UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-36020

Traws Pharma, Inc.

(Exact name of registrant as specified in its charter)


Delaware		22-3627252
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

12 Penns Trail, Newtown, PA		18940
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (267) 759-3680

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ⌧ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ⌧ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ⌧ No

The number of outstanding shares of the registrant’s Common Stock, par value $0.01 per share, as of May 1, 2024 was 25,301,009.

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	TRAW	The Nasdaq Stock Market LLC

Table of Contents

TRAWS PHARMA, INC.

TABLE OF CONTENTS FOR QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2024


	Page
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations	4
Condensed Consolidated Statements of Comprehensive Loss	5
Consolidated Statement of Stockholders’ Equity (Deficit)	6
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	28
Item 4. Controls and Procedures	28

PART II — OTHER INFORMATION

Item 1. Legal Proceedings	30
Item 1A. Risk Factors	30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3. Defaults Upon Senior Securities	33
Item 4. Mine Safety Disclosures	33
Item 5. Other Information	33
Item 6. Exhibits	34
SIGNATURES	35

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Traws Pharma, Inc.

Condensed Consolidated Balance Sheets


	March 31,		December 31,
	2024		2023
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	16,390,000	$	20,821,000
Receivables		18,000		18,000
Prepaid expenses and other current assets		1,745,000		1,821,000
Total current assets		18,153,000		22,660,000
Property and equipment, net		18,000		22,000
Other non-current assets		1,000		1,000
Total assets	$	18,172,000	$	22,683,000
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	6,568,000	$	5,619,000
Accrued expenses and other current liabilities		2,628,000		3,375,000
Deferred revenue		226,000		226,000
Total current liabilities		9,422,000		9,220,000
Deferred revenue, non-current		2,735,000		2,791,000
Total liabilities		12,157,000		12,011,000

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.01 par value, 5,000,000 shares authorized, none issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Common stock, $0.01 par value, 125,000,000 shares authorized, 21,085,935 and 21,003,409 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		211,000		210,000
Additional paid in capital		493,448,000		493,116,000
Accumulated deficit		(487,614,000)		(482,631,000)
Accumulated other comprehensive loss		(30,000)		(23,000)
Total stockholders’ equity		6,015,000		10,672,000
Total liabilities and stockholders’ equity	$	18,172,000	$	22,683,000

See accompanying notes to condensed consolidated financial statements.

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Traws Pharma, Inc.

Condensed Consolidated Statements of Operations (unaudited)


	Three Months Ended March 31,
	2024		2023
Revenue	$	56,000	$	56,000
Operating expenses:
General and administrative		3,356,000		2,113,000
Research and development		1,912,000		4,080,000
Total operating expenses		5,268,000		6,193,000
Loss from operations		(5,212,000)		(6,137,000)
Other income, net		229,000		362,000
Net loss	$	(4,983,000)	$	(5,775,000)
Net loss per share, basic and diluted	$	(0.24)	$	(0.28)
Basic and diluted weighted average shares outstanding		21,043,458		20,960,171

See accompanying notes to condensed consolidated financial statements.

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Traws Pharma, Inc.

Condensed Consolidated Statements of Comprehensive Loss (unaudited)


	Three Months Ended March 31,
	2024		2023
Net loss	$	(4,983,000)	$	(5,775,000)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments, net		(7,000)		6,000
Other comprehensive (loss) income, net of tax		(7,000)		6,000
Comprehensive loss	$	(4,990,000)	$	(5,769,000)

See accompanying notes to condensed consolidated financial statements.

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Traws Pharma, Inc.

Consolidated Statement of Stockholders’ Equity (Deficit) (unaudited)


	Three Month Periods Ended March 31, 2024 and 2023
								Accumulated
				Additional				other
	Common Stock			Paid in		Accumulated		comprehensive
	Shares	Amount		Capital		deficit		(loss) income		Total
Balance at December 31, 2023	21,003,409	$	210,000	$	493,116,000	$	(482,631,000)	$	(23,000)	$	10,672,000
Net loss	—		—		—		(4,983,000)		—		(4,983,000)
Other comprehensive loss	—		—		—		—		(7,000)		(7,000)
Stock-based compensation	—		—		333,000		—		—		333,000
Shares issued for vested restricted stock units	82,526		1,000		(1,000)		—		—		—
Balance at March 31, 2024	21,085,935	$	211,000	$	493,448,000	$	(487,614,000)	$	(30,000)	$	6,015,000

Balance at December 31, 2022	20,925,992	$	209,000	$	491,816,000	$	(463,683,000)	$	(33,000)	$	28,309,000
Net loss	—		—		—		(5,775,000)		—		(5,775,000)
Other comprehensive loss	—		—		—		—		6,000		6,000
Exercise of stock options	—		—		—		—		—		—
Stock-based compensation	—		—		336,000		—		—		336,000
Shares issued for vested restricted stock units	43,567		1,000		(1,000)		—		—		—
Balance at March 31, 2023	20,969,559	$	210,000	$	492,151,000	$	(469,458,000)	$	(27,000)	$	22,876,000

See accompanying notes to condensed consolidated financial statements.

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Traws Pharma, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)


	Three Months Ended March 31,
	2024		2023
Operating activities:
Net loss	$	(4,983,000)	$	(5,775,000)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		4,000		3,000
Stock compensation expense		333,000		336,000
Changes in assets and liabilities:
Receivables		—		12,000
Prepaid expenses and other current assets		76,000		(241,000)
Accounts payable		949,000		1,036,000
Accrued expenses and other current liabilities		(747,000)		142,000
Deferred revenue		(56,000)		(56,000)
Net cash used in operating activities		(4,424,000)		(4,543,000)

Effect of foreign currency translation on cash		(7,000)		6,000
Net decrease in cash and cash equivalents		(4,431,000)		(4,537,000)
Cash and cash equivalents at beginning of period		20,821,000		38,757,000
Cash and cash equivalents at end of period	$	16,390,000	$	34,220,000

See accompanying notes to condensed consolidated financial statements.

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Traws Pharma, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of Business

The Company

Traws Pharma, Inc. (“Traws Pharma”), formerly known as Onconova Therapeutics, Inc. (the “Company”), was incorporated in the State of Delaware on December 22, 1998 and commenced operations on January 1, 1999. The Company's headquarters are located in Newtown, Pennsylvania. On April 1, 2024, the Company acquired Trawsfynydd Therapeutics, Inc., a Delaware corporation (“Trawsfynydd”), and the name change to Traws Pharma was effected (See Note 9 – Subsequent Events in these Notes to Condensed Consolidated Financial Statements). Traws Pharma is a clinical stage biopharmaceutical company aiming to address unmet medical needs in respiratory viral diseases and cancer. The viral respiratory disease program includes an oral inhibitor drug candidate of the SARS-CoV-2 Mpro (3CL protease) and an oral antiviral drug candidate for influenza. In the cancer program, Traws Pharma is developing the novel, proprietary multi-kinase CDK2/4/6 inhibitor narazaciclib for refractory endometrial cancer and potentially for other cancers.

Liquidity

The Company has incurred recurring operating losses since inception. For the three months ended March 31, 2024, the Company incurred a net loss of $4,983,000 and as of March 31, 2024 the Company had generated an accumulated deficit of $487,614,000. Traws Pharma anticipates that operating losses will continue for the foreseeable future due to, among other things, costs related to research, development of its product candidates and its preclinical programs, strategic alliances and its administrative organization. At March 31, 2024, the Company had cash and cash equivalents of $16,390,000. On April 1, 2024, the Company received $14,000,000 in a private placement of securities described in detail in Note 9 – Subsequent Events in these Notes to Condensed Consolidated Financial Statements. Based on current projections, Traws Pharma does not have sufficient cash and cash equivalents to support its operations for at least the 12 months following the date that these financial statements are issued. These conditions raise substantial doubt about Traws Pharma’s ability to continue as a going concern through the one-year period after the date that the financial statements are issued. Due to the inherent uncertainty involved in making estimates and the risks associated with the research, development, and commercialization of biotechnology products, Traws Pharma may have based this estimate on assumptions that may prove to be wrong, and Traws Pharma's operating plan may change as a result of many factors currently unknown to Traws Pharma.

Traws Pharma will require substantial additional financing to fund its ongoing clinical trials and operations, and to continue to execute its strategy. To alleviate the conditions that raise substantial doubt about Traws Pharma’s ability to continue as a going concern, management plans to explore various dilutive and non-dilutive sources of funding, including equity financings, strategic alliances, business development and other sources. The future success of Traws Pharma is dependent upon its ability to obtain additional funding. There can be no assurance, however, that Traws Pharma will be successful in obtaining such funding in sufficient amounts, on terms acceptable to Traws Pharma, or at all. The failure to obtain sufficient capital on acceptable terms when needed would have a material adverse effect on Traws Pharma’s business, results of operations and financial condition. Accordingly, management has concluded that substantial doubt exists with respect to Traws Pharma's ability to continue as a going concern within one year after the date that these financial statements are issued.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business, and do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should Traws Pharma be unable to continue as a going concern.

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Traws Pharma, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

2. Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and footnotes normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The financial statements include the consolidated accounts of the Company and its wholly-owned subsidiary, Onconova Europe GmbH, as of March 31, 2024. All significant intercompany transactions have been eliminated. The acquisition of Trawsfynydd occurred on April 1, 2024, and therefore the accompanying condensed consolidated balance sheet as of March 31, 2024 and the condensed consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for the three months ended March 31, 2024 do not include the accounts of Trawsfynydd (See Note 9 – Subsequent Events in these Notes to Condensed Consolidated Financial Statements).

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of March 31, 2024, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2024 and 2023, the consolidated statements of stockholders’ equity (deficit) for the three months ended March 31, 2024 and 2023 and the condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 are unaudited. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2024, the results of its operations for the three months ended March 31, 2024 and 2023, and its cash flows for the three months ended March 31, 2024 and 2023. The financial data and other information disclosed in these notes related to the three months ended March 31, 2024 and 2023 are unaudited. The results for the three months ended March 31, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024, any other interim periods, or any future year or period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2023 included in the Company’s annual report on Form 10-K filed with the SEC on April 1, 2024.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment, which is the identification and development of oncology therapeutics.

Concentrations of Credit Risk and Off-Balance Sheet Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of money market accounts with financial institutions that management believes are creditworthy. The Company has no financial instruments with off-balance sheet risk of loss.

At March 31, 2024 the Company had $16,042,000 of its cash and cash equivalents in a Morgan Stanley Institutional Liquidity Fund. The fund is a AAA rated money market fund that invests in a portfolio of liquid, high-quality debt securities issued by the U.S. government. The fund resides in a custodial account held by U.S. Bank for which SVB Asset Management is the advisor.

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Traws Pharma, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2023 included in the Company’s annual report on Form 10-K filed with the SEC on April 1, 2024. There have been no changes to the Company’s significant accounting policies as of and for the three months ended March 31, 2024.

Fair Value Measurements

At both March 31, 2024 and December 31, 2023, the Company had no financial assets and liabilities measured at fair value on a recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company utilizes a valuation hierarchy for disclosure of the inputs to the valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, accounts payable, and accrued liabilities approximate their respective fair values because of the short-term nature of these accounts.

3. Revenue

The Company’s revenue during the three months ended March 31, 2024 and 2023 was from its license and collaboration agreement with SymBio.


	Three Months Ended March 31,
	2024		2023
Symbio
Upfront license fee recognition over time	$	56,000	$	56,000

Deferred revenue is as follows:


	Symbio
	Upfront Payment
Deferred balance at December 31, 2023	$	3,017,000
Recognition to revenue		(56,000)

Deferred balance at March 31, 2024	$	2,961,000

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Traws Pharma, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

4. Net Loss Per Share of Common Stock

The following potentially dilutive securities outstanding at March 31, 2024 and 2023 have been excluded from the computation of diluted weighted average shares outstanding, as they would be antidilutive (reflects the number of common shares as if the dilutive securities had been converted to common stock):


	March 31,
	2024	2023
Warrants	307,716	344,990
Stock options	2,292,543	1,856,722
	2,600,259	2,201,712

5. Warrants

Common Stock warrants are accounted for in accordance with applicable accounting guidance provided in ASC Topic 815, Derivatives and Hedging - Contracts in Entity’s Own Equity (ASC Topic 815), as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement.

Warrants outstanding and warrant activity (reflects the number of common shares as if the warrants were converted to common stock) for the three months ended March 31, 2024 is as follows:

Balance

Exercise

Expiration

December 31,

Warrants

March 31,

Description

Classification

Price

Date

2023

Issued

Exercised

Expired

2024

Non-tradable pre-funded warrants

Equity

SEC Form 10-Q filed by Traws Pharma Inc.