On March 27, 2020 Seneca Biopharma, Inc. (Nasdaq: SNCA), a biopharmaceutical company focused on developing novel treatments for diseases of high unmet medical need, reported its financial results for the year ended December 31, 2019 (Press release, Seneca Biopharma, MAR 27, 2020, View Source [SID1234555956]).
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Business Highlights for the Year Ended December 31, 2019
In early 2019, the Company shifted its operating strategy and focus away from the development of our neural stem cell treatments and initiated an out-licensing effort to partner these programs, while seeking to in-license or acquire novel therapeutics that are complementary to our current technologies and could benefit from our development experience.
On July 17, 2019, we effected a 1-for-20 reverse stock split of our common stock;
In July of 2019, we completed an underwritten public offering of our securities resulting in gross proceeds of approximately $7.5 million;
On October 28, 2019, we changed our name from Neuralstem, Inc. to Seneca Biopharma, Inc.
Financial Results for the Year Ended December 31, 2019
Cash Position and Liquidity: At December 31, 2019, cash was approximately $5.1 million as compared to approximately $5.8 million at December 31, 2018. The $0.7 million decrease is due to cash used in operations of approximately $7.3 million partially offset by the proceeds from our July 2019 underwritten offering.
Operating Loss: Operating loss for the year ended December 31, 2019 was $8.6 million compared to a loss of $8.3 million for 2018. The increase in operating loss for the year was primarily due to the absence of revenue and a small increase in research and development expenses. General and administrative expenses totaled approximately $4.6 million during the two periods.
Net Loss: Net loss for the year ended December 31, 2019 was $8.4 million, or $3.80 per share, compared to a loss of $4.9 million, or $7.80 per share on a post-reverse stock-split basis, for 2018. The change in net loss was primarily attributed to non-cash related changes in the fair value of our liability classified stock purchase warrants.
R&D Expense: Research and development expense for the year ended December 31, 2019 was $4.1 million as compared to $4.0 million for the year ended December 31, 2018. The increase was primarily attributable to an increase in external consulting services engaged in the technical evaluation of our internal programs as well as the evaluation of certain potential assets we considered for acquisition. These costs were partially offset by lower clinical trial expenditures as we wound down clinical activates.
G&A Expense: General and administrative expense were approximately $4.6 million for both 2019 and 2018. As noted above, in early 2019, the Company shifted its operating strategy and initiated an out-licensing effort to partner our neural stem cell treatments while seeking to acquire novel therapeutics with the potential to be complementary to our current technologies and that could benefit from our development experience. Associated with this shift in strategic focus, our G&A expenses in 2019 reflect an enhanced internal management structure including individual consultants in key roles.
Liquidity: In January 2020, the Company entered into an agreement with certain accredited investors from our July 2019 underwritten offering. Under this agreement the exercise price of certain warrants issued in the July offering were reduced from $2.70 to $1.36 to induce the immediate cash exercise of such warrants. The Company received approximately $6.8 million in net proceeds. We believe that the proceeds from the warrant exercise, along with our cash as of December 31, 2019, will be sufficient to fund our planned operations for more than 12 months.
"With the proceeds from the January 2020 transaction, we have the capital to build out our management team and continue our initiative of evaluating new therapeutic products for development as well as seeking partners for our promising neural stem-cell therapeutic NSI-566" commented Dr. Kenneth Carter, Seneca’s Executive Chairman. "On this front, our China-based subsidiary is readying a new facility which will be utilized to complete activities for our China-based stroke trial from which we are expecting top line data by the end of this year. In addition, we recently held a discussion with the US FDA regarding a path forward for our ALS program. We will provide additional information on these programs when certain activities are concluded."