Despite securing a much-needed $5 million lifeline from an equity offering this week, HCW Biologics is continuing to warn that its financial future remains in doubt.
The inflammation-focused biotech explained in its first-quarter earnings release May 15 that the $1.1 million left in its bank account at the end of March meant there remained “substantial doubt” about the company’s ability to “continue as a going concern for at least 12 months … without additional funding or financial support.”
Some financial respite arrived yesterday when the biotech secured $5 million in gross proceeds via an equity offering “in a difficult market without using a highly structured deal.” HCW’s CEO Hing Wong said the cash infusion would be used to open clinical sites for the phase 1 trial of its injectable interleukin-2 (IL-2) fusion protein HCW9302.
The trial of HCW9302, which is designed to activate and expand regulatory T cells, is set to evaluate patients with moderate to severe alopecia areata from the third quarter of the year.
“Our new round of financing will provide funding for critical studies to complete the research package for our business development campaign to identify a licensing partner to commercialize our immune-cell engagers, including T-cell engagers, which we created using our TRBC drug discovery and development platform,” Wong added in the release.
But even when considering “future elements of our financing plan,” the company warned in the same May 15 release that more money is needed to keep the show on the road.
“We have had some early success in completing key elements of our multi-step financing plan, however, we cannot be assured that we will continue to have success with all of the elements of our plan,” the biotech said.
Florida-based HCW first raised concerns about its financial sustainability over a year ago and has been keeping itself afloat through a series of small-scale financings.
In November 2024, China’s WY Biotech handed HCW a $7 million upfront fee for the right to take a functional immune cell stimulator called HCW11-006 into the clinic. Preclinical research suggested that HCW11-006 is effective at inducing antitumor CD8+ T cell and NK cell responses without triggering unwanted side effects, HCW explained at the time.
The company’s other key focus is HCW9206, a fusion protein the biotech has touted as an “alternative novel strategy for CAR-T cell production with the advantage of generating a large population of CAR-Ts with a stem cell-like memory T cell phenotype, which should enhance the persistence of CAR-Ts in patients.”
Wong said HCW9206 is now “ready to commercialize.”
“It is a promising revolutionary reagent to replace anti-CD3/anti-CD28/IL-2-based approaches to streamline and lower the costs of CAR-T manufacturing,” the CEO added. “Equally important, we believe that HCW9206 can improve the functional activities and persistence of CAR-Ts following adoptive transfer, a goal that has not been achieved for the last decade.”