Lixte Biotechnology Holdings, Inc. (LIXT) is a clinical-stage biopharmaceutical company dedicated to improving patients' lives by developing a drug class called Protein Phosphatase 2A inhibitors. The company's corporate office is located in Pasadena, California.
Business Overview
Lixte Biotechnology's product pipeline is primarily focused on inhibitors of protein phosphatase 2A, used to enhance cytotoxic agents, radiation, immune checkpoint blockers and other cancer therapies. The company believes that inhibitors of protein phosphatases have significant therapeutic potential for a broad range of cancers. Lixte is focusing on the clinical development of a specific protein phosphatase inhibitor, referred to as LB-100, which has been shown to have clinical anti-cancer activity at doses that produce little or no toxicity.
The company's activities are subject to significant risks and uncertainties, including the need for additional capital. Lixte has not yet commenced any revenue-generating operations, does not have positive cash flows from operations, relies on stock-based compensation for a substantial portion of employee and consultant compensation, and is dependent on periodic infusions of equity capital to fund its operating requirements.
Financials
For the fiscal year ended December 31, 2023, Lixte reported an annual net loss of $5,087,029, with no revenue generated. The company's annual operating cash flow was -$4,293,265, and its annual free cash flow was also -$4,293,265.
In the first quarter of 2024, Lixte reported a net loss of $971,322, with no revenue generated. The company's operating cash flow for the quarter was -$789,225, and its free cash flow was also -$789,225.
Liquidity and Capital Resources
As of March 31, 2024, Lixte had cash of $3,414,263 available to fund its operations. The company's consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
However, the company has concluded that there is substantial doubt about its ability to continue as a going concern within one year after the date that the consolidated financial statements are being issued. Lixte's ability to continue as a going concern is dependent upon its ability to raise additional equity capital to fund its research and development activities and to ultimately achieve sustainable operating revenues and profitability.
Based on current operating plans, the company estimates that its existing cash resources at March 31, 2024 will provide sufficient working capital to fund the current clinical trial program with respect to the development of its lead anti-cancer clinical compound LB-100 through approximately December 31, 2024. However, existing cash resources will not be sufficient to complete the clinical development of, and obtain regulatory approval for, the company's product candidate, which will require that Lixte raise significant additional capital.
The company estimates that it will need to raise additional capital in one or more tranches by approximately September 30, 2024 in order to be able to effectively manage its current business plan during the remainder of 2024, the full year 2025, and thereafter. In addition, the company's operating plans may change as a result of many factors that are currently unknown and/or outside of the control of the company, and additional funds may be needed sooner than planned.
Nasdaq Listing
Lixte's common stock and the warrants are traded on the Nasdaq Capital Market ("Nasdaq") under the symbols "LIXT" and "LIXTW", respectively. On June 2, 2023, the company effected a 1-for-10 reverse split of its outstanding shares of common stock in order to remain in compliance with the $1.00 minimum closing bid price requirement of Nasdaq. However, there can be no assurances that the company will be able to remain in compliance with the $1.00 minimum closing bid price requirement of Nasdaq over time, or that it will be successful in maintaining compliance with any of the other continued listing requirements of Nasdaq.
Recent Developments
Effective February 23, 2024, Lixte entered into a Patent License Agreement with the National Institute of Neurological Disorders and Stroke (NINDS) and the National Cancer Institute (NCI), each an institute or center of the National Institute of Health (NIH). Pursuant to the License Agreement, the company has licensed on an exclusive basis the NIH's intellectual property rights claimed for a Cooperative Research and Development Agreement (CRADA) subject invention co-developed with the company, and the licensed field of use, which focuses on promoting anti-cancer activity alone, or in combination with standard anti-cancer drugs. The scope of this clinical research extends to checkpoint inhibitors, immunotherapy, and radiation for the treatment of cancer.
The License Agreement is effective, and shall extend, on a licensed product, licensed process, and country basis, until the expiration of the last-to-expire valid claim of the jointly owned licensed patent rights in each such country in the licensed territory, estimated at twenty years, unless sooner terminated. Enhancing immunotherapy with LB-100 is a primary strategy of the company that could generate significant clinical and business prospects, subject to the availability of adequate financing to pursue this opportunity.
Clinical Pipeline and Trials
Lixte's product pipeline is primarily focused on inhibitors of Protein Phosphatase 2A, used to enhance cytotoxic agents, radiation, immune checkpoint blockers and other cancer therapies. The company is focusing on the clinical development of its lead anti-cancer clinical compound, LB-100.
The company is currently conducting several clinical trials evaluating LB-100, including:
1. A Phase 1b clinical trial in combination with carboplatin, etoposide and atezolizumab in small cell lung cancer, being conducted at the City of Hope National Medical Center and the Sarah Cannon Research Institute. As of March 31, 2024, three patients have been entered into the trial, with two evaluable.
2. A Phase 1b clinical trial in combination with doxorubicin in sarcoma, being conducted by the Spanish Sarcoma Group (GEIS). As of March 31, 2024, seven patients have been entered into the trial.
3. A Phase 1b/2 collaborative clinical trial to assess whether adding LB-100 to a human programmed death receptor-1 (PD-1) blocking antibody, dostarlimab-gxly, may enhance the effectiveness of immunotherapy in the treatment of ovarian clear cell carcinoma. This trial is being sponsored by The University of Texas MD Anderson Cancer Center and the first patient was entered in January 2024.
Lixte's remaining financial contractual commitments pursuant to these and other clinical trial agreements and clinical trial monitoring agreements not yet incurred aggregated approximately $6,317,000 as of March 31, 2024, which are currently scheduled to be incurred through approximately December 31, 2027.
Risks and Challenges
Lixte's business activities are subject to significant risks and uncertainties, including the need for additional capital, the unpredictable nature of pharmaceutical research and development, and potential impacts from external factors such as the COVID-19 pandemic, inflation and interest rate changes, supply chain issues, a potential recession, and geopolitical risks.
The company has concluded that there is substantial doubt about its ability to continue as a going concern within one year after the date that the consolidated financial statements are being issued. Lixte's ability to continue as a going concern is dependent upon its ability to raise additional equity capital to fund its research and development activities and to ultimately achieve sustainable operating revenues and profitability.
Outlook
Based on current operating plans, Lixte estimates that its existing cash resources at March 31, 2024 will provide sufficient working capital to fund the current clinical trial program with respect to the development of its lead anti-cancer clinical compound LB-100 through approximately December 31, 2024. However, the company will need to raise significant additional capital by approximately September 30, 2024 in order to be able to effectively manage its current business plan during the remainder of 2024, the full year 2025, and thereafter.
The company is considering various strategies and alternatives to obtain the required additional capital, but there can be no assurance that Lixte will be able to secure additional financing on acceptable terms, as and when necessary, to continue to conduct operations. If cash resources are insufficient to satisfy the company's ongoing cash requirements, Lixte would be required to scale back or discontinue its clinical trial program, as well as its licensing and patent prosecution efforts and its technology and product development efforts, or obtain funds, if available, through strategic alliances or joint ventures that could require the company to relinquish rights to and/or control of LB-100, or to discontinue operations entirely.
Conclusion
Lixte Biotechnology Holdings, Inc. is a clinical-stage biopharmaceutical company with a promising pipeline of protein phosphatase 2A inhibitors, led by its lead compound LB-100. The company has made progress in advancing its clinical trials, but faces significant risks and uncertainties, including the need for substantial additional capital to complete the development and regulatory approval process for its product candidate. Investors should carefully consider the company's financial position, liquidity, and the risks outlined in evaluating an investment in Lixte.