March 13, 2023
United States Securities and Exchange Commission
Washington, D.C. 20549
Division of Corporation Finance
Attention: Christine Torney and Vanessa Robertson
Re: BriaCell Therapeutics Corp.
Form 10-K for the Fiscal Year Ended July 31, 2022 Filed October 28, 2022
File No. 001-40101
Ladies and Gentlemen:
On behalf of BriaCell Therapeutics Corp. (the “Company”), please find below our response to the comment raised by the staff (the “Staff”) of the Securities and Exchange Commission in its letter dated March 8, 2023 relating to the Company’s Form 10-K for the Fiscal Year Ended July 31, 2022 filed October 28, 2022.
For your convenience, the Staff’s comment has been restated and is followed by the Company’s response in italics.
Form 10-K for the Fiscal Year Ended July 31, 2022
Management’s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations
Research Costs, page 64
| 1. | Please disclose the costs incurred during each period presented for each of your key research and development projects. If you do not track your research and development costs by project, please disclose that fact and explain why you do not maintain and evaluate research and development costs by project. Provide other quantitative or qualitative disclosure that provides more transparency as to the type of research and development expenses incurred (i.e. by nature or type of expense) which should reconcile to total research and development expense on the Statements of Operations. |
Response:
The Company has a breakdown of research and development expenses by project and by nature for all periods from August 1, 2022. The Company did not track expenses by project prior to August 1, 2022 as the Company was at a significantly earlier stage in its clinical and pre-clinical development and we believed that the breakdown of such costs would have been arbitrary and would not provide a meaningful assessment.
We are therefore in a position to include quantitative and qualitative analysis of our research and development costs in our January 31, 2023 Form 10-Q, which is also set forth below.
Results of Operations for the Three Months Ended January 31, 2023 and 2022
Research and Development Costs
Research costs are comprised primarily of (i) salaries and wages to Company employees at our laboratory; and (ii) clinical trials and investigational drug costs, which include the testing and manufacture of our investigational drugs and costs of our clinical trials.
The following is a breakdown of our research and development costs by project:
| Three months ended January 31, | ||||||||
| 2023 | 2022 | |||||||
| Clinical trials | $ | 1,438,231 | $ | 635,195 | ||||
| Pre-clinical projects | 745,236 | 599,007 | ||||||
| Chemical, Manufacturing and Control Costs (“CMC Costs”) | 331,590 | 178,012 | ||||||
| Other | 538,300 | 295,965 | ||||||
| $ | 3,053,357 | $ | 1,708,179 | |||||
Our clinical trial expenses include our immunotherapy program, Bria-IMT™, a 46-subject Phase I/IIa clinical trial. Clinical trial expenses increased in 2023 as we recruited more patients into the Bria-IMT™ trial and began setting up the Bria-OTS™ trial.
Pre-clinical projects include expenses incurred in our off-the-shelf personalized immunotherapies, including Bria-OTS+™, and Bria-PROS™. Our pre-clinical costs have increased in 2023 as we hired more staff to accelerate our existing pre-clinical program and added an addition pre-clinical program (sCD80).
CMC costs include the manufacturing of Bria-IMT™ and Bria-OTS™ and all quality control and quality assurance testing on the investigational product. CMC costs increased in 2023 to support the addition patients in our trials.
Other costs are ancillary expenses we incur such as costs to maintain our patents, investigation of early-stage projects, scientific advisory board expenses, contracts with vendors for pre-clinical work, and administration costs associated with all our research and development expenditure. Other costs increased in 2023 as we investigated additional potential pre-clinical projects.
The following is a breakdown of our research and development costs by nature of expenses:
| Three months ended January 31, | ||||||||
| 2023 | 2022 | |||||||
| Clinical trial sites and investigational drug costs | $ | 1,288,577 | $ | 1,022,705 | ||||
| Wages and salaries | 1,282,441 | 524,108 | ||||||
| Laboratory Rent | 48,000 | 25,800 | ||||||
| Supplies | 207,061 | 20,762 | ||||||
| Professional fees | 2,187 | 5,351 | ||||||
| Insurance product | - | - | ||||||
| Share-based compensation | 225,091 | 109,453 | ||||||
| $ | 3,053,357 | $ | 1,708,179 | |||||
For the three-month period ended January 31, 2023, total research costs amounted to $3,053,357, as compared to $1,708,179 for the three-month period ended January 31, 2022. The rise in these costs is primarily attributed to the continued expansion of the Company’s clinical trials, specifically our Bria-IMT™ trial. Clinical Trials and investigational drug costs increased from $1,022,705 in 2022 to $1,288,577 in 2023. Laboratory costs increase during 2023 as well, including the hiring of additional lab employees which increased from $524,108 in 2022 to $1,282,441 in 2023 and increased supplies from $20,762 in 2022 to $207,061 in 2023. Finally, the increase in share based compensation (non-cash) expenses, from $109,453 in 2022 to $225,091 in 2023 also contributed to the increase in research and development expenses.
| 2 |
Results of Operations for the Six Months Ended January 31, 2023 and 2022
Research and Development Costs
Research costs are comprised primarily of (i) salaries and wages to Company employees at our laboratory; and (ii) Clinical trials and investigational drug costs, which include the testing and manufacture of our investigational drugs and costs of our clinical trials.
The following is a breakdown of our research and development costs by project:
| Six months ended January 31, | ||||||||
| 2023 | 2022 | |||||||
| Clinical trials | $ | 3,041,327 | $ | 960,804 | ||||
| Pre-clinical projects | 1,608,402 | 906,067 | ||||||
| CMC Costs | 741,608 | 269,264 | ||||||
| Other | 917,235 | 447,679 | ||||||
| $ | 6,308,572 | $ | 2,583,815 | |||||
Our clinical trial expenses include our immunotherapy program, Bria-IMT™, a 46-subject Phase I/IIa clinical trial. Clinical trial expenses increased in 2023 as we recruited more patients into the Bria-IMT™ trial and began setting up the Bria-OTS™ trial.
Pre-clinical projects include expenses incurred in our off-the-shelf personalized immunotherapies, including Bria-OTS+™, and Bria-PROS™. Our pre-clinical costs have increased in 2023 as we hired more staff to accelerate our existing pre-clinical program and added an addition pre-clinical program (sCD80).
CMC costs include the manufacturing of Bria-IMT™ and Bria-OTS™. CMC costs increased in 2023 to support the additional patients in our trials.
Other costs are ancillary expenses we incur such as costs to maintain our patents, investigation of early-stage projects, scientific advisory board expenses, contracts with vendors for pre-clinical work, and administration costs associated with all our research and development expenditure. Other costs increased in 2023 as we investigated additional potential pre-clinical projects.
The following is a breakdown of our research and development costs by nature of expenses:
| Six months ended January 31, | ||||||||
| 2023 | 2022 | |||||||
| Clinical trial sites and investigational drug costs | $ | 3,330,516 | $ | 1,497,780 | ||||
| Wages and salaries | 1,998,985 | 809,648 | ||||||
| Laboratory Rent | 96,000 | 55,954 | ||||||
| Supplies | 300,425 | 80,391 | ||||||
| Professional fees | 7,299 | 28,933 | ||||||
| Insurance product | - | 1,656 | ||||||
| Share-based compensation | 575,347 | 109,453 | ||||||
| $ | 6,308,572 | $ | 2,583,815 | |||||
For the six-month period ended January 31, 2023, research costs amounted to $6,308,572, as compared to $2,583,815 for the six-month period ended January 31, 2022. The rise in these costs is primarily attributed to the continued expansion of the Company’s clinical trials, specifically our Bria-IMT™ trial. Clinical Trials and investigational drug costs increased from $1,497,780 in 2022 to $3,330,516 in 2023. Laboratory costs increase during 2023 as well, including the hiring of additional lab employees which increased from $809,648 in 2022 to $1,998,985 in 2023 and increased supplies from $80,391 in 2022 to $300,425 in 2023. Finally, the increase in share based compensation (non-cash) expenses, from $109,453 in 2022 to $575,347 in 2023 also contributed to the increase in research and development expenses.
The following is a breakdown of research and development expenses by project (for the year ended July 31, 2022 only) and by nature for the year ended July 31, 2022 compared to July 31, 2021.
| 3 |
The following is a breakdown of our research and development costs by project:
Year ended July 31, 2022 | ||||
| Clinical Trial | $ | 3,540,955 | ||
| Pre-clinical projects | 2,076,127 | |||
| CMC Costs | 1,346,810 | |||
| Other | 1,057,598 | |||
| $ | 8,021,489 | |||
The following is a breakdown of our research and development costs by nature of expenses:
| Year ended July 31, | ||||||||
| 2022 | 2021 | |||||||
| Clinical Trials and Investigational drug costs | $ | 4,881,940 | $ | 669,943 | ||||
| Wages and salaries | 2,225,050 | 605,106 | ||||||
| Laboratory Rent | 138,354 | 28,031 | ||||||
| Supplies | - | 4,084 | ||||||
| Professional fees | 309,992 | - | ||||||
| Insurance product | 30,590 | - | ||||||
| Share-based compensation | - | 8,332 | ||||||
| $ | 8,021,489 | $ | 2,020,899 | |||||
***
| 4 |
We acknowledge our responsibility for the accuracy and adequacy for our disclosures notwithstanding any review, comment or action or absence of action by the Staff.
Should you have additional questions regarding the information contained herein, please contact our counsel, Avital Perlman at 212-930-9700.
| Sincerely, | |
| /s/ Gadi Levin | |
| Gadi Levin, Chief Financial Officer |
| cc: | William V. Williams | |
| Avital Perlman, Esq. |
| 5 |