ESSA Pharma Reports Financial Results for Fiscal First Quarter Ended December 31, 2024

Rhea-AI Summary

ESSA Pharma (NASDAQ: EPIX) reported financial results for Q1 2025 ended December 31, 2024. Following the termination of masofaniten clinical trials, the company is exploring strategic options to maximize shareholder value, including potential merger, asset sale, or dissolution.

Key financial highlights: Net loss increased to $8.5 million compared to $6.0 million in Q1 2023. R&D expenses were $5.5 million vs $5.4 million year-over-year, while G&A expenses rose to $4.2 million from $2.2 million. The company maintains a strong financial position with $120.6 million in cash reserves and short-term investments, and $118.8 million in net working capital.

The company has 44,388,550 common shares outstanding and 2,920,000 common shares issuable through prefunded warrants at $0.0001 exercise price.

Positive

• Strong cash position of $120.6 million with no long-term debt
• Net working capital of $118.8 million

Negative

• Net loss increased 41.7% to $8.5 million from $6.0 million YoY
• G&A expenses nearly doubled to $4.2 million from $2.2 million YoY
• Investment income decreased to $1.1 million from $1.6 million YoY
• Termination of all clinical trials for masofaniten
• Planned headcount and cost reductions

Insights

Financial Analyst

The Q1 FY2025 results highlight ESSA Pharma's critical transition phase following the discontinuation of its lead program. The company's substantial cash reserves of $120.6 million represent approximately $2.72 per share in cash (based on 44.38M shares), significantly above the current market cap. This creates an interesting value proposition, as the company trades below cash value.

The 91% increase in G&A expenses to $4.2 million primarily reflects restructuring costs and strategic review expenses, including potential M&A advisory fees. While concerning, this spike is likely temporary and necessary for the strategic transition. The stable R&D expenses of $5.5 million mainly represent wind-down costs of clinical operations, which should decrease significantly in coming quarters.

The current quarterly cash burn rate of approximately $7.4 million (excluding non-cash items) suggests over 16 quarters of runway, providing ample time to execute strategic alternatives. The presence of 2.92M prefunded warrants at a nominal exercise price indicates potential dilution, though minimal given the current cash position.

Key considerations for investors include:

• The company's strategic review could result in various outcomes, from M&A to asset sales or liquidation, with the substantial cash position providing negotiating leverage
• The current trading below cash value suggests the market is pricing in significant cash burn during the strategic review process
• Management's focus on "maximizing shareholder value" could potentially lead to a distribution of excess cash while pursuing strategic alternatives

Company continues to explore and review strategic options focused on maximizing shareholder value

SOUTH SAN FRANCISCO, California and VANCOUVER, Canada, Feb. 11, 2025 /PRNewswire/ - ESSA Pharma Inc. ("ESSA," or the "Company") (NASDAQ: EPIX), a pharmaceutical company that, prior to the discontinuation of its clinical trials and development programs, has been focused on developing novel therapies for the treatment of prostate cancer, today reported financial results for the fiscal first quarter ended December 31, 2024.

"Following our decision to terminate the clinical development of masofaniten, we have been evaluating and reviewing strategic options with a focus on maximizing shareholder value," said David Parkinson, MD, President and CEO of ESSA. "We look forward to providing updates in the near future."

First Quarter 2025 and Recent Updates

• Following the decision to terminate all clinical trials evaluating masofaniten and to withdraw the related IND and CTAs, ESSA is conducting a comprehensive process to explore and review a range of strategic options focused on maximizing shareholder value. These options may include, but are not limited to, a merger, amalgamation, take-over, business combination, asset sale or acquisition, shareholder distribution, wind-up, liquidation and dissolution, or other strategic direction. The process is expected to involve headcount and other cost reductions.

Summary of Financial Results
(Amounts expressed in U.S. dollars)

• Net Loss. ESSA recorded a net loss of $8.5 million for the first quarter ended December 31, 2024, compared to $6.0 million for the first quarter ended December 31, 2023. Investment and other income was $1.1 million for the first quarter ended December 31, 2024, compared to $1.6 million for the first quarter ended December 31, 2023.
• Research and Development ("R&D") expenditures. R&D expenditures for the first quarter ended December 31, 2024 were $5.5 million compared to $5.4 million for the first quarter ended December 31, 2023, and include non-cash costs related to share-based payments of $729,780 for the first quarter ended 2024 compared to $526,241 for the first quarter ended 2023. The increase in the first quarter was primarily attributed to the initiation and wind-down of clinical site closures.
• General and Administration ("G&A") expenditures. G&A expenditures for the first quarter ended December 31, 2024 were $4.2 million compared to $2.2 million for the first quarter ended December 31, 2023 and include non-cash costs related to share-based payments of $1,972,151 for the first quarter ended 2024 compared to $277,177 for the first quarter ended 2023.

Liquidity and Outstanding Share Capital

• As of December 31, 2024, the Company had available cash reserves and short-term investments of $120.6 million and net working capital of $118.8 million. The company has no long-term debt facilities.
• As of December 31, 2024, the Company had 44,388,550 common shares issued and outstanding, and there were 2,920,000 common shares issuable upon the exercise of prefunded warrants at an exercise price of $0.0001.

About ESSA Pharma Inc.

ESSA is a pharmaceutical company that was previously focused on developing novel and proprietary therapies for the treatment of patients with prostate cancer. For more information, please visit www.essapharma.com.

Forward-Looking Statement Disclaimer

This release contains certain information which, as presented, constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements"). Forward-looking statements include, but are not limited to, statements that relate to future events and often addresses expected future business and financial performance, containing words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions and includes, but is not limited to, statements regarding the termination of the Company's clinical studies of masofaniten, the Company's evaluation of its strategic alternatives and future announcements in connection therewith, the Company's expected headcount and cost reductions and other statements surrounding the Company's evaluation of masofaniten.

Forward-looking statements are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of ESSA to control or predict, and which may cause ESSA's actual results, performance or achievements to be materially different from those expressed or implied thereby. Such statements reflect ESSA's current views with respect to future events, are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by ESSA as of the date of such statements, are inherently subject to significant medical, scientific, business, economic, competitive, political and social uncertainties and contingencies. In making forward looking statements, ESSA may make various material assumptions, including but not limited to (i) the accuracy of ESSA's financial projections; (ii) obtaining necessary regulatory approvals; (iii) ESSA's ability to efficiently wind down its clinical trial activities (iv) that one or more strategic options may be available to ESSA at reasonably acceptable terms; and (v) general business, market and economic conditions.

Forward-looking statements are developed based on assumptions about such risks, uncertainties and other factors set out herein and in ESSA's Annual Report on Form 10-K dated December 17, 2024, under the heading "Risk Factors", a copy of which is available on ESSA's profile on EDGAR at www.sec.gov and on SEDAR+ at www.sedarplus.ca, and as otherwise disclosed from time to time on ESSA's EDGAR and SEDAR+ profiles. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and ESSA undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as may be required by applicable United States and Canadian securities laws. Readers are cautioned against attributing undue certainty to forward-looking statements.

Contacts
ESSA Pharma Inc.
David Wood, Chief Financial Officer
778.331.0962
dwood@essapharma.com

Investors and Media
Argot Partners
212.600.1902
essa@argotpartners.com

ESSA PHARMA INC.
CONSOLIDATED BALANCE SHEETS
Unaudited
Amounts in thousands of United States dollars

	December 31, 2024	September 30, 2024
Cash	$         93,311	$       103,710
Prepaids and other assets	29,323	24,402
Total assets	$       122,634	$        128,112
Current liabilities	3,687	3,301
Long-term debt	180	205
Shareholders' deficiency	118,767	124,606
Total liabilities and shareholders' equity	$       122,634	$        128,112

ESSA PHARMA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Unaudited
Amounts in thousands of United States dollars, except share and per share data

	Three months ended December 31, 2024		Three months ended December 31, 2023
OPERATING EXPENSES
Research and development	$          5,474		$          5,377
General and administration	4,211		2,218
Total operating expenses	(9,685)		(7,595)
Interest and other items	1,153		1,630
Net loss for the period	$         (8,532)		$         (5,965)
OTHER COMPREHENSIVE LOSS
Unrealized gain (loss) on short-term investments	(9)		20
Loss and comprehensive loss for the period	$         (8,541)		$         (5,945)
Basic and diluted loss per common share	$             (0.19)	$              (0.14)
Weighted average number of common shares outstanding	44,388,550		44,129,491

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SOURCE ESSA Pharma Inc

FAQ

What strategic options is EPIX considering after terminating masofaniten trials?

EPIX is exploring options including merger, amalgamation, take-over, business combination, asset sale or acquisition, shareholder distribution, wind-up, liquidation and dissolution, or other strategic directions.

How much cash does EPIX have as of December 31, 2024?

EPIX had $120.6 million in cash reserves and short-term investments, with net working capital of $118.8 million.

What was EPIX's net loss for Q1 2025?

EPIX reported a net loss of $8.5 million for Q1 2025, compared to $6.0 million in Q1 2024.

How many shares does EPIX have outstanding as of December 31, 2024?

EPIX has 44,388,550 common shares outstanding and 2,920,000 common shares issuable through prefunded warrants.

What caused the increase in EPIX's G&A expenses in Q1 2025?

G&A expenses increased to $4.2 million from $2.2 million, primarily due to higher non-cash costs related to share-based payments, which rose to $1,972,151 from $277,177.