CohBar, Inc. (NASDAQ:CWBR) is a clinical-stage biotechnology company that has historically focused on leveraging the power of the mitochondria and the peptides encoded in its genome to develop potential breakthrough therapeutics targeting chronic and age-related diseases. The company's primary historical activities have included utilizing its mitochondria-focused technology platform to identify and develop novel peptide analogs, the research and development of its pipeline, securing intellectual property protection for its discoveries and assets, managing collaborations and clinical trials with contract research organizations (CROs), and raising capital to fund its operations.

Recent Developments

In December 2022, CohBar suspended its Investigational New Drug (IND)-enabling work on pre-clinical candidate CB5138-3, which the company had been developing as a potential treatment for idiopathic pulmonary fibrosis and other fibrotic diseases. The decision to suspend IND-enabling work was based on completed non-clinical formulation studies seeking to identify a formulation suitable for clinical development. In addition, the company does not believe that the formulation of CB4211 used in the Phase 1b stage of the trial is suitable for further development. Efforts to develop an improved formulation have not been successful to date, and there can be no assurances that the company will be able to develop such a formulation.

Financials

Historically, CohBar has financed its operations primarily with proceeds from sales of its equity securities, including its initial public offering, private placements of its securities, a debt offering, public sales of its securities, and the exercise of outstanding warrants and stock options. Since its inception through June 30, 2023, the company's operations have been funded with an aggregate of approximately $97.3 million from the sale and issuance of equity instruments and debt, including the proceeds from the exercise of warrants and stock options.

Since inception, CohBar has incurred significant operating losses. The company's net losses were $6.5 million and $6.0 million for the six months ended June 30, 2023 and 2022, respectively. CohBar incurred $0.7 million and $1.0 million in non-cash expenses during the six months ended June 30, 2023 and 2022, respectively. The company's net losses excluding non-cash expenses were $5.8 million and $5.0 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, CohBar had an accumulated deficit of $103 million. Dependent upon the completion of the pending merger, significant expenses and operating losses over the next several years may continue to occur.

CohBar's net losses may fluctuate significantly from quarter to quarter and from year to year. For the full year 2022, the company reported a net loss of $11.9 million, with no revenue generated. The company's annual operating cash flow and free cash flow for 2022 were both -$10.4 million.

Recent Developments

On May 22, 2023, CohBar entered into a Merger Agreement with Merger Sub and Morphogenesis, pursuant to which, among other matters and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Morphogenesis, with Morphogenesis continuing as a wholly owned subsidiary of CohBar, and CohBar being the surviving corporation of the Merger.

Concurrent with the execution and delivery of the Merger Agreement, CohBar entered into a Stock Purchase Agreement with an investor, pursuant to which the investor has agreed to purchase from CohBar 7,500,000 shares of CohBar common stock at a per share price of $2.00 for an aggregate purchase price of $15.0 million immediately prior to the closing of the Merger, subject to adjustments contained in the Stock Purchase Agreement. In addition, CohBar has agreed to sell, at the election of the investor, which must be made within six months following the closing of the Merger, an aggregate of 7,500,000 additional shares of CohBar common stock for an aggregate purchase price of $15.0 million at the same price per share as sold in the initial closing, also subject to adjustments contained in the Stock Purchase Agreement.

After taking into account the initial financing, immediately after the Merger, pre-Merger Morphogenesis stockholders would own approximately 77% of the combined company, pre-Merger CohBar stockholders would own approximately 15% of the combined company, and the investor would own approximately 9% of the combined company.

Research and Development Expenses

Research and development expenses were $1.2 million in the six months ended June 30, 2023, compared to $2.7 million in the prior year period, a decrease of $1.5 million, or 55%. The lower research and development expenses were primarily due to a decrease of $0.8 million associated with CohBar's research programs related to the suspension of its activities, a $0.4 million decrease in consulting expenses due to less usage of those services, a $0.2 million decrease in compensation costs primarily due to lower headcount in the current year period, and a $0.1 million decrease in rent expense as the company reduced the amount of office space leased.

General and Administrative Expenses

General and administrative expenses were $5.5 million in the six months ended June 30, 2023, compared to $3.3 million in the prior year period, an increase of $2.2 million, or 68%. The increase in general and administrative expenses was due to a $1.4 million increase in professional fees primarily due to merger-related costs and a $1.2 million compensation charge incurred in the current year period related to the retention of the company's key executives. These increases were partially offset by a $0.2 million decrease in compensation costs primarily due to lower stock-based compensation expenses and a $0.1 million decrease in annual meeting fees due to the difference in timing of the dates of the current year's meeting as compared to the prior year's meeting.

Liquidity

As of June 30, 2023, CohBar had cash, cash equivalents, and investments totaling $12.3 million. The company maintains its cash in a checking and savings account on deposit with a banking institution in the United States. Based on management's current plans on working towards the Merger and the suspension of its R&D activities, the company believes that its funds available will be sufficient to fund its planned operating expenses and capital expenditure requirements for at least one year from the issuance of these financial statements. However, if the Merger is not approved or does not occur, CohBar may not be successful in identifying and implementing any strategic alternatives to the Merger, including a debt or equity raise, business combination, investment into the company, asset sale, or other strategic transaction.

Net cash used in operating activities for the six months ended June 30, 2023 and 2022 was $3.5 million and $5.9 million, respectively. The cash used in operations for the six months ended June 30, 2023 was primarily due to the company's reported net loss of $6.5 million, partially offset by an increase of $1.4 million in accounts payable and accrued expenses primarily due to costs related to the Merger, $0.7 million in stock-based compensation, a $0.6 million increase in accrued compensation primarily due to retention bonuses accrued at June 30, 2023, and a $0.3 million increase in prepaid expenses and other current assets primarily due to the amortization of those items.

Net cash provided by investing activities was $3.7 million in the six months ended June 30, 2023 and was primarily due to the redemptions of investments during the period. No net cash was used in or provided by financing activities in the six months ended June 30, 2023.

Conclusion

In conclusion, CohBar, Inc. is a clinical-stage biotechnology company that has faced significant challenges in its research and development efforts, leading to the suspension of its IND-enabling work on pre-clinical candidate CB5138-3 and the inability to identify a suitable formulation for its CB4211 product candidate. The company has incurred substantial operating losses and is heavily reliant on external financing to fund its operations. The pending merger with Morphogenesis represents a potential strategic alternative for the company, but its success is subject to various conditions and uncertainties. Investors should carefully consider the risks and uncertainties associated with CohBar's business before making any investment decisions.