Revelation Biosciences, Inc. (NASDAQ: REVB) is a clinical-stage biopharmaceutical company at the forefront of harnessing the power of trained immunity for the prevention and treatment of disease. With a focus on developing innovative therapeutics that modulate the innate immune system, Revelation is making strides in addressing unmet medical needs across various therapeutic areas.
Business Overview and History Revelation Biosciences was incorporated in the state of Delaware on November 20, 2019, originally as Petra Acquisition, Inc. Based in San Diego, California, the company has been dedicated to developing therapeutics that harness the power of trained immunity for disease prevention and treatment since its inception.
In January 2022, Revelation Biosciences completed a business combination with Petra Acquisition, Inc., which provided a pathway for Revelation to become a publicly traded entity on the Nasdaq Capital Market. This significant milestone allowed the company’s common stock and public warrants to be listed under the symbols REVB and REVBW, respectively.
The company’s journey has not been without challenges. Prior to the business combination, Revelation faced difficulties in raising capital as a private entity. In December 2022, the company took an unusual step by closing the sale of one share of Series A Preferred Stock to its Chief Executive Officer for $5,000, which was automatically redeemed in January 2023 upon the effectiveness of a reverse stock split.
Revelation also encountered legal hurdles, including a dispute with LifeSci Capital LLC over unpaid banking and advisory fees. In December 2023, a magistrate judge issued a report recommending summary judgment in favor of LifeSci Capital LLC. The company ultimately paid a judgment, including interest, totaling $7.3 million in August 2024.
Despite these obstacles, Revelation Biosciences has achieved some important financial milestones. In February 2023, the company successfully closed a public offering of its common stock, pre-funded warrants, and warrants, raising net proceeds of $14 million. Later that year, the company received notices of cash exercise for the pre-funded warrants issued in the offering. Building on this momentum, Revelation closed another public offering in February 2024, raising net proceeds of $5.4 million.
The company’s lead product candidate, Gemini, is a proprietary formulation of PHAD, an established TLR4 agonist, which has the potential to stimulate the human body’s innate immune response to prevent and treat disease.
Revelation’s current pipeline consists of three Gemini-based programs: GEM-AKI, which is being developed for the prevention and treatment of acute kidney injury following cardiac surgery; GEM-CKD, targeting the prevention and treatment of chronic kidney disease; and GEM-PSI, focused on the prevention and treatment of post-surgical infections. The company has made significant progress in advancing these programs, with the successful completion of the GMP manufacture of Gemini clinical drug supply being a notable recent milestone.
Financial Performance As a clinical-stage biopharmaceutical company, Revelation Biosciences has not yet generated any revenue from product sales. The company has historically funded its operations through the issuance and sale of its capital stock, raising net proceeds of $53.0 million since inception as of September 30, 2024.
For the nine months ended September 30, 2024, Revelation reported a net loss of $13.31 million, compared to a net loss of $2.08 million for the same period in the prior year. The company’s research and development expenses decreased by $0.10 million, from $3.10 million for the nine months ended September 30, 2023, to $2.90 million for the nine months ended September 30, 2024. This decrease was primarily due to decreases in other program expenses and manufacturing expenses, offset by increases in clinical study expenses related to GEM-AKI and GEM-PSI, as well as personnel expenses.
General and administrative expenses increased by less than $0.10 million, from $3.20 million for the nine months ended September 30, 2023, to $3.30 million for the nine months ended September 30, 2024. This increase was primarily due to higher personnel expenses, offset by a decrease in legal and professional fees.
For the fiscal year 2023, Revelation reported no revenue, a net loss of $120,254, operating cash flow (OCF) of -$7,286,286, and free cash flow (FCF) of -$7,286,286. In the most recent quarter (Q3 2024), the company reported no revenue, a net loss of $2,241,565, OCF of -$14,220,091, and FCF of -$14,256,951. Compared to the prior year quarter, revenue remained at $0, while the net loss increased from -$2,630,000, OCF decreased from -$2,563,000, and FCF decreased from -$2,584,000. The increase in net loss and decreases in OCF and FCF were primarily due to higher research and development expenses related to the continued advancement of the company’s product candidates.
Liquidity As of September 30, 2024, Revelation Biosciences had $6.50 million in cash and cash equivalents, which the company believes will be sufficient to fund operations into 2025. However, the company expects to continue generating significant operating losses and negative cash flows from operations for the foreseeable future as it advances its clinical programs and invests in further research and development.
The company’s debt-to-equity ratio is 0, as it had no debt as of September 30, 2024. The current ratio and quick ratio are both 1.64, indicating the company’s ability to meet its short-term obligations. Revelation has not disclosed any available credit lines or other credit facilities.
Since inception, Revelation has incurred recurring losses and negative cash flows. As of September 30, 2024, the company had an accumulated deficit of $38.78 million and believes its current cash and cash equivalents will not be sufficient to sustain operations within one year after the date the unaudited financial statements were issued, which raises substantial doubt about its ability to continue as a going concern. The company plans to seek additional funding through public or private equity or debt financings, but may not be able to obtain financing on acceptable terms, or at all.
Regulatory and Clinical Developments Revelation Biosciences has made notable progress in advancing its clinical programs. In November 2024, the company announced the successful completion of the GMP manufacture of Gemini clinical drug supply, a crucial milestone for the company’s anticipated Investigational New Drug (IND) application with the FDA.
The company’s Gemini-based programs have also shown promising results in early-stage clinical studies. In a recent announcement, Revelation reported that Gemini induced dose-dependent significant increases in IL-10, an anti-inflammatory cytokine, in healthy volunteers. These findings suggest Gemini’s potential to modulate the innate immune system and support the continued development of the company’s pipeline.
Challenges and Risks While Revelation Biosciences has made significant progress, the company faces several challenges and risks common to the biopharmaceutical industry. As a clinical-stage company, Revelation’s ability to generate revenue and achieve profitability is heavily dependent on the successful development, regulatory approval, and commercialization of its product candidates. Delays or failures in any of these areas could have a substantial impact on the company’s future prospects.
Additionally, Revelation Biosciences has recently encountered issues with its Nasdaq listing, including non-compliance with the minimum bid price and stockholders’ equity requirements. The company has appealed these issues and is taking measures to regain compliance, but there is no assurance that it will be successful in its efforts.
The company’s cash position, while sufficient to fund operations into 2025, remains a concern, and Revelation may need to seek additional funding through public or private offerings, partnerships, or other sources to support its ongoing and future research and development activities.
Conclusion Revelation Biosciences is a promising clinical-stage biopharmaceutical company focused on harnessing the power of trained immunity to address unmet medical needs. The company’s lead product candidate, Gemini, has shown encouraging results in early-stage studies, and the successful completion of the GMP manufacture of Gemini clinical drug supply is a significant milestone.
However, Revelation faces the typical challenges of a clinical-stage biotech, including the need to navigate regulatory hurdles, manage its cash position, and maintain its Nasdaq listing. The company’s ability to execute on its clinical programs and secure additional funding will be crucial in determining its future success. Investors should closely monitor Revelation’s progress as the company continues to advance its innovative immunology-based therapies.
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