Business Overview and History CohBar, Inc. (CWBR) is a clinical-stage biotechnology company that has historically focused on leveraging the power of the mitochondria and the peptides encoded in its genome to develop potential breakthrough therapeutics targeting chronic and age-related diseases. With a diverse pipeline and a commitment to innovation, CohBar is poised to make a significant impact in the pharmaceutical industry.
CohBar was founded in 2007 with the goal of harnessing the potential of mitochondrial-derived peptides (MDPs) to address unmet medical needs. The company's primary historical activities have included utilizing its mitochondria-focused technology platform to identify and develop novel peptide analogs, the research and development of its pipeline, securing intellectual property protection for its discoveries and assets, managing collaborations and clinical trials with contract research organizations (CROs), and raising capital to fund its operations.
Since its inception through June 30, 2023, CohBar's operations have been funded with an aggregate of approximately $97.3 million from the sale and issuance of equity instruments and debt, including the proceeds from the exercise of warrants and stock options. The company has financed its operations primarily through sales of its equity securities, including its initial public offering, private placements of its securities, a debt offering, public sales of its securities, and the exercise of outstanding warrants and stock options.
Since inception, CohBar has incurred significant operating losses. The company's net losses were $6.5 million and $6.0 million for the six months ended June 30, 2023 and 2022, respectively. CohBar incurred $0.7 million and $1.0 million in non-cash expenses during the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, CohBar had an accumulated deficit of $103.0 million.
In December 2022, CohBar suspended its Investigational New Drug (IND)-enabling work on pre-clinical candidate CB5138-3, which the company had been developing as a potential treatment of idiopathic pulmonary fibrosis and other fibrotic diseases. The decision to suspend IND-enabling work was based on completed non-clinical formulation studies seeking to identify a formulation suitable for clinical development. In addition, CohBar does not believe that the formulation of CB4211 used in the Phase 1b stage of the trial is suitable for further development. Efforts to develop an improved formulation have not been successful to date, and there can be no assurances that the company will be able to develop such a formulation.
Recent Developments On May 22, 2023, CohBar entered into an Agreement and Plan of Merger with Morphogenesis, Inc., a clinical-stage immuno-oncology company. Pursuant to the merger agreement, Chimera MergeCo, Inc., a wholly owned subsidiary of CohBar, will merge with and into Morphogenesis, with Morphogenesis surviving as a wholly owned subsidiary of CohBar. After the completion of the merger, CohBar will change its corporate name to TuHURA Biosciences, Inc.
Immediately after the merger, pre-merger Morphogenesis stockholders are expected to own approximately 77% of the combined company, pre-merger CohBar stockholders are expected to own approximately 15% of the combined company, and an investor is expected to own approximately 9% of the combined company, excluding the effect of out-of-the-money options and warrants of CohBar that will remain outstanding after the merger, subject to certain assumptions.
Concurrently with the execution and delivery of the merger agreement, CohBar entered into a Stock Purchase Agreement with an investor, pursuant to which CohBar will issue 7.5 million shares of its common stock for an aggregate purchase price of $15 million immediately prior to the closing of the merger. Additionally, CohBar has agreed to sell, at the election of the investor, an aggregate of 7.5 million additional shares of its common stock for an aggregate purchase price of up to $15 million at the same price per share as sold in the initial closing.
Financials and Liquidity As of June 30, 2023, CohBar had a cash, cash equivalents, and investments balance of $12.30 million and working capital and stockholders' equity of $9.50 million and $9.50 million, respectively. During the six months ended June 30, 2023, the company incurred a net loss of $6.50 million. Based on management's current plans on working towards the merger and the suspension of its R&D activities, the company believes that its funds available will be sufficient to fund its planned operating expenses and capital expenditure requirements for at least one year from the issuance of these financial statements.
For the fiscal year 2022, CohBar reported no revenue and a net loss of $12.18 million. The company's operating cash flow (OCF) and free cash flow (FCF) were both negative $10.45 million for the year.
In the most recent quarter (Q2 2023), CohBar again reported no revenue and a net loss of $4.33 million. The OCF and FCF for the quarter were both negative $1.80 million. As the company did not generate any revenue in either the current or prior year quarter, there is no year-over-year growth to report.
Research and development expenses decreased significantly, dropping 85% from $1.19 million in Q2 2022 to $0.18 million in Q2 2023. This decrease was primarily due to the suspension of activities related to the company's research programs. Conversely, general and administrative expenses saw a substantial increase of 173%, rising from $1.56 million in Q2 2022 to $4.25 million in Q2 2023. This increase was largely attributed to a $1.7 million increase in professional fees related to the pending merger and a $1.2 million compensation charge for executive retention.
For the six months ended June 30, 2023, CohBar incurred research and development expenses of $1.20 million, compared to $2.69 million in the prior year period, a decrease of $1.49 million or 55%. The lower research and development expenses were primarily due to a decrease in spending associated with the suspension of the company's research programs. General and administrative expenses were $5.53 million in the six months ended June 30, 2023, compared to $3.30 million in the prior year period, an increase of $2.23 million or 68%. The increase in general and administrative expenses was due to higher professional fees primarily related to costs associated with the pending merger, as well as a compensation charge related to the retention of key executives.
In terms of liquidity, CohBar has no debt, resulting in a debt-to-equity ratio of 0. The company's cash and investments stood at $12.30 million as of June 30, 2023. CohBar's current ratio and quick ratio are both 15.69, indicating a strong short-term liquidity position. However, no information is available regarding any credit facilities or credit lines.
CohBar operates exclusively in the United States, as it is a small-cap biotechnology company focused on research and development activities.
Risks and Challenges CohBar faces several risks and challenges, including the successful completion of the proposed merger with Morphogenesis, the ability to identify and implement strategic alternatives if the merger does not occur, the development and commercialization of its product candidates, and the ability to secure additional funding to support its operations. The company also faces risks related to regulatory approvals, competition, intellectual property protection, and the ability to attract and retain key personnel.
Conclusion CohBar's transition towards the proposed merger with Morphogenesis marks a significant milestone in the company's history. While the suspension of its IND-enabling work on CB5138-3 and the challenges in developing a suitable formulation for CB4211 have presented setbacks, CohBar's commitment to leveraging the power of the mitochondria and the peptides encoded in its genome remains steadfast. As the company navigates this pivotal period, investors will closely follow its ability to successfully complete the merger, implement strategic alternatives if necessary, and continue to advance its pipeline of potential breakthrough therapeutics. The merger with Morphogenesis, expected to close in the third quarter of 2023, subject to stockholder approvals and other customary closing conditions, will shift the company's focus towards Morphogenesis' personalized cancer vaccine technology. This strategic move could potentially open new avenues for growth and development in the immuno-oncology field.