Regen Biopharma, Inc. (NASDAQ: [Ticker]) – 10-K Annual Report Review

Overview

Warren.AI 💰 2.5 / 10

Regen Biopharma, Inc. is a clinical-stage biopharmaceutical company focused on regenerative medicine and immunotherapies. Incorporated in Nevada in 2012, Regen owns multiple patents and has in‐house development programs designed to:

1. Repair damaged tissue or bone marrow (e.g., HemaXellarate for aplastic anemia)
2. Activate or suppress the immune system to treat cancers or autoimmune diseases (e.g., dCellVax, tCellVax, DiffronC, DuraCar)
3. Target NR2F6, an emerging immunologic checkpoint, with both cellular and small-molecule therapeutics.

Regen’s strategy is to develop therapies through Phase I/II, then out-license or co-develop in Phase III and beyond. To date, the company has no commercial products and limited license revenues.

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1. Business Description (Item 1)

Core Programs

HemaXellarate (Phase I IND filed)
An autologous stromal vascular fraction (SVF) therapy derived from patient adipose tissue to restore bone marrow function in severe aplastic anemia.

dCellVax (IND filed)
Dendritic cell vaccine: patient dendritic cells are collected, treated with siRNA to block indoleamine 2,3-dioxygenase (IDO), then reinfused to stimulate anti-tumor immunity. Initial target: metastatic breast cancer (Phase I/II).

tCellVax (IND filed)
Autologous immune cells treated ex vivo with siRNA to inhibit NR2F6, then reinfused into patients with solid tumors to boost T-cell activity.

DiffronC (preclinical)
shRNA delivered in vivo to knock down NR2F6 in tumor cells and T cells, aiming to both suppress tumor growth and enhance immune response.

DuraCar (preclinical)
CAR-T cells engineered with shRNA against NR2F6 to improve persistence and anti-solid tumor activity. Preclinical CRO studies show high NR2F6 expression in CAR-modified T cells, suggesting potential utility in autoimmunity.

Small Molecules (patented, preclinical)
Series of NR2F6 agonists and antagonists to fine-tune immune activation or suppression, with applications from cancer to autoimmune disease and anti-angiogenesis.

Intellectual Property

Regen and subsidiary KCL control a robust patent portfolio over key immunologic and regenerative technologies, including:

• BORIS gene silencing (U.S. Patent 8,263,571)
• NR2F6 modulation and IL-17 induction in T cells (U.S. Patent 11,053,503)
• NR2F6 ligand screening (U.S. Patent 10,088,485)
• Checkpoint-inhibited cord blood cells (U.S. Patent 11,141,471)
• mRNA cancer vaccines (U.S. Patent 11,090,332)
• siRNA cancer therapy (U.S. Patent 8,389,708)
• Small molecule NR2F6 modulators (U.S. Patents 11,324,719 & 11,712,474)
• Anti-angiogenesis via NR2F6 (U.S. Patent 11,655,474)

License Agreements

• Zander Therapeutics, Inc. (common control) – exclusive, worldwide non-human veterinary license; $100k upfront and annual license fees; 4% royalties; 10% sublicense revenue; 15-year term.
• Oncology Pharma, Inc. – exclusive human license for pancreatic and colon cancer mRNA vaccines; $55k upfront; 5% royalties; 10% sublicense revenue; 15-year term.

No royalties have been realized from human licenses as no commercial products have launched.

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2. Financial Highlights (Items 7 & 8)

Revenues (2024 vs. 2023)

• Total: $236.6k in both 2024 and 2023
• Zander license fees & minimum royalties: $110k/year
• Oncology Pharma license fees & royalties: $126.6k/year

R&D and Operating Expenses

• R&D: $153.7k (2024) vs. $212.3k (2023)
• G&A: $58.9k vs. $45.0k
• Consulting & Professional: $364.0k vs. $606.2k
• Rent: $77.2k vs. $60.0k
• Total OpEx: $653.8k vs. $923.5k

Regen remains in an early preclinical/clinical stage, keeping R&D burn modest. 2024 consulting fees declined as management scaled back outsourced services, but overall OpEx still outpaces license revenues.

Non-Operating Results & Net Loss

• Net Operating Loss: $(417k) 2024 vs. $(687k) 2023
• Other Loss (derivative revaluation, interest): $(251k) 2024 vs. +$1.84M 2023
• Net Loss: $(668k) 2024 vs. +$1.16M 2023 (2023 benefited from a large non-cash derivative gain)

Balance Sheet & Liquidity

• Cash: $0.7k at 9/30/24 (vs. $121k in 9/30/23)
• Working Capital Deficit: $(5.24M) vs. $(5.18M)
• Convertible/Related Party Debt: ~$0.34M short-term; ~$0.25M long-term
• Derivative Liabilities: $1.40M for convertible note equity features

Cash Flow

• Operating: $(751k)
• Financing: +$631k (common shares, notes)
• Net Change: $(120k)

Going Concern: Regens financial statements include a going concern note. The companys cash runway extended through Q1 2025 via December 2024 financings, but it must raise additional capital or generate significant license revenue to fund R&D and overhead.

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3. Risk Factors (Item 1A)

1. No Approved Products: All programs are preclinical or Phase I/II; clinical success is uncertain.
2. Regulatory: FDA or EMA may not grant IND or BLA approvals.
3. Financing: $120k of cash at 9/30/24; negative OCF in 2024; repeated capital raises required.
4. Dilution: Frequent issuance of convertible debt and equity shares to raise cash.
5. Market Adoption: Even if approved, pricing, reimbursement and physician adoption are uncertain.
6. Intellectual Property: Patent challenges, expiring patents, or inability to enforce could harm prospects.

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4. Valuation & Derivative Instruments

Embedded Derivatives: Convertible notes have share-price indexed conversion features requiring derivative accounting under ASC 815. As of 9/30/24, the net PV of these features was recorded as a liability ($1.4M) with changes recognized in other income/expense.

Investments: Regen holds equity stakes in related-party Zander Therapeutics, Inc. (0.8M shares total) measured at fair value (Level 3). Unrealized losses (~$205k) are recorded in OCI. Smoky secondary markets for these small private companies add to uncertainty.

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5. Outlook & Valuation

Early Stage: Regen is still pre-revenue on proprietary platforms. Its near-term value driver is successful IND/clinical data and license partnerships.

Financing Needs: With $0.7k cash and negative OCF, Regen likely needs a $1M–$2M equity or debt raise in H1 2025 to sustain operations and IND activations.

Valuation: A discounted cash flow is premature. Comparable small‐cap biotechs trade on clinical pipeline, patents, and cash runway. With negative cash and early stage, we assign a low risk-adjusted NPV.

Investment Score: 2.5 / 10

• Strengths: Robust IP portfolio, multiple therapeutic platforms, orphan drug pathway for HemaXellarate.
• Risks: No approved products, heavy dilution, limited cash runway, high clinical and regulatory risk.

Regen Biopharma bears typical small‐cap biotech risk: high uncertainty, reliance on additional financings, long development timelines. Investors should be prepared for major share dilution and binary clinical readouts.