HCW Biologics Reports Fourth Quarter and Fiscal Year 2024 Business Highlights and Financial Results

MIRAMAR, Fla., March 28, 2025 (GLOBE NEWSWIRE) -- HCW Biologics Inc. (the "Company" or "HCW Biologics") (NASDAQ: HCWB), a clinical-stage biopharmaceutical company focused on discovering and developing novel immunotherapies to lengthen health span by disrupting the link between inflammation and age-related diseases, today reported financial results and recent business highlights for its fourth quarter and fiscal year ended December 31, 2024.

Dr. Hing Wong, Founder and CEO, stated, "We are more passionate than ever about our desire to create breakthrough immunotherapeutic treatments for diseases with no known cures, especially pancreatic, ovarian cancer and other age-related diseases. We have received clearance to begin clinical trials in alopecia areata, our first-quality-of-life indication, with one of our lead molecules, HCW9302. In non-human primate studies, HCW9302 is well tolerated at the dose level of effectively expanding regulatory T ("T(reg) ") cells. Our surrogate efficacious marker for HCW9302 in treated patients is the expansion of T(reg) cells after subcutaneous administration."

Further, Dr. Wong provided insights to the Company's preclinical programs, adding, "Our preclinical programs are also promising. In the fourth quarter of 2024, the Company revealed its new drug discovery and development platform, with a novel scaffolding or "backbone" of proteins called T-cell Receptor <BETA> Chain constant region ("TRBC"). The TRBC drug discovery and development platform leverages the Company's in-depth knowledge of T cell and natural killer ("NK") cell immunology. The Company has constructed 50 proprietary compounds with the TRBC platform for the treatment of hematologic and solid tumors, virally infected cells, and cellular senescence diseases associated with aging."

Dr. Wong explained, "Our expanded portfolio now includes constructs with immune-cell engagers targeting cell-surface antigens associated with diseased cells and multifunctional immunotherapeutic fusions which improve the performance of immune checkpoint inhibitors. They exhibit remarkably target-specific anti-tumor activity and tolerability in relevant animal models." He continued, "We believe that some of our TRBC-based molecules could be a game-changer for Cell and Gene Based Therapies ("CGTs") by significantly reducing cost and improving the clinical efficacy of engineered effector cells for CGT. Based on preclinical studies, it appears they also support the rapidly developing "in-vivo" CAR-T manufacturing approach for CGT. We are excited to share the data in future scientific publications and invited presentations. We believe that we are uniquely positioned for a strong clinical development pipeline through our own programs and with corporate partnerships."

Business Highlights

Business Development Transactions

   -- The Company's clinical development strategy is to select certain 
      proprietary molecules for development through out-licensing arrangements 
      and other business development transactions. The Company continually 
      assesses its portfolio of molecules in order to identify potential 
      business development opportunities. 
 
   -- On November 17, 2024, the Company entered an exclusive worldwide 
      licensing agreement with WY Biotech Co. Ltd. ("WY Biotech"), which was 
      amended in 2025. Under the amended agreement, the Company expects to 
      receive $7.0 million in June 2025. The WY Biotech license agreement 
      grants WY Biotech the exclusive, world-wide license to use and apply 
      HCW11-006 for in vivo applications. HCW11-006 is a preclinical drug. 
      Under the terms of the license agreement, the Company has opt-in rights 
      to reclaim the Americas market, including United States, Canada, Central 
      America, and South America, at no cost which may be exercised after WY 
      Biotech completes a Phase 1 clinical trial. 
 
   -- The next major business development program will focus on Immune-Cell 
      Engagers, including T-Cell Engagers. In light of recent transactions 
      demonstrating the strong interest in this class of therapeutics by larger 
      pharmaceutical with the necessary clinical development expertise, the 
      Company intends to develop these molecules through corporate partnering 
      and out-licensing arrangements. 

Financing Transactions

   -- In 2024, the Company raised $16.3 million: 
 
          -- On February 20, 2024, it raised $2.5 million in a private 
             placement of common stock with officers and directors. 
 
          -- In multiple closings throughout 2024, it raised $6.9 million in 
             Senior Notes, which are secured by the Company's shares of Wugen 
             common stock. The Company received shares of Wugen stock as an 
             upfront licensing fee for the Wugen exclusive worldwide license 
             for some of the Company's proprietary molecules. 
 
          -- On November 18, 2024, the Company entered a $6.9 million 
             securities purchase agreement with an institutional investor, 
             involving a registered direct offering and a concurrent private 
             placement of common stock and warrants. 
 
   -- On February 20, 2025, the Company entered into an Equity Purchase 
      Agreement with Square Gate Capital Master Fund, LLC - Series 4 ("Square 
      Gate"), pursuant to which the Company will have the right, but not the 
      obligation, to sell to Square Gate, and Square Gate will have the 
      obligation to purchase from the Company, up to $20,000,000 (with a 
      potential increase of an additional $20,000,000) worth of the Company's 
      shares of common stock, at the Company's sole discretion, over the next 
      36 months, subject to certain conditions precedent and other limitations. 

Compliance with Nasdaq Listing Rules

   -- During 2024, the Company received three deficiency notices from the 
      Listing Staff of The Nasdaq Stock Market (the "Exchange") related to the 
      Company's stock price of trading shares and the market value of the 
      Company. On March 3, 2025, the Nasdaq Hearings Panel (the "Panel") 
      granted the Company an extension in which to regain compliance with all 
      Nasdaq continued listing rules. As a result of the extension, the Panel 
      granted the Company's request for continued listing on the Exchange, 
      provided that the Company demonstrates compliance with the Bid Price Rule 
      by April 28, 2025, and all other Exchange continued listing rules by June 
      15, 2025. 
 
   -- On March 31, 2025, the Company will hold a Special Meeting of the 
      Stockholders to obtain stockholder approval for three proposals critical 
      for the success of the compliance plan presented to the Panel, including 
      a reverse stock split, use of the full line of the Equity Line of Credit, 
      and approval of the terms to convert the Senior Notes issued in 2024 into 
      equity. 

Clinical Development Results

   -- On January 28, 2025, the Company received clearance of its IND from the 
      FDA to initiate a first-in-human Phase 1 dose escalation clinical trial 
      to evaluate one of its lead drug candidates, HCW9302, in patients with 
      moderate-to-severe alopecia areata, a common autoimmune disease in humans 
      that currently has no curative FDA approved treatments. 
 
   -- As of December 31, 2024, the Company was required to close the Phase 2 
      clinical study to evaluate HCW9218 in combination with neoadjuvant 
      chemotherapy in ovarian cancer sponsored by the University of Pittsburgh 
      Medical Center, as required under the Settlement Agreement, due to lack 
      of enrollment. 

Financial Results

   -- Revenues: Revenues for the fourth quarters ended December 31, 2023 and 
      2024 were $1.3 million and $394,000, respectively. Revenues for the years 
      ended December 31, 2023 and 2024 were $2.8 million and $2.6 million, 
      respectively. Revenues in both periods were derived exclusively from the 
      sale of licensed molecules to the Company's licensee, Wugen. The licensed 
      molecules are one of the components used by Wugen in manufacturing their 
      immunotherapeutic products. 
 
   -- Research and development (R&D) expenses: R&D expenses for the fourth 
      quarters ended December 31, 2023 and 2024 were $2.1 million and $1.0 
      million, respectively, a decrease of $1.1 million, or 51%. R&D expenses 
      for the years ended December 31, 2023 and 2024 were $7.7 million and $6.4 
      million, respectively, a decrease of $1.3 million, or 17%. R&D expenses 
      were comparatively higher in the reporting periods of 2023 because there 
      were two ongoing clinical trials to evaluate HCW9218 in cancer 
      indications, and IND-enabling studies required for the IND application 
      for HCW9302, including toxicology studies. For the year ended December 
      31, 2024, the decrease in R&D expenses compared to the comparable period 
      in 2023 was partially offset by an increase in manufacturing costs for 
      replenishing supply of the high-expressing cell line of HCW9101. 
 
   -- General and administrative (G&A) expenses: G&A expenses for the quarters 
      ended December 31, 2023 and 2024 were $1.7 million and $2.0 million, 
      respectively, an increase of $367,320, or 22%. G&A expenses for the years 
      ended December 31, 2023 and 2024 were $6.8 million and $6.8 million, 
      respectively, an increase of $60,081, or 1%. Changes in G&A expenses 
      reflect cost cutting measures effected by the Company in the second 
      quarter of 2024, offset by increases in professional fees, facilities and 
      office expenses, and financing expenses. 
 
   -- Legal expenses: Legal expenses for the quarter ended December 31, 2023 
      and 2024 were $2.0 million and $148,949, respectively, a decrease of $1.8 

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