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ZT

ZyVersa Therapeutics, Inc. (ZVSA)·Q1 2023 Earnings Summary

Executive Summary

  • ZyVersa remains pre-revenue and reported Q1 2023 net loss of $3.54M and diluted EPS of $(0.39); operating loss was $(4.59)M as operating expenses increased, while cash declined to $1.28M, and management stated cash is sufficient only on a month-to-month basis, necessitating additional financing .
  • Pipeline timelines were reiterated: IC 100 preclinical completion targeted by year-end with IND submission anticipated in Q2 2024; VAR 200 investigator-initiated trial in renal disease expected to begin in Q4 2023 .
  • YoY, R&D was essentially flat (~$1.06M), while G&A rose 53.7% to $3.54M due to higher D&O insurance, investor/public relations, and PIPE effectiveness failure payments; net loss improved by ~$0.2M YoY aided by a $1.05M tax benefit .
  • Wall Street consensus estimates from S&P Global for Q1 2023 EPS and revenue were unavailable; thus, estimate-based beat/miss analysis cannot be provided at this time.

What Went Well and What Went Wrong

What Went Well

  • Management reaffirmed development momentum across two proprietary platforms, citing “a very exciting time…as we seek to build shareholder value” and believing both VAR 200 and IC 100 “have transformative potential” .
  • IC 100 preclinical program on track for completion this year and IND filing in Q2 2024; multiple peer-reviewed publications supported ASC inhibition’s potential in neurological and liver diseases, reinforcing mechanistic validation .
  • Strengthened advisory and governance: added three nephrology experts to Renal SAB and an innate immunity authority to Inflammatory Disease SAB, alongside three biopharma leaders to the Board of Directors .

What Went Wrong

  • Liquidity tightness: cash was $1.28M at March 31, 2023, and management disclosed cash is only sufficient on a month-to-month basis, indicating an urgent need for additional financing .
  • Elevated G&A expenses: +53.7% YoY to $3.54M driven by higher D&O insurance (+$0.4M), investor relations marketing (+$0.4M), and payments related to PIPE effectiveness failure (+$0.4M) .
  • Continued operating losses: no revenue and operating loss of $(4.59)M; while net loss improved YoY due to tax benefit, the core loss profile remains substantial for a pre-revenue entity .

Financial Results

Income Statement Highlights (YoY)

MetricQ1 2022 (Oldest)Q1 2023 (Newest)
Revenues ($USD)$0.00 $0.00
Research and Development ($USD)$1,066,962 $1,055,943
General and Administrative ($USD)$2,301,369 $3,536,136
Total Operating Expenses ($USD)$3,368,331 $4,592,079
Operating Loss ($USD)$(3,368,331) $(4,592,079)
Pre-Tax Net Loss ($USD)$(3,748,495) $(4,591,001)
Income Tax Benefit ($USD)$0 $1,047,051
Net Loss ($USD)$(3,748,495) $(3,543,950)
Diluted EPS ($USD)$(0.16) $(0.39)
Weighted Avg Shares (Basic & Diluted)24,167,257 9,128,488

Notes: No revenue recognized in either period; net loss improvement in Q1 2023 primarily reflects a tax benefit .

Liquidity (Prior Quarter vs Current)

MetricQ4 2022 (Dec 31, 2022)Q1 2023 (Mar 31, 2023)
Cash and Equivalents ($USD)$5,902,199 $1,278,073
Total Current Assets ($USD)$6,362,546 $2,834,624
Total Current Liabilities ($USD)$8,187,960 $8,578,405
Deferred Tax Liability ($USD)$10,323,983 $9,276,932

Segment Breakdown

  • Not applicable. ZyVersa is a clinical-stage, pre-revenue biopharmaceutical company without reported operating segments .

KPIs

KPIQ1 2022Q1 2023
Total Operating Expenses ($USD)$3,368,331 $4,592,079
Operating Loss ($USD)$(3,368,331) $(4,592,079)
Net Loss ($USD)$(3,748,495) $(3,543,950)
Cash and Equivalents (Period-End) ($USD)N/A$1,278,073

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
IC 100 IND-enabling preclinical completionFY 2023Complete by end of year On track to complete by end of year Maintained
IC 100 IND submissionQ2 2024IND in Q2 2024 IND anticipated in Q2 2024 Maintained
VAR 200 investigator-initiated trial startQ4 2023Initiation expected Q4 2023 Trial initiation expected Q4 2023 Maintained
Financial guidance (revenue, margins, OpEx, tax rate, dividends)FY/Q1 2023None provided None provided; management emphasized need for additional financing N/A

Earnings Call Themes & Trends

  • No Q1 2023 earnings call transcript was available in our document catalog, so themes are extracted from press releases [List: earnings-call-transcript not found for period; see search results above].
TopicPrevious Mentions (Q-2)Previous Mentions (Q-1: Q4 2022)Current Period (Q1 2023)Trend
R&D execution (VAR 200)N/APlanning IIT in up to three renal indications, initiation expected Q4 2023 Continued progress to launch IIT; trial initiation expected Q4 2023 Steady execution
Regulatory timeline (IC 100)N/APrepare to complete IND-enabling studies by year-end; IND in Q2 2024 On track to complete IND-enabling preclinical by year-end; IND anticipated Q2 2024 Maintained
Scientific validation (ASC publications)N/AMultiple peer-reviewed papers on mechanism and CNS activity Several peer-reviewed articles supporting ASC inhibition in CNS and liver disease contexts Strengthening scientific narrative
Financing/liquidityN/ACash $5.9M; month-to-month sufficiency; need additional financing Cash $1.28M; month-to-month sufficiency; need additional financing Worsening liquidity
Governance/advisoryN/AAdded three Board members and three Renal SAB members Added three nephrology experts to Renal SAB and an innate immunity expert to Inflammatory Disease SAB; enhanced Board Continued build-out

Management Commentary

  • “This is a very exciting time in the growth and evolution of ZyVersa…We believe that both technologies have transformative potential, enabling development of drugs for patients who have limited or no therapeutic options.” — Stephen C. Glover, CEO .
  • “ZyVersa expects to complete IC 100’s preclinical program this year, with an Investigational New Drug (“IND”) submission anticipated in second quarter of 2024.” .
  • “We look forward to…advance our investigator-initiated trial to evaluate VAR 200 in patients with renal disease, expected to begin in the fourth quarter of 2023.” .
  • On Q4 2022 strategic inflection: “Our business combination…providing a gateway to the Nasdaq Global Market…enabling our R&D initiatives.” — Stephen C. Glover .

Q&A Highlights

  • No Q1 2023 earnings call transcript identified; therefore, there are no Q&A highlights to report for this period.

Estimates Context

  • S&P Global consensus estimates for Q1 2023 EPS and revenue for ZVSA were unavailable at time of retrieval; as a result, estimate-based comparison (beat/miss) cannot be provided.
  • Implication: In absence of consensus, investor focus will center on liquidity runway disclosures and pipeline milestone execution timelines .

Key Takeaways for Investors

  • Liquidity is the primary near-term risk: cash of $1.28M at quarter-end with management indicating month-to-month sufficiency and a need for additional financing .
  • Operating profile remains pre-revenue with persistent losses; Q1 operating loss $(4.59)M and net loss $(3.54)M, though YoY net loss improved via a tax benefit .
  • Pipeline milestones are clear and near-term: IC 100 preclinical completion (FY 2023), IND filing (Q2 2024), VAR 200 IIT start (Q4 2023), offering potential catalysts for sentiment if timelines are met .
  • G&A cost inflation warrants monitoring given increases tied to insurance, investor relations, and PIPE-related payments; resource allocation scrutiny is prudent in a constrained cash environment .
  • Scientific momentum has strengthened through peer-reviewed publications supporting ASC inhibition’s role in neuroinflammation and liver disease, bolstering mechanistic confidence for IC 100 .
  • Governance/advisory enhancements may aid execution quality and external credibility across renal and inflammatory disease programs .
  • With estimate data unavailable, traders should anchor decisions on financing developments and tangible pipeline progress against the stated timelines, as these are likely to drive stock reaction in the near term .