PaxMedica Reports Net Loss of $6.7M, Decrease in Operating Expenses, and Cash Deterioration in 10-Q Filing

PaxMedica, Inc. reported significant financial changes in its 10-Q filing for the six months ended June 30, 2024. The company, which focuses on developing drug candidates for autism spectrum disorder (ASD) and other neurological conditions, experienced a net loss of approximately $6.7 million, a decrease from a net loss of about $7.3 million in the same period of 2023. The basic and diluted net loss per share improved to $(0.39) from $(4.05) year-over-year, reflecting a substantial reduction in the weighted average number of shares outstanding, which increased from 860,715 to 7,655,549.

Total operating expenses for the six months ended June 30, 2024, were approximately $6.7 million, down from $7.4 million in the prior year. This decline was primarily attributed to a decrease in general and administrative expenses, which fell from approximately $6.6 million to $4.8 million, largely due to reduced stock compensation and legal fees. Conversely, research and development expenses rose to approximately $1.9 million from $0.8 million, driven by increased development activities related to the company's drug candidates.

PaxMedica's cash position deteriorated significantly, with cash decreasing to $324,486 as of June 30, 2024, from $4.7 million at the end of 2023. Total current assets also fell sharply from $5.7 million to $799,611, while total liabilities increased from $2.3 million to $2.6 million. The company reported a total stockholders’ deficit of approximately $(58.7) million, a notable decline from a positive equity position of $3.4 million at the end of 2023.

Strategically, PaxMedica entered into an exclusive distribution agreement with Vox Nova, LLC for its lead product, PAX-101, which includes an upfront fee of $0.5 million and potential additional payments contingent on regulatory approvals. The company also executed a reverse stock split of 1-for-17 effective October 30, 2023, and its common stock began trading on the Nasdaq Capital Market on a split-adjusted basis before being suspended on May 2, 2024, and subsequently trading on the OTC Pink Market.

PaxMedica has not generated any revenue to date and continues to rely on external funding sources, including an equity purchase agreement with Lincoln Park Capital Fund, which allows for the sale of up to $20 million in common stock over 30 months. However, no shares were issued under this agreement during the reported period. The company anticipates ongoing losses and may need to raise substantial additional funds to support its operations and development activities.