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First Quarter Fiscal Year 2022 Operational & Financial Results
Bioasis Technologies Inc. BIOAF filed first quarter fiscal year 2022 operational and financial reports with SEDAR on July 29, 2021 for the three-month period of March 1 to May 31, 2021.
During the reporting period and to-date, Bioasis:
➢ Executed warrant extension and repricing - March 2021
➢ Entered into a research collaboration with Aposense - March 2021
➢ Published research validating the xB3 platform in the CNS - June 2021
➢ Entered into a funding agreement for CA$10 million and closed the initial CA$3 million - June 2021
➢ Entered into a research collaboration with Oxyrane UK Ltd. - June 2021
➢ Appointed Dave Jenkins as CFO - July 2021
➢ Announced results from rodent multiple sclerosis model - July 2021
➢ Announced stock option grants - July 2021
➢ Appointed Jeffrey Sprouse as Preclinical Program Manager - July 2021
In the financial realm, Bioasis reported first quarter total operating expenses of CA$789,0001 for the quarter resulting in net loss of $541,000 or ($0.01) per share.
For the three months ending May 31, 2021 and versus the three months ending May 31, 2020:
➢ General and administrative expenses totaled $589,000, up 2% from $579,000 on higher investor relations, marketing, travel and share-based compensation partially offset by lower office, insurance, amortization, legal and other professional and regulatory expenses;
➢ Research and development expenses totaled $200,000, declining 55% from $445,000 on decreases in patent maintenance, legal and filing fees, salaries, consulting fees, benefits, share-based compensation and preclinical expenses;
➢ Foreign exchange loss improved 72% to ($9,410) vs ($33,700);
➢ Change in estimated fair value of derivative warrants rose 51% to $258,000 from $170,000;
➢ Net loss was ($522,000), or ($0.01) per share, compared to ($1.05) million, or ($0.02) per share;
As of May 31, 2021, cash and equivalents on the balance sheet totaled $1.87 million, excluding the subsequent $3 million infusion in June from Lind Global Macro Fund. Cash burn for the quarter was approximately ($803,000) with the difference relative to net loss attributable to subtracting the warrant liability gain and reductions in accounts payable and accrued liabilities.
Research Collaboration With Aposense
Aposense Limited joined forces with Bioasis as disclosed in a March 31st press release. The collaborator is an Israeli biopharmaceutical company specializing in development of novel drugs utilizing membrane electrical forces. Bioasis and Aposense entered into a research collaboration that will focus on delivering siRNA into the brain. Neurological diseases affect a significant population worldwide; however, delivering therapies across the blood-brain barrier into the brain has created a significant hurdle to otherwise effective therapies. News of the collaboration followed the recent publication of research demonstrating xB3's ability to not only cross the blood-brain barrier, but to facilitate the transcytosis of siRNA across the BBB. This ability supports the use of siRNA, which works by intercepting proteins before they are expressed in the cell.
Research Collaboration With Oxyrane
On June 30, 2021, Bioasis announced a research collaboration with Oxyrane UK Ltd. Oxyrane is a UK-based developer of enhanced enzyme replacement therapies (ERT) for the treatment of lysosomal storage diseases, with a focus on the diseases of the central nervous system. The company is targeting Gaucher Disease, Parkinson's Disease and Pompe Disease with plans to use the xB3 platform to deliver an undisclosed enhanced ERT into the brain.
Appointments
Dave Jenkins Appointed CFO
Announced in a July 1, 2021 press release, Dave Jenkins was appointed as Bioasis' Chief Financial Officer. Jenkins brings more than 35 years of accounting and finance experience including 31 years at PricewaterhouseCoopers. At PwC, Jenkins supported multinational public clients as an audit partner. He also served private equity portfolio companies and venture backed growth companies. Sectors included bioscience, software and healthcare. Jenkins' expertise includes raising capital, acquisitions and international expansion. He holds a bachelor's in business administration and accounting from Muhlenberg College.
Jeffrey Sprouse, Ph.D. Appointed Preclinical Program Manager
On July 20, 2021, Bioasis announced the appointment of Jeffrey Sprouse, Ph.D. as its Preclinical Program Manager. Sprouse brings over 20 years of drug discovery experience. He is a trained neuropharmacologist who has held leadership positions in top tier pharma and served as project lead for drug discovery programs at Pfizer, where he and his team were responsible for proof of concept for a number of clinical candidates, and as committee chair for early project development at Lundbeck where his group focused on the generation of new pipeline assets. Sprouse has operated as a consultant, evaluating biological targets in the CNS space for potential investment, refining product profile messaging for key decision makers, supporting NCEs by developing mechanistic stories, and determining fit for clinical indications. Sprouse earned his doctorate at Cornell University Medical College with postdoctoral training in the Department of Psychiatry at Yale. He has authored/co-invented over 60 scientific papers, book chapters and patents.
In the Financial Sphere
Bioasis has conducted a number of financial transactions in the last quarters. It has entered into a convertible security funding agreement with Lind Global Macro Fund, LP, executed a $200,000 private placement with a family office, resolved a contractual dispute through the issuance of equity, granted stock options and modified the terms of outstanding warrants.
On July 20, 2021, Bioasis announced that it had granted stock options corresponding to a total of 1,367,606 common shares at $0.38 per share. Options were granted to directors and officers of Bioasis and an investor relations consultant. The options are granted as compensation in lieu of cash as Bioasis prioritizes partnership-enhancing R&D.
On June 22, 2021, the company entered into a convertible security funding agreement with Lind Global Macro Fund where the fund will issue up to $10 million in convertible securities. The initial investment of $3 million was closed on June 29, which included a closing fee of $90,000 and the issuance of 4.8 million 30-month warrants exercisable at $0.41 per share. 180 days after closing, Bioasis will begin repaying the note in $125,000 installments. Prepaid interest will accrue at $20,000 per month, and every 90 days, Lind retains the option to convert accrued interest into common shares at 90% of the market closing price on the day prior to the conversion. Converted shares will be locked up for four months + 1 day and short selling by Lind is prohibited. Principal value may also be converted to shares at a value of $0.31 per share.
Announced March 22, 2021, Bioasis applied to the TSX Venture Exchange to extend the expiry date and amend pricing of 5,797,795 common share purchase warrants issued in a private placement closed in April 2017. The extension requested to push the expiry date of these warrants from April 11, 2021 to the same date a year later. Two days later, Bioasis informed that the TSXV approved the proposed amendment and extension, and the exercise price was reduced from $1.00 to $0.85.
On February 10, 2021, Bioasis announced that it had entered into an agreement with an arms-length third party pursuant to which Bioasis agreed to issue 300,000 common shares at $0.3975 per share in order to resolve a contractual dispute.
A $200,000 non-brokered private placement was announced January 29, 2021, issuing 400,000 common shares to a Canadian family office at a price of $0.50 per share. On January 29, BIOAF shares traded at $0.33. The raise, albeit for a small amount of funds, was at a >50% premium.
Positive Results from Efficacy Study of xB3-IL-1RA in Multiple Sclerosis Model
Previous work by Thom et al.2 demonstrated that xB3 could deliver an interleukin-1 receptor antagonist to the brain, eliciting analgesia in a neuropathic pain animal model where systemic administration alone did not. IL-1 cytokines have been implicated in many autoimmune and neuroinflammatory diseases, creating an opportunity to attempt delivery of IL-1RA into the brain using the xB3 platform. A rodent allergic encephalomyelitis model of multiple sclerosis was administered with multiple doses of xB3-IL-1RA. Results, announced July 7, 2021, showed both delayed onset and reduced clinical symptom score in the treated animals versus control (p < 0.016). The data further evidenced the utility of xB3 to deliver large payloads across the blood-brain barrier and supports the potential application of Bioasis' technology to treatment of neuroinflammatory diseases such as multiple sclerosis.
Bioasis' long term goal is to advance into areas where activation of the inflammasome is critical to neuroinflammation. Neurodegeneration, lysosomal function and activation of the inflammasome are all linked and addressing the dysfunction at the level of the lysosome by using a replacement approach may yield further benefits. The research has implications for Parkinson's Disease, Lewy Body dementia and frontotemporal dementia.
Publications
Over the previous several months, Bioasis has published both proof of concept of xB3 delivery of siRNA across the blood-brain barrier and the ability for the xB3 peptide chain to enter organelles within neurons, glia and microglia in the brain.
Announced on March 29, 2021, a document was published validating the ability of Bioasis' xB3 platform to deliver an siRNA payload across the blood-brain barrier to the CNS in therapeutically relevant doses. Dr. Wilfred A. Jefferies joined Bioasis scientists to evaluate xB3 in siRNA applications to ischemic stroke. The results showed that the platform can translocate a siRNA payload across the blood-brain barrier and the siRNA can execute knockdown therapy, as evidenced by reduced stroke damage in the brain and improved neurological function. The paper, entitled "A Nanomule Peptide Carrier Delivers siRNA Across the Intact Blood-Brain Barrier to Attenuate Ischemic Stroke," was published in the Frontiers in Molecular Biosciences.
Months later, Bioasis announced a publication in Frontiers in Neuroscience, "Discovery of a Highly Conserved Peptide in the Iron Transporter Melanotransferrin that Traverses an Intact Blood Brain Barrier and Localized in Neural Cells," on June 3, 2021. Again, Dr. Wilfred Jefferies worked with Bioasis scientists, this time demonstrating that xB3 could not only cross the blood-brain barrier but also enter organelles, including endosomes and lysosomes, within many cell types in the CNS including neurons, glia and microglia in the brain.
Upcoming Milestones
Below we have provided the anticipated timeline for events related to portfolio candidates (calendar quarters):
➢ xB3-Progranulin BBB data – August 2021
➢ xB3-007 glucocerebrosidase enzyme replacement therapy (ERT), BBB data – September 2021
➢ xB3-Progranulin FTD disease model read out – 4Q:21
➢ xB3-007 disease model read out – 4Q:21
Key Reasons to Own Bioasis Shares
➢ Best in class xB3 blood brain barrier penetrating technology
◦ Non-transferrin based transcytotic pathway
◦ Addresses a major hurdle to CNS therapy
◦ High selectivity for BBB and CNS parenchyma
◦ Preserves payload function and pharmacodynamics
◦ Can deliver antibodies, enzymes, siRNA and small molecules
➢ Lead indications in HER2+ metastatic breast cancer and Gaucher Disease
➢ Licensing and funding opportunities with numerous partners
➢ Diversified preclinical portfolio able to address multiple CNS disorders
➢ 120+ patents and pending applications across 10+ patent families
Summary
Bioasis offers a broad portfolio built on its xB3 technology platform that can be developed both internally and with partners for many therapies demonstrating brain activity. Bioasis has continued its efforts to expand its stable of partners, adding thoroughbreds Aposense and Oxyrane to its string. Continued publications continue to show evidence of xB3's ability to ferry multiple compounds across the BBB and localize in neural cells, expanding potential indications for the neurodegeneration and inflammatory CNS program. We anticipate parallel development of several xB3 compounds that will enter the clinic over the next several years. Our valuation work assumes median drug revenue for each of the programs underway and applies a discount related to the anticipated 8% weighted probability of success. Please refer to our initiation here for detail on the company and a thorough discussion of our thesis.
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1. Subsequent financial results and comparison in Canadian Dollars (CA$)
2. Thom G, Tian MM, Hatcher JP, et al. A peptide derived from melanotransferrin delivers a protein-based interleukin 1 receptor antagonist across the BBB and ameliorates neuropathic pain in a preclinical model. J Cereb Blood Flow Metab. 2019;39(10):2074-2088. doi:10.1177/0271678X18772998
3. Source: Bioasis March 2021 Corporate Presentation
4. Source: March 2021 Corporate Slide Deck
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