Coeptis Therapeutics Holdings, Inc. (NASDAQ:COEPW): Navigating the Challenges of a Biopharmaceutical Startup

Published on September 24, 2024 | Ticker: COEPW

Coeptis Therapeutics Holdings, Inc. (NASDAQ:COEPW) is a biopharmaceutical company that owns, acquires, and develops cell therapy technologies for cancer and other diseases. The company has faced significant operational challenges in recent years, including the impact of the COVID-19 pandemic on the launch of its 505b2 products. Despite these obstacles, Coeptis is now focused on identifying and investing resources into innovative products and technologies that it believes will transform its current offerings.

Business Overview

Coeptis was originally incorporated in the British Virgin Islands in 2018 under the name Bull Horn Holdings Corp. In October 2022, the company domesticated to Delaware and changed its name to Coeptis Therapeutics Holdings, Inc. in connection with the closing of a merger with Coeptis Therapeutics, Inc. As a result of the merger, Coeptis Therapeutics, Inc. became a wholly-owned subsidiary of the company, and the company now operates through its direct and indirect wholly-owned subsidiaries Coeptis Therapeutics, Inc., Coeptis Pharmaceuticals, Inc., and Coeptis Pharmaceuticals, LLC.

Coeptis' current business model is focused on furthering the development of its product portfolio, which includes innovative cell therapy technologies for cancer and other diseases. The company is continuously exploring partnership opportunities with companies that have novel therapies in various stages of development or technologies that improve drug delivery to patients. These partnerships could include in-license agreements, out-license agreements, co-development arrangements, and other strategic collaborations in therapeutic areas such as autoimmune disease and oncology.

Operational Challenges and Pivots

In 2020 and 2021, Coeptis faced several operational challenges related to the COVID-19 pandemic, which impacted the launch of its two 505b2 products. The global pandemic and resulting market dynamics made it difficult for the company to achieve expected sales, as field sales personnel were unable to make in-person visits to healthcare providers. Coeptis explored and implemented various non-personal promotion efforts, but the global limitations and dynamics proved challenging. As a result, the company has since abandoned all activities and ownership pertaining to these two products.

Shifting Focus to Innovative Cell Therapies

Following the reverse merger transaction in 2022, Coeptis has shifted its focus to identifying and investing resources into innovative products and technologies that it believes will significantly transform its current offerings. The company has entered into several strategic partnerships to co-develop improved therapies for the autoimmune and oncology markets.

Vy-Gen-Bio Partnership

In May 2021, Coeptis entered into two exclusive option agreements with Vy-Gen-Bio, Inc. (Vy-Gen), a subsidiary of Vycellix, Inc., related to technologies designed to improve the treatment of CD38-related cancers. The agreements cover two Vy-Gen drug product candidates:

CD38-GEAR-NK:

This autologous, NK cell-based therapeutic is designed to protect CD38+ NK cells from destruction by anti-CD38 monoclonal antibodies, potentially revolutionizing the treatment of CD38-related cancers, including multiple myeloma, chronic lymphocytic leukemia, and acute myeloid leukemia.

CD38-Diagnostic:

This in vitro diagnostic tool is intended to analyze if cancer patients might be appropriate candidates for anti-CD38 monoclonal antibody therapy, providing the opportunity to make more cost-effective medical decisions and avoid unnecessary administration of ineffective therapy.

Coeptis made initial payments totaling $750,000 in 2021 to acquire exclusive options for these technologies. In August 2021, the company entered into amendments to the agreements, delivering promissory notes aggregating $3,250,000 and making a $1,000,000 cash payment to exercise the options. In December 2021, Coeptis completed its payment obligations to secure a 50% ownership interest in the CD38-Diagnostic product candidate, and in November 2022, it completed the purchase of a 50% ownership interest in the CD38-GEAR-NK product candidate.

Deverra Therapeutics Acquisition

In August 2023, Coeptis entered into an exclusive licensing arrangement with Deverra Therapeutics Inc. (Deverra), acquiring the exclusive rights to use Deverra's proprietary allogeneic stem cell expansion and directed differentiation platform for the generation of natural killer (NK) and monocyte/macrophage cell types. This platform is intended to be used in conjunction with Coeptis' SNAP-CAR and GEAR technologies. As consideration, Coeptis paid Deverra approximately $570,000 in cash, issued 4,000,000 shares of its common stock, and assumed certain liabilities related to Deverra's ongoing clinical trials.

Financials

Coeptis' financial performance has been characterized by minimal revenue, primarily from consulting arrangements and product sales. For the year ended December 31, 2023, the company reported annual revenue of $0, annual net income of -$21,266,537, annual operating cash flow of -$7,239,514, and annual free cash flow of -$7,239,514.

For the three months ended March 31, 2024, Coeptis reported no revenue, a net loss of $3,001,388, and a decrease in cash and cash equivalents from $1,469,134 as of December 31, 2023, to $1,029,244 as of March 31, 2024. The company's operating expenses decreased from $6,538,951 in the first quarter of 2023 to $2,922,383 in the first quarter of 2024, primarily due to lower professional services expenses related to equity transactions.

Liquidity

As of March 31, 2024, Coeptis had a current ratio of 1.6 and a quick ratio of 1.6, indicating a strong liquidity position. However, the company's cash conversion cycle was 865.08 days, and its cash flow to debt ratio was -3.15, suggesting potential challenges in managing its working capital and debt obligations.

Coeptis believes that its ability to raise capital through equity transactions will increase its liquidity and enable the execution of its operating strategy in 2024. The company's management expects that development costs will increase to support its new strategic initiatives, including the partnerships with Vy-Gen and Deverra Therapeutics.

Risks and Challenges

Coeptis faces several risks, including the ability to successfully develop and commercialize its innovative cell therapy technologies, the potential for delays or setbacks in its research and development efforts, and the need to secure additional funding to support its operations. The company's future success will depend on its ability to navigate these challenges and execute its strategic plan effectively.

Outlook

Despite the operational and financial hurdles the company has faced, Coeptis remains focused on identifying and investing in transformative products and technologies that it believes will significantly improve patient outcomes in the autoimmune and oncology markets. The company's partnerships with Vy-Gen and Deverra Therapeutics represent important steps in this direction, and Coeptis is optimistic about the potential of its pipeline to drive long-term growth and value creation for its shareholders.

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