$
|
(9,307,345
|
)
|
$
|
(14,384,556
|
)
|
$
|
(18,521,601
|
)
|
|||||
Net Loss per share, basic and diluted
|
$
|
(0.44
|
)
|
$
|
(0.92
|
)
|
$
|
(0.43
|
)
|
$
|
(0.79
|
)
|
$
|
(1.05
|
)
|
|||||
Weighted average shares outstanding, basic and diluted
|
32,915,377
|
27,390,527
|
21,744,740
|
18,238,822
|
17,610,697
|
|||||||||||||||
As of December 31,
|
||||||||||||||||||||
Balance Sheet Data:
|
2018
|
2017
|
2016
|
2015
|
2014
|
|||||||||||||||
Cash, Cash Equivalents, and Marketable Securities
|
$
|
14,725,821
|
$
|
26,831,095
|
$
|
20,315,580
|
$
|
23,439,526
|
$
|
32,698,296
|
||||||||||
Working Capital(1)
|
$
|
12,747,118
|
$
|
24,901,710
|
$
|
19,041,597
|
$
|
22,000,046
|
$
|
30,970,020
|
||||||||||
Total Assets
|
$
|
16,042,926
|
$
|
28,287,881
|
$
|
21,043,532
|
$
|
24,805,029
|
$
|
33,533,060
|
||||||||||
Warrant Liabilities
|
$
|
2,307,586
|
$
|
7,853,635
|
$
|
1,573,366
|
$
|
2,739,163
|
$
|
3,768,351
|
||||||||||
Accumulated Deficit
|
$
|
(154,687,242
|
)
|
$
|
(140,318,712
|
)
|
$
|
(115,024,209
|
)
|
$
|
(105,716,864
|
)
|
$
|
(91,332,308
|
)
|
|||||
Total Stockholders’ Equity
|
$
|
10,562,890
|
$
|
16,768,596
|
$
|
17,058,462
|
$
|
18,775,548
|
$
|
26,580,491
|
||||||||||
Common shares outstanding
|
37,527,420
|
31,725,114
|
23,736,878
|
19,741,378
|
17,825,331
|
(1) |
Working Capital defined as current assets less current liabilities
|
· |
CROs and investigative sites in connection with clinical studies;
|
· |
vendors in connection with product manufacturing, development, and distribution of clinical supplies; and
|
· |
vendors in connection with preclinical development activities.
|
For the Year Ended
December 31,
|
||||||||
2018
|
2017
|
|||||||
Clinical Candidates:
|
||||||||
RX-3117
|
$
|
6,126,200
|
$
|
4,559,200
|
||||
RX-5902
|
3,104,400
|
2,019,700
|
||||||
RX-0201
|
651,200
|
535,700
|
||||||
Preclinical, Personnel and Overhead
|
3,227,258
|
3,600,696
|
||||||
Total Research and Development Expenses
|
$
|
13,109,058
|
$
|
10,715,296
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Net Cash Used in Operating Activities
|
$
|
(18,838,638
|
)
|
$
|
(15,420,055
|
)
|
||
Net Cash Provided By (Used In) Investing Activities
|
11,910,996
|
(9,372,778
|
)
|
|||||
Net Cash Provided by Financing Activities
|
6,772,789
|
22,113,514
|
||||||
Net Decrease in Cash and Cash Equivalents
|
$
|
(154,853
|
)
|
$
|
(2,679,319
|
)
|
· |
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.
|
· |
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and the dispositions of our assets;
|
· |
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and the board of directors; and
|
· |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect
on the financial statements.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
(a) |
The following documents are filed as a part of this Annual Report:
|
(1)
|
The following documents are filed as a part of this Annual Report:
|
|||
Report of Baker Tilly Virchow Krause, LLP
|
F-1
|
|||
Balance Sheet as of December 31, 2018 and December 31, 2017
|
F-2
|
|||
Statement of Operations for the year ended December 31, 2018 and 2017
|
F-3
|
|||
Statement of Comprehensive Loss for the year ended December 31, 2018 and 2017
|
F-4
|
|||
Statement of Stockholders’ Equity for the year ended December 31, 2018 and 2017
|
F-5
|
|||
Statement of Cash Flows for the year ended December 31, 2018 and 2017
|
F-6
|
|||
Notes to the Financial Statements
|
F-7
|
|||
(2)
|
All financial statement schedules have been omitted because they are not applicable or not required or because the information is included
elsewhere in the financial statements or the Notes thereto.
|
|||
(3)
|
See the accompanying Index to Exhibits filed as a part of this Annual Report, which list is incorporated by reference in this Item.
|
(b) |
See the accompanying Index to Exhibits filed as a part of this Annual Report.
|
(c) |
Other schedules are not applicable.
|
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 of Amended and Restated Certificate of Incorporation,
filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on May 5, 2017, is incorporated herein by reference.
|
|
Amended and Restated Bylaws, as amended, through March 21, 2014, filed as Exhibit
3.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, is incorporated herein by reference.
|
|
Specimen Certificate for the Company’s Common Stock, par value $.0001 per share,
filed as Exhibit 4.3 to the Company’s Registration Statement on Form S-8 (File No. 333-129294) filed on October 28, 2005, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on November 6, 2015, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on February 26, 2016, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on September 14, 2016, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on June 7, 2017, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on October 13, 2017, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on October 19, 2018, is incorporated herein by reference.
|
|
Form of Common Stock Purchase 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.
|
|
Rexahn Pharmaceuticals, Inc. Stock Option Plan, as amended, filed as Exhibit 4.4
to the Company’s Registration Statement on Form S-8 (File No. 333-129294) filed on October 28, 2005, is incorporated herein by reference.
|
|
Form of Stock Option Grant Agreement for Employees, filed as Exhibit 4.5.1 to the
Company’s Registration Statement on Form S-8 (File No. 333-129294) filed on October 28, 2005, is incorporated herein by reference.
|
|
Form of Stock Option Grant Agreement for Non-Employee Directors and Consultants,
filed as Exhibit 4.5.2 to the Company’s Registration Statement on Form S-8 (File No. 333-129294) filed on October 28, 2005, is incorporated herein by reference.
|
|
Rexahn Pharmaceuticals, Inc. 2013 Stock Option Plan, as amended and restated,
filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 10, 2016, is incorporated herein by reference.
|
|
First Amendment to the Rexahn Pharmaceuticals, Inc. 2013 Stock Option Plan, as
amended and restated as of June 9, 2016, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 13, 2017, is incorporated herein by reference.
|
Form of Stock Option Grant Agreement under the Rexahn Pharmaceuticals, Inc. 2013
Stock Option Plan filed as Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 is incorporated herein by reference.
|
|
Form of Restricted Stock Unit Agreement under the Rexahn Pharmaceuticals, Inc. 2013 Stock Option Plan.
|
|
Employment Agreement, dated as of September 9, 2010, by and between Rexahn
Pharmaceuticals, Inc. and T. H. Jeong, filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on September 10, 2010, is incorporated herein by reference.
|
|
Separation, Transition and General Release Agreement, dated as of December 11,
2017, by and between Rexahn Pharmaceuticals, Inc. and Tae Heum (Ted) Jeong, filed as Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, is incorporated herein by reference.
|
|
Employment Agreement, dated as of February 4, 2013, by and between Rexahn
Pharmaceuticals, Inc. and Peter Suzdak, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 22, 2013, is incorporated herein by reference.
|
|
Separation, Transition and General Release Agreement, dated as of November 14,
2018, by and between Rexahn Pharmaceuticals, Inc. and Peter Suzdak, filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 16, 2018, is herein incorporated by reference.
|
|
Employment Agreement, dated as of February 2, 2015, by and between Rexahn
Pharmaceuticals, Inc. and Ely Benaim, M.D., filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, is incorporated herein by reference.
|
|
Employment Agreement, dated as of July 6, 2016, by and between Rexahn
Pharmaceuticals, Inc. and Lisa Nolan, Ph.D., filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016, is incorporated herein by reference.
|
|
Employment Agreement, dated as of January 2, 2018, by and between Rexahn
Pharmaceuticals, Inc. and Douglas Swirsky, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 4, 2018 is incorporated herein by reference.
|
|
Amendment to Employment Agreement, dated as of November 14, 2018, by and between
Rexahn Pharmaceuticals, Inc. and Douglas Swirsky, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 16, 2018 is incorporated herein by reference.
|
|
Lease Agreement, dated June 5, 2009, by and between Rexahn Pharmaceuticals, Inc.
and The Realty Associates Fund V, L.P., filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, is incorporated herein by reference.
|
|
First Amendment to Lease Agreement, dated as of June 7, 2013, by and between
Rexahn Pharmaceuticals, Inc. and SG Plaza Holdings, LLC, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, is incorporated herein by reference.
|
Second Amendment to Lease Agreement, dated as of July 26, 2014, by and between
Rexahn Pharmaceuticals, Inc. and SG Plaza Holdings, LLC, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014, is incorporated herein by reference.
|
|
Third Amendment to Lease Agreement, dated as of May 6, 2015, by and between
Rexahn Pharmaceuticals, Inc. and SG Plaza Holdings, LLC, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, is incorporated herein by reference.
|
|
Fourth Amendment to Lease Agreement, dated as of April 4, 2016, by and between
Rexahn Pharmaceuticals, Inc. and SG Plaza Holdings, LLC, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016, is incorporated herein by reference.
|
|
Fifth Amendment to Lease Agreement, dated as of April 13, 2017, by and between
Rexahn Pharmaceuticals, Inc. and SG Plaza Holdings, LLC, filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of November 6, 2015, by and
between Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 6, 2015, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of February 26, 2016, by and
between Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 26, 2016, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of September 14, 2016, by and
between Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 14, 2016, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of June 6, 2017, by and between
Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 7, 2017, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of October 13, 2017, by and
between Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 13, 2017, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of October 17, 2018, by and
between Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 19, 2018, is incorporated herein by reference.
|
|
Clinical Trial Collaboration and Supply Agreement, dated August 13, 2018, by and
between Merck Sharp & Dohme B.V., and Rexahn Pharmaceuticals, Inc., filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018, is herein incorporated by reference.
|
Consent of Baker Tilly Virchow Krause, LLP, independent registered public accounting firm
|
|
Power of Attorney
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
|
|
Certification of Chief Executive Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase
|
101.DEF
|
XBRL Taxonomy Definition Linkbase
|
101.LAB
|
XBRL Taxonomy Label Linkbase
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase
|
REXAHN PHARMACEUTICALS, INC.
|
|||
By:
|
/s/ Douglas J. Swirsky
|
||
Douglas J. Swirsky
|
|||
Chief Executive Officer and President
|
Name
|
Title
|
Date
|
|
/s/ Douglas J. Swirsky
|
President, Chief Executive Officer and Director (Principal Executive, Financial and Accounting Officer)
|
March 7, 2019
|
|
Douglas J. Swirsky
|
|||
/s/ Peter Brandt*
|
Chairman
|
March 7, 2019
|
|
Peter Brandt
|
|||
/s/ Charles Beever*
|
Director
|
March 7, 2019
|
|
Charles Beever
|
|||
/s/ Kwang Soo Cheong*
|
Director
|
March 7, 2019
|
|
Kwang Soo Cheong
|
|||
/s/ Ben Gil Price*
|
Director
|
March 7, 2019
|
|
Ben Gil Price
|
|||
/s/ Richard J. Rodgers*
|
Director
|
March 7, 2019
|
|
Richard J. Rodgers
|
|||
/s/ Lara Sullivan*
|
Director
|
March 7, 2019
|
|
Lara Sullivan
|
December 31, 2018
|
December 31, 2017
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
8,744,301
|
$
|
8,899,154
|
||||
Marketable securities
|
5,981,520
|
17,931,941
|
||||||
Prepaid expenses and other current assets
|
1,173,847
|
1,304,541
|
||||||
Total Current Assets
|
15,899,668
|
28,135,636
|
||||||
Security Deposits
|
30,785
|
30,785
|
||||||
Equipment, Net
|
112,473
|
121,460
|
||||||
Total Assets
|
$
|
16,042,926
|
$
|
28,287,881
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$
|
3,152,550
|
$
|
3,233,926
|
||||
Deferred Research and Development Arrangement
|
-
|
375,000
|
||||||
Other Liabilities
|
19,900
|
56,724
|
||||||
Warrant Liabilities
|
2,307,586
|
7,853,635
|
||||||
Total Liabilities
|
5,480,036
|
11,519,285
|
||||||
Commitments and Contingencies (note 15)
|
||||||||
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 and 50,000,000 authorized shares, 37,527,420 and
31,725,114 issued and outstanding
|
3,753
|
3,173
|
||||||
Additional paid-in capital
|
165,264,215
|
157,141,021
|
||||||
Accumulated other comprehensive loss
|
(17,836
|
)
|
(56,886
|
)
|
||||
Accumulated deficit
|
(154,687,242
|
)
|
(140,318,712
|
)
|
||||
Total Stockholders’ Equity
|
10,562,890
|
16,768,596
|
||||||
Total Liabilities and Stockholders’ Equity
|
$
|
16,042,926
|
$
|
28,287,881
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Revenues:
|
$
|
-
|
$
|
-
|
||||
Expenses:
|
||||||||
General and administrative
|
7,428,615
|
6,639,421
|
||||||
Research and development
|
13,109,058
|
10,715,296
|
||||||
Total Expenses
|
20,537,673
|
17,354,717
|
||||||
Loss from Operations
|
(20,537,673
|
)
|
(17,354,717
|
)
|
||||
Other Income (Expense)
|
||||||||
Interest income
|
254,344
|
207,003
|
||||||
Other income
|
368,750
|
-
|
||||||
Unrealized gain (loss) on fair value of warrants
|
5,546,049
|
(7,594,162
|
)
|
|||||
Financing expense
|
-
|
(552,627
|
)
|
|||||
Total Other Income (Expense)
|
6,169,143
|
(7,939,786
|
)
|
|||||
Net Loss Before Provision for Income Taxes
|
(14,368,530
|
)
|
(25,294,503
|
)
|
||||
Provision for income taxes
|
-
|
-
|
||||||
Net Loss
|
$
|
(14,368,530
|
)
|
$
|
(25,294,503
|
)
|
||
Net loss per share, basic and diluted
|
$
|
(0.44
|
)
|
$
|
(0.92
|
)
|
||
|
||||||||
Weighted average number of shares outstanding, basic and diluted
|
32,915,377
|
27,390,527
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Net Loss
|
$
|
(14,368,530
|
)
|
$
|
(25,294,503
|
)
|
||
Unrealized gain (loss) on available-for-sale securities
|
39,050
|
(50,764
|
)
|
|||||
Comprehensive Loss
|
$
|
(14,329,480
|
)
|
$
|
(25,345,267
|
)
|
Common Stock
|
||||||||||||||||||||||||
Number of
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Accumulated
Other
Comprehensive
Loss
|
Total
Stockholders’
Equity
|
|||||||||||||||||||
Balances at January 1, 2017
|
23,736,878
|
$
|
2,374
|
$
|
132,086,419
|
$
|
(115,024,209
|
)
|
$
|
(6,122
|
)
|
$
|
17,058,462
|
|||||||||||
Issuance of common stock and units, net of issuance costs
|
6,295,613
|
630
|
10,495,217
|
-
|
-
|
10,495,847
|
||||||||||||||||||
Common stock issued in exchange for services
|
15,000
|
2
|
31,198
|
-
|
-
|
31,200
|
||||||||||||||||||
Stock-based compensation
|
-
|
-
|
1,044,167
|
-
|
-
|
1,044,167
|
||||||||||||||||||
Stock options exercised
|
25,000
|
2
|
77,498
|
-
|
-
|
77,500
|
||||||||||||||||||
Stock warrants exercised
|
1,652,623
|
165
|
13,406,522
|
-
|
-
|
13,406,687
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(25,294,503
|
)
|
-
|
(25,294,503
|
)
|
||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
(50,764
|
)
|
(50,764
|
)
|
||||||||||||||||
Balances at
December 31, 2017
|
31,725,114
|
$
|
3,173
|
$
|
157,141,021
|
$
|
(140,318,712
|
)
|
$
|
(56,886
|
)
|
$
|
16,768,596
|
|||||||||||
Issuance of common stock and units, net of issuance costs
|
5,769,231
|
577
|
6,872,212
|
-
|
-
|
6,872,789
|
||||||||||||||||||
Common stock issued in exchange for services
|
15,000
|
1
|
22,649
|
-
|
-
|
22,650
|
||||||||||||||||||
Stock-based compensation
|
-
|
-
|
1,228,335
|
-
|
-
|
1,228,335
|
||||||||||||||||||
Common stock issued from vested restricted stock units
|
18,075
|
2
|
(2
|
)
|
-
|
-
|
-
|
|||||||||||||||||
Net loss
|
-
|
-
|
-
|
(14,368,530
|
)
|
-
|
(14,368,530
|
)
|
||||||||||||||||
Other comprehensive gain
|
-
|
-
|
-
|
-
|
39,050
|
39,050
|
||||||||||||||||||
Balances at December 31, 2018
|
37,527,420
|
$
|
3,753
|
$
|
165,264,215
|
$
|
(154,687,242
|
)
|
$
|
(17,836
|
)
|
$
|
10,562,890
|
For the Year Ended
December 31,
|
||||||||
2018
|
2017
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net loss
|
$
|
(14,368,530
|
)
|
$
|
(25,294,503
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Compensatory stock
|
22,650
|
31,200
|
||||||
Depreciation and amortization
|
48,211
|
42,358
|
||||||
Amortization of premiums and discounts on marketable securities, net
|
39,251
|
52,012
|
||||||
Stock-based compensation
|
1,228,335
|
1,044,167
|
||||||
Amortization and termination of deferred research and development arrangement
|
(375,000
|
)
|
(75,000
|
)
|
||||
Unrealized (gain) loss on fair value of warrants
|
(5,546,049
|
)
|
7,594,162
|
|||||
Financing expense
|
-
|
552,627
|
||||||
Amortization of deferred lease incentive
|
(12,443
|
)
|
(12,444
|
)
|
||||
Deferred rent
|
(24,381
|
)
|
(10,036
|
)
|
||||
Changes in assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
230,694
|
(696,024
|
)
|
|||||
Accounts payable and accrued expenses
|
(81,376
|
)
|
1,351,426
|
|||||
Net Cash Used in Operating Activities
|
(18,838,638
|
)
|
(15,420,055
|
)
|
||||
Cash Flows from Investing Activities:
|
||||||||
Purchase of equipment
|
(39,224
|
)
|
(75,168
|
)
|
||||
Purchase of marketable securities
|
-
|
(21,017,610
|
)
|
|||||
Redemption of marketable securities
|
11,950,220
|
11,720,000
|
||||||
Net Cash Provided by (Used In) Investing Activities
|
11,910,996
|
(9,372,778
|
)
|
|||||
Cash Flows from Financing Activities:
|
||||||||
Issuance of common stock and units, net of issuance costs
|
6,872,789
|
16,681,921
|
||||||
Payment of deferred offering costs
|
(100,000
|
)
|
-
|
|||||
Proceeds from exercise of stock warrants
|
-
|
5,354,093
|
||||||
Proceeds from exercise of stock options
|
-
|
77,500
|
||||||
Net Cash Provided by Financing Activities
|
6,772,789
|
22,113,514
|
||||||
Net Decrease in Cash and Cash Equivalents
|
(154,853
|
)
|
(2,679,319
|
)
|
||||
Cash and Cash Equivalents – beginning of period
|
8,899,154
|
11,578,473
|
||||||
Cash and Cash Equivalents - end of period
|
$
|
8,744,301
|
$
|
8,899,154
|
||||
Supplemental Cash Flow Information
|
||||||||
Non-cash financing and investing activities:
|
||||||||
Warrants issued
|
$
|
4,841,830
|
$
|
6,738,701
|
||||
Warrant liability extinguishment from exercise of warrants
|
$
|
-
|
$
|
8,052,594
|
1. |
Operations and Organization
|
2.
|
Summary of Significant Accounting Policies
|
Life
|
Depreciation Method
|
||
Furniture and fixtures
|
7 years
|
straight line
|
|
Office equipment
|
5 years
|
straight line
|
|
Lab equipment
|
5-7 years
|
straight line
|
|
Computer equipment
|
3-5 years
|
straight line
|
|
Leasehold improvements
|
3-5 years
|
straight line
|
3.
|
Marketable Securities
|
December 31, 2018
|
||||||||||||||||
Cost
|
Gross
Unrealized
|
Gross
Unrealized
|
Fair
|
|||||||||||||
Basis
|
Gains
|
Losses
|
Value
|
|||||||||||||
Corporate Bonds
|
$
|
5,999,356
|
$
|
-
|
$
|
(17,836
|
)
|
$
|
5,981,520
|
December 31, 2017
|
||||||||||||||||
Cost
|
Gross
Unrealized
|
Gross
Unrealized
|
Fair
|
|||||||||||||
Basis
|
Gains
|
Losses
|
Value
|
|||||||||||||
Commercial Paper
|
$
|
3,241,005
|
$
|
-
|
$
|
(2,505
|
)
|
$
|
3,238,500
|
|||||||
Corporate Bonds
|
14,747,822
|
-
|
(54,381
|
)
|
14,693,441
|
|||||||||||
Total Marketable Securities
|
$
|
17,988,827
|
$
|
-
|
$
|
(56,886
|
)
|
$
|
17,931,941
|
4.
|
Prepaid Expenses and Other Current Assets
|
December 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Deposits on contracts
|
$
|
618,417
|
$
|
793,940
|
||||
Prepaid expenses and other current assets
|
555,430
|
510,601
|
||||||
$
|
1,173,847
|
$
|
1,304,541
|
5.
|
Equipment, Net
|
December 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Furniture and fixtures
|
$
|
82,686
|
$
|
82,686
|
||||
Office and computer equipment
|
159,489
|
171,724
|
||||||
Lab equipment
|
447,653
|
445,134
|
||||||
Leasehold improvements
|
131,762
|
133,762
|
||||||
Total equipment
|
821,590
|
833,306
|
||||||
Less: Accumulated depreciation and amortization
|
(709,117
|
)
|
(711,846
|
)
|
||||
Net carrying amount
|
$
|
112,473
|
$
|
121,460
|
6. |
Accounts Payable and Accrued Expenses
|
December 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Trade payables
|
$
|
547,519
|
$
|
895,638
|
||||
Accrued expenses
|
140,637
|
95,416
|
||||||
Accrued research and development contract costs
|
1,782,131
|
1,435,109
|
||||||
Payroll liabilities
|
682,263
|
807,763
|
||||||
$
|
3,152,550
|
$
|
3,233,926
|
7. |
Deferred Research and Development Arrangement
|
8.
|
Other Liabilities
|
December 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Deferred lease incentive
|
$
|
154,660
|
$
|
154,660
|
||||
Less accumulated amortization
|
(148,438
|
)
|
(135,995
|
)
|
||||
Balance
|
$
|
6,222
|
$
|
18,665
|
9. |
Net Loss per Common Share
|
10. |
Common Stock
|
Gross Proceeds:
|
$
|
10,000,003
|
||
Allocated to warrant liabilities
|
3,673,168
|
|||
Allocated to common stock and additional paid-in capital
|
6,326,835
|
|||
Total allocated gross proceeds:
|
$
|
10,000,003
|
Gross Proceeds:
|
$
|
8,000,007
|
||
Allocated to warrant liabilities
|
2,360,459
|
|||
Allocated to common stock and additional paid-in capital
|
5,639,548
|
|||
Total allocated gross proceeds:
|
$
|
8,000,007
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Compensatory shares issued
|
15,000
|
15,000
|
||||||
Aggregate market value
|
$
|
22,650
|
$
|
31,200
|
11.
|
Stock-Based Compensation
|
For the Year Ended
December 31,
|
||||||||
2018
|
2017
|
|||||||
Statement of operations line item:
|
||||||||
General and administrative
|
$
|
883,855
|
$
|
765,726
|
||||
Research and development
|
344,480
|
278,441
|
||||||
Total
|
$
|
1,228,335
|
$
|
1,044,167
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Black-Scholes assumptions
|
||||||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
||||
Expected volatility
|
69-73
|
%
|
69-79
|
%
|
||||
Risk-free interest rate
|
2.3-2.9
|
%
|
1.7-2.0
|
%
|
||||
Expected term (in years)
|
5.5-6 years
|
5.5-6 years
|
Number of
Options
|
Weighted
Average
Exercise
Price
|
Weighted Average
Remaining
Contractual Term
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding, January 1, 2018
|
1,814,231
|
$
|
5.33
|
7.1 years
|
$
|
53,883
|
|||||||
Granted
|
1,483,185
|
$
|
1.60
|
||||||||||
Exercised
|
-
|
$
|
-
|
||||||||||
Expired
|
(56,000
|
)
|
$
|
14.04
|
|||||||||
Cancelled
|
(169,695
|
)
|
$
|
3.14
|
|||||||||
Outstanding, December 31, 2018
|
3,071,721
|
$
|
3.49
|
7.8 years
|
$
|
-
|
|||||||
Exercisable, December 31, 2018
|
1,493,365
|
$
|
5.39
|
6.2 years
|
$
|
-
|
2018
|
||||||||
Number of
Options
|
Weighted Average Fair
Value at Grant Date
|
|||||||
Unvested at January 1, 2018
|
727,543
|
$
|
2.39
|
|||||
Granted
|
1,483,185
|
$
|
1.04
|
|||||
Vested
|
(513,177
|
)
|
$
|
2.67
|
||||
Cancelled
|
(119,195
|
)
|
$
|
1.49
|
||||
Unvested at December 31, 2018
|
1,578,356
|
$
|
1.10
|
Number of RSUs
|
Weighted
Average Grant
Date Fair Value
|
|||||||
Outstanding, January 1, 2018
|
47,300
|
$
|
1.84
|
|||||
Granted
|
-
|
$
|
-
|
|||||
Vested and Released
|
(18,075
|
)
|
$
|
1.84
|
||||
Cancelled
|
(12,500
|
)
|
$
|
1.84
|
||||
Outstanding, December 31, 2018
|
16,725
|
$
|
1.84
|
12.
|
Warrants
|
Number of Warrants:
|
|||||||||||||
Warrant Issuance
|
December 31,
2018
|
December 31,
2017
|
Exercise
Price
|
Expiration
Date
|
|||||||||
Liability-classified Warrants
|
|||||||||||||
July 2013 Investor Warrants
|
-
|
200,000
|
$
|
5.90
|
July 2018
|
||||||||
October 2013 Investor Warrants
|
-
|
231,732
|
$
|
5.75
|
Oct. 2018
|
||||||||
January 2014 Investor Warrants
|
476,193
|
476,193
|
$
|
12.80
|
Jan. 2019
|
||||||||
November 2015 Investor Warrants
|
1,250,001
|
1,250,001
|
$
|
5.30
|
May 2021
|
||||||||
November 2015 Placement Agent Warrants
|
3,334
|
3,334
|
$
|
5.30
|
Nov. 2020
|
||||||||
March 2016 Investor Warrants
|
607,806
|
607,806
|
$
|
4.20
|
Sept. 2021
|
||||||||
September 2016 Investor Warrants
|
805,000
|
805,000
|
$
|
3.00
|
Mar. 2022
|
||||||||
June 2017 Investor Warrants
|
1,515,152
|
1,515,152
|
$
|
4.00
|
Dec. 2022
|
||||||||
June 2017 Placement Agent Warrants
|
181,818
|
181,818
|
$
|
4.13
|
Jun. 2022
|
||||||||
October 2017 Investor Warrants
|
1,632,654
|
1,632,654
|
$
|
2.85
|
Apr. 2023
|
||||||||
October 2017 Placement Agent Warrants
|
195,919
|
195,919
|
$
|
3.06
|
Oct. 2022
|
||||||||
Total liability classified warrants
|
6,667,877
|
7,099,609
|
|||||||||||
Equity-classified Warrants
|
|||||||||||||
October 2018 Investor Warrants
|
5,769,231
|
-
|
$
|
1.67
|
Apr. 2024
|
||||||||
October 2018 Placement Agent Warrants
|
346,154
|
-
|
$
|
1.63
|
Oct. 2023
|
||||||||
Total equity-classified warrants
|
6,115,385
|
-
|
|||||||||||
Total outstanding warrants
|
12,783,262
|
7,099,609
|
Number of Warrants
|
||||||||||||||||
Liability-
classified
|
Equity-
classified
|
Total
|
Weighted
average exercise
price
|
|||||||||||||
Balance, January 1
|
7,099,609
|
-
|
7,099,609
|
$
|
4.55
|
|||||||||||
Issued during the period
|
-
|
6,115,385
|
6,115,385
|
$
|
1.67
|
|||||||||||
Exercised during the period
|
-
|
-
|
-
|
$
|
-
|
|||||||||||
Expired during the period
|
(431,732
|
)
|
-
|
(431,732
|
)
|
$
|
5.82
|
|||||||||
Balance, December 31
|
6,667,877
|
6,115,385
|
12,783,262
|
$
|
4.55
|
Fair Value as of:
|
||||||||
Warrant Issuance:
|
December 31, 2018
|
December 31, 2017
|
||||||
July 2013 Investor Warrants
|
$
|
-
|
$
|
8,762
|
||||
October 2013 Investor Warrants
|
-
|
26,288
|
||||||
January 2014 Investor Warrants
|
-
|
29,257
|
||||||
November 2015 Investor Warrants
|
234,918
|
1,260,050
|
||||||
November 2015 Placement Agent Warrants
|
435
|
2,936
|
||||||
March 2016 Investor Warrants
|
160,099
|
697,554
|
||||||
September 2016 Investor Warrants
|
333,834
|
1,054,083
|
||||||
June 2017 Investor Warrants
|
623,324
|
1,981,864
|
||||||
June 2017 Placement Agent Warrants
|
65,149
|
221,591
|
||||||
October 2017 Investor Warrants
|
801,551
|
2,305,552
|
||||||
October 2017 Placement Agent Warrants
|
88,276
|
265,698
|
||||||
Total:
|
$
|
2,307,586
|
$
|
7,853,635
|
December 31, 2018
|
December 31, 2017
|
|||||||
Trading market prices
|
$
|
0.93
|
$
|
2.02
|
||||
Estimated future volatility
|
105
|
%
|
104
|
%
|
||||
Dividend
|
-
|
-
|
||||||
Estimated future risk-free rate
|
2.35-2.53
|
%
|
2.14-2.45
|
%
|
||||
Equivalent volatility
|
99-104
|
%
|
85-104
|
%
|
||||
Equivalent risk-free rate
|
2.51-2.55
|
%
|
1.30-1.89
|
%
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Expired and Fully Exercised Warrants
|
$
|
-
|
$
|
(855,000
|
)
|
|||
July 2013 Investor Warrants
|
8,762
|
(6,702
|
)
|
|||||
October 2013 Investor Warrants
|
26,288
|
(22,580
|
)
|
|||||
January 2014 Investor Warrants
|
29,257
|
(28,543
|
)
|
|||||
November 2015 Investor Warrants
|
1,025,132
|
(999,550
|
)
|
|||||
November 2015 Placement Agent Warrants
|
2,501
|
(365,748
|
)
|
|||||
March 2016 Investor Warrants
|
537,455
|
(2,708,163
|
)
|
|||||
September 2016 Investor Warrants
|
720,249
|
(4,571,872
|
)
|
|||||
June 2017 Investor Warrants
|
1,358,540
|
1,691,304
|
||||||
June 2017 Placement Agent Warrants
|
156,442
|
212,729
|
||||||
October 2017 Investor Warrants
|
1,504,001
|
54,907
|
||||||
October 2017 Placement Agent Warrants
|
177,422
|
5,056
|
||||||
Total:
|
$
|
5,546,049
|
$
|
(7,594,162
|
)
|
13.
|
Income Taxes
|
December 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Net Operating Loss Carryforwards
|
$
|
41,184,000
|
$
|
35,805,000
|
||||
Stock Compensation Expense
|
1,608,000
|
1,458,000
|
||||||
Book tax differences on assets and liabilities
|
195,000
|
365,000
|
||||||
Valuation Allowance
|
(42,987,000
|
)
|
(37,628,000
|
)
|
||||
Net Deferred Tax Assets
|
$
|
-
|
$
|
-
|
14.
|
Collaboration Agreements
|
15.
|
Commitments and Contingencies
|
a) |
The Company has contracted with various vendors for research and development services, with terms
that require payments over the term of the agreements, usually ranging from two to 36 months. The costs to be incurred are estimated and are subject to revision. As of December 31, 2018, the total estimated cost to complete
these agreements was approximately $6,340,000. 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 initial license fee was $100,000, all of which was paid as of December 31, 2009. 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 December 31, 2018, the milestone has not occurred.
|
c) |
Office Space Lease
|
For the year ending December 31:
|
2019
|
176,080
|
|||
|
2020
|
34,468
|
|||
Total
|
$
|
210,548
|
d) |
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 $120,558 and $123,145, for the years ended December 31, 2018 and 2017 respectively.
|
e) |
In July 2013, the Company entered into an exclusive license agreement with the University of Maryland, Baltimore for a novel drug delivery platform. The agreement
required the Company to make payments to the University of Maryland if any products from the licensed delivery platform would have achieved development milestones. In December 2018, the Company terminated the license
agreement. At the time of termination, no development milestones had occurred.
|
f) |
In October 2013, the Company signed an exclusive license agreement with the Ohio State Innovation Foundation, for a novel oligonucleotide drug delivery platform.
The agreement required the Company to make payments to the Ohio State Innovation Foundation if any products from the licensed delivery platform would have achieved development milestones. In December 2018, the Company
terminated the license agreement. At the time of termination, no development milestones had occurred.
|
g) |
On February 5, 2018, the Company and Next BT terminated the research collaboration agreement between the Company and Rexgene. 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.
|
16.
|
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;
|
|
Level 3 Inputs
|
—
|
Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants.
|
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
|
Fair Value Measurements at December 31, 2017
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
Commercial Paper
|
3,238,500
|
-
|
3,238,500
|
-
|
||||||||||||
Corporate Bonds
|
14,693,441
|
-
|
14,693,441
|
-
|
||||||||||||
Total Assets:
|
$
|
17,931,941
|
$
|
-
|
$
|
17,931,941
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Warrant Liabilities
|
$
|
7,853,635
|
$
|
-
|
$
|
-
|
$
|
7,853,635
|
Warrant Liabilities
|
||||
Balance at January 1, 2018
|
$
|
7,853,635
|
||
Additions
|
-
|
|||
Unrealized gains, net
|
(5,546,049
|
)
|
||
Transfers out of level 3
|
-
|
|||
Balance at December 31, 2018
|
$
|
2,307,586
|
Warrant Liabilities
|
||||
Balance at January 1, 2017
|
$
|
1,573,366
|
||
Additions
|
6,738,701
|
|||
Unrealized losses, net
|
7,594,162
|
|||
Transfers out of level 3
|
(8,052,594
|
)
|
||
Balance at December 31, 2017
|
$
|
7,853,635
|
17.
|
Select Quarterly Data (Unaudited)
|
2018
|
||||||||||||||||
For the Quarter Ended
|
||||||||||||||||
March 31
|
June 30
|
September 30
|
December 31
|
|||||||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Expenses
|
5,885,855
|
5,001,441
|
4,683,907
|
4,966,470
|
||||||||||||
Loss from Operations
|
(5,885,855
|
)
|
(5,001,441
|
)
|
(4,683,907
|
)
|
(4,966,470
|
)
|
||||||||
Other Income (Expense), net
|
3,810,982
|
1,163,173
|
(654,912
|
)
|
1,849,900
|
|||||||||||
Net Loss
|
$
|
(2,074,873
|
)
|
$
|
(3,838,268
|
)
|
$
|
(5,338,819
|
)
|
$
|
(3,116,570
|
)
|
||||
Net Loss per share, basic and diluted
|
$
|
(0.07
|
)
|
$
|
(0.12
|
)
|
$
|
(0.17
|
)
|
$
|
(0.09
|
)
|
2017
|
||||||||||||||||
For the Quarter Ended
|
||||||||||||||||
March 31
|
June 30
|
September 30
|
December 31
|
|||||||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Expenses
|
3,953,241
|
4,283,925
|
4,219,322
|
4,898,229
|
||||||||||||
Loss from Operations
|
(3,953,241
|
)
|
(4,283,925
|
)
|
(4,219,322
|
)
|
(4,898,229
|
)
|
||||||||
Other Income (Expense), net
|
(17,657,783
|
)
|
5,230,981
|
3,181,250
|
1,305,766
|
|||||||||||
Net Income (Loss)
|
$
|
(21,611,024
|
)
|
$
|
947,056
|
$
|
(1,038,072
|
)
|
$
|
(3,592,463
|
)
|
|||||
Net Income (Loss) per share, basic
|
$
|
(0.91
|
)
|
$
|
0.04
|
$
|
(0.04
|
)
|
$
|
(0.12
|
)
|
|||||
Net Income (Loss) per share, diluted
|
$
|
(0.91
|
)
|
$
|
0.03
|
$
|
(0.04
|
)
|
$
|
(0.12
|
)
|
18.
|
Subsequent Events
|