Scinai Publishes Financial Results and Provides Business Update; Shareholders' Equity up from negative $7.3 million as of June 30, 2024, to positive $10 million
JERUSALEM, Nov. 22, 2024 /PRNewswire/ -- Scinai Immunotherapeutics Ltd. (Nasdaq: SCNI) ("Scinai", or the "Company"), a biopharmaceutical company focused on developing inflammation and immunology (I&I) biological products and on providing CDMO services through its Scinai Bioservices business unit, today published its financial results for the nine months ended September 30, 2024 and provided a business update.
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Business Update & Recent Highlights
Conversion of EIB Loan into Equity bringing shareholders' equity to $10 million
On August 21, 2024, the Company announced that it had closed a Loan Restructuring Agreement, which included an amendment and restatement to the amended Finance Contract with the European Investment Bank (the "EIB"). In connection with the transaction, an amount equal to approximately EUR 26.6 million (equal to approximately $28.1 million as of November 21, 2024), including interest accrued through the closing date, owed by the Company to the EIB under the amended Finance Contract between the parties was converted into 1,000 preferred shares, no par value per share, of the Company (the "Preferred Shares") convertible into a fixed number of ADSs, calculated at the closing date to represent 19.5% of the then fully diluted outstanding capital stock of the Company (364 thousand ADSs). The Preferred Shares do not contain any anti-dilution provisions, do not accrue dividends, and are not subject to mandatory redemption, but are redeemable at the election of the Company at a cumulative redemption value of $34 million. Under the terms of the agreement, EIB may not convert its Preferred Shares into ADSs for a period of twelve (12) months from the date of issuance of the Preferred Shares. In addition, EIB may not convert its Preferred Shares into ADSs if at the time of conversion, the aggregate number of ADSs EIB will receive or would have been entitled to receive within the twelve months prior to such conversion would exceed 4.99% of the ADSs issued and outstanding at the time of such conversion.
Following the conversion, the total outstanding amount owed by the Company to the EIB was reduced to EUR 250,000 (equal to approximately $264,000 as of November 21(st), 2024). This remaining outstanding amount has a maturity date of December 31, 2031, is not prepayable in advance, and no interest accrues or is due and payable on such amount.
On August 29, 2024, the Company announced that on August 27, 2024, it had received formal notification from the Listing Qualification Department of the Nasdaq Stock Market that the Company had regained compliance with Nasdaq Listing Rule 5550(b)(1) (the "Rule") that requires listed companies to maintain stockholders' equity of at least $2.5 million. Regaining compliance with the Rule was facilitated by the closing of the Loan Restructuring Agreement with the EIB and the concomitant conversion of the EIB loan as described above.
CDMO business unit
Since Jan 2024, the Company has received CDMO work orders valued at approximately $600K, and the Company is in advanced contract discussions with several other potential clients. The Company's sales guidance for 2024 is at $600,000 in expected revenues. The Company has also received $575,000 in grants from the Israeli Innovation Authority in support of its CDMO business unit creation. The Company applied for a grant extension that, if granted, would provide reimbursement for 66% of approved CDMO costs covering up to NIS 1.5 million (approximately $400,000 as of November 21, 2024) of costs. As the Company's CDMO unit is new, and the Company is focused on rapidly growing, acquiring new clients and building its reputation and brand awareness of its CDMO services, the Company expects revenues from the CDMO business to increase materially in the coming years. This is also coupled with growing demand for boutique CDMO services from early-stage biotech companies looking for fast project onset at competitive pricing without compromising on meeting the most stringent scientific and quality standards.
In addition, in 2024 the Company has been pursuing extensive targeted marketing activities, including online advertisements, direct outreach campaigns and participation in major pharmaceutical conferences, such as BIO Europe Spring in Barcelona (March 2024), the BioMed Israel conference in Tel Aviv, Israel (May 2024), and Bio Europe in Stockholm Sweden (November 2024) at which the Company marketed its CDMO services and met with prospective clients for its CDMO business unit, potential partners for its R&D pipeline and potential investors.
The Company's CDMO unit is currently focused both on executing drug development projects for its clients and on validating its processes and facilities as required by cGMP standards.
R&D business unit - Pipeline Development
On June 4, 2024, the Company met for a scientific advisory meeting with the Paul Erlich Institute (the PEI) of Germany, the scientific advice of which is considered acceptable guidance for IMPD filing with the European Medicines Agency (EMA) and is also considered the European comparable to a pre-IND meeting with the FDA in the U.S. Consequently, on July 23, 2024, the Company announced the receipt of positive regulatory feedback from the PEI for its drug development program towards Phase 1/2a clinical trial of its anti-IL-17A/F nanoAb (SCN-1) in Plaque Psoriasis. The Phase 1/2a study is expected to include approximately 24 plaque psoriasis patients and is expected to commence in the second half of 2025 with readout in 2026.
On July 15, 2024, the Company announced promising results from its pre-clinical, in-vivo proof of concept study in plaque psoriasis, conducted by the team of Prof. Amos Gilhar at the internationally renowned Skin Research Laboratory at the Technion, Israel Institute of Technology, Haifa. The statistical analysis of psoriasis markers measured in the study confirmed that the effect of Scinai's nanoAb was similar to that of the two comparator drugs. This supports the hypothesis that intralesional injection of a nanoAb blocking the IL-17 cytokine can positively impact the inflammatory cytokine cascade, leading to a reduction in psoriatic lesion severity and improvement in skin integrity. By delivering a biological treatment directly into psoriatic lesions, the Company aims to improve disease management for patients suffering from mild to moderate plaque psoriasis and those with psoriatic lesions in hard-to-treat areas (such as the scalp, genitals, palms of hands, and soles of feet). This approach offers the high potency and specificity advantages of biologic drugs while providing a safer and more convenient treatment option compared to existing therapies for this patient category. On September 26, 2024, the Company filed with the Securities and Exchange Commission a Current Report on Form 6-K disclosing that it had entered into a license agreement with an unaffiliated U.S. private company ("Licensee"), pursuant to which Scinai has granted Licensee exclusive global rights to certain patents and know-how under Scinai's agreement with the Max Planck Society and the University Medical Center Göttingen for the development and commercialization of licensed products in exchange for an up-front license fee payable by the Licensee's completion of specified pre-clinical work, as well as other contingent development milestone payments across several indications and royalties on net sales of licensed products.
Additional nanoAbs for treatment of additional autoimmune diseases, such as asthma, atopic dermatitis and wet AMD, have been discovered and characterized at the Max Planck Institute in Gottingen and the University Medical Center Göttingen, both in Germany as part of their research collaboration agreement with Scinai. Scinai holds exclusive options for exclusive, world-wide licenses to develop and commercialize these nanoAbs at pre-agreed financial terms.
The Company is pursuing strategic partnerships and sublicensing options for its anti-IL-17 nanoAb for the treatment of plaque psoriasis and other potential indications and also is looking for partners to co-develop or sub license the additional nanoAbs that have been discovered and characterized. Parties interested in discussing partnering opportunities should contact the company at BD@scinai.com
Nine (9) Months of 2024 Financial Summary
-- Revenues for the nine months ended September 30, 2024, amounted to $452
thousands, compared to no revenues for the period of nine months ended
September 30, 2023.The increase is due to the CDMO starting to generate
revenues for the first time in 2024.
-- R&D expenses for the nine months ended September 30, 2024, amounted to
$4,195 thousands compared to $4,583 thousands for the nine months ended
September 30, 2023. The decrease was not material and primarily reflects
minor fluctuations in R&D activities during the period.
-- Marketing, general and administrative expenses for the nine months ended
September 30, 2024, amounted to $1,767 thousands compared to $3,300
thousands for the nine months ended September 30, 2023. The decrease was
primarily due to salaries and service providers decrease.
-- Financial income, net for the nine months ended September 30, 2024,
amounted to $13,374 thousands compared to $3,713 thousands for the nine
months ended September 30, 2023. The increase was primarily due to
$14,759 financial income from loan conversion to equity.
-- Net Gain for the nine months ended September 30, 2024, was $7,026
thousands compared to net loss of $4,170 thousands for the nine months
ended September 30, 2023. The increase was primarily due to $14,759
financial income from loan conversion.
As of September 30, 2024, Scinai had cash and cash equivalents and short-term deposits of $1,169 thousands compared to $5,010 thousands as of September 30, 2023.
SCINAI IMMUNOTHERAPEUTICS LTD.
(Formerly known as BiondVax Pharmaceuticals Ltd.)
CONDENSED FINANCIAL STATEMENTS
September 30, 2024
Unaudited
SCINAI IMMUNOTHERAPEUTICS LTD. (Formerly known as BiondVax Pharmaceuticals Ltd.) - (Unaudited)
BALANCE SHEETS
U.S. dollars in thousands
September 30, December 31,
2024 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $
1,032 $
4,870
Restricted cash 137 140
Trade receivables 120
Prepaid expenses and other receivables 328 437
Total current assets 1,617 5,447
NON-CURRENT ASSETS:
Property, plant and equipment, net 9,686 10,825
Operating lease right-of-use assets 958 1,200
Total non-current assets 10,644 12,025
Total assets $
12,261 $
17,472
The accompanying notes are an integral part of the financial statements.
SCINAI IMMUNOTHERAPEUTICS LTD. (Formerly known as BiondVax Pharmaceuticals Ltd.) - (Unaudited)
BALANCE SHEETS
U.S. dollars in thousands (except share data)
September
30, December 31,
2024 2023
LIABILITIES NET OF CAPITAL DEFICIENCY
CURRENT LIABILITIES:
Trade payables $
430 $
535
Operating lease liabilities 364 396
Other payables 598 849
Total current liabilities 1,392 1,780
NON-CURRENT LIABILITIES:
Warrants liability 3 96
Loan from others 280 19,368
Non-current operating lease liabilities 583 797
Total non-current liabilities 866 20,261
SHAREHOLDERS' DEFICIT:
Ordinary shares of no-par value: Authorized: 20,000,000,000 shares at September 30, 2024 and at December 31, 2023; Issued and outstanding 3,411,983,584 shares at September 30, 2024 and 1,857,169,984 shares at December 31, 2023
Preferred shares, no par value; Authorized: 1,000 shares at September 30, 2024 and 0 shares at December 31, 2023; Issued and outstanding: 1,000 shares at September 30, 2024 and 0 shares at December 31, 2023 5,627
Additional paid-in capital 121,425 119,506
Accumulated deficit (115,309) (122,335)
Accumulated other comprehensive loss (1,740) (1,740)
Total shareholders' equity (deficit) 10,003 (4,569)
Total liabilities and shareholders' equity (deficit) $
12,261 $
17,472
SCINAI IMMUNOTHERAPEUTICS LTD. (Formerly known as BiondVax Pharmaceuticals Ltd.) - (Unaudited)
STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share data)
For the Three months ended For the Nine months ended
September 30, September 30,
2024 2023 2024 2023
Unaudited
Revenues $
168 $
452 -
Cost of revenues (417) (865)
Gross loss (249) (413)
Research and development expenses, net $
(1,407) $
(1,134) $
(4,195) $
(4,583)
Marketing, general and administrative (764) (968) (1,767) (3,300)
Total operating expenses (2,171) (2,102) (5,962) (7,883)
Total operating loss (2,420) (2,102) (6,375) (7,883)
Financial income from loan conversion 14,759 14,759
Other Financial income, (expenses) net (1,884) (5,209) (1,385) 3,713
Financial income (loss), net 12,875 (5,209) 13,374 3,713
Net gain (loss) $
10,455 $
(3,107) $
7,026 $
(4,170)
Net gain (loss) per share attributable to basic ordinary shareholders, 0.0021 (0.002) 0.0026 (0.002)
Weighted average number of shares used for computing basic net loss per share 3,374,265,323 1,876,885,253 2,652,916,244 1,682,990,012
SCINAI IMMUNOTHERAPEUTICS LTD. (Formerly known as BiondVax Pharmaceuticals Ltd.) - (Unaudited)
STATEMENTS OF COMPREHENSIVE LOSS
U.S. dollars in thousands
For the Three months For the Nine months
ended ended
September 30, September 30,
2024 2023 2024 2023
Net gain (loss) $
10,455 $
(3,107) $
7,026 $
(4,170)
Other comprehensive income:
Foreign currency translation adjustments 267
Total comprehensive gain (loss) $
10,455 $
(3,107) $
7,026 $
(3,903)
SCINAI IMMUNOTHERAPEUTICS LTD. (Formerly known as BiondVax Pharmaceuticals Ltd.) - (Unaudited)
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands (except share data)
Ordinary shares Preferred shares Additional Accumulated Accumulated Total
paid-in comprehensive shareholders'
Number Amount Number Amount capital loss deficit equity
Balance as of January 1, 2024 1,857,169,984
$
$ $
119,506
$(1, 740 ) $
(122,335
) $
(4,569)
Issuance and exercise of warrants, net of issuance
costs of $275
1,553,792,800 1,441 1,441
Loan conversion into preferred shares
1,000 5,627 5,627
Vested RSU's 1,020,800
Share-based compensation 478 478
Net gain 7,026 7,026
Balance as of September 30, 2024 3,411,983,584 1,000 $
5,627 $
121,425
$(1, 740) $
(115,309) $
10,003
Nine months ended September 30, 2023
Ordinary shares Additional paid- Accumulated Accumulated Total
in shareholders'
Number Amount capital comprehensive loss deficit equity
Balance as of January 1, 2023 989,290,784
$ - $116,082 $(2,007) $(115,835) $(1,760)
Exercise of warrants 584,015,200 801 801
Vested RSU's 7,464,800
Issuance of shares and warrants, net 160,000,000 1,484 1,484
Share-based compensation 686 686
Other comprehensive income 267 267
Net loss (4,170) (4,170)
Balance as of September 30, 2023 1,740,770,784 -
$ $119,053 $(1,740) $(120,005) $(2,692)
SCINAI IMMUNOTHERAPEUTICS LTD. (Formerly known as BiondVax Pharmaceuticals Ltd.) - (Unaudited)
STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
For the
nine
months ended
September 30,
2024 2023
Cash flows from operating activities:
---
Net gain (loss) $
7,026 $
(4,170)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property, plant and equipment 1,150 430
Financial expense (income) related to loan from others 1,302 (369)
Financial income related to loan conversion (14,759)
Revaluation of warrants (93) (3,924)
Share-based compensation 478 686
Increase in trade receivables (120)
Decrease (increase) in other receivables 109 (82)
Changes in operating lease right-of-use assets 246 (14)
Increase in trade payables (102) (135)
Changes in operating lease liabilities (246)
Increase (decrease) in other payables (250) (579)
Net cash used in operating activities (5,259) (8,157)
Cash flows from investing activities:
---
Purchase of property, plant and equipment (12) (403)
Net cash used in investing activities $
(12) $
(403)
SCINAI IMMUNOTHERAPEUTICS LTD. (Formerly known as BiondVax Pharmaceuticals Ltd.) - (Unaudited)
STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
For the nine months ended September
30,
2024 2023
Cash flows from financing activities:
---
Issuance of shares and warrants 1,086
Proceed from exercise of warrants, net $
1,441
Net cash provided by financing activities 1,441 1,086
Effect of exchange rate changes on cash, cash equivalents and restricted cash (11) (258)
Increase (decrease) in cash, cash equivalents and restricted cash (3,841) (7,732)
Cash, cash equivalents and restricted cash at beginning of year 5,010 14,215
Cash, cash equivalents and restricted cash at end of year $
1,169 $
6,484
Supplementary disclosure of cash flows activities:
---
(1) Cash paid during the year for:
Interest $
143 $
725
(2) Non-cash transactions:
Issuance of warrants 1,345
Loan convert into preferred shares 5,627
Exercise of warrants liability into shares
$ $
801
Reconciliation of cash, cash equivalents and restricted cash:
---
Cash and cash equivalents $
1,032 $
6,362
Restricted cash 137 122
Cash, cash equivalents and restricted cash $
1,169 $
6,484
About Scinai Immunotherapeutics
Scinai Immunotherapeutics Ltd. (Nasdaq: SCNI) is a biopharmaceutical company with two complementary business units, one focused on in-house development of inflammation and immunology (I&I) biological therapeutic products beginning with an innovative, de-risked pipeline of nanosized VHH antibodies (nanoAbs) targeting diseases with large unmet medical needs, and the other a boutique CDMO providing biological drug development, analytical methods development, clinical cGMP manufacturing, and pre-clinical and clinical trial design and execution services for early stage biotech drug development projects.
Company website: www.scinai.com.
Company Contacts
Investor Relations | +972 8 930 2529 | ir@scinai.com
Business Development | +972 8 930 2529 | bd@scinai.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Litigation Reform Act of 1995. Words such as "expect," "believe," "intend," "plan," "continue," "may," "will," "anticipate," and similar expressions are intended to identify forward-looking statements. All statements, other than statements of historical facts, are forward-looking statements. Examples of such statements include, but are not limited to, the potential of Scinai's nanoAb program, expected revenues of Scinai's CDMO business and timing of pre-clinical and clinical studies of the Company's anti-IL nanoAbs for the treatment of plaque psoriasis and their results. These forward-looking statements reflect management's current views with respect to certain current and future events and are subject to various risks, uncertainties and assumptions that could cause the results to differ materially from those expected by the management of Scinai Immunotherapeutics Ltd. Risks and uncertainties include, but are not limited to; the risk that the Company will otherwise be unable to remain compliant with the continued listing requirements of Nasdaq; lower than anticipated revenues of Scinai's CDMO business in 2024 and thereafter; failure to sign agreements with other potential clients of the CDMO business; a delay in the commencement and results of pre-clinical and clinical studies, including the Phase 1/2a study for psoriasis, the risk of delay in, Scinai's inability to conduct, or the unsuccessful results of, its research and development activities, including the contemplated in-vivo studies and a clinical trial; the risk that Scinai will not be successful in expanding its CDMO business or in-license other nanoAbs; the risk that Scinai may not be able to secure additional capital on attractive terms, if at all; the risk that the therapeutic and commercial potential of nanoAbs will not be met or that Scinai will not be successful in bringing the nanoAbs towards commercialization; the risk of a delay in the preclinical and clinical trials data for nanoAbs, if any; the risk that our business strategy may not be successful; Scinai's ability to acquire rights to additional product opportunities; Scinai's ability to enter into collaborations on terms acceptable to Scinai or at all; timing of receipt of regulatory approval of Scinai's manufacturing facility in Jerusalem, if at all or when required; the risk that the manufacturing facility will not be able to be used for a wide variety of applications and other vaccine and treatment technologies; and the risk that drug development involves a lengthy and expensive process with uncertain outcomes. More detailed information about the risks and uncertainties affecting the Company is contained under the heading "Risk Factors" in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission ("SEC") on May 15, 2024, and the Company's subsequent filings with the SEC. Scinai undertakes no obligation to revise or update any forward-looking statement for any reason.
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