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2Q:22 Financial and Operational Review
Tenax Therapeutics, Inc. (NASDAQ:TENX) reported second quarter 2022 results on August 11, 2022 via its filing of Form 10-Q with the SEC. Since our previous report, the company announced the completion of its pharmacokinetic study of TNX-201 and held a key opinion leader (KOL) event on the use of imatinib in pulmonary arterial hypertension (PAH). The other important event in the second quarter was a successful $8 million private investment in public equity (PIPE) in mid-May with a single healthcare-focused institutional investor. Despite the slow pace, we are impressed with the clinical data for both of Tenax' assets in PAH, levosimendan and imatinib and think there is tremendous upside if dilution concerns can be addressed. We see a dramatic quality of life improvement for patients, with levosimendan being an especially remarkable opportunity in Pulmonary Hypertension in Patients With Heart Failure and Preserved Ejection Fraction (PH-HFpEF) which has no other approved therapies.
Highlights for 2022 include:
➢ TNX-102 patent allowed by USPTO - January 2022
➢ Transition to oral levosimendan open label extension completed - January 2022
➢ Formation of Scientific Advisory Board (SAB) - January 2022
➢ US patent granted for subcutaneous TNX-102 (levosimendan) - January 2022
➢ Robyn Hunter appointed to Board - January 2022
➢ $8 million PIPE offered at the market – May 2022
➢ Pharmacokinetic (PK) study completion for TNX-201 – May 2022
➢ KOL event examining imatinib for treatment of PAH – May 2022
➢ Delisting extension granted – August 2022
Tenax produced no revenues in 2Q:22 and incurred operating expenses of $2.9 million resulting in net loss of ($2.9) million, or ($0.11) per share.
For the quarter ended June 30, 2022 versus the same prior year period:
➢ General and administrative expenses rose 5% to $1.3 million primarily due to increases in legal fees related to its outsourcing, and higher costs for insurance, and administrative expense, partially offset by lower professional fees;
➢ Research and development expenses increased 120% to $1.5 million from $0.7 million with the rise related to expenses incurred for the PK study in TNX-102;
➢ Net loss was ($2.9) million versus ($1.7) million, or ($0.11) and ($0.10) per share, respectively.
At the end of the quarter, cash and equivalents totaled $7.2 million, compared to $5.6 million at the end of 2021. During the second quarter, Tenax announced an $8 million raise from the sale of 10.6 million units of pre-funded and other warrants that offset quarterly and first half cash burn of ($3.4) million and ($6.4) million respectively.
PAH KOL Event
Tenax held a key opinion leader (KOL) event on June 2nd featuring medical experts in the field including Anna Hemnes, MD, of Vanderbilt University Medical Center, John Ryan, MD, of the University of Utah, Bradley Maron, MD, of Harvard Medical School and Robert Frantz, MD, of Mayo Clinic College of Medicine. It was hosted by Tenax' Chief Medical Officer Dr. Stuart Rich. The discussion provided a review of Pulmonary Arterial Hypertension (PAH) including its prevalence of 50,000 to 100,000 in the United States.
Dr. Hemnes highlighted the growth factors are implicated in PAH which bind to tyrosine kinase to change its signaling inside of cells that alter the way genes are transcribed. Imatinib is able to reverse the proliferation of micro-fibroblasts and extracellular matrix changes in the lumina blood vessels, thereby reversing the vascular remodeling and allowing the diameter of the vessel to increase and improve blood flow.
Dr. Ryan summarized the details of Novartis' study of imatinib in PAH in the IMPRES trial. He proposed that reasons why the optimistic initial results failed to turn into an FDA approved drug in the years after the trial were due to a high dropout rate due to gastrointestinal-related adverse events and dose and dose titration. These problems can be addressed by modifying the formulation of the tablets.
Dr. Maron discussed some of the trials that have been conducted to investigate PAH. New imaging technology is able to measure the disease burden of PAH in the lung, with is an important biomarker for evaluating the effectiveness of new therapies. Two recent trials were conducted in the field including one for sotatercept which is based on stabilizing activin/GDF-BMP signaling in the Phase II PULSAR trial and the other targeting bromodomain containing protein-4 (BDR-4) which changes the DNA signature without changing the underlying DNA sequence in Phase I trial. Both of these trials demonstrated favorable data in their primary and secondary endpoints.
Dr. Frantz rounded out the event with his discussion of his imatinib experience during his management of the IMPRES trial. The trial took place in 2010 and 2011, and patients with the most severe PAH symptoms were very attracted to the trial given the severe side effects of taking standard of care therapy. He highlighted the importance of using biomarkers in a study because the range of patient phenotypes in PAH is broad, and matching the right patient with imatinib is key to the drug's success.
$8 Million PIPE Offered and Other Financing Details
On May 18th Tenax announced an $8 million private investment in public equity (PIPE) that raised $8 million from the sale of 10,596,027 units at $0.755 per unit. Each unit consisted of a pre funded warrant exercisable at $0.0001 and one warrant with an exercise price of $0.63. Both warrants are immediately exercisable. The prefunded warrant is perpetual and the $0.63 strike price warrants offer a duration of 5.5 years. Proceeds will support research and development activities for levosimendan and imatinib as well as general corporate purposes.
Certain warrants issued by the company over the last several years were modified to reduce the exercise price to $0.63 and extend their term by two years.
American College of Cardiology Scientific Sessions
Tenax announced that drug candidates levosimendan and imatinib would be featured at the American College of Cardiology (ACC) Scientific Sessions on April 3rd and 4th. Tenax' scientific advisory board member Barry Borlaug, MD shared data from the Phase II HELP trial1 in a presentation entitled "Helping PH-HFpEF Patients Walk Further with Levosimendan." His presentation will be part of the session "A Whole New World in Pulmonary Hypertension: Randomized Clinical Trial Updates For 2022" held April 3rd. Professor Stuart Rich, Tenax' Chief Medical Officer, presented on April 4th at the "Back to the Future: Old Drugs with a New Purpose in PAH" session. Dr. Rich's address is called "Next-generation Tyrosine Kinase Inhibitors for PAH" where he will review the mechanisms underlying the TKI class.
Clinical Asset Update
On January 4, 2022, Tenax provided an update on TNX-102 (subcutaneous levosimendan), TNX-103 (oral levosimendan) and TNX-201 (enteric-coated imatinib in PAH).
Tenax received a Notice of Allowance from the USPTO2 for patent number 11,213,524, Pharmaceutical Compositions for Subcutaneous Administration of Levosimendan (TNX-102) in early January. The patent covers subcutaneous administration of levosimendan for treatment of health conditions of any kind. On January 12th, Tenax announced that the patent had been granted, confirmed that it will offer protection through the end of 2039 and will be eligible for patent term extension. A Canadian patent of the same name, titled: Pharmaceutical compositions for subcutaneous administration of levosimendan is pending approval.
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Tenax also announced the completion of the IV to oral levosimendan transition (TNX-103) for patients currently enrolled in the open label extension rollover study (TNX-LVO-05) who advanced from the Phase II HELP trial. The goal of the extension was to determine the safety and tolerability of oral levosimendan and establish an oral dose that would maintain its efficacy. All patients in the extension successfully shifted from IV to oral without any unexpected safety issues or serious drug related adverse events. Data from the extension confirms that oral levosimendan, when dosed at 3-4 mg per day, was safe, well-tolerated, and maintained the efficacy of IV levosimendan therapy in PH-HFpEF patients. Multiple measures of efficacy confirmed that oral levosimendan is comparable or possibly more effective than the weekly IV regimen in this group of patients.
Tenax updated investors on its TNX-201 (enteric-coated imatinib in PAH) program. The pharmacokinetic (PK) assessment in healthy volunteers has been completed. The PK study assessed imatinib versus its enteric-coated formulation to help ensure optimal efficacy and tolerance in its upcoming Phase III trial, anticipated to start in late 2022. In a May 23rd, 2022 press release results from the study were provided showing that TNX-201 significantly exceeded the relative bioavailability threshold when compared with Gleevec tablets. This is expected to reduce the gastrointestinal side effect profile and improve adherence, helping sidestep one of the shortcomings of previous formulations of imatinib therapy.
Tenax also announced in January that it had selected a large, global contract research organization (CRO) partner, which has successfully completed over 20 PAH projects including multiple Phase III trials. Identifying Key Opinion Leaders (KOLs) and site engagement were key goals for 2022.
To conclude the announcement, Tenax reported the formation of a Scientific Advisory Board for imatinib, chaired by Dr. Anna Hemnes of Vanderbilt University and including Dr. Robert Frantz of the Mayo Clinic, Dr. Bradley Maron of Harvard University, and Dr. John Ryan of the University of Utah. The members are globally renowned scientists with deep experience in PAH clinical trials as well as translational science in pulmonary vascular disease. These members of the SAB later participated in a KOL event discussing the background of imatinib and PAH.
![](https://s27.q4cdn.com/906368049/files/pictures/2022/08232022_TENX_2.png)
Milestones
➢ Site selection and enrollment for imatinib PAH trial - 2022
➢ Phase I comparative PK study for enteric imatinib topline readout – Summer 2022
➢ Launch Phase III imatinib in PAH - 2H:22
➢ Launch Phase III levosimendan in PH-HFpEF - 2023
➢ Imatinib PH trial topline report - 2024
➢ Completion of Phase III in PH-HFpEF – 2024
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1. Discussion of HELP trial in our report here.
2. US Patent and Trademark Office
3. Source: March 2022 Tenax Corporate Presentation
4. Source: Tenax Therapeutics June 2022 Corporate Presentation