References in this report to "we," "us," "our," "the Company" and "Coronado"
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this Form 10-Q. Our consolidated financial statements have been prepared in accordance with U.S. GAAP. The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words "expect," "anticipate," "intend," "believe," "may," or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended
Since inception, we have been a biopharmaceutical company involved in the development of novel immunotherapy agents for the treatment of autoimmune diseases and cancer, namely CNDO-201 or Trichuris suis ova ("TSO") and CNDO-109, as more fully described below. As part of our growth strategy, we plan to identify, evaluate and potentially in-license, acquire or invest in pharmaceutical and biotechnology products, technologies and/or companies. We may also, from time to time, consider financing existing or later-acquired products, technologies or companies through partnerships, joint ventures, direct financings, and/or public or private spin-outs. We believe these activities will diversify our product development and, over time, may enhance shareholder value through potential royalty, milestone and equity payments, fees as well as potential product revenues.
Our two principal pharmaceutical product candidates currently in clinical development are:
• TSO, or CNDO-201, the microscopic eggs of the porcine whipworm, for the
treatment of autoimmune diseases, such as Crohn's disease, or CD, ulcerative
colitis, or UC, multiple sclerosis, or MS, autism, psoriasis, and type 1
diabetes, or T1D; and
• CNDO-109, a biologic that activates natural killer, or NK, cells of the immune
system to seek and destroy cancer cells, for the treatment of acute myeloid
We are continuing to evaluate the data from TRUST-I. We will use this analysis, along with the clinical study report of TRUST-II data, other current data on TSO and other factors to determine our future development plans for TSO. Our current focus is on our investigator initiated studies in psoriasis and autism.
Results of Operations General
To date, we have not generated any revenues from operations and, at
Research and Development Expenses
Conducting research and development is central to our business and aggregated expenses of
• employee-related expenses, which include salaries and benefits, and rent
• noncash stock-based compensation expense;
• license fees and milestone payments related to in-licensed products and
• expenses incurred under agreements with CROs, investigative sites and
consultants that conduct or provide other services relating to our clinical trials and our preclinical activities;
• the cost of acquiring clinical trial materials from third-party manufacturers;
• costs associated with non-clinical activities, patent filings and regulatory
We expect to continue to incur expenses related to our research and development activities for the foreseeable future as we develop our existing product candidates and new product candidates. Since product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later stage clinical trials, we expect that our research and development expenses may increase in the future. In addition, if our product development efforts are successful, we expect to incur substantial costs to prepare for potential commercialization of any late-stage product candidates and, in the event one or more of these product candidates receive regulatory approval, to fund the launch of the product.
From inception through
General and Administrative Expenses
General and administrative expenses consist principally of personnel-related costs, professional fees for legal, consulting, audit and tax services, rent and other general operating expenses not otherwise included in research and development and such expenses were
• support of our expanded research and development activities; and
• an expanding infrastructure and increased professional fees and other costs
associated with the regulatory requirements and increased compliance associated with being a public reporting company.
Comparison of three months ended
For the three months ended March 31, Change ($ in thousands) 2014 2013 $ % Operating expenses: Research and development
$ 4,487 $ 5,974 $ (1,487 )(25 )% General and administrative 2,095 2,484 (389 ) (16 )% Loss from operations (6,582 ) (8,458 ) 1,876 (22 )% Interest income 178 76 102 134 % Interest expense (966 ) (476 ) (490 ) 103 % Net loss $ (7,370 ) $ (8,858 ) $ 1,488(17 )%
Research and development expenses decreased
General and administrative expenses decreased
Interest expense in 2014 primarily relates to interest on the Hercules Note, which included a prepayment penalty of
Liquidity and Capital Resources
To date, we have funded our operations through the sale of debt and equity securities, aggregating
We may require additional financing to fully develop, and prepare regulatory filings and obtain regulatory approvals for our existing product candidates (and potentially new product candidates), fund operating losses, and, if deemed appropriate, establish or secure through third parties manufacturing for our potential products (and potentially new product candidates), sales and marketing capabilities. We have funded our operations to date primarily through the sale of equity and debt securities. We believe that our current cash is sufficient to fund operations for at least the next twelve months. Our failure to raise capital as and when needed would have a material adverse impact on our financial condition and our ability to pursue our business strategies. We may seek funds through equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing. Adequate additional funding, particularly subsequent to the negative results from our TRUST-I clinical trial, may not be available to us on acceptable terms or at all. If adequate funds are not available to us when needed, we may be required to delay, curtail or eliminate one or more of our research and development programs and, potentially, delay our growth strategy.