NurExone Reports Second Quarter 2023 Financial Results and Provides Corporate Update
NurExone Reports Second Quarter 2023 Financial Results and Provides Corporate Update
- Completed the first tranche of a non-brokered private placement offering of units for gross proceeds of approximately CAD$1.3 million to extend cash runway into 2024
- Strengthened the Board of Directors through the appointment of Dr. Gadi Riesenfeld, Former President of Pharmos Corporation (a publicly traded biotech company listed on NASDAQ)
- Positive imaging results from an internal preclinical study of its investigational drug ExoPTEN, confirming successful nerve regeneration following traumatic transection of the spinal cord in rats
- Significant advancements in extracellular vesicles (EVs) functionality, leveraging its proprietary and patented 3D-Flow production
TORONTO and HAIFA, Israel, Aug. 28, 2023 (GLOBE NEWSWIRE) — NurExone Biologic Inc. (TSXV: NRX) (FSE: J90) (NRX.V) (the “Company” or “NurExone”), a biopharmaceutical company developing biologically-guided exosome therapy (“ExoTherapy”) for patients with traumatic spinal cord injuries, is pleased to announce the filings of its financial results for the quarter ended June 30, 2023 and provide a corporate update.
“The Company continues to achieve key milestones for our prospective ExoPTEN drug and the development of an exosome-based therapy platform to be potentially used to achieve functional recovery in acute injuries related to the central nervous system,” said Dr. Lior Shaltiel, CEO of NurExone. “We believe that the advancements made in recent studies and collaborations puts us on the path to make further discoveries that can advance our research and development efforts and enhance our proprietary exosome-based products.”
The Company is pleased to announce that it has closed the first tranche of its previously announced non-brokered private placement (the “Private Placement”) of 4,644,548 units of the Company (each a “Unit”) at a price of CAD$0.275 per Unit for aggregate proceeds of CAD$1,277,250.70 (the “First Tranche”).
Each Unit consists of (i) one common share in the capital of the Company (each, a “Common Share”); (ii) one-half of one class A Common Share purchase warrant (each whole class A Common Share purchase warrant, a “Class A Warrant”); and (iii) one-half of one class B Common Share purchase warrant (each whole class B Common Share warrant, a “Class B Warrant” and collectively each whole Class A Warrant and each whole Class B Warrant, a “Warrant”). Each Class A Warrant entitles the holder thereof to purchase one Common Share at a price of CAD$0.34 per Common Share for a period of 24 months from the closing of the First Tranche and each whole Class B Warrant entitles the holder thereof to purchase one Common Share at a price of CAD$0.48 per Common Share for a period of 36 months from the closing of the First Tranche.
The Warrants are subject to accelerated expiration whereby if the daily volume weighted average trading price of the Common Shares on the TSX Venture Exchange (“TSXV”) for any period of 20 consecutive trading days equals or exceeds CAD$0.69 in respect of the Class A Warrants or CAD$0.83 in respect of the Class B Warrants, the Company may, upon providing written notice to the holders of the Class A Warrants or Class B Warrants, as applicable (the “Acceleration Notice”), accelerate the expiry date of the respective Class A Warrants or Class B Warrants to the date that is 30 days following the date of the Acceleration Notice. If the Warrants are not exercised by the applicable accelerated expiry dates, the Warrants will expire and be of no further force or effect.
The Company intends to use the proceeds of the Private Placement for working capital purposes. All securities issued under the First Tranche are subject to a statutory hold period of four months and one day from the closing of the First Tranche. The Company plans to complete one or more addition tranches of the Private Placement for additional proceeds of up to CAD$350,000.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this news release in the United States. Such securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and, accordingly, may not be offered or sold within the United States, or to or for the account or benefit of persons in the United States or “U.S. Persons”, as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.
New Additions to Leadership Team
The Company added Dr. Gadi Riesenfeld as an independent director to the Company’s Board, replacing Mr. Ron Mayron, a member of the Board since 2021, effective July 6, 2023. Mr. Riesenfeld was the former president of Pharmos Corporation, a publicly traded biotech company listed on NASDAQ, and president of several bio-pharmaceutical companies, including Kamapharm Ltd., Galisar Ltd., and OticPharma.
Research and Development
The Company reported positive imaging results from an internal preclinical study of its investigational drug ExoPTEN, confirming successful nerve regeneration following traumatic full transection of the spinal cord in rats. These results align with previous results showing a remarkable recovery of motor function in 75% of paralyzed rats suffering from spinal cord injuries that were treated with the new therapy. The drug is being developed using NurExone’s proprietary ExoTherapy platform for producing and loading exosomes with pharmaceutical cargo targeting central nervous system injuries.
Furthermore, the Company announced significant advancements in extracellular vesicles (EVs) functionality, leveraging its proprietary and patented 3D-Flow production. These achievements include an amplified immuno-modulatory response, which means the immune system is more capable to respond to injury and achieved a reduction of inflammation activity. In addition, there was significantly improved cellular uptake, allowing NurExone’s EVs to penetrate cells better, holding great promise for the Company’s future EVs-based therapies. The Company is committed to further exploring the potency and therapeutic benefits of EVs produced through the 3D-Flow process using rigorous preclinical and clinical studies.
Overall, these studies underscore the significant potential of the Company’s exosome-based technology and NurExone intends to continue implementing new scientific initiatives to enhance its intellectual properties.
Strategic Collaboration and Partnerships
On June 1, 2023, the Company announced a collaboration with Particle Metrix, a leading provider of particle analysis devices. In connection with the collaboration, a highly-advanced Nanoparticle Tracking Analysis instrument (NTA) has been placed at the Company’s laboratory. The Company plans to leverage the capabilities of the advanced NTA to validate its methodology for analysis of loaded exosomes, a vital part of the development process of its ExoPTEN drug, targeted at the US$2.9 billion global market for patients with acute spinal cord injury.1
Growth Outlook for 2023
As part of the Company’s strategy to commercialize its exosome-based technology portfolio, enhancing its ExoTherapy production, and scaling its overall business, NurExone intends to implement the following growth initiatives:
- Advance scientific development of NurExone’s ExoPTEN drug and exosome-based technology through preclinical studies;
- Receive written response on the request for a Pre-IND meeting with the U.S. Food and Drug Administration;
- Secure Orphan Drug Designation status for its primary drug product
- Expand intellectual property and file new patent applications with the U.S. Patent and Trademark Office; and
- Establish new strategic collaborations or partnerships looking to unlock business synergies and license NurExone’s exosome platform technology.
Second Quarter Fiscal 2023 Financial Results
- Research and development expenses were US$0.46 million in the second quarter of 2023, compared to US$0.30 million in the same quarter in 2022. The increase was largely attributable to the research and development efforts towards pre-clinical activity and development of the siRNA- PTEN technology and other siRNA targets.
- General and administrative expenses were US$0.60 million in the second quarter of 2023, compared to US$1.18 million in the same period in 2022. The decrease was largely attributable to costs relating to the reverse takeover transaction that occurred in Q2 2022.
- There were no listing expenses incurred in the second quarter of 2023, compared to US$2.04 million in the second quarter of 2022. Listing expenses were recognized, as follows: US$1.61 million at a fair value for the reverse takeover acquisition of 2,536,000 EnerSpar Corp. shares at a share price of CAD $0.80, US$0.24 million for net liabilities of EnerSpar Corp., US$0.19 million for legal costs as associated with the completed reverse takeover transaction in the second quarter of 2022.
- Financial (income) expenses were (US$0.02) million in the second quarter of 2023, compared to US$0.28 million in the same period in 2022. The decrease was largely attributable to costs relating to fundraising in 2022 prior to the reverse takeover transaction, financial derivatives, and exchange rate adjustments.
- Net loss was US$1.04 million in the second quarter of 2023, compared to a net loss of US$3.80 million in the second quarter of 2022.
As of June 30, 2023, the Company had cash of US$0.88 million (December 31, 2022 – US$2.46 million) and working capital of $0.63 million (December 31, 2022 – $2.11 million). The Company had an accumulated deficit of US$12.16 million as of June 30, 2023, (December 31, 2022 – US$10.42 million).
“We believe our cash position as of June 30, 2023, together with the cash received from the Private Placement, will be sufficient to fund operating expenses and capital expenditure requirements into early 2024”, said Eran Ovadya, CFO of NurExone.
About NurExone Biologic Inc.
NurExone Biologic Inc. is a TSXV listed pharmaceutical company that is developing a platform for biologically-guided ExoTherapy to be delivered, non-invasively, to patients who suffered traumatic spinal cord injuries. ExoTherapy was conceptually demonstrated in animal studies at the Technion, Israel Institute of Technology. NurExone is translating the treatment to humans, and the company holds an exclusive worldwide license from the Technion and Tel Aviv University for the development and commercialization of the technology.
For more information, please contact:
Dr. Lior Shaltiel
Chief Executive Officer and Director
Phone: +1 905-347-5569
This press release contains certain “forward-looking statements”, that reflect the Company’s current expectations and projections about its future results. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements relating to: our research and development processes, including conducting preclinical studies, meeting with the U.S. Food and Drug Administration, and potential to secure Orphan Drug Designation; our ability to develop and commercialize product candidates; our commercialization, marketing and manufacturing capabilities and strategy; our expectations regarding regulatory requirements; whether we will receive regulatory approvals in the United States for our drug candidates; future potential activities relating to a strategic collaboration with Particle Metrix; and the completion of additional tranches of the Private Placement. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.
In developing the forward-looking statements in this press release, we have applied several material assumptions, including our ability to attract investors on the terms under the Private Placement; the general business and economic conditions of the industries and countries in which we operate; the market conditions; inflation will remain stable; and that the results of our studies reflect results that can be extrapolated.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks related to the Company’s early stage of development, lack of revenues to date, government regulation, market acceptance for its products, rapid technological change, dependence on key personnel, protection of the Company’s intellectual property, dependence on the Company’s strategic partners and the risks discussed under the heading “Risk Factors” on pages 29 to 36 of the Company’s Annual Information Form dated March 30, 2023, a copy of which is available under the Company’s SEDAR+ profile at www.sedarplus.ca. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.