Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 10, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36856 | |
Entity Registrant Name | HEPION PHARMACEUTICALS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-2783806 | |
Entity Address, Address Line One | 399 Thornall Street | |
Entity Address, Address Line Two | First Floor | |
Entity Address, City or Town | Edison | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 08837 | |
City Area Code | 732 | |
Local Phone Number | 902-4000 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | HEPA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 3,811,482 | |
Entity Central Index Key | 0001583771 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 42,993,359 | $ 51,189,088 |
Prepaid expenses | 2,813,046 | 5,306,985 |
Total current assets | 45,806,405 | 56,496,073 |
Property and equipment, net | 63,749 | 81,620 |
Right-of-use assets | 0 | 50,585 |
In-process research and development | 3,190,000 | 3,190,000 |
Other assets | 436,097 | 426,174 |
Total assets | 49,496,251 | 60,244,452 |
Current liabilities: | ||
Accounts payable | 3,168,012 | 2,665,896 |
Accrued expenses | 6,258,291 | 4,799,983 |
Operating lease liabilities, current | 0 | 53,614 |
Short-term portion of contingent consideration | 373,642 | 366,229 |
Total current liabilities | 9,799,945 | 7,885,722 |
Contingent consideration | 2,134,792 | 2,093,771 |
Deferred tax liability | 409,022 | 409,022 |
Total liabilities | 12,343,759 | 10,388,515 |
Commitments and contingencies (see Note 11) | ||
Stockholders' equity: | ||
Common stock—$0.0001 par value per share; 120,000,000 shares authorized, 3,811,482 and 3,811,481 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 381 | 381 |
Additional paid-in capital | 224,489,063 | 223,950,940 |
Accumulated other comprehensive loss | (70,815) | (90,168) |
Accumulated deficit | (188,961,265) | (175,701,344) |
Total stockholders' equity | 37,152,492 | 49,855,937 |
Total liabilities and stockholders' equity | 49,496,251 | 60,244,452 |
Series A | ||
Stockholders' equity: | ||
Convertible preferred stock | 855,808 | 855,808 |
Series C | ||
Stockholders' equity: | ||
Convertible preferred stock | $ 839,320 | $ 840,320 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 3,811,482 | 3,811,481 |
Common stock, shares outstanding (in shares) | 3,811,482 | 3,811,481 |
Series A | ||
Convertible preferred stock, par value (in dollars per share) | $ 10 | $ 10 |
Convertible preferred stock, shares issued (in shares) | 85,581 | 85,581 |
Convertible preferred stock, shares outstanding (in shares) | 85,581 | 85,581 |
Series C | ||
Convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Convertible preferred stock, shares issued (in shares) | 1,800 | 1,801 |
Convertible preferred stock, shares outstanding (in shares) | 1,800 | 1,801 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenues | $ 0 | $ 0 |
Cost and expenses: | ||
Research and development | 9,797,659 | 4,311,134 |
General and administrative | 3,411,506 | 2,941,334 |
Total operating expenses | 13,209,165 | 7,252,468 |
Loss from operations | (13,209,165) | (7,252,468) |
Other income (expense): | ||
Interest expense | (2,322) | (2,209) |
Change in fair value of contingent consideration | (48,434) | 324,992 |
Loss before income taxes | (13,259,921) | (6,929,685) |
Income tax benefit (expense) | 0 | 0 |
Net loss | $ (13,259,921) | $ (6,929,685) |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 3,811,482 | 3,811,445 |
Diluted (in shares) | 3,811,482 | 3,811,445 |
Net loss per common share: (see Note 10) | ||
Basic (in dollars per share) | $ (3.48) | $ (1.82) |
Diluted (in dollars per share) | $ (3.48) | $ (1.82) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (13,259,921) | $ (6,929,685) |
Other comprehensive income: | ||
Foreign currency translation | 19,353 | 9,146 |
Total other comprehensive income | 19,353 | 9,146 |
Comprehensive loss | $ (13,240,568) | $ (6,920,539) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders’ Equity - USD ($) | Total | Preferred Stock Series A | Preferred Stock Series C | Common Stock | Additional Paid in Capital | Accumulated other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 85,581 | 1,806 | 3,811,263 | ||||
Beginning balance at Dec. 31, 2021 | $ 92,995,003 | $ 855,808 | $ 845,320 | $ 381 | $ 224,794,789 | $ 0 | $ (133,501,295) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (6,929,685) | (6,929,685) | |||||
Other comprehensive income (loss) | 9,146 | 9,146 | |||||
Stock-based compensation expense | 556,610 | 556,610 | |||||
Conversion of preferred stock to common (in shares) | (5) | 2 | |||||
Conversion of Series C to common | 0 | $ (5,000) | 5,000 | ||||
Issuance of common stock, net (in shares) | 216 | ||||||
Issuance of common stock, net | 5,008 | 5,008 | |||||
Ending balance (in shares) at Mar. 31, 2022 | 85,581 | 1,801 | 3,811,481 | ||||
Ending balance at Mar. 31, 2022 | 86,636,082 | $ 855,808 | $ 840,320 | $ 381 | 225,361,407 | 9,146 | (140,430,980) |
Beginning balance (in shares) at Dec. 31, 2022 | 85,581 | 1,801 | 3,811,481 | ||||
Beginning balance at Dec. 31, 2022 | 49,855,937 | $ 855,808 | $ 840,320 | $ 381 | 223,950,940 | (90,168) | (175,701,344) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (13,259,921) | (13,259,921) | |||||
Other comprehensive income (loss) | 19,353 | 19,353 | |||||
Stock-based compensation expense | 537,123 | 537,123 | |||||
Conversion of preferred stock to common (in shares) | (1) | ||||||
Conversion of Series C to common | 0 | $ (1,000) | 1,000 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 85,581 | 1,800 | 3,811,482 | ||||
Ending balance at Mar. 31, 2023 | $ 37,152,492 | $ 855,808 | $ 839,320 | $ 381 | $ 224,489,063 | $ (70,815) | $ (188,961,265) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (13,259,921) | $ (6,929,685) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 1,930,753 | 1,541,450 |
Depreciation | 18,037 | 22,730 |
Change in fair value of contingent consideration | 48,434 | (324,992) |
Changes in operating assets and liabilities: | ||
Accounts payable and accrued expenses | 566,623 | 76,304 |
Right of use asset | 50,585 | 67,170 |
Operating lease liability | (53,614) | (69,652) |
Prepaid expenses and other assets | 2,484,590 | (4,512,635) |
Net cash used in operating activities | (8,214,513) | (10,129,310) |
Cash flows from investing activities: | ||
Purchases of property and equipment | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Cash flows from financing activities: | ||
Contingent consideration milestone payment | 0 | (2,000,000) |
Net cash used in financing activities | 0 | (2,000,000) |
Effect of exchange rates on cash | 18,784 | 3,169 |
Net decrease in cash | (8,195,729) | (12,126,141) |
Cash at beginning of period | 51,189,088 | 91,348,967 |
Cash at end of period | 42,993,359 | 79,222,826 |
Supplementary disclosure of non-cash financing activities: | ||
Conversion of Series C convertible preferred stock | 1,000 | 5,000 |
Issuance of common stock in conjunction with milestone payment | $ 0 | $ 5,008 |
Business Overview
Business Overview | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview | Business Overview Hepion Pharmaceuticals, Inc. (we, our, or us) is a biopharmaceutical company headquartered in Edison, New Jersey, focused on the development of drug therapy for treatment of chronic liver diseases. This therapeutic approach targets fibrosis, inflammation, and shows potential for the treatment of hepatocellular carcinoma (“HCC”) associated with non-alcoholic steatohepatitis (“NASH”), viral hepatitis, and other liver diseases. Our cyclophilin inhibitor, rencofilstat (formerly CRV431), is being developed to offer benefits to address multiple complex pathologies related to advanced liver disease. Rencofilstat is a cyclophilin inhibitor that targets multiple pathologic pathways involved in the progression of liver disease. We are developing rencofilstat as our lead molecule. Rencofilstat is a compound that binds and inhibits the function of a specific class of isomerase enzymes called cyclophilins that regulate protein folding. Many closely related isoforms of cyclophilins exist in humans. Cyclophilins A, B, and D are the best characterized cyclophilin isoforms. Inhibition of cyclophilins has been shown in the scientific literature to have therapeutic effects in a variety of experimental models, including liver disease models. On May 10, 2018, we submitted an Investigational New Drug Application (“IND”) to the U.S. Food and Drug Administration (“FDA”) to support initiation of our rencofilstat HBV clinical development program in the United States and received approval in June 2018. We completed the first segment of our Phase 1 clinical activities for rencofilstat in October 2018 wherein we reached a major clinical milestone of positive data from a Phase I trial of rencofilstat in humans. This achievement triggered the first milestone payment, as stated in the May 26, 2016 acquisition agreement between us and Ciclofilin Pharmaceuticals, Inc. (“Ciclofilin”) (the “Merger Agreement") for the acquisition of Ciclofilin and we paid a related milestone payment of approximately $0.3 million to Aurinia Pharmaceuticals, Inc. ("Aurinia") and $0.7 million to the former Ciclofilin shareholders along with the issuance of 72 shares of our common stock with a fair value of $0.1 million, representing 2.5% of our issued and outstanding common stock as of June, 2016, to the former Ciclofilin shareholders. Our CEO is a former Ciclofilin shareholder and received approximately $0.3 million and 30 shares of common stock. Additional milestone payments could potentially be payable to the former Ciclofilin shareholders pursuant to the Ciclofilin Merger Agreement as follows: (i) upon receipt of Phase II positive data from a proof of concept clinical trial of rencofilstat in humans - 216 shares of common stock and $3.0 million, (ii) upon initiation of a Phase III trial of rencofilstat - $5.0 million, and (iii) upon acceptance by the FDA of a new drug application for rencofilstat - $8.0 million. In addition, on February 14, 2014, Ciclofilin had entered into a Purchase and Sale Agreement to acquire Aurinia’s entire interest in rencofilstat. This agreement contains future milestone payments payable by us based on clinical and marketing milestones of up to CAD $2.5 million. The milestone payments payable to the former Ciclofilin shareholders will be subject to offset by certain of the clinical and marketing milestone payments payable to Aurinia as follows: (a) the payments to the former Ciclofilin shareholders pursuant to (ii) above would be offset by payment to Aurinia of CAD $0.5 million, and (b) the payments to the former Ciclofilin shareholders pursuant to (iii) above would be subject to offset by payment to Aurinia of up to CAD $2.0 million. In addition to the above clinical and milestone payments, the Aurinia Agreement provides for the following additional contingent payment obligations: (x) a royalty of 2.5% on net sales of rencofilstat which is uncapped, (y) a royalty of 5.0% on license revenue from rencofilstat and (z) a payment equal to 30.0% of the proceeds from a Liquidity Event (as defined in the Purchase and Sale Agreement) with respect to Ciclofilin, of which approximately $0.2 million plus interest will be paid to Aurinia. The maximum obligation under both (y) and (z) is CAD $5.0 million. The Merger Agreement was amended on January 14, 2022 for the following: (i) upon receipt of Phase II positive data from the first Phase II clinical trial of rencofilstat in NASH patients which has been achieved: (1) such number of validly issued, fully paid and non-assessable shares of our common stock equal to 7.5% of the issued and outstanding of our common stock on the Closing Date as defined in the original agreement, which 216 was issued in March 2022, and (2) a payment of $2.0 million, made in January 2022 to Ciclofilin shareholders, including a payment to our CEO of $0.8 million and other Hepion employees of $0.2 million, (ii) a payment of $1.0 million upon the positive read out of the first planned interim futility analysis of a Phase IIb clinical trial of rencofilstat in NASH patients, supporting the continuation of the Phase IIb trial. The original agreement required a $3.0 million payment upon receipt of Phase II positive data from a proof-of-concept clinical trial of CRV431, (iii) a payment of $5.0 million upon initiation of the first Phase III trial of rencofilstat in patients, where initiation occurs with first patient in the study dosed with study medication, which remains unchanged from the original agreement, (iv) a payment of $5.0 million upon the filing and acceptance by the U.S. Food and Drug Administration of the first new drug application for rencofilstat, which was $8.0 million in the original agreement; and (v) a payment of $8.0 million upon the regulatory approval by the U.S. Food and Drug Administration of the first new drug application for rencofilstat. On June 17, 2019, we submitted an IND to the FDA to support initiation of our rencofilstat NASH clinical development program in the United States and received approval in July 2019. We completed dosing of rencofilstat in our multiple ascending dose (“MAD’) clinical trial in September 2020. On July 13, 2021, we announced positive topline results from our Phase 2a "Ambition" NASH clinical trial. All primary endpoints of the trial were met. This Phase 2a study confirmed rencofilstat tolerability and successfully elucidated drug dose range for the upcoming Phase 2b trial. On September 13, 2021, we announced additional positive data from the Phase 2a Ambition trial and the initiation of the Phase 2b "Ascend" NASH clinical trial. On November 20, 2020, we submitted an IND to the FDA to support initiation of a rencofilstat clinical development program in the United States for COVID-19. We received approval December 17, 2020, to conduct a COVID-19 clinical trial and are investigating potential sources of collaboration and/or funding for the trial. To date, we have not sourced funding yet. On November 19, 2021 we submitted an IND to the FDA to support initiation of a rencofilstat clinical development program in the United States for the treatment of HCC and received approval on December 17, 2021. On November 30, 2021, the FDA granted Fast Track designation for our lead drug candidate, rencofilstat, for the treatment of NASH. The FDA Fast Track designation allows sponsors to gain access to expedited drug approval reviews for medical conditions that are serious and potentially life-threatening, and where there is an unmet medical need. The program is also designed to facilitate drug development by making provisions for more frequent meetings with the FDA to discuss drug development plans, and Fast Track designation can lead to Accelerated Approval and/or Priority Review eligibility if certain criteria are met. On June 20, 2022, the FDA granted Orphan Drug Designation to rencofilstat, a liver-targeting, orally administered, novel cyclophilin inhibitor, for the treatment of HCC. The FDA Orphan Drug Designation program provides orphan status to drugs or biologics intended for the prevention, diagnosis, or treatment of diseases that affect fewer than 200,000 people in the United States. Sponsors of medicines that are granted Orphan Drug Designation are entitled to certain incentives, including tax credits for qualified clinical trials, prescription drug user-fee exemptions, and potential seven-year marketing exclusivity upon FDA approval. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation These unaudited condensed consolidated financial statements have been prepared following the requirements of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim reporting. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary to present fairly our interim financial information. The consolidated balance sheet as of December 31, 2022, was derived from the audited annual consolidated financial statements but does not include all disclosures required by U.S. GAAP. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2022, contained in our Annual Report on Form 10-K filed with the SEC on April 10, 2023. Principles of Consolidation The accompanying condensed consolidated financial statements include our accounts and the accounts of our subsidiaries, Contravir Research Inc. and Hepion Research Corp, which conduct their operations in Canada. All intercompany balances and transactions have been eliminated in consolidation. Going Concern As of March 31, 2023, we had $43.0 million in cash, an accumulated deficit of $189.0 million, and working capital of $36.0 million. For the three months ended March 31, 2023, cash used in operating activities was $8.2 million and we had a net loss of $13.3 million . We have not generated revenue to date and have incurred substantial losses and negative cash flows from operations since our inception. We have historically funded our operations through issuances of convertible debt, common stock and preferred stock. We expect to continue to incur losses for the next several years as we expand our research, development and clinical trials of rencofilstat. We are unable to predict the extent of any future losses or when we will become profitable, if at all. These condensed consolidated financial statements have been prepared under the assumption that we will continue as a going concern. Due to our recurring and expected continuing losses from operations, we have concluded there is substantial doubt in our ability to continue as a going concern within one year of the issuance of these condensed consolidated financial statements without additional capital becoming available to attain further operating efficiencies and, ultimately, to generate revenue. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. We will be required to raise additional capital within the next year to continue the development and commercialization of our current product candidate and to continue to fund operations at the current cash expenditure levels. We cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct business. If we are unable to raise additional capital when required or on acceptable terms, we may have to (i) significantly delay, scale back or discontinue the development and/or commercialization of one or more product candidates; (ii) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to technologies, product candidates or products that we would otherwise seek to develop or commercialize on unfavorable terms. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Changes in estimates and assumptions are reflected in reported results in the period in which they become known. Actual results could differ from those estimates. Our significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2022, included in our Annual Report on Form 10-K. Since the date of such consolidated financial statements, there have been no changes to our significant accounting policies. Cash As of March 31, 2023 and December 31, 2022, cash was $43.0 million and $51.2 million, respectively, consisting of checking accounts held at U.S. and Canadian commercial banks. At certain times, our cash balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits. We believe it mitigates our risk by depositing our cash balances with high credit, quality financial institutions. We have never experienced losses related to these balances. Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a three-tier fair value hierarchy that distinguishes among the following: • Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we can access. • Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly. • Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Financial instruments consist of cash, accounts payable, and contingent consideration. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature, except for contingent consideration, which is recorded at fair value at the end of each reporting period. We recorded contingent consideration from the 2016 acquisition of Ciclofilin, which is required to be carried at fair value. See Note 5 for additional information on the fair value of the contingent consideration. Property, equipment and depreciation As of March 31, 2023 and December 31, 2022, we had $0.1 million and $0.1 million, respectively, of property and equipment, consisting primarily of lab equipment, computer equipment, and furniture and fixtures. Expenditures for additions, renewals and improvements will be capitalized at cost. Depreciation will generally be computed on a straight-line method based on the estimated useful lives of the related assets. The estimated useful lives of the depreciable assets are 3 to 7 years. Leasehold improvements are amortized using the straight-line method over their estimated useful lives, or the remaining term of the lease, whichever is shorter. Expenditures for repairs and maintenance are charged to operations as incurred. We will periodically evaluate whether current events or circumstances indicate that the carrying value of our depreciable assets may not be recoverable. There were no adjustments to the carrying value of property and equipment at March 31, 2023 or December 31, 2022. In-Process Research & Development In accordance with ASC Topic 350, Intangibles — Goodwill and Other (“ASC Topic 350”), acquired In-Process Research and Development ("IPR&D") was determined to have an indefinite life and, therefore, are not amortized. Instead, it is tested for impairment annually, in our fourth quarter, and between annual tests if we become aware of an event or a change in circumstances that would indicate the carrying value may be impaired. IPR&D acquired in a business combination is capitalized as indefinite-lived assets on our consolidated balance sheets at the acquisition-date fair value. IPR&D relates to amounts that arose in connection with the acquisition of Ciclofilin. Once the project is completed, the carrying value of the IPR&D is reclassified to other intangible assets, net and is amortized over the estimated useful life of the asset. Post-acquisition research and development expenses related to the IPR&D projects are expensed as incurred. The projected discounted cash flow models used to estimate the fair values of our IPR&D assets, acquired in connection with the Ciclofilin acquisition, reflect significant assumptions regarding the estimates a market participant would make in order to evaluate a drug development asset, including: (i) probability of successfully completing clinical trials and obtaining regulatory approval; (ii) market size, market growth projections, and market share; (iii) estimates regarding the timing of and the expected costs to advance clinical programs to commercialization; (iv) estimates of future cash flows from potential product sales; and (v) a discount rate. These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The use of different inputs and assumptions could increase or decrease our estimated discounted future cash flows, the resulting estimated fair values and the amounts of related impairments, if any. The annual, or interim (if events or changes in circumstances indicate that it is more likely than not that the asset is impaired), IPR&D impairment test is performed by comparing the fair value of the asset to the asset’s carrying amount. When testing indefinite-lived intangibles for impairment, we may assess qualitative factors for its indefinite-lived intangibles to determine whether it is more likely than not that the asset is impaired. Alternatively, we may bypass this qualitative assessment for our indefinite-lived intangible asset and perform the quantitative impairment test that compares the fair value of the indefinite-lived intangible asset with the asset’s carrying amount. If IPR&D becomes impaired or is abandoned, the carrying value of the IPR&D is written down to the revised fair value with the related impairment charge recognized in the period in which the impairment occurs. If the carrying value of the asset becomes impaired as the result of unfavorable data from any ongoing or future clinical trial, changes in assumptions that negatively impact projected cash flows, or because of any other information regarding the prospects of successfully developing or commercializing our programs, we could incur significant charges in the period in which the impairment occurs. We performed a qualitative assessment of IPR&D at March 31, 2023 and a quantitative assessment for fiscal year 2022 and determined that the asset was not impaired. Income Taxes We account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect to recover or settle those temporary differences. We recognize the effect of a change in tax rates on deferred tax assets and liabilities in the results of operations in the period that includes the enactment date. We reduce the measurement of a deferred tax asset, if necessary, by a valuation allowance if it is more likely than not that we will not realize some or all of the deferred tax asset. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is “more-likely-than-not” that the position will be sustained upon examination. Potential interest and penalties associated with unrecognized tax positions are recognized in income tax expense. We continue to maintain a full valuation allowance for our U.S and foreign net deferred tax assets. Under the provisions of the Internal Revenue Code, the net operating loss (NOL) and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, respectively, as well as similar state tax provisions. This could limit the amount of tax attributes that we can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will be determined based on our value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The utilization of these NOLs is subject to limitations based on past and future changes in our ownership pursuant to Section 382. We completed a Section 382 study of transactions in our stock through December 31, 2021 and concluded that we have experienced ownership changes since inception that we believe under Section 382 and 383 of the Internal Revenue Code will result in limitations on our ability to use certain pre-ownership change NOLs and credits. We are not aware of any ownership changes in 2023 or 2022. In addition, we may experience subsequent ownership changes as a result of future equity offerings or other changes in the ownership of our stock, some of which are beyond our control. As a result, the amount of the NOLs and tax credit carryforwards presented in our consolidated financial statements could be further limited. Similar provisions of state tax law may also apply to limit the use of accumulated state tax attributes. Contingencies In the normal course of business, we are subject to loss contingencies, such as legal proceedings and claims arising out of our business that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, product and environmental liability, and tax matters. In accordance with ASC Topic 450, Accounting for Contingencies , (“ASC 450”), we record accruals for such loss contingencies when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. In accordance with this guidance, we do not recognize gain contingencies until realized. Research and Development Research and development costs, which include expenditures in connection with an in-house research and development laboratory, salaries and staff costs, application and filing for regulatory approval of proposed products, purchased in-process research and development, license costs, regulatory and scientific consulting fees, as well as contract research, insurance and FDA consultants, are accounted for in accordance with ASC Topic 730, Research and Development , (“ASC 730”). Also, as prescribed by this guidance, patent filing and maintenance expenses are considered legal in nature and therefore classified as general and administrative expense, if any. We do not currently have any commercial biopharmaceutical products and do not expect to have such for several years, if at all. Accordingly, our research and development costs are expensed as incurred. While certain of our research and development costs may have future benefits, our policy of expensing all research and development expenditures is predicated on the fact that we have no history of successful commercialization of product candidates to base any estimate of the number of future periods that would be benefited. Also as prescribed by ASC 730, non-refundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred and capitalized. As the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided, the deferred amounts would be recognized as an expense. At March 31, 2023 and December 31, 2022, we had prepaid research and development costs of $2.5 million and $4.7 million, respectively. Share-based payments ASC Topic 718, Compensation—Stock Compensation (“ASC 718”), requires companies to measure the cost of employee and non-employee services received in exchange for the award of equity instruments based on the estimated fair value of the award at the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award. Generally, we issue stock options with only service-based vesting conditions and record the expense for awards using the straight-line method (see Note 9). We account for awards granted to employees that are in excess of what is available to grant as a liability recorded at fair value each reporting period in the consolidated financial statements (see Note 8). The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The estimated expected stock volatility is based on the historical volatility of our own traded stock price. The expected term of stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that we have never paid cash dividends and do not expect to pay any cash dividends in the foreseeable future. ASC 718 allows for the election of forfeitures to be estimated at the time of grant and revised if necessary, in subsequent periods if actual forfeitures differ from those estimates. Our actual historical forfeiture rate of 3% was used for the three months ended March 31, 2023 and 2022. We will continue to analyze the forfeiture rate on at least an annual basis or when there are any identified triggers that would justify immediate review. Foreign Exchange The functional currency of Hepion Pharmaceuticals, Inc. and ContraVir Research Inc. is the U.S. dollar. The functional currency of Hepion Research Corp. is the Canadian dollar. Assets and liabilities of Hepion Research Corp. are translated into U.S. dollars using period-end exchange rates; income and expenses are translated using the average exchange rates for the reporting period. Unrealized foreign currency translation adjustments are deferred in accumulated other comprehensive loss, a separate component of shareholders’ equity. The amount of currency translation adjustment was $70,815 and $90,168 at March 31, 2023 and December 31, 2022, respectively. Transactions in foreign currencies are remeasured into the functional currency of the relevant subsidiaries at the exchange rate in effect at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into the functional currency at exchange rates in effect at the balance sheet date or on settlement. Resulting gains and losses are recorded in general and administrative expense within the consolidated statements of operations. The impact of foreign exchange gains (losses) was $25,433 and $(35,196) for the three months ended March 31, 2023 and 2022, respectively. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker views our operations and manages the business in one segment. Net loss per share Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share , (“ASC 260”) for all periods presented. In accordance with this guidance, basic and diluted net loss per common share was determined by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding during the period. Recent Accounting Pronouncements There are no recent accounting pronouncements that will have a material effect on our condensed consolidated financial statements for the three months ended March 31, 2023. |
Stockholders' Equity and Deriva
Stockholders' Equity and Derivative Liability - Warrants | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity and Derivative Liability - Warrants [Abstract] | |
Stockholders' Equity and Derivative Liability - Warrants | Stockholders’ Equity and Derivative Liability — Warrants Series A Convertible Preferred Stock On October 14, 2014, our Board of Directors authorized the sale and issuance of up to 1,250,000 shares of Series A Convertible Preferred Stock (the “Series A”). All shares of the Series A were issued between October 2014 and February 2015. Each share of the Series A is convertible at the option of the holder into the number of shares of common stock determined by dividing the stated value of such share by the conversion price that is subject to adjustment. As of March 31, 2023, there were 85,581 shares outstanding. During the three months ended March 31, 2023 and 2022, no shares of the Series A were converted. If we sell common stock or equivalents at an effective price per share that is lower than the conversion price, the conversion price may be reduced to the lower conversion price. The Series A will be automatically convertible into common stock in the event of a fundamental transaction as defined in the offering. Series C Convertible Preferred Stock Issuance On July 3, 2018, we completed a rights offering pursuant to our effective registration statement on Form S-1. We offered for sale units in the rights offering and each unit sold in connection with the rights offering consisted of 1 share of our Series C Convertible Preferred Stock, or Series C, and common stock warrants (the “Rights Offering”). Upon completion of the offering, pursuant to the rights offering, we sold an aggregate of 10,826 units at an offering price of $1,000 per unit comprised of 10,826 shares of Series C and 4,446 common stock warrants that will expire in July 2023. As of March 31, 2023, there were 1,800 shares of Series C outstanding. During the three months ended March 31, 2023, 1 share of the Series C were converted into 1 share of our common stock and during the three months ended March 31, 2022, 5 shares of the Series C were converted into 2 shares of our common stock. Each share of Series C is convertible into common stock at any time at the option of the holder thereof at the conversion price then in effect. The conversion price for the Series C is determined by dividing the stated value of $1,000 per share by $0.08 per share (subject to adjustments upon the occurrence of certain dilutive events). |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table presents our liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy at March 31, 2023 and December 31, 2022. Fair Value Measurement at Reporting Date Using Description Fair value (Level 1) (Level 2) (Level 3) As of March 31, 2023: Contingent consideration $ 2,508,434 $ — $ — $ 2,508,434 As of December 31, 2022: Contingent consideration $ 2,460,000 $ — $ — $ 2,460,000 Contingent consideration was recorded for the acquisition of Ciclofilin Pharmaceuticals, Inc. (Ciclofilin) on June 10, 2016. The contingent consideration represented the acquisition date fair value of potential future payments, to be paid in cash and our stock, upon the achievement of certain milestones and was estimated based on a probability-weighted discounted cash flow model. At March 31, 2023 and December 31, 2022, the assumptions we used to calculate the fair value were as follows: Assumptions March 31, December 31, Discount rate 8.5% 8.5% Projected milestone achievement dates Dec 2023 — Dec 2028 Dec 2023 — Dec 2028 Probability of success of milestone achievements 13 % — 40% 13 % — 40% As of March 31, 2023, $2,134,792 was classified as a non-current liability based upon management's best estimate using the latest available information. Management reviewed the assumptions and there were no changes for the three months ended March 31, 2023. The following table presents the change in fair value of the contingent consideration for the three months ended March 31, 2023. Acquisition-related Contingent Consideration Liabilities: Balance at December 31, 2022 $ 2,460,000 Change in fair value recorded in earnings 48,434 Balance at March 31, 2023 $ 2,508,434 |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost and depreciated using the straight-line method, based on useful lives as follows: Estimated Useful Life (in years) March 31, December 31, Equipment 3 years $ 326,815 $ 326,382 Furniture and fixtures 7 years 62,183 62,183 Less: Accumulated depreciation (325,249) (306,945) $ 63,749 $ 81,620 |
Indefinite-lived Intangible Ass
Indefinite-lived Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Indefinite-lived Intangible Assets | Indefinite-lived Intangible Assets IPR&D Our IPR&D asset consisted of the following at: Indefinite-lived Rencofilstat balance at December 31, 2022 $ 3,190,000 Change during the three months ended March 31, 2023 — Rencofilstat balance at March 31, 2023 $ 3,190,000 No impairment losses were recorded on IPR&D during the three months ended March 31, 2023 and 2022. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following: March 31, December 31, Payroll and related costs $ 360,613 $ 838,683 Stock-based compensation - see Note 9 3,300,031 1,906,401 Research and development 2,389,560 1,716,035 Professional fees 153,774 246,664 Other 54,313 92,200 Total accrued expenses $ 6,258,291 $ 4,799,983 |
Accounting for Share-Based Paym
Accounting for Share-Based Payments | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Accounting for Share-Based Payments | Accounting for Share-Based PaymentsOn June 3, 2013, we adopted the 2013 Equity Incentive Plan (the “Plan”). Stock options granted under the Plan typically will vest after three years of continuous service from the grant date and will have a contractual term of ten years. We granted options during the three months ended June 30, 2022 and 2021, and at the time that these grants were made, we did not have any options available for grant under the Plan. We accounted for these option grants as liability-classified awards requiring us to measure the fair value of the awards each reporting period since there were not enough shares available at the time of the grant. As of March 31, 2023, the liability related to the awards was $3.3 million and is included in accrued expenses in our condensed consolidated balance sheets with the corresponding expense included in our condensed consolidated statements of operations and comprehensive loss (see Note 8). At our annual meeting of stockholders June, 2022, shareholders voted against our 2021 Omnibus Equity Incentive Plan. Therefore, we will continue to account for this option grant as liability-classified until we receive stockholder approval to increase the available options to grant. We classify stock-based compensation expense in our condensed consolidated statement of operations in the same way the award recipient's payroll costs are classified or in which the award recipients' service payments are classified. We recorded stock-based compensation expense as follows: Three Months Ended 2023 2022 General and administrative $ 1,193,460 $ 1,083,101 Research and development 737,293 458,349 Total stock-based compensation expense $ 1,930,753 $ 1,541,450 A summary of stock option activity under the Plan is presented as follows: Number of Options Exercise Price Weighted Intrinsic Weighted Balance outstanding, December 31, 2022 444,749 $ 13.80 - $ 40,320.00 $ 46.20 $ — 8.13 years Granted — $ — - $ — $ — $ — Exercised — $ — - $ — $ — $ — Forfeited (112) $ 34.00 - $ 34.00 $ 34.00 $ — Cancelled — $ — - $ — $ — $ — Balance outstanding, March 31, 2023 444,637 $ 13.80 - $ 40,320.00 $ 46.20 $ 6,168 7.88 years Awards outstanding, vested awards and those expected to vest at March 31, 2023 442,597 $ 13.80 - $ 40,320.00 $ 46.20 $ — 7.88 years Vested and exercisable at March 31, 2023 316,432 $ 13.80 - $ 40,320.00 $ 50.80 $ — 7.83 years The total fair value of awards vested during the three months ended March 31, 2023 and 2022 was $0.5 million and $0.2 million, respectively. As of March 31, 2023, the unrecognized compensation cost related to non-vested stock options outstanding, net of expected forfeitures, was $1.7 million to be recognized over a weighted-average remaining vesting period of approximately 1.0 years. The following weighted-average assumptions are used in the Black-Scholes valuation model to estimate the fair value of stock option awards when granted to employees. Risk-free interest rate —Based on the daily yield curve rates for U.S. Treasury obligations with maturities which correspond to the expected term of our stock options. Dividend yield —We have not paid any dividends on our common stock since inception and do not anticipate paying dividends on our common stock in the foreseeable future. Expected volatility —We base expected volatility on the trading price of our common stock. Expected term —The expected option term represents the period that stock-based awards are expected to be outstanding based on the simplified method provided in SAB No. 107, which SAB No. 107, options are considered to be “plain vanilla” if they have the following basic characteristics: (i) granted “at-the-money”; (ii) exercisability is conditioned upon service through the vesting date; (iii) termination of service prior to vesting results in forfeiture; (iv) limited exercise period following termination of service; and (v) options are non-transferable and non-hedgeable. SAB No. 110, Share-Based Payment , (“SAB No. 110”) expresses the views of the Staff of the SEC with respect to extending the use of the simplified method, as discussed in SAB No. 107, in developing an estimate of the expected term of “plain vanilla” share options in accordance with ASC 718. For the expected term, we have “plain-vanilla” stock options, and therefore used a simple average of the vesting period and the contractual term for options granted as permitted by SAB No. 107. |
Loss per Share
Loss per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Loss per Share | Loss per ShareBasic and diluted net loss per common share was determined by dividing net loss by the weighted-average common shares outstanding during the period. The following table sets forth the computation of basic and diluted net loss per share for the periods indicated: Three Months Ended Basic and diluted net loss per common share: 2023 2022 Numerator: Net loss $ (13,259,921) $ (6,929,685) Denominator: Weighted average common shares outstanding 3,811,482 3,811,445 Net loss per share of common stock—basic and diluted $ (3.48) $ (1.82) The following outstanding securities at March 31, 2023 and 2022 have been excluded from the computation of basic and diluted weighted shares outstanding, as they would have been anti-dilutive: Three Months Ended 2023 2022 Common shares issuable upon conversion of Series A preferred stock 159 159 Common shares issuable upon conversion of Series C preferred stock 829 830 Stock options 444,637 438,749 Warrants – liability classified — 536 Warrants – equity classified 215,559 215,559 Total 661,185 655,833 The liability and equity classified warrants disclosed above have been excluded from the computation of basic and diluted earnings per share because the exercise price of the warrants exceeds the average market price of our common stock for the period they were outstanding. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contractual Obligations In August 2014, we entered into a lease for corporate office space in Edison, New Jersey. In December 2017, we entered an amendment to the lease for corporate office space in Edison, New Jersey expanding the office footprint and extending the lease for an approximate 5-year period. The lease expired on March 31, 2023 and we are currently leasing this space on a month-to-month basis. We are currently negotiating with the landlord for a new lease agreement. In October 2019, we entered into a 3-year lease for office and research laboratory space in Edmonton, Canada, which expired on September 30, 2022 and we are leasing this space on a month-to-month basis. We are currently in negotiating with the landlord for a new lease agreement. Legal Proceedings We are involved in various legal proceedings. Significant judgment is required to determine both the likelihood and the estimated amount of a loss related to such matters. Additionally, while any litigation contains an element of uncertainty, we have at this time no reason to believe that the outcome of such proceedings or claims will have a material adverse effect on our consolidated financial condition or results of operations. Leases We account for leases in accordance with ASC Topic 842, Leases , (“ASC 842”). We determine if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property or equipment for a period in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property and equipment), and (2) the customer has the right to control the use of the identified asset. Operating leases where we are the lessee are included under the caption “Right of Use Assets” ("ROU") on our consolidated balance sheets. The lease liabilities are initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments include how we determine (1) the discount rate used to discount the unpaid lease payments to present value, (2) lease term and (3) lease payments. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Reverse Stock Split On May 3, 2023, our Board of Directors declared a 1-for-20 reverse stock split of the outstanding shares of our common stock in order to satisfy requirements for the continued listing of our common stock on Nasdaq. The reverse stock split is effective as of May 11, 2023. All applicable share and per share information in these condensed consolidated financial statements on Form 10-Q have been adjusted retrospectively to give effect to the reverse stock split for all periods presented. The reverse stock split did not reduce the number of authorized shares of common stock and will not alter the par value. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These unaudited condensed consolidated financial statements have been prepared following the requirements of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim reporting. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary to present fairly our interim financial information. The consolidated balance sheet as of December 31, 2022, was derived from the audited annual consolidated financial statements but does not include all disclosures required by U.S. GAAP. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2022, contained in our Annual Report on Form 10-K filed with the SEC on April 10, 2023. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include our accounts and the accounts of our subsidiaries, Contravir Research Inc. and Hepion Research Corp, which conduct their operations in Canada. All intercompany balances and transactions have been eliminated in consolidation. Going Concern As of March 31, 2023, we had $43.0 million in cash, an accumulated deficit of $189.0 million, and working capital of $36.0 million. For the three months ended March 31, 2023, cash used in operating activities was $8.2 million and we had a net loss of $13.3 million . We have not generated revenue to date and have incurred substantial losses and negative cash flows from operations since our inception. We have historically funded our operations through issuances of convertible debt, common stock and preferred stock. We expect to continue to incur losses for the next several years as we expand our research, development and clinical trials of rencofilstat. We are unable to predict the extent of any future losses or when we will become profitable, if at all. These condensed consolidated financial statements have been prepared under the assumption that we will continue as a going concern. Due to our recurring and expected continuing losses from operations, we have concluded there is substantial doubt in our ability to continue as a going concern within one year of the issuance of these condensed consolidated financial statements without additional capital becoming available to attain further operating efficiencies and, ultimately, to generate revenue. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. We will be required to raise additional capital within the next year to continue the development and commercialization of our current product candidate and to continue to fund operations at the current cash expenditure levels. We cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct business. If we are unable to raise additional capital when required or on acceptable terms, we may have to (i) significantly delay, scale back or discontinue the development and/or commercialization of one or more product candidates; (ii) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to technologies, product candidates or products that we would otherwise seek to develop or commercialize on unfavorable terms. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Changes in estimates and assumptions are reflected in reported results in the period in which they become known. Actual results could differ from those estimates. |
Cash | Cash As of March 31, 2023 and December 31, 2022, cash was $43.0 million and $51.2 million, respectively, consisting of checking accounts held at U.S. and Canadian commercial banks. At certain times, our cash balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits. We believe it mitigates our risk by depositing our cash balances with high credit, quality financial institutions. We have never experienced losses related to these balances. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a three-tier fair value hierarchy that distinguishes among the following: • Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we can access. • Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly. • Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by us in determining fair |
Property, equipment and depreciation | Property, equipment and depreciationAs of March 31, 2023 and December 31, 2022, we had $0.1 million and $0.1 million, respectively, of property and equipment, consisting primarily of lab equipment, computer equipment, and furniture and fixtures. Expenditures for additions, renewals and improvements will be capitalized at cost. Depreciation will generally be computed on a straight-line method based on the estimated useful lives of the related assets. The estimated useful lives of the depreciable assets are 3 to 7 years. Leasehold improvements are amortized using the straight-line method over their estimated useful lives, or the remaining term of the lease, whichever is shorter. Expenditures for repairs and maintenance are charged to operations as incurred. We will periodically evaluate whether current events or circumstances indicate that the carrying value of our depreciable assets may not be recoverable. |
Goodwill and In-Process Research & Development | In-Process Research & Development In accordance with ASC Topic 350, Intangibles — Goodwill and Other (“ASC Topic 350”), acquired In-Process Research and Development ("IPR&D") was determined to have an indefinite life and, therefore, are not amortized. Instead, it is tested for impairment annually, in our fourth quarter, and between annual tests if we become aware of an event or a change in circumstances that would indicate the carrying value may be impaired. IPR&D acquired in a business combination is capitalized as indefinite-lived assets on our consolidated balance sheets at the acquisition-date fair value. IPR&D relates to amounts that arose in connection with the acquisition of Ciclofilin. Once the project is completed, the carrying value of the IPR&D is reclassified to other intangible assets, net and is amortized over the estimated useful life of the asset. Post-acquisition research and development expenses related to the IPR&D projects are expensed as incurred. The projected discounted cash flow models used to estimate the fair values of our IPR&D assets, acquired in connection with the Ciclofilin acquisition, reflect significant assumptions regarding the estimates a market participant would make in order to evaluate a drug development asset, including: (i) probability of successfully completing clinical trials and obtaining regulatory approval; (ii) market size, market growth projections, and market share; (iii) estimates regarding the timing of and the expected costs to advance clinical programs to commercialization; (iv) estimates of future cash flows from potential product sales; and (v) a discount rate. These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The use of different inputs and assumptions could increase or decrease our estimated discounted future cash flows, the resulting estimated fair values and the amounts of related impairments, if any. The annual, or interim (if events or changes in circumstances indicate that it is more likely than not that the asset is impaired), IPR&D impairment test is performed by comparing the fair value of the asset to the asset’s carrying amount. When testing indefinite-lived intangibles for impairment, we may assess qualitative factors for its indefinite-lived intangibles to determine whether it is more likely than not that the asset is impaired. Alternatively, we may bypass this qualitative assessment for our indefinite-lived intangible asset and perform the quantitative impairment test that compares the fair value of the indefinite-lived intangible asset with the asset’s carrying amount. If IPR&D becomes impaired or is abandoned, the carrying value of the IPR&D is written down to the revised fair value with the related impairment charge recognized in the period in which the impairment occurs. If the carrying value of the asset becomes impaired as the result of unfavorable data from any ongoing or future clinical trial, changes in assumptions that negatively impact projected cash flows, or because of any other information regarding the prospects of successfully developing or commercializing our programs, we could incur significant charges in the period in which the impairment occurs. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect to recover or settle those temporary differences. We recognize the effect of a change in tax rates on deferred tax assets and liabilities in the results of operations in the period that includes the enactment date. We reduce the measurement of a deferred tax asset, if necessary, by a valuation allowance if it is more likely than not that we will not realize some or all of the deferred tax asset. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is “more-likely-than-not” that the position will be sustained upon examination. Potential interest and penalties associated with unrecognized tax positions are recognized in income tax expense. We continue to maintain a full valuation allowance for our U.S and foreign net deferred tax assets. Under the provisions of the Internal Revenue Code, the net operating loss (NOL) and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, respectively, as well as similar state tax provisions. This could limit the amount of tax attributes that we can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will be determined based on our value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The utilization of these NOLs is subject to limitations based on past and future changes in our ownership pursuant to Section 382. We completed a Section 382 study of transactions in our stock through December 31, 2021 and concluded that we have experienced ownership changes since inception that we believe under Section 382 and 383 of the Internal Revenue Code will result in limitations on our ability to use certain pre-ownership change NOLs and credits. We are not aware of any ownership changes in 2023 or 2022. In addition, we may experience subsequent ownership changes as a result of future equity offerings or other changes in the ownership of our stock, some of which are beyond our control. As a result, the amount of the NOLs and tax credit carryforwards presented in our consolidated financial statements could be further limited. Similar provisions of state tax law may also apply to limit the use of accumulated state tax attributes. |
Contingencies | Contingencies In the normal course of business, we are subject to loss contingencies, such as legal proceedings and claims arising out of our business that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, product and environmental liability, and tax matters. In accordance with ASC Topic 450, Accounting for Contingencies , (“ASC 450”), we record accruals for such loss contingencies when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. In accordance with this guidance, we do not recognize gain contingencies until realized. |
Research and Development | Research and Development Research and development costs, which include expenditures in connection with an in-house research and development laboratory, salaries and staff costs, application and filing for regulatory approval of proposed products, purchased in-process research and development, license costs, regulatory and scientific consulting fees, as well as contract research, insurance and FDA consultants, are accounted for in accordance with ASC Topic 730, Research and Development , (“ASC 730”). Also, as prescribed by this guidance, patent filing and maintenance expenses are considered legal in nature and therefore classified as general and administrative expense, if any. We do not currently have any commercial biopharmaceutical products and do not expect to have such for several years, if at all. Accordingly, our research and development costs are expensed as incurred. While certain of our research and development costs may have future benefits, our policy of expensing all research and development expenditures is predicated on the fact that we have no history of successful commercialization of product candidates to base any estimate of the number of future periods that would be benefited. |
Share-based payments | Share-based payments ASC Topic 718, Compensation—Stock Compensation (“ASC 718”), requires companies to measure the cost of employee and non-employee services received in exchange for the award of equity instruments based on the estimated fair value of the award at the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award. Generally, we issue stock options with only service-based vesting conditions and record the expense for awards using the straight-line method (see Note 9). We account for awards granted to employees that are in excess of what is available to grant as a liability recorded at fair value each reporting period in the consolidated financial statements (see Note 8). The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The estimated expected stock volatility is based on the historical volatility of our own traded stock price. The expected term of stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that we have never paid cash dividends and do not expect to pay any cash dividends in the foreseeable future. ASC 718 allows for the election of forfeitures to be estimated at the time of grant and revised if necessary, in subsequent periods if actual forfeitures differ from those estimates. Our actual historical forfeiture rate of 3% was used for the three months ended March 31, 2023 and 2022. We will continue to analyze the forfeiture rate on at least an annual basis or when there are any identified triggers that would justify immediate review. |
Foreign Exchange | Foreign ExchangeThe functional currency of Hepion Pharmaceuticals, Inc. and ContraVir Research Inc. is the U.S. dollar. The functional currency of Hepion Research Corp. is the Canadian dollar. Assets and liabilities of Hepion Research Corp. are translated into U.S. dollars using period-end exchange rates; income and expenses are translated using the average exchange rates for the reporting period. Unrealized foreign currency translation adjustments are deferred in accumulated other comprehensive loss, a separate component of shareholders’ equity. The amount of currency translation adjustment was $70,815 and $90,168 at March 31, 2023 and December 31, 2022, respectively. Transactions in foreign currencies are remeasured into the functional currency of the relevant subsidiaries at the exchange rate in effect at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into the functional currency at exchange rates in effect at the balance sheet date or on settlement. Resulting gains and losses are recorded in general and administrative expense within the consolidated statements of operations. The impact of foreign exchange gains (losses) was $25,433 and $(35,196) for the three months ended March 31, 2023 and 2022, respectively. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker views our operations and manages the business in one segment. |
Net loss per share | Net loss per share Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share , (“ASC 260”) for all periods presented. In accordance with this guidance, basic and diluted net loss per common share was determined by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding during the period. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements There are no recent accounting pronouncements that will have a material effect on our condensed consolidated financial statements for the three months ended March 31, 2023. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Liabilities Measured and Recognized at Fair Value on a Recurring Basis | The following table presents our liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy at March 31, 2023 and December 31, 2022. Fair Value Measurement at Reporting Date Using Description Fair value (Level 1) (Level 2) (Level 3) As of March 31, 2023: Contingent consideration $ 2,508,434 $ — $ — $ 2,508,434 As of December 31, 2022: Contingent consideration $ 2,460,000 $ — $ — $ 2,460,000 |
Schedule of Assumptions Used to Calculate Fair Value | At March 31, 2023 and December 31, 2022, the assumptions we used to calculate the fair value were as follows: Assumptions March 31, December 31, Discount rate 8.5% 8.5% Projected milestone achievement dates Dec 2023 — Dec 2028 Dec 2023 — Dec 2028 Probability of success of milestone achievements 13 % — 40% 13 % — 40% |
Schedule of Changes in Fair Value of Contingent Consideration | The following table presents the change in fair value of the contingent consideration for the three months ended March 31, 2023. Acquisition-related Contingent Consideration Liabilities: Balance at December 31, 2022 $ 2,460,000 Change in fair value recorded in earnings 48,434 Balance at March 31, 2023 $ 2,508,434 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property and equipment are stated at cost and depreciated using the straight-line method, based on useful lives as follows: Estimated Useful Life (in years) March 31, December 31, Equipment 3 years $ 326,815 $ 326,382 Furniture and fixtures 7 years 62,183 62,183 Less: Accumulated depreciation (325,249) (306,945) $ 63,749 $ 81,620 |
Indefinite-lived Intangible A_2
Indefinite-lived Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Our IPR&D asset consisted of the following at: Indefinite-lived Rencofilstat balance at December 31, 2022 $ 3,190,000 Change during the three months ended March 31, 2023 — Rencofilstat balance at March 31, 2023 $ 3,190,000 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued liabilities consisted of the following: March 31, December 31, Payroll and related costs $ 360,613 $ 838,683 Stock-based compensation - see Note 9 3,300,031 1,906,401 Research and development 2,389,560 1,716,035 Professional fees 153,774 246,664 Other 54,313 92,200 Total accrued expenses $ 6,258,291 $ 4,799,983 |
Accounting for Share-Based Pa_2
Accounting for Share-Based Payments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Based Compensation Expense | We recorded stock-based compensation expense as follows: Three Months Ended 2023 2022 General and administrative $ 1,193,460 $ 1,083,101 Research and development 737,293 458,349 Total stock-based compensation expense $ 1,930,753 $ 1,541,450 |
Schedule of Stock Option Activity | A summary of stock option activity under the Plan is presented as follows: Number of Options Exercise Price Weighted Intrinsic Weighted Balance outstanding, December 31, 2022 444,749 $ 13.80 - $ 40,320.00 $ 46.20 $ — 8.13 years Granted — $ — - $ — $ — $ — Exercised — $ — - $ — $ — $ — Forfeited (112) $ 34.00 - $ 34.00 $ 34.00 $ — Cancelled — $ — - $ — $ — $ — Balance outstanding, March 31, 2023 444,637 $ 13.80 - $ 40,320.00 $ 46.20 $ 6,168 7.88 years Awards outstanding, vested awards and those expected to vest at March 31, 2023 442,597 $ 13.80 - $ 40,320.00 $ 46.20 $ — 7.88 years Vested and exercisable at March 31, 2023 316,432 $ 13.80 - $ 40,320.00 $ 50.80 $ — 7.83 years |
Loss per Share (Tables)
Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share for the periods indicated: Three Months Ended Basic and diluted net loss per common share: 2023 2022 Numerator: Net loss $ (13,259,921) $ (6,929,685) Denominator: Weighted average common shares outstanding 3,811,482 3,811,445 Net loss per share of common stock—basic and diluted $ (3.48) $ (1.82) |
Schedule of Outstanding Securities Excluded from the Computation of Basic and Diluted Weighted Shares Outstanding | The following outstanding securities at March 31, 2023 and 2022 have been excluded from the computation of basic and diluted weighted shares outstanding, as they would have been anti-dilutive: Three Months Ended 2023 2022 Common shares issuable upon conversion of Series A preferred stock 159 159 Common shares issuable upon conversion of Series C preferred stock 829 830 Stock options 444,637 438,749 Warrants – liability classified — 536 Warrants – equity classified 215,559 215,559 Total 661,185 655,833 |
Business Overview (Details)
Business Overview (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |||||
Jan. 14, 2022 USD ($) | Feb. 14, 2014 USD ($) | Mar. 31, 2022 shares | Oct. 31, 2018 USD ($) shares | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Feb. 14, 2014 CAD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
First milestone payment | $ 0 | $ 2,000,000 | |||||
Threshold milestone payment payable | $ 2.5 | ||||||
Merger Agreement, Upon Receipt of Phase II Positive Data | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Number of shares to be issued (in shares) | shares | 216 | ||||||
Additional milestone payments payable | $ 3,000,000 | ||||||
Merger Agreement, Upon Initiation of Phase III Trial | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Additional milestone payments payable | 5,000,000 | $ 5,000,000 | |||||
Merger Agreement, Upon Acceptance By FDA of New Drug | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Additional milestone payments payable | 8,000,000 | ||||||
CEO | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
First milestone payment | 800,000 | $ 300,000 | |||||
Number of shares issued (in shares) | shares | 30 | ||||||
Hepion Employees | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
First milestone payment | 200,000 | ||||||
Ciclofilin | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
First milestone payment | $ 2,000,000 | $ 700,000 | |||||
Number of shares issued (in shares) | shares | 216 | 72 | |||||
Issuance of common stock in conjunction with milestone payment | $ 100,000 | ||||||
Percentage of issued and outstanding common stock | 7.50% | 2.50% | |||||
Percentage of proceeds from liquidity event | 30% | ||||||
Ciclofilin | Merger Agreement, Upon Positive Analysis of Phase IIb Trial | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Additional milestone payments payable | $ 1,000,000 | ||||||
Ciclofilin | Merger Agreement, Upon Acceptance By FDA of New Drug | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Additional milestone payments payable | 5,000,000 | ||||||
Ciclofilin | Merger Agreement Upon Approval by FDA Of New Drug | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Additional milestone payments payable | $ 8,000,000 | ||||||
Aurinia | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
First milestone payment | $ 300,000 | ||||||
Threshold milestone payment payable | 0.5 | ||||||
Offset payment, amount | 2 | ||||||
Percentage of royalty on net sales | 2.50% | ||||||
Royalty percentage | 5% | ||||||
Amount payable from the proceeds of liquidity event | $ 200,000 | ||||||
Threshold amount payable | $ 5 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cash | $ 42,993,359 | $ 51,189,088 | |
Accumulated deficit | 188,961,265 | $ 175,701,344 | |
Working capital | 36,000,000 | ||
Net cash used in operating activities | 8,214,513 | $ 10,129,310 | |
Net loss | $ 13,259,921 | $ 6,929,685 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Cash (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Cash | $ 42,993,359 | $ 51,189,088 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Property, Equipment and Depreciation (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 63,749 | $ 81,620 |
Carrying value adjustments | $ 0 | $ 0 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 3 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 7 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Share-Based Payments (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accounting Policies [Abstract] | ||
Historical forfeiture rate (as a percent) | 0.03 | 0.03 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Prepaid research and development costs | $ 2.5 | $ 4.7 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Foreign Exchange (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||
Accumulated other comprehensive loss | $ (70,815) | $ (90,168) | |
Foreign exchange | $ 25,433 | $ (35,196) |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Segment Information (Details) | 3 Months Ended |
Mar. 31, 2023 segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Stockholders' Equity and Deri_2
Stockholders' Equity and Derivative Liability - Warrants - Series A Convertible Preferred Stock (Details) - Series A - shares | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Oct. 14, 2014 |
Class of Stock [Line Items] | ||||
Convertible preferred stock, shares authorized (in shares) | 1,250,000 | |||
Convertible preferred stock, shares outstanding (in shares) | 85,581 | 85,581 | ||
Stock issued as a result of conversion (in shares) | 0 | 0 |
Stockholders' Equity and Deri_3
Stockholders' Equity and Derivative Liability - Warrants - Series C Preferred Stock Issuances (Details) | 3 Months Ended | |||
Jul. 03, 2018 $ / shares shares | Mar. 31, 2023 $ / shares shares | Mar. 31, 2022 shares | Dec. 31, 2022 $ / shares shares | |
Class of Stock [Line Items] | ||||
Preferred shares converted into common stock (in shares) | 1 | 2 | ||
Series C | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, shares issued (in shares) | 1,800 | 1,801 | ||
Issuance of common stock, net (in shares) | 10,826 | |||
Convertible preferred stock, par value (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | $ 1,000 | |
Convertible preferred stock, shares outstanding (in shares) | 1,800 | 1,801 | ||
Stock issued as a result of conversion (in shares) | 1 | 5 | ||
Conversion ratio | 0.08 | |||
Preferred Stock | Series C | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, shares issued (in shares) | 1 | |||
Warrants | ||||
Class of Stock [Line Items] | ||||
Warrants issued (in shares) | 4,446 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Liabilities Measured on Recurring Basis (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 2,134,792 | $ 2,093,771 |
Recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 2,508,434 | 2,460,000 |
Recurring basis | (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Recurring basis | (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Recurring basis | (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 2,508,434 | $ 2,460,000 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-current portion of contingent consideration | $ 2,134,792 | $ 2,093,771 |
Discount rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, fair value measurement input | 0.085 | 0.085 |
Fair Value Measurements - Assum
Fair Value Measurements - Assumptions Used to Calculate Fair Value (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Probability of success of milestone achievements | 13% | 13% |
Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Probability of success of milestone achievements | 40% | 40% |
Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration, fair value measurement input | 0.085 | 0.085 |
Fair Value Measurements - Activ
Fair Value Measurements - Activity for Fair Value of Contingent Consideration (Details) - Acquisition-related Contingent Consideration - (Level 3) - Recurring basis | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of the period | $ 2,460,000 |
Change in fair value recorded in earnings | 48,434 |
Balance at end of the period | $ 2,508,434 |
Property and Equipment, net - P
Property and Equipment, net - PPE (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Less: Accumulated depreciation | $ (325,249) | $ (306,945) | |
Property and equipment, net | 63,749 | 81,620 | |
Depreciation | 18,037 | $ 22,730 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 326,815 | 326,382 | |
Estimated useful life (in years) | 3 years | ||
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 62,183 | $ 62,183 | |
Estimated useful life (in years) | 7 years |
Indefinite-lived Intangible A_3
Indefinite-lived Intangible Assets - IPR&D (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Indefinite-lived Intangible Assets [Roll Forward] | ||
In-process research and development, beginning balance | $ 3,190,000 | |
Change during period | 0 | |
In-process research and development, ending balance | 3,190,000 | |
Impairment of IPR&D | $ 0 | $ 0 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Payroll and related costs | $ 360,613 | $ 838,683 |
Stock-based compensation - see Note 9 | 3,300,031 | 1,906,401 |
Research and development | 2,389,560 | 1,716,035 |
Professional fees | 153,774 | 246,664 |
Other | 54,313 | 92,200 |
Accrued expenses | $ 6,258,291 | $ 4,799,983 |
Accounting for Share-Based Pa_3
Accounting for Share-Based Payments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 03, 2013 | Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Contractual term (in years) | 10 years | ||
Liability related to awards granted | $ 3.3 | ||
Total fair value of awards vested | 0.5 | $ 0.2 | |
Unrecognized compensation cost related to non-vested stock | $ 1.7 | ||
Weighted average remaining vesting period over which unrecognized compensation is expected to be recognized (in years) | 1 year |
Accounting for Share-Based Pa_4
Accounting for Share-Based Payments - Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 1,930,753 | $ 1,541,450 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 1,193,460 | 1,083,101 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 737,293 | $ 458,349 |
Accounting for Share-Based Pa_5
Accounting for Share-Based Payments - Stock Option Activity (Details) - Stock options - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Number of Options | ||
Balance outstanding at the beginning of the period (in shares) | 444,749 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Forfeited (in shares) | (112) | |
Cancelled (in shares) | 0 | |
Balance outstanding at the end of the period (in shares) | 444,637 | 444,749 |
Awards outstanding, vested awards and those expected to vest at the end of the period (in shares) | 442,597 | |
Vested and exercisable at the end of the period (in shares) | 316,432 | |
Weighted Average Exercise Price Per Share | ||
Balance outstanding at the beginning of the period (in dollars per share) | $ 46.20 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 34 | |
Cancelled (in dollars per share) | 0 | |
Balance outstanding at the end of the period (in dollars per share) | 46.20 | $ 46.20 |
Awards outstanding, vested awards and those expected to vest at the end of the period (in dollars per share) | 46.20 | |
Vested and exercisable at the end of the period (in dollars per share) | $ 50.80 | |
Intrinsic Value | ||
Balance outstanding at the beginning of the period | $ 0 | |
Granted | 0 | |
Exercised | 0 | |
Forfeited | 0 | |
Cancelled | 0 | |
Balance outstanding at the end of the period | 6,168 | $ 0 |
Awards outstanding, vested awards and those expected to vest at the end of the period | 0 | |
Vested and exercisable at the end of the period | $ 0 | |
Weighted Average Remaining Contractual Team | ||
Balance outstanding term (in years) | 7 years 10 months 17 days | 8 years 1 month 17 days |
Awards outstanding, vested awards and those expected to vest at the end of the period (in years) | 7 years 10 months 17 days | |
Vested and exercisable at the end of the period (in years) | 7 years 9 months 29 days | |
Exercise price range one | ||
Exercise Price Per Share | ||
Exercise price, low end of the range (in dollars per share) | $ 13.80 | |
Exercise price, high end of the range (in dollars per share) | $ 40,320 | |
Exercise price range two | ||
Exercise Price Per Share | ||
Exercise price, low end of the range (in dollars per share) | $ 0 | |
Exercise price, high end of the range (in dollars per share) | 0 | |
Exercise price range three | ||
Exercise Price Per Share | ||
Exercise price, low end of the range (in dollars per share) | 0 | |
Exercise price, high end of the range (in dollars per share) | 0 | |
Exercise price range four | ||
Exercise Price Per Share | ||
Exercise price, low end of the range (in dollars per share) | 34 | |
Exercise price, high end of the range (in dollars per share) | 34 | |
Exercise price range five | ||
Exercise Price Per Share | ||
Exercise price, low end of the range (in dollars per share) | 0 | |
Exercise price, high end of the range (in dollars per share) | 0 | |
Exercise price range six | ||
Exercise Price Per Share | ||
Exercise price, low end of the range (in dollars per share) | 13.80 | |
Exercise price, high end of the range (in dollars per share) | 40,320 | |
Exercise price range seven | ||
Exercise Price Per Share | ||
Exercise price, low end of the range (in dollars per share) | 13.80 | |
Exercise price, high end of the range (in dollars per share) | 40,320 | |
Exercise price range nine | ||
Exercise Price Per Share | ||
Exercise price, low end of the range (in dollars per share) | 13.80 | |
Exercise price, high end of the range (in dollars per share) | $ 40,320 |
Loss per Share - Computation of
Loss per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net loss | $ (13,259,921) | $ (6,929,685) |
Denominator: | ||
Weighted average common shares outstanding (in shares) | 3,811,482 | 3,811,445 |
Weighted average common shares outstanding (in shares) | 3,811,482 | 3,811,445 |
Net loss per share of common stock—basic (in dollars per share) | $ (3.48) | $ (1.82) |
Net loss per share of common stock—diluted (in dollars per share) | $ (3.48) | $ (1.82) |
Loss per Share - Schedule of Ou
Loss per Share - Schedule of Outstanding Securities Excluded from Computation of Basic and Diluted Weighted Shares Outstanding (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 661,185 | 655,833 |
Common shares issuable upon conversion of Series A preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 159 | 159 |
Common shares issuable upon conversion of Series C preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 829 | 830 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 444,637 | 438,749 |
Warrants – liability classified | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 0 | 536 |
Warrants – equity classified | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 215,559 | 215,559 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Oct. 31, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | ||||
Rent expense | $ 0.1 | $ 0.1 | ||
Corporate Office Space | ||||
Lessee, Lease, Description [Line Items] | ||||
Renewal term (in years) | 5 years | |||
Office and Research Laboratory | ||||
Lessee, Lease, Description [Line Items] | ||||
Term (in years) | 3 years |
Subsequent Events (Details)
Subsequent Events (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Stock split, conversion ratio | 0.5 |