Business Overview and History
Revelation Biosciences (NASDAQ:REVB) is a clinical-stage biopharmaceutical company that is pioneering the development of innovative immunologic-based therapies for the prevention and treatment of disease. The company's focus is on harnessing the power of trained immunity, a unique mechanism of the innate immune system, to optimize health and combat a variety of ailments.
Revelation Biosciences was founded in 2019 and is headquartered in San Diego, California. The company was originally incorporated as Petra Acquisition, Inc. before completing a business combination with Revelation Biosciences, Inc. in January 2022, at which point the combined entity took on the Revelation Biosciences name and began trading on the Nasdaq Capital Market.
In February 2023, the company closed a public offering of common stock, pre-funded warrants, and warrants to purchase common stock, raising net proceeds of $14 million. The company issued Class C Common Stock Warrants in connection with this offering, which were initially valued at $14 million and accounted for as a liability on the company's balance sheet due to certain features of the warrants.
In August 2024, Revelation entered into a warrant exercise inducement offer with certain holders of its existing Class D Common Stock Warrants. The company reduced the exercise price of these warrants and issued new Class E Common Stock Warrants, raising net proceeds of $3.5 million.
The company has faced legal challenges, including a lawsuit filed by LifeSci Capital LLC in February 2022 seeking $5.3 million in unpaid banking and advisory fees. In August 2024, a District Court judge entered an order granting summary judgment in favor of LifeSci Capital LLC, resulting in a judgment, including interest, totaling $7.3 million, which the company paid in full that same month.
In October 2024, Revelation received a notice from Nasdaq that it was not in compliance with the minimum bid price requirement for continued listing on the exchange. The company has appealed this determination and is working to regain compliance with Nasdaq's listing requirements.
The company's lead product candidate, Gemini, is a proprietary formulation of PHAD, an established Toll-like Receptor 4 (TLR4) agonist. Gemini is being developed for the prevention and treatment of various diseases, with the company's current focus on programs targeting acute kidney injury (GEM-AKI), chronic kidney disease (GEM-CKD), and post-surgical infection (GEM-PSI).
Since its inception, Revelation has devoted substantial resources to research and development of Gemini, as well as the organization and staffing of the company. The company has funded its operations primarily through the issuance and sale of its capital stock, raising a total of $53 million in net proceeds as of September 30, 2024.
Financial Overview
As a clinical-stage biopharmaceutical company, Revelation Biosciences has yet to generate any significant revenue from product sales. The company reported revenue of $26,964 in the most recent quarter. However, Revelation has incurred recurring losses since its inception, including a net loss of $15,025,223,183 for the most recent quarter. As of September 30, 2024, Revelation had an accumulated deficit of $38.8 million and available cash and cash equivalents of $6.5 million.
The company's research and development expenses, which account for the majority of its operating expenses, were $2.94 million for the nine months ended September 30, 2024, a slight decrease from $3.09 million in the prior year period. This decrease was primarily due to decreases of $1.60 million in other program expenses and $0.40 million in manufacturing expenses, offset by increases of $1.40 million in clinical study expenses related to GEM-AKI and GEM-PSI and $0.50 million in personnel expenses.
General and administrative expenses were $3.28 million for the nine-month period, up from $3.24 million a year earlier. This increase was primarily due to a $0.50 million increase in personnel expenses, offset by a $0.40 million decrease in legal and professional fees.
Revelation Biosciences expects to continue generating operating losses and negative cash flows from operations as it advances the development of its product candidates. The company does not anticipate generating significant revenue from product sales until it successfully completes development and obtains regulatory approval for Gemini or its other programs, which it expects will not occur for several years, if ever.
The company experienced significant declines in net income, operating cash flow (OCF), and free cash flow (FCF) compared to the prior period. The most recent quarter's OCF was -$18,301,739,258, and FCF was -$18,320,854,226.
Liquidity
As of September 30, 2024, Revelation Biosciences had cash and cash equivalents of $6.5 million. The company has primarily funded its operations through the issuance and sale of its capital stock, raising a total of $53 million in net proceeds as of September 30, 2024. Given its current cash position and ongoing operating expenses, the company will likely need to raise additional capital in the near future to continue its operations and advance its clinical programs.
The company's current ratio and quick ratio are both 3.43, indicating that Revelation has sufficient short-term assets to cover its short-term liabilities. However, the company's current cash and cash equivalents balance is not expected to be sufficient to sustain operations within one year after the date the September 30, 2024 financial statements were issued, which raises substantial doubt about the company's ability to continue as a going concern. Revelation plans to seek additional funding through public or private equity or debt financings to support its ongoing operations and product development activities.
Pipeline and Clinical Development
Revelation Biosciences' pipeline is centered around its lead candidate, Gemini, which is being evaluated for the prevention and treatment of various diseases.
GEM-AKI: The company's GEM-AKI program is focused on the prevention and treatment of acute kidney injury as a result of cardiac surgery. Revelation reported positive topline data from a Phase 1 clinical study of Gemini in this indication in June 2024, which showed statistically significant, dose-dependent increases in interleukin-10 (IL-10), an important anti-inflammatory cytokine.
GEM-CKD: Revelation's GEM-CKD program is investigating Gemini as a potential therapy for the prevention and treatment of chronic kidney disease. In January 2025, the company announced the initiation of a Phase 1b clinical study of Gemini in patients with Stage 3 and 4 CKD, with topline data expected mid-year.
GEM-PSI: The GEM-PSI program is evaluating Gemini for the prevention and treatment of post-surgical infection. Revelation has not yet initiated clinical trials for this indication.
Regulatory Milestones
In December 2024, Revelation Biosciences announced that the U.S. Food and Drug Administration (FDA) had accepted the company's Investigational New Drug (IND) application for Gemini. This critical milestone allows Revelation to initiate its planned Phase 1b clinical study in CKD patients.
Additionally, in January 2025, the company received continued listing approval from Nasdaq, allowing its common stock to remain listed on the exchange. This came after Revelation had previously received notices of noncompliance related to the minimum bid price and stockholders' equity requirements, which the company was able to resolve through financing activities and other measures.
Competitive Landscape and Risks
Revelation Biosciences operates in a highly competitive biopharmaceutical industry, with many larger, more established companies developing therapies in the immunology and kidney disease spaces. The company faces significant risks, including the inherent uncertainties of drug development, the potential inability to raise sufficient capital, and the risk of failing to obtain regulatory approvals for its product candidates.
The company's financial challenges, including significant declines in net income, operating cash flow, and free cash flow in the most recent quarter, add to the risks faced by Revelation. The substantial doubt about the company's ability to continue as a going concern highlights the urgent need for additional funding to support ongoing operations and clinical development programs.
Despite these challenges, Revelation Biosciences remains focused on advancing Gemini through the clinic and ultimately bringing innovative treatments to patients in need. The company's unique approach targeting trained immunity, combined with its current cash position and recent regulatory milestones, provide a foundation for potential progress in the years ahead. However, the company's ability to execute its strategy and achieve its goals will depend heavily on its success in securing additional funding and advancing its clinical programs.