UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-36020

Onconova Therapeutics, Inc.

(Exact name of registrant as specified in its charter)


Delaware		22-3627252
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

12 Penns Trail, Newtown, PA		18940
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (267) 759-3680

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ⌧ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ⌧ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ⌧ No

The number of outstanding shares of the registrant’s Common Stock, par value $0.01 per share, as of May 2, 2022 was 20,895,563.

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	ONTX	The Nasdaq Stock Market LLC

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ONCONOVA THERAPEUTICS, INC.

TABLE OF CONTENTS FOR QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2022


	Page
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations	4
Condensed Consolidated Statements of Comprehensive Loss	5
Consolidated Statement of Stockholders’ Equity (Deficit)	6
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	30
Item 4. Controls and Procedures	30

PART II — OTHER INFORMATION

Item 1. Legal Proceedings	30
Item 1A. Risk Factors	30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3. Defaults Upon Senior Securities	31
Item 4. Mine Safety Disclosures	31
Item 5. Other Information	31
Item 6. Exhibits	31
SIGNATURES	32

All common stock, equity, share and per share amounts have been retroactively adjusted to reflect a one-for-fifteen reverse stock split which was effective May 20, 2021.

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Onconova Therapeutics, Inc.

Condensed Consolidated Balance Sheets


	March 31,		December 31,
	2022		2021
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	50,767,000	$	55,070,000
Receivables		27,000		28,000
Prepaid expenses and other current assets		583,000		332,000
Total current assets		51,377,000		55,430,000
Property and equipment, net		35,000		38,000
Other non-current assets		10,000		10,000
Total assets	$	51,422,000	$	55,478,000
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	3,122,000	$	2,757,000
Accrued expenses and other current liabilities		2,600,000		3,132,000
Deferred revenue		226,000		226,000
Total current liabilities		5,948,000		6,115,000
Deferred revenue, non-current		3,187,000		3,243,000
Total liabilities		9,135,000		9,358,000

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.01 par value, 5,000,000 shares authorized, none issued and outstanding at March 31, 2022 and December 31, 2021		—		—
Common stock, $0.01 par value, 125,000,000 shares authorized, 20,895,563 shares issued and outstanding at March 31, 2022 and December 31, 2021		209,000		209,000
Additional paid in capital		490,940,000		490,644,000
Accumulated deficit		(448,841,000)		(444,719,000)
Accumulated other comprehensive loss		(21,000)		(14,000)
Total stockholders’ equity		42,287,000		46,120,000
Total liabilities and stockholders’ equity	$	51,422,000	$	55,478,000

See accompanying notes to condensed consolidated financial statements.

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Onconova Therapeutics, Inc.

Condensed Consolidated Statements of Operations (unaudited)


	Three Months Ended March 31,
	2022		2021
Revenue	$	56,000	$	56,000
Operating expenses:
General and administrative		2,186,000		2,217,000
Research and development		2,002,000		1,937,000
Total operating expenses		4,188,000		4,154,000
Loss from operations		(4,132,000)		(4,098,000)
Change in fair value of warrant liability		—		(636,000)
Other income, net		10,000		19,000
Net loss	$	(4,122,000)	$	(4,715,000)
Net loss per share, basic and diluted	$	(0.20)	$	(0.32)
Basic and diluted weighted average shares outstanding		20,904,085		14,616,139

See accompanying notes to condensed consolidated financial statements.

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Onconova Therapeutics, Inc.

Condensed Consolidated Statements of Comprehensive Loss (unaudited)


	Three Months Ended March 31,
	2022		2021
Net loss	$	(4,122,000)	$	(4,715,000)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments, net		(7,000)		(16,000)
Other comprehensive loss, net of tax		(7,000)		(16,000)
Comprehensive loss	$	(4,129,000)	$	(4,731,000)

See accompanying notes to condensed consolidated financial statements.

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Onconova Therapeutics, Inc.

Consolidated Statement of Stockholders’ Equity (Deficit) (unaudited)


	Three Month Periods Ended March 31, 2022 and 2021
								Accumulated
				Additional				other
	Common Stock			Paid in		Accumulated		comprehensive
	Shares	Amount		Capital		deficit		(loss) income		Total
Balance at December 31, 2021	20,895,563	$	209,000	$	490,644,000	$	(444,719,000)	$	(14,000)	$	46,120,000
Net loss	—		—		—		(4,122,000)		—		(4,122,000)
Other comprehensive loss	—		—		—		—		(7,000)		(7,000)
Stock-based compensation	—		—		296,000		—		—		296,000
Balance at March 31, 2022	20,895,563	$	209,000	$	490,940,000	$	(448,841,000)	$	(21,000)	$	42,287,000

Balance at December 31, 2020	12,396,219	$	124,000	$	434,593,000	$	(428,556,000)	$	14,000	$	6,175,000
Net loss	—		—		—		(4,715,000)		—		(4,715,000)
Other comprehensive loss	—		—		—		—		(16,000)		(16,000)
Exercise of stock options	2,867		—		17,000		—		—		17,000
Stock-based compensation	—		—		65,000		—		—		65,000
Issuance of common stock, net	3,220,075		32,000		35,115,000		—		—		35,147,000
Issuance of common stock upon exercise of warrants	160,000		2,000		478,000		—		—		480,000
Balance at March 31, 2021	15,779,161	$	158,000	$	470,268,000	$	(433,271,000)	$	(2,000)	$	37,153,000

See accompanying notes to condensed consolidated financial statements.

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Onconova Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)


	Three Months Ended March 31,
	2022		2021
Operating activities:
Net loss	$	(4,122,000)	$	(4,715,000)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		3,000		3,000
Change in fair value of warrant liabilities		—		636,000
Stock compensation expense		296,000		65,000
Changes in assets and liabilities:
Receivables		1,000		(1,000)
Prepaid expenses and other current assets		(251,000)		115,000
Accounts payable		365,000		(845,000)
Accrued expenses and other current liabilities		(532,000)		(1,850,000)
Deferred revenue		(56,000)		(56,000)
Net cash used in operating activities		(4,296,000)		(6,648,000)

Financing activities:
Proceeds from the sale of common stock and warrants, net of costs		—		35,147,000
Proceeds from the exercise of common warrants		—		480,000
Proceeds from the exercise of stock options		—		17,000
Net cash provided by financing activities		—		35,644,000
Effect of foreign currency translation on cash		(7,000)		(16,000)
Net increase (decrease) in cash and cash equivalents		(4,303,000)		28,980,000
Cash and cash equivalents at beginning of period		55,070,000		19,025,000
Cash and cash equivalents at end of period	$	50,767,000	$	48,005,000

See accompanying notes to condensed consolidated financial statements.

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of Business

The Company

Onconova Therapeutics, Inc. (the “Company”) was incorporated in the State of Delaware on December 22, 1998 and commenced operations on January 1, 1999. The Company’s headquarters are located in Newtown, Pennsylvania. The Company is a clinical-stage biopharmaceutical company focused on discovering and developing novel products for patients with cancer. The Company has proprietary targeted anti-cancer agents designed to disrupt specific cellular pathways that are important for cancer cell proliferation. The Company believes that the product candidates in its pipeline have the potential to be efficacious in a variety of cancers with unmet medical need. The Company has the following two clinical-stage programs: 1. narazaciclib (ON 123300), a multi-kinase inhibitor in solid tumors; and 2. oral rigosertib alone or in combination with PD-1 inhibitors for treatment of KRAS-mutated solid tumors. During 2012, Onconova Europe GmbH was established as a wholly owned subsidiary of the Company for the purpose of further developing business in Europe.

On May 20, 2021, the Company amended its certificate of incorporation to decrease the number of authorized shares of common stock par value $0.01 per share from 250,000,000 to 125,000,000, and to effect a one-for-fifteen reverse stock split of its common stock. All common stock, equity, share and per share amounts in the financial statements and notes have been retroactively adjusted to reflect this one-for-fifteen reverse stock split.

Liquidity

The Company has incurred recurring operating losses since inception. For the three months ended March 31, 2022, the Company incurred a net loss of $4,122,000 and as of March 31, 2022 the Company had generated an accumulated deficit of $448,841,000. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to research, development of its product candidates and its preclinical programs, strategic alliances and its administrative organization. At March 31, 2022, the Company had cash and cash equivalents of $50,767,000. The Company will require substantial additional financing to fund its ongoing clinical trials and operations, and to continue to execute its strategy.

The Company has and may continue to delay, scale-back, or eliminate certain of its research and development activities and other aspects of its operations until such time as the Company is successful in securing additional funding. The Company is exploring various dilutive and non-dilutive sources of funding, including equity financings, strategic alliances, business development and other sources. The future success of the Company is dependent upon its ability to obtain additional funding. There can be no assurance, however, that the Company will be successful in obtaining such funding in sufficient amounts, on terms acceptable to the Company, or at all. The Company believes that its cash and cash equivalents will be sufficient to fund its ongoing trials and business operations for more than twelve months from the date of this filing.

COVID-19

While the Company is not aware of a material impact from the novel coronavirus disease (“COVID-19”) pandemic through March 31, 2022, the full extent to which COVID-19 will directly or indirectly impact the Company’s business, results of operations and financial condition, including manufacturing, clinical trials and research and development costs, depends on future developments that are uncertain at this time.

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

2. Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and footnotes normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The financial statements include the consolidated accounts of the Company and its wholly-owned subsidiary, Onconova Europe GmbH. All significant intercompany transactions have been eliminated.

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021, the consolidated statements of stockholders’ equity (deficit) for the three months ended March 31, 2022 and 2021 and the condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 are unaudited. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2022, the results of its operations for the three months ended March 31, 2022 and 2021, and its cash flows for the three months ended March 31, 2022 and 2021. The financial data and other information disclosed in these notes related to the three months ended March 31, 2022 and 2021 are unaudited. The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s annual report on Form 10-K filed with the SEC on March 21, 2022.

All common stock, equity, share and per share amounts in the financial statements and notes have been retroactively adjusted to reflect a one-for-fifteen reverse stock split which was effective May 20, 2021.

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. The Company views its operations and manages its business in one segment, which is the identification and development of oncology therapeutics.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2021 included in the Company’s annual report on Form 10-K filed with the SEC on March 21, 2022. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies.

Fair Value Measurements

The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, accounts payable, and accrued liabilities approximate their respective fair values because of the short-term nature of these accounts. The fair value of the warrant liability is discussed in Note 7, “Fair Value Measurements.”

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Recent Accounting Pronouncements

In June 2016, the FASB issued new guidance on the accounting for credit losses on financial instruments. The guidance was amended in November 2019. The new guidance introduces an expected loss model for estimating credit losses, replacing the incurred loss model. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The guidance is effective for the Company in fiscal years beginning after December 15, 2022, and interim periods within those years, with early adoption permitted. The guidance is not expected to have a material effect on the Company.

SEC Form 10-Q filed by Onconova Therapeutics Inc.