Business Overview and History
Virpax Pharmaceuticals, Inc. (VRPX) is a preclinical-stage biopharmaceutical company focused on developing novel and proprietary drug delivery systems across various pain indications. The company's mission is to enhance compliance and optimize each product candidate in its pipeline, with a particular emphasis on advancing non-opioid and non-addictive pain management treatments and therapies for central nervous system (CNS) disorders.
Virpax was incorporated on May 12, 2017, in the state of Delaware as a preclinical-stage pharmaceutical company. In its early years, the company was primarily engaged in organizational activities, including raising capital and conducting research and development. Virpax entered into several key licensing and research agreements to advance the development of its product candidates.
In 2017, Virpax licensed global rights for a topical diclofenac formulation called Epoladerm from MedPharm Limited. The company also entered into a research and option agreement with MedPharm to conduct research and development on proprietary formulations. In 2018, Virpax licensed global rights for a long-acting liposomal bupivacaine formulation called Probudur from LipoCureRX, Ltd.
The company further expanded its portfolio in 2019 by entering into a collaboration and license agreement with Nanomerics Ltd. for the exclusive worldwide license to develop and commercialize its enkephalin-based product candidate Envelta. In 2020 and 2021, Virpax continued to grow its pipeline through additional licensing agreements with Nanomerics for the viral barrier product AnQlar and the cannabidiol formulation NobrXiol.
Despite these early licensing and research activities, Virpax has faced significant challenges. The company has not generated any revenues and has not yet achieved profitable operations, nor has it ever generated positive cash flow from operations. Virpax has incurred substantial losses since inception, including a net loss of $15.2 million in 2023. The company has been engaged in preclinical studies and research and development efforts, but has not yet demonstrated the ability to successfully complete a large-scale, pivotal clinical trial or obtain marketing approval for any of its product candidates.
Virpax's portfolio currently consists of multiple preclinical-stage product candidates, including Epoladerm, Probudur, Envelta, AnQlar, and NobrXiol.
Epoladerm is a topical diclofenac epolamine metered-dosed spray film formulation being developed to manage pain associated with osteoarthritis. The company believes Epoladerm could provide a pathway for additional proprietary spray formulations with strong adhesion and accessibility properties upon application, especially around active joints and contoured body surfaces. Based on the company's pre-investigational new drug (IND) meeting, Virpax believes it is reasonable to pursue a 505(b)(2) new drug application (NDA) for Epoladerm.
Probudur is a long-acting liposomal bupivacaine formulation injected at a wound site to provide both immediate and extended pain relief. It is based on a unique liposomal delivery system utilizing multi-lamellar vesicles (MLV) encapsulating a high dose of the local anesthetic bupivacaine. Early preclinical animal studies produced data which demonstrated that Probudur provided significantly improved onset and duration of analgesic effect as compared to a similar product on the market. If successful in Phase 3 trials, the company believes Probudur may represent the first long-acting local anesthetic with an opioid sparing label.
Envelta is a nanotechnology-based intranasal spray drug product candidate that enables the delivery of enkephalin to control severe pain, including post-cancer pain and post-traumatic stress disorder (PTSD). Preclinical studies in animal models have shown Envelta exhibited pain control without the development of tolerance, and did not demonstrate respiratory depression, a common side effect of opioids. Virpax plans to utilize the 505(b)(2) regulatory pathway to bring Envelta to market.
AnQlar is a high-density molecular masking spray formulation being developed as a 24-hour prophylactic viral barrier to inhibit viral infection by influenza or SARS-CoV-2. The FDA has indicated that, upon successful completion of all necessary preclinical and clinical trials, Virpax may pursue an NDA drug approval with the Office of Non-Prescription Drugs for AnQlar.
NobrXiol is an investigational formulation delivered via the nasal route that uses Molecular Envelope Technology (MET) to enhance cannabidiol (CBD) transport to the brain, potentially to treat epileptic seizures associated with Lennox-Gastaut syndrome and Dravet syndrome in pediatric patients two years of age and older.
Virpax's development activities for these product candidates are conducted through collaborations and licensing agreements with various research organizations and pharmaceutical companies, including MedPharm Limited, LipoCureRx Ltd., Nanomerics Ltd., and the National Center for Advancing Translational Sciences (NCATS), an institute of the National Institutes of Health (NIH).
Financial Snapshot
Virpax is a preclinical-stage company, and as such, it has not yet generated any revenue from the commercialization of its product candidates. The company has incurred net losses since its inception, reporting net losses of $12.1 million and $15.2 million for the years ended December 31, 2024, and December 31, 2023, respectively. As of December 31, 2024, Virpax had an accumulated deficit of $71.6 million.
The company's primary source of capital has been the issuance of debt and equity securities. Virpax raised $15.8 million from its initial public offering in 2021 and an additional $37 million from a follow-on offering in 2021. In 2024, the company raised $6.3 million from two public offerings and received $2.8 million from the exercise of warrants.
As of December 31, 2024, Virpax had cash and cash equivalents of $1.51 million. The company will require substantial additional financing to fund its operations, including completing the clinical development of and commercially developing all of its product candidates, as well as potential litigation costs and separation payments to its former Chief Executive Officer.
For the most recent quarter (Q3 2024), Virpax reported: - Revenue: $0 - Net Income: -$3,390,088 - Operating Cash Flow (OCF): Not available - Free Cash Flow (FCF): Not available
Liquidity
Virpax's liquidity position remains a significant concern for the company. With only $1.51 million in cash and cash equivalents as of December 31, 2024, and ongoing operational expenses, the company will need to secure additional funding to continue its research and development activities and advance its product candidates through clinical trials.
Key liquidity metrics as of December 31, 2024: - Debt/Equity Ratio: Not available - Cash: $1.51 million - Available Credit Line: Not available - Current Ratio: 0.63 - Quick Ratio: 0.63
The low current and quick ratios indicate that Virpax may face challenges in meeting its short-term obligations. Due to the company's continuing losses and cash position, there exists substantial doubt about Virpax's ability to continue as a going concern.
Recent Developments and Milestones
In 2023, Virpax faced a legal dispute with Sorrento Therapeutics, Inc. and Scilex Pharmaceuticals Inc., which resulted in a settlement agreement in early 2024. The company paid $6 million to the plaintiffs and agreed to pay royalties of 6% of annual net sales of products developed from Epoladerm, Probudur, and Envelta.
In July 2024, Virpax announced positive results from a swine model pilot study for its Probudur product candidate. The pharmacokinetics and safety study demonstrated that Probudur was well-tolerated by the pigs and showed a long-term, slow-release profile. This was a significant milestone for the company as it continues to advance Probudur through the development process.
In November 2024, Virpax raised $5 million through a public offering of common stock and pre-funded warrants. The company plans to use the proceeds to fund the ongoing development of Probudur, marketing and advertising efforts, and for general corporate purposes.
The company has experienced recent turnover in its senior management team, with the resignation of the former CEO and CFO in October 2024. Jatinder Dhaliwal was appointed as the new CEO in October 2024.
Virpax anticipates commencing clinical trials for Probudur in 2025 and Envelta in 2026, but there are risks that these timelines could be delayed. The company has recently implemented significant cost-cutting measures, including the elimination of its directors and officers insurance coverage, which could impact its ability to retain and attract key personnel.
Risks and Challenges
Virpax faces several risks and challenges common to preclinical-stage pharmaceutical companies, including the uncertainty of regulatory approval, the ability to successfully complete clinical trials, and the availability of future financing. The company's reliance on third-party manufacturers and contract research organizations (CROs) also introduces risks related to supply chain disruptions and potential delays in product development.
Additionally, Virpax's former Chief Executive Officer, Anthony Mack, was involved in a legal dispute with Sorrento Therapeutics and Scilex Pharmaceuticals, which resulted in a settlement agreement that could have a material impact on the company's financial position and future operations. Mr. Mack is still involved in litigation, and the company may have to indemnify him or pay additional amounts related to the litigation.
The company's narrow pipeline and lack of revenue-generating products also pose risks, as the failure of any one of its product candidates could significantly impair Virpax's ability to continue as a going concern.
The recent cost-cutting measures, including the elimination of directors and officers insurance coverage, may make it challenging for Virpax to attract and retain key personnel, which is crucial for the company's development and potential future success.
Outlook and Conclusion
Virpax's focus on developing non-opioid and non-addictive pain management treatments and therapies for CNS disorders positions the company to potentially address significant unmet medical needs. The positive results from the Probudur swine model study and the company's recent capital raises provide some optimism for Virpax's future.
However, the company's preclinical stage, limited financial resources, and ongoing legal challenges present significant hurdles that Virpax must overcome to achieve long-term success. Investors should closely monitor the company's progress in advancing its product candidates through the clinical development process, securing additional financing, and resolving any outstanding legal issues.
The anticipated commencement of clinical trials for Probudur in 2025 and Envelta in 2026 represents critical milestones for Virpax. Successfully meeting these timelines and demonstrating positive clinical results will be crucial for the company's future prospects and ability to attract additional investment.
Overall, Virpax Pharmaceuticals is a promising yet high-risk biopharmaceutical company navigating the complexities of drug development in the competitive pain management and CNS disorder treatment markets. The company's ability to execute its strategy, overcome financial constraints, and successfully advance its product candidates through clinical development will be critical in determining its future prospects. While Virpax's innovative approach to drug delivery systems offers potential, the company faces significant challenges that will require careful management and substantial additional resources to overcome.