PharmaCyte Biotech, Inc. (OTCMKTS:PMCB) is a biotechnology company at the forefront of developing novel cellular therapies for the treatment of various cancers. With a focus on leveraging its proprietary Cell-in-a-Box technology, the company is seeking to revolutionize the way cancer is approached and managed.
Business Overview and History
PharmaCyte Biotech was founded in 1996 and initially operated under the name Nuvilex, Inc. In 2013, the company underwent a significant restructuring, shifting its focus entirely to biotechnology. During this restructuring, PharmaCyte acquired licenses from SG Austria Pte. Ltd. and Austrianova Singapore Pte. Ltd. to utilize their Cell-in-a-Box technology for cancer treatment. This strategic move marked the beginning of the company’s dedication to developing novel and effective cancer therapies.
In January 2015, the company rebranded itself as PharmaCyte Biotech, Inc., reflecting its new biotechnology-focused direction. The Cell-in-a-Box technology became the cornerstone of PharmaCyte’s research and development efforts, serving as a platform for developing therapies for various types of cancer, with a particular emphasis on locally advanced, inoperable pancreatic cancer.
October 2021 saw another significant change for the company as it relocated its headquarters from Laguna Hills, California to Las Vegas, Nevada. Prior to this move, on September 1, 2020, PharmaCyte had submitted an Investigational New Drug Application (IND) to the U.S. Food and Drug Administration (FDA) for its planned clinical trial in locally advanced, inoperable pancreatic cancer. However, on October 1, 2020, the FDA placed the IND on clinical hold, providing specific guidance on the steps necessary to lift the hold.
The company’s current lead product candidate is CypCaps, which utilizes the Cell-in-a-Box technology to treat locally advanced, inoperable pancreatic cancer (LAPC). PharmaCyte has been working diligently to address the clinical hold placed by the U.S. Food and Drug Administration (FDA) on its Investigational New Drug (IND) application for a planned clinical trial in LAPC. To lift the hold, the company has been conducting various studies and providing additional information requested by the FDA, including stability studies, biocompatibility assessments, and detailed manufacturing process descriptions.
The Cell-in-a-Box technology is designed to encapsulate genetically engineered live human cells in pinhead-sized cellulose-based capsules. These encapsulated cells are then placed in the body near a cancerous tumor. When a cancer prodrug is administered, the encapsulated cells are able to convert the prodrug into its cancer-killing form, optimizing the drug’s potency and limiting exposure to healthy tissues.
In 2022, PharmaCyte underwent a significant change in its leadership, with the company entering into a Cooperation Agreement with Iroquois Master Fund Ltd. and its affiliates. This agreement resulted in the election of a reconstituted board of directors, which formed a Business Review Committee to evaluate the company’s business, affairs, strategy, management, and operations. The committee is currently reviewing the company’s development programs, including its relationship with SG Austria, a key partner. This review has resulted in the curtailment of spending on the company’s programs pending the completion of the review and determination of future actions.
Financial Performance and Liquidity
As of July 31, 2024, PharmaCyte reported cash and cash equivalents of approximately $32.6 million, a decrease from the $50.2 million reported as of April 30, 2024. The company’s working capital was approximately $25.0 million as of July 31, 2024, compared to $43.0 million as of April 30, 2024. The decrease in cash and working capital is primarily attributable to the redemption of preferred stock, the repurchase of common stock, and the investment in MyMD Pharmaceuticals, Inc. (now known as TNF Pharmaceuticals, Inc.).
PharmaCyte reported no revenue for the three months ended July 31, 2024, and 2023. The company’s total operating expenses and loss from operations during the three months ended July 31, 2024, were $1.27 million, a decrease of $806,440 compared to the three months ended July 31, 2023. This decrease was mainly due to decreases in general and administrative costs, including warrant issuance costs, and research and development expenses, partially offset by increases in compensation expense, director fees, and legal and professional expenses.
For the three months ended July 31, 2024, PharmaCyte reported other income and expenses, net, of $24.69 million, compared to $1.11 million for the three months ended July 31, 2023. This increase was primarily attributable to interest income, changes in the fair value of the company’s warrant liability and derivative liability, a gain on its investment in TNF Pharmaceuticals, and changes in the fair value of its convertible note receivable and warrant asset.
For the most recent quarter (Q1 2025), PharmaCyte reported net income of $23,421,355, despite having no revenue. However, the company had negative operating cash flow of -$373,297 and negative free cash flow of -$373,297. It’s worth noting that this is the company’s first reported quarter, so year-over-year growth comparisons are not available.
As of July 31, 2024, PharmaCyte’s current ratio and quick ratio were both 4.40, indicating a strong short-term liquidity position. The company did not report any debt on its most recent balance sheet, so a debt/equity ratio is not applicable. PharmaCyte believes its current cash position will be sufficient to support its projected operating requirements and financial commitments for at least the next twelve months.
Navigating Challenges and Opportunities
PharmaCyte’s progress in addressing the FDA’s clinical hold on its IND for the planned LAPC clinical trial has been a key focus for the company. By conducting additional studies and providing the requested information, the company is working to resolve the non-clinical issues identified by the FDA and enable the review of a new clinical protocol that reflects the standard of care for LAPC.
To address the FDA’s concerns and lift the clinical hold, PharmaCyte has been working to complete a number of additional studies, including stability testing on the final product candidate, biocompatibility assessments, and further genetic analysis and characterization of the encapsulated cells. The company estimates the total cost of the work required to satisfy the FDA’s requests at approximately $212,000, of which $157,000 is related to services provided by the company’s related party, SG Austria.
The company’s relationship with SG Austria, a key partner, has also been under review by the newly reconstituted Board of Directors and the Business Review Committee. This review is evaluating the company’s development programs and the alignment of incentives between PharmaCyte and SG Austria, as all licensed patents have expired and the know-how relating to the Cell-in-a-Box technology solely resides with SG Austria.
In May 2024, PharmaCyte made a strategic $7 million investment in MyMD Pharmaceuticals, Inc. (now known as TNF Pharmaceuticals, Inc.), a biopharmaceutical company focused on inflammatory disease. This investment, which includes preferred stock and warrants, has the potential to diversify PharmaCyte’s portfolio and provide exposure to additional therapeutic opportunities.
Risks and Challenges
PharmaCyte’s success is contingent upon its ability to navigate the regulatory landscape and secure the necessary approvals for its lead product candidate, CypCaps, for the treatment of LAPC. The company’s ongoing efforts to address the FDA’s clinical hold and the potential for further delays or setbacks in the development process pose significant risks.
Additionally, the company’s reliance on its partnership with SG Austria and the potential need to establish a new framework for this relationship introduce additional uncertainties. The alignment of incentives and the continued availability of the Cell-in-a-Box technology know-how are critical factors that could impact PharmaCyte’s long-term success.
Funding and liquidity also remain key concerns for the company. While PharmaCyte currently has a sizable cash position, its ability to secure additional funding, if needed, to support its ongoing development efforts and strategic initiatives could be challenging, especially in the current market environment.
The recent change in leadership and the ongoing business review by the new Board of Directors add another layer of uncertainty to the company’s future direction. The curtailment of spending on development programs pending the completion of this review could impact the company’s progress in the short term.
Conclusion
PharmaCyte Biotech is a biotechnology company with a unique and innovative approach to cancer treatment. Its proprietary Cell-in-a-Box technology holds promise for the development of targeted and effective therapies, particularly for LAPC. However, the company faces significant challenges in navigating the regulatory landscape, managing its partnership dynamics, and ensuring adequate funding to support its ambitious goals.
As PharmaCyte continues to work diligently to address the FDA’s clinical hold and explore new strategic opportunities, investors will closely monitor the company’s progress and its ability to overcome the hurdles that stand in the way of realizing the full potential of its innovative technology. The ongoing business review and potential changes in strategy resulting from the new leadership could also significantly impact the company’s future trajectory.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.