Rafael Holdings Reports Fourth Quarter and Full Fiscal Year 2020 Results

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NEWARK, N.J., Oct. 29, 2020 /PRNewswire/ -- Rafael Holdings, Inc., (NYSE: RFL), reported revenue of $4.9 million and a loss per share of $0.66 for the fiscal year ended July 31, 2020. Fourth quarter revenue was $1.2 million with a loss per share of $0.34.

Q4 FY 2020 Consolidated Highlights

  • Revenue of $1.2 million in Q4 FY2020, generated by Rafael Holdings' real estate portfolio, was unchanged from the year-ago quarter. The loss per share of $0.34 increased from $0.16 in the year ago quarter largely due to additional investment in the Company's wholly owned pharmaceutical research venture, the Barer Institute.

  • In August after the quarter close, the company sold its commercial real estate property in Piscataway, New Jersey for $3.9 million

Rafael Pharmaceuticals

At July 31, 2020, the Company and its subsidiaries collectively owned securities representing 51% of the outstanding capital stock of Rafael Pharmaceuticals and approximately 37% on a fully diluted basis.

  • The U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation for Rafael Pharma's lead compound, CPI-613® (devimistat), for the treatment of soft tissue sarcoma. Rafael's clinical trial will focus on the treatment of relapsed or refractory clear cell sarcoma.

  • Ono Pharmaceutical Co., has begun a multicenter, open-label Phase 1 study in Japan for patients with pancreatic cancer. The study is evaluating the efficacy and safety of CPI-613®️ (devimistat) in combination with modified FOLFIRINOX (mFFX).

  • Rafael Pharma reached its target enrollment of 500 patients in its pivotal Phase 3 clinical trial for metastatic pancreatic cancer (AVENGER 500). The trial is evaluating the efficacy and safety of CPI-613®️ (devimistat) in combination with modified FOLFIRINOX (mFFX) as first-line therapy. Efficacy data for this trial could be available for analysis as early as the second quarter of calendar year 2021.

  • Rafael Pharma has crossed the midpoint to its first interim analysis in enrollment for its pivotal Phase 3 clinical trial (ARMADA 2000) of CPI-613® (devimistat) for relapsed or refractory acute myeloid leukemia (AML). The multicenter, open-label, randomized pivotal trial is evaluating the efficacy and safety of its lead compound devimistat in combination with high dose cytarabine and mitoxantrone (CHAM) in older patients. The efficacy data for this trial couuld be available for interim analysis as early as the second quarter of calendar year 2021.

  • Rafael Pharma expanded its Phase 2 clinical trial of CPI-613® (devimistat) for patients with relapsed or refractory Burkitt's lymphoma/leukemia.

  • Rafael Pharma entered into a research collaboration with Roswell Park Comprehensive Cancer Center to evaluate the effects of CPI-613® (devimistat) with or without chemotherapy agents, including oxaliplatin/cisplatin/5-FU/carboplatin/taxol, on esophageal cancer cells.

LipoMedix
At July 31, 2020, Rafael Holdings held 67% 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. This stake is inclusive of 4 million shares of LipoMedix purchased in May 2020 for $1 million including conversion of outstanding bridge notes.

Barer Institute
The Barer Institute has identified and begun to evaluate 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. In addition, the Barer Institute has identified several potential lead compounds for clinical development and found combinations that may meaningfully increase the efficacy of certain clinical compounds.

Remarks by Howard Jonas, Chairman and CEO of Rafael Holdings
"Rafael Holdings' continued to execute on our strategic vision in the fourth quarter, selling our Piscataway property and further increasing our majority stake in LipoMedix. In August, Rafael Pharma announced a major milestone – fully enrolling its pivotal Phase 3 Avenger 500 study for patients with metastatic pancreatic cancer. Results could be available as early as the second quarter of 2021. The Barer Institute has multiple compounds under development and collaboration programs in process with some of the premier academic centers in the country."

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 compounds focused on the regulation of cancer metabolism. The company also holds commercial real estate assets in New Jersey and Jerusalem. For more information, visit our website at rafaelholdings.com.

Rafael Holdings, Inc.

Consolidated Balance Sheet

(in thousands except for share and per share data)




July 31,




2020



2019


ASSETS







CURRENT ASSETS







Cash and cash equivalents


$

6,206



$

12,024


Trade accounts receivable, net of allowance for doubtful accounts of $218 and $122 at July 31,
2020 and 2019, respectively



267




450


Due from Rafael Pharmaceuticals



118




280


Prepaid expenses and other current assets



273




507


Assets held for sale



2,968





Total current assets



9,832




13,261











Property and equipment, net



44,433




48,733


Equity investment – RP Finance



192





Investments – Rafael Pharmaceuticals



70,018




70,018


Investments – Other Pharmaceuticals



1,201




2,000


Investments – Hedge Funds



7,510




5,125


Deferred income tax assets, net



6




19


In-process research and development and patents



1,575




1,575


Other assets



1,580




1,412


TOTAL ASSETS


$

136,347



$

142,143


LIABILITIES AND EQUITY









CURRENT LIABILITIES









Trade accounts payable


$

921



$

795


Accrued expenses



1,191




605


Amount due for purchase of membership interest



3,500





Other current liabilities



115




27


Total current liabilities



5,727




1,427











Due to related parties






65


Convertible debt, net of discount of $0 and $54 - Related Party






14,946


Other liabilities



92




292


Accrued interest on convertible debt - Related Party






649


TOTAL LIABILITIES



5,819




17,379











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 July 31, 2020 and July 31, 2019, respectively



8




8


Class B common stock, $0.01 par value; 200,000,000 shares authorized, 15,034,598 issued and
15,028,536 outstanding as of July 31, 2020, and 13,142,502 shares issued and outstanding as of
July 31, 2019



149




131


Additional paid-in capital



129,136




112,898


Accumulated deficit



(16,255)




(5,840)


Accumulated other comprehensive income related to foreign currency translation adjustment



3,762




3,784


Total equity attributable to Rafael Holdings, Inc.



116,800




110,981


Noncontrolling interests



13,728




13,783


TOTAL EQUITY



130,528




124,764


TOTAL LIABILITIES AND EQUITY


$

136,347



$

142,143



Rafael Holdings, Inc.

Consolidated Statement of Operations

(in thousands except for share and per share data)




Year Ended July 31,




2020



2019


REVENUES







Rental – Third Party


$

1,516



$

1,452


Rental – Related Party



2,082




2,125


Parking



832




874


Other – Related Party



480




480


Total Revenue



4,910




4,931











COSTS AND EXPENSES









Selling, general and administrative



9,118




8,821


Research and development



2,391




1,027


Depreciation



1,866




1,779


Loss from operations



(8,465)




(6,696)











Interest (expense) income, net



(32)




469


Net (loss) gain resulting from foreign exchange transactions



(5)




47


Gain on sale of marketable securities






330


Impairment of investments - Other Pharmaceuticals



(799)





Unrealized gain on investments - Hedge Funds



2,385




907


Loss before income taxes



(6,916)




(4,943)


(Provision for) benefit from income taxes



(29)




19


Impairment of equity method investment of Altira



(4,000)





Equity in earnings of RP Finance



192





Consolidated net loss



(10,753)




(4,924)


Net loss attributable to noncontrolling interests



(338)




(231)


Net loss attributable to Rafael Holdings, Inc.


$

(10,415)



$

(4,693)











OTHER COMPREHENSIVE LOSS









Net Loss


$

(10,753)



$

(4,924)


Foreign Currency Translation Adjustment



(22)




298


Total Comprehensive Loss



(10,775)




(4,626)


Comprehensive (loss) income attributable to noncontrolling interests



(9)




173


Total Comprehensive loss attributable to Rafael Holdings, Inc.


$

(10,784)



$

(4,453)











Loss per share









Basic and Diluted


$

(0.66)



$

(0.35)











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









Basic and Diluted



15,764,829




13,275,239


Rafael Holdings, Inc.

Consolidated Statement of Cash Flows

(in thousands)




Year Ended July 31,




2020



2019


Operating activities









Net loss


$

(10,753)



$

(4,924)


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









Depreciation



1,866




1,779


Deferred income taxes



13




(19)


Interest income on Rafael Pharmaceuticals Series D Convertible Note






(848)


Interest income






(37)


Net gain on sale of marketable securities






(330)


Net unrealized gain on investments - Hedge Funds



(2,385)




(907)


Impairment of investments - Other Pharmaceuticals



799





Impairment of equity method investment of Altira



4,000





Equity in earnings of RP Finance



(192)





Provision for doubtful accounts



96




122


Noncash compensation



684




372


Amortization of debt discount



54




17


Write-off of patents






76











Change in assets and liabilities:









Trade accounts receivable



87




(285)


Prepaid expenses and other current assets



234




(86)


Other assets



(168)




275


Accounts payable and accrued expenses



713




533


Other current liabilities



88




3


Due to related parties



(65)




654


Due from related parties



162




(280)


Accrued interest - Related Party



19




649


Other liabilities



82




104


Net cash used in operating activities



(4,666)




(3,132)











Investing activities









Purchase of investment in Altira



(500)





Purchases of property and equipment



(534)




(399)


Proceeds from sale and maturity of marketable securities






25,031


Investment in Rafael Pharmaceuticals






(55,870)


Net cash used in investing activities



(1,034)




(31,238)











Financing activities









Contribution from noncontrolling interest of consolidated entity






4,587


Repayment of loan from Rafael Pharmaceuticals, including interest






3,335


Proceeds from exercise of options



29




190


Proceed from sale of shares






7,777


Proceeds from issuance of convertible note






15,000


Payments for taxes related to shares withheld for employee taxes



(125)





Net cash (used in) provided by financing activities



(96)




30,889


Effect of exchange rate changes on cash and cash equivalents



(22)




(298)


Net decrease in cash and cash equivalents



(5,818)




(3,779)


Cash and cash equivalents, beginning of year



12,024




15,803


Cash and cash equivalents, end of year


$

6,206



$

12,024











Supplemental Schedule of Noncash Investing and Financing Activities









Adoption effect of ASU 2016-01


$



$

39


Beneficial conversion feature of convertible debt - Related Party


$



$

71


Debt and accrued interest converted to Series D Preferred Stock


$



$

10,848


Related Party deposit utilized to purchase Class B Common Stock


$



$

864


Amount due for purchase of membership interest


$

3,500



$


Transfer of asset held for sale


$

2,968



$


Conversion of LipoMedix Bridge Notes


$

283



$


Conversions of related party convertible notes payable and accrued interest


$

15,668



$


Cision
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SOURCE Rafael Holdings, Inc.