On May 7, 2020 ESSA Pharma Inc. ("ESSA", or the "Company") (NASDAQ: EPIX, TSX-V: EPI), a pharmaceutical company focused on developing novel therapies for the treatment of prostate cancer, reported financial results for the fiscal second quarter ended March 31, 2020 (Press release, ESSA, MAY 7, 2020, View Source [SID1234557387]). All references to "$" in this release refer to United States dollars, unless otherwise indicated.

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"This past quarter has seen ESSA achieve a significant milestone as we filed the IND for EPI-7386 on time, and subsequently received allowance from the FDA to proceed with the Phase I clinical trial of EPI-7386," stated David Parkinson, MD, President and CEO of ESSA. Dr. Parkinson continued, "We are currently working with clinical sites in the US and Canada so we can begin enrollment of patients as soon as possible, ensuring compliance with COVID-19 risk management guidance as provided by the FDA."

Recent Corporate Highlights

The Investigational New Drug ("IND") application for EPI-7386 was filed and accepted by the Food and Drug Administration ("FDA"), and a clinical trial application ("CTA") was subsequently filed with Health Canada. The clinical trial is expected to enroll approximately 18 patients at multiple medical institutions in a standard 3+3 trial design with an approximate 10 additional patients enrolled in the dose expansion cohort.
Entered into an Open Market Sale Agreement (the "ATM Sales Agreement") with Jefferies LLC, effective as of April 13, 2020. Under the ATM Sales Agreement, ESSA may sell its common shares in the capital of the Company from time to time for up to US$35.0 million in aggregate sales proceeds in "at-the-market" transactions.
The Company will present posters with preclinical data on EPI-7386 at both the American Urological Association Annual Meeting to be held virtually on May 18, 2020 and the AACR (Free AACR Whitepaper) Virtual Annual Meeting II held from June 22-24th. The poster presentations will include new gene expression data for EPI-7386, enzalutamide and the combination of the two in prostate cancer models.
The ESSA management team will participate in Jefferies Virtual Healthcare Conference from June 2-4, 2020.
Summary Financial Results

Net Income (Loss). ESSA recorded a net loss of $9.4 million ($0.45 loss per common share based on 20,819,572 weighted average common shares outstanding) for the quarter ended March 31, 2020, compared to a net loss of $3.4 million ($0.54 loss per common share based on 6,311,098 weighted average common shares outstanding) for the quarter ended March 31, 2019. This included non-cash share-based payments of $3.6M for the quarter ended March 31, 2020 compared to $316,407 for the quarter ended March 31, 2019, recognized for stock options granted and vesting.

Research and Development ("R&D") expenditures. R&D expenditures for the quarter ended March 31, 2020 were $4.6 million compared to $1.5 million for the quarter ended March 31, 2019. The increase in R&D expenditures for the quarter were primarily related to preparing the IND application for EPI-7386, preparatory clinical costs, manufacturing and chemistry costs, and non-cash costs related to share-based payments ($1.03M for quarter ending March 31, 2020 compared to $92,851 for quarter ended March 31, 2019). R&D costs in the comparative period were primarily related to preclinical research of the Company’s next-generation aniten compounds.

General and administration ("G&A") expenditures. G&A expenditures for the quarter ended March 31, 2020 were $4.9 million compared to $1.8 million for the quarter ended March 31, 2019. The increase in the quarter is primarily due to non-cash share-based payments. ($2.55M for the quarter ending March 31, 2020 compared to $223,556 for the quarter ending March 31, 2019.)
Liquidity and Outstanding Share Capital

Cash on hand at March 31, 2020 was $39.9 million, with working capital of $39.7 million, reflecting the aggregate gross proceeds of the August 2019 financing of $36 million and the acquisition of Realm Therapeutics plc which provided the Company with $22.2 million in cash, less operating expenses in the intervening period.

As of March 31, 2020, the Company had 20,824,339 common shares issued and outstanding.

In addition, as of March 31, 2020 there were 12,331,127 common shares issuable upon the exercise of warrants and broker warrants. This includes 11,919,404 prefunded warrants at an exercise price of $0.0001 that were issued in lieu of common shares in the August 2019 financing, and 411,723 other warrants at a weighted average exercise price of $38.93. There are 5,310,000 common shares issuable upon the exercise of outstanding stock options at a weighted-average exercise price of $3.41 per common share.