HCW Biologics Reports $30M Net Loss and Decreased Revenue for 2024

HCW Biologics Inc. (HCWB) reported a net loss of $30.0 million for the year ended December 31, 2024, compared to a net loss of $25.0 million in 2023. Revenue for 2024 was $2.6 million, a decrease of $275,000 from 2023's $2.8 million. The decrease in revenue is attributed to lower sales of licensed molecules to Wugen. The increase in net loss is primarily due to significantly higher legal expenses ($15.9 million in 2024 versus $6.6 million in 2023), a $1.3 million loss from a fraudulent scheme, and increased interest expense. Research and development expenses decreased by $1.3 million (17%) to $6.4 million, primarily due to reduced preclinical and clinical activity costs. General and administrative expenses increased by $60,000 (1%) to $6.8 million, mainly due to accretion expense related to Senior Secured Notes.

Significant developments during the year included the July 2024 settlement agreement with ImmunityBio, resolving a long-running arbitration. This agreement resulted in HCWB retaining rights to develop and commercialize HCW9302 for autoimmune and proinflammatory diseases and HCW9218 for non-oncology indications. The company also launched a new drug discovery platform, TRBC, and entered into a licensing agreement with WY Biotech for HCW11-006, receiving a $7 million upfront payment (later amended to adjust the payment schedule). The company also received FDA clearance to initiate a Phase 1 clinical trial for HCW9302 in alopecia areata in January 2025. As of December 31, 2024, HCWB had 36 full-time employees.

The company's financial position as of December 31, 2024, showed $4.7 million in cash and cash equivalents. However, the filing notes substantial doubt about the company's ability to continue as a going concern within one year, based on its current cash position and projected operating losses. The company's plan to address this includes raising additional capital through equity offerings, debt financing, and business development transactions. Outstanding obligations as of December 31, 2024, included $14.4 million in unpaid legal fees and $4.3 million in unpaid construction costs for a new headquarters and manufacturing facility. A forbearance agreement was reached with the prime contractor to allow time to secure financing for the facility's completion.

HCWB's outlook is contingent upon successful clinical trials, securing additional funding, and navigating the complexities of regulatory approvals. The company's strategy focuses on diseases with no known FDA-approved treatments, utilizing its proprietary platforms to develop novel immunotherapies. The company anticipates increased expenses in the coming years as it advances its clinical development programs and potentially expands its commercial operations. The company's continued listing on Nasdaq is also subject to regaining compliance with certain listing rules, for which extensions have been granted.

The company's financial statements are subject to various accounting estimates and judgments, particularly regarding revenue recognition, fair value measurements, and stock-based compensation. The company's reliance on third-party manufacturers and collaborators introduces operational and supply chain risks. The company also faces significant competition in the biopharmaceutical industry and the inherent uncertainties associated with clinical development and regulatory approvals.