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Rafael Holdings Reports Second Quarter Fiscal Year 2021 Results

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.

Rafael Holdings holds commercial real estate assets and interests in two clinical stage pharmaceutical companies.  The pharmaceutical holdings consist of interests in Rafael Pharmaceuticals, Inc. and a majority stake in Lipomedix Pharmaceuticals Ltd., both of which are focused on development and commercialization of drugs in the oncology space.  For more information, visit www.rafaelholdings.com (PRNewsfoto/Rafael Holdings, Inc.)

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


 

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SOURCE Rafael Holdings, Inc.

Mar 17, 2021