NeuroBo Pharmaceuticals, Inc. (NASDAQ:NRBO) is a clinical-stage biotechnology company at the forefront of transforming the treatment of cardiometabolic diseases. With a focused pipeline and a strategic realignment, the company is poised to deliver on its clinical milestones and unlock value for shareholders.
Business Overview and History NeuroBo was founded in 2016 with the goal of developing innovative treatments for a range of indications, including viral, neurodegenerative, and cardiometabolic diseases. In 2019, the company completed a $24.24 million private placement financing, which allowed it to advance its pipeline and grow operations. One of NeuroBo’s key priorities during this time was the development of NB-01, a therapeutic candidate for the treatment of painful diabetic neuropathy.
The year 2020 brought challenges related to the COVID-19 pandemic, impacting the company’s ability to conduct clinical trials and operations. Despite these difficulties, NeuroBo managed to raise $7.5 million through a common stock offering to support its ongoing activities. In 2021, the company continued to progress its pipeline, including the NB-01 program, and raised an additional $24 million through a common stock offering. However, NeuroBo reported a net loss of $15.3 million for that year.
A significant turning point came in late 2022 when NeuroBo acquired the rights to two promising drug candidates, DA-1241 and DA-1726, from Dong-A ST Co., Ltd., a South Korean pharmaceutical company. This acquisition marked a strategic shift in the company’s focus towards cardiometabolic diseases.
DA-1241 is a novel G-Protein-Coupled Receptor 119 (GPR119) agonist being developed for the treatment of metabolic dysfunction-associated steatohepatitis (MASH), formerly known as non-alcoholic steatohepatitis (NASH). MASH is a progressive liver disease characterized by inflammation and fat buildup in the liver, often associated with obesity and type 2 diabetes. DA-1241 has demonstrated promising preclinical results, showing beneficial effects on glucose, lipid profile, and liver inflammation.
The company is currently conducting a Phase 2a clinical trial evaluating the efficacy and safety of DA-1241 in patients with presumed MASH. The trial has two parts: Part 1 is exploring the efficacy of DA-1241 as a monotherapy, while Part 2 is examining the combination of DA-1241 and sitagliptin. Enrollment for this trial began in August 2023, and the company recently announced the completion of the last patient’s last visit, with top-line results expected in December 2024. A total of 109 patients have been randomized so far in this trial.
DA-1726, on the other hand, is a novel oxyntomodulin analogue that functions as a GLP-1 receptor (GLP1R) and glucagon receptor (GCGR) dual agonist. This unique mechanism of action is designed to treat obesity by reducing appetite (through GLP1R agonism) and increasing energy expenditure (through GCGR agonism). NeuroBo is currently conducting a Phase 1 clinical trial to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of DA-1726 in obese, otherwise healthy subjects. The company recently announced the completion of enrollment for the single ascending dose (SAD) portion of the trial, with positive top-line data expected in the third quarter of 2024. The SAD study enrolled 45 subjects across five cohorts and was found to be safe and well-tolerated, with no serious adverse events reported. The multiple ascending dose (MAD) portion of the trial began enrollment in June 2024 and is expected to enroll approximately 36 subjects. Top-line results from the full Phase 1 trial, including the Part 3 proof-of-concept portion, are anticipated in the second half of 2026.
In addition to its two lead programs, NeuroBo has four legacy therapeutic programs that the company continues to evaluate for out-licensing and divestiture opportunities. These programs are designed to address a range of indications in viral, neurodegenerative, and cardiometabolic diseases. In July 2024, NeuroBo entered into an exclusive out-license agreement with MThera Pharma Co., LTD. to provide MThera with the rights to develop and commercialize NB-01, one of the legacy assets, for the treatment of painful diabetic neuropathy.
Financials and Liquidity As of September 30, 2024, NeuroBo reported $21.7 million in cash, which the company believes will be sufficient to fund operations into the third quarter of 2025. During the nine months ended September 30, 2024, the company incurred a net loss of $22.42 million and utilized $19.3 million in operating cash flow.
For the three months ended September 30, 2024, NeuroBo reported a net loss of $5.65 million. The company’s total operating expenses for this period were $6.26 million, with the increase primarily driven by higher research and development expenses related to the ongoing clinical trials for DA-1241 and DA-1726.
In June 2024, NeuroBo closed on a registered direct offering and a private placement, raising aggregate gross proceeds of $20 million. The company issued common stock, pre-funded warrants, and Series A and Series B warrants as part of this financing.
NeuroBo’s financial position remains precarious, with no revenue generated in the most recent quarter or fiscal year. For the fiscal year 2023, the company reported a net loss of $12.47 million. The company’s cash burn remains significant, with negative operating cash flow of $5.59 million in Q3 2024.
The company’s liquidity position shows a debt-to-equity ratio of 0, as NeuroBo has no debt. The current ratio and quick ratio both stand at 2.41, indicating a relatively healthy short-term liquidity position. However, the company does not disclose any available credit lines, which could limit its financial flexibility.
NeuroBo plans to continue funding its operations through equity offerings, debt financings, or other sources, including potential collaborations and out-licensing agreements. The company’s ability to secure additional funding will be crucial for its continued operations and development pipeline.
Risks and Challenges As a clinical-stage biotechnology company, NeuroBo faces the inherent risks associated with drug development, including the potential for delays or failures in clinical trials, regulatory approvals, and commercialization. The company’s success is heavily dependent on the outcomes of its two lead programs, DA-1241 and DA-1726. Any setbacks or negative results in these trials could significantly impact the company’s prospects.
Additionally, NeuroBo’s limited financial resources and the need for additional capital raises the risk of dilution for existing shareholders. The company’s ability to secure future financing on favorable terms will be crucial for its continued operations and development.
Outlook and Catalysts NeuroBo is poised for several key catalysts in the coming months and quarters. The company expects to report top-line results from the Phase 2a trial of DA-1241 for the treatment of MASH in December 2024. Furthermore, top-line data from the MAD portion of the Phase 1 trial of DA-1726 for the treatment of obesity is anticipated in the first quarter of 2025, with full Phase 1 results, including the proof-of-concept portion, expected in the second half of 2026.
In August 2024, NeuroBo also announced a joint research agreement with Dong-A ST and ImmunoForge to develop a long-acting, once-monthly formulation of DA-1726 utilizing ImmunoForge’s long-lasting half-life extension Elastin-Like Polypeptide (ELP) platform technology. This collaboration could potentially enhance the commercial potential of DA-1726.
Conclusion NeuroBo Pharmaceuticals is a promising biotech company that is making significant strides in the cardiometabolic disease space. With a focused pipeline, strategic partnerships, and an experienced management team, the company is well-positioned to deliver on its clinical milestones and create value for shareholders. As NeuroBo navigates the challenges of drug development, investors will closely monitor the upcoming data readouts and the company’s ability to secure the necessary funding to advance its pipeline. The company’s focus on high-value indications like MASH and obesity, coupled with its strategic collaborations, provides multiple avenues for potential success. However, investors should remain cognizant of the inherent risks associated with clinical-stage biotechnology companies and the need for substantial additional funding to bring these promising therapies to market.
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