Biovie Inc.: Form 10-Q for the period ended Mar 31, 2025

This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Any statements contained in this report that are not statements of historical fact may be forward-looking statements. When we use the words “intends,” “estimates,” “predicts,” “potential,” “continues,” “anticipates,” “plans,” “expects,” “believes,” “should,” “could,” “may,” “will” or the negative of these terms or other comparable terminology, we are identifying forward-looking statements. Forward-looking statements involve risks and uncertainties, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by forward-looking statements. These factors include, among others: our research and development activities and distributor channel; compliance with regulatory requirements; and our ability to satisfy our capital needs Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

You are cautioned not to place undue reliance on the forward-looking statements in this report, which speak only as of the date of this report. Except as may be required by applicable law, we do not undertake or intend to update or revise our forward-looking statements, and we assume no obligation to update any forward-looking statements contained in this report as a result of new information or future events or developments, except as required by law. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. You should carefully review and consider the various disclosures we make in this report and our other reports filed with the Securities and Exchange Commission (the “SEC”) that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business.

The following discussion of the Company’s financial condition and the results of operations should be read in conjunction with the Financial Statements and Notes thereto appearing elsewhere in this report.

Management’s Discussion

BioVie Inc. (the “Company” or “we” or “our”) is a clinical-stage company developing innovative drug therapies to treat chronic debilitating conditions including neurological and neuro-degenerative disorders and liver disease.

Neurodegenerative Disease Program

The Company acquired the biopharmaceutical assets of NeurMedix, Inc. (“NeurMedix”) a privately held clinical-stage pharmaceutical company and a related party in June 2021. The acquired assets included NE3107. In April 2024, the Company announced that the United States Adopted Names Council, and the World Health Organization International Nonproprietary Names expert committee had approved “bezisterim” as the non-proprietary (generic) name for NE3107. Bezisterim (NE3107) is an investigational, novel, orally administered small molecule that is thought to inhibit inflammation-driven insulin resistance and major pathological inflammatory cascades with a novel mechanism of action. There is emerging scientific consensus that both inflammation and insulin resistance may play fundamental roles in the development of AD and PD, and bezisterim (NE3107) could, if approved by FDA, represent an entirely new medical approach to treating these devastating conditions affecting an estimated 6 million Americans suffering from AD and 1 million Americans suffering from PD.

In neurodegenerative disease, bezisterim (NE3107) inhibits activation of inflammatory ERK and nuclear factor kappa-light-chain-enhancer of activated B cells (“NFκB”) (including interactions with TNF signaling and other relevant inflammatory pathways) that lead to neuroinflammation and insulin resistance. Bezisterim (NE3107) does not interfere with their homeostatic functions (e.g., insulin signaling and neuron growth and survival). Both inflammation and insulin resistance are drivers of AD and PD.

Chronic neuroinflammation, insulin resistance, and oxidative stress are common features in the major neurodegenerative diseases, including AD, PD, frontotemporal lobar dementia, and Amyotrophic lateral sclerosis. Bezisterim (NE3107) is an investigational oral small molecule, blood-brain permeable, compound with potential anti-inflammatory, insulin sensitizing, and ERK-binding properties that may allow it to selectively inhibit ERK-, NFκB- and TNF-stimulated inflammation. Bezisterim’s (NE3107) potential to inhibit neuroinflammation and insulin resistance forms the basis for the Company’s work testing the molecule in AD, PD, and long COVID patients. Bezisterim (NE3107) is patented in the United States, Australia, Canada, Europe and South Korea.

Parkinson’s Disease

Parkinson’s disease (“PD”) is driven in large part by neuroinflammation and activation of brain microglia, leading to increased proinflammatory cytokines (particularly TNF). Multiple daily administrations of levodopa (converted to dopamine in the brain) is the current standard of care treatment for this movement disorder. However, levodopa effectiveness diminishes over time necessitating increased dosage and prolonged daily administration leads to side effects of uncontrolled movements called levodopa-induced dyskinesia, commonly referred to as LID, which is exacerbated by high dose levodopa. Although levodopa provides symptomatic benefit, it does not slow PD progression.

The Phase 2 study of bezisterim (NE3107) for the treatment of PD (NCT05083260), completed in December 2022, was a double-blind, placebo-controlled, safety, tolerability, and pharmacokinetics study in PD participants treated with carbidopa/levodopa and bezisterim (NE3107). Forty-five patients with a defined L-dopa “off state” were randomized 1:1 to placebo: bezisterim (NE3107) 20 mg twice daily for 28 days. This trial was launched with two design objectives: 1) the primary objective was safety and a drug-drug interaction study as requested by the FDA to measure the potential for adverse interactions of bezisterim (NE3107) with carbidopa/ levodopa; and 2) the secondary objective was to determine if preclinical indications of promotoric activity and apparent enhancement of levodopa activity could be seen in humans. Both objectives were met.

To extend this Phase 2 data in progressed patients, the Company has designed a new Phase 2 study of bezisterim (NE3107) as a potential first line therapy to treat patients with new onset PD. In July 2024, the Company submitted the new protocol and received a response from the FDA which permitted the Company to proceed with the study. The trial commenced in April 2025.

Long COVID Program

In April 2024, the Company announced the grant of a clinical trial award of up to $13.1 million from the U.S. Department of Defense (“DOD”), awarded through the Peer Reviewed Medical Research Program of the Congressionally Directed Medical Research Programs. In August 2024, U.S. Army Medical Research and Development Command, Office of Human Research Oversight (“OHRO”) approved the Company’s plan to evaluate bezisterim (NE3107) for the treatment of neurological symptoms that are associated with long COVID. and the FDA authorized our Investigational New Drug (“IND”) application for bezisterim (NE3107) allowing the Company to study a novel, anti-inflammatory approach or the treatment of the debilitating neurocognitive symptoms associated with long covid. The Company anticipates the trial to commence in May 2025.

Liver Disease Program

In liver disease, our investigational drug candidate BIV201 (continuous infusion terlipressin), which has been granted both FDA Fast Track designation status and FDA Orphan Drug status, is being evaluated as a treatment option for patients suffering from ascites and other life-threatening complications of advanced liver cirrhosis caused by non-alcoholic steatohepatitis (NASH), hepatitis, and alcoholism. The initial target for BIV201 therapy was refractory ascites. These patients suffer from frequent life-threatening complications, generate more than $5 billion in annual treatment costs, and have an estimated 50% mortality rate within 6 to 12 months.

After receiving guidance from the FDA regarding the design of Phase 3 clinical testing of BIV201 for the treatment of patients with cirrhosis and ascites, the Company is now targeting a broader ascites patient population. The Company is currently finalizing the protocol design for the Phase 3 study of BIV201 with a focus on demonstrating clinical benefit through a composite primary endpoint of complications and disease progression in patients with cirrhosis and ascites who have recently recovered from acute kidney injury (“AKI”). This patient population is not limited to those having refractory ascites. BIV201 is administered as a patent-pending liquid formulation with patents issued in US, China, Japan, Chile and India to date.

In June 2021, the Company initiated a Phase 2 study (NCT04112199) designed to evaluate the efficacy of BIV201 (terlipressin, administered by continuous infusion for two 28-day treatment cycles) combined with standard-of-care (“SOC”), compared to SOC alone, for the treatment of refractory ascites. The primary endpoints of the study were the incidence of ascites-related complications and change in ascites fluid accumulation during treatment compared to a pre-treatment period. By October 12, 2022, there were 15 patients enrolled for treatment and the last patient completed treatment on May 2023.

In March 2023, enrollment was paused and that data from the first 15 patients treated with BIV201 plus SOC appeared to show at least a 30% reduction in ascites fluid during the 28 days after treatment initiation compared to the 28 days prior to treatment. The change in ascites volume was significantly different from those patients receiving SOC treatment. Patients who completed the treatment with BIV201 experienced a 53% reduction in ascites fluid, which was sustained (43% reduction) during the three months after treatment initiation as compared to the three-month pre-treatment period.

Comparison of the three months ended March 31, 2025 to the three months ended March 31, 2024

Net loss

The net loss for the three months ended March 31, 2025 was approximately $2.8 million as compared to the net loss of $8.1 million for the three months ended March 31, 2024. The net decrease of $5.3 million is due to a decrease in research and development expenses of $4.4 million, decrease in selling, general and administrative expenses of approximately $388,000, and a decline in other expense of approximately $536,000.

Total operating expenses for the three months ended March 31, 2025 were approximately $3.0 million as compared to $7.7 million for the three months ended March 31, 2024. The net decrease of approximately $4.7 million for the three months ended March 31, 2025 was comprised of decreased research and development expenses of approximately $4.4 million primarily due to the completion of clinical trials in the prior fiscal year and a net decrease in selling, general and administrative expenses of approximately $388,000.

Research and Development Expenses

Research and development (“R&D”) expenses were approximately $1.3 million and $5.7 million for the three months ended March 31, 2025 and 2024, respectively. The $4.4 million net decrease was primarily attributed to a decline in expenses of approximately $2.9 million from studies that completed in prior fiscal year and other related expenses such as the clinical teams’ payroll of approximately $262,000, reflecting the reduction in force in December 2023, and a decrease in consultancy expense of approximately $678,000, resulting from declining use of consultants as the clinical studies were completed, a decrease in Chemistry, Manufacturing and Controls (“CMC”) and new drug discovery totaling approximately $354,000, a reduction in the use of regulatory and other consultants totaling approximately $29,000, and a decrease in related expenses of approximately $18,000 in travel, conferences and publications.

The table below summarizes the expenses incurred for the three months ended March 31, 2025 and 2024 by study:

23

Selling, General and Administrative Expenses

Selling, general and administrative expenses were approximately $1.6 million and $2.0 million for the three months ended March 31, 2025 and 2024, respectively. The net decrease in expenses of approximately $388,000 were primarily attributed to decreases in directors’ compensation of approximately $201,000, executive teams’ compensation of $148,000 and legal fees of approximately $121,000, offset by increased expenses comprising of increased audit, accounting and regulatory filing fees of approximately $19,000, other consulting and professional fees of approximately $25,000, public and investor relations fees of $8,000 and miscellaneous expenses for website development, travel and other banking fees totaling approximately $23,000.

Other Income and Expense

Other income, net was approximately $200,000 compared to other expense, net of $336,000, for the three months ended March 31, 2025 and 2024, respectively. The net decrease in other expense of approximately $536,000 was comprised of the decrease in the change in fair value of the derivative liabilities of approximately $102,000, offset by a decline in interest expense of approximately $624,000 due to the payoff of the notes payable on December 1, 2024, and an increase in interest income of approximately $14,000.

Comparison of the nine months ended March 31, 2025 to the nine months ended March 31, 2024

Net loss

The net loss for the nine months ended March 31, 2025 was approximately $14.1 million as compared to the net loss of $27.2 million for the nine months ended March 31, 2024. The net decrease of $13.1 million was primarily attributed to decline in research and development expenses of $13.0 million, and a net increase in other income, net of approximately $140,000.

Total operating expenses for the nine months ended March 31, 2025 were approximately $14.4 million and $27.4 million for the nine months ended March 31, 2024. The net decrease of approximately $13.0 million was primarily due to decreased research and development expenses of approximately $13.0 million due to the completion of clinical trials in the prior fiscal year.

Research and Development Expenses

Research and development expenses were approximately $8.0 million and $21.0 million for the nine months ended March 31, 2025 and 2024, respectively. The $13.0 million reduction was primarily attributed to the completion of the clinical studies in the prior fiscal year and comprised of a declines in direct study costs of approximately $7.6 million, and the related expenses such as the clinical team payroll of $1.6 million, reflecting the reduction in force in December 2023, and consultants expenses of $2.6 million, reflecting a declining use of consultants and a reduction in the use of regulatory and other consultants totaling approximately $469,000 as the clinical studies completed in the prior fiscal year. Other decrease included a decrease in CMC and new drug discovery totaling approximately $535,000, and a decrease in travel & conferences of approximately $76,000 and publications of approximately $127,000.

The decrease in clinical studies of approximately $7.6 million represented the net decrease in clinical trial studies expense of approximately $11.6 million due the completion of the clinical trials in the prior fiscal year offset by the planning and development of the two new clinical studies, Sunrise PD Phase 2 and Long Covid Program, totaling approximately $4.0 million. The table below summarizes the expense amounts for the nine months ended March 31, 2025 and 2024 by study:

25

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the nine months ended March 31, 2025, was approximately $6.2 million and was comparable to approximately $6.2 million for the nine months ended March 31, 2024. The net fluctuations in expenses were primarily comprised of decreases in directors’ compensation of approximately $339,000, executive teams’ compensation of approximately $416,000, investor and public relation fees of $131,000 offset by increases in other professional and consultancy fees of $566,000, legal fees of approximately $255,000, audit and accounting fees of approximately $72,000, and insurance premiums of approximately $31,000.

Other Income and Expense

Other income, net was approximately $350,000 for the nine months ended March 31, 2025, compared to approximately $210,000 for the nine months ended March 31, 2024. The net increase in other income of approximately $140,000 was comprised of a decrease in the change in fair value of the related derivative liabilities of approximately $1.8 million, and an increase in interest income of approximately $190,000, offset by a reduction in interest expense of approximately $2.1 million due to the pay-off of the notes on December 1, 2024.

Capital Resources and Liquidity

As of March 31, 2025, the Company had working capital of approximately $21.2 million, cash and cash equivalents totaling approximately $23.2 million, stockholders’ equity of approximately $21.8 million, and an accumulated deficit of approximately $348.7 million.

The Company used net cash in operations totaling approximately $13.4 million and net cash provided by financing activities was approximately $12.7 million comprised of net proceeds from the capital raise activities of $15.7 million and proceeds from exercise of warrants of $2.9 million offset by the payment of $5.0 million of the Company’s notes payable and payment of the $850,000 loan premium.

The Company has not generated any revenue, and no revenues are expected in the foreseeable future. The Company’s future operations are dependent on the success of the Company’s ongoing development and commercialization efforts, as well as its ability to secure additional financing. Management expects that future sources of funding may include sales of equity, obtaining loans, or other strategic transactions.

Although management continues to pursue the Company’s strategic plans, there is no assurance that the Company will be successful in obtaining sufficient financing on terms acceptable to the Company, if at all, to fund continuing operations. These circumstances raise substantial doubt on the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Critical Accounting Policies and Estimates

For the nine-month period ended March 31, 2025, the Company added a Grant Program accounting policy that is disclosed in the Significant Accounting Policies section of this Form 10-Q. There were no other significant changes to the Company’s critical accounting policies as identified in the Annual Report Form 10-K for the fiscal year ended June 30, 2024.

New Accounting Pronouncements

The Company considered the applicability and impact of recent accounting pronouncements and determined those to be either not applicable or expected to have minimal impact on our balance sheets or statement of operations and comprehensive loss.

We maintain “disclosure controls and procedures.” Such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Office and Chief Financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Our disclosure controls and procedures have been designed to meet reasonable assurance standards. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgement in evaluating the cost-benefit relationship of possible disclosure and procedures. The design of and disclosure controls and procedures also are based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15f and 15d-15(f) under the Exchange Act) that occurred during the three months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other than as described below, there have been no material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K filed with the SEC on September 30, 2024 (the “2024 Form 10-K”), our quarterly report for the period ended September 30, 2024 (the “Q1 2025 10-Q”) and our quarterly report for the period ended December 31, 2024 (the “Q2 2025 10-Q”). The risks described in our 2024 Form 10-K, our Q1 2025 10-Q, our Q2 2025 10-Q and below are not the only risks facing our Company. Additional risks and uncertainties not currently known to the Company or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

Risks Relating to Our Business and Industry

We rely and will continue to rely on third parties to conduct our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines or do not successfully perform and comply with regulatory requirements, we may not be able to obtain regulatory approval of or commercialize our product candidates.

We depend, and will continue to depend, on third parties, including, but not limited to, contract research organizations (“CROs”), clinical trial sites and clinical trial principal investigators, contract laboratories, IRBs, manufacturers, suppliers, and other third parties to conduct our clinical trials, including those for our drug candidates bezisterim (NE3107) and BIV201. We rely heavily on these third parties over the course of our clinical trials, and we control only certain aspects of their activities. Nevertheless, we retain ultimate responsibility for ensuring that each of our studies is conducted in accordance with the protocol and applicable legal, regulatory, and scientific standards and regulations, and our reliance on third parties does not relieve the Company of our regulatory responsibilities. We and these third parties are required to comply with cGCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for the conduct of clinical trials on product candidates in clinical development. Regulatory authorities enforce cGCPs through periodic inspections and for-cause inspections of clinical trial principal investigators and trial sites. If, due to the failure of either the Company or a third party, a clinical trial fails to comply with applicable cGCPs, FDA’s IND requirements, other applicable regulatory requirements, or requirements set forth in the applicable IRB-approved protocol, the Company may be required to conduct additional clinical trials to support our marketing applications, which would delay the regulatory approval process.

Although we design the clinical trials for our product candidates, our CROs are tasked with facilitating and monitoring these trials. As a result, many aspects of our clinical development programs, including site and investigator selection, and the conduct, timing, and monitoring of the study, is outside our direct control, either partially or in whole. Our reliance on third parties to conduct clinical trials also results in less direct control over the collection, management, and quality of data developed through clinical trials than would be the case if we were relying entirely upon our own employees. Communicating with third parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities. Our business may be impacted if any of these third parties violates applicable federal, state, or foreign laws and/or regulations, including but not limited to FDA’s IND regulations, cGCPs, fraud and abuse or false claims laws, healthcare privacy and data security laws, or provide the Company or government agencies with inaccurate, misleading, or incomplete data.

Risks Relating To Our Common Stock

You may experience future dilution as a result of future equity offerings or if we issue shares subject to options, warrants, stock awards or other arrangements.

As of March 31, 2025, our Articles of Incorporation, as amended, authorize the issuance of 800,000,000 shares of Common Stock, and we had 18,545,735 shares of Common Stock issued and 18,517,376 issued and outstanding. Accordingly, we may issue up to an additional 781,454,265 shares of Common Stock. The future issuance of Common Stock may result in substantial dilution in the percentage of our Common Stock held by our then existing stockholders. We may value any Common Stock in the future on an arbitrary basis. The issuance of Common Stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, might have an adverse effect on any trading market for our Common Stock and could impair our ability to raise capital in the future through the sale of equity securities.

In order to raise additional capital, we may in the future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock. We may sell shares or other securities in offerings at a price per share that is less than the current market price of our securities, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The sale of additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock would dilute all of our stockholders, and if such sales of convertible securities into or exchangeable into our Common Stock occur at a deemed issuance price that is lower than the current exercise price of our outstanding warrants sold to Acuitas Group Holdings, LLC (“Acuitas”) in August 2022, the exercise price for those warrants would adjust downward to the deemed issuance price pursuant to price adjustment protection contained within those warrants.

As of March 31, 2025, there were warrants outstanding to purchase an aggregate of 9,600,564 shares of our Common Stock at exercise prices ranging from $1.37 to $125.00 per share and 887,129 shares issuable upon exercise of outstanding options at exercise prices ranging from $1.90 to $420.90 per share and restricted stock units totaling 109,039. We may also grant additional options, warrants or equity awards. To the extent such shares are issued, the interest of holders of our Common Stock will be diluted.

Moreover, we are obligated to issue shares of our Common Stock upon achievement of certain clinical, regulatory and commercial milestones with respect to certain of our drug candidates (i.e., bezisterim (NE3107), NE3291, NE3413, and NE3789) pursuant to the asset purchase agreement, dated April 27, 2021, by and among the Company, NeurMedix and Acuitas, as amended on May 9, 2021. The achievement of these milestones could result in the issuance of up to 1.8 million shares of our Common Stock, further diluting the interest of holders of our Common Stock.

If we fail to meet Nasdaq’s minimum bid price requirement prior to the one-year anniversary of our prior reverse stock split, we would be issued a delisting determination, and if our Common Stock were delisted from Nasdaq, it would adversely affect the liquidity of our Common Stock and the market price of our Common Stock could decrease.

Our Common Stock is currently listed on Nasdaq. Nasdaq has minimum requirements that a company maintain a minimum closing bid price of $1.00 per share. If a company fails to maintain Nasdaq’s minimum bid price requirement for a period of 30 consecutive business days, Nasdaq will deem the company noncompliant. In January 2025, the SEC approved amendments to Nasdaq’s minimum bid price compliance rules designed to limit reliance on reverse stock splits. The amendments provide that if a company fails to meet the bid price requirement and the company has effected a reverse stock split over the prior one-year period, the company would not be eligible for any compliance period to address the bid price deficiency. Instead, Nasdaq will move forward with delisting proceedings. We previously effected a reverse stock split on August 6, 2024. If we fail to meet the minimum bid price requirement prior to the one-year anniversary of our prior reverse stock split, or August 6, 2025, we would not be granted a compliance period and would be issued a delisting determination.

Since we have a recent history of our Common Stock trading below $1.00, we are currently considering available options to ensure continued compliance with Nasdaq’s minimum bid price requirement, including taking steps to effect a reverse stock split. There is no guarantee that any corrective measures we take would help us maintain compliance with the minimum bid price requirement or other Nasdaq listing rules. If our Common Stock were to be delisted, the liquidity of our Common Stock would be adversely affected and the market price of our Common Stock could decrease. Our failure to be listed on Nasdaq or another national securities exchange would have a material adverse effect on the value of your investment in us.