UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)

August 5, 2020

 

INTEC PHARMA LTD.

(Exact name of registrant as specified in its charter)

  

Israel   001-37521   N/A

(State or other jurisdiction

of incorporation)

  (Commission File Number)  

(IRS Employer

Identification No.)

 

12 Hartom St.

Har Hotzvim

   
Jerusalem, Israel   9777512
(Address of principal executive offices)   (Zip Code)
 
+ 972-2-586-4657

(Registrant’s telephone number, including area code)

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: 

Title of each class   Trading Symbol   Name of each exchange
on which registered
Ordinary Shares, no, par value   NTEC   Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

 

 

 

 

 

Item 2.02 Results of Operation and Financial Condition.

 

On August 5, 2020, Intec Pharma Ltd. (the “Company”) issued a press release announcing the Company’s results of operations for the second quarter ended June 30, 2020. The press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein in its entirety.

 

The information included in this Item 2.02 of Current Report on Form 8-K, including the attached Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Current Report, regardless of any general incorporation language in any such filing, except as expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statement and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
99.1   Press release, dated August 5, 2020

 

1

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: August 5, 2020

  INTEC PHARMA LTD.
   
  By: /s/ Nir Sassi
    Nir Sassi
    Chief Financial Officer

 

 

 

2

 

 

Exhibit 99.1

 

 

Intec Pharma Reports Second Quarter 2020 Financial Results and Provides Corporate Update

 

JERUSALEM (August 5, 2020) - Intec Pharma Ltd. (NASDAQ: NTEC) (“Intec” or “the Company”) today announces financial results for the second quarter ended June 30, 2020 and provides a corporate update.

 

“We have worked diligently over the past quarter to address the challenges of an evolving landscape for both our business and clinical development initiatives given the global COVID-19 pandemic,” stated Jeffrey A. Meckler, Vice Chairman and Chief Executive Officer of Intec Pharma.

 

“Despite constraints on our ability to conduct in-person meetings, our partnering activities to identify new opportunities and compounds for our unique gastric retentive oral delivery system as well as our partnering efforts for the AP-CD/LD program in Parkinson’s disease remain ongoing. Looking into the second half of the year, we continue to seek to advance these productive conversations towards a deal that demonstrates apprioriate value for both the Company and our shareholders.

 

“We look forward to advancing our newly designed AP-THC program into clinical development later this year as we recently received the active pharmaceutical ingredients needed for the clinical material production.

 

“Earlier this year, we announced we met the in vitro specifications for Merck’s compound. At this time, we do not anticipate the compound entering an in vivo study this year. We continue to discuss development opportunitines for the Accordion Pill with Merck.”

 

“Our recent registered direct offering not only strengthens our balance sheet but, more importantly, provides the financial support and flexibility to position the Company for its next stage of development,” added Mr. Meckler.

 

Financial Highlights for Second Quarter Ended June 30, 2020

 

Research and development expenses, net, for the three-month period ended June 30, 2020 were approximately $1.3 million, a decrease of $6.6 million, or approximately 84%, compared with approximately $7.9 million in the three-month period ended June 30, 2019. Research and development expenses, net, for the six-month period ended June 30, 2020 were approximately $3.3 million, a decrease of approximately $13.1 million, or approximately 80%, compared with approximately $16.4 million in the six-month period ended June 30, 2019. The decrease was primarily due to the completion of the ACCORDANCE study and Open Label Extension study during 2019, decrease in expenses related to the scale up activities for the commercial scale manufacturing and a decrease in payroll and related expenses, mostly due to a reduction in headcount, and share-based compensation.

 

General and administrative expenses for the three-month period ended June 30, 2020 were approximately $1.6 million, a decrease of $500,000, or approximately 24%, compared with approximately $2.1 million in the three-month period ended June 30, 2019. General and administrative expenses for the six-month period ended June 30, 2020 amounted to approximately $3.3 million, a decrease of approximately $1.0 million, or approximately 23%, compared to approximately $4.3 million for the six-month ended June 30, 2019. The decrease for the three and six-month periods was primarily related to a decrease in payroll and related expenses, including reduction in headcount, share-based compensation and reduction in associated expenses.

 

 

 

 

Net loss for the three-month period ended June 30, 2020 was approximately $2.9 million, a decrease of $7.1 million, or approximately 71%, compared with the net loss for the three-month period ended June 30, 2019 of approximately $10.0 million. The decrease for the three and six-month periods was mainly due to a decrease in research and development expenses, net, and general and administrative expenses, as detailed above.

 

Loss per ordinary share for the three-month period ended June 30, 2020, was $0.05 compared with $0.30 for the three-month period ended June 30, 2019. Loss per ordinary share for the six-month period ended June 30, 2020, was $0.12 compared with $0.62 for the six-month period ended June 30, 2019.

 

As of June 30, 2020, the Company had cash and cash equivalents of approximately $13.8 million. As of December 31, 2019, the Company had cash and cash equivalents and marketable securities of approximately $10.1 million.

 

Net cash used in operating activities was approximately $6.8 million for the six-month period ended June 30, 2020 compared with net cash used in operating activities of approximately $17.7 million for the six-month period ended June 30, 2019. This decrease resulted primarily from a decrease in research and development activities in the amount of approximately $13.1 million, offset by changes in operating asset and liability items of approximately $2.0 million.

 

The Company had positive cash flow from investing activities of approximately $769,000 for the six-month period ended June 30, 2020 compared to negative cash flow from investing activities of approximately $1.0 for the six-month period ended June 30, 2019. This change resulted primarily from an investment in the establishment of the commercial scale manufacturing in the amount of approximately $1.4 million in the six-month period ended June 30, 2019 and an increase in proceeds from the disposal of marketable securities in the amount of approximately $200,000.

 

Net cash provided by financing activities for the six-month period ended June 30, 2020 was approximately $10.6 million, which was provided primarily by the proceeds from the Company’s registered direct offering in May 2020 that resulted in net proceeds of approximately $4.5 million, proceeds from the company’s underwritten public offering in February 2020 that resulted in net proceeds of approximately $5.7 million and by the funds received from the sale of our ordinary shares under the Company’s “at-the-market” equity offering program that resulted in net proceeds of approximately $421,000.

 

In May, 2020, the Company raised $5.0 million in a registered direct offering of 16,291,952 ordinary shares at a purchase price of $0.3069 per share. In addition, in a concurrent private placement, the Company also sold and issued to the purchasers in the offering unregistered warrants to purchase 8,145,976 ordinary shares. The warrants have an exercise price of $0.245 per share, are immediately exercisable, and will expire five and one-half years from the date of issuance.

 

About Intec Pharma Ltd.

 

Intec Pharma is a clinical-stage biopharmaceutical company focused on developing drugs based on its proprietary Accordion Pill platform technology. The Company's Accordion Pill is an oral drug delivery system that is designed to improve the efficacy and safety of existing drugs and drugs in development by utilizing an efficient gastric retention and specific release mechanism. The Company's product pipeline includes two product candidates in clinical trial stages: Accordion Pill Carbidopa/Levodopa, or AP-CD/LD, which is in late-stage Phase 3 development for the treatment of Parkinson's disease symptoms in advanced Parkinson's disease patients, and AP-cannabinoids, an Accordion Pill to deliver either or both of the primary cannabinoids contained in Cannabis sativa, cannabidiol (CBD) and tetrahydrocannabinol (THC) for various pain indications. In addition, the Company has a research collaboration with Merck & Co.

 

For more information, visit www.intecpharma.com. Intec Pharma routinely posts information that may be important to investors in the Investor Relations section of its website.

 

 

 

 

Cautionary Note Regarding Forward-Looking Statements

 

This press release contains forward looking statements about our expectations, beliefs and intentions. Forward-looking statements can be identified by the use of forward-looking words such as "believe", "expect", "intend", "plan", "may", "should", "could", "might", "seek", "target", "will", "project", "forecast", "continue" or "anticipate" or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. These forward-looking statements are based on assumptions and assessments made in light of management's experience and perception of historical trends, current conditions, expected future developments and other factors believed to be appropriate. Forward-looking statements in this press release are made as of the date of this press release, and we undertake no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of our control. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, the following: our limited operating history and history of operating losses, our ability to continue as a going concern, our ability to obtain additional financing, the impact of the outbreak of coronavirus, our ability to successfully operate our business or execute our business plan, the timing and cost of our clinical trials, the completion and receiving favorable results in our clinical trials, our ability to obtain and maintain regulatory approval of our product candidates, our ability to protect and maintain our intellectual property and licensing arrangements, our ability to develop, manufacture and commercialize our product candidates, the risk of product liability claims, the availability of reimbursement, and the influence of extensive and costly government regulation. More detailed information about the risks and uncertainties affecting us is contained under the heading "Risk Factors" included in our most recent Annual Report on Form 10-K filed with the SEC on March 13, 2020, and in other filings that we have made and may make with the Securities and Exchange Commission in the future.

 

Intec Pharma Investor Contact:

Will O'Connor  
Stern IR  
+1 212-362-1200  
will@sternir.com 

 

 

 

 

INTEC PHARMA LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

   June 30,   December 31, 
   2020   2019 
   U.S. dollars in
thousands
 
     
Assets          
CURRENT ASSETS:          
Cash and cash equivalents  $13,799   $9,292 
Investment in marketable securities   -    770 
Prepaid expenses and other receivables   1,307    3,683 
TOTAL CURRENT ASSETS   15,106    13,745 
           
NON-CURRENT ASSETS:          
Property and equipment, net   1,967    2,575 
Operating lease right-of-use assets   993    1,243 
Other assets   3,717    3,717 
TOTAL NON-CURRENT ASSETS   6,677    7,535 
           
TOTAL ASSETS  $21,783   $21,280 
           
Liabilities and shareholders’ equity          
CURRENT LIABILITIES -          
Accounts payable and accruals:          
Trade  $382   $3,507 
Other   3,997    4,835 
TOTAL CURRENT LIABILITIES   4,379    8,342 
LONG-TERM LIABILITIES -          
Non-current operating lease liabilities   536    799 
Other liabilities   690    604 
TOTAL LONG-TERM LIABILITIES   1,226    1,403 
TOTAL LIABILITIES   5,605    9,745 
           
COMMITMENTS AND CONTINGENT LIABILITIES          
           
SHAREHOLDERS’ EQUITY:          
Ordinary shares, with no par value - authorized: 100,000,000 Ordinary Shares as of June 30, 2020 and December 31, 2019; issued and outstanding: 69,428,032 and 35,892,209 Ordinary Shares as of June 30, 2020 and December 31, 2019, respectively   727    727 
Additional paid-in capital   211,691    200,231 
Accumulated deficit   (196,240)   (189,423)
TOTAL SHAREHOLDERS’ EQUITY   16,178    11,535 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $21,783   $21,280 

 

 

 

 

INTEC PHARMA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three months ended
June 30
   Six months ended
June 30
 
   2020   2019   2020   2019 
   U.S. dollars
in thousands
   U.S. dollars
in thousands
 
OPERATING EXPENSES:                    
RESEARCH AND DEVELOPMENT EXPENSES, net  $(1,275)  $(7,860)  $(3,299)  $(16,402)
GENERAL AND ADMINISTRATIVE EXPENSES   (1,630)   (2,144)   (3,345)   (4,334)
OPERATING LOSS   (2,905)   (10,004)   (6,644)   (20,736)
FINANCIAL INCOME (EXPENSES), net   4    33    (66)   143 
LOSS BEFORE INCOME TAX   (2,901)   (9,971)   (6,710)   (20,593)
INCOME TAX   (46)   (38)   (107)   (72)
NET LOSS  $(2,947)  $(10,009)  $(6,817)  $(20,665)

 

   U.S. dollars 
LOSS PER SHARE BASIC AND DILUTED  $(0.05)  $(0.30)  $(0.12)  $(0.62)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER ORDINARY SHARE IN THOUSANDS   62,820    33,300    54,913    33,274 

 

 

 

 

(Continued) - 1

 

INTEC PHARMA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

 

   Ordinary Shares   Additional paid-in capital   Accumulated Deficit   Total 
   Number           Amounts     
   of shares   Amounts   U.S. dollars in thousands 
BALANCE AT JANUARY 1, 2019   33,232,988   $727   $194,642   $(141,824)  $53,545 
CHANGES IN THE SIX-MONTH PERIOD ENDED JUNE 30, 2019:                         
Exercise of options   69,812    -    268    -    268 
Share-based compensation        -    1,961    -    1,961 
Net loss   -    -    -    (20,665)   (20,665)
BALANCE AT JUNE 30, 2019   33,302,800   $727   $196,871   $(162,489)  $35,109 
                          
BALANCE AT JANUARY 1, 2020   35,892,209   $727   $200,231   $(189,423)  $11,535 
CHANGES IN THE SIX-MONTH PERIOD ENDED JUNE 30, 2020:                         
Issuance of ordinary shares, net of issuance costs   831,371    -    421    -    421 
Issuance of ordinary shares and warrants, net of issuance costs   16,250,000    -    5,692    -    5,692 
Issuance of ordinary shares and warrants, net of issuance costs   16,291,952    -    4,426    -    4,426 
Exercise of warrants   162,500         65         65 
Share-based compensation   -    -    856    -    856 
Net loss   -    -    -    (6,817)   (6,817)
BALANCE AT JUNE 30, 2020   69,428,032   $727   $211,691   $(196,240)  $16,178 

 

 

 

 

(Continued) - 2

 

INTEC PHARMA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

 

   Ordinary Shares   Additional paid-in capital   Accumulated Deficit   Total 
   Number of       Amounts 
   shares   Amounts   U.S. dollars in thousands 
BALANCE AT APRIL 1, 2019   33,297,371   $727   $195,842   $(152,480)  $44,089 
CHANGES IN THE THREE-MONTH PERIOD ENDED JUNE 30, 2019:                         
Exercise of options   5,429    -    11    -    11 
Share-based compensation   -    -    1,018    -    1,018 
Net loss   -    -    -    (10,009)   (10,009)
BALANCE AT JUNE 30, 2019   33,302,800   $727   $196,871   $(162,489)  $35,109 
                          
BALANCE AT APRIL 1, 2020   52,973,580   $727   $206,786   $(193,293)  $14,220 
CHANGES IN THE THREE-MONTH PERIOD ENDED JUNE 30, 2020:                         
Issuance of ordinary shares and warrants, net of issuance costs   16,291,952    -    4,426    -    4,426 
Exercise of warrants   162,500    -    65    -    65 
Share-based compensation   -    -    414    -    414 
Net loss   -    -    -    (2,947)   (2,947)
BALANCE AT JUNE 30, 2020   69,428,032   $727   $211,691   $(196,240)  $16,178 

 

 

 

 

INTEC PHARMA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Six months ended June 30 
   2020   2019 
   U.S. dollars in thousands 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(6,817)  $(20,665)
Adjustments required to reconcile net loss to net cash used in operating activities:          
Depreciation   611    431 
Exchange differences on cash and cash equivalents   49    (19)
Change in right of use asset   250    351 
Change in lease liabilities   (263)   (243)
Gains on marketable securities   (2)   (5)
Share-based compensation   856    1,961 
Changes in operating assets and liabilities:          
Decrease (increase) in prepaid expenses and other receivables   2,376    (136)
Increase in deferred tax assets   -    (148)
Increase (decrease) in accounts payable and accruals   (3,963)   583 
Increase in other liabilities   86    163 
Net cash used in operating activities   (6,817)   (17,727)
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of property and equipment   (3)   (151)
Investment in other assets   -    (1,435)
Proceeds from disposal of marketable securities, net   772    576 
Net cash provided by (used in) investing activities   769    (1,010)
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from issuance of ordinary shares, net of issuance costs   421    - 
Proceeds from issuance of ordinary shares and warrants, net of issuance costs   5,692    - 
Proceeds from issuance of ordinary shares and warrants, net of issuance costs   4,426    - 
Proceeds from exercise of warrants   65    - 
Proceeds from exercise of options   -    268 
Net cash provided by financing activities   10,604    268 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   4,556    (18,469)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD   9,292    39,246 
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS   (49)   19 
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD  $13,799   $20,796 
           
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:          
Liability with respect to property and equipment  $-   $502 
Liability with respect to other assets  $-   $1,114 
           
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION -          
Taxes paid  $-   $50 
Interest received  $27   $263