Rafael Holdings Reports Fourth Quarter and Full Fiscal Year 2020 Results
NEWARK, N.J., Oct. 29, 2020 /PRNewswire/ -- Rafael Holdings, Inc., (NYSE: RFL), reported revenue of $4.9 million and a loss per share of $0.66 for the fiscal year ended July 31, 2020. Fourth quarter revenue was $1.2 million with a loss per share of $0.34.
Q4 FY 2020 Consolidated Highlights
-- Revenue of $1.2 million in Q4 FY2020, generated by Rafael Holdings' real
estate portfolio, was unchanged from the year-ago quarter. The loss per
share of $0.34 increased from $0.16 in the year ago quarter largely due
to additional investment in the Company's wholly owned pharmaceutical
research venture, the Barer Institute.
-- In August after the quarter close, the company sold its commercial real
estate property in Piscataway, New Jersey for $3.9 million
Rafael Pharmaceuticals
At July 31, 2020, the Company and its subsidiaries collectively owned securities representing 51% of the outstanding capital stock of Rafael Pharmaceuticals and approximately 37% on a fully diluted basis.
-- The U.S. Food and Drug Administration (FDA) granted Orphan Drug
Designation for Rafael Pharma's lead compound, CPI-613® (devimistat),
for the treatment of soft tissue sarcoma. Rafael's clinical trial will
focus on the treatment of relapsed or refractory clear cell sarcoma.
-- Ono Pharmaceutical Co., has begun a multicenter, open-label Phase 1
study in Japan for patients with pancreatic cancer. The study is
evaluating the efficacy and safety of CPI-613®? (devimistat) in
combination with modified FOLFIRINOX (mFFX).
-- Rafael Pharma reached its target enrollment of 500 patients in its
pivotal Phase 3 clinical trial for metastatic pancreatic cancer (AVENGER
500). The trial is evaluating the efficacy and safety of CPI-613®?
(devimistat) in combination with modified FOLFIRINOX (mFFX) as
first-line therapy. Efficacy data for this trial could be available for
analysis as early as the second quarter of calendar year 2021.
-- Rafael Pharma has crossed the midpoint to its first interim analysis in
enrollment for its pivotal Phase 3 clinical trial (ARMADA 2000) of
CPI-613® (devimistat) for relapsed or refractory acute myeloid leukemia
(AML). The multicenter, open-label, randomized pivotal trial is
evaluating the efficacy and safety of its lead compound devimistat in
combination with high dose cytarabine and mitoxantrone (CHAM) in older
patients. The efficacy data for this trial couuld be available for
interim analysis as early as the second quarter of calendar year 2021.
-- Rafael Pharma expanded its Phase 2 clinical trial of CPI-613®
(devimistat) for patients with relapsed or refractory Burkitt's
lymphoma/leukemia.
-- Rafael Pharma entered into a research collaboration with Roswell Park
Comprehensive Cancer Center to evaluate the effects of CPI-613®
(devimistat) with or without chemotherapy agents, including
oxaliplatin/cisplatin/5-FU/carboplatin/taxol, on esophageal cancer
cells.
LipoMedix
At July 31, 2020, Rafael Holdings held 67% of the issued and outstanding ordinary shares of LipoMedix, a development-stage Israeli company focused on the development of an innovative, safe and effective cancer therapy based on liposome delivery. This stake is inclusive of 4 million shares of LipoMedix purchased in May 2020 for $1 million including conversion of outstanding bridge notes.
Barer Institute
The Barer Institute has identified and begun to evaluate new therapeutic compounds, including compounds to regulate cancer metabolism, through internal development and in-licensing. It is working to validate newly discovered biomarkers for resistance and sensitivity within its portfolio compounds and to identify certain novel targetable mechanisms of action. In addition, the Barer Institute has identified several potential lead compounds for clinical development and found combinations that may meaningfully increase the efficacy of certain clinical compounds.
Remarks by Howard Jonas, Chairman and CEO of Rafael Holdings
"Rafael Holdings' continued to execute on our strategic vision in the fourth quarter, selling our Piscataway property and further increasing our majority stake in LipoMedix. In August, Rafael Pharma announced a major milestone - fully enrolling its pivotal Phase 3 Avenger 500 study for patients with metastatic pancreatic cancer. Results could be available as early as the second quarter of 2021. The Barer Institute has multiple compounds under development and collaboration programs in process with some of the premier academic centers in the country."
About Rafael Holdings, Inc.:
Rafael Holdings is focused on development of novel cancer therapies. The company is a significant investor in two clinical stage oncology companies, Rafael Pharmaceuticals, Inc. and LipoMedix Pharmaceuticals Ltd. Through its wholly owned Barer Institute subsidiary, the company is developing compounds focused on the regulation of cancer metabolism. The company also holds commercial real estate assets in New Jersey and Jerusalem. For more information, visit our website at rafaelholdings.com.
Rafael Holdings, Inc.
Consolidated Balance Sheet
(in thousands except for share and per share data)
July 31,
2020 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents $
6,206 $
12,024
Trade accounts receivable, net of allowance for doubtful accounts of $218 and $122 at July 31, 267 450
2020 and 2019, respectively
Due from Rafael Pharmaceuticals 118 280
Prepaid expenses and other current assets 273 507
Assets held for sale 2,968
Total current assets 9,832 13,261
Property and equipment, net 44,433 48,733
Equity investment - RP Finance 192
Investments - Rafael Pharmaceuticals 70,018 70,018
Investments - Other Pharmaceuticals 1,201 2,000
Investments - Hedge Funds 7,510 5,125
Deferred income tax assets, net 6 19
In-process research and development and patents 1,575 1,575
Other assets 1,580 1,412
TOTAL ASSETS $
136,347 $
142,143
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade accounts payable $
921 $
795
Accrued expenses 1,191 605
Amount due for purchase of membership interest 3,500
Other current liabilities 115 27
Total current liabilities 5,727 1,427
Due to related parties 65
Convertible debt, net of discount of $0 and $54 - Related Party 14,946
Other liabilities 92 292
Accrued interest on convertible debt - Related Party 649
TOTAL LIABILITIES 5,819 17,379
COMMITMENTS AND CONTINGENCIES
EQUITY
Class A common stock, $0.01 par value; 35,000,000 shares authorized, 787,163 shares issued and 8 8
outstanding as of July 31, 2020 and July 31, 2019, respectively
Class B common stock, $0.01 par value; 200,000,000 shares authorized, 15,034,598 issued and 149 131
15,028,536 outstanding as of July 31, 2020, and 13,142,502 shares issued and outstanding as of
July 31, 2019
Additional paid-in capital 129,136 112,898
Accumulated deficit (16,255) (5,840)
Accumulated other comprehensive income related to foreign currency translation adjustment 3,762 3,784
Total equity attributable to Rafael Holdings, Inc. 116,800 110,981
Noncontrolling interests 13,728 13,783
TOTAL EQUITY 130,528 124,764
TOTAL LIABILITIES AND EQUITY $
136,347 $
142,143
Rafael Holdings, Inc.
Consolidated Statement of Operations
(in thousands except for share and per share data)
Year Ended July 31,
2020 2019
REVENUES
Rental - Third Party $
1,516 $
1,452
Rental - Related Party 2,082 2,125
Parking 832 874
Other - Related Party 480 480
Total Revenue 4,910 4,931
COSTS AND EXPENSES
Selling, general and administrative 9,118 8,821
Research and development 2,391 1,027
Depreciation 1,866 1,779
Loss from operations (8,465) (6,696)
Interest (expense) income, net (32) 469
Net (loss) gain resulting from foreign exchange transactions (5) 47
Gain on sale of marketable securities 330
Impairment of investments - Other Pharmaceuticals (799)
Unrealized gain on investments - Hedge Funds 2,385 907
Loss before income taxes (6,916) (4,943)
(Provision for) benefit from income taxes (29) 19
Impairment of equity method investment of Altira (4,000)
Equity in earnings of RP Finance 192
Consolidated net loss (10,753) (4,924)
Net loss attributable to noncontrolling interests (338) (231)
Net loss attributable to Rafael Holdings, Inc. $
(10,415) $
(4,693)
OTHER COMPREHENSIVE LOSS
Net Loss $
(10,753) $
(4,924)
Foreign Currency Translation Adjustment (22) 298
Total Comprehensive Loss (10,775) (4,626)
Comprehensive (loss) income attributable to noncontrolling interests (9) 173
Total Comprehensive loss attributable to Rafael Holdings, Inc. $
(10,784) $
(4,453)
Loss per share
Basic and Diluted $
(0.66) $
(0.35)
Weighted average number of shares used in calculation of loss per share
Basic and Diluted 15,764,829 13,275,239
Rafael Holdings, Inc.
Consolidated Statement of Cash Flows
(in thousands)
Year Ended July 31,
2020 2019
Operating activities
Net loss $
(10,753) $
(4,924)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation 1,866 1,779
Deferred income taxes 13 (19)
Interest income on Rafael Pharmaceuticals Series D Convertible Note (848)
Interest income (37)
Net gain on sale of marketable securities (330)
Net unrealized gain on investments - Hedge Funds (2,385) (907)
Impairment of investments - Other Pharmaceuticals 799
Impairment of equity method investment of Altira 4,000
Equity in earnings of RP Finance (192)
Provision for doubtful accounts 96 122
Noncash compensation 684 372
Amortization of debt discount 54 17
Write-off of patents 76
Change in assets and liabilities:
Trade accounts receivable 87 (285)
Prepaid expenses and other current assets 234 (86)
Other assets (168) 275
Accounts payable and accrued expenses 713 533
Other current liabilities 88 3
Due to related parties (65) 654
Due from related parties 162 (280)
Accrued interest - Related Party 19 649
Other liabilities 82 104
Net cash used in operating activities (4,666) (3,132)
Investing activities
Purchase of investment in Altira (500)
Purchases of property and equipment (534) (399)
Proceeds from sale and maturity of marketable securities 25,031
Investment in Rafael Pharmaceuticals (55,870)
Net cash used in investing activities (1,034) (31,238)
Financing activities
Contribution from noncontrolling interest of consolidated entity 4,587
Repayment of loan from Rafael Pharmaceuticals, including interest 3,335
Proceeds from exercise of options 29 190
Proceed from sale of shares 7,777
Proceeds from issuance of convertible note 15,000
Payments for taxes related to shares withheld for employee taxes (125)
Net cash (used in) provided by financing activities (96) 30,889
Effect of exchange rate changes on cash and cash equivalents (22) (298)
Net decrease in cash and cash equivalents (5,818) (3,779)
Cash and cash equivalents, beginning of year 12,024 15,803
Cash and cash equivalents, end of year $
6,206 $
12,024
Supplemental Schedule of Noncash Investing and Financing Activities
Adoption effect of ASU 2016-01
$ $
39
Beneficial conversion feature of convertible debt - Related Party
$ $
71
Debt and accrued interest converted to Series D Preferred Stock
$ $
10,848
Related Party deposit utilized to purchase Class B Common Stock
$ $
864
Amount due for purchase of membership interest $
3,500
$
Transfer of asset held for sale $
2,968
$
Conversion of LipoMedix Bridge Notes $
283
$
Conversions of related party convertible notes payable and accrued interest $
15,668
$
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SOURCE Rafael Holdings, Inc.
