Executive Summary / Key Takeaways

• Diverse, Early-Stage Pipeline: Hoth Therapeutics is a clinical-stage biopharmaceutical company with a broad pipeline targeting significant unmet medical needs across oncology supportive care (HT-001), rare cancers (HT-KIT), Alzheimer's (HT-ALZ), and obesity (HT-VA), leveraging proprietary platforms and strategic partnerships.
• Accelerated R&D Investment: The company significantly increased its research and development spending in the first half of 2025, reflecting active progression of its lead candidates, including positive preclinical and initial Phase II clinical data for HT-KIT and HT-001, respectively.
• Critical Funding Needs: Hoth operates with consistent net losses and relies heavily on equity financing. While current cash is projected to last 12 months, substantial additional capital is required to advance its pipeline through costly clinical trials and regulatory approvals.
• Niche Innovation vs. Big Pharma Scale: Hoth differentiates itself through targeted, potentially more efficient therapies for specific conditions, contrasting with the broad portfolios of large pharmaceutical competitors. Its success hinges on demonstrating superior efficacy and safety in these niche areas.
• Regulatory and Market Headwinds: The biopharmaceutical industry faces increasing scrutiny and cost containment measures from healthcare reforms, posing significant challenges to pricing, coverage, and profitability for emerging therapies.

The Genesis of a Niche Biopharma Challenger

Hoth Therapeutics, Inc. (NASDAQ:HOTH) emerged in May 2017 as a clinical-stage biopharmaceutical company with a clear mission: to develop new generation therapies for unmet medical needs. From its inception, Hoth has pursued a strategy of building a diverse pipeline through a combination of internal development, strategic licensing agreements, and academic collaborations. This approach positions Hoth as a focused innovator in a biopharmaceutical landscape dominated by large, diversified players.

The company's foundational strength lies in its commitment to addressing specific, often underserved, therapeutic areas. Its pipeline spans critical fields such as oncology supportive care, rare cancers, neuroinflammatory diseases like Alzheimer's, and metabolic disorders including obesity. This strategic breadth, while ambitious for a company of its size, reflects a calculated effort to capture value in areas where existing treatments may be inadequate or carry significant side effects.

Technological Edge: Precision and Potency in Development

Hoth's core investment thesis is deeply intertwined with its differentiated technology platforms and the promising data emerging from its pipeline candidates. The company is not merely developing drugs; it is aiming for precision and enhanced patient outcomes through targeted mechanisms.

One of Hoth's lead assets, HT-001, is a topical formulation designed to treat severe skin toxicities associated with epidermal growth factor receptor inhibitor (EGFRi) cancer therapies. These toxicities are common and often force patients to reduce or discontinue life-saving cancer treatment. Initial data from its Phase IIa clinical trial has been highly encouraging, demonstrating a 50% reduction in pruritus (mean score dropped from 1.6 to 0.8) by Day 21 in the open-label portion, with rapid symptom relief observed by Day 7. Furthermore, HT-001 achieved a 100% response rate in at least one endpoint in this trial. The company has also secured a USPTO Filing Receipt for a new formulation patent application, expanding its intellectual property, and is actively engaging ICON Clinical Research Limited to expand the Phase II trial into European Union countries, with regulatory approval anticipated from potentially three EU nations in the coming months. This expansion signifies a strategic move towards broader market access and validation.

Another key program, HT-KIT, is a precision antisense therapy targeting rare and aggressive KIT-driven cancers, including gastrointestinal stromal tumors (GIST) and systemic mastocytosis. Preclinical results for HT-KIT have been robust, showing dramatic suppression of tumor growth and potent downregulation of oncogenic KIT mutations with no observed systemic toxicity. Specific safety data indicated dose-dependent liver activity with no adverse effects on kidney, spleen, or thymus, and a 100% clean safety profile in vivo. HT-KIT triggered significant tumor cell death as early as 24 hours post-treatment in GIST models. The company has also been granted a Japanese Patent for this RNA-based cancer therapy, bolstering its global intellectual property in precision oncology.

In the neuroinflammatory space, HT-ALZ is being developed for Alzheimer's and other neuroinflammatory diseases. Preclinical data for HT-ALZ, an FDA-approved NK-1 receptor antagonist, demonstrated a rapid (~15%) reduction in brain interstitial fluid Aβ levels within 20 hours of acute treatment. This dual-action profile, impacting both pathology and symptomology, is a significant differentiator. Hoth is collaborating with Washington University School of Medicine on an NIH grant application to further advance this promising research.

Beyond these, Hoth has strategically entered the burgeoning obesity market with HT-VA, a GDNF-based therapy for obesity and related conditions. This program is being advanced through a 50/50 joint venture with Silo Pharma (SILO) and is based on technology exclusively licensed from the U.S. Department of Veterans Affairs. A critical side-by-side study benchmarking daily GDNF injections against semaglutide has commenced at the Atlanta VA Medical Center, directly addressing the competitive landscape of this multi-billion dollar market. The company also has the BioLexa Platform in Phase I for eczema, and other candidates like HT-4 for asthma/allergies and HT-TBI for traumatic brain injury.

The "so what" for investors is clear: Hoth's technological differentiators aim to deliver targeted, potentially more effective, and safer therapies. The quantitative and qualitative preclinical and early clinical data suggest a strong scientific foundation, which, if replicated in larger trials, could translate into significant competitive advantages, higher pricing power, and accelerated market penetration in specific, high-value indications.

Financial Performance: Investing in the Future, Funding the Present

Hoth Therapeutics, like many clinical-stage biopharmaceutical companies, operates without product revenue, focusing instead on significant research and development investments. As of June 30, 2025, the company reported an accumulated deficit of $66.10 million, underscoring its history of operating losses and negative cash flows.

The first six months of 2025 saw a substantial acceleration in R&D activities. Research and development expenses surged to approximately $3.00 million, a significant increase from $1.22 million in the comparable 2024 period. This increase was primarily driven by:

• HT-1.00: Approximately $1.10 million for manufacturing and clinical activities.
• HT-KIT: Approximately $0.50 million for manufacturing and preclinical activities.
• HT-ALZ: Approximately $12,000 for preclinical studies.
• Patent Acquisition: A notable non-cash expense of approximately $1.30 million for in-process research and development (IPRD) related to the acquisition of patent applications.

General and administrative (G&A) expenses remained relatively stable at approximately $2.68 million for the six months ended June 30, 2025, compared to $2.67 million in the prior year. The slight increase was primarily due to higher professional and consulting fees, including legal, accounting, and stock-based professional fees, partially offset by a decrease in stock-based compensation for executives and board members.

From a liquidity perspective, Hoth ended June 30, 2025, with approximately $9.01 million in cash and cash equivalents, an increase from $7.04 million at December 31, 2024. This improvement was largely due to successful financing activities, which generated approximately $7.10 million in net cash from the issuance of common stock and the exercise of warrants during the six-month period. Net cash used in operating activities, however, increased to approximately $5.20 million for the six months ended June 30, 2025, from $3.30 million in the prior year, reflecting the intensified R&D spend.

Management believes its current cash is sufficient to fund operations for at least the next 12 months from the filing date of August 12, 2025. However, the company explicitly states that "significant additional capital" will be necessary for its longer-term business plan, particularly to advance its product candidates through regulatory approvals. Hoth maintains an At The Market (ATM) Offering Agreement, under which it has sold approximately $2.80 million of common stock as of August 12, 2025, out of an aggregate sales price of up to $7.70 million. The company also faces potential future obligations, including milestone payments of up to approximately $36 million if all milestones across its current agreements are achieved, alongside various license maintenance and royalty payments.

Competitive Landscape and Strategic Positioning

Hoth Therapeutics operates in a highly competitive biopharmaceutical arena, vying for market share and investor attention against a backdrop of established giants and numerous agile startups. Its strategic positioning is one of a niche innovator, seeking to carve out market segments with targeted therapies where larger players may have broader, but less specialized, approaches.

Direct competitors like Biogen Inc. (BIIB), Pfizer Inc. (PFE), Johnson & Johnson (JNJ), and Amgen Inc. (AMGN) possess immense scale, diversified portfolios, and robust commercialization infrastructures. Their financial performance, as evidenced by their latest TTM ratios, starkly contrasts with Hoth's early-stage profile. For instance, Biogen boasts a Gross Profit Margin of 76% and a Net Profit Margin of 17%, with strong operating cash flow per share of $19.74. Pfizer shows a Gross Profit Margin of 66% and a Net Profit Margin of 13%, with operating cash flow per share of $2.25. Johnson & Johnson reports a Gross Profit Margin of 69% and a Net Profit Margin of 16%, with operating cash flow per share of $10.08. Amgen, similarly, has a Gross Profit Margin of 62% and a Net Profit Margin of 12%, with operating cash flow per share of $21.24. In contrast, Hoth Therapeutics, as a pre-revenue company, reports TTM Gross Profit, Operating Profit, and Net Profit Margins of 0.00%, and a Free Cash Flow Per Share of -$0.67, reflecting its deep investment phase.

Hoth's competitive advantage lies in its agility and focused innovation. Its proprietary BioLexa platform and the specialized nature of candidates like HT-001 and HT-KIT allow for potentially faster development and more efficient targeting of specific disease mechanisms compared to the often broader, more resource-intensive R&D pipelines of its larger rivals. For example, HT-001's topical application for EGFRi-induced skin toxicities offers a direct, localized solution to a common and debilitating side effect, potentially preserving cancer treatment adherence. The direct benchmarking of HT-VA against semaglutide highlights Hoth's willingness to challenge established therapies in a market projected to exceed $100 billion globally.

However, Hoth's smaller scale presents significant vulnerabilities. It faces higher operational costs relative to its size and more limited resources for R&D compared to the multi-billion dollar budgets of its competitors. This can impact its ability to sustain long, expensive clinical trials or rapidly scale manufacturing. The biopharmaceutical industry's high barriers to entry—including immense R&D costs, stringent regulatory pathways, and the need for specialized expertise—protect Hoth's niche but also make it challenging for the company to expand rapidly or compete broadly. Hoth mitigates some of these challenges through strategic partnerships with academic institutions and other biopharma companies, leveraging external expertise and shared resources.

Outlook and Key Risks

Hoth's outlook is characterized by continued investment in its promising pipeline and an ongoing need for capital. Management explicitly expects research and development activities and associated costs to increase as existing product candidates advance and new ones are potentially acquired. This includes rising expenses for employee-related costs, in-licensed products, clinical research organizations, clinical trial materials, and regulatory approvals. General and administrative expenses are also anticipated to rise, supporting R&D, business development, and regulatory compliance.

The company's future hinges on several critical milestones:

• HT-001: Successful progression of the Phase II clinical trial, including the planned expansion into Europe, and the potential for an Expanded Access Program (EAP) to provide early patient access.
• HT-KIT: Advancing towards an Investigational New Drug (IND) application, building on strong preclinical safety and efficacy data.
• HT-ALZ: Continued positive preclinical results and successful collaboration on the NIH grant application to move this candidate forward.
• HT-VA: Favorable outcomes from the side-by-side study against semaglutide, which could significantly de-risk the program and attract further investment or partnerships.

However, significant risks loom. The biopharmaceutical industry is subject to intense regulatory scrutiny and evolving healthcare reform measures. Legislation such as the Medicare Modernization Act (MMA), the Patient Protection and Affordable Care Act (ACA), and the recently signed One Big Beautiful Bill Act (OBBBA) are designed to contain healthcare costs and could negatively impact the pricing, coverage, and profitability of Hoth's future products. State-level initiatives to control drug pricing further compound these challenges. Management acknowledges that "the implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or successfully commercialize our drugs."

Liquidity remains a persistent concern. While current cash provides a 12-month runway, the need for "significant additional capital" is undeniable. The ability to raise this funding through equity, debt, or strategic partnerships is subject to market conditions and the company's clinical progress. Future equity issuances could dilute existing shareholders, while debt could impose restrictive covenants. Furthermore, a material weakness in internal control over financial reporting, identified in late 2024 related to expense classification, highlights operational risks, though management has initiated a remediation plan.

Conclusion

Hoth Therapeutics stands at a pivotal juncture, embodying the high-risk, high-reward nature of early-stage biopharmaceutical investment. Its diverse pipeline, underpinned by promising preclinical and early clinical data for candidates like HT-001, HT-KIT, HT-ALZ, and HT-VA, targets substantial unmet medical needs. The company's strategic focus on niche innovation, leveraging proprietary technology and key partnerships, offers a compelling counter-narrative to the scale of its larger competitors.

The accelerated investment in R&D signals a commitment to advancing these assets, but it also underscores the critical and ongoing need for capital. Hoth's ability to translate its technological advantages into successful clinical outcomes and navigate a complex, cost-conscious regulatory environment will be paramount. For investors with a high tolerance for risk and a long-term horizon, Hoth Therapeutics represents an opportunity to participate in the potential upside of breakthrough therapies, provided the company can consistently execute on its clinical development roadmap and secure the necessary funding to bring its innovative solutions to patients.