Rafael Holdings Reports Second Quarter Fiscal Year 2021 Results

News provided by

Rafael Holdings, Inc.

Mar 17, 2021, 16:30 ET

NEWARK, N.J., March 17, 2021 /PRNewswire/ -- Rafael Holdings, Inc., (NYSE: RFL), reported revenue of $1.0 million and a loss per share of $0.50 for the second quarter of its 2021 fiscal year, the three months ended January 31, 2021.

Q2 FY 2021 Consolidated Financial and Operational Highlights

  • Revenue of $1.0 million, generated by Rafael Holdings' real estate portfolio, decreased from $1.2 million in the year-ago quarter due, in part, to the sale of its building in Piscataway, NJ.
  • Loss per share of $0.50 compared to a loss per share of $0.08 in the year ago quarter primarily due to a $7.0 million impairment of the company's interest in Altira, as described below.
  • Rafael Holdings' Board of Directors has appointed Ameet Mallik to become the Company's Chief Executive Office effective May 1, 2021.  Howard Jonas, who has served as the company's Chairman and CEO since its inception, will continue as Chairman of the Board and remain an active member of the management team. 
  • William "Bill" Conkling has been named Rafael Holdings' Chief Commercial Officer.
  • On December 7, 2020, the Company acquired the economic rights related to a 33.33% membership interest in Altira, adding to the 33.33% interest purchased in fiscal 2020.  As in the first such agreement, the purchase gives the Company an indirect right to receive a 1% royalty on potential net sales of certain Rafael Pharmaceuticals' products. 
  • On December 7, 2020, Rafael Holdings sold 567,437 shares of the Company's Class B common stock and warrants to purchase an additional 113,487 shares of the Company's Class B common stock for an aggregate sale price of $13 million.

Q2 FY 2021 – Pharmaceutical Holdings - Recent Developments

Rafael Pharmaceuticals

At January 31, 2021, the Company and its affiliates collectively owned securities representing 51% of the issued and outstanding capital stock of Rafael Pharmaceuticals and approximately 41% on a fully diluted basis including shares beneficially held through its interest in RP Finance, LLC., a funding vehicle.  Recent developments announced by Rafael Pharmaceuticals include:

  • The U.S. Food and Drug Administration (FDA) has granted Fast Track designation for Rafael Pharmaceuticals' lead compound, CPI-613® (devimistat), for the treatment of both metastatic pancreatic cancer and acute myeloid leukemia (AML).
  • Rafael Pharmaceuticals announced that it will initiate a Phase 2 clinical trial of CPI-613®(devimistat) in combination with hydroxychloroquine in patients with clear cell sarcoma of soft tissue. Rafael Pharmaceuticals will begin enrolling patients in partnership with Sara's Cure and Sarcoma Alliance for Research through Collaboration (SARC).

The FDA has granted Orphan Drug Designation for CPI-613® (devimistat) for the treatment of soft tissue sarcoma.  Rafael Pharmaceuticals' clinical trial will focus on the treatment of relapsed or refractory clear cell sarcoma.

LipoMedix

At January 31, 2021, Rafael Holdings held 68% of the issued and outstanding ordinary shares of LipoMedix, a development-stage Israeli company focused on the development of an innovative, safe and effective cancer therapy based on liposome delivery.

LipoMedix announced that its lead compound, Promitil® (PL-MLP), will be manufactured in the United States by ForDoz Pharma (ForDoz), a specialty pharmaceutical company focused on the development, manufacturing, and commercialization of value-added sterile and complex injectable products.  

Barer Institute

The Barer Institute, a wholly owned subsidiary of Rafael Holdings, has identified and begun to develop new therapeutic compounds, including compounds to regulate cancer metabolism, through internal development and in-licensing. It is working to validate newly discovered biomarkers for resistance and sensitivity within its portfolio compounds and to identify certain novel targetable mechanisms of action.

The Barer Institute announced that it had reached an agreement with Princeton University's Office of Technology Licensing for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program and related intellectual property from the laboratory of Professor Joshua Rabinowitz, Department of Chemistry.

Remarks by Howard Jonas, Chairman and CEO of Rafael Holdings

"The progress being made by our pharma partners is highlighted by our Board's selection of Ameet Mallik to join as CEO of Rafael Holdings beginning on May 1, 2021.  Ameet is an extraordinarily capable and accomplished pharma executive with deep knowledge of oncological drug development and commercialization. Together with Bill Conkling, who has joined our team as Chief Commerical Officer, Ameet will lead our effort to realize the potential of Rafael Holdings including its investments in Rafael Pharmaceuticals, LipoMedix, and the Barer Institute." 

About Rafael Holdings, Inc.:

Rafael Holdings is focused on development of novel cancer therapies.  The Company is a significant investor in two clinical stage oncology companies, Rafael Pharmaceuticals, Inc. and LipoMedix Pharmaceuticals Ltd.  Through its wholly owned Barer Institute subsidiary, the Company is developing a pipeline of compounds focused on the regulation of cancer metabolism.  For more information, visit rafaelholdings.com.

RAFAEL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except share and per share data)


January 31,
2021

July 31,
2020

ASSETS






CURRENT ASSETS






Cash and cash equivalents

$

6,086

$

6,206

Trade accounts receivable, net of allowance for doubtful accounts of $117 and $218 at January 31, 2021 and July 31, 2020, respectively

124


267

Due from Rafael Pharmaceuticals

360


118

Prepaid expenses and other current assets

116


273

Assets held for sale

—


2,968

Total current assets

6,686


9,832








Property and equipment, net

43,760


44,433

Equity investment – RP Finance LLC

383


192

Due from RP Finance LLC

3,750


—

Investments – Rafael Pharmaceuticals

79,141


70,018

Investments – Other Pharmaceuticals

477


1,201

Investments – Hedge Funds

8,943


7,510

Deferred income tax assets, net

—


6

In-process research and development and patents

1,575


1,575

Other assets

1,534


1,580

TOTAL ASSETS

$

146,249

$

136,347








LIABILITIES AND EQUITY














CURRENT LIABILITIES






Trade accounts payable

$

495

$

921

Accrued expenses

643


1,191

Amount due for purchase of membership interest

9,500


3,500

Other current liabilities

162


115

Due to related parties

29


—

Total current liabilities

10,829


5,727








Other liabilities

33


92

TOTAL LIABILITIES

10,862


5,819








COMMITMENTS AND CONTINGENCIES














EQUITY






Class A common stock, $0.01 par value; 35,000,000 shares authorized, 787,163 shares issued and outstanding as of January 31, 2021 and July 31, 2020, respectively

8


8

Class B common stock, $0.01 par value; 200,000,000 shares authorized, 15,664,476 issued and 15,652,120 outstanding as of January 31, 2021, and 15,034,598 issued and 15,028,536 outstanding as of July 31, 2020

155


149

Additional paid-in capital

142,746


129,136

Accumulated deficit

(25,866)


(16,255)

Accumulated other comprehensive income related to foreign currency translation adjustment

3,761


3,762

Total equity attributable to Rafael Holdings, Inc.

120,804


116,800

Noncontrolling interests

14,583


13,728

TOTAL EQUITY

135,387


130,528

TOTAL LIABILITIES AND EQUITY

$

146,249

$

136,347

RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except share and per share data)


Three Months Ended
January 31,

Six Months Ended
January 31,

2021

2020

2021

2020

REVENUE










Rental – Third Party

$

190

$

370

$

426


716

Rental – Related Party

527


527


1,047


1,047

Parking

122


219


299


443

Other – Related Party

120


120


240


240

Total revenue

959


1,236


2,012


2,446
















COSTS AND EXPENSES














Selling, general and administrative

2,767


2,221


5,359


4,262

Research and development

1,568


448


2,083


693

Depreciation and amortization

441


473


878


939

Impairment – Altira

7,000


—


7,000


—

Loss from operations

(10,817)


(1,906)


(13,308)


(3,448)
















Interest (expense) income, net

(1)


33


(1)


(31)

Net loss resulting from foreign exchange transactions

—


—


—


(5)

Gain on sale of building

—


—


749


—

Impairment of investments - Other Pharmaceuticals

—


—


(724)


—

Unrealized gain on investments - Hedge Funds

2,489


557


3,433


520

Loss before income taxes

(8,329)


(1,316)


(9,851)


(2,964)

Provision for income taxes

(4)


(12)


(9)


(16)

Equity in earnings of RP Finance

96


—


192


—

Consolidated net loss

(8,237)


(1,328)


(9,668)


(2,980)

Net loss attributable to noncontrolling interests

(72)


(75)


(57)


(129)

Net loss attributable to Rafael Holdings, Inc.

$

(8,165)

$

(1,253)

$

(9,611)

$

(2,851)
















OTHER COMPREHENSIVE LOSS














Net loss

$

(8,237)

$

(1,328)

$

(9,668)

$

(2,980)

Foreign currency translation adjustment

37


(34)


(1)


(28)

Total comprehensive loss

(8,200)


(1,362)


(9,669)


(3,008)

Comprehensive loss attributable to noncontrolling interests

10


(18)


(11)


(16)

Total comprehensive loss attributable to Rafael Holdings, Inc.

$

(8,210)

$

(1,344)

$

(9,658)

$

(2,992)
















Loss per share














Basic and diluted

$

(0.50)

$

(0.08)

$

(0.60)

$

(0.18)
















Weighted average number of shares used in calculation of loss per share














Basic and diluted

16,172,421


15,790,400


15,997,571


15,715,442

RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited, in thousands)


Six Months Ended
January 31,

2021

2020

Operating activities






Net loss

$

(9,668)

$

(2,980)

Adjustments to reconcile net loss to net cash used in operating activities






Depreciation and amortization

878


939

Deferred income taxes

6


12

Net unrealized gain on investments - Hedge Funds

(3,433)


(520)

Impairment of investments - Other Pharmaceuticals

724


—

Impairment – Altira

7,000


—

Equity in earnings of RP Finance

(192)


—

Provision for doubtful accounts

104


48

Stock-based compensation

719


411

Amortization of debt discount

—


54

Gain on sale of building

(749)


—








Change in assets and liabilities:






Trade accounts receivable

39


77

Prepaid expenses and other current assets

157


181

Other assets

46


(38)

Accounts payable and accrued expenses

(933)


(252)

Due from Rafael Pharmaceuticals

(242)


—

Other current liabilities

47




Due to related parties

29


126

Other liabilities

(59)


42

Net cash used in operating activities

(5,527)


(1,900)








Investing activities






Purchase of investment in Altira

(1,000)


—

Purchases of property and equipment

(205)


(456)

Payments to fund RP Finance

(3,750)


—

Proceeds from sale of building

3,658


—

Proceeds related to distribution of Hedge Funds

2,000


—

Investment in Rafael Pharmaceuticals

(9,123)


—

Net cash used in investing activities

(8,420)


(456)








Financing activities






Contribution from noncontrolling interest of consolidated entity

912


—

Proceeds from exercise of options

43


—

Proceeds from issuance of shares

13,000


—

Payments for taxes related to shares withheld for employee taxes

(146)


(116)

Net cash provided by (used in) financing activities

13,809


(116)

Effect of exchange rate changes on cash and cash equivalents

18


(30)

Net decrease in cash and cash equivalents

(120)


(2,502)

Cash and cash equivalents, beginning of period

6,206


12,024

Cash and cash equivalents, end of period

$

6,086

$

9,522








Supplemental schedule of noncash investing and financing activities






Conversion of LipoMedix bridge notes

$

—

$

200

Conversions of related party convertible notes payable and accrued interest

$

—

$

15,668

SOURCE Rafael Holdings, Inc.

Related Links

https://www.rafaelholdings.com/