After markets closed on Monday, Enveric Biosciences, Inc. (NASDAQ: ENVB) reported financial results for the third quarter ended Sept. 30. The company has no revenue at this time and reported a net loss of $2.82 million versus last year’s net loss of $2.6 million for the same time period.
The quarter’s basic and diluted loss per share was $1.30, versus last year’s diluted loss per share of $1.46 for the quarter.
The net cash used in operations was $2.98 million. As of Sept. 30, the company said it had cash and cash equivalents of $4.27 million. The concern here is that the company will run out of money before revenue begins to hit. The latest regulatory filing stated that Enveric has an accumulated deficit of $93 million and might not make it beyond a year:
The company’s current cash on hand is insufficient to satisfy its operating cash needs for the 12 months following the filing of this Quarterly Report on Form 10-Q. These conditions raise substantial doubt regarding the company’s ability to continue as a going concern for a period of one year after the date the financial statements are issued.
“The third quarter of 2023 was a period of significant progress for our team, as we completed several initiatives that served to enhance the value of our differentiated neuroplastogenic small-molecule therapeutics as we advance toward the clinic,” said Joseph Tucker, director and CEO.
If the company receives regulatory approval for its candidates, it will need to spend significant amounts of money to manufacture the products, for which it would need to pay a third party.
Despite the headwinds, Tucker added, “We significantly strengthened our IP estate across our development portfolio, highlighted by new patents from the United States Patent and Trademark Office (USPTO) for our EVM301 Series of novel non-hallucinogenic molecules and for EB-373, our lead EVM201 Series prodrug product candidate.”
The company also filed six applications for patents outside the U.S. related to the EVM301 series, as well as “a new application for our AI-based computational methods for identifying and optimizing novel tryptamine derivatives,” Tucker said.
During the third quarter, the company also completed “key manufacturing and preclinical activities” required to receive approval for human trials of its EB-373 compound.
“We announced favorable results from exploratory animal studies, which demonstrated oral bioavailability and well-tolerated side effects for EB-373,” Tucker noted. “The outcome of these animal studies indicated the potential for EB-373 to reduce GI upset and vomiting as well as rapid onset of action and systemic clearance, improving the pharmacokinetic characteristics of psilocybin. ”
The company also completed preclinical work assessing absorption, distribution, metabolism, and excretion (ADME) assays, which “demonstrated rapid conversion of EB-373 to the active metabolite psilocin.”
Enveric has been cutting costs amid a restructuring plan including laying off 35% of its workforce and cutting contracts with consultants.
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