On March 31, 2017 Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN), a clinical stage biotechnology company focused on the development of novel small molecule therapeutics for cancer and other hypoxia-related diseases, reported financial results for the full year of 2016 and provided an overview of recent operational highlights (Press release, Diffusion Pharmaceuticals, MAR 31, 2017, View Source [SID1234518358]).
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David Kalergis, Chairman and Chief Executive Officer, stated: "The recently received proceeds from our private placement provide Diffusion with resources to move forward with our Phase 3 clinical program testing of trans sodium crocetinate (TSC) in newly diagnosed GBM patients, as well as advance its use in other indications. Diffusion staff, expert consultants and key opinion leaders continue to work together to craft the most cost-effective programs with optimal chances for success."
Corporate Highlights
In November 2016, our common stock was approved for listing, and commenced trading on the NASDAQ Capital Market;
In February 2017, data from our Phase 1/2 clinical trial evaluating the safety and efficacy of TSC in newly diagnosed glioblastoma multiforme was published in the print edition of the peer-reviewed Journal of Neurosurgery;
In March 2017, we completed an initial closing of our Series A Convertible Preferred Stock offering to accredited investors in private placement;
In March 2017, U.S. Patent 9,604,899 entitled "Bipolar Trans Carotenoid Salts and Their Uses" was granted by the United States Patent and Trademark Office. This patent expands the coverage of the therapeutic use of TSC and other related compounds to five hypoxia-related conditions including congestive heart failure, chronic renal failure, acute lung injury (ALI), chronic obstructive pulmonary disease (COPD) and respiratory distress syndrome (RDS).
Year End 2016 Results
Research and development expenses were $7.3 million during the year ended December 31, 2016, compared to $3.9 million during the year ended December 31, 2015. This increase was primarily a result of an additional $1.2 million in expenses related to animal toxicology studies, an increase of $1.0 million in active product ingredient manufacturing costs and an additional $0.5 million in costs related to the TSC pancreatic cancer program. Additionally, a $1.0 million noncash impairment charge was recognized for the abandonment of future development efforts related to the RES-440 IPR&D asset. Salaries and wages expense and stock compensation expense increased by $0.3 million and $0.4 million, respectively, due to an increase in headcount. The overall increase in research and development expense was offset by a $0.9 million decrease in spend related to GBM trials.
General and administrative expenses were $11.1 million for the year ended December 31, 2016, compared to $2.5 million for the year ended December 31, 2015. The increase was primarily attributable to $4.1 million in professional fees incurred in connection with preparing to operate as a public company, merger and transaction related fees and fees related to investment bank advisory services. There was also a $2.5 million noncash charge recognized upon settlement of a litigation matter. In addition, insurance expense increased by $0.8 million due to an increase in directors and officer’s insurance and salaries and wages and stock compensation expense increased by $0.4 million and $0.4 million, respectively, due to an increase in headcount.
Net loss was $18.0 million for the year ended December 31, 2016, compared to a net loss of $6.7 million for the year ended December 31, 2015. The increase in the net loss was primarily due to higher expenses associated with research and development and general and administrative costs.
Cash and cash equivalents were $1.6 million as of December 31, 2016, compared to $2.0 million as of December 31, 2015.