Scopus BioPharma Inc. (SCPS) is a biopharmaceutical company at the forefront of developing transformational therapeutics for serious diseases with significant unmet medical needs. The company's primary focus is on its innovative immuno-oncology programs, which are primarily conducted through its majority-owned subsidiary, Duet BioTherapeutics Inc. (Duet).

Business Overview

Duet's Unique Approach to Immuno-Oncology

Duet continues to make strides in its novel approach to immuno-oncology, with a suite of bifunctional oligonucleotides that activate antigen-presenting cells within the tumor microenvironment while simultaneously alleviating tumor immunosuppression. This unique mechanism-of-action stems from the simultaneous targeting of two intracellular immune pathways – signal transducer and activator of transcription 3 (STAT3), a master immune checkpoint inhibitor, and toll-like receptor 9 (TLR9). The targeted inhibition of STAT3 reawakens immune cells, allowing for the full potential of TLR9-driven innate and adaptive immune responses.

Duet's Immuno-Oncology Pipeline

Duet's immuno-oncology pipeline, known as the Duet Platform, consists of three distinctive, complementary CpG-STAT3 inhibitors:

1. Antisense CpG-STAT3ASO (DUET-101): A systemically delivered STAT3 antisense oligonucleotide (ASO) molecule that binds directly to STAT3 mRNA, recruiting ribonuclease H1 to degrade the STAT3 mRNA. The use of ASO allows for greater stability in human blood, enabling the treatment of harder-to-reach solid tumors.

2. RNA silencing CpG-STAT3siRNA (DUET-201): A small interfering RNA (siRNA)-based technology delivered intratumorally, with a similar mechanism of action as DUET-101, but using an siRNA molecule to silence STAT3.

3. DNA-binding inhibitor CpG-STAT3decoy (DUET-301): An alternative approach to silencing STAT3 activity, targeting the STAT3 transcription factor protein directly.

Duet's initial focus is on DUET-201 as a monotherapy for B-cell non-Hodgkin lymphoma (NHL). However, the company's drug candidates are being evaluated both as monotherapies and in combination with checkpoint inhibitors and/or chimeric antigen receptor T-cell therapies.

Financials

For the six months ended June 30, 2023, Scopus BioPharma reported a net loss of $5.6 million, compared to a net loss of $8.0 million for the same period in the prior year. The decrease in net loss was primarily attributable to a $5.0 million reduction in general and administrative expenses, partially offset by a $2.6 million increase in research and development expenses.

As of June 30, 2023, the company had cash of $362,097. Subsequent to the quarter end, Scopus and Duet raised aggregate gross proceeds of approximately $2.4 million in concurrent financings through the sale of Scopus common stock, Duet shares, and Duet warrants. However, the company continues to have an immediate need for additional financing, as its existing capital resources will not be sufficient to fully implement its business plan, including the development of its drug candidates, while also continuing to be subject to or pursuing ongoing litigation.

For the full year 2022, Scopus BioPharma reported an annual net loss of $11.6 million, with no revenue generated. The company's annual operating cash flow and free cash flow were negative $8.1 million and $8.1 million, respectively.

Duet's Clinical Development Progress

Duet expects to file an investigational new drug (IND) application for DUET-201 in Q3 2024 in advanced solid malignancies, with a Phase 1/2 clinical trial anticipated to begin in Q4 2024 in the United States. Dose-range finding studies, good laboratory practice toxicology studies, and good manufacturing process manufacturing of the drug substance and product for DUET-101 are currently in process.

Pursuant to a sponsored research agreement, Duet is also evaluating novel chemical structures and formulations to increase the stability of siRNA-based molecules to enable systemic delivery, which the company refers to as DUET-202. Additionally, research is being conducted on double-stranded antisense oligonucleotides, known as DUET-102.

Litigation Matters

Scopus BioPharma continues to be a party in several litigation matters initiated by or against certain adverse parties and certain of their affiliates and/or related parties. The outcome of these legal proceedings is highly unpredictable, and the costs of litigation, including legal fees, costs, and expenses, as well as the possible liabilities, including monetary damages, to which the company could become subject, could be significant. Any such liabilities could have a material adverse effect on the company's financial condition and ability to implement its business plan.

Risks and Challenges

Scopus BioPharma faces several risks and challenges, including:

1. Substantial doubt about the company's ability to continue as a going concern due to its limited cash resources and the need for additional financing. 2. Ongoing litigation matters that could result in significant costs and liabilities. 3. Delays in the development of its drug candidates, including due to the COVID-19 pandemic. 4. Inability to raise sufficient capital to fully implement its business plan and continue the development of its drug candidates. 5. Potential failure to obtain regulatory approvals for its drug candidates. 6. Intense competition in the biopharmaceutical industry.

Outlook and Conclusion

Scopus BioPharma's focus on its innovative immuno-oncology programs through Duet presents a compelling opportunity in the rapidly evolving field of cancer treatment. The company's unique approach to simultaneously targeting STAT3 and TLR9 pathways holds promise for the development of transformative therapies. However, the company's immediate need for additional financing and the ongoing litigation matters pose significant challenges that must be addressed for Scopus BioPharma to fully realize the potential of its pipeline and achieve its long-term objectives.