BriaCell Therapeutics Corp (NASDAQ:BCTX) is a clinical-stage biotechnology company at the forefront of developing novel immunotherapies to transform cancer care. The company's lead candidate, Bria-IMT™, is currently in a pivotal Phase 3 study for the treatment of advanced metastatic breast cancer, with promising results from earlier trials.
Business Overview
BriaCell is focused on harnessing the power of the body's own immune system to recognize and destroy cancer cells. The company's lead program, Bria-IMT™, is an off-the-shelf personalized immunotherapy that is designed to stimulate the immune system to attack the patient's cancer. Bria-IMT™ is currently being evaluated in a pivotal Phase 3 study in advanced metastatic breast cancer patients who have failed at least two prior approved therapies.In addition to Bria-IMT™, BriaCell is also developing a personalized off-the-shelf immunotherapy, Bria-OTS™, which provides a platform technology to develop personalized off-the-shelf immunotherapies for numerous types of cancer. The company is also advancing a soluble CD80 protein therapeutic, which acts as both a stimulator of the immune system and an immune checkpoint inhibitor.
Recent Developments
In August 2023, BriaCell completed a plan of arrangement spinout transaction, in which certain pipeline assets, including Bria-TILsRx™ and protein kinase C delta (PKCδ) inhibitors, were spun out to a 66.6%-owned subsidiary, BriaPro Therapeutics Corp. This transaction allows BriaCell to focus its resources on advancing its lead Bria-IMT™ program.On October 3, 2023, BriaCell initiated its pivotal Phase 3 study of Bria-IMT™ in advanced metastatic breast cancer. The study will evaluate the efficacy and safety of the Bria-IMT™ combination regimen with an immune checkpoint inhibitor (Retifanlimab) in patients who have failed at least two approved therapies. Bria-IMT™ is currently under Fast Track Designation by the U.S. FDA, which is intended to accelerate the review process of novel treatments that address unmet medical needs.
Financials
For the fiscal year ended July 31, 2023, BriaCell reported an annual net loss of $20,302,394, with no revenue generated. The company's annual operating cash flow and free cash flow were both negative $23,744,860.In the three months ended April 30, 2024, BriaCell reported a net profit of $1,692,242, compared to a net loss of $4,895,436 in the same period of the prior year. This turnaround was primarily driven by a significant decrease in the fair value of the company's warrant liability, which resulted in a gain of $10,945,672 during the quarter.
Research and development expenses increased significantly in the three-month period ended April 30, 2024, rising to $7,657,632 from $3,860,568 in the same period of the prior year. This increase was largely due to the continued expansion of the company's clinical trials, particularly the Bria-IMT™ trial, as well as higher costs associated with the initiation of the pivotal Phase 3 study.
General and administrative expenses decreased slightly in the three-month period ended April 30, 2024, amounting to $1,572,016 compared to $1,816,461 in the same period of the prior year. This reduction was mainly attributed to lower shareholder communication expenses, insurance costs, and professional fees.
As of April 30, 2024, BriaCell had a negative working capital balance of $1,227,767, compared to a positive working capital of $25,147,050 as of July 31, 2023. The company's cash and cash equivalents decreased from $21,251,092 as of July 31, 2023, to $935,694 as of April 30, 2024, primarily due to the significant cash outflows from operating activities.
Liquidity
BriaCell's ability to fund its longer-term cash requirements is subject to multiple risks, many of which are beyond its control. The company intends to raise additional capital, either through debt or equity financings, in order to achieve its business plan objectives. Management believes that it can be successful in obtaining additional capital; however, there can be no assurance that the Company will be able to do so.To this end, as of March 1, 2024, certain directors and officers have agreed to defer payment of their directors' fees/compensation until further notice. In addition, the company is reducing expenditure on certain non-core activities whilst maintaining its focus on the pivotal Phase 3 Bria-IMT™ study.
Risks and Challenges
BriaCell faces several risks and challenges in its pursuit of developing and commercializing its innovative immunotherapies. These include the inherent risks associated with clinical development, such as the potential for adverse events, the uncertainty of regulatory approval, and the competitive landscape in the oncology space.Additionally, the company's ability to raise sufficient capital to fund its operations and execute its business plan is a significant risk factor. The company's negative working capital position and declining cash balance highlight the need for additional financing, which may not be available on favorable terms, or at all.