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TENX: 1Q:22 Financial and Operational Review


By John Vandermosten, CFA



Tenax Therapeutics, Inc. (NASDAQ:TENX) reported first quarter 2022 results on May 16, 2022 via its filing of Form 10-Q with the SEC. The company provided no updates since the full year report released at the end of March; however, on March 18, the company announced a much needed cash infusion from an $8 million PIPE offering. On June 2nd, Tenax will hold a KOL event in conjunction with LifeSci advisors to discuss the treatment landscape and unmet need in pulmonary arterial hypertension. Even with abnormally low probabilities of success applied to the potential for the company’s two development products in PAH, levosimendan and imatinib, the upside for these products and ability to address a material unmet need is tremendous if dilution concerns can be addressed.

Highlights for 2022 include:

➢ TNX-102 patent allowed by USPTO - January 2022

➢ Transition to oral levosimendan open label extension completed - January 2022

Formation of Scientific Advisory Board (SAB) - January 2022

➢ US patent granted for subcutaneous TNX-102 (levosimendan) - January 2022

➢ Robyn Hunter appointed to Board - January 2022

➢ $8 million PIPE offered at the market – May 2022

Tenax produced no revenues in 1Q:21 and incurred operating expenses of $2.7 million resulting in net loss of ($2.7) million, or ($0.11) per share.

For the quarter ended March 31, 2022 versus the same ended March 31, 2021:

➢ General and administrative rose 12% to $1.5 million compared to $1.4 million primarily due to increases in legal fees due to the outsourcing of this function, and higher costs for insurance, and administrative expense, partially offset by lower personnel costs due to lower headcount;

➢ Research and development expenses fell 95% to $1.2 million from $22.4 million as $21.8 million in in-process R&D expense was recognized in the prior year period related to PHPM which was not repeated. Other components of R&D were up on a year over year basis including clinical and preclinical development costs due to ongoing clinical trials and formulation work for imatinib. Personnel costs also rose on a year over year basis related to the hiring of a new Chief Medical Officer;

➢ Net loss was ($2.7) million versus ($23.7) million, or ($0.11) and ($1.64) per share, respectively.

At the end of the quarter, cash and equivalents totaled $2.9 million, compared to $5.6 million at the end of 2021. During the quarter, Tenax issued an 8-month, $365,000 note to Premium Funding Associates, which it is already in the process of repaying. On May 18, 2022, Tenax announced an $8 million raise from the sale of 10.6 million units of pre-funded and other warrants.

$8 Million PIPE Offered

On May 18th Tenax announced an $8 million private investment in public equity (PIPE) that is expected to raise $8 million from the sale of 10,596,027 units at $0.755 per unit. Each unit consists of a pre funded warrant exercisable at $0.0001 and one warrant with an exercise price of $0.63. Both warrants are immediately exercisable. The prefunded warrant is perpetual and the $0.63 strike price warrants offer a duration of 5.5 years. Proceeds will support research and development activities for levosimendan and imatinib as well as general corporate purposes.

Certain warrants issued by the company over the last several years were modified to reduce the exercise price to $0.63 and extend their term by two years.

American College of Cardiology Scientific Sessions

Tenax announced that drug candidates levosimendan and imatinib would be featured at the American College of Cardiology (ACC) Scientific Sessions on April 3rd and 4th. Tenax’ scientific advisory board member Barry Borlaug, MD shared data from the Phase II HELP trial1 in a presentation entitled “Helping PH-HFpEF Patients Walk Further with Levosimendan.” His presentation will be part of the session “A Whole New World in Pulmonary Hypertension: Randomized Clinical Trial Updates For 2022” held April 3rd. Professor Stuart Rich, Tenax’ Chief Medical Officer, presented on April 4th at the “Back to the Future: Old Drugs with a New Purpose in PAH” session. Dr. Rich’s address is called “Next-generation Tyrosine Kinase Inhibitors for PAH” where he will review the mechanisms underlying the TKI class.

Clinical Asset Update

On January 4, 2022, Tenax provided an update on TNX-102 (subcutaneous levosimendan), TNX-103 (oral levosimendan) and TNX-201 (enteric-coated imatinib in PAH).

Tenax received a Notice of Allowance from the USPTO2 for patent number 11,213,524, Pharmaceutical Compositions for Subcutaneous Administration of Levosimendan (TNX-102) in early January. The patent covers subcutaneous administration of levosimendan for treatment of health conditions of any kind. On January 12th, Tenax announced that the patent had been granted, confirmed that it will offer protection through the end of 2039 and will be eligible for patent term extension. A Canadian patent of the same name, titled: Pharmaceutical compositions for subcutaneous administration of levosimendan is pending approval.

Tenax also announced the completion of the IV to oral levosimendan transition (TNX-103) for patients currently enrolled in the open label extension rollover study (TNX-LVO-05) who advanced from the Phase II HELP trial. The goal of the extension was to determine the safety and tolerability of oral levosimendan and establish an oral dose that would maintain its efficacy. All patients in the extension successfully shifted from IV to oral without any unexpected safety issues or serious drug related adverse events. Data from the extension confirms that oral levosimendan, when dosed at 3-4 mg per day, was safe, well-tolerated, and maintained the efficacy of IV levosimendan therapy in PH-HFpEF patients. Multiple measures of efficacy confirmed that oral levosimendan is comparable or possibly more effective than the weekly IV regimen in this group of patients.

Tenax updated investors on its TNX-201 (enteric-coated imatinib in PAH) program. The pharmacokinetic (PK) assessment in healthy volunteers has been completed. The PK study assessed imatinib versus its enteric-coated formulation to help ensure optimal efficacy and tolerance in its upcoming Phase III trial, anticipated to start in 2H:22. Tenax also announced that it had selected a large, global contract research organization (CRO) partner, which has successfully completed over 20 PAH projects including multiple Phase III trials. Key Opinion Leader (KOL) and site engagement is expected to commence early this year.

To conclude the announcement, Tenax reported the formation of a Scientific Advisory Board for imatinib, chaired by Dr. Anna Hemnes of Vanderbilt University and including Dr. Robert Frantz of the Mayo Clinic, Dr. Bradley Maron of Harvard University, and Dr. John Ryan of the University of Utah. The members are globally renowned scientists with deep experience in PAH clinical trials as well as translational science in pulmonary vascular disease.

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1. Discussion of HELP trial in our report here.

2. US Patent and Trademark Office

3. Source: March 2022 Tenax Corporate Presentation

4. Source: Tenax Therapeutics March 2022 Corporate Presentation

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