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Dec. 2, 2021, 4:09 p.m. EST

10-Q: CONTEXT THERAPEUTICS INC.

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(EDGAR Online via COMTEX) -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion of our financial condition and results of operations together with the unaudited interim condensed consolidated financial statements and the notes thereto included elsewhere in this report and other financial information included in this report and our audited consolidated financial statements and related notes thereto and management's discussion and analysis of financial condition and results of operations for the years ended December 31, 2019 and 2020 included in our prospectus dated October 19, 2021, filed with the Securities and Exchange Commission, or SEC, pursuant to Rule 424(b) under the Securities Act of 1933. This discussion contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks referred to under Part I, Item 1A. "Risk Factors" of our prospectus dated October 19, 2021, filed with the SEC pursuant to Rule 424(b) under the Securities Act ("Prospectus"). Please also see the section entitled "Special Note Regarding Forward-Looking Statements." Overview We are a clinical-stage biopharmaceutical company dedicated to improving the lives of women living with cancer. Our development team is advancing a pipeline of innovative therapies with a primary focus on treating female, hormone-dependent cancer, including breast, ovarian, and endometrial (uterine) cancer. Our first program and lead product candidate, ONA-XR, builds upon a foundation of successful drug development by our management team and advisors in the field of hormone-dependent cancers. ONA-XR is a potent and selective antagonist of the progesterone receptor, which has been linked to resistance to multiple classes of cancer therapeutics, including anti-estrogen therapies, across female hormone-dependent cancers. We were incorporated in April 2015 under the laws of the State of Delaware. Since inception, we have devoted substantially all of our resources to developing product and technology rights, conducting research and development, organizing and staffing our company, business planning and raising capital. We operate as one business segment and have incurred recurring losses, the majority of which are attributable to research and development activities, and negative cash flows from operations. We have funded our operations primarily through the sale of convertible debt and convertible preferred stock. Our net loss was $7.4 million for the nine months ended September 30, 2021. As of September 30, 2021, we had an accumulated deficit of $26.2 million.

In October 2021, we closed an initial public offering ("IPO") on the Nasdaq Stock Market, in which we issued and sold 5,750,000 shares at a public offering price of $5.00 per share. We received gross proceeds of approximately $28.8 million as a result of the offering. In December 2021, we entered into a definitive securities purchase agreement for a private placement, in which we agreed to sell 5,000,000 shares of common stock together with warrants to purchase 5,000,000 shares of common stock for expected gross proceeds of $31.3 million. We expect our existing cash and cash equivalents together with the proceeds from our IPO and expected proceeds from our private placement will be sufficient to fund our operations into 2024. Currently, our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or future product candidates. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval. In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. Furthermore, in connection with the closing of our initial public offering, we have incurred and continue to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenses on other research and development activities.

General and Administrative Expenses







        Results of Operations
        Comparison of the Three Months Ended September 30, 2021 and 2020
        The following table sets forth our results of operations for the three months
        ended September 30, 2021 and 2020:
                                                       Three months ended September 30,
                                                           2021                    2020                 $ Change                 % Change
        Operating expenses:
        Research and development                   $          739,598          $  468,671                270,927                         58  %
        General and administrative                            828,464             182,389                646,075                        354  %
        Loss from operations                               (1,568,062)           (651,060)              (917,002)                       141  %
        Interest expense                                       (1,261)            (95,211)                93,950                        -99  %
        Change in fair value of convertible
        promissory notes                                            -            (129,966)               129,966                       -100  %
        Other income                                          126,531                   -                126,531                        100  %
        Net loss                                   $       (1,442,792)         $ (876,237)              (566,555)                        65  %
        


Research and Development Expenses

General and Administrative Expenses

Interest Expense







        Other Income
        Other income of $0.1 million for the three months ended September 30, 2021 is
        primarily due to the recognition of a gain on extinguishment of debt as a result
        of the forgiveness of our outstanding Paycheck Protection Program loan in July
        2021.
        Comparison of the Nine Months Ended September 30, 2021 and 2020
        The following table sets forth our results of operations for the nine months
        ended September 30, 2021 and 2020:
                                                        Nine months ended September 30,
                                                           2021                    2020                $ Change                % Change
        Operating expenses:
        Acquired in progress research and
        development                                $       3,087,832          $         -          $   3,087,832                      100  %
        Research and development                           2,511,438            1,046,662              1,464,776                      140  %
        General and administrative                         1,834,645              755,962              1,078,683                      143  %
        Loss from operations                              (7,433,915)          (1,802,624)            (5,631,291)                     312  %
        Interest expense                                     (64,555)            (566,790)               502,235                      -89  %
        Change in fair value of convertible
        promissory notes                                       9,317            9,798,628             (9,789,311)                    -100  %
        Other income                                         124,148                    -                124,148                      100  %
        Net income (loss)                          $      (7,365,005)         $ 7,429,214          $ (14,794,219)                    -199  %
        


Acquired In-Process Research and Development Expenses Acquired in-process research and development expense of $3.1 million for the nine months ended September 30, 2021, reflects the fair value of consideration paid/issued under the collaboration and licensing agreement with Integral Molecular, Inc. ("Integral") for the development of an anti-claudin 6 ("CLDN6") bispecific monoclonal antibody ("BsMAb") for gynecologic cancer therapy. There was no such consideration issued under collaboration arrangements in 2020.

Research and Development Expenses

General and Administrative Expenses

Interest Expense

Table of Contents

We will need additional funds to meet our operational needs and capital requirements for clinical trials, other research and development expenditures, and general and administrative expenses. We currently have no credit facility or committed sources of capital.







                                                                       Nine months ended September 30,
                                                                        2021                      2020
        Cash used in operating activities                       $       (3,837,803)         $     (858,595)
        . . .
        


Dec 02, 2021

COMTEX_398188790/2041/2021-12-02T16:09:20

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