UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
☒
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the Fiscal Year Ended December 31, 2024
☐
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ______ until ______
Commission
File Number: 001-41719
60
DEGREES PHARMACEUTICALS, INC.
(Exact
name of Registrant as specified in its charter)
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
(Address of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code: (202)327-5422
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 $0.0001 per share SXTP The Nasdaq Stock Market LLC
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐ No ☒
Indicate
by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☒
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 past 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 post 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 has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
The aggregate market value of the Registrant’s
common stock, held by non-affiliates of the Registrant on June 30, 2024 (which is the last business day of Registrant’s most recently
completed second fiscal quarter) based upon checking the closing market price of such stock on The Nasdaq Capital Market on June 28, 2024,
the closest trading day, was approximately $2.70 million.
As of March 27, 2025 the Registrant had 1,472,891 shares of common
stock, par value $0.0001 per share, issued and outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
TABLE
OF CONTENTS
PAGE
PART I 1
Item 1. Description of Business 1
Item 1A. Risk Factors 39
Item 1B. Unresolved Staff Comments 39
Item 1C. Cybersecurity 39
Item 2. Properties 40
Item 3. Legal Proceedings 40
Item 4. Mine Safety Disclosures 40
Item 6. [Reserved] 46
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 58
Item 8. Financial Statements and Supplementary Data F-1
Item 9A. Controls and Procedures 59
Item 9B. Other Information 60
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 60
PART III 61
Item 10. Directors, Executive Officers and Corporate Governance 61
Item 11. Executive Compensation 67
Item 14. Principal Accountant Fees and Services 77
Item 15. Exhibits and Financial Statement Schedules 78
SIGNATURES 82
In
this Annual Report on Form 10-K, unless otherwise stated or as the context otherwise requires, references to “60 Degrees Pharmaceuticals,
Inc.,” “60 Degrees Pharmaceuticals,” “60P,” the “Company,” “we,” “us,”
“our” and similar references refer to 60 Degrees Pharmaceuticals, Inc., a Delaware corporation. Our logo and other trademarks
or service marks of the Company appearing in this Annual Report on Form 10-K are the property of 60 Degrees Pharmaceuticals, Inc. This
Annual Report on Form 10-K also contains registered marks, trademarks and trade names of other companies. All other trademarks, registered
marks and trade names appearing in this Annual Report on Form 10-K are the property of their respective holders.
i
Cautionary
Note Regarding Forward-Looking Statements and Industry Data
This
Annual Report on Form 10-K, in particular, Part II Item 7 “Management’s Discussion and Analysis of Financial Condition
and Results of Operations,” contains certain “forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). These forward-looking statements represent our expectations, beliefs, intentions or strategies
concerning future events, including, but not limited to, any statements regarding our assumptions about financial performance; the continuation
of historical trends; the sufficiency of our cash balances for future liquidity and capital resource needs; the expected impact of changes
in accounting policies on our results of operations, financial condition or cash flows; anticipated problems and our plans for future
operations; and the economy in general or the future of the industry in which we operate, all of which were subject to various risks
and uncertainties.
When
used in this Annual Report on Form 10-K and other reports, statements and information we have filed with the Securities and Exchange
Commission (“SEC”), in our press releases, presentations to securities analysts or investors, in oral statements made by
or with the approval of an executive officer, the words or phrases “believes,” “may,” “will,” “expects,”
“should,” “continue,” “anticipates,” “intends,” “will likely result,” “estimates,”
“projects” or similar expressions and variations thereof are intended to identify such forward-looking statements. However,
any statements contained in this Annual Report on Form 10-K that are not statements of historical fact may be deemed to be forward-looking
statements. These statements are only predictions. All forward-looking statements included in this Annual Report on Form 10-K are based
on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Any or
all of our forward-looking statements in this document may turn out to be wrong. Actual events or results may differ materially. Our
forward-looking statements can be affected by inaccurate assumptions we might make or by known or unknown risks, uncertainties and other
factors.
This
Annual Report on Form 10-K also contains estimates, projections and other information concerning our industry, our business and particular
markets, including data regarding the estimated size of those markets. Information that is based on estimates, forecasts, projections,
market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially
from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business,
market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties,
industry, general publications, government data and similar sources.
ii
PART
I
Item
1. Description of Business.
Overview
We
are a specialty pharmaceutical company with a goal of using cutting-edge biological science and applied research to further develop and
commercialize new therapies for the prevention and treatment of infectious diseases. We have successfully achieved regulatory approval
of Arakoda, a malaria preventative treatment that has been on the market since late 2019. Currently, 60P’s pipeline under development
covers development programs for vector-borne, fungal, and viral diseases utilizing three of the Company’s future products: (i)
new products that contain the Arakoda regimen of Tafenoquine; (ii) new products that contain Tafenoquine; and (iii) Celgosivir. Additionally,
we are conducting due diligence activities in relation to potential in-licensing of a product relevant to Lyme disease and an antimalarial
combination partner for Tafenoquine for P. vivax malaria.
Corporate
History
60
Degrees Pharmaceuticals, Inc. is a Delaware corporation that was incorporated on June 1,
2022. On June 1, 2022, 60 Degrees Pharmaceuticals, LLC, a District of Columbia limited liability
company (“60P LLC”), entered into the Agreement and Plan of Merger with 60 Degrees
Pharmaceuticals, Inc., pursuant to which 60P LLC merged into 60 Degrees Pharmaceuticals,
Inc. The value of each outstanding member’s membership interest in 60P LLC was correspondingly
converted into common stock of 60 Degrees Pharmaceuticals, Inc., par value $0.0001 per share,
with a cost-basis equal to $300.00 per share.
We
also operate one subsidiary. A summary of our majority-owned subsidiary is below.
We
own 97% equity in 60P Australia Pty Ltd, a Sydney-Australia based subsidiary (“60P Australia”). 60P Australia holds sub-licensing
rights for several ex-U.S. territories for our product.
60P
Australia previously solely owned a Singaporean subsidiary company, 60P Singapore Pte. Ltd., which dissolved at our election in the second
quarter of 2022.
1
Recent
Developments
Reverse Split
On November 6, 2024, our Board of Directors (“Board”)
approved a reverse stock split of our Common Stock at a split ratio ranging between 1:3 and 1:5, as determined by the Board in its sole
discretion. On November 6, 2024, a majority of the stockholders of the Company approved the proposed reverse stock split. On February
10, 2025, the Board approved a 1-for-5 reverse split ratio. On February 24, 2025, the Company effectuated a 1-for-5 reverse stock split
of our common stock (the “1:5 Reverse Stock Split”). Beginning February 24, 2025, our common stock traded on The Nasdaq Capital
Market on a split adjusted basis. All common share and applicable per share amounts in this Annual Report on Form 10-K have been retroactively
restated to reflect the effect of the 1:5 Reverse Stock Split.
Previously, at the 2024 Annual Meeting of Stockholders
in July 2024, our stockholders approved an amendment to our Certificate of Incorporation to effect reverse stock split of our common
stock at a range of ratios between 1:5 to 1:12, and on July 19, 2024, our Board approved the implementation of the reverse stock split
at a ratio of 1:12 (the “1:12 Reverse Stock Split”, and together with the 1:5 Reverse Stock Split, the “Reverse Stock
Splits”). On August 12, 2024, we effectuated a 1-for-12 reverse stock split of our common stock. Beginning August 12, 2024, our
common stock began trading on The Nasdaq Capital Market on a split adjusted basis.
The Reverse Stock Splits did not change the authorized
number of shares of common stock or preferred stock. Proportional adjustments were made to the number of shares of common stock issuable
upon exercise or conversion of our equity awards, warrants, and other equity instruments convertible into common stock, as well as the
respective exercise prices, if applicable in accordance with the terms of the instruments. No fractional shares of common stock were
issued in connection with the Reverse Stock Splits and all fractional shares were rounded up to the nearest whole share with respect
to outstanding shares of common stock. Unless otherwise noted, all references to numbers of shares of our common stock and per share
information presented in this Annual Report on Form 10-K have been retroactively adjusted, as appropriate, to reflect the Reverse Stock
Splits.
February
2025 Offering
On
February 5, 2025, we entered into a securities purchase agreement (the “February 2025 Securities Purchase Agreement”) with
certain institutional investors (the “February 2025 Purchasers”) pursuant to which the Company sold, in a registered direct
offering an aggregate of 300,700 shares (the “February 2025 Shares”) of common stock at a purchase price of $3.575 per share
in a registered direct offering priced at-the-market under the rules of Nasdaq (the “February 2025 Offering”).
The
February 2025 Shares were offered pursuant to a “shelf” registration statement on Form S-3 (Registration No. 333-280796),
which was declared effective by the Securities and Exchange Commission (the “SEC”) on July 18, 2024 as supplemented by a
prospectus supplement dated February 5, 2025, filed with the SEC on February 6, 2025 and accompanying base prospectus, pursuant to Rule
424(b)(5) promulgated under the Securities Act.
In
a concurrent private placement, the Company also issued to the February 2025 Purchasers unregistered warrants (the “February 2025
Warrants”) to purchase up to an aggregate of 300,700 shares of common stock at an exercise price of $2.95 per share. The February
2025 Warrants are exercisable upon issuance and expire twenty-four months from the date of issuance.
Pursuant
to the February 2025 Securities Purchase Agreement, the Company is required to file a registration statement with the SEC within 45 days
after the date of the February 2025 Securities Purchase Agreement to register the shares underlying the February 2025 Warrants under
the Securities Act. The Company shall use commercially reasonable efforts to cause such registration statement to become effective within
75 days following the closing date of the February 2025 Offering and to keep such registration statement effective at all times until
no February 2025 Purchaser owns any February 2025 Warrants or shares underlying the February 2025 Warrants issuable upon exercise thereof.
Any
holder will not have the right to exercise any portion of the February 2025 Warrants if the holder (together with its affiliates) would
beneficially own more than 4.99% (or, upon the election of the holder, 9.99%) of the number of shares of the common stock outstanding
immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the February
2025 Warrants. However, any holder may increase or decrease such percentage, provided that any increase will not be effective until the
61st day after such election.
The
exercise price of the February 2025 Warrants is subject to customary adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting the common stock and also upon any distributions of assets,
including cash, stock or other property to the stockholders of the Company.
The
issuance of the February 2025 Warrants pursuant to the February 2025 Securities Purchase
Agreement and issuance of the February 2025 Placement Agent Warrants (defined below) were
made pursuant to the exemption from the registration requirements under the Securities Act,
available to the Company under Section 4(a)(2) promulgated thereunder and Rule 506 of Regulation
D promulgated under the Securities Act due to the fact the offering of the February 2025
Common Warrants and the February 2025 Placement Agent Warrants thereunder did not involve
a public offering of securities.
2
The
February 2025 Securities Purchase Agreement contained customary representations and warranties. The February 2025 Offering closed on
February 6, 2025.
Pursuant
to the Engagement Agreement, the Placement Agent acted as the Company’s exclusive placement agent in connection with the offering.
Pursuant
to the terms of the Engagement Agreement, the Company paid the Placement Agent a cash transaction fee equal to 7.5% of the aggregate
gross cash proceeds in the offering and a management fee equal to 1.0% of the aggregate gross cash proceeds in the offering. In addition,
the Company paid for certain non-accountable expenses in the amount of $15,000 and a clearing fee in the amount of $10,000. The Company
also issued to the Placement Agent (or its designees) warrants to purchase up to 22,554 shares of Common Stock (the “February 2025
Placement Agent Warrants”). The February 2025 Placement Agent Warrants have an exercise price equal to $4.469 per share and are
exercisable upon issuance and expire twenty-four months from the date of issuance.
The
Company received net proceeds of $908,627 from the offering, after deducting estimated offering
expenses paid by the Company, including the Placement Agent fees. The Company intends to
use the net proceeds from the offering for general corporate purposes, including working
capital.
January
2025 Offering
On January 28, 2025, we entered into a securities
purchase agreement (the “January 2025 Securities Purchase Agreement”) with certain institutional investors (the “January
2025 Purchasers”) pursuant to which the Company sold, in a registered direct offering an aggregate of 204,312 shares (the “January
2025 Shares”) of common stock at a purchase price of $5.105 per share in a registered direct offering priced at-the-market under
the rules of The Nasdaq Stock Market LLC (“Nasdaq”).
The
January 2025 Shares were offered pursuant to a “shelf” registration statement on Form S-3 (Registration No. 333-280796),
which was declared effective by the Securities and Exchange Commission (the “SEC”) on July 18, 2024 as supplemented by a
prospectus supplement dated January 28, 2025, filed with the SEC on January 30, 2025, and accompanying base prospectus, pursuant to Rule
424(b)(5) promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
In
a concurrent private placement, the Company also issued to the January 2025 Purchasers unregistered
warrants (the “January 2025 Warrants”) to purchase up to an aggregate of 408,621
shares of common stock at an exercise price of $3.855 per share. The January 2025 Warrants
are exercisable upon issuance and expire twenty-four months from the date of issuance.
Pursuant
to the January 2025 Securities Purchase Agreement, the Company is required to file a registration
statement with the SEC within 45 days after the date of the January 2025 Securities Purchase
Agreement to register the shares underlying the January 2025 Warrants under the Securities
Act. The Company shall use commercially reasonable efforts to cause such registration statement
to become effective within 75 days following the closing date of the January 2025 Offering
and to keep such registration statement effective at all times until no January 2025 Purchaser
owns any January 2025 Warrants or shares underlying the January 2025 Warrants issuable upon
exercise thereof.
Any
holder will not have the right to exercise any portion of the January 2025 Warrants if the
holder (together with its affiliates) would beneficially own more than 4.99% (or, upon the
election of the holder, 9.99%) of the number of shares of the common stock outstanding immediately
after giving effect to the exercise, as such percentage ownership is determined in accordance
with the terms of the January 2025 Warrants. However, any holder may increase or decrease
such percentage, provided that any increase will not be effective until the 61st day after
such election.
The
exercise price of the January 2025 Warrants is subject to customary adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting the common stock and also upon any distributions of assets,
including cash, stock or other property to the stockholders of the Company.
The
issuance of the January 2025 Warrants pursuant to the January 2025 Securities Purchase Agreement and issuance of the January 2025 Placement
Agent Warrants (defined below) were made pursuant to the exemption from the registration requirements under the Securities Act of 1933,
as amended (the “Securities Act”), available to the Company under Section 4(a)(2) promulgated thereunder and Rule 506 of
Regulation D promulgated under the Securities Act due to the fact the offering of the January 2025 Warrants and the January 2025 Placement
Agent Warrants thereunder did not involve a public offering of securities.
The
January 2025 Securities Purchase Agreement contained customary representations and warranties. The January 2025 Offering closed on January
30, 2025.
Pursuant
to an engagement letter agreement between and H.C. Wainwright & Co., LLC (the “Placement Agent”) dated August 30, 2024,
as amended on September 3, 2024 and January 24, 2025 (the “Engagement Agreement”), the Placement Agent acted as the Company’s
exclusive placement agent in connection with the offering.
3
Pursuant
to the terms of the Engagement Agreement, the Company paid the Placement Agent a cash transaction
fee equal to 7.5% of the aggregate gross cash proceeds in the offering and a management fee
equal to 1.0% of the aggregate gross cash proceeds in the offering. In addition, the Company
paid for certain non-accountable expenses in the amount of $15,000 and a clearing fee in
the amount of $10,000. The Company also issued to the Placement Agent (or its designees)
warrants to purchase up to 15,325 shares of common stock (the “January 2025 Placement
Agent Warrants”). The January 2025 Placement Agent Warrants have an exercise price
equal to $6.382 per share and are exercisable upon issuance, or January 30, 2025, for twenty-four
months from the date of issuance, or January 30, 2027.
The
Company received net proceeds of approximately $804,346 from the offering, after deducting
estimated offering expenses paid by the Company, including the Placement Agent fees. The
Company intends to use the net proceeds from the offering for general corporate purposes,
including working capital.
Supply
Chain Updates
In
February 2025, the FDA authorized the importation of Kodatef from Australia, to cover any future disruption of Arakoda in the U.S. market.
Kodatef is the branded version of tafenoquine for malaria prevention approved by the TGA for use in Australia. The Company made this
request of the FDA due to robust demand for Arakoda in late 2024/early 2025, and the potential for delays in the completion of new lots
of Arakoda currently being commercially validated by our key supplier, PCI. Although we anticipate that new commercial Arakoda lots will
enter the supply chain prior to the exhaustion of existing inventory, Kodatef will be available to cover any shortage through a specialty
pharmacy that already carries Arakoda, and has the capacity to ship to customers in all 50 states.
IRB
Approval of Phase II Study to Evaluate Tafenoquine for Chronic Babesiosis
On January 8, 2025, we announced that the approval
of an Investigational Review Board (IRB) sanctioned Phase II clinical study. The study (NCT06656351) will evaluate the efficacy and safety
of the ARAKODA® regimen (tafenoquine) over 90 days for treating patients with a presumptive diagnosis of chronic babesiosis who have
experienced severe fatigue with significant functional impairment for at least six months upon enrollment. Patient enrollment is expected
to begin in Q3 2025.
First
Patient in Tafenoquine Expanded Access Clinical Study for Persistent (B. microti) Babesiosis
On
January 8, 2025, we announced that the first patient has been enrolled in NCT06478641, an expanded access clinical study intended to
confirm the activity of tafenoquine in treating patients with persistent babesiosis who have failed standard of care treatment and are
at high risk of experiencing a relapse.
Patent
License Agreement
On
December 23, 2024, we and Tufts Medical Center announced signing of a Patent License Agreement to jointly advance the development and
commercialization of tafenoquine for the treatment and prevention of babesiosis. Tafenoquine is not currently approved by the U.S. Food
and Drug Administration (“FDA”) for the treatment and prevention of babesiosis. The agreement follows initiation of collaboration
between researchers from both organizations to study the activity of tafenoquine against babesiosis, a serious tick-borne disease caused
by microscopic parasites that infect red blood cells. The study formed the basis of U.S. Provisional Patent Application No. 63/461,060,
and related U.S. utility and PCT applications, granting the parties shared intellectual property rights to tafenoquine’s potential
future use for babesiosis.
Expansion
of Tafenoquine Clinical Trial for Babesiosis to Brigham and Women’s Hospital
On
December 11, 2024, we entered into a clinical trial agreement with Brigham and Women’s Hospital (BWH) in Boston to conduct a double-blind,
placebo-controlled study evaluating the safety and efficacy of tafenoquine in combination with standard of care treatment for hospitalized
babesiosis patients. The trial (NCT06207370) evaluates tafenoquine combined with standard treatment for babesiosis, addressing a critical
unmet medical need. The double-blind, placebo-controlled trial will examine outcomes for hospitalized patients with severe babesiosis,
a tick-borne illness often found as a co-infection of Lyme disease.
4
ARAKODA®
Promotional Pilot in Advance of Expanded U.S. Launch
On October 3, 2024, we announced that we have
commenced a nine-month promotional pilot to bring greater awareness of ARAKODA® (tafenoquine) and its benefits to patients and healthcare
providers who prescribe it. The pilot program includes inside, or virtual, sales representatives who will conduct outreach to prospective
and current ARAKODA customers to promote the co-pay program and increase sales. The status of this program is outlined in the “Strategy”
section.
Amendments
to 2022 Equity Incentive Plan
On July 16, 2024 and November 6, 2024, our
stockholders approved an amendment to the 60 Degrees Pharmaceuticals, Inc. 2022 Equity Incentive Plan (the “2022 Plan”)
to increase the number of shares of Common Stock authorized for issuance by 83,334 shares and 100,000 shares, respectively, which
were previously approved by the Board. The total number of shares that remain available for issuance under the 2022 Plan is 57,068
shares effective as of March 27, 2025, which additional reservation of shares provides us with flexibility to address future equity
compensation needs. These increases are essential to attract and retain qualified employees, directors and consultants, and to align
their interests with those of our stockholders.
September 2024 Private Placement
On September 4, 2024, we entered into a securities
purchase agreement (the “Purchase Agreement”) with a single institutional investor. The Purchase Agreement provided
for the sale and issuance by us of an aggregate of: (i) Pre-Funded Warrants to purchase up to 579,711 Shares of our Common Stock, (ii)
579,711 shares of Common Stock issuable upon exercise of Series A Warrants, and (iii) 579,711 shares of Common Stock issuable upon exercise
of Series B Warrants.
The Pre-Funded Warrants are exercisable immediately
upon issuance and expire when exercised in full at an exercise price of $0.005 per share. The Series A Warrants and Series B Warrants
have an exercise price of $6.90 per share and were exercisable beginning on the effective date of stockholder approval of the issuance
of the shares of Common Stock upon exercise of the Common Warrants and the Placement Agent Warrants (discussed below), which was received
November 6, 2024 (the “Stockholder Approval”). The Series A Warrants will expire five years from Stockholder Approval and
the Series B Warrants will expire eighteen (18) months from Stockholder Approval.
H.C. Wainwright & Co., LLC acted
as the exclusive placement agent in connection with the Private Placement. In connection with the Private Placement, we issued to Wainwright
the Placement Agent Warrants to purchase 43,479 shares of our Common Stock. The Placement Agent Warrants have an exercise price equal
to $8.625 per share and are exercisable beginning on the effective date of Stockholder Approval for five years from Stockholder Approval.
The Registered Securities were subsequently registered
pursuant to a registration statement on Form S-3 (File No. 333-282221) that was originally filed with the Securities and Exchange Commission
on September 19, 2024, and which was declared effective on September 30, 2024.
ATM Offering
On July 12, 2024, we entered into an At-the-Market
Issuance Sales Agreement (the “ATM Agreement”) with WallachBeth Capital LLC (“WallachBeth”) to sell shares of
Common Stock having an aggregate offering price of up to $1,253,603 from time to time, through an “at the market offering”
program (the “ATM Offering”). On July 22, 2024, we filed an amendment to the prospectus supplement with the SEC to increase
the amount of Common Stock that may be offered and sold in the ATM Offering to $1,774,640 in the aggregate, inclusive of the shares of
Common Stock previously sold in the ATM Offering. On July 24, 2024, we filed a second amendment to the prospectus supplement with the
SEC to further increase the amount of Common Stock that may be offered and sold in the ATM Offering to $1,890,705 in the aggregate, inclusive
of the shares of Common Stock previously sold in the ATM Offering. On July 26, 2024, we filed a third amendment to the prospectus supplement
with the SEC to further increase the amount of Common Stock that may be offered and sold in the ATM Offering to $2,190,416 in the aggregate,
inclusive of the shares of Common Stock previously sold in the ATM Offering. On August 2, 2024, we filed a fourth amendment to the prospectus
supplement with the SEC to further increase the amount of Common Stock that may be offered and sold in the ATM Offering to $2,295,192
in the aggregate, inclusive of the shares of Common Stock previously sold in the ATM Offering. The offer and sale of shares of Common
Stock from the ATM Offering were made pursuant to our effective “shelf” registration statement on Form S-3 and an accompanying
base prospectus contained therein (Registration Statement No. 333-280796) which became effective on July 18, 2024. From July 19, 2024
to August 2, 2024, the Company sold a total of 135,568 shares in the ATM Offering for gross proceeds of $1,994,583.
Mission
Our
mission is to address the unmet medical need associated with infectious diseases through the development and commercialization of new
small molecule therapeutics, focusing on synthetic drugs (made by chemists in labs, excluding biologics) with good safety profiles based
on prior clinical studies, in order to reduce cost, risk, and capitalize on existing research. We are seeking to expand Arakoda’s
use beyond malaria prevention and to demonstrate clinical benefit for other disease indications. We are further testing the viability
of another product (Celgosivir) to determine whether to advance it into further clinical development, and may seek to develop and license
other molecules in the future. Celgosivir is being considered for development as an antiviral product for a number of diseases.
Market
Opportunity
Malaria
Prevention
In
2018, the FDA approved Arakoda for malaria prevention in individuals 18 years and older. Arakoda entered the U.S. supply chain in the
third quarter of 2019, just prior to the COVID-19 pandemic. As the approved indication is for travel medicine, and international travel
was substantially impacted by the pandemic, we did not undertake any active marketing efforts for Arakoda. Following our financing in
January 2024, the Company hired a Chief Commercial Officer and commissioned IQVIA market data and a qualitative marketing demand study.
That research, recently completed, suggests that prescribing for malaria prevention therapies has returned to pre-pandemic levels, and
that the total U.S. market represents around 1.1 million prescriptions (one prescription per three weeks of travel). Based on consumer
and HCP demand research, the Company estimates that the accessible market for Arakoda represents about one third of this volume (about
330,000 prescriptions). Barriers to entry include low brand awareness in the prescriber community and the low cost of some of the generic
alternatives. In the second half of 2024 we will conduct a pilot commercialization study to confirm these barriers can be overcome (see
“Strategy”).
5
Treatment
and Prevention of Tick-Borne Disease (Babesiosis)
We
are repositioning the Arakoda regimen of Tafenoquine for several potential new therapeutic indications that have substantial U.S. caseloads,
as further described below:
Recent market data shows that Tafenoquine
appears to be increasingly prescribed by Lyme physicians to manage Chronic Babesiosis. This trend may follow the recent publication of
several case reports demonstrating activity in immunosuppressed patients with acute babesiosis, and animal data showing eradication of
Babesia parasites with Tafenoquine (primarily as Arakoda).3 The Company believes the recent increases in sales of Arakoda
have been driven by organic growth of these activities. There are no formal epidemiological publications articulating the incidence or
prevalence of Chronic Babesiosis, so these metrics must be inferred based on data for PTLDS and the rate of coinfection with Babesia
parasites. Thus, the cumulative case load of Chronic Babesiosis may be as high as1.01 million patients in the United States.4
We believe, based on our market research that at least 37% of this market, or 375,000 cases, may be addressable with Tafenoquine
during the remainder of its market exclusivity window for malaria. We are undertaking additional research to determine how much additional
market capture might be feasible.
Acute
infection with many different organisms (e.g. Borrelia, SARS-Cov-2, Epstein Barr virus) trigger “Long Syndromes” in a minority
of cases, characterized by cognitive dysfunction, fatigue and post-exertional malaise.5 For many years, such conditions have
been confusing to the mainstream medical community because there may not be formal diagnostic criteria or an established theory of disease.
This is changing with the advent of Long COVID, and a recent prominent paper outlined the pathophysiological mechanisms for the first
time.6 Although there is not yet supporting evidence in the medical literature, some key opinion leaders in the Lyme community
have postulated, using the veterinary literature as an analog, that life-long infection by sequestering forms of Babesia (e.g.,
B. odocoilei) may be a significant driver of chronic fatigue symptoms.7 If this is true, the addressable market for
antibabesial drugs may be substantially larger than stated above, since the prevalence of chronic fatigue syndrome in the U.S. is at
least 3.3 million cases (excluding Long COVID and PTLDS).8
2 Conclusions from Company-commissioned market research.
3 Conclusions from Company-commissioned market research.
8 See https://www.cdc.gov/nchs/data/databriefs/db488.pdf.
11 According to IDSA guidelines.
6
Treatment
and Prevention of Fungal Infections
We
are evaluating Tafenoquine for potential utility in the following fungal diseases:
Viral
Diseases
Celgosivir, a potential clinical candidate of
60P’s, has activity in a number of animal models of important viral diseases such as Dengue and RSV. According to the European
CDC, Dengue is associated with at least 4.1 million cases globally.19 And, according to the U.S. CDC, RSV is responsible for
up to 240,000 hospitalizations in children less than five years of age and adults greater than 65 years of age in the United States each
year.20 As outlined in the “Strategy” section below, we expect to evaluate Celgosivir in additional non-clinical
disease models before making a decision regarding clinical development.
7
More
information about our products is provided in the next section, and the status of various development efforts for the above-mentioned
diseases is outlined in Figure A, below.
Figure
A
Products
Arakoda
(Tafenoquine) for malaria prevention
We
entered into a cooperative research and development agreement with the United States Army in 2014 to complete development of Arakoda
for prevention of malaria.21 With the U.S. Army, and other private sector entities as partners, we coordinated the execution
of two clinical trials, development of a full manufacturing package, gap-filling non-clinical studies, compilation of a full regulatory
dossier, successful defense of our program at an FDA advisory committee meeting and submitted a new drug application (“NDA”)
to the FDA in 2018. The history of that collaboration has been publicly communicated by the U.S. Army.22
8
The
FDA and Australia’s medicinal regulatory agency, the Therapeutic Goods Administration, subsequently approved Arakoda (brand name
in the U.S.) and Kodatef (brand name in Australia), respectively, for prevention of malaria in travelers in 2018. Prescribing information
and guidance for patients can be found at www.arakoda.com. The features and benefits of Tafenoquine for malaria prophylaxis, some
of which have been noted by third-party experts, include: convenient once weekly dosing following a three day load; the absence of reports
of drug resistance during malaria prophylaxis; activity against liver and blood stages of malaria as well as both the major malaria species
(Plasmodium vivax and Plasmodium falciparum); absence of any black-box safety warnings; good tolerability, including in
women and individuals with prior psychiatric medical history; and a comparable adverse event rate to placebo with up to 12 months continuous
dosing.23 Tafenoquine entered the commercial supply chains in the U.S. and Australia in the third quarter of 2019.
The
only limitation of Arakoda is the requirement for a G6PD test prior to administration.24 The G6PD test must be administered
to a prospective patient prior to administration of Arakoda in order to prevent the potential occurrence of hemolytic anemia in individuals
with G6PD deficiency.25 G6PD is one of the most common enzyme deficiencies and is implicated in hemolysis following administration/ingestion
of a variety of oxidant drugs/food. G6PD must also be ruled out as a possible cause when diagnosing neonatal jaundice. As a consequence,
G6PD testing is widely available in the United States through commercial pathology service providers (e.g., Labcorp, Quest Diagnostics,
etc.). Although these tests have a turn-around time of up to 72 hours, the test needs only to be administered once. Thus, existing U.S.
testing infrastructure is sufficient to support the FDA-approved use of the product (malaria prevention) by members of the armed forces
(who automatically have a G6PD test when they enlist), civilian travelers with a long planning horizon, or repeat travelers.
Tafenoquine
for Other (Infectious) Diseases
During
the pandemic, we also worked with NIH to evaluate the utility of Tafenoquine as an antifungal. We, and the NIH, found that Tafenoquine
exhibits a Broad Spectrum of Activity in cell culture against Candida and other yeast strains via a different Mode of Action than
traditional antifungals and also exhibits antifungal activity against some fungal strains at clinically relevant doses in animal models.26
Our work followed Legacy Studies that show Tafenoquine is effective for treatment and prevention of Pneumocystis pneumonia
in animal models.27 We believe that if added to the standard of care for anti-fungal and yeast infection treatments for general
use, Tafenoquine has the potential to improve patient outcomes in terms of recovery from yeast infections, and prevention of fungal pneumonias
in immunosuppressed patients. There are limited treatment options available for these indications, and Tafenoquine’s novel mechanism
of action might also mitigate problems of resistance. Clinical trial(s) to prove safety and efficacy, and approval by the FDA and other
regulators, would be required before Tafenoquine could be marketed for these indications.
Tafenoquine
monotherapy, or use in combination with other antibabesial medications, clears and eradicates Babesia infections, respectively,
in both immunocompetent and immunocompromised animal models of babesiosis (tick borne red blood cell infections).28 In up
to 80% of cases Tafenoquine administered in combination with antibabesial drugs after prior failure of conventional antibiotics in immunosuppressed
babesiosis patients resulted in cures.29 Tafenoquine is also increasingly being utilized by Lyme disease prescribers to manage
symptoms of Chronic Babesiosis. Consequently, we believe that (i) if combined with standard of care products, Tafenoquine has the potential
to accelerate parasite clearance and reduce the duration of illness and treatment with antibiotic therapy in immunosuppressed patients
hospitalized with severe illness, (ii) once appropriate clinical studies have been conducted, it is likely that Tafenoquine would be
quickly embraced for post-exposure prophylaxis of babesiosis in patients with tick bites, and (iii) Tafenoquine could become the leading
treatment for Chronic Babesiosis. Clinical trial(s) to prove safety and efficacy, and approval by FDA and other regulators, would be
required before Tafenoquine could be marketed for these indications.
24 See prescribing information at www.arakoda.com.
25 See prescribing information at www.arakoda.com.
9
Celgosivir
Celgosivir
is a host targeted glucosidase inhibitor that was developed separately by other sponsors for HIV then for hepatitis C.30 The
sponsors abandoned Celgosivir after completion of Phase II clinical trials involving 700+ patients, because other antivirals in development
at the time had superior activity. The National University of Singapore initiated development of Celgosivir independently for Dengue
fever. A clinical study, conducted in Singapore, the results of which were accepted for publication in the peer-reviewed journal Lancet
Infectious Diseases, confirmed its safety but the observed reduction in viral load was lower than what the study was powered to detect.31
Celgosivir (as with other Dengue antivirals) exhibits greater capacity to cure Dengue infections in animal models when administered
prior to symptom onset when compared to administration post-symptom onset. In animal models, this problem can be addressed by administering
the same dose of drug split into four doses per day rather than two doses per day (as was the case in the Singaporean clinical trial).32
This observation led to the filing and approval of a patent related to Dengue, which we licensed from the National University of
Singapore.
Additional
clinical studies would be required to prove that such a 4x daily dosing regimen would be safe and effective in Dengue patients to regulators’
satisfaction. To that end, earlier in our history, we, in partnership with the National University of Singapore, and Singapore General
Hospital, successfully secured a grant from the government of Singapore for a follow-on clinical trial. Unfortunately, we were unable
at that time to raise matching private sector funding. We concluded as a result that development of Repositioned Molecules for Dengue,
solely and without simultaneous development for other therapeutic use, despite substantial morbidity and mortality in tropical countries,
was an effort best suited for philanthropic entities. Accordingly, during the pandemic, we undertook an effort (in partnership with NIH’s
Division of Microbiology and Infectious Diseases program and Florida State University) to determine whether Celgosivir might be more
broadly useful for respiratory diseases that have impact in both tropical and temperate countries. Preliminary data suggest that Celgosivir
inhibits the replication of the virus that causes COVID-19 (SARS-CoV-2) in cell culture, and the RSV virus in cell culture and provides
benefits in animals. We have filed and/or licensed patents in relation to Celgosivir for these other viruses as we believe there is potential
applications to fight respiratory diseases that might have more commercial viability than historical development of Celgosivir to combat
Dengue fever.
Competitive
Strengths
Our
main competitive strength has been our ability to achieve important clinical milestones inexpensively in therapeutic areas that other
entities have found extremely challenging. With a small virtual management team, we have successfully built productive research partnerships
with public and academic entities, and licensed products with well characterized safety profiles in prior clinical studies, thereby reducing
the cost and risk of clinical development. This business and product model enabled Arakoda to be approved in 2018, with a total operating
expense of < $10 million. We plan to focus in the future on generating proof of concept clinical data sets for the approved Arakoda
regimen of Tafenoquine in other therapeutic areas, all of which is expected to foster and continue our existing tradition of inexpensive
product development.
Strategy
Following
our initial public offering in July 2023, our initial strategic priority was to conduct a Phase IIB that would have evaluated the potential
of the Arakoda regimen of Tafenoquine to accelerate disease recovery in COVID-19 patients with low risk of disease progression. In October
2023, we made a decision to suspend this study. This was a consequence of advice previously received from the FDA, which we interpreted
to mean that the Agency would not have granted clearance for the study to proceed unless we redesigned it to (i) enroll a patient population
in which receipt of Paxlovid or Lagevrio would be medically contraindicated, or (ii) compare Tafenoquine to placebo in patients taking
a “standard of care” regimen (defined by the FDA as Lagevrio or Paxlovid). The FDA’s position was somewhat surprising
given that neither Paxlovid nor Lagevrio is indicated for treatment of COVID-19 in low-risk patients. We determined that conducting our
study in an alternate population in the United States would be unfeasible, and that conducting an add-on-to standard of care study might
not be Phase III enabling. Accordingly, the Company made a decision to pivot back to continue commercialization of Arakoda for malaria,
and further evaluation of the Arakoda regimen of Tafenoquine for babesiosis and other diseases. We believe such an approach is both less
risky and less expensive.
Moving
forward, our general strategy to achieve profitability and grow shareholder value has three facets: (i) increase sales of Arakoda; (ii)
conduct clinical trials to expand the number of patients who can use Tafenoquine for new indications in the future; and (iii) reposition
small molecule therapeutics with good clinical safety profiles for new indications.
32 Watanabe et al, Antiviral Research 2016; 10:e19.
10
Expansion of U.S. Arakoda Sales
Hiring
of Chief Commercial Officer. In February 2024, we hired Kristen Landon to lead our commercial efforts to reintroduce Arakoda for