Rockville drug development company RegeneRx Biopharmaceuticals Inc. is aiming to secure some short-term funding, following a period of dwindling cash reserves and stalled clinical trials amid the coronavirus pandemic.
The biotech said this week it has verbally agreed to a short-term financing deal with a major stockholder, board members and management. That agreement would give it enough working capital through the first quarter of 2021, as the business waits for Arise-3, its late-stage clinical study for a dry eye treatment candidate, to complete this year — later than planned, after enrollment was delayed due to the pandemic.
RegeneRx has less cash than projected, currently sufficient to run through October of this year, it said. It expects the deal to close “shortly,” it said Monday, but “there is no guarantee” it will happen before the end of October “or at all.”
The company said Wednesday that it expects to finish enrolling individuals in the study in November and get results from the trial in December.
“We have been working diligently to secure financing for operations with a number of potential investors during a very challenging Covid situation and have been fortunate to have been able to reduce our cash use and extend our runway,” said President and CEO J.J. Finkelstein in a statement Monday. “I believe we should be able to consummate the currently contemplated transaction over the next week or so and strengthen our cash position while we await the completion and results of Arise-3. Once we receive a readout from Arise-3, we can determine how to proceed with any additional financings, as well as other strategic options.”
RegeneRx develops novel therapeutics to protect, repair and regenerate tissue and organs. The company now has three candidates in development for eye, skin, and traumatic brain injury and cardiac issues. That pipeline includes RGN-259, an eye drop in phase 3 trials for dry eye syndrome and neurotrophic keratitis, a degenerative disease that damages the cornea. The business also has multiple strategic licensing agreements — in the U.S., China, Europe and Pan Asia, which includes Korea, Japan and Australia.
RegeneRx is now considering evaluating another candidate, RGN-352 — an injectable for cardiac damage, chronic heart failure and nervous system pathologies that’s gone through phase 1 trials — as a Covid-19 treatment, “if it is able to obtain the requisite funding,” it said.
The company’s stock, which trades over the counter, closed down 3.44% Tuesday afternoon to $0.45 per share and remained unchanged by Wednesday afternoon.
RegeneRx received a $55,400 loan through the Small Business Administration’s Paycheck Protection Program in April. And as of June 30, the company had cash and cash equivalents totaling $377,594 and accumulated deficit totaling roughly $108 million, according to Securities and Exchange Commission filings. Without a commercialized product, the business reported $38,000 in revenue for the first half of 2020, the same as it had earned in 2019, from licensing fees. It also experienced a net loss of $823,000 for the first six months of 2020, more than the net loss of $721,000 it recorded for the first six months of 2019.
“We have not commercialized any product candidates to date and incurred net operating losses every year since our inception in 1982,” the company wrote in its filings, indicating a common problem for many smaller biotech companies. "We believe these losses will continue for the foreseeable future and may increase.”
The nearly 40-year-old drugmaker had three full-time employees as of March 20, according to SEC filings. That included Finkelstein, in addition to one part-time financial consultant and three independent contractors.
