Indaptus Therapeutics, Inc. SEC 10-K Report

Indaptus Therapeutics, Inc., a clinical-stage biotechnology company focused on developing innovative therapies for cancer and infectious diseases, has released its 2024 10-K report. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces as it advances its clinical development programs.

Financial Highlights

• Net Loss: The company reported a net loss of approximately $15.0 million for the year ended December 31, 2024, a slight improvement from the $15.4 million net loss in 2023.
• Net Loss Available to Common Stockholders Per Share, Basic and Diluted: $1.61, a decrease from $1.83 in 2023, reflecting a reduction in net loss per share.
• Total Operating Expenses: $15.4 million, a decrease of 6.2% from $16.4 million in 2023, primarily due to reductions in both research and development and general and administrative expenses.
• Research and Development Expenses: $7.2 million, a decrease of 4.9% from 2023, mainly due to reduced costs in the development of manufacturing processes for Decoy20.
• General and Administrative Expenses: $8.1 million, a decrease of 7.3% from 2023, attributed to lower legal fees, recruitment costs, and insurance expenses, partially offset by increased investor relations and business development expenses.
• Other Income, Net: $0.3 million, a significant decrease of 64.0% from 2023, primarily due to lower interest income from cash and cash equivalents.

Business Highlights

• Clinical Trials Progress: The company initiated a Phase 1 clinical trial for its lead candidate, Decoy20, targeting patients with advanced solid tumors. The trial is designed to assess safety, tolerability, and pharmacokinetics, with early signs of potential benefits observed in some patients.
• Regulatory Approvals: In February 2025, the company received clinical trial authorization from Health Canada, allowing the expansion of its ongoing U.S. clinical trial to Canadian sites.
• Product Development: The company's technology does not rely on targeting specific antigens, offering broad potential across multiple cancer indications. The approach involves using attenuated bacteria to activate both innate and adaptive immune responses.
• Partnerships and Collaborations: A clinical supply agreement was established with BeiGene Switzerland GmbH to evaluate Decoy20 in combination with BeiGene’s anti-PD-1 antibody, tislelizumab, for treating advanced solid tumors.
• Manufacturing and Production: Successful cGMP manufacturing and stability studies have been completed for Decoy20, with IND-enabling multi-dose toxicology studies showing no sustained induction of cytokine release syndrome.
• Preclinical Success: Preclinical models demonstrated significant single-agent anti-tumor activity and combination therapy-mediated regression in various cancer types, including non-Hodgkin’s lymphoma and colorectal carcinoma.
• Future Outlook: The company plans to advance Decoy20 into combination studies with checkpoint inhibitors and expand its bacterial product platform to target additional cancer types and infectious diseases.

Strategic Initiatives

• Strategic Focus: Indaptus Therapeutics, Inc. is focused on advancing its clinical development activities, particularly the Phase 1 clinical trial of its lead candidate, Decoy20, for patients with advanced solid tumors. The company is also exploring collaborations, strategic alliances, or license agreements to enhance its capital resources and support its research and development efforts.
• Capital Management: The company has engaged in several capital management activities, including completing multiple equity offerings in 2024 and early 2025, raising approximately $6.3 million net of expenses. These offerings included registered direct offerings and private placements with warrants. Additionally, the company entered into a Standby Equity Purchase Agreement (SEPA) with Yorkville, allowing for the sale of up to $20 million of common stock over 36 months. The company has no ongoing material financing commitments and has suspended its ATM program.
• Future Outlook: Indaptus anticipates needing additional capital resources to fund operations beyond the second quarter of 2025. The company plans to continue seeking equity or debt financing and may pursue collaborations or strategic partnerships to support its financial needs. The company acknowledges the potential for substantial dilution to stockholders if new financing is secured. There is substantial doubt about the company's ability to continue as a going concern without securing additional financing.

Challenges and Risks

• Limited Operating History and Profitability Concerns: Indaptus Therapeutics is a clinical-stage biotechnology company with a limited operating history, currently not profitable, and does not expect to become profitable in the near future. All product candidates are in the preclinical or early clinical development stage, and none have been approved for marketing. The company has incurred significant operating losses since inception, with a net loss of approximately $15.0 million for the year ended December 31, 2024, and an accumulated deficit of approximately $60.4 million as of December 31, 2024. The company expects to continue incurring losses as it expands development activities and seeks regulatory approvals.
• Going Concern Doubts: The company has identified conditions and events that raise substantial doubt regarding its ability to continue as a going concern. As of December 31, 2024, Indaptus had approximately $5.8 million in cash and used $12.3 million of cash in operations during the twelve months ended December 31, 2024. The company expects to continue to incur significant cash outflows and additional losses to execute its operating plan. Current cash and cash equivalents, together with proceeds from the January 2025 financing, are expected to fund operating expenses and capital expenditure requirements into the second quarter of 2025. The company will need to increase its capital resources through equity and/or debt financings, collaborations, strategic alliances, or license agreements with third parties. However, there is no assurance that new financing will be available on commercially acceptable terms or in the required amounts, if at all. This uncertainty raises substantial doubt about the company's ability to continue as a going concern. If unsuccessful in securing sufficient financing, the company may need to delay, reduce, or eliminate its research and development programs, which could adversely affect its business prospects or lead to the cessation of operations.
• Future Capital Requirements: The company's future capital requirements will depend on many factors, including the scope, progress, results, and costs of preclinical studies and clinical trials, the amount of revenues received under future licensing, collaboration, development, and commercialization arrangements, the impact of any pandemic or other future health crisis on business and operations, and the costs associated with being a public company. Even if the company believes it has sufficient funds for current or future operating plans, it may continue to seek additional capital if market conditions are favorable or in light of specific strategic considerations. Adequate additional financing may not be available on acceptable terms, or at all. If unable to obtain sufficient funding on a timely basis, in required amounts or on favorable terms, the company may be required to significantly delay, reduce or eliminate one or more of its research or product development programs and/or commercialization efforts. The company may also be unable to expand operations or otherwise capitalize on business opportunities as desired. Any of these events could materially adversely affect the company's financial condition and business prospects.
• Potential Dilution: Raising additional capital would cause dilution to shareholders and may restrict operations or require the company to relinquish rights to its technologies or product candidates. Until such time, if ever, as the company can generate substantial product revenues, it expects to finance its cash needs through a combination of equity and/or debt financings and collaborations, licensing agreements, or other strategic arrangements. To the extent that the company raises additional capital through the sale of equity or convertible debt securities, ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect shareholder rights.

SEC Filing: Indaptus Therapeutics, Inc. [ INDP ] - 10-K - Mar. 13, 2025