Overview

Lipella Pharmaceuticals is a clinical-stage biotech company focused on reformulating existing generic drugs to create new treatments. This strategy combines the cost benefits of using existing drugs with potential patent protections for the new formulations. The company is focused on diseases with high unmet need and no approved treatments, which can help reduce the time and cost of gaining marketing approval.

LP-10 is Lipella’s lead product, which is a reformulated version of the approved drug tacrolimus, optimized for treating a rare disease called radiation-induced hemorrhagic cystitis (radiation cystitis). This painful bladder condition occurs in some cancer survivors after pelvic radiation therapy. In February 2021, Lipella began a clinical trial of LP-10, and reported positive results in Q1 2023 showing it reduced bleeding symptoms.

Lipella met with the FDA about these results in Q4 2023. The FDA granted LP-10 orphan drug status, which provides market exclusivity incentives. Lipella plans to start a phase 2b trial in Q2 2024 after finalizing the design with the FDA. There are currently no FDA-approved treatments for radiation cystitis patients.

Recent Developments

In April 2024, the FDA granted a meeting to discuss Lipella’s proposed phase 2b trial design for LP-10. The meeting is scheduled for May 21, 2024.

Financial Results

Revenue

In Q1 2024, Lipella recognized $146,000 in grant revenue, up from $118,000 in Q1 2023. This NIH grant funds Lipella’s research and was recently extended through 2024, providing total funding of $1.35 million.

Expenses

Research and development (R&D) expenses were $843,000 in Q1 2024, increased from $694,000 in Q1 2023. The $149,000 rise was driven by higher costs for clinical trials and operations.

General and administrative (G&A) expenses were $521,000 in Q1 2024, up slightly from $509,000 in Q1 2023, mainly due to salaries and investor relations.

Net Loss

The Q1 2024 net loss was $1.19 million compared to $1.07 million in Q1 2023. The increased loss reflects higher operating expenses.

Cash Position

Lipella held $2.1 million in cash and equivalents as of March 31, 2024. The company raised $5 million from its December 2022 IPO after underwriting discounts and offering expenses.

Lipella expects operating losses and negative cash flow to continue as it advances LP-10 and other early-stage programs. But based on current plans, existing cash should fund operations through end of 2024. Further funding would be needed to continue development programs.

Raising additional financing sufficient to support these plans remains a risk and could significantly impact timing and viability of development programs.

Going Concern

Lipella’s financial statements have been prepared under the assumption it will continue operating as a going concern. But the company has no products and expects ongoing losses, negative cash flow, and need for equity financing. These factors raise doubt about its ability to continue as a going concern.

In summary, Lipella reported increased R&D investment and continued net losses and cash burn in Q1 2024. But progress continues advancing lead program LP-10, including an upcoming FDA meeting to finalize next trial. Existing cash projected to support operations through 2024.