Tevogen Bio Reports Second Quarter 2024 Financial Results, Eliminates Doubt About Company’s Ability to Continue as a Going Concern, Eliminates Series B Preferred Shares

Rhea-AI Summary

Tevogen Bio Holdings Inc. (Nasdaq: TVGN) has reported its Q2 2024 financial results. Key highlights include:

- $5.1 million net cash used in operating activities for H1 2024
- $33.0 million in non-cash expenses, including $30.5 million in stock-based compensation
- $8.6 million in operating expenses for Q2 2024
- $2.4 million in current assets as of June 30, 2024
- $2.8 million received from Series A-1 Preferred Stock financing, with $3.0 million expected in Q3 2024

Tevogen has eliminated doubt about its ability to continue as a going concern, citing sufficient cash for at least 12 months of operations. The company also repurchased all outstanding Series B preferred shares at a fair value of $3.6 million, with no cash consideration.

Positive

• Elimination of doubt about the company's ability to continue as a going concern
• Repurchase of all outstanding Series B preferred shares, reducing potential shareholder dilution
• Secured $2.8 million from Series A-1 Preferred Stock financing with an additional $3.0 million expected in Q3 2024
• Finalization of a line of credit facility in June 2024, providing additional financial flexibility

Negative

• $5.1 million net cash used in operating activities for H1 2024
• $33.0 million in non-cash expenses, primarily due to stock-based compensation
• $8.6 million in operating expenses for Q2 2024
• Low current assets of $2.4 million as of June 30, 2024

Insights

Financial Analyst

Tevogen Bio's Q2 2024 results reveal a mixed financial picture. The company's $5.1 million net cash burn in operations over six months is concerning, especially given the current assets of only $2.4 million. However, the elimination of going concern doubts is a positive sign, supported by the $2.8 million Series A-1 financing and a new credit facility.

The repurchase of Series B preferred shares for $3.6 million without cash consideration is intriguing, potentially simplifying the capital structure. The $30.5 million in stock-based compensation raises questions about dilution and executive incentives. Investors should monitor cash burn rate and future financing needs closely.

Biotech Industry Expert

Tevogen's focus on off-the-shelf, genetically unmodified T cell therapeutics across multiple disease areas is ambitious but risky. The lack of specific updates on clinical progress or pipeline developments in this financial report is noteworthy. Biotech investors typically look for milestones in drug development alongside financial metrics.

The company's emphasis on cost-effective operations is important in the capital-intensive biotech sector. However, with $8.6 million in quarterly operating expenses, Tevogen will need to demonstrate clear clinical progress to justify continued investment. The absence of detailed R&D spending breakdown leaves questions about the allocation of resources across their diverse therapeutic areas.

WARREN, N.J., Aug. 15, 2024 (GLOBE NEWSWIRE) -- Tevogen Bio Holdings Inc. (“Tevogen” or “Tevogen Bio”) (Nasdaq: TVGN), a clinical-stage specialty immunotherapy biotech pioneer developing off-the-shelf, genetically unmodified T cell therapeutics in oncology, neurology, and virology, has announced financial results for the fiscal quarter ending June 30, 2024, and filed its quarterly report on Form 10-Q with the Securities and Exchange Commission.

Tevogen’s reported $5.1 million net cash used in operating activities and $33.0 million in non-cash expenses for the six months ending June 30, 2024. The key non-cash expense items included $30.5 million in stock-based compensation expenses. The Company reported operating expenses for the three months ending June 30, 2024, of $8.6 million including both cash and non-cash expenses.

As of June 30, 2024, Tevogen reported current assets of $2.4 million. The company also reported it received $2.8 million from Series A-1 Preferred Stock financing during the quarter with $3.0 million expected to be received in the third quarter of 2024. As a result of cash reported as of June 30, 2024, along with the available cash resources from the line of credit facility finalized in June 2024, Tevogen concluded that it has sufficient cash to fund its operations for at least the next 12 months, and therefore no substantial doubt exists about the Company’s ability to continue as a going concern.

In June 2024, Tevogen repurchased all outstanding Series B preferred shares, at a fair value of $3.6 million, which were issued in the first quarter of 2024. The purchase of the shares was in exchange for the release of the holder of the Series B preferred shares from certain liability obligations, but no cash consideration. As of June 30, 2024, there were no shares of Series B outstanding, and no dividends were paid on Series B preferred shares.

Dr. Ryan Saadi, Founder and CEO said "Tevogen’s leadership is focused on advancing our story by leveraging our unique technology platform and unwavering commitment to cost-effective operations. The company will look to sustain progress and expect to deliver value to patients and shareholders alike, now and into the future.”

About Tevogen Bio

Tevogen is a clinical-stage specialty immunotherapy company harnessing CD8+ cytotoxic T lymphocytes, to develop off-the-shelf, genetically unmodified precision T cell therapies for the treatment of infectious diseases, cancers, and neurological disorders, aiming to address the significant unmet needs of large patient populations. Tevogen leadership believes that sustainability and commercial success in the current era of healthcare rely on ensuring patient accessibility through advanced science and innovative business models. Tevogen has reported positive safety data from its proof-of-concept clinical trial, and its key intellectual property assets are wholly owned by the company, not subject to any third-party licensing agreements. These assets include three granted patents and numerous pending patents, two of which are related to artificial intelligence.

Tevogen is driven by a team of experienced industry leaders and scientists with drug development and global product launch experience. Tevogen’s leadership believes that accessible personalized therapeutics are the next frontier of medicine, and that disruptive business models are required to sustain medical innovation.

Forward Looking Statements

This press release contains certain forward-looking statements, including without limitation statements relating to: expectations regarding the terms and expected use of proceeds of Tevogen’s line of credit; the healthcare and biopharmaceutical industries; Tevogen’s ability to continue as a going concern; Tevogen’s development of, the potential benefits of, and patient access to its product candidates for the treatment of infectious diseases, cancer and neurological disorders, including TVGN 489 for the treatment of COVID-19 and Long COVID; Tevogen’s ability to develop additional product candidates, including through use of Tevogen’s ExacTcell platform; the anticipated benefits of ExacTcell; expectations regarding Tevogen’s future clinical trials; and Tevogen’s ability to generate revenue in the future. Forward-looking statements can sometimes be identified by words such as “may,” “could,” “would,” “expect,” “anticipate,” “possible,” “potential,” “goal,” “opportunity,” “project,” “believe,” “future,” and similar words and expressions or their opposites. These statements are based on management’s expectations, assumptions, estimates, projections and beliefs as of the date of this press release and are subject to a number of factors that involve known and unknown risks, delays, uncertainties and other factors not under the company’s control that may cause actual results, performance or achievements of the company to be materially different from the results, performance or other expectations expressed or implied by these forward-looking statements.

Factors that could cause actual results, performance, or achievements to differ from those expressed or implied by forward-looking statements include, but are not limited to: that Tevogen will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; the effect of the recent business combination with Semper Paratus Acquisition Corporation (the “Business Combination”) on Tevogen’s business relationships, operating results, and business generally; the outcome of any legal proceedings that may be instituted against Tevogen related to the Business Combination; changes in the markets in which Tevogen competes, including with respect to its competitive landscape, technology evolution, or regulatory changes; changes in domestic and global general economic conditions; the risk that Tevogen may not be able to execute its growth strategies or may experience difficulties in managing its growth and expanding operations; the risk that Tevogen may not be able to develop and maintain effective internal controls; costs related to the Business Combination and the failure to realize anticipated benefits of the Business Combination; the failure to achieve Tevogen’s commercialization and development plans, and identify and realize additional opportunities, which may be affected by, among other things, competition, the ability of Tevogen to grow and manage growth economically and hire and retain key employees; the risk that Tevogen may fail to keep pace with rapid technological developments to provide new and innovative products and services or make substantial investments in unsuccessful new products and services; the ability to develop, license or acquire new therapeutics; that Tevogen will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; the risk of regulatory lawsuits or proceedings relating to Tevogen’s business; uncertainties inherent in the execution, cost, and completion of preclinical studies and clinical trials; risks related to regulatory review, and approval and commercial development; risks associated with intellectual property protection; Tevogen’s limited operating history; and those factors discussed or incorporated by reference in Tevogen’s Annual Report on Form 10-K and subsequent filings with the SEC.

You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Tevogen undertakes no obligation to update any forward-looking statements, except as required by applicable law.

Contacts

Tevogen Bio Communications
T: 1 877 TEVOGEN, Ext 701
Communications@Tevogen.com

FAQ

What were Tevogen Bio's (TVGN) key financial results for Q2 2024?

Tevogen Bio reported $8.6 million in operating expenses, $2.4 million in current assets, and received $2.8 million from Series A-1 Preferred Stock financing for Q2 2024.

Has Tevogen Bio (TVGN) resolved concerns about its ability to continue as a going concern?

Yes, Tevogen Bio has eliminated doubt about its ability to continue as a going concern, citing sufficient cash to fund operations for at least the next 12 months.

What happened to Tevogen Bio's (TVGN) Series B preferred shares in Q2 2024?

Tevogen Bio repurchased all outstanding Series B preferred shares at a fair value of $3.6 million, with no cash consideration, eliminating this class of shares.

How much additional funding does Tevogen Bio (TVGN) expect in Q3 2024?

Tevogen Bio expects to receive an additional $3.0 million from Series A-1 Preferred Stock financing in the third quarter of 2024.