Cyclo Therapeutics, Inc. is a clinical-stage biotechnology company dedicated to developing innovative, life-changing medicines through scientific advancements for patients and families living with rare and neurological diseases. The company's lead asset, Trappsol® Cyclo™, is currently being evaluated in a pivotal Phase 3 clinical trial for the treatment of Niemann-Pick Disease Type C1 (NPC1), a rare and fatal genetic disorder. With a steadfast commitment to addressing unmet medical needs, Cyclo Therapeutics has navigated a remarkable journey, positioning itself as a trailblazer in the rare disease space.

Business Overview and Company History Cyclo Therapeutics was incorporated in August 1990 as Cyclodextrin Technologies Development, Inc. and commenced operations in July 1992. In 2000, the company underwent a restructuring and changed its name to CTD Holdings, Inc. In 2019, the company further rebranded itself as Cyclo Therapeutics, Inc. to better reflect its current business focus on the development of innovative cyclodextrin-based therapies.

The company's core expertise lies in the utilization of cyclodextrins, a class of naturally occurring molecules, for the treatment of rare and neurological diseases. Cyclo Therapeutics' lead drug candidate, Trappsol® Cyclo™, is a proprietary hydroxypropyl beta cyclodextrin formulation that has shown promise in addressing the underlying pathophysiology of NPC1, a devastating disorder characterized by the accumulation of cholesterol and other lipids within cells.

In 2014, Cyclo Therapeutics filed a Type II Drug Master File with the U.S. Food and Drug Administration (FDA) for Trappsol® Cyclo™ as a treatment for NPC. The following year, the company launched its International Clinical Program for Trappsol® Cyclo™ as a potential treatment for NPC1. In 2016, Cyclo Therapeutics filed an Investigational New Drug (IND) application with the FDA, which described its Phase I clinical plans for a randomized, double-blind, parallel group study at a single clinical site in the U.S. The Phase I study was designed to evaluate the safety and pharmacokinetics of Trappsol® Cyclo™ along with markers of cholesterol metabolism and markers of NPC during a 12-week treatment period.

The FDA approved the IND in September 2016, and in January 2017, the agency granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC1. Initial patient enrollment in the U.S. Phase I study commenced in September 2017, and in May 2020, the company announced top-line data showing that Trappsol® Cyclo™ was well tolerated in this study.

Recognizing the urgent need for effective treatments, Cyclo Therapeutics has diligently progressed its clinical development efforts. In 2020, the company received a Study May Proceed notification from the FDA for its proposed Phase 3 clinical trial, and in June 2021, Cyclo Therapeutics commenced enrollment in the pivotal TransportNPC™ study, the most comprehensive ongoing controlled trial for NPC1 in terms of patient size, global footprint, duration, and clinical outcomes. The company achieved a landmark milestone in May 2024 with the completion of patient enrollment in the TransportNPC™ study, positioning it to deliver highly anticipated topline data from the 48-week interim analysis in the first half of 2025.

Financials and Liquidity As of September 30, 2024, Cyclo Therapeutics reported a cash and cash equivalents balance of $928,010, a decrease from $9,250,000 as of December 31, 2023. The company's working capital declined to a negative $15,460,000 as of September 30, 2024, compared to a positive $3,850,000 as of December 31, 2023. This change in the company's liquidity position can be attributed to the ongoing investment in its clinical development efforts, particularly the pivotal TransportNPC™ study.

For the nine months ended September 30, 2024, Cyclo Therapeutics reported total revenues of $559,330, compared to $765,010 for the same period in 2023, a decrease of 27%. The company's net loss for the nine months ended September 30, 2024, was $19,160,000, compared to a net loss of $14,410,000 for the same period in 2023. The increase in net loss was primarily driven by the continued investment in research and development activities, as well as higher professional fees and general and administrative expenses.

Cyclo Therapeutics' cash used in operating activities for the nine months ended September 30, 2024, was $18,220,000, compared to $11,890,000 for the same period in 2023. This increase in cash burn reflects the company's focus on advancing its lead candidate, Trappsol® Cyclo™, through the pivotal TransportNPC™ study.

For the most recent fiscal year (2023), Cyclo Therapeutics reported revenue of $1.08 million, a net loss of $20.06 million, and operating cash flow and free cash flow of negative $16.19 million. In the most recent quarter (Q3 2024), the company reported revenue of $233,770, a net loss of $8.83 million, operating cash flow of negative $8.19 million, and free cash flow of negative $12.04 million. The year-over-year revenue decrease of 53% in Q3 2024 compared to Q3 2023 was primarily due to the reclassification of revenue derived from compassionate sales of Trappsol Cyclo. The net loss increased by 85% compared to Q3 2023, primarily due to higher research and development expenses related to the NPC program.

Regarding the company's liquidity position, Cyclo Therapeutics reported a debt-to-equity ratio of -0.0015, cash of $928,010, a current ratio of 0.17, and a quick ratio of 0.16 as of September 30, 2024. The company has received $15 million in convertible notes from Rafael Holdings through November 2024 to fund operations.

Cyclo Therapeutics operates in one business segment, primarily focusing on the development and commercialization of innovative cyclodextrin-based products for the treatment of serious and life-threatening rare diseases and medical conditions. However, substantially all of the company's revenues are derived from the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs.

The company's product revenue can be broken down into several key categories:

1. Trappsol HPB: Sales of Trappsol HPB, the company's lead drug candidate for the treatment of Niemann-Pick Type C (NPC) disease, decreased by 89% for the three-month period ended September 30, 2024, to approximately $37,000, compared to approximately $342,000 for the three months ended September 30, 2023. For the nine-month period ended September 30, 2024, Trappsol HPB sales decreased by 47% to approximately $256,000, compared to approximately $485,000 for the nine months ended September 30, 2023. The decrease was attributed to a reclassification of revenue derived from compassionate sales of Trappsol Cyclo.

2. Other Trappsol Products: Sales of other Trappsol products, which include the company's fine chemical cyclodextrin products, increased by 29% for the three-month period ended September 30, 2024, to approximately $196,000, compared to approximately $152,000 for the three months ended September 30, 2023. For the nine-month period ended September 30, 2024, other Trappsol product sales increased by 12% to approximately $300,000, compared to approximately $267,000 for the nine months ended September 30, 2023.

3. Aquaplex: Sales of Aquaplex, another cyclodextrin-based product, for the three-month period ended September 30, 2024, were approximately $100, as compared to sales of Aquaplex for the three months ended September 30, 2023 of approximately $60. For the nine-month period ended September 30, 2024, Aquaplex sales were approximately $660, as compared to sales of Aquaplex for the nine months ended September 30, 2023 of approximately $10,000.

The company's largest customers continue to account for a significant portion of its annual sales volume, with the four largest customers accounting for 90% of sales during the nine months ended September 30, 2024, and the three largest customers accounting for 86% of sales during the nine months ended September 30, 2023. This concentration of sales to a small number of customers makes the company's quarterly revenues and operating results susceptible to fluctuations based on the timing of these large orders.

The company's cost of products sold, excluding any allocation of direct and indirect overhead and handling costs, decreased by 56% to approximately $17,000 for the three-month period ended September 30, 2024, compared to approximately $39,000 for the same period in 2023. For the nine-month period ended September 30, 2024, cost of products sold decreased by 39% to approximately $42,000, compared to approximately $69,000 for the same period in 2023. The company's cost of products sold as a percentage of sales was 8% for the nine months ended September 30, 2024, and 9% for the nine months ended September 30, 2023.

It's important to note that Cyclo Therapeutics is a clinical-stage biotechnology company, and as such, its financial performance is not necessarily indicative of its long-term potential. The company's success will largely depend on the outcome of its ongoing clinical trials and its ability to secure regulatory approvals and commercialize its lead candidate.

Operational Highlights and Milestones Cyclo Therapeutics has achieved several notable operational milestones in recent years, highlighting its commitment to advancing its pipeline and addressing the unmet needs of rare disease patients.

In March 2021, the company announced positive results from its Phase 3 clinical study of Trappsol® Cyclo™ in Europe and Israel, where 100% of patients who completed the trial improved or remained stable, and 89% met the outcome measure in at least two domains of the 17-domain NPC severity scale.

Building on this momentum, Cyclo Therapeutics commenced enrollment in its pivotal TransportNPC™ study in June 2021, which is designed to evaluate the safety, tolerability, and efficacy of Trappsol® Cyclo™ in NPC1 patients. In May 2024, the company achieved a significant milestone by completing enrollment of the last patient in this comprehensive study, paving the way for the highly anticipated 48-week interim analysis data readout expected in the first half of 2025.

In addition to its lead NPC1 program, Cyclo Therapeutics is also exploring the potential of Trappsol® Cyclo™ in the treatment of Alzheimer's disease. In January 2018, the company received FDA authorization for a single-patient expanded access program using Trappsol® Cyclo™ to treat Alzheimer's disease. Building on this early experience, Cyclo Therapeutics submitted an IND for a Phase 2 study evaluating Trappsol® Cyclo™ in Alzheimer's disease, which was cleared by the FDA in December 2021. Patient dosing for this study began in the first quarter of 2023.

Cyclo Therapeutics has also made progress in strengthening its intellectual property portfolio. In January 2024, the company received a notice of allowance from the U.S. Patent and Trademark Office (USPTO) for its patent application covering the use of Trappsol® Cyclo™ for the treatment of Alzheimer's disease. Additionally, in July 2024, Cyclo Therapeutics announced that the European Patent Office had granted a patent for the company's methods to treat Alzheimer's disease using Trappsol® Cyclo™.

Regulatory Milestones and Partnerships Cyclo Therapeutics has proactively engaged with regulatory authorities to ensure the optimal development and potential approval of Trappsol® Cyclo™ for NPC1 and Alzheimer's disease.

In January 2017, the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC1, recognizing the serious and life-threatening nature of the disease and the potential for this investigational therapy to address the unmet medical need. Additionally, in December 2017, the FDA designated NPC1 as a Rare Pediatric Disease, further highlighting the critical need for effective treatments.

Cyclo Therapeutics has also maintained an open dialogue with the European Medicines Agency (EMA). In February 2020, the company submitted a request for scientific advice and protocol assistance from the EMA regarding the company's plans to conduct a Phase 3 clinical trial of Trappsol® Cyclo™ in Europe.

Partnerships and Collaborations To further strengthen its capabilities and resources, Cyclo Therapeutics has established key partnerships and collaborations. In January 2022, the company executed an agreement with Ashland, Inc., a leading global specialty materials company, to secure the supply of critical raw materials used in the production of Trappsol® Cyclo™.

Cyclo Therapeutics' collaborative efforts extend beyond its supply chain. In December 2023, the company completed a strategic combination with Applied Molecular Transport Inc. (AMTI), a biopharmaceutical company, to leverage complementary expertise and resources in advancing its clinical programs.

Navigating Challenges and Looking Ahead Cyclo Therapeutics has faced various challenges inherent to the biotechnology industry, including the complexities of clinical trial execution, regulatory hurdles, and the need for ongoing capital raises to fund its operations. However, the company has demonstrated its resilience and adaptability in addressing these obstacles.

In October 2024, Cyclo Therapeutics received a notice from the Nasdaq Stock Market stating that the company was not in compliance with certain listing requirements. The company is currently working to regain compliance within the allotted timeframe, underscoring its commitment to maintaining a strong public market presence.

Despite these challenges, Cyclo Therapeutics remains focused on its mission to bring transformative therapies to rare disease patients. The company is eagerly anticipating the 48-week interim analysis data readout from the pivotal TransportNPC™ study, which is expected in the first half of 2025. If the data demonstrate statistical significance, Cyclo Therapeutics plans to submit a New Drug Application (NDA) to the FDA and a Marketing Authorization Application (MAA) to the EMA in the second half of 2025.

Furthermore, the company's efforts in exploring the potential of Trappsol® Cyclo™ for the treatment of Alzheimer's disease remain a key focus, with the ongoing Phase 2 study progressing as planned. Cyclo Therapeutics is committed to advancing its pipeline and exploring additional indications where its cyclodextrin-based technology may offer therapeutic benefits.

Conclusion Cyclo Therapeutics has established itself as a trailblazer in the rare disease space, driven by its unwavering commitment to developing innovative, life-changing medicines. The company's lead candidate, Trappsol® Cyclo™, has demonstrated promising results in clinical studies for the treatment of NPC1, a devastating genetic disorder, and holds potential in addressing the unmet needs of Alzheimer's disease patients.

As Cyclo Therapeutics navigates the challenges inherent to the biotechnology industry, it remains steadfast in its mission to transform the lives of rare disease patients. With the pivotal TransportNPC™ study nearing a critical data readout and the ongoing exploration of Trappsol® Cyclo™ in Alzheimer's disease, the company's future holds great promise. Investors and patients alike will eagerly await the upcoming milestones that could shape the trajectory of Cyclo Therapeutics and its pursuit of delivering novel, life-changing therapies.

The NPC and Alzheimer's disease markets represent significant unmet medical needs, with limited treatment options currently available. Industry trends show a compound annual growth rate (CAGR) of over 20% for rare disease drug development, and the Alzheimer's disease market is expected to grow rapidly as the population ages. These market dynamics position Cyclo Therapeutics favorably as it continues to advance its pipeline and work towards potential commercialization of its innovative therapies.