Unicycive Therapeutics, Inc. (NASDAQ: UNCY) is a biotechnology company dedicated to developing treatments for kidney disease that have the potential to offer medical benefit. The company's development programs are focused on the development of two novel therapies: Oxylanthanum Carbonate, for the treatment of hyperphosphatemia in patients with chronic kidney disease, and UNI 494, for the treatment of acute kidney injury (AKI).

Market Potential

Chronic kidney disease (CKD) is the gradual loss of kidney function that can get worse over time leading to lasting damage. According to the United States Renal Data System (USRDS) 2022 Annual Data Report, 30 million (14%) of adults in the United States are estimated to have CKD, and of these, approximately 13 million patients have advanced CKD (stage 3-5). Approximately 550,000 patients (ESRD) are on dialysis and of those, approximately 450,000 patients (~80%) take phosphate binders to control hyperphosphatemia. The number of patients with ESRD in the U.S. is increasing steadily and is projected to reach between 971,000 and 1,259,000 patients in 2030.

AKI is a sudden episode of kidney failure or kidney damage (within the first 90 days of injury). After 90 days, the patient is considered to have progressed into CKD. AKI affects more than 2 million US patients and costs the healthcare system in excess of $9 billion per year. More than 300,000 patients per year in the U.S. die due to AKI that has many causes.

Business Overview

Unicycive's business model is to license technologies and drugs and pursue development, regulatory approval, and commercialization of those products in global markets. The company believes that its management team's broad network, expertise in the biopharmaceutical industry, and successful track record gives it an advantage in identifying and bringing these assets into the Company at an attractive price with limited upfront cost.

Financials

Since its formation, Unicycive has devoted substantially all of its resources to developing its product candidates. The company has incurred significant operating losses to date, with net losses of $14.6 million and $20.9 million for the three months ended March 31, 2023 and March 31, 2024, respectively. As of March 31, 2024, Unicycive had an accumulated deficit of $85.5 million. The company expects that its operating expenses will increase significantly as it advances its product candidates through pre-clinical and clinical development, seeks regulatory approval, and prepares for and, if approved, proceeds to commercialization.

Unicycive has funded its operations primarily from the sale and issuance of common and preferred stock, convertible promissory notes, and from a loan, including cash and deferred salary from its Chief Executive Officer and principal stockholder. The company's ability to generate product revenue will depend on the successful development, regulatory approval, and eventual commercialization of its current product candidates and future product candidates.

On March 13, 2024, Unicycive signed a securities purchase agreement with certain healthcare-focused institutional investors that provided $50 million in gross proceeds to the company through a private placement. Pursuant to the securities purchase agreement, Unicycive issued to institutional purchasers $50.0 million in shares of the company's Series B Convertible Preferred Stock.

Risks and Challenges

The COVID-19 pandemic could result in difficulty securing clinical trial site locations, CROs, and/or trial monitors and other critical vendors and consultants supporting Unicycive's trials. These situations, or others associated with COVID-19, could cause delays in the company's clinical trial plans and could increase expected costs, all of which could have a material adverse effect on Unicycive's business and financial condition.

Revenue Recognition

Unicycive recognizes revenue from product sales or services rendered when control of the promised goods is transferred to a counterparty in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. The company may earn licensing revenue in the future if it negotiates business development arrangements with third parties.

Financial Performance

Research and development expenses increased by approximately $3.8 million, or 125%, from approximately $3.0 million for the three months ended March 31, 2023, to approximately $6.8 million for the three months ended March 31, 2024. The increase in research and development expenses was primarily due to a $3.6 million increase in drug development costs.

General and administrative expenses increased by $544,000, or 29%, from approximately $1.8 million for the three months ended March 31, 2023, to approximately $2.4 million for the three months ended March 31, 2024 primarily due to an increase of $232,000 in non-cash stock compensation costs.

Other income (expenses) increased $1.4 million, or 13%, from $10.4 million in the three months ended March 31, 2023 to $11.8 million for the three months ended March 31, 2024 due primarily to a change in fair value of Unicycive's warrant liability.

Liquidity

Based on the company's current level of expenditures, Unicycive believes that it has sufficient resources such that there is not substantial doubt about the ability to continue operations for at least one year after the date that these financial statements are available to be issued. However, the company expects to continue incurring losses in the future and will be required to raise additional capital in the future to complete its clinical trials, pursue product development initiatives, and penetrate markets for the sale of its products.

Conclusion

In conclusion, Unicycive Therapeutics is a promising biotechnology company focused on developing novel treatments for kidney disease. With its two lead product candidates, Oxylanthanum Carbonate and UNI 494, the company is well-positioned to address significant unmet medical needs in the chronic kidney disease and acute kidney injury markets. While the company has incurred substantial losses to date, its recent financing activities and strong management team provide a solid foundation for future growth and value creation.