On March 30, 2020 Cardax, Inc. (OTCQB:CDXI) reported its 2019 results (Press release, Cardax Pharmaceuticals, MAR 30, 2020, View Source [SID1234556015]). Highlights:
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CHASE Clinical Trial. On September 23, 2019, the Company announced findings from the pre-specified interim review of its ongoing CHASE (Cardiovascular Health Astaxanthin Supplement Evaluation) clinical trial. The CHASE clinical trial is a double-blind, randomized, placebo-controlled clinical trial evaluating the effect of the Company’s astaxanthin dietary supplement ZanthoSyn, on cardiovascular health, as measured by C-Reactive Protein or "CRP" levels in subjects with documented cardiovascular risk factors. Pre-specified secondary cardiovascular and inflammatory health markers, safety parameters, exploratory endpoints, and pre-specified sub-groups are also being assessed.
The interim review included several key cardiovascular health markers: CRP, triglycerides, total cholesterol, LDL cholesterol, oxidized LDL cholesterol, and blood pressure. The results demonstrated pleiotropic effects and excellent safety, which the Company believes provide further mechanistic support for its astaxanthin pharmaceutical development program, the basis for additional patent filings, and support for the cardiovascular health benefits of ZanthoSyn.*
The CHASE clinical trial recently suspended recruitment of new subjects and study visits for existing subjects due to the coronavirus disease 2019 (COVID-19) pandemic and the related governmental "stay-at-home" orders. The Company expects to resume clinical trial operations when permissible and safe to proceed.
Intellectual Property. The Company filed additional patents in 2019 that if issued would extend its patent coverage to 2040 for the composition of matter of CDX-101, the Company’s lead pharmaceutical candidate, and 2039 for certain cardiovascular uses based on the CHASE clinical trial results.
ZanthoSyn Net revenues rebounded with $500,586 in the second half of 2019 compared to $210,363 in the first half of the year. The rebound was primarily driven by a stronger correlation of inventory sell-in/sell-through patterns by the Company’s largest customer, General Nutrition Corporation ("GNC"). ("Sell-in" is defined as wholesale orders of ZanthoSyn by GNC. "Sell-through" is defined as retail sales of ZanthoSyn to GNC customers.)
Financial Results. The Company raised financing of $3,360,000 in 2019 vs. $1,244,037 (net) in 2018 using a combination of convertible notes, equity units (stock and warrants), and loans, the proceeds of which were used for general working capital and to fund research, development, and clinical programs.
Net losses increased to $5,093,037 in 2019 from $4,024,222 in 2018 primarily due to non-cash expenses related to convertible notes issued in 2019, including interest expenses and changes in derivative liability amounts. The loss from operations of $4,077,103 in 2019 was nearly unchanged from $4,022,495 in 2018.
Net revenues decreased to $710,949 in 2019 vs. $1,510,875 in 2018 primarily due to the decrease in GNC replenishment orders of ZanthoSyn in the first half of 2019 following larger stocking orders in 2018. Inventory sell-in/sell-through patterns were more strongly correlated in the second half of 2019.
Subsequent Events. Cardax released a white paper and accompanying press release on March 20, 2020 outlining the potential role of astaxanthin in the treatment of COVID-19 and is seeking strategic collaborations to further develop astaxanthin for COVID-19, including clinical trials. A provisional patent covering this use was also filed.
The Company believes that its financing, including any public or private offerings, and revenues may be affected in 2020 by the COVID-19 pandemic, although the extent of the impact is uncertain at this time.
Cardax raised $770,000 in Q1 2020, of which $150,000 was used to pay off a convertible note due in March 2020, and the balance is being used for general working capital.
"We believe the encouraging CHASE trial interim results and our new patent filings were important accomplishments in 2019. These milestones reflect the successful execution of key parts of our strategy to create value around our pharmaceutical development programs," said David G. Watumull, Cardax CEO. "On the consumer side of the business, we were glad to see the rebound in ZanthoSyn sales in the second half of 2019."