Executive Summary

Virpax delivered a pre-revenue Q3 2023 with tightened operating loss and EPS versus prior year driven by lower R&D, while cash declined sequentially due to operating burn and a higher litigation accrual; no formal financial guidance was issued .
Management highlighted positive preclinical data: Probudur demonstrated 3–5x longer efficacy vs. Exparel in animal incision models, supporting plans to file IND and begin Phase 2 in 2024; Envelta IND targeted for mid-2024 with first-in-human in 2024 .
Litigation risk escalated: the Delaware Chancery Court found in favor of plaintiffs (Scilex/Sorrento) on most counts; Virpax increased its estimated litigation liability from $2.0M to $5.0M, a potential overhang and cash use catalyst .
Wall Street consensus via S&P Global was unavailable for EPS and revenue estimates; thus, there were no quantified beats/misses to report (S&P Global data unavailable).
Near-term stock reaction catalysts: additional preclinical results for Probudur/Envelta, any resolution or milestones in litigation, and licensing progress noted by management .

What Went Well and What Went Wrong

What Went Well

Probudur preclinical efficacy outperformed Exparel (3–5x longer effect) in animal models, supporting clinical readiness in 2024: “demonstrated significantly longer efficacy in animal models than the product currently on the market today” .
Envelta regulatory momentum: after a pre-IND meeting with FDA, Virpax expects mid-2024 IND and first-in-human trials in 2024, with NIH collaboration and support .
Non-dilutive strategy and licensing traction: “strong interest from potential licensing partners,” CRADAs across Rx programs, encouraging grant pipeline progress .

What Went Wrong

Litigation risk increased: court opinion against Virpax/Mack on several counts; estimated litigation liability raised to $5.0M, potentially leading to material loss and added uncertainty .
Sequential cash draw: cash fell to $12.15M at quarter end from $14.80M (Q2) and $16.99M (Q1), driven by operating losses and accruals; underscores funding runway considerations .
No revenue; increasing G&A (driven by salaries, board fees, travel, stock comp, professional fees) partially offsets lower litigation defense costs; R&D down YoY due to reduced activity in several programs, with mix shift toward Probudur .

Financial Results

Quarterly P&L and Cash (pre-revenue company)

Metric	Q1 2023	Q2 2023	Q3 2023
Revenue ($USD)	$0	$0	$0
General & Administrative ($USD)	$415,451	$1,948,700	$4,619,519
Research & Development ($USD)	$1,235,614	$1,290,787	$1,495,619
Total Operating Expenses ($USD)	$1,651,065	$3,239,487	$6,115,138
Operating Loss ($USD)	$(1,651,065)	$(3,239,487)	$(6,115,138)
Other Income ($USD)	$130,531	$126,720	$120,640
Net Loss ($USD)	$(1,520,534)	$(3,112,767)	$(5,994,498)
EPS (Basic & Diluted) ($USD)	$(0.13)	$(0.27)	$(0.51)
Cash and Equivalents ($USD)	$16,986,917	$14,804,000	$12,152,993
Estimated Litigation Liability ($USD)	$2,000,000	$2,000,000	$5,000,000

Notes: Margins (Gross/EBITDA/Net) are not applicable given no revenue reported .

Year-over-Year (Q3 2023 vs Q3 2022)

Metric	Q3 2022	Q3 2023
General & Administrative ($USD)	$4,910,039	$4,619,519
Research & Development ($USD)	$2,805,103	$1,495,619
Operating Loss ($USD)	$(7,715,142)	$(6,115,138)
Other Income ($USD)	$73,252	$120,640
Net Loss ($USD)	$(7,641,890)	$(5,994,498)
EPS (Basic & Diluted) ($USD)	$(0.65)	$(0.51)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Probudur IND/Phase 2 timeline	2024	Preclinical studies to initiate by year-end 2023; advancement supported by advisors/CMC buildout	“On track to file IND and begin Phase 2 trials of Probudur in 2024”	Maintained/clarified toward 2024 execution
Envelta IND submission	Mid-2024	“On track to file IND by Q2 2024”	“Expect to submit IND in mid-2024 and initiate first-in-human trials in 2024”	Clarified timing (Q2 → mid-2024), overall maintained
NobrXiol program	2023–2024	CRADA with NINDS/ETSP to evaluate NobrXiol	Continued CRADA work; focus on grant strategy	Maintained
Financial metrics (revenue, margins, OpEx, tax)	2023–2024	None provided	None provided	N/A

Earnings Call Themes & Trends

Note: We found no Q3 2023 earnings call transcript in our document set.

Topic	Previous Mentions (Q1 2023)	Previous Mentions (Q2 2023)	Current Period (Q3 2023)	Trend
Probudur efficacy & readiness	Added advisors; scale-up and preclinical initiation targeted end-2023	Added liposomal/nanotech expert; plan to initiate CRADA studies by year-end	3–5x longer efficacy vs Exparel in animal models; IND/Phase 2 targeted 2024	Positive momentum toward clinical
Envelta regulatory	Dose ranging completed; IND by Q2 2024	Continued progress; MET safety highlighted	Post pre-IND, IND mid-2024; first-in-human in 2024	Milestones clarified
NobrXiol CRADA	Engaged pediatric epilepsy experts	CRADA with NINDS/ETSP announced	Ongoing; grant strategy emphasized	Stable execution
Non-dilutive grants	Pursuing grants across Rx programs	CRADAs for all three Rx candidates; DOD/NIH engagement	Continued pursuit of grants, validation of assets	Consistent strategy
Licensing/OTC pipeline	Engaged advisors (Destum, NE Investors)	Strengthened org with new CFO	OTC subsidiary Novvae formed; active licensing discussions	Increasing commercial focus
Litigation/regulatory risk	—	—	Court opinion against Virpax/Mack; accrual increased; potential material loss	New headwind emerged

Management Commentary

“We recently announced results from two preclinical studies for Probudur™, our lead product candidate for post operative pain, that demonstrated significantly longer efficacy in animal models than the product currently on the market today.” — Anthony P. Mack, Chairman & CEO .
“Following our pre-IND meeting with the FDA, we expect to submit an IND for Envelta™, our non-addictive pain product candidate for acute and chronic pain, in mid-2024 and initiate first in human trials in 2024.” — Anthony P. Mack .
“We have had strong interest from potential licensing partners and are encouraged by the current level of activity.” — Anthony P. Mack .
Litigation update: “The Court found in favor of the plaintiffs… no damages judgment was specified… additional proceedings to determine the remedy.” — Company press release .

Q&A Highlights

No Q3 2023 earnings call transcript was found; therefore, no Q&A highlights are available in our document set.

Estimates Context

Wall Street consensus EPS and revenue via S&P Global were unavailable for VRPX for Q1–Q3 2023 (S&P Global data unavailable).
Without consensus, we cannot assess beats/misses; however, the quarter was pre-revenue with net loss and EPS improving YoY on lower R&D .
Estimates may need to incorporate litigation accrual changes and updated clinical timelines, particularly Probudur Phase 2 and Envelta IND timing .

Key Takeaways for Investors

Preclinical data for Probudur materially strengthens the clinical case vs. Exparel; IND/Phase 2 timing in 2024 is a potential catalyst for re-rating .
Envelta’s mid-2024 IND and first-in-human timelines, supported by NIH and MET platform, could unlock non-dilutive funding and partnership optionality .
The litigation ruling and increased accrual to $5.0M introduce overhang and potential cash impact; monitor remedy proceedings closely .
Cash declined to $12.15M; runway management remains critical given operating losses and program advancement costs .
Licensing interest and OTC subsidiary buildout (Novvae) indicate proactive monetization strategy; progress here could offset funding needs .
Near-term focus: additional preclinical readouts, IND filings, CRADA milestones; mid-term: Phase 2 initiation for Probudur and FIH for Envelta .
Risk-reward hinges on clinical execution and litigation resolution; any positive partnership or grant wins would be near-term supportive .

Appendix: Additional Contextual Data

Program and Operating Highlights in Q3 2023

CRADA with USAISR for Probudur extended to September 2024 .
OTC subsidiary Novvae Pharmaceuticals formed; leadership appointment .
Probudur preclinical dose escalation studies showed 3–5x longer efficacy vs. Exparel .
Litigation update and accrual increase; remedy phase pending .

Detailed Quarterly Operating Drivers

Q3 G&A decreased YoY ($4.6M vs. $4.9M) primarily due to lower legal defense costs net of accrual, partially offset by higher salaries, board fees, travel, stock comp, and professional fees .
Q3 R&D decreased YoY ($1.5M vs. $2.8M) driven by reduced preclinical activity in AnQlar, NobrXiol, and Epoladerm, partially offset by increased Probudur activity .
Operating loss improved YoY ($6.1M vs. $7.7M), net loss improved YoY ($6.0M vs. $7.6M), and EPS improved YoY ($(0.51) vs. $(0.65)) .

Prior Quarter Summaries (for trend analysis)

Q2 2023: G&A $1.95M; R&D $1.29M; Net loss $(3.11)M; EPS $(0.27); Cash $14.80M; NINDS CRADA for NobrXiol; CFO appointment .
Q1 2023: G&A $0.42M (D&O reimbursement benefited YoY); R&D $1.24M; Net loss $(1.52)M; EPS $(0.13); Cash $16.99M; MET toxicology completed; advisors engaged; licensing advisors retained .

Virpax Pharmaceuticals, Inc. (VRPX)·Q3 2023 Earnings Summary