Statements in this Quarterly Report that are not strictly historical areforward-looking statements and include statements about products in development,results and analyses of pre-clinical studies, clinical trials and studies,research and development expenses, cash expenditures, and alliances andpartnerships, among other matters. You can identify these forward-lookingstatements because they involve our expectations, intentions, beliefs, plans,projections, anticipations, or other characterizations of future events orcircumstances. These forward-looking statements are not guarantees of futureperformance and are subject to risks and uncertainties that may cause actualresults to differ materially from those in the forward-looking statements as aresult of any number of factors. These factors include, but are not limited to,risks relating to our: ability to conduct and obtain successful results fromongoing pre-clinical and clinical trials, commercialize our technology, obtainregulatory approval for our product candidates, contract with third parties toadequately test and manufacture our proposed therapeutic products, protect ourintellectual property rights and obtain additional financing to continue ouroperations. Some of these factors are more fully discussed, as are otherfactors, in our Annual Report on Form 10-K for the fiscal year ended December31, 2019, as filed with the SEC, in our subsequent filings with the SEC as wellas in the section of this Quarterly Report entitled "Risk Factors" and elsewhereherein. We do not undertake to update any of these forward-looking statements orto announce the results of any revisions to these forward-looking statementsexcept as required by law.We urge you to read this entire Quarterly Report on Form 10-Q, including the"Risk Factors" section, the condensed consolidated financial statements, andrelated notes. As used in this Quarterly Report, unless the context otherwiserequires, the words "we," "us," "our," "the Company" and "Seneca" refers toSeneca Biopharma, Inc. and its subsidiary. Also, any reference to "commonshares" or "common stock," refers to our $.01 par value common stock. Anyreference to "Series A Preferred Stock" or "Preferred Stock" refers to ourSeries A 4.5% Convertible Preferred Stock. The information contained herein iscurrent as of the date of this Quarterly Report (March 31, 2020), unless anotherdate is specified. On July 17, 2019, we completed a 1-for-20 reverse stock splitof our common stock. All share and per shares information in this report havebeen adjusted to reflect the reverse stock split. We prepare our interimfinancial statements in accordance with U.S. GAAP. Our financials and results ofoperations for the three-month period ended March 31, 2020 are not necessarilyindicative of our prospective financial condition and results of operations forthe pending full fiscal year ending December 31, 2020. The interim financialstatements presented in this Quarterly Report as well as other informationrelating to our Company contained in this Quarterly Report should be read inconjunction and together with the reports, statements and information filed byus with the SEC.Our Management's Discussion and Analysis of Financial Condition and Results ofOperations or MD&A is provided, in addition to the accompanying condensedconsolidated financial statements and notes, to assist you in understanding ourresults of operations, financial condition and cash flows. Our MD&A is organizedas follows:
Executive Overview - Discussion of our business and overall analysis of
financial and other items affecting the Company in order to provide context for
Trends & Outlook - Discussion of what we view as the overall trends affecting
Critical Accounting Policies - Accounting policies that we believe are
important to understanding the assumptions and judgments incorporated in our
Results of Operations - Analysis of our financial results comparing the
three-month periods ended March 31, 2020 to the comparable period of 2019.
Liquidity and Capital Resources - An analysis of cash flows and discussion of
Our patented technology platform has three core components:
1. Over 300 lines of human, regionally specific neural stem cells, some of which
have the potential to be used to treat serious or life-threatening diseases
through direct transplantation into the central nervous system;
2. Proprietary screening capability - our ability to generate human neural stem
cell lines provides a platform for chemical screening and discovery of novel
compounds against nervous system disorders; and
3. Small molecules that resulted from Seneca's neurogenesis screening platform
To date, our technology platform has produced two lead assets in clinicaldevelopment: our NSI-566 stem cell therapy program and our NSI-189 smallmolecule program. A component of our current strategy is out-licensing and wehave recently initiated a formal out-licensing initiative aimed at securingpartners to advance the clinical development of these two programs.
In-licensing and Acquisition Strategy
Below is a description of our clinical programs, their intended indication andcurrent stage of development:
Motor Deficits Due to Ischemic Stroke
Amyotrophic Lateral Sclerosis
Chronic Spinal Cord Injury
Clinical Experience with NSI-566
Amyotrophic Lateral Sclerosis
Pre-Clinical Experience with NSI-566 and other candidates in our stem cellpipeline
NSI-189 (Small Molecule Pharmaceutical Compound)
Major Depressive Disorder (MDD)
Clinical Experience with NSI-189
Preclinical Experience with NSI-189
NSI-189 has shown promise in preclinical studies evaluating its impact in animalmodels for a number of different disease indications, including:
1. Ischemic stroke-in 2017 Tajiri and colleagues published a manuscript
reporting that NSI-189 ameliorated motor and neurological deficits in a
rodent model of ischemic stroke (Tajiri et al., J Cell Physiol 2017,
232(10):2731-2740)
2. Radiation-induced cognitive dysfunction-in 2018 Allen and colleagues
published a manuscript reporting that NSI-189 treatment could reverse
cognitive deficits in rats caused by cranial irradiation, a model of cranial
radiotherapy in the treatment of brain tumors (Allen et al., Radiat Res 2018,
189(4):345-353).
3. Angelman syndrome-in 2019 Liu and colleagues published a manuscript reporting
that NSI-189 reversed impairments in cognitive and motor deficits in a rodent
model of Angelman syndrome and increased synaptic strength in sections of
brains taken from these animals (Liu et al., Neuropharmacology 2019,
144:337-344). Angelman syndrome (AS) is a rare congenital genetic disorder
caused by a lack of function in the UBE3A gene on the maternal 15th
chromosome. It affects approximately one in 15,000 people - about 500,000
individuals globally. Symptoms of AS include developmental delay, lack of
speech, seizures, and walking and balance disorders.
4. Diabetes-associated peripheral neuropathy-in 2019 Jolivalt and colleagues
published a manuscript reporting that NSI-189 mitigated or reversed
disease-associated central and peripheral neuropathy in two rodent models of
diabetes (Jolivalt et al., Diabetes 2019, (11):2143-2154). Improvements
resulting from NSI-189 treatment were seen on multiple sensory and cognitive
Our Proprietary and Novel Screening Platform
Small Molecule Pharmaceutical Compounds.
In addition to patenting our technologies, we also rely on confidential andproprietary information and take active measures to control access to thatinformation, including the use of confidentiality agreements with our employees,consultants and certain of our contractors.
As of April 30, 2020, we had seven (7) full-time employees. We also use theservices of several outside consultants in business and scientific matters.
We generated no revenues from the sale of our proposed therapies for any of theperiods presented.
We have historically generated minimal revenue from the licensing of ourintellectual property to third parties as well as payments under a settlementagreement.
Research and Development Expenses
We have a wholly-owned subsidiary in the People's Republic of China thatprimarily oversees our current clinical trial to treat motor deficits due toischemic stroke.
General and Administrative Expenses
Comparison of Three Months Ended March 31, 2020 and 2019
Revenue
Operating expenses for the three months ended March 30 were as follows:
Research and Development Expenses
General and Administrative Expenses
Other income (expense)
Other expense, net totaled approximately ($5,585,000) and ($657,000) for thethree months ended March 31, 2020 and 2019, respectively.
Cash Flows - 2020 compared to 2019
Net cash used in operating activities $ (1,677,629 )$ (1,665,905 )$ (11,724 )
Net cash provided by financing activities $ 6,593,428$ (117,019 )$ 6,710,447
Net Cash Used in Operating Activities
Net Cash (Used in) Provided by Investing Activities
There were no investing activities in either of the three months ended March 31,2020 or 2019.
Net Cash Used in by Financing Activities
Edgar Online, source Glimpses
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SENECA BIOPHARMA : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q) - marketscreener.com
