Scopus BioPharma Inc. (SCPS) is a biopharmaceutical company developing transformational therapeutics for serious diseases with significant unmet medical need. The company’s primary focus is on its immuno-oncology portfolio, which is being advanced through its majority-owned subsidiary, Duet BioTherapeutics Inc.
Company Background
Scopus BioPharma’s journey began in April 2017, with the company’s initial focus on immuno-oncology programs. In June 2020, Scopus entered into an exclusive, worldwide license agreement with City of Hope (COH) relating to DUET-201, a small interfering RNA (siRNA) based technology delivered intratumorally. This agreement allowed Scopus to gain access to a broader technology platform from the laboratory of the principal senior research scientist who is the architect of the oligonucleotide bifunctionality underpinning Duet’s technology platform.
In June 2021, Scopus acquired Duet, previously known as Olimmune Inc., further expanding its immuno-oncology portfolio. This strategic shift has positioned Scopus BioPharma as a prominent player in the rapidly evolving field of immuno-oncology. However, the company faced challenges during this time period. The COVID-19 pandemic had a material adverse impact on Scopus, including delays in drug development. The design of the investigator-sponsored clinical protocol for DUET-201, including the number of study visits, together with constraints on mobility and travel due to the pandemic, resulted in development delays, including those relating to clinical enrollment.
Immuno-Oncology Pipeline
Duet’s novel approach to immuno-oncology revolves around a suite of bifunctional oligonucleotides that activate antigen-presenting cells within the tumor microenvironment, while simultaneously alleviating tumor immunosuppression. This unique mechanism-of-action aims to jump-start T cell-mediated immune responses against cancer. Duet’s platform, known as the Duet Platform, comprises three distinctive and complementary CpG-STAT3 inhibitors: DUET-101 (Antisense CpG-STAT3ASO), DUET-201 (RNA silencing CpG-STAT3siRNA), and DUET-301 (DNA-binding inhibitor CpG-STAT3decoy).
The company’s lead immuno-oncology program, DUET-201, is currently in the preclinical development stage, with plans to file an investigational new drug (IND) application in Q3 2024 for advanced solid malignancies. Scopus BioPharma expects to initiate a Phase 1/2 clinical trial in Q4 2024 in the United States. Additionally, the company is actively advancing DUET-101 and DUET-301, with ongoing dose-range finding studies, good laboratory practice toxicology studies, and good manufacturing process manufacturing of the drug substances and products.
Scopus BioPharma’s immuno-oncology pipeline is being evaluated both as monotherapies and in combination with checkpoint inhibitors and/or chimeric antigen receptor T-cell (CAR-T) therapies. The company continues to refine, update, and enhance its pipeline, including prioritizing solid tumor indications, to optimize the effectiveness and delivery of its drug candidates and identify additional intellectual property protections.
These oligonucleotides target two intracellular immune pathways – signal transducer and activator of transcription 3 (STAT3), a master immune checkpoint inhibitor, and toll-like receptor 9 (TLR9) – with the goal of reawakening immune cells and allowing for the full potential of TLR9-driven innate and adaptive immune responses.
The company’s initial efforts in immuno-oncology were related to DUET-201 as a monotherapy targeting B-cell non-Hodgkin lymphoma (NHL). However, development of DUET-201 has faced delays, including due to the COVID-19 pandemic’s impact on clinical enrollment. As a result, Scopus has gained access to the broader Duet technology platform, including CpG-STAT3siRNA (DUET-201) and the planned development of DUET-101 for systemic delivery to target harder-to-reach solid tumors.
In addition to its immuno-oncology portfolio, Scopus had previously obtained licenses for certain non-immuno-oncology drug candidates. However, due to the company’s increased focus on its immuno-oncology programs and other considerations, including capital constraints, it has allowed certain of these non-core rights to lapse and continues to evaluate its posture with regard to certain other rights.
Challenges and Legal Issues
However, the company’s journey has not been without its challenges. Scopus BioPharma has been embroiled in several litigation matters initiated by or against certain adverse parties and their affiliates or related parties. These legal proceedings have had a material adverse impact on the company’s financial resources and operations, including delays in drug development and the need for additional financing.
The company is facing several ongoing litigation matters initiated by or against certain adverse parties who are stockholders of the company and some of whom are former officers/directors. The status and timing of these legal proceedings remain uncertain, but the costs and potential liabilities could have a material adverse effect on the company.
Financials and Liquidity
As of June 30, 2023, Scopus BioPharma reported an accumulated deficit of approximately $58.1 million and a working capital deficit of $10.5 million. The company’s ability to fund its operations is dependent on its ability to raise additional capital through equity and debt offerings, government or other third-party funding and grants, collaborations and development agreements, strategic alliances, and licensing arrangements. However, the company’s access to capital has been severely curtailed due to the current market conditions and the limited availability of authorized common stock.
In August 2023, Scopus BioPharma and its subsidiary, Duet, raised aggregate gross proceeds of approximately $2.4 million in concurrent financings through the sale of Scopus common stock, Duet shares, and Duet warrants to third-party investors. While this funding provides a temporary reprieve, the company continues to have an immediate need for additional financing to support its ongoing operations and drug development efforts.
Scopus does not have any products approved for sale and has not generated any revenue to date. The company expects to continue to incur significant expenses and increasing operating losses as it advances its research and development efforts, contracts with third-party research organizations, and seeks to obtain regulatory approvals for its drug candidates.
For the most recent fiscal year (2022), Scopus reported revenue of $0, net income of -$11,609,827, operating cash flow of -$8,126,628, and free cash flow of -$8,128,180. In the most recent quarter (Q2 2023), the company reported revenue of $0, net income of -$2,616,553, operating cash flow of -$1,009,216, and free cash flow of -$1,009,216. There was no year-over-year growth, as the company has not generated any revenue to date. The decreases in net income, operating cash flow, and free cash flow were primarily attributable to increased research and development expenses related to the company’s preclinical studies for its DUET-101 drug candidate.
The company currently only operates in the United States. As of June 30, 2023, Scopus had a cash balance of $362,100. The company has no debt, resulting in a debt-to-equity ratio of 0. The company does not have any available credit lines or other credit facilities disclosed. The current ratio and quick ratio are both 0.052, indicating potential liquidity challenges.
Future Outlook
Scopus BioPharma’s future success will depend on its ability to navigate the challenges posed by the limited capital markets, ongoing litigation, and the complex landscape of immuno-oncology drug development. The company’s experienced management team and its focus on advancing its innovative Duet Platform remain crucial to its long-term prospects. As Scopus BioPharma continues to pursue its transformative therapeutic pipeline, investors will closely monitor the company’s ability to secure the necessary funding and overcome the legal obstacles that have hindered its progress to date.
The company’s existing capital resources will not be sufficient to fully implement its business plan, including drug development, especially if the litigation continues. The company requires additional financing, but its ability to raise capital continues to be impeded by the limited availability of authorized common stock and the current stock price. Scopus BioPharma’s long-term viability remains uncertain without its ability to secure sufficient additional financing.
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