Ceapro Inc. Reports 2021 Third Quarter and Nine-Month Financial Results and Operational Highlights

 

– Increased R&D activities focused on the completion of a clinical trial for oat beta glucan as a potential cholesterol reducer and on the development of yeast beta glucan as a potential inhalable therapeutic for COVID-19 –

– Q3 2021 record sales of $4,523,000 compared to $3,476,000 for Q3 2020, representing a 30% increase –

– Net profit of $875,000 for Q3 2021 vs. net profit of $192,000 for Q3 2020, a 356% increase –

– Achieved record production levels despite COVID-19 pandemic situation –

EDMONTON, Alberta, Nov. 17, 2021 (GLOBE NEWSWIRE) — Ceapro Inc. (TSX-V: CZO; OTCQX: CRPOF) (“Ceapro” or the “Company”), a growth-stage biotechnology company focused on the development and commercialization of active ingredients for healthcare and cosmetic industries, today announced financial results and operational highlights for the third quarter and the first nine months ended September 30, 2021.

“Progress continues on all fronts from production operations to research and development, allowing us to advance our pipeline while expanding our business model. We are extremely proud of our employees who worked tirelessly since the beginning of the year to maintain operations and deliver these very solid results despite the COVID-19 pandemic. As we continue to move forward, our focus remains on the health and safety of our associates, followed by business continuity,” stated Gilles Gagnon, M.Sc., MBA, President and CEO.

Corporate and Operational Highlights

Pipeline Development:

• Pursued the development of new PGX-dried chemical complexes for potential applications under various forms like pills, capsules, fast dissolving strips and face masks. Alginate and yeast beta glucan to become key products of Ceapro’s portfolio.
• Resumed bioavailability studies with University of Alberta for new chemical complexes yeast beta glucan-CoQ10, alginate-CoQ10 and newly formed alginate yeast beta glucan-CoQ10.
• Announced research agreement with Boston-based Angiogenesis Foundation to assess in vivo bioefficacy of oat beta glucan and avenanthramides in angiogenesis, blood vessel repairs, wound healing and tissue regeneration in various inflammation-based diseases and conditions like COVID-19 presenting damages of the lung blood vessels.
• Expanded collaboration with Montreal Heart Institute to initiate a Phase 1 clinical trial to assess safety and tolerability of pharmaceutical grade avenanthramides powder formulation.
• Conducting in vivo studies with McMaster University with yeast beta glucan as a potential inhalable therapeutic.
  

Technology:

• Pursued installment in Edmonton of a commercial scale unit for impregnation of bioactives with PGX-processed biopolymers.
• Ongoing engineering design for PGX processing commercial unit.

Production Operations:

• Achieved record levels with production of over 70 MT of finished products during the last quarter reliably providing our customers essential high quality products.
  

Subsequent to Quarter:

• Announced discovery of a new mechanism of action for PGX processed yeast beta glucan (PGX-YBG) as a potential inhalable therapeutic for lung fibrotic diseases including COVID-19 patients.
  • PGX-YBG binds to specific receptors (Dectin 1) located on macrophages responsible for the cascade of immunomodulating events when activated.
  • McMaster’s research team demonstrates ability of PGX-YBG to reprogram macrophages on its own.
• Reported preliminary results from clinical trial evaluating oat beta glucan in patients with high cholesterol levels. The study did not achieve the expected primary endpoint related to a decrease of low-density lipoproteins cholesterol when using Ceapro’s pill dosage form. While there was no statistically significant difference between the placebo group and the different dosages of beta glucan, there were positive signals that beta glucan nutraceutical formulation may offer appreciable health benefits as indicated with approved Health Canada’s beta glucan monograph (Natural Product Division)

Financial Highlights for the Third Quarter and Nine-Month Period Ended September 30, 2021

• Total sales of $4,523,000 for the third quarter of 2021 and $13,633,000 for the first nine months of 2021 compared to $3,476,000 and $12,415,000 for the comparative periods in 2020. The 10% increase in sales for the first nine months is mainly due to a significant increase in sales of avenanthramides in the USA compared to the same period in 2020.
• Net profit of $875,000 for the third quarter of 2021 and $2,067,000 for the first nine months of 2021 compared to a net profit of $192,000 and $2,395,000 for the comparative periods in 2020. Increased net profit for the third quarter of 2021 comes from improved margin of 65.2% as compared to 47.8% in 2020. Improved margins in 2021 result from the buying of excellent source material and from the diligent work of highly skilled personnel operating in only one site as compared to two sites in 2020.
• R&D investments were $1,400,000 for Q3 2021 compared to $479,000 for the same period in 2020. The significant increase being due to payments made to Montreal Heart Institute for a clinical trial for the assessment of oat beta glucan as a potential cholesterol reducer by almost $1.0 million during Q3 2021.
• Cash flows generated from operations of $2,837,000for the first nine months in 2021 vs $4,777,000 in 2020.
• Positive working capital balance of $10,367,000 as of September 30, 2021.
  

“Looking ahead, while considering the ongoing potential economic impact related to COVID-19, evolving consumption trends and escalating inflationary levels we believe Ceapro is well-positioned to once again deliver a strong growth in sales well in line with the positive trend achieved over the last years. While we have experienced a “bump in the road” with the beta glucan trial, our solid base business and expanded pipeline will enable us to pursue the expansion of our business model to the nutraceutical sector with avenanthramides and yeast beta glucan for which we are going to conduct more preclinical assays before investing at large scale levels. With a strong balance sheet, a group of dedicated people, and a solid base business, coupled with the innovative technologies and products that we have developed to enable us to expand, Ceapro is poised to emerge as a successful life science company,” concluded Mr. Gagnon.

CEAPRO INC.
Condensed Interim Consolidated Balance Sheets
Unaudited
	September 30,		December 31,
	2021		2020
	$		$
ASSETS
Current Assets
Cash and cash equivalents	7,410,214		5,369,029
Trade receivables	2,716,058		2,019,723
Other receivables	39,522		102,224
Inventories (note 3)	1,532,271		1,210,079
Prepaid expenses and deposits	133,760		348,845
Total Current Assets	11,831,825		9,049,900
Non-Current Assets
Investment tax credits receivable	607,700		607,700
Deposits	82,124		82,124
Licences (note 4)	16,292		18,514
Property and equipment (note 5)	17,776,791		18,591,189
Deferred tax assets	874,304		874,304
Total Non-Current Assets	19,357,211		20,173,831
TOTAL ASSETS	31,189,036		29,223,731
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities	1,097,645		1,067,622
Current portion of lease liabilities (note 6)	286,608		250,658
Current portion of CAAP loan (note 8)	80,811		72,263
Total Current Liabilities	1,465,064		1,390,543
Non-Current Liabilities
Long-term lease liabilities (note 6)	2,432,682		2,648,917
Deferred tax liabilities	874,304		874,304
Total Non-Current Liabilities	3,306,986		3,523,221
TOTAL LIABILITIES	4,772,050		4,913,764
Equity
Share capital (note 7 (b))	16,557,401		16,511,067
Contributed surplus (note 7 (e))	4,676,456		4,682,393
Retained earnings	5,183,129		3,116,507
Total Equity	26,416,986		24,309,967
TOTAL LIABILITIES AND EQUITY	31,189,036		29,223,731

CEAPRO INC.
Condensed Interim Consolidated Statements of Net Income and Comprehensive Income
Unaudited
	Quarters				Nine Months
	Ended September 30,				Ended September 30,
	2021		2020		2021		2020
	$		$		$		$
Revenue (note 14)	4,522,980		3,475,625		13,633,354		12,414,970
Cost of goods sold	1,573,655		1,814,080		5,787,608		5,794,573
Gross margin	2,949,325		1,661,545		7,845,746		6,620,397
Research and product development	1,403,186		478,993		3,050,544		1,381,332
General and administration	766,605		791,217		2,431,659		2,494,514
Sales and marketing	4,957		12,395		34,557		89,830
Finance costs (note 11)	37,684		43,066		169,938		189,258
Income from operations	736,893		335,874		2,159,048		2,465,463
Other (expenses) income (note 10)	138,381		(144,251	)	(92,426	)	(70,746	)
Income before tax	875,274		191,623		2,066,622		2,394,717
Income taxes	–		–		–		–
Total comprehensive income for the period	875,274		191,623		2,066,622		2,394,717
Net income per common share (note 17):
Basic	0.01		0.00		0.03		0.03
Diluted	0.01		0.00		0.03		0.03
Weighted average number of common shares outstanding (note 17):
Basic	77,684,017		77,610,113		77,669,747		77,585,679
Diluted	78,740,532		78,700,415		78,694,469		78,039,105

CEAPRO INC.
Condensed Interim Consolidated Statements of Cash Flows
Unaudited
	2021		2020
Nine Months Ended September 30,	$		$
OPERATING ACTIVITIES
Net income for the period	2,066,622		2,394,717
Adjustments for items not involving cash
Finance costs	106,390		117,237
Transaction costs	–		1,108
Depreciation and amortization	1,408,392		1,382,838
Gain on disposal of equipment	(5,000	)	–
Accretion	8,548		15,913
Share-based payments	13,672		122,902
Net income for the period adjusted for non-cash items	3,598,624		4,034,715
CHANGES IN NON-CASH WORKING CAPITAL ITEMS
Trade receivables	(696,335	)	1,821,449
Other receivables	62,702		(96,375	)
Inventories	(322,192	)	(522,670	)
Prepaid expenses and deposits	137,618		12,471
Accounts payable and accrued liabilities relating to operating activities	163,017		(355,552	)
Total changes in non-cash working capital items	(655,190	)	859,323
Net income for the period adjusted for non-cash and working capital items	2,943,434		4,894,038
Interest paid	(106,390	)	(117,237	)
CASH GENERATED FROM OPERATIONS	2,837,044		4,776,801
INVESTING ACTIVITIES
Purchase of property and equipment	(494,833	)	(222,610	)
Purchase of leasehold improvements	(19,472	)	–
Proceeds from sale of equipment	5,000		353
Accounts payable and accrued liabilities relating to investing activities	(132,994	)	14,161
CASH USED IN INVESTING ACTIVITIES	(642,299	)	(208,096	)
FINANCING ACTIVITIES
Stock options exercised	26,725		3,013
Repayment of long-term debt	–		(112,973	)
Repayment of lease liabilities	(180,285	)	(197,537	)
CASH USED IN FINANCING ACTIVITIES	(153,560	)	(307,497	)
Increase in cash and cash equivalents	2,041,185		4,261,208
Cash and cash equivalents at beginning of the period	5,369,029		1,857,195
Cash and cash equivalents at end of the period	7,410,214		6,118,403

The complete financial statements are available for review on SEDAR at https://sedar.com/Ceapro and on the Company’s website at www.ceapro.com.

About Ceapro Inc.

Ceapro Inc. is a Canadian biotechnology company involved in the development of proprietary extraction technology and the application of this technology to the production of extracts and “active ingredients” from oats and other renewable plant resources. Ceapro adds further value to its extracts by supporting their use in cosmeceutical, nutraceutical, and therapeutics products for humans and animals. The Company has a broad range of expertise in natural product chemistry, microbiology, biochemistry, immunology and process engineering. These skills merge in the fields of active ingredients, biopharmaceuticals and drug-delivery solutions. For more information on Ceapro, please visit the Company’s website at www.ceapro.com.

For more information contact:

Jenene Thomas
JTC Team, LLC
Investor Relations and Corporate Communications Advisor
T (US): +1 (833) 475-8247
E: [email protected]

This press release does not express or imply that the Company claims its product has the ability to eliminate, cure or contain the SARS-2-CoV-2 (COVID-19) at this time.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Source: Ceapro Inc.

Ceapro Inc. Reports Preliminary Results from Clinical Trial Evaluating Oat Beta Glucan in Patients with High Cholesterol Levels

 

EDMONTON, Alberta, Nov. 17, 2021 (GLOBE NEWSWIRE) — Ceapro Inc. (TSX-V: CZO; OTCQX: CRPOF) (“Ceapro” or the “Company”), a growth-stage biotechnology company focused on the development and commercialization of active ingredients for healthcare and cosmetic industries, today reported preliminary results from the clinical study entitled “A Multicenter, Randomized, Double-Blind, Parallel Group, Placebo-Controlled Study to Compare the Efficacy and Safety of High-Medium Molecular Weight Beta-Glucan as Add-On to Statin Therapy in Subjects with Hyperlipidemia”. Following a protocol amendment, patients not treated with a statin were also eligible to enter the study.  

This clinical trial assessed the safety and efficacy of three dosages of oat beta glucan administered as 500 mg pills (1.5 g, 3 g and 6 g per day) compared to placebo. A total of 263 patients (169 females and 94 males) were enrolled in the study. The majority of patients did not receive a statin. The overall compliance to study pill intake was greater than 80%. From a safety perspective, there was no death and beta glucan was generally well tolerated.

The effect of oat beta glucan on the study primary endpoint of change in low-density lipoprotein cholesterol (LDL-C) was not statistically significant compared to placebo. Of note, amongst some positive findings observed with different parameters, there were dosage-related responses in weight and body-mass index at 12 weeks, but they also did not reach statistical significance.

“While we had hoped for a more definitive statistically significant outcome, many observations send some positive signals. They are in accordance with recent data by Cicero et al.¹ on another beta glucan nutraceutical formulation and reinforce the hypothesis that oat beta glucan may offer appreciable health benefits, as indicated in Health Canada’s oat beta glucan approved monograph. While Ceapro’s oat beta glucan product complies with requirements for market authorization for a natural product and seeks to surpass marketed products, continued efforts may be warranted to explore its effect on weight and body-mass index with prolonged exposure and possibly higher dosage. The current study has been conducted under best clinical research practices by the expert team of the Montreal Heart Institute. I am very grateful for their great work, resilience, professionalism and competencies during this pandemic period,” commented Gilles R. Gagnon, Chief Executive Officer of Ceapro.

About Ceapro Inc.

Ceapro Inc. is a Canadian biotechnology company involved in the development of proprietary extraction technology and the application of this technology to the production of extracts and “active ingredients” from oats and other renewable plant resources. Ceapro adds further value to its extracts by supporting their use in cosmeceutical, nutraceutical, and therapeutics products for humans and animals. The Company has a broad range of expertise in natural product chemistry, microbiology, biochemistry, immunology and process engineering. These skills merge in the fields of active ingredients, biopharmaceuticals and drug-delivery solutions. For more information on Ceapro, please visit the Company’s website at www.ceapro.com.

For more information contact:

Jenene Thomas
JTC Team, LLC
Investor Relations and Corporate Communications Advisor
T (US): +1 (833) 475-8247
E: [email protected]

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release

¹ Arrigo F. G. Cicero et al., « A Randomized Placebo-Controlled Clinical Trial to Evaluate the Medium-Term Effects of Oat Fibers on Human Health: The Beta-Glucan Effects on Lipid Profile, Glycemia and InTestinal Health (BELT) Study », Nutrients 12, n^o 3 (3 mars 2020): E686, https://doi.org/10.3390/nu12030686.

	Image Credit: Jean van der Meulen (Pexels)

Cancers Are in an Evolutionary Battle with Treatments – Evolutionary Game Theory Could Tip the Advantage to Medicine

 

Cancer was the second leading cause of death in the U.S. in 2020. Although billions of dollars have been poured into cancer research, the results are still disappointing for many patients who pay hundreds of thousands of dollars to extend their lives for just a few more months. But why do cancer therapies fail?

 

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It was written by and represents the research-based opinions of, Anuraag Bukkuri, PhD Student in Integrated Mathematical Oncology, University of South Florida

 

I’m a doctoral student at the Moffitt Cancer Center and the University of South Florida who develops and applies mathematical and evolutionary theories to understand how cancer works and how to best treat it. And I believe that approaching cancer treatment through the lens of ecology and evolution may help doctors and researchers grapple with this question and fight more effectively against cancer.

Cancer can be seen as being in a predator-prey relationship with the immune system of the body, where cancer is the prey and the immune system is the predator.

 

Standard Treatment Protocols

For decades, standard treatment for cancer involved bombarding patients with the maximum tolerable dose of a drug, attempting to kill as many cancer cells as possible while minimizing adverse side effects.

However, the cancer cells that make up a tumor are not all the same. By random chance, some of these cells develop mutations, or alterations in the cell’s genetic material, that make them immune to a drug. These cells can then proliferate and repopulate the tumor, leading to therapeutic resistance that renders the drug ineffective.

When this occurs, physicians typically switch to another drug that targets a different aspect of the cancer cells. This continues until a therapy is able to effectively control the cancer or no more drugs are available, at which point patients are provided hospice care to make their last days as comfortable as possible.

This protocol has led to the development of a plethora of drugs that target specific features of the tumor’s biology, from boosting the body’s natural defense system to blocking chemical signals on the cancer cells to prevent them from growing. Though some of these drugs have proved to be incredibly effective in a subset of patients, this approach does not work for everyone.

 

The Role of Evolutionary Game Theory

To improve long-term outcomes for all patients, cancer researchers ask two critical questions: How do tumors grow, and how do they become resistant? Looking at cancer through the lens of ecology and evolution, or how the environment of the body molds and is molded by evolving cancer cells over time, can help answer these questions.

One way to think through this is with evolutionary game theory, which uses rigorous mathematics to try to predict how something will react to changes in its environment in a way that maximizes its fitness, or its ability to reproduce.

Evolutionary game theory can help
researchers understand the effect of selective pressures, which are external
factors that affect an organism’s survival. In the case of cancer, selective
pressures can be therapies, and EGT helps researchers understand their effects
on how cancer cells interact with one another and their environment.

For example, consider the principle of the double bind. In nature, this refers to how a prey’s tactic for avoiding one predator results in an increase in the prey’s susceptibility to another. For example, gerbils seek refuge from owls by hiding in bushes scattered across a desert. But snakes are waiting to strike under some of these bushes. The gerbil’s tactics to avoid one predator make it more vulnerable to the other.

Similarly, in cancer, therapies can be administered in a way that leads to a double bind by which the cancer’s growing resistance to one therapy leaves it more susceptible to other therapies. This puts the cancer in an evolutionary trap created from its own adaptations.

These mathematical models have paved the way for the development of therapies using principles from ecology and evolution to better treat and manage cancer. For example, one lung cancer clinical trial gave patients an immunotherapy, which teaches the body’s immune system to recognize and destroy cancer cells, followed by a chemotherapy, which kills cancer cells directly. Exposure to the first treatment sensitized the cancer cells to the second, making the combined treatments more effective than they would have been by themselves.

 

Looking Ahead

Evolutionary game theory can help researchers and oncologists more effectively predict how cancers will respond to different treatments and potentially control the evolutionary trajectory of cancer. This could help ensure optimal outcomes for patients.

While there has been a lot of progress in treating cancer, there’s still a long way to go to make all forms of cancer manageable diseases. One promising path to that goal is harnessing the power of evolution to keep the pressure on cancer.

 

Suggested Reading:

For Stem Cells, Bigger Doesn’t Mean Better

Pros and Cons of FDA Funded in Part by Companies

Attacking Tumors by Returning Cancer Cells to the Body

CPI and PPI Both Suggests Persistent Inflation

 

Stay up to date. Follow us:

	Image Credit: Jean van der Meulen (Pexels)

Cancers Are in an Evolutionary Battle with Treatments – Evolutionary Game Theory Could Tip the Advantage to Medicine

 

Cancer was the second leading cause of death in the U.S. in 2020. Although billions of dollars have been poured into cancer research, the results are still disappointing for many patients who pay hundreds of thousands of dollars to extend their lives for just a few more months. But why do cancer therapies fail?

 

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It was written by and represents the research-based opinions of, Anuraag Bukkuri, PhD Student in Integrated Mathematical Oncology, University of South Florida

 

I’m a doctoral student at the Moffitt Cancer Center and the University of South Florida who develops and applies mathematical and evolutionary theories to understand how cancer works and how to best treat it. And I believe that approaching cancer treatment through the lens of ecology and evolution may help doctors and researchers grapple with this question and fight more effectively against cancer.

Cancer can be seen as being in a predator-prey relationship with the immune system of the body, where cancer is the prey and the immune system is the predator.

 

Standard Treatment Protocols

For decades, standard treatment for cancer involved bombarding patients with the maximum tolerable dose of a drug, attempting to kill as many cancer cells as possible while minimizing adverse side effects.

However, the cancer cells that make up a tumor are not all the same. By random chance, some of these cells develop mutations, or alterations in the cell’s genetic material, that make them immune to a drug. These cells can then proliferate and repopulate the tumor, leading to therapeutic resistance that renders the drug ineffective.

When this occurs, physicians typically switch to another drug that targets a different aspect of the cancer cells. This continues until a therapy is able to effectively control the cancer or no more drugs are available, at which point patients are provided hospice care to make their last days as comfortable as possible.

This protocol has led to the development of a plethora of drugs that target specific features of the tumor’s biology, from boosting the body’s natural defense system to blocking chemical signals on the cancer cells to prevent them from growing. Though some of these drugs have proved to be incredibly effective in a subset of patients, this approach does not work for everyone.

 

The Role of Evolutionary Game Theory

To improve long-term outcomes for all patients, cancer researchers ask two critical questions: How do tumors grow, and how do they become resistant? Looking at cancer through the lens of ecology and evolution, or how the environment of the body molds and is molded by evolving cancer cells over time, can help answer these questions.

One way to think through this is with evolutionary game theory, which uses rigorous mathematics to try to predict how something will react to changes in its environment in a way that maximizes its fitness, or its ability to reproduce.

Evolutionary game theory can help
researchers understand the effect of selective pressures, which are external
factors that affect an organism’s survival. In the case of cancer, selective
pressures can be therapies, and EGT helps researchers understand their effects
on how cancer cells interact with one another and their environment.

For example, consider the principle of the double bind. In nature, this refers to how a prey’s tactic for avoiding one predator results in an increase in the prey’s susceptibility to another. For example, gerbils seek refuge from owls by hiding in bushes scattered across a desert. But snakes are waiting to strike under some of these bushes. The gerbil’s tactics to avoid one predator make it more vulnerable to the other.

Similarly, in cancer, therapies can be administered in a way that leads to a double bind by which the cancer’s growing resistance to one therapy leaves it more susceptible to other therapies. This puts the cancer in an evolutionary trap created from its own adaptations.

These mathematical models have paved the way for the development of therapies using principles from ecology and evolution to better treat and manage cancer. For example, one lung cancer clinical trial gave patients an immunotherapy, which teaches the body’s immune system to recognize and destroy cancer cells, followed by a chemotherapy, which kills cancer cells directly. Exposure to the first treatment sensitized the cancer cells to the second, making the combined treatments more effective than they would have been by themselves.

 

Looking Ahead

Evolutionary game theory can help researchers and oncologists more effectively predict how cancers will respond to different treatments and potentially control the evolutionary trajectory of cancer. This could help ensure optimal outcomes for patients.

While there has been a lot of progress in treating cancer, there’s still a long way to go to make all forms of cancer manageable diseases. One promising path to that goal is harnessing the power of evolution to keep the pressure on cancer.

 

Suggested Reading:

For Stem Cells, Bigger Doesn’t Mean Better

Pros and Cons of FDA Funded in Part by Companies

Attacking Tumors by Returning Cancer Cells to the Body

CPI and PPI Both Suggests Persistent Inflation

 

Stay up to date. Follow us:

Ceapro Inc. Reports Preliminary Results from Clinical Trial Evaluating Oat Beta Glucan in Patients with High Cholesterol Levels

 

EDMONTON, Alberta, Nov. 17, 2021 (GLOBE NEWSWIRE) — Ceapro Inc. (TSX-V: CZO; OTCQX: CRPOF) (“Ceapro” or the “Company”), a growth-stage biotechnology company focused on the development and commercialization of active ingredients for healthcare and cosmetic industries, today reported preliminary results from the clinical study entitled “A Multicenter, Randomized, Double-Blind, Parallel Group, Placebo-Controlled Study to Compare the Efficacy and Safety of High-Medium Molecular Weight Beta-Glucan as Add-On to Statin Therapy in Subjects with Hyperlipidemia”. Following a protocol amendment, patients not treated with a statin were also eligible to enter the study.  

This clinical trial assessed the safety and efficacy of three dosages of oat beta glucan administered as 500 mg pills (1.5 g, 3 g and 6 g per day) compared to placebo. A total of 263 patients (169 females and 94 males) were enrolled in the study. The majority of patients did not receive a statin. The overall compliance to study pill intake was greater than 80%. From a safety perspective, there was no death and beta glucan was generally well tolerated.

The effect of oat beta glucan on the study primary endpoint of change in low-density lipoprotein cholesterol (LDL-C) was not statistically significant compared to placebo. Of note, amongst some positive findings observed with different parameters, there were dosage-related responses in weight and body-mass index at 12 weeks, but they also did not reach statistical significance.

“While we had hoped for a more definitive statistically significant outcome, many observations send some positive signals. They are in accordance with recent data by Cicero et al.¹ on another beta glucan nutraceutical formulation and reinforce the hypothesis that oat beta glucan may offer appreciable health benefits, as indicated in Health Canada’s oat beta glucan approved monograph. While Ceapro’s oat beta glucan product complies with requirements for market authorization for a natural product and seeks to surpass marketed products, continued efforts may be warranted to explore its effect on weight and body-mass index with prolonged exposure and possibly higher dosage. The current study has been conducted under best clinical research practices by the expert team of the Montreal Heart Institute. I am very grateful for their great work, resilience, professionalism and competencies during this pandemic period,” commented Gilles R. Gagnon, Chief Executive Officer of Ceapro.

About Ceapro Inc.

Ceapro Inc. is a Canadian biotechnology company involved in the development of proprietary extraction technology and the application of this technology to the production of extracts and “active ingredients” from oats and other renewable plant resources. Ceapro adds further value to its extracts by supporting their use in cosmeceutical, nutraceutical, and therapeutics products for humans and animals. The Company has a broad range of expertise in natural product chemistry, microbiology, biochemistry, immunology and process engineering. These skills merge in the fields of active ingredients, biopharmaceuticals and drug-delivery solutions. For more information on Ceapro, please visit the Company’s website at www.ceapro.com.

For more information contact:

Jenene Thomas
JTC Team, LLC
Investor Relations and Corporate Communications Advisor
T (US): +1 (833) 475-8247
E: [email protected]

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release

¹ Arrigo F. G. Cicero et al., « A Randomized Placebo-Controlled Clinical Trial to Evaluate the Medium-Term Effects of Oat Fibers on Human Health: The Beta-Glucan Effects on Lipid Profile, Glycemia and InTestinal Health (BELT) Study », Nutrients 12, n^o 3 (3 mars 2020): E686, https://doi.org/10.3390/nu12030686.

Ceapro Inc. Reports 2021 Third Quarter and Nine-Month Financial Results and Operational Highlights

 

– Increased R&D activities focused on the completion of a clinical trial for oat beta glucan as a potential cholesterol reducer and on the development of yeast beta glucan as a potential inhalable therapeutic for COVID-19 –

– Q3 2021 record sales of $4,523,000 compared to $3,476,000 for Q3 2020, representing a 30% increase –

– Net profit of $875,000 for Q3 2021 vs. net profit of $192,000 for Q3 2020, a 356% increase –

– Achieved record production levels despite COVID-19 pandemic situation –

EDMONTON, Alberta, Nov. 17, 2021 (GLOBE NEWSWIRE) — Ceapro Inc. (TSX-V: CZO; OTCQX: CRPOF) (“Ceapro” or the “Company”), a growth-stage biotechnology company focused on the development and commercialization of active ingredients for healthcare and cosmetic industries, today announced financial results and operational highlights for the third quarter and the first nine months ended September 30, 2021.

“Progress continues on all fronts from production operations to research and development, allowing us to advance our pipeline while expanding our business model. We are extremely proud of our employees who worked tirelessly since the beginning of the year to maintain operations and deliver these very solid results despite the COVID-19 pandemic. As we continue to move forward, our focus remains on the health and safety of our associates, followed by business continuity,” stated Gilles Gagnon, M.Sc., MBA, President and CEO.

Corporate and Operational Highlights

Pipeline Development:

• Pursued the development of new PGX-dried chemical complexes for potential applications under various forms like pills, capsules, fast dissolving strips and face masks. Alginate and yeast beta glucan to become key products of Ceapro’s portfolio.
• Resumed bioavailability studies with University of Alberta for new chemical complexes yeast beta glucan-CoQ10, alginate-CoQ10 and newly formed alginate yeast beta glucan-CoQ10.
• Announced research agreement with Boston-based Angiogenesis Foundation to assess in vivo bioefficacy of oat beta glucan and avenanthramides in angiogenesis, blood vessel repairs, wound healing and tissue regeneration in various inflammation-based diseases and conditions like COVID-19 presenting damages of the lung blood vessels.
• Expanded collaboration with Montreal Heart Institute to initiate a Phase 1 clinical trial to assess safety and tolerability of pharmaceutical grade avenanthramides powder formulation.
• Conducting in vivo studies with McMaster University with yeast beta glucan as a potential inhalable therapeutic.
  

Technology:

• Pursued installment in Edmonton of a commercial scale unit for impregnation of bioactives with PGX-processed biopolymers.
• Ongoing engineering design for PGX processing commercial unit.

Production Operations:

• Achieved record levels with production of over 70 MT of finished products during the last quarter reliably providing our customers essential high quality products.
  

Subsequent to Quarter:

• Announced discovery of a new mechanism of action for PGX processed yeast beta glucan (PGX-YBG) as a potential inhalable therapeutic for lung fibrotic diseases including COVID-19 patients.
  • PGX-YBG binds to specific receptors (Dectin 1) located on macrophages responsible for the cascade of immunomodulating events when activated.
  • McMaster’s research team demonstrates ability of PGX-YBG to reprogram macrophages on its own.
• Reported preliminary results from clinical trial evaluating oat beta glucan in patients with high cholesterol levels. The study did not achieve the expected primary endpoint related to a decrease of low-density lipoproteins cholesterol when using Ceapro’s pill dosage form. While there was no statistically significant difference between the placebo group and the different dosages of beta glucan, there were positive signals that beta glucan nutraceutical formulation may offer appreciable health benefits as indicated with approved Health Canada’s beta glucan monograph (Natural Product Division)

Financial Highlights for the Third Quarter and Nine-Month Period Ended September 30, 2021

• Total sales of $4,523,000 for the third quarter of 2021 and $13,633,000 for the first nine months of 2021 compared to $3,476,000 and $12,415,000 for the comparative periods in 2020. The 10% increase in sales for the first nine months is mainly due to a significant increase in sales of avenanthramides in the USA compared to the same period in 2020.
• Net profit of $875,000 for the third quarter of 2021 and $2,067,000 for the first nine months of 2021 compared to a net profit of $192,000 and $2,395,000 for the comparative periods in 2020. Increased net profit for the third quarter of 2021 comes from improved margin of 65.2% as compared to 47.8% in 2020. Improved margins in 2021 result from the buying of excellent source material and from the diligent work of highly skilled personnel operating in only one site as compared to two sites in 2020.
• R&D investments were $1,400,000 for Q3 2021 compared to $479,000 for the same period in 2020. The significant increase being due to payments made to Montreal Heart Institute for a clinical trial for the assessment of oat beta glucan as a potential cholesterol reducer by almost $1.0 million during Q3 2021.
• Cash flows generated from operations of $2,837,000for the first nine months in 2021 vs $4,777,000 in 2020.
• Positive working capital balance of $10,367,000 as of September 30, 2021.
  

“Looking ahead, while considering the ongoing potential economic impact related to COVID-19, evolving consumption trends and escalating inflationary levels we believe Ceapro is well-positioned to once again deliver a strong growth in sales well in line with the positive trend achieved over the last years. While we have experienced a “bump in the road” with the beta glucan trial, our solid base business and expanded pipeline will enable us to pursue the expansion of our business model to the nutraceutical sector with avenanthramides and yeast beta glucan for which we are going to conduct more preclinical assays before investing at large scale levels. With a strong balance sheet, a group of dedicated people, and a solid base business, coupled with the innovative technologies and products that we have developed to enable us to expand, Ceapro is poised to emerge as a successful life science company,” concluded Mr. Gagnon.

CEAPRO INC.
Condensed Interim Consolidated Balance Sheets
Unaudited
	September 30,		December 31,
	2021		2020
	$		$
ASSETS
Current Assets
Cash and cash equivalents	7,410,214		5,369,029
Trade receivables	2,716,058		2,019,723
Other receivables	39,522		102,224
Inventories (note 3)	1,532,271		1,210,079
Prepaid expenses and deposits	133,760		348,845
Total Current Assets	11,831,825		9,049,900
Non-Current Assets
Investment tax credits receivable	607,700		607,700
Deposits	82,124		82,124
Licences (note 4)	16,292		18,514
Property and equipment (note 5)	17,776,791		18,591,189
Deferred tax assets	874,304		874,304
Total Non-Current Assets	19,357,211		20,173,831
TOTAL ASSETS	31,189,036		29,223,731
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities	1,097,645		1,067,622
Current portion of lease liabilities (note 6)	286,608		250,658
Current portion of CAAP loan (note 8)	80,811		72,263
Total Current Liabilities	1,465,064		1,390,543
Non-Current Liabilities
Long-term lease liabilities (note 6)	2,432,682		2,648,917
Deferred tax liabilities	874,304		874,304
Total Non-Current Liabilities	3,306,986		3,523,221
TOTAL LIABILITIES	4,772,050		4,913,764
Equity
Share capital (note 7 (b))	16,557,401		16,511,067
Contributed surplus (note 7 (e))	4,676,456		4,682,393
Retained earnings	5,183,129		3,116,507
Total Equity	26,416,986		24,309,967
TOTAL LIABILITIES AND EQUITY	31,189,036		29,223,731

CEAPRO INC.
Condensed Interim Consolidated Statements of Net Income and Comprehensive Income
Unaudited
	Quarters				Nine Months
	Ended September 30,				Ended September 30,
	2021		2020		2021		2020
	$		$		$		$
Revenue (note 14)	4,522,980		3,475,625		13,633,354		12,414,970
Cost of goods sold	1,573,655		1,814,080		5,787,608		5,794,573
Gross margin	2,949,325		1,661,545		7,845,746		6,620,397
Research and product development	1,403,186		478,993		3,050,544		1,381,332
General and administration	766,605		791,217		2,431,659		2,494,514
Sales and marketing	4,957		12,395		34,557		89,830
Finance costs (note 11)	37,684		43,066		169,938		189,258
Income from operations	736,893		335,874		2,159,048		2,465,463
Other (expenses) income (note 10)	138,381		(144,251	)	(92,426	)	(70,746	)
Income before tax	875,274		191,623		2,066,622		2,394,717
Income taxes	–		–		–		–
Total comprehensive income for the period	875,274		191,623		2,066,622		2,394,717
Net income per common share (note 17):
Basic	0.01		0.00		0.03		0.03
Diluted	0.01		0.00		0.03		0.03
Weighted average number of common shares outstanding (note 17):
Basic	77,684,017		77,610,113		77,669,747		77,585,679
Diluted	78,740,532		78,700,415		78,694,469		78,039,105

CEAPRO INC.
Condensed Interim Consolidated Statements of Cash Flows
Unaudited
	2021		2020
Nine Months Ended September 30,	$		$
OPERATING ACTIVITIES
Net income for the period	2,066,622		2,394,717
Adjustments for items not involving cash
Finance costs	106,390		117,237
Transaction costs	–		1,108
Depreciation and amortization	1,408,392		1,382,838
Gain on disposal of equipment	(5,000	)	–
Accretion	8,548		15,913
Share-based payments	13,672		122,902
Net income for the period adjusted for non-cash items	3,598,624		4,034,715
CHANGES IN NON-CASH WORKING CAPITAL ITEMS
Trade receivables	(696,335	)	1,821,449
Other receivables	62,702		(96,375	)
Inventories	(322,192	)	(522,670	)
Prepaid expenses and deposits	137,618		12,471
Accounts payable and accrued liabilities relating to operating activities	163,017		(355,552	)
Total changes in non-cash working capital items	(655,190	)	859,323
Net income for the period adjusted for non-cash and working capital items	2,943,434		4,894,038
Interest paid	(106,390	)	(117,237	)
CASH GENERATED FROM OPERATIONS	2,837,044		4,776,801
INVESTING ACTIVITIES
Purchase of property and equipment	(494,833	)	(222,610	)
Purchase of leasehold improvements	(19,472	)	–
Proceeds from sale of equipment	5,000		353
Accounts payable and accrued liabilities relating to investing activities	(132,994	)	14,161
CASH USED IN INVESTING ACTIVITIES	(642,299	)	(208,096	)
FINANCING ACTIVITIES
Stock options exercised	26,725		3,013
Repayment of long-term debt	–		(112,973	)
Repayment of lease liabilities	(180,285	)	(197,537	)
CASH USED IN FINANCING ACTIVITIES	(153,560	)	(307,497	)
Increase in cash and cash equivalents	2,041,185		4,261,208
Cash and cash equivalents at beginning of the period	5,369,029		1,857,195
Cash and cash equivalents at end of the period	7,410,214		6,118,403

The complete financial statements are available for review on SEDAR at https://sedar.com/Ceapro and on the Company’s website at www.ceapro.com.

About Ceapro Inc.

Ceapro Inc. is a Canadian biotechnology company involved in the development of proprietary extraction technology and the application of this technology to the production of extracts and “active ingredients” from oats and other renewable plant resources. Ceapro adds further value to its extracts by supporting their use in cosmeceutical, nutraceutical, and therapeutics products for humans and animals. The Company has a broad range of expertise in natural product chemistry, microbiology, biochemistry, immunology and process engineering. These skills merge in the fields of active ingredients, biopharmaceuticals and drug-delivery solutions. For more information on Ceapro, please visit the Company’s website at www.ceapro.com.

For more information contact:

Jenene Thomas
JTC Team, LLC
Investor Relations and Corporate Communications Advisor
T (US): +1 (833) 475-8247
E: [email protected]

This press release does not express or imply that the Company claims its product has the ability to eliminate, cure or contain the SARS-2-CoV-2 (COVID-19) at this time.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Source: Ceapro Inc.

Tuesday, November 16, 2021

Schwazze (SHWZ)
Reports 3Q21 Results; Adding Another Dispensary

Medicine Man Technologies, Inc. is now operating under its new trade name, Schwazze. Schwazze is executing its strategy to become a leading vertically integrated cannabis holding company with a portfolio consisting of top-tier licensed brands spanning cultivation, extraction, infused-product manufacturing, dispensary operations, consulting, and a nutrient line. Schwazze leadership includes Colorado cannabis leaders with proven expertise in product and business development as well as top-tier executives from Fortune 500 companies. As a leading platform for vertical integration, Schwazze is strengthening the operational efficiency of the cannabis industry in Colorado and beyond, promoting sustainable growth and increased access to capital, while delivering best-quality service and products to the end consumer. The corporate entity continues to be named Medicine Man Technologies, Inc.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

3Q21 Results. Revenue totaled $31.8 million, up from $30.7 million sequentially, and up 328.4% over the same period last year. Adjusted EBITDA for the quarter was $8.8 million, down from $10.0 million sequentially and representing a 27.6% margin. Schwazze recorded net income of $968,756, or $0.02 per diluted share compared to a loss of $2.9 million, or $0.07 per share, last year. We were at $34.2 million and $0.06, respectively.


Operating Metrics Improving.  Notably, Schwazze continues to outperform the overall Colorado market, with sales at the 17 Star Buds up 1% in the quarter compared to an overall decline in the market of 10.5%. Average basket size was $59.05, up 7.3%. Recorded customer visits fell 5.8% in the quarter, but were up 5.1% YTD to 1,046,232. GM increased to 47.3% from 37.4% last year …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

	Image Credit: MIT Research

This Light-Powered Catalyst Mimics Photosynthesis

 

Anne Trafton | MIT News Office

By mimicking photosynthesis, the light-driven process that plants use to produce sugars, MIT researchers have designed a new type of photocatalyst that can absorb light and use it to drive a variety of chemical reactions.

The new type of catalyst, known as a biohybrid photocatalyst, contains a light-harvesting protein that absorbs light and transfers the energy to a metal-containing catalyst. This catalyst then uses the energy to perform reactions that could be useful for synthesizing pharmaceuticals or converting waste products into biofuels or other useful compounds.

“By replacing harmful conditions and reagents with light, photocatalysis can make pharmaceutical, agrochemical, and fuel synthesis more efficient and environmentally compatible,” says Gabriela Schlau-Cohen, an associate professor of chemistry at MIT and the senior author of the new study.

Working with colleagues at Princeton University and North Carolina State University, the researchers showed that the new photocatalyst could significantly boost the yield of the chemical reactions they tried. They also demonstrated that, unlike existing photocatalysts, their new catalyst can absorb all wavelengths of light.

 

High-Energy Reactions

Most catalysts speed up reactions by lowering the energy barrier needed for the reaction to occur. In the past 20 years or so, chemists have made great strides in developing photocatalysts — catalysts that can absorb energy from light. This allows them to catalyze reactions that couldn’t occur without that extra input of energy.

“In photocatalysis, the catalyst absorbs light energy to go to a much more highly excited electronic state. And through that energy, it introduces reactivity that would be prohibitively energy-intensive if all that was available were ground-state energy,” Schlau-Cohen says.

This is analogous to what plants do during photosynthesis. Plant cells’ photosynthetic machinery includes light-absorbing pigments such as chlorophyll that capture photons from sunlight. This energy is then transferred to other proteins that store the energy as ATP, and that energy is then used to produce carbohydrates.

In previous work on photocatalysts, researchers have used one molecule to perform both the light absorption and catalysis. This approach has limitations because most of the catalysts used can only absorb certain wavelengths of light, and they don’t absorb light efficiently.

“When you have one molecule that needs to do the light-harvesting and the catalysis, you can’t simultaneously optimize for both things,” Schlau-Cohen says. “It’s for that reason that natural systems separate them. In photosynthesis, there’s a dedicated architecture where some proteins do the light-harvesting and then funnel that energy directly to the proteins that do the catalysis.”

To create their new biohybrid catalyst, the researchers decided to mimic photosynthesis and combine two separate elements: one to harvest light and another to catalyze the chemical reaction. For the light-harvesting component, they used a protein called R-phycoerythrin (RPE), found in red algae. They attached this protein to a ruthenium-containing catalyst, which has been previously used for photocatalysis on its own.

 

 

Working with North Carolina State University researchers led by professor of chemistry Felix Castellano, Schlau-Cohen’s lab showed that the light-harvesting protein could effectively capture light and transfer it to the catalyst. Then, Princeton University researchers led by David MacMillan, a professor of chemistry and a recent recipient of the Nobel Prize in chemistry, tested the performance of the catalyst in two different types of chemical reactions. One is a thiol-ene coupling, which joins a thiol and an alkene to form a thioether, and the other replaces a leftover thiol group with methyl after peptide coupling.

The Princeton team showed that the new biohybrid catalyst could boost the yield of these reactions up to tenfold, compared to the ruthenium photocatalyst on its own. They also found that the reactions could occur under illumination with red light, which has been difficult to achieve with existing photocatalysts and is beneficial because it produces fewer unwanted side reactions and is less damaging to tissue, so it could potentially be used in biological systems.

 

Chemical Synthesis

This improved photocatalyst could be incorporated into chemical processes that use the two reactions tested in this study, the researchers say. Thiol-ene coupling is useful for creating compounds used in protein imaging and sensing, drug delivery, and biomolecule stability. As one example, it is used to synthesize lipopeptides that may enable easier uptake of antigen vaccine candidates. The other reaction the researchers tested, cysteinyl desulfurization, has many applications in peptide synthesis, including the production of enfurvitide, a drug that could be used to treat HIV.

This type of photocatalyst could also potentially be used to drive a reaction called lignin depolymerization, which could help to generate biofuels from wood or other plant materials that are difficult to break down.

The researchers now plan to try swapping in different light-harvesting proteins and catalysts, to adapt their approach for a variety of chemical reactions.

“We did a proof of principle where you can separate light-harvesting and catalytic function. Now we want to think about varying the catalytic piece and varying the light-harvesting piece to expand that toolkit, to see if this approach can work in different solvents and in different reactions,” Schlau-Cohen says.

 

*This work was supported as part of the Bioinspired Light-Escalated Chemistry (BioLEC) Energy Frontier Research Center, funded by the U.S. Department of Energy Office of Science.

 

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Tuesday, November 16, 2021

Schwazze (SHWZ)
Reports 3Q21 Results; Adding Another Dispensary

Medicine Man Technologies, Inc. is now operating under its new trade name, Schwazze. Schwazze is executing its strategy to become a leading vertically integrated cannabis holding company with a portfolio consisting of top-tier licensed brands spanning cultivation, extraction, infused-product manufacturing, dispensary operations, consulting, and a nutrient line. Schwazze leadership includes Colorado cannabis leaders with proven expertise in product and business development as well as top-tier executives from Fortune 500 companies. As a leading platform for vertical integration, Schwazze is strengthening the operational efficiency of the cannabis industry in Colorado and beyond, promoting sustainable growth and increased access to capital, while delivering best-quality service and products to the end consumer. The corporate entity continues to be named Medicine Man Technologies, Inc.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

3Q21 Results. Revenue totaled $31.8 million, up from $30.7 million sequentially, and up 328.4% over the same period last year. Adjusted EBITDA for the quarter was $8.8 million, down from $10.0 million sequentially and representing a 27.6% margin. Schwazze recorded net income of $968,756, or $0.02 per diluted share compared to a loss of $2.9 million, or $0.07 per share, last year. We were at $34.2 million and $0.06, respectively.


Operating Metrics Improving.  Notably, Schwazze continues to outperform the overall Colorado market, with sales at the 17 Star Buds up 1% in the quarter compared to an overall decline in the market of 10.5%. Average basket size was $59.05, up 7.3%. Recorded customer visits fell 5.8% in the quarter, but were up 5.1% YTD to 1,046,232. GM increased to 47.3% from 37.4% last year …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Tuesday, November 16, 2021

Cocrystal Pharma Inc. (COCP)
3Q21 Reported With Phase 1 Influenza Trial Expected To Begin

Cocrystal Pharma Inc is a clinical stage biotechnology company discovering and developing novel antiviral therapeutics that target the replication machinery of influenza viruses, hepatitis C viruses, and noroviruses. The company employs structure-based technologies and Nobel Prize-winning expertise to create first-and best-in-class antiviral drugs. It is developing CC-31244, an investigational, oral, broad-spectrum replication inhibitor called a non-nucleoside inhibitor (NNI). CC-31244 is currently being evaluated in a Phase 2a study for the treatment of hepatitis C as part of a cocktail for ultra-short therapy of 4 to 6 weeks.

Robert LeBoyer, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

3Q21 Reported. Cocrystal reported a 3Q21 loss of $3.9 million or $(0.04) per share, compared with our expected loss of $3.1 million or $(0.03) per share. The company also confirmed the projected early 2022 start for its Phase 1 Influenza trial, and updated progress on the intranasal and orally administered versions of CDI-45205, a protease inhibitor for SARS-CoV-2 (the virus that causes COVID-19). Cash balance at the end of the quarter was $61.6 million.


Influenza Trial Is Planned For IQ22.  The first product from the programs for seasonal and pandemic influenza, CC-42344, is a PB2 inhibitor expected to begin Phase 1 enrollment in early 2022. The trial is being conducted in Australia where the flu season occurs in the middle of the calendar year, with data is expected later in the year. Separately, the Influenza A/B collaboration with Merck could …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Monday, November 15, 2021

Helius Medical Technologies (HSDT)(HSM:CA)
3Q21 Results; Raises $9.8 million, net

Helius Medical Technologies is a neurotech company focused on neurological wellness. The Company’s purpose is to develop, license and acquire unique and non-invasive platform technologies that amplify the brain’s ability to heal itself. The Company’s first commercial product is the Portable Neuromodulation Stimulator (PoNSTM). For more information, visit www.heliusmedical.com.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Gregory Aurand, Senior Research Analyst, Healthcare Services & Medical Devices, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

3Q21 Operating Results. Revenue of $109,000 and a net loss of $4.7 million, or $2.01 per share. This compares to revenue of $131,000 and a net loss of $3.5 million, or $2.70 per share, in the third quarter last year. (Share count increased to 2.4 million from 1.3 million y-o-y.) We had forecast revenue of $79,000 and a net loss $4.2 million, or $1.75 per share.


Early Days.  Helius remains in the top of the first inning in terms of PoNS commercialization. The better than expected revenue is due to a slow re-opening of Canada from COVID restrictions. The Company has established 36 clinics throughout the country. The main difference in the loss is due to $0.9 million of severance cost related to the former CFO …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Cocrystal Pharma Reports Third Quarter Financial Results and Provides an Update on Development Programs and Milestones

 

• Submitted pre-IND briefing package to the FDA for intranasal/pulmonary CDI-45205 for the treatment of COVID-19 and sets goal of initiating IND-enabling study and Phase 1 in 2022
• Advance oral COVID-19 program with goal of initiating IND-enabling study and Phase 1 in 2022
• Received regulatory clearance to initiate a Phase 1 trial in Australia with orally administered CC-42344 for the treatment of pandemic and seasonal influenza A
  

BOTHELL, Wash., Nov. 15, 2021 (GLOBE NEWSWIRE) — Cocrystal Pharma, Inc. (Nasdaq: COCP) (“Cocrystal” or the “Company”), a clinical-stage biotechnology company, reports financial results for the three and nine months ended September 30, 2021, and provides updates on its antiviral pipeline, upcoming milestones and business activities.

“Today we are reporting progress with our promising COVID-19 antiviral development programs along with setting the goal of beginning first-in-human clinical studies with our novel SARS-CoV-2 protease inhibitors in 2022,” said Sam Lee, Ph.D., co-interim CEO and President of Cocrystal. “We expect comments from the U.S. Food and Drug Administration (FDA) by mid-December on our pre-IND briefing package for our intranasal/pulmonary-delivered SARS-CoV-2 protease inhibitor CDI-45205, our most advanced SARS-CoV-2 program. The FDA’s comments will be useful in designing the Phase 1 and Phase 2 clinical trial protocols for this program.

“Under our second SARS-CoV-2 program, this one targeting oral administration, by year-end 2021 we expect to select a lead candidate from novel SARS-CoV-2 protease inhibitors discovered using our proprietary structure-based technology,” he added. “We will then prepare a pre-IND briefing package to submit to the FDA with the goal of initiating a clinical trial in 2022. Work also continues with a third COVID-19 program using our platform to discover oral replication inhibitors for the treatment of COVID-19.

“Regarding our influenza programs, our supplier is manufacturing our novel PB2 inhibitor CC-42344 for pandemic and seasonal influenza A. We expect patient enrollment in our Phase 1 trial to begin in early 2022 with data readouts later that same year,” said Dr. Lee. “With the influenza A/B program, we anticipate providing an update on the development of the compounds jointly discovered with Merck using our technology platform in the first quarter 2022.”

“With the proceeds from financings completed earlier this year and a clean balance sheet, we believe our capital is sufficient to fund planned operations. This outlook includes our goal of having multiple high-value antiviral compounds in clinical development next year as we advance our programs toward commercialization,” said James Martin, co-interim CEO and CFO. “We are aggressively pursuing the advancement of these potent compounds as we navigate a challenging global supply chain. Thankfully our strong partnership with CROs has benefited us to that extent.”

Antiviral Pipeline Overview

COVID-19 and Other Coronavirus Programs

• Intranasal/Pulmonary Protease Inhibitor
  • Our lead therapeutic molecule CDI-45205 was among the broad-spectrum viral protease inhibitors obtained from Kansas State University Research Foundation (KSURF) under an exclusive license agreement announced in 2020. We believe the protease inhibitors obtained from KSURF have the ability to inhibit the inactive SARS-CoV-2 polymerase replication enzymes into an active form.
  • CDI-45205 and several analogs showed potent in vitro activity against the SARS-CoV-2 Delta (India/B.1.617.2), Gamma (Brazil/P.1), Alpha (United Kingdom/B.1.1.7) and Beta (South African/B.1.351) variants, surpassing the activity observed with the original or wild-type Wuhan strain.
  • CDI-45205 demonstrated good bioavailability in mouse and rat pharmacokinetic studies via intraperitoneal injection, and no cytotoxicity against a variety of human cell lines. CDI-45205 also demonstrated a strong synergistic effect with the FDA-approved COVID-19 medicine remdesivir.
  • A proof-of-concept animal study demonstrated that daily injection of CDI-45205 exhibited favorable in vivo efficacy in mice infected with MERS-CoV-2.

• Oral Protease Inhibitors
  • Using our drug discovery platform, we discovered and are developing novel SARS-CoV-2 3CL protease inhibitors and anticipate identifying a preclinical 3CL lead for oral administration by the end of 2021.
  • We plan to submit a pre-IND briefing package to the FDA in the first half of 2022 to support an IND application, with the goal of progressing to IND-enabling study and Phase 1 in late 2022.
  • The main SARS-CoV-2 protease inhibitors showed potent in vitro pan-viral activity against human common coronaviruses, rhinoviruses, and respiratory enteroviruses that frequently cause the common cold, as well as against noroviruses that can cause symptoms of acute gastroenteritis.

• Replication Inhibitors
  • We are using our platform to seek to discover replication inhibitors for developing orally administered therapeutic and prophylactic treatments for SARS-CoV-2. Replication inhibitors have the potential to work with protease inhibitors in a combination therapy regimen.

Influenza Programs

• Pandemic and Seasonal Influenza A
  • Our novel PB2 inhibitor CC-42344 has shown excellent antiviral activity against influenza A strains, including pandemic and seasonal strains, as well as strains resistant to Tamiflu and Xofluza. CC-42344 also has favorable pharmacokinetic and drug-resistance profiles.
  • We have completed preclinical IND-enabling studies with CC-42344 and have received clearance from the Australian Human Research Ethics Committees (HREC) to initiate a Phase 1 clinical trial. Our supplier is manufacturing drug and we expect to begin patient enrollment in the first quarter of 2022.

• Pandemic and Seasonal Influenza A/B program
  
  • In January 2019 we entered into an Exclusive License and Research Collaboration Agreement with Merck Sharp & Dohme Corp. to discover and developed certain proprietary influenza A/B antiviral agents that are effective against both influenza A and B strains. This agreement includes milestone payments of up to $156 million plus royalties on sales of products discovered under the agreement.
  • In January 2021 we announced completion of all research obligations under the agreement. Merck is now solely responsible for further preclinical and clinical development of the influenza A/B antiviral compounds discovered under this agreement. We anticipate providing a program update during the first quarter of 2022.

• The World Health Organization (WHO) estimates there are approximately 1 billion cases of influenza annually worldwide, resulting in 3 million to 5 million cases of severe illness and 290,000 to 650,000 deaths. The Centers for Disease Control and Prevention (CDC) estimates that since 2010 influenza has caused 9 million to 45 million illnesses in the U.S. annually, resulting in 140,000 to 810,000 hospitalizations and 12,000 to 61,000 deaths each year.
  

Norovirus Program

• We are developing certain proprietary broad-spectrum antiviral compounds to treat norovirus infections.
• Norovirus is a global public health problem responsible for nearly 90% of epidemic, non-bacterial outbreaks of gastroenteritis around the world.

Hepatitis C Program

• We are seeking a partner to advance the development of CC-31244 following completion of a Phase 2a trial. This compound has shown favorable safety and preliminary efficacy in a triple regimen Phase 2a study in combination with Epclusa (sofosbuvir/velpatasvir) for the ultra-short duration treatment of individuals infected with the hepatitis C virus (HCV).
• HCV is a viral infection of the liver that causes both acute and chronic infection. According to the WHO, in 2017 an estimated 71 million people worldwide had chronic HCV infection, including 3.5 million in the U.S. Approximately 399,000 people die each year from HCV infection, mostly from cirrhosis and hepatocellular carcinoma.

Third Quarter Financial Results

Throughout 2020 Cocrystal reported quarterly revenues under an influenza A/B collaboration with Merck consisting of research and development (R&D) services performed by Cocrystal and reimbursed by Merck.

As discussed above, in January 2021 Merck assumed all activities and expenses associated with the continued development of the influenza A/B compounds discovered under this collaboration. As anticipated, Cocrystal reported no revenues for the third quarter of 2021 compared with $489,000 in revenues for the third quarter of 2020. Under the terms of the Merck collaboration, Cocrystal is eligible to receive up to $156 million in payments related to designated developments, regulatory and sales milestones, as well as royalties on product sales.

R&D expenses for the third quarter of 2021 were $2.2 million compared with $2.1 million for the third quarter of 2020, with the increase primarily related to COVID-19 and influenza programs advancement. The Company expects R&D expenses to increase in the fourth quarter of 2021 due to the advancement of our influenza A program into clinical trials and progress with our pre-clinical COVID-19 program toward clinical development. General and administrative (G&A) expenses for the third quarter of 2021 were $1.8 million compared with $1.1 million for the prior-year quarter, with the increase primarily due to litigation settlements.

The net loss for the third quarter of 2021 was $3.9 million, or $0.04 per share, compared with a net loss for the third quarter of 2020 of $2.7 million, or $0.05 per share.

Year to Date Financial Results

The Company reported no revenues for the first nine months of 2021 versus $1.5 million for the first nine months of 2020. The 2020 revenues were from reimbursed R&D services performed under the influenza A/B program with Merck.

R&D expenses for the first nine months of 2021 increased 22% to $6.5 million and G&A expenses decreased 6% to $4.0 million, both compared with the first nine months of 2020. The higher R&D expenses in 2021 were primarily due to COVID-19 and influenza programs advancement.

The net loss for the nine months ended September 30, 2021 was $10.5 million, or $0.12 per share, compared with a net loss for the nine months ended September 30, 2020 of $8.2 million, or $0.16 per share.

The Company reported unrestricted cash of $61.6 million as of September 30, 2021 compared with $33.0 million as of December 31, 2020. The Company reported working capital of $61.2 million as of September 30, 2021.

About Cocrystal Pharma, Inc.
Cocrystal Pharma, Inc. is a clinical-stage biotechnology company discovering and developing novel antiviral therapeutics that target the replication process of influenza viruses, coronaviruses (including SARS-CoV-2), hepatitis C viruses and noroviruses. Cocrystal employs unique structure-based technologies and Nobel Prize-winning expertise to create first- and best-in-class antiviral drugs. For further information about Cocrystal, please visit www.cocrystalpharma.com.

Cautionary Note Regarding Forward-Looking Statements
press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our goals of initiating Phase 1 studies in 2022, selection of a lead candidate for our second SARS-CoV-2 program by year end, our attempts to discover replication inhibitors, our initiation of the Australian clinical trial, our development of antiviral treatments for norovirus, our expectations concerning R&D expenses, our plans to provide a program update on the Merck influenza A/B research, and our liquidity. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events. Some or all of the events anticipated by these forward-looking statements may not occur. Important factors that could cause actual results to differ from those in the forward-looking statements include, but are not limited to, the risks arising from supply chain disruptions on our ability to obtain products including raw materials and test animals as well as similar problems with our vendors and our current CRO and future CROs and CMOs, the impact of the COVID-19 pandemic on the national and global economy, the ability of our CROs to recruit volunteers for, and to proceed with, clinical trials, possible delays resulting from the lockdown in Australia, the cooperation of the FDA in accelerating development in our COVID-19 program, our reliance on Merck for further development in the influenza A/B program under the license and collaboration agreement, our collaboration partners’ technology and software performing as expected, the results of future preclinical and clinical trials, general risks arising from clinical trials, receipt of regulatory approvals, regulatory changes, and development of effective treatments and/or vaccines by competitors, including as part of the programs financed by the U.S. government. Further information on our risk factors is contained in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2020. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Investor Contact:
LHA Investor Relations
Jody Cain
310-691-7100
[email protected]

Financial Tables to follow

 COCRYSTAL PHARMA, INC.

CONSOLIDATED BALANCE SHEETS
(in thousands)

		September 30, 2021				December 31, 2020
		(unaudited)
Assets
Current assets:
Cash		$	61,644			$	33,010
Restricted cash			50				50
Accounts receivable			–				556
Prepaid expenses and other current assets			747				399
Total current assets			62,441				34,015
Property and equipment, net			493				591
Deposits			46				46
Operating lease right-of-use assets, net (including $167 and $37, respectively, to related party)			526				498
Goodwill			19,092				19,092
Total assets		$	82,598			$	54,242
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses		$	961			$	1,080
Current maturities of finance lease liabilities			29				39
Current maturities of operating lease liabilities (including $167 and $39, respectively, to related party)			204				178
Derivative liabilities			34				61
Total current liabilities			1,228				1,358
Long-term liabilities:
Finance lease liabilities			14				34
Operating lease liabilities			344				345
Total long-term liabilities			358				379
Total liabilities			1,586				1,737
Commitments and contingencies (note 9)
Stockholders’ equity:
Common stock, $0.001 par value; 150,000 shares authorized; 97,469 and 70,439 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively			98				71
Additional paid-in capital			336,322				297,342
Accumulated deficit			(255,408	)			(244,908	)
Total stockholders’ equity			81,012				52,505
Total liabilities and stockholders’ equity		$	82,598			$	54,242

COCRYSTAL PHARMA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

		Three months ended September 30,								Nine months ended September 30,
		2021				2020				2021				2020
Revenues:
Collaboration revenue		$	–			$	489			$	–			$	1,504
			–				489				–				1,504
Operating expenses:
Research and development			2,165				2,077				6,489				5,336
General and administrative			1,788				1,121				4,030				4,284
Total operating expenses			3,953				3,198				10,519				9,624
Loss from operations			(3,953	)			(2,709	)			(10,519	)			(8,120	)
Other income (expense):
Interest expense, net			(1	)			(2	)			(4	)			(6	)
Foreign exchange loss			(4	)			–				(4	)			–
Change in fair value of derivative liabilities			17				41				27				(29	)
Total other income (expense), net			12				39				19				(35	)
Net loss		$	(3,941	)		$	(2,670	)		$	(10,500	)		$	(8,155	)
Net loss per common share, basic and diluted		$	(0.04	)		$	(0.05	)			(0.12	)			(0.16	)
Weighted average number of common shares outstanding, basic and diluted			97,469				57,555				85,301				50,491

Source: Cocrystal Pharma, Inc.

Ayala Pharmaceuticals Reports Third Quarter 2021 Financial Results and Provides Business Update

 

– Presented Preliminary Clinical Data from 6mg Cohort of Phase 2 ACCURACY Trial of AL101 in R/M ACC Demonstrating 70% Disease Control Rate at ESMO 2021 –

– Presented Pre-Clinical Proof of Concept Data for Enhanced Activity of AL101 in Combination with Approved Cancer Therapies in ACC-

– Published Case Studies Highlighting Clinical Activity of AL101 with Long-Lasting Responses in Patients with Desmoid Tumors –

– Enrollment in All Ongoing Studies is on Track and Have Progressed as Planned –

– Multiple Milestones Across Clinical-Stage Pipeline Expected in 2022 –

REHOVOT, Israel & WILMINGTON, Del., Nov. 15, 2021 (GLOBE NEWSWIRE) — Ayala Pharmaceuticals, Inc. (Nasdaq: AYLA), a clinical-stage oncology company focused on developing and commercializing small molecule therapeutics for patients suffering from rare and aggressive cancers, primarily in genetically defined patient populations, today reported financial results for the period ended September 30, 2021 and highlighted recent progress and upcoming milestones for its pipeline programs.

“As we gear up for multiple important milestones in 2022 across all of our clinical-stage programs in various indications, including desmoid tumors, triple negative breast cancer, adenoid cystic carcinoma and potentially multiple myeloma, we remain steadfast in our approach to developing gamma secretase inhibitors to treat these genetically defined cancers,” said Roni Mamluk, Ph.D., Chief Executive Officer of Ayala. “We are incredibly pleased with the safety and efficacy profile of AL101 for the treatment of recurrent/metastatic adenoid cystic carcinoma harboring Notch-activating mutations, as presented at ESMO in September, as well as the strong preclinical rationale for potential combination treatment in this indication and other tumor types. We also continued to progress our pivotal RINGSIDE trial evaluating AL102 for the treatment of desmoid tumors as enrollment continues across multiple sites globally and look forward to reporting preliminary results from this trial in mid-2022. In addition, we are very pleased with our ongoing collaboration with Novartis and the status of the study of our AL102 in combination with their anti BCMA agent for multiple myeloma.”

Recent Business Highlights and Upcoming Milestones:

• Published Two Case Studies Highlighting Clinical Activity of AL101 in Desmoid Tumors in Current Oncology: In September 2021, Ayala published two case studies of adult patients with desmoid tumors treated with AL101. Both patients experienced significant tumor burden and symptomatic and life-threatening disease due to disease bulk and location. With AL101 treatment, both subjects achieved long-lasting partial responses with a maximal decrease in tumor size from baseline of 41% after approximately 1 year (55 weeks) of treatment in Case One, and a maximal decrease in tumor size from baseline of 60% after about 1.6 years (82 weeks) of treatment in Case Two.
  
  
• On Track to Report Initial Interim Data from Part A of the Pivotal Phase 2/3 RINGSIDE Trial for the Treatment of Desmoid Tumors in Mid-2022: Enrollment continues to progress globally in the Phase 2/3 RINGSIDE Trial of AL102. Ayala expects to report an initial interim data read-out from part A of the trial in mid-2022, with part B of the study commencing thereafter.
  
  
• Phase 1 Trial of AL102 in Combination with Novartis’ BCMA Targeting Agent, WVT087 for the Treatment of Relapsed/Refractory Multiple Myeloma Continues to Progress: Enrollment progresses as planned in the Phase 1 combination trial of AL102 with Novartis’ investigational anti-B-cell maturation antigen (BCMA) agent, WVT078, for the treatment of relapsed and/or refractory (R/R) multiple myeloma (MM).
  
  
• Presented Preliminary Clinical Data from the Ongoing Phase 2 ACCURACY Trial and ACC at European Society for Medical Oncology (ESMO) Virtual Congress 2021: In September 2021, Ayala presented updated interim data from the 6mg cohort of its ongoing Phase 2 ACCURACY study of AL101 for the treatment of recurrent/metastatic adenoid cystic carcinoma (R/M ACC) harboring Notch activating mutations. The data demonstrated meaningful clinical activity of AL101 6mg monotherapy with a 70% disease control rate across 33 evaluable patients. Partial responses were observed in three subjects (9%) and stable disease was observed in 20 subjects (61%). The 6mg dose of AL101 was well tolerated with manageable side effects consistent with those observed in the 4mg cohort.
  
  
• Presented Preclinical Proof of Concept Data of AL101 in Combination with Approved Cancer Therapies in ACC at ESMO: In September 2021, Ayala also presented a preclinical study evaluating the potential of combination therapy of AL101 in PDX models of ACC, comparing the differential gene expression of ACC tumors versus normal matched tissue regardless of Notch activation status. AL101 in combination demonstrated significant tumor growth inhibition, including regressions, compared to each drug alone, and the study indicated that crosstalk between signaling pathways may increase the efficacy of AL101 in R/M ACC regardless of Notch mutational status.
  
  
• Phase 2 TENACITY Trial of AL101 for the Treatment of Triple Negative Breast Cancer Continues to Progress: Ayala continues to enroll patients in the Phase 2 TENACITY clinical trial of AL101, for the treatment of patients with Notch-activated recurrent or metastatic (R/M) triple negative breast cancer (TNBC). The Company expects to report preliminary data from this ongoing trial in 2022.
  
  

Third Quarter 2021 Financial Results

• Cash Position: Cash and cash equivalents were $40.8 million as of September 30, 2021, as compared to $42.0 million as of December 31, 2020.
• Collaboration Revenue: Collaboration revenue was $0.6 million for the third quarter of 2021, as compared to $0.7 million for the same period in 2020.
• R&D Expenses: Research and development expenses were $7.4 million for the third quarter of 2021, compared to $5.4 million for the same period in 2020. The increase was primarily driven by the advancement in our clinical trials.
• G&A Expenses: General and administrative expenses were $2.2 million for the third quarter of 2021, compared to $1.9 million for the same period in 2020.
• Net Loss: Net loss was $9.8 million for the third quarter of 2021, resulting in a basic and diluted net loss per share of $0.68. Net loss was $7.4 million for the same period in 2020, resulting in a basic and diluted net loss per share of $0.59.
  
  

About Ayala Pharmaceuticals

Ayala Pharmaceuticals, Inc. is a clinical-stage oncology company focused on developing and commercializing small molecule therapeutics for patients suffering from rare and aggressive cancers, primarily in genetically defined patient populations. Ayala’s approach is focused on predicating, identifying and addressing tumorigenic drivers of cancer through a combination of its bioinformatics platform and next-generation sequencing to deliver targeted therapies to underserved patient populations. The company has two product candidates under development, AL101 and AL102, targeting the aberrant activation of the Notch pathway with gamma secretase inhibitors to treat a variety of tumors including Adenoid Cystic Carcinoma, Triple Negative Breast Cancer (TNBC), T-cell Acute Lymphoblastic Leukemia (T-ALL), Desmoid Tumors and Multiple Myeloma (MM) (in collaboration with Novartis). AL101, has received Fast Track Designation and Orphan Drug Designation from the U.S. FDA and is currently in a Phase 2 clinical trial for patients with ACC (ACCURACY) bearing Notch activating mutations and in a Phase 2 clinical trial for patients with TNBC (TENACITY) bearing Notch activating mutations and other gene rearrangements. AL102 is currently in a Pivotal Phase 2/3 clinical trials for patients with desmoid tumors (RINGSIDE) and is being evaluated in a Phase 1 clinical trial in combination with Novartis’ BMCA targeting agent, WVT078, in Patients with relapsed/refractory Multiple Myeloma. For more information, visit www.ayalapharma.com.

Investors:
Julie Seidel
Stern Investor Relations, Inc.
+1-212-362-1200
[email protected]

Ayala Pharmaceuticals:
+1-857-444-0553
[email protected]

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements relating to our development of AL101 and AL102, the promise and potential impact of our preclinical or clinical trial data, the timing of and plans to initiate additional clinical trials of AL101 and AL102, upcoming milestones, including without limitation the timing and results of any clinical trials or readouts and patient enrollment. These forward-looking statements are based on management’s current expectations. The words “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “estimate,” “believe,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the impact of the COVID-19 pandemic on our operations, including our preclinical studies and clinical trials, and the continuity of our business; we have incurred significant losses, are not currently profitable and may never become profitable; our need for additional funding; our cash runway; our limited operating history and the prospects for our future viability; the lengthy, expensive, and uncertain process of clinical drug development, including potential delays in regulatory approval; our requirement to pay significant payments under product candidate licenses; the approach we are taking to discover and develop product candidates and whether it will lead to marketable products; the expense, time-consuming nature and uncertainty of clinical trials; enrollment and retention of patients; potential side effects of our product candidates; our ability to develop or to collaborate with others to develop appropriate diagnostic tests; protection of our proprietary technology and the confidentiality of our trade secrets; potential lawsuits for, or claims of, infringement of third-party intellectual property or challenges to the ownership of our intellectual property; risks associated with international operations; our ability to retain key personnel and to manage our growth; the potential volatility of our common stock; costs and resources of operating as a public company; unfavorable or no analyst research or reports; and securities class action litigation against us. These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the U.S. Securities and Exchange Commission (SEC) on March 24, 2021 and our other filings with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. New risk factors and uncertainties may emerge from time to time, and it is not possible to predict all risk factors and uncertainties. While we may elect to update such forward-looking statements at some point in the future, except as required by law, we disclaim any obligation to do so, even if subsequent events cause our views to change. Although we believe the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

AYALA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)

AYALA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share & per share amounts)