NurExone Reports Second Quarter 2022 Financial Results and Provides Business Update
Calgary, Alberta--(Newsfile Corp. - August 25, 2022) - NurExone Biologic Inc. (TSXV: NRX) (formerly, EnerSpar Corp.) (the "Company" or "NurExone"), a biopharmaceutical company developing biologically-guided exosome therapy for patients suffering from traumatic spinal cord injuries, released a business update and reported financial results for the quarter ended June 30, 2022.
"The first half of 2022 was transformative for NurExone, as we completed our go-public listing and continued to optimize our ExoTherapy product - ExoPTEN, to complete the product file Chemistry Manufacturing and Controls as part of the Pre-Investigational New Drug application, which will be submitted to the U.S. Food and Drug Administration," said Lior Shaltiel, Ph.D., CEO of NurExone. "We are excited that we could holistically address major technological challenges in having potent EVs-loaded Therapies, in order to grow NurExone's Intellectual Property portfolio and ensure its freedom to operate. NurExone has the potential to change the outlook for patients suffering from Spinal Cord Injury and could bring forth a new treatment for other CNS traumatic indications. That said, we look forward to advancing the development of our unique drug platform."
Key Business Highlights
- Go-Public Transaction
Following the Closing of the Reverse Takeover Transaction ("RTO") on June 15, 2022, in which the RTO was discussed in the previous Management's Discussion and Analysis filed on November 29, 2021, the Company commenced trading on the TSX Venture Exchange under its new symbol "NRX" effective at the marketing opening as of June 22, 2022. In connection with the RTO, the Company completed a non-brokered private placement, raising approximately C$3.6 million as well as a private placement financing of US$870,080 and a convertible loan of C$162,000.
- Preparations for an INTERACT meeting with the U.S. Food and Drug Administration ("FDA")
As NurExone is moving forward with its pre-clinical study, the Company is gearing up for a meeting with the FDA to receive needed guidelines for preparations to submit a Pre-Investigational New Drug application. NurExone plans to finalize the product characterization of its innovative biologically-guided ExoTherapy and to scale up the production of ExoPTEN, its first ExoTherapy product.
- New Research and Development facility
NurExone continues to advance the development of a new state-of-the-art facility, which will be used to accelerate the Company's R&D activities, enabling NurExone to work exclusively on its fully owned IPs. The Company has secured a site in Haifa, Israel and is currently working with the facility's developer to prepare the required design and engineering documents to build this facility. The Company expects the development of the new R&D facility to be completed in the first quarter of 2023.
- Expansion of Intellectual Property ("IP") portfolio
NurExone continued to strengthen its IP portfolio during the second quarter of fiscal 2022:
- NurExone submitted three (3) new provisional patent applications fully owned by NurExone. The three (3) applications address compositions and methods for loading Extracellular Vesicles (EVs) including using modified siRNA against PTEN and also other Central Nervous System ("CNS") proteins, to be used for therapy applications.
- NurExone licensed from the Technion additional patent applications in a Patent Cooperation Treaty ("PCT") stage on the Production of EVs from stem cells (WO2020261257).
- A new Sponsor Research Agreement has also been extended with Technion University until the end of the third quarter of 2023 to continue existing developments.
- NurExone maintained the licensed technology (ExoPTEN) under the PCT application - WO2019186558. This PCT has entered the national phase in several territories such as the US, Europe, and some major Asian countries.
- Strategic partnerships & collaborations towards the transition of ExoTherapy to humans
On July 11, 2022, NurExone signed a Collaboration Agreement with Polyrizon Ltd, a leading clinical development stage biotech company based in Israel and hold partly by Medigus Ltd. in order to develop an effective and tailored intranasal delivery formulation for the administration of their exosome-based drug platform in humans.
- Appointment of James (Jay) Richardson to the Board of Directors
Mr. Richardson is a Canadian Chartered Accountant (1970), a Singapore Certified Public Accountant (1986) and a Fellow of the Insolvency Practitioners' Association of the United Kingdom. He has practiced as a Partner of Clarkson Gordon Arthur Young (now Ernst & Young, Canada and Singapore) and a Partner of KPMG (UK) prior to establishing his own practice as a company doctor in Toronto in 1993. He has served as the CEO or Chairman of listed public companies on six occasions and in many other CFO and private company situations. He has extensive public company governance experience from over a dozen Board memberships including serving as Interim Chairman of the Argus Corporation. In his very extensive charitable and community activities, he is most commonly associated with the visual arts, having served among others as the Chairman of the Royal Canadian Academy. Mr. Jay Richardson, Former CEO of EnerSpar and director of NurExone to EnerSpar's shareholders.
- Appointment of Oded Orgil to the Board of Directors
Mr. Orgil has over 25 years of experience in Capital Markets as a Financial Advisor and Senior Executive for both bank-owned and national independent firms. As a financial advisor with Merrill Lynch, he achieved executive status early in his career working with families, business owners, and professionals managing their wealth and estate planning. He moved on to hold Senior Executive positions with Canaccord Genuity and Manulife Financial. He was CEO of Gravitas Securities, a national full-service boutique investment firm. During his time there Oded oversaw the firm's expansion to Vancouver, San Jose, and New York. In his career on Bay Street, Oded has participated in over C$10 billion of capital market transitions and acquisitions. Prior to entering the financial services sector, Mr. Orgil practiced law with a downtown Toronto firm. Mr. Orgil is an active member of the community and has been President of the Canada Israel Chamber of Commerce since 2010. He is a member of the board of directors of Adcore Inc. He holds a Bachelor of Laws (BA) from The University of Western Ontario and a Bachelor of Arts in Political Science from York University.
Second Quarter Fiscal 2022 Financial Results
- Research and development expenses were US$0.30 million in the second quarter of 2022, compared to US$0.16 million in the same quarter in 2021. The increase was largely attributable to the extensive research and development efforts required to continue the development of the siRNA-PTEN technology and other siRNA targets.
- General and administrative expenses were US$1.18 million in the second quarter of 2022, compared to US$0.29 million in the same period in 2021. The increase was mainly due to a US$0.72 million increase in service providers (for issued 1,150,000 Advisory Services Shares at an RTO share price of C$0.80 in connection with certain financial and advisory services related to the RTO), an increase of US$0.17 million in salaries (driven by an increase in headcounts) and share-based compensation expenses.
- Listing expenses were US$2.04 million in the second quarter of 2022. These expenses were recognized in the three months ended June 30, 2022, the quarter in which the RTO was completed, as follows: US$1.61 million at a fair value for the RTO acquisition of 2,536,000 EnerSpar shares at a share price of CAD $0.80, US$0.24 million for net liabilities of EnerSpar, US$0.19 million for legal costs as associated with the RTO transaction.
- Finance expenses, net, were US$0.28 million in the second quarter of 2022, compared to an income of US$0.06 million in the same period in 2021. The increase was primarily due to revaluation and a change in accounting policy for warrant derivatives.
- Net loss was US$3.80 million in the second quarter of 2022, or a loss of US$0.117 per share, compared to a net loss of US$0.38 million, or a loss of US$0.151 per share, in the second quarter of 2021.
About NurExone Biologic Inc.
NurExone Biologic Inc. is a TSXV-listed pharmaceutical company that is developing a platform for biologically-guided ExoTherapy to be delivered non-invasively to patients who have suffered traumatic spinal cord injuries. ExoTherapy was conceptually demonstrated in animal studies at the Technion, Israel Institute of Technology. NurExone is transferring the treatment to humans, and the company holds an exclusive worldwide license from the Technion for the development and commercialization of the technology.
Cautionary Note Regarding Forward-Looking Statements
Certain information set forth in this news release, including, without limitation, information regarding research and development, collaborations, the filing of potential applications with the FDA and other regulatory authorities, the potential achievement of future regulatory milestones, the potential for treatment of conditions and other therapeutic effects resulting from research activities and/or the Company's products, requisite regulatory approvals, the establishment of a new research and development facility and the timing for market entry, is forward-looking information within the meaning of applicable securities laws. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond NurExone's control. The forward-looking information contained in this news release is based on certain key expectations and assumptions made by NurExone, including expectations and assumptions concerning the anticipated benefits of the products, satisfaction of regulatory requirements in various jurisdictions and satisfactory completion of requisite production and distribution arrangements.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks related to the Company's early stage of development, lack of revenues to date, government regulation, market acceptance for its products, rapid technological change, dependence on key personnel, protection of the Company's intellectual property, dependence on the Company's strategic partners and delay in the completion of the development of the new R&D facility. These factors should be considered carefully, and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
A comprehensive discussion of other risks that impact NurExone can also be found in NurExone's public reports and filings which are available under NurExone's profile at www.sedar.com.
Dr. Lior Shaltiel
Chief Executive Officer and Director
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