Hepion Pharmaceuticals, Inc. is a biopharmaceutical company that has been focused on the development of drug therapies for the treatment of chronic liver diseases. The company’s lead product candidate, rencofilstat, was being developed as a potential treatment for non-alcoholic steatohepatitis (NASH), hepatocellular carcinoma (HCC), and other chronic liver diseases.
Company History and Pipeline Development Hepion was founded in 2013 and is headquartered in Edison, New Jersey. The company’s lead molecule, rencofilstat (formerly CRV431), was being developed as a cyclophilin inhibitor that could offer benefits to address multiple complex pathologies related to the progression of liver disease. Hepion has completed several Phase 1 and Phase 2 clinical trials with rencofilstat, which have provided encouraging data on the compound’s safety and efficacy profile.
In May 2023, Hepion announced that its Phase 2a study, ALTITUDE-NASH, met its primary endpoint by demonstrating improved liver function and was well-tolerated after four months of treatment with once-daily oral rencofilstat in NASH subjects with stage 3 or greater fibrosis. These findings built upon the positive results from the company’s earlier Phase 2a AMBITION trial, further reinforcing rencofilstat’s direct antifibrotic mode of action and increasing Hepion’s confidence in the potential for fibrosis reduction in the ongoing Phase 2b ASCEND-NASH clinical trial. All additional secondary efficacy and safety endpoints were also met in the ALTITUDE-NASH study.
In June 2023, Hepion announced that the Data and Safety Monitoring Board (DSMB) had reviewed the current data for the ASCEND-NASH Phase 2b study and issued a “study may proceed without modification” clearance. This marked the first planned DSMB meeting, where all labs, electrocardiograms, adverse events, and protocol deviations were reviewed, with a focus on any potential safety signals from the placebo-controlled trial.
Challenges and Strategic Initiatives Despite the promising clinical data, Hepion has faced challenges in its drug development efforts. In December 2023, the company’s board of directors approved a strategic restructuring plan to preserve capital by reducing operating costs. This resulted in a one-time restructuring charge of approximately $0.7 million in the fourth quarter of 2023. Additionally, Hepion initiated a process to explore a range of strategic and financing alternatives focused on maximizing shareholder value within the current financial environment and NASH drug development landscape.
On April 19, 2024, Hepion announced that it had begun wind-down activities in its ASCEND-NASH clinical trial. All clinical trial activities were completed, and the trial was closed in August 2024. The company is continuing efforts, to the extent that cash is available, to provide any value derived from rencofilstat to its shareholders.
Financial Overview
Financials Hepion has not generated any revenue from operations to date, as it does not have any commercial biopharmaceutical products. The company has funded its operations primarily through the issuance of convertible preferred stock, the issuance and sale of shares of its common stock, and subsequent issuances of shares of its common stock through at-the-market offerings.
As of September 30, 2024, Hepion had an accumulated deficit of $236.3 million and $1.5 million in cash. The company’s net loss for the nine months ended September 30, 2024, was $11.6 million, with net cash used in operating activities of $17.1 million. Hepion’s working capital as of September 30, 2024, was $0.8 million, compared to $12.2 million as of December 31, 2023.
For the fiscal year 2023, Hepion reported no revenue, a net loss of $48.93 million, operating cash flow of -$40.89 million, and free cash flow of -$40.90 million. In the most recent quarter (Q3 2024), the company reported no revenue, a net loss of $4.87 million, operating cash flow of -$2.52 million, and free cash flow of -$2.52 million.
The company experienced a decrease in research and development expenses by $5.76 million primarily due to reduced clinical trial costs. General and administrative expenses also decreased by $0.45 million due to reduced headcount.
Liquidity The company has concluded that there is substantial doubt in its ability to continue as a going concern without additional capital becoming available. Hepion will be required to raise additional capital to continue funding its operations, and there can be no assurance that additional funding will be available on acceptable terms, or at all.
As of September 30, 2024, Hepion’s debt-to-equity ratio was -5.47, with a cash balance of $1.50 million. The company’s current ratio and quick ratio were both 1.30. No available credit lines were disclosed in the financial reports.
Proposed Merger with Pharma Two B On July 19, 2024, Hepion announced that it had entered into an Agreement and Plan of Merger with Pharma Two B Ltd., a late-clinical stage company developing an innovative Parkinson’s disease treatment. The proposed transaction, which has been approved by the respective boards of directors of Pharma Two B and Hepion, is expected to close in the fourth quarter of 2024 and remains subject to approval by both Pharma Two B and Hepion’s respective stockholders, regulatory approval, listing of Pharma Two B’s ordinary shares on Nasdaq, and other customary closing conditions.
If the merger is completed, the combined company will operate under the Pharma Two B name and is expected to focus on the development and commercialization of Pharma Two B’s lead product candidate, P2B001, for the treatment of Parkinson’s disease. The merger is intended to provide the combined company with additional resources and a diversified pipeline to enhance its chances of success in the highly competitive biopharmaceutical industry.
Risks and Uncertainties Hepion’s business is subject to various risks and uncertainties, including the ability to successfully complete the proposed merger with Pharma Two B, the continued development and potential commercialization of rencofilstat, the ability to raise additional capital to fund operations, and the impact of the COVID-19 pandemic on the company’s clinical trials and overall business operations.
The merger with Pharma Two B is subject to several conditions, including obtaining the necessary shareholder approvals and regulatory clearances. If the merger is not completed, Hepion may be unable to find an alternative strategic partner or transaction, which could adversely affect the company’s stock price and future business prospects.
Furthermore, Hepion’s ability to continue as a going concern is dependent on its success in raising additional capital. If the company is unable to secure the necessary financing, it may be forced to curtail planned operations or even cease its business activities altogether.
Business Overview Hepion Pharmaceuticals is a small-cap company that operates exclusively in the United States. The company’s focus has been on developing innovative therapies for chronic liver diseases, with its lead candidate rencofilstat showing promise in early clinical trials.
The company’s recent history includes several key developments:
No significant scandals, short seller reports, or CEO departures have been reported for Hepion Pharmaceuticals.
Conclusion Hepion Pharmaceuticals has faced significant challenges in its drug development efforts, including the recent wind-down of its ASCEND-NASH clinical trial and the need to explore strategic alternatives to maximize shareholder value. The proposed merger with Pharma Two B presents a potential opportunity for the company to diversify its pipeline and gain access to additional resources, but it is subject to significant uncertainties and risks.
As Hepion navigates these challenges, the company’s ability to secure additional financing and successfully execute on its strategic initiatives will be critical to its long-term success. The company’s financial position remains precarious, with no revenue generated to date and a substantial accumulated deficit. The decrease in research and development expenses due to reduced clinical trial costs and the reduction in general and administrative expenses reflect the company’s efforts to conserve cash and streamline operations.
The proposed merger with Pharma Two B represents a significant shift in Hepion’s strategic direction, potentially moving the company’s focus from liver diseases to Parkinson’s disease treatment. This transition, if successful, could provide new opportunities for growth and development, but it also introduces new risks and uncertainties as the company enters a different therapeutic area.
Investors should closely monitor the company’s progress and the outcome of the proposed merger, as well as any updates on Hepion’s pipeline development and financial position, to make informed decisions about the investment potential of this biopharmaceutical company. The company’s ability to secure additional financing in the near term will be crucial for its continued operations and the potential realization of value from its existing assets, including rencofilstat.
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.