HCW Biologics Q2 2024 Financial Results and Business Highlights

HCW Biologics Inc., a clinical-stage biopharmaceutical company based in Miramar, Florida, announced its financial results and business highlights for the second quarter ending June 30, 2024. The company focuses on developing novel immunotherapies aimed at mitigating age-related diseases by targeting inflammation. Dr. Hing C. Wong, the Founder and CEO, emphasized that a significant milestone was reached with the successful settlement of an arbitration issue that had impeded the company's progress for almost two years. This resolution has allowed the company to promptly initiate a multi-faceted financing strategy, including a substantial equity offering and a revitalized out-licensing program.

The company retains full control over its TOBI™ platform, a core asset used in developing protein-fusion molecules for non-oncology applications. HCW Biologics continues to advance its clinical development in cancer treatments through molecules like HCW9302, HCW9206, and HCW9201. The Company also plans to introduce HCW9302 into clinical trials shortly to evaluate its effectiveness in treating autoimmune diseases.

In terms of business developments, on July 13, 2024, HCW Biologics entered a Settlement Agreement to resolve an arbitration brought against the Company and Dr. Wong. The agreement involved mutual general releases without any monetary payments or damages from any party. HCW Biologics retains its ownership of the TOBI™ platform and associated molecules, as well as the Wugen license and shares received as an upfront licensing fee.

Following this, the company launched a new financing plan, including an equity offering expected to close by the end of 2024. Additionally, HCW Biologics is in discussions with potential partners for out-licensing some non-core assets.

For the quarter ending June 30, 2024, HCW Biologics reported revenues of $618,854, slightly down from $622,807 for the same period in 2023. However, revenues for the first half of 2024 increased to $1.7 million from $664,690 during the same period in 2023, primarily driven by the sale of licensed molecules to Wugen. Research and development (R&D) expenses rose by 26% to $2.0 million for the quarter and by 7% to $4.2 million for the first half of 2024 due to increased manufacturing costs and supplemental research studies.

General and administrative (G&A) expenses remained stable at $1.6 million for the quarter but decreased by 12% to $3.2 million for the first half of 2024, attributed to cost-cutting measures and reduced legal fees related to patent procurement and insurance. Legal expenses saw a significant increase, rising to $10.4 million for the quarter and $14.8 million for the first half of 2024, due to the Altor/NantCell matter.

The net loss for the quarter was $15.3 million, up from $4.3 million in the previous year, while the net loss for the first half of 2024 was $22.7 million, compared to $9.4 million for the same period in 2023.

HCW Biologics has raised $8.0 million in 2024 through a combination of private placements and secured notes. However, the company acknowledges that there is substantial doubt about its ability to continue as a going concern for at least 12 months without additional funding.

On regulatory matters, HCW Biologics received notifications from Nasdaq indicating non-compliance with certain listing rules, including market value and minimum bid price requirements. The company has 180 days from the respective notice dates to address these deficiencies but cautions that there is no guarantee of regaining compliance.

HCW Biologics continues to focus on its mission of developing immunotherapies to tackle chronic, low-grade inflammation and age-related diseases. Utilizing its TOBI™ platform, the company aims to generate innovative, multifunctional fusion molecules with therapeutic properties. The lead molecules developed through this platform include HCW9218, HCW9302, HCW9206, and HCW9201. The University of Pittsburgh Medical Center plans to include HCW9218 in a Phase 2 clinical trial for advanced ovarian cancer in conjunction with chemotherapy.

Overall, HCW Biologics remains optimistic about its future, leveraging recent business milestones and focusing on its core mission of extending healthspan through advanced immunotherapeutic solutions.