Cocrystal Pharma, Inc.

Cocrystal Pharma, Inc. is a clinical-stage biotechnology company focused on discovering and developing novel antiviral therapeutics for serious and/or chronic viral diseases caused by RNA viruses, including influenza virus, norovirus, coronaviruses (SARS-CoV-2 & MERS-CoV), and hepatitis C virus (HCV) infections. The company operates as a single business entity and employs unique structure-based technologies, leveraging Nobel Prize-winning expertise, to create safe, effective, and convenient small molecule antiviral drugs. Their proprietary platform integrates computational chemistry, medicinal chemistry, X-ray crystallography, and extensive know-how to design direct-acting antiviral drug candidates that target essential viral replication functions. The company's approach focuses on highly conserved regions of viral drug target enzymes and inhibitor-enzyme interactions at the atomic level, aiming to develop drugs effective against various viral subtypes and potential mutants, with reduced off-target interactions to minimize side effects.

The core business model revolves around the discovery and development of small molecule antiviral therapeutics that inhibit the essential viral replication function of RNA viruses. The company aims to treat and prevent infections by influenza virus, norovirus, and coronaviruses. Revenue generation is currently not from product sales, as all product candidates are in preclinical and early clinical stages. The company has an accumulated deficit of $342.2 million ¹ from inception through December 31, 2025, and does not anticipate generating revenue from product sales for at least four years. They primarily fund operations through public and private equity offerings and seek strategic partnerships for research, development, and commercialization.

The company's research and development efforts are primarily concentrated in three areas: Influenza, Norovirus and Coronavirus, and Hepatitis C. In the Influenza Program, CC-42344, a novel PB2 inhibitor, is being developed as an oral or inhaled treatment for pandemic and seasonal influenza A. This candidate binds to a highly conserved PB2 site of the influenza polymerase complex and has shown excellent in vitro antiviral activity against various influenza A strains, including Tamiflu® and Xofluza® resistant strains, with favorable pharmacokinetic and drug resistance profiles. An inhaled formulation of CC-42344 is also in preclinical development for prophylactic treatment. For the Norovirus and Coronavirus Programs, CDI-988, a novel protease inhibitor, is being developed as an oral pan-viral treatment for noroviruses and coronaviruses, including SARS-CoV-2 and its variants. This candidate targets a highly conserved region in the active site of noroviruses, coronaviruses, and other 3CL viral proteases. The Hepatitis C (HCV) Program focuses on CC-31244, an HCV NNI targeting the viral NS5B polymerase, with the goal of developing ultra-short combination oral treatments of four to six weeks.

For the fiscal year ended December 31, 2025, the company reported a net loss of $8,831,000 ², an improvement from a net loss of $17,504,000 ³ for the year ended December 31, 2024. Total operating expenses decreased to $9,019,000 ⁴ in 2025 from $17,878,000 ⁵ in 2024. Research and development expenses were $5,055,000 ⁶ in 2025, down from $12,537,000 ⁷ in 2024, primarily due to the winding down of clinical study costs for drug candidates, particularly the initial Phase 2a study for CC-42344, and reductions in employee-related expenses. General and administrative expenses also decreased to $3,964,000 ⁸ in 2025 from $5,341,000 ⁹ in 2024, mainly due to reductions in insurance, compensation, and other general administrative expenses. The company had total other income, net, of $188,000 ¹⁰ in 2025, a decrease from $374,000 ¹¹ in 2024, primarily due to a decrease in interest income from $537,000 ¹² in 2024 to $134,000 ¹³ in 2025. Foreign exchange gain was $54,000 ¹⁴ in 2025, compared to a loss of $163,000 ¹⁵ in 2024.

Year-over-year, research and development expenses for the Influenza Program significantly decreased from $6,861,000 ¹⁶ in 2024 to $1,083,000 ¹⁷ in 2025. Norovirus and Coronavirus Programs' R&D expenses also saw a reduction from $3,245,000 ¹⁸ in 2024 to $2,545,000 ¹⁹ in 2025. Other discoveries' R&D expenses decreased from $563,000 ²⁰ in 2024 to $388,000 ²¹ in 2025. Overall external R&D costs declined from $10,669,000 ²² in 2024 to $4,016,000 ²³ in 2025. Indirect allocations for salaries, stock-based compensation, and other employee expenses decreased from $1,751,000 ²⁴ in 2024 to $974,000 ²⁵ in 2025, and depreciation and other costs decreased from $117,000 ²⁶ to $65,000 ²⁷ over the same period. The net cash used in operating activities was $8,192,000 ²⁸ in 2025, a decrease from $16,485,000 ²⁹ in 2024, reflecting the winding down of clinical trial expenses.

During the reported period, a significant operational development was the determination that the Phase 2a study for oral CC-42344 in the Influenza A program yielded insufficient data due to an unexpectedly low influenza infection rate among participants. Management has decided that a new Phase 2a study is necessary. A dispute has arisen with the United Kingdom clinical research organization (CRO) that conducted the study, with the company contending a breach of agreement and requesting a refund of $6,309,000 ³⁰ or a redo of the study, while the CRO seeks an additional approximately $600,000 ³¹. The company plans to arbitrate this dispute. For the Norovirus and Coronavirus Programs, CDI-988 completed a Phase 1 study in Australia with favorable safety and tolerability results across doses up to 1,200 mg. In September 2025, the company received a Study May Proceed Letter from the FDA to conduct a Phase 1b challenge study in the U.S. for CDI-988 as a norovirus preventive and treatment, with subject screening commencing in December 2025 and the study starting in February 2026. The company also received a $500,000 ³² Small Business Innovation Research (SBIR) Phase I award from the NIH/NIAID in October 2025 to support the development of a novel, oral, broad-spectrum antiviral candidate for influenza A and B infections.

The company explicitly states that its current cash balance is not sufficient to fund operations beyond the next 12 months, necessitating additional capital raises to support ongoing and anticipated working capital needs. Management intends to fund future operations through additional private or public equity offerings and through arrangements with strategic partners or other sources, acknowledging that there can be no assurances that additional funding will be available on acceptable terms, or at all, and any equity financing may be very dilutive to existing stockholders. The company expects to continue incurring substantial operating losses and negative cash flows from operations over the next several years during its pre-clinical and clinical development phases.

A major growth area is the continued development of oral CC-42344 as a treatment for pandemic and seasonal influenza A. This will require conducting a new Phase 2a trial to obtain scientifically viable efficacy results, which is contingent on raising additional capital. The company also continues preclinical development of an inhaled formulation of CC-42344 for potential prophylactic treatment of pandemic and seasonal influenza infections. Furthermore, novel broad-spectrum influenza antivirals targeting replication enzymes of seasonal and pandemic influenza A and B strains are under development.

Another key growth vector is the advancement of CDI-988, a novel protease inhibitor, as an oral pan-viral treatment for noroviruses and coronaviruses, including SARS-CoV-2 and its variants. Following favorable safety and tolerability results from a Phase 1 study in Australia, the company received a Study May Proceed Letter from the FDA in September 2025 to conduct a Phase 1b challenge study in the U.S. This study, which commenced subject screening in December 2025 and dosing in February 2026, aims to assess the reduction in incidence of clinical symptoms as its primary efficacy endpoint, with secondary endpoints focusing on reduction in viral shedding and disease severity, as well as safety and pharmacokinetic profiles. The company believes CDI-988 represents the only oral pan-viral antiviral in development for the treatment and prevention of viral gastroenteritis caused by noroviruses and coronaviruses.

The company's operational outlook includes an expectation to incur additional expenses in future periods to pursue a new Phase 2a study for CC-42344 following unexpectedly low infection rates in the initial study. Research and development expenses are generally expected to increase substantially as product candidates advance toward clinical programs. The company's Australian subsidiary is entitled to receive government assistance in the form of refundable and non-refundable research and development tax credits, which are recorded as a reduction of R&D expenses. For the year ended December 31, 2025, the company recorded tax credits receivable of $661,910 ³³.

Planned capital allocation includes continued investment in research and development. The company is party to an At-The-Market Offering Agreement (ATM Agreement) with H.C. Wainwright & Co., LLC, under which it previously sold 1,200,152 ³⁴ shares of common stock for total net proceeds of approximately $2,380,000 ³⁵. Although sales under the ATM Agreement were terminated on September 12, 2025, the agreement remains in effect, allowing for future sales if a new prospectus supplement is filed. On September 12, 2025, the company completed a registered direct offering of 2,764,710 ³⁶ shares of common stock at $1.70 ³⁷ per share and a concurrent private placement of warrants to purchase up to 5,529,420 ³⁸ shares of common stock at an initial exercise price of $1.50 ³⁹ per share, receiving net proceeds of $4,183,000 ⁴⁰. Additionally, on October 28, 2025, the company sold 743,024 ⁴¹ units of its securities to four accredited inside investors at $1.39 ⁴² per unit, each unit consisting of one common stock share and one warrant to purchase two shares of common stock at an exercise price of $1.24 ⁴³ per share, generating gross proceeds of $1,032,000 ⁴⁴. As of December 31, 2025, the company had 7,222,821 ⁴⁵ warrants outstanding. The company has not declared or paid any cash dividends and intends to retain future earnings, if any, to finance business expansion.

Management explicitly flagged several structural headwinds and execution risks to the growth plan. The initial Phase 2a study for CC-42344 in the Influenza A program failed to yield scientifically viable efficacy results due to an inadequately low infectivity rate, leading to considerable delays and a dispute with the CRO. This could result in the loss of all or part of the $6,309,000 ⁴⁶ already paid to the CRO and necessitates raising additional capital for a new study. The company's ability to conduct clinical trials in a cost-effective manner and within desired timeframes is subject to uncertainties, supply chain shortages, and potential difficulties in obtaining adequate participant enrollments or infection rates. Reliance on third-party CROs and CMOs for research, development, and manufacturing also poses risks, including potential delays, increased costs, and limited control over their performance.

Geographic, regulatory, and macro factors identified as constraints include the extensive government regulation of drug product research, development, testing, manufacturing, and commercialization by agencies like the FDA and foreign regulatory bodies. Compliance with laws and regulations in foreign jurisdictions, such as Australia and the United Kingdom, is also required. The company's operations are subject to general laws applicable to operations abroad, such as the U.S. Foreign Corrupt Practices Act. The 2025 inauguration of a new presidential administration in the U.S. and its initiatives to reduce federal government size and spending, such as the Department of Government Efficiency (DOGE), could lead to reduced resources and staff at the FDA and other federal agencies, potentially prolonging regulatory approval processes or limiting access to federal funding for programs. Macroeconomic factors like inflation, a deteriorating labor market, the possibility of recession, increases in interest rates, tariffs, trade wars, and geopolitical conflicts (e.g., in the Middle East and Ukraine) could adversely impact the company's ability to access capital on favorable terms, further research and development efforts, and disrupt supply chains.

The company faces substantial doubt about its ability to continue as a going concern due to limited capital and an accumulated deficit of $342.2 million ¹ as of December 31, 2025, with current resources not sufficient to fund operations beyond the next 12 months. A significant operational risk is the failure of the initial Phase 2a study for the Influenza A product candidate CC-42344, which yielded insufficient efficacy data due to low infectivity, requiring a new study and leading to a dispute with the CRO over a $6,309,000 ³⁰ payment and an additional $600,000 ³¹ claim. This has caused considerable delays and potential loss of investment. Competitive risks are intense, with larger biotechnology and pharmaceutical companies possessing greater financial resources and more advanced products, and the potential for viral mutations (e.g., COVID-19 variants KP.3.1.1, LP.8.1, NB1.8.1, XFG, and BA.3.2 ⁴⁷) to render existing or developing treatments less effective. Regulatory risks include lengthy and uncertain approval processes, potential rescission or limitation of FDA authorizations, and the impact of government initiatives to reduce spending and staff at agencies like the FDA, which could delay approvals or limit funding. Geopolitical conflicts and macroeconomic factors such as inflation, potential recession, high central bank interest rates, and trade wars could disrupt capital markets, supply chains, and the company's ability to raise necessary funds. Cybersecurity threats and the increasing use of artificial intelligence by competitors also pose risks, potentially leading to data breaches, loss of intellectual property, or competitive disadvantage if the company does not adopt AI platforms.

Management's message to shareholders conveys a tone of cautious determination, acknowledging significant financial challenges while emphasizing ongoing progress in drug development. They explicitly state that the company's current cash balance is not sufficient to fund operations beyond the next 12 months and that additional capital will be required, which may involve dilutive equity financing. Despite these liquidity concerns, management remains focused on advancing its clinical-stage pipeline. Key strategic priorities include resolving the dispute with the CRO regarding the failed CC-42344 Phase 2a influenza study and securing capital to conduct a new Phase 2a trial for this candidate. Another priority is the continued progression of CDI-988, the oral pan-viral treatment for noroviruses and coronaviruses, into a Phase 1b challenge study in the U.S. Management also highlights the ongoing discovery and development of novel broad-spectrum antiviral candidates for influenza A and B, supported by a recent $500,000 ³² NIH/NIAID award.