CNBX Pharmaceuticals Seeks Financial Stability

The biopharmaceutical firm reports a narrowed quarterly loss while facing funding and market challenges.

January 14, 2025

Overview of the Latest Quarter

CNBX Pharmaceuticals Inc., a pre-clinical-stage biopharmaceutical company focused on developing treatments for colorectal cancer, released its financial and operational results for the quarter ending November 30, 2024. While the company managed to decrease its net loss significantly compared to the same quarter last year, challenges in liquidity and operational sustainability persist.

For the three-month period, CNBX reported a net loss of $34,352, marking an improvement from the $178,523 loss incurred during the same period in 2023. The decrease in operating expenses, from $261,337 in the previous year to $36,837, contributed to the narrowed loss. This reduction was driven by scaled-back research activities and lower administrative costs, highlighting the company's ongoing efforts to optimize its financial structure.

Key Financial Highlights

The financial data reflects a company in transition:

• Revenue: The company reported no revenue for the quarter, a drop from $89,437 in the same period last year.


• Operating Expenses: General and administrative expenses decreased by over 75%, primarily due to reduced professional fees and share-based payments.


• Liquidity: Cash and cash equivalents stood at $17,339 at quarter's end, down from $81,647 a year ago.


• Convertible Loans: The company raised $30,000 through convertible promissory notes, a testament to its reliance on external funding for survival.

These figures emphasize the company’s constrained cash flow and heavy dependence on financing activities to sustain operations.

Operational Updates

CNBX’s primary focus remains on advancing RCC-33, a novel drug candidate targeting colorectal cancer. The company plans to initiate Phase I/II clinical trials in 2024, aiming to evaluate the drug's efficacy as a neoadjuvant and adjuvant treatment. However, the suspension of research operations during the quarter underscores the challenges in maintaining momentum.

The absence of research and development expenses, which totaled $112,418 in the same period last year, indicates a temporary pause in activities due to financial limitations. Management emphasized the importance of resuming these operations to achieve clinical milestones.

Capital Structure and Risks

The company’s total liabilities exceeded its assets, leading to a stockholders’ deficit of $2.5 million. This precarious financial position is compounded by cumulative losses of nearly $25 million since inception. CNBX's ability to continue as a going concern depends heavily on securing additional funding, whether through debt, equity issuance, or partnerships.

To date, the company has relied on convertible promissory notes, with interest rates ranging from 5% to 9%, and short-term forbearance agreements with institutional investors to address outstanding debts. These agreements provide temporary relief but do not resolve the long-term capital needs of the business.

Future Outlook

Despite the financial hurdles, CNBX remains committed to its mission of addressing unmet medical needs in oncology. The company estimates a minimum of $120,000 in expenses over the next 12 months, encompassing legal, administrative, and clinical costs. Management is exploring strategic collaborations and additional funding sources to bridge the gap between its current financial position and future operational requirements.

Conclusion

CNBX Pharmaceuticals’ quarterly results highlight the delicate balance of managing financial constraints while striving to advance groundbreaking therapies. With a narrowed loss and a promising pipeline, the company has taken steps in the right direction but must address its liquidity challenges to ensure long-term viability in a competitive biopharmaceutical landscape.