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Virios Therapeutics, Inc. (VIRI)·Q3 2023 Earnings Summary

Executive Summary

  • Q3 2023 delivered disciplined expense control with net loss of $1.24M and EPS of $(0.06), improving significantly year over year from $(2.58M) and $(0.28) on lower R&D spending .
  • The company extended runway, expecting capital to support operations into Q3 2024, a modest improvement from “at least the next 12 months” disclosed in Q2, aided by prior ATM proceeds and prudent OpEx .
  • Strategic progress: FDA guidance secured to progress IMC-1 to Phase 3 in fibromyalgia and briefing materials submitted to FDA for IMC-2 IND in Long-COVID; new provisional IP for IMC-2 including Alzheimer’s filed, potentially to 2043 .
  • Potential stock reaction catalysts: Phase 3 alignment and pK start for IMC-1, FDA feedback on IMC-2 IND (fatigue proposed as primary endpoint), and partnership discussions with multiple life sciences companies .

What Went Well and What Went Wrong

What Went Well

  • Expense discipline drove lower quarterly burn: R&D fell to $0.37M (from $1.62M YoY), with total OpEx down ~51% YoY to $1.27M .
  • Regulatory momentum: “secured FDA guidance” to progress IMC-1 into Phase 3; briefing materials submitted for IMC-2 IND in Long-COVID with no FDA-approved LC treatments currently .
  • Management engagement for strategic partnering: “several life science companies are engaged and reviewing our Phase 2 data and proposed Phase 3 program” (CEO Greg Duncan) .

What Went Wrong

  • No revenue; continued net losses reflect development-stage status with financing risk if timelines slip .
  • Dependency on external funding/partnerships: IMC-1 Phase 3 and IMC-2 advanced studies will require additional capital or collaboration despite extended runway .
  • Limited visibility on near-term clinical catalysts dates; FDA feedback timing on IMC-2 could slip into early 2024, introducing timeline uncertainty (Greg Duncan in Q&A) .

Financial Results

Quarterly Trend (Q1 → Q3 2023)

MetricQ1 2023Q2 2023Q3 2023
Revenue ($USD)$0 $0 $0
Research & Development ($USD)$497,714 $557,843 $374,200
General & Administrative ($USD)$1,059,573 $919,374 $900,089
Total Operating Expenses ($USD)$1,557,287 $1,477,217 $1,274,289
Net Loss ($USD)$(1,516,864) $(1,440,904) $(1,235,074)
Net Loss per Share (Basic & Diluted)$(0.08) $(0.08) $(0.06)
Weighted Avg Shares18,330,390 18,411,399 19,093,758
Cash at Period End ($USD)$5,332,542 $4,590,128 $4,786,117

Q3 YoY Comparison (Q3 2022 → Q3 2023)

MetricQ3 2022Q3 2023
Revenue ($USD)$0 $0
Research & Development ($USD)$1,622,374 $374,200
General & Administrative ($USD)$969,946 $900,089
Total Operating Expenses ($USD)$2,592,320 $1,274,289
Net Loss ($USD)$(2,575,715) $(1,235,074)
Net Loss per Share (Basic & Diluted)$(0.28) $(0.06)
Weighted Avg Shares9,199,955 19,093,758

KPIs (Operating focus)

KPIQ1 2023Q2 2023Q3 2023
Other Income ($USD)$40,423 $36,313 $39,215
Total Assets ($USD)$6,520,617 $5,212,119 $5,248,905
Total Liabilities ($USD)$549,290 $520,032 $487,144
Stockholders’ Equity ($USD)$5,971,327 $4,692,087 $4,761,761

Guidance Changes

MetricPeriod (as-of)Previous GuidanceCurrent GuidanceChange
Cash runwayQ1 2023 (May 11, 2023)—“Sufficient resources to support general R&D and administrative operations into Q2 2024.” Initiated guidance
Cash runwayQ2 2023 (Aug 10, 2023)Into Q2 2024 “Cash at June 30, 2023 together with $1.4M raised via Sales Agreement subsequent to quarter-end is sufficient to fund operating expenses and capital requirements for at least the next 12 months.” Maintained/clarified (added ATM proceeds)
Cash runwayQ3 2023 (Nov 13, 2023)“At least next 12 months” from Q2 base “Expects to have capital to support operations into Q3 of 2024.” Raised (explicit extension to Q3 2024)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2023)Trend
IMC-1 Phase 3 in FibromyalgiaFDA amenable to Phase 3 proposal; chronic tox data submitted; pK/food-effect study planned; factorial design arm proposed FDA guidance secured to progress to Phase 3; life sciences companies engaged on Phase 2 data and proposed Phase 3 program Advancing (regulatory clarity; partnering interest)
IMC-2 Long-COVIDPositive open-label data at Bateman Horne Center; plan to meet FDA to advance into Phase 2; follow-up double-blind study planned Briefing materials submitted to FDA for proposed IND; fatigue suggested as primary endpoint in Q&A; feedback expected 4–8 weeks, possibly early 2024 Advancing (toward IND)
Intellectual Property—New provisional method-of-use IP for IMC-2 in LC and Alzheimer’s; potential coverage to at least 2043 Strengthening IP
Expense Management/RunwayCompany targeting lower OpEx; Q1 guided runway into Q2 2024 Runway extended to Q3 2024 via prudent expense management Improving runway
Partnership Strategy—Multiple companies reviewing Phase 2 and proposed Phase 3 program as basis for potential forward development partnership Active outreach

Management Commentary

  • “Having secured FDA guidance on our plan to progress IMC-1 to Phase 3… several life science companies are engaged and reviewing our Phase 2 data and proposed Phase 3 program as the basis for a potential forward development partnership.” — Greg Duncan, Chairman & CEO .
  • “Submitted briefing materials to FDA concerning submission of a proposed investigational new drug application (IND) for IMC-2 as a treatment for LC. There are currently no FDA approved LC treatments.” .
  • “Through prudent expense management, the Company expects to have capital to support operations into Q3 of 2024.” .
  • Q&A context: “We think fatigue, for example, should be the primary endpoint… we should get feedback sometime in the next four to eight weeks… could bleed into the very early part of 2024.” — Greg Duncan .

Q&A Highlights

  • IND process for IMC-2 in Long-COVID: management submitted questions and proposed endpoints (fatigue primary); FDA feedback expected in 4–8 weeks, possibly early 2024, clarifying sample sizes and endpoints .
  • Endpoint selection rationale: fatigue highlighted as dominant LC symptom, shaping trial design .
  • Near-term catalysts: pK/food-effect study for IMC-1 and finalizing Phase 3 protocols (previously stated), plus partnership updates as diligence progresses .
  • Runway and financing: runway extended via expense discipline; prior ATM proceeds noted in Q2 context .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2023 EPS and revenue was unavailable for VIRI via S&P Global due to missing mapping; therefore, estimate comparisons are not provided [SpgiEstimatesError].
  • Given zero revenue and development-stage profile, the focus remains on OpEx, net loss trajectory, runway, and regulatory catalysts .

Key Takeaways for Investors

  • Cost discipline continues to reduce quarterly burn; net loss improved to $(1.24M) and EPS $(0.06), supporting extended runway into Q3 2024 .
  • Regulatory path is de-risking: FDA guidance secured for IMC-1 Phase 3; IMC-2 IND briefing submitted with proposed fatigue endpoint; feedback imminent, a potential near-term catalyst .
  • Partnering optionality: multiple companies engaged on IMC-1 Phase 3 plan; a collaboration could materially reduce financing risk and accelerate timelines .
  • IP expansion for IMC-2 (LC and Alzheimer’s) potentially extends protection to at least 2043, enhancing long-term strategic value .
  • Trading implications (short-term): watch for FDA feedback on IMC-2 IND and any partnership announcements; both could drive outsized moves given micro-cap status and binary catalysts .
  • Medium-term thesis: execution on IMC-1 Phase 3 setup (pK study start, protocol alignment) and initiation of LC Phase 2 program for IMC-2 underpin value creation; financing strategy (ATM vs. partner funding) remains central .
  • Risk flags: continued lack of revenue, reliance on regulatory outcomes and external funding, and potential delays in FDA feedback or study starts .

Additional references and context:

  • Q3 2023 earnings press release and financial tables .
  • Q2 2023 earnings press release and financial tables .
  • Q1 2023 earnings press release and financial tables .
  • Q3 2023 call transcript sources and Nov 6 pre-call notice .
  • Q3 press release on Nasdaq/GlobeNewswire mirrors .