RAPH 10-K

Raphael Pharmaceutical Inc. (RAPH)

10-K 2025-03-31 For: 2024-12-31

View Original

Added on April 06, 2026

Large accelerated filer ☐			Accelerated filed ☐
Non-accelerated filer ☒			Smaller reporting company ☒
			Emerging growth company ☐

Item No.	Description	Page
Cautionary Note Regarding Forward-Looking Statements		ii

	PART I

Item 1.	Business	1
Item 1A.	Risk Factors	23
Item 1B.	Unresolved Staff Comments	48
Item 1C	Cyber Security	48
Item 2.	Properties	48
Item 3.	Legal Proceedings	48
Item 4.	Mine Safety Disclosures	48

	PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	49
Item 6.	[Reserved]	49
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	56
Item 8.	Financial Statements and Supplementary Data	56
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	57
Item 9A.	Controls and Procedures	57
Item 9B.	Other Information	57
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	57

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance	58
Item 11.	Executive Compensation	61
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	63
Item 13.	Certain Relationships and Related Transactions, and Director Independence	64
Item 14.	Principal Accounting Fees and Services	65

	PART IV

Item 15.	Exhibits and Financial Statement Schedules	66
Item 16.	Form 10-K Summary	67
Signatures		68

	●	the regulatory pathways that we may elect to utilize in seeking U.S. Food and Drug Administration, or FDA, European Medicines Agency, or EMA, and other regulatory approvals, if any;

	●	obtaining (and the cost thereof) FDA and EMA approval of, or other regulatory action in Europe or the United States, or U.S., and elsewhere with respect to our product candidates;

	●	the commercial launch and future sales of our product candidates and our advancement of product candidates for other indications in our pipeline;

	●	the potential cost of our rheumatoid arthritis product candidate, or RA, and RA product candidate, respectively, for patients;

	●	our expectations regarding the timing of conducting clinical trials;

	●	our expectations regarding the supply of the active pharmaceutical ingredient for our product candidates;

	●	third-party payor reimbursement for our product candidates;

	●	our estimates regarding anticipated expenses, capital requirements and our needs for additional financing;

	●	completion and receiving favorable results of clinical trials for our product candidates; and

	●	the filing by us, and the subsequent issuance of patents to us, by the U.S. Patent and Trademark Office, or USPTO, and other governmental patent agencies.

Drug Product	Strength	Dose Form	Price ($)		Recommended Dose	Annual Drug Cost ($)
Sarilumab (Kevzara)	150 mg/1.14 mL 200 mg/1.14 mL	Pre-filled syringe	700.0000		200 mg SC every two weeks	18,200

Abatacept SC (Orencia)	125 mg/mL	Pre-filled syringe	366.1000		125 mg weekly	19,037

Abatacept IV (Orencia)	250 mg/15 mL	Vial	490.0500		Patients < 60 kg: 500 mg Patients 60 to 100 kg: 750 mg Patients > 100 kg: 1,000 mg 500 to 1,000 mg at weeks 0, 2, and 4 then every 4 weeks	Year 1: 20,582 Thereafter: 19,112

Adalimumab SC (Humira)	40 mg/0.8 mL	Pre-filled syringe or pen	769.9700		40 mg every other week	20,019

Anakinra (Kineret)	100 mg	Pre-filled syringe	48.0571		100 mg daily	17,493

Certolizumab pegol (Cimzia)	200 mg/mL	Pre-filled syringe	664.5100		400 mg at weeks 0, 2 and 4 then 200 mg every 2 weeks	Year 1: 19,271 Thereafter: 17,277

Etanercept (Enbrel)	25 mg 50mg/mL	Vial Pre-filled syringe or auto-injector	202.9300 405.9850		50 mg weekly or two 25 mg doses on same day every week or every 3 or 4 days	21,105 21,111

Entanercept (Brenzys)	50 mg/mL	Pre-filled syringe	305.0000	^d	50 mg weekly	15,860

Golimumab SC (Simponi)	50 mg/0.5 mL	Pre-filled syringe or auto-injector	1,555.17		50 mg monthly	18,662

Golimumab IV (Simponi)	50 mg/4 mL	Vial	849.5000	^b	2 mg/kg at weeks 0 and 4, then every 8 weeks thereafter	Year 1:17,829 Thereafter: 16,565

Infliximab (Remicade)	100 mg	Vial	987.5600		3 mg/kg at weeks 0, 2, and 6, then every 8 weeks thereafter	Year 1: 23,701 Thereafter: 19,257 10 mg/kg every 4 weeks: $102,706 annually

Infliximab (Inflectra)	100 mg	Vial	525.0000		Depending on clinical response, dose can be increased to 10 mg/kg and/or up to every four weeks	Year 1: 12,600^bThereafter: 10,238^b10 mg/kg every 4 weeks: $54,600 annually¹⁵

Rituximab (Rituxan)	100 mg/10 mL 500 mg/50 mL	Vial	466.3200 2,331.61		A course consists of 1,000 mg infusions at weeks 0 and 2. Reassess for retreatment at week 26, no sooner than 16 weeks after previous	18,653 assumes 2 courses Per course: 9,326

Tocilizumab SC (Actemra)	162 mg/0.9 mL	Pre-filled syringe	355.0000		Patients < 100 kg: 162 mg SC every two weeks, increasing to weekly based on clinical response. Patients ≥ 100 kg: 162 mg SC weekly	Every two weeks: 9,230 Weekly: 18,460

Tocilizumab IV (Actemra)	80 mg/4 mL 200 mg/10mL 400 mg/20 mL	Vial	180.8100 452.0300 904.0600		4 mg/kg every 4 weeks followed by an increase to 8 mg/kg based on clinical response	4 mg/kg: 10,577 8 mg/kg: 17,629

Tofacitinib (Xeljanz)	5 mg	Tablet	23.5585		5 mg p.o. twice daily	17,151

	●	completion of preclinical studies, animal studies and formulation studies in compliance with the FDA’s GLP regulations;

	●	submission to the FDA of an IND application to support human clinical testing in the U.S.;

	●	approval by an IRB at each clinical site before each trial may be initiated;

	●	performance of adequate and well-controlled clinical trials in accordance with federal regulations and with GCP regulations to establish the safety and efficacy of the investigational product candidate for each target indication;

	●	submission of a new drug application, or NDA, to the FDA;

	●	satisfactory completion of an FDA Advisory Committee review, if applicable;

	●	satisfactory completion of an FDA inspection of the manufacturing facilities at which the investigational product candidate is produced to assess compliance with cGMP, and to assure that the facilities, methods and controls are adequate; and

	●	FDA review and approval of the NDA.

	●	Phase IIa. Phase IIa will include a randomized, double-blind, placebo-controlled, multiple ascending dose study in Israel to determine the maximum CBD extract administered sublingually to assess the safety, tolerability, pharmacokinetics, pharmacodynamics and efficacy for at least 4 weeks in RA patients in the presence of concurrent active therapies, such as non-steroidal anti-inflammatory drugs, or NSAIDs, and steroids. We expect that Phase IIa will take approximately 6 months.

	●	Phase IIb. Phase IIb will include IND submission for randomized, multi center double blinded, placebo-controlled dose response finding, or DRF, study for at least 12 weeks with either CBD extract or placebo administered sublingually in the presence of concurrent active therapies such as NSAIDs and steroids. This study will include 300-400 patients (80-100 patients per cohort) to study safety and efficacy of the product in active RA patients. We expect that Phase IIb will take approximately 18 months.

	●	Our executive officer, directors and certain stockholders who are beneficial owners of 5% or more of our outstanding Common Stock possess the majority of our voting power, and through this ownership, have the ability to control our Company and our corporate actions.

	●	Investors may have difficulty in reselling their shares due to the substantial lack of liquidity of our Common Stock.

	●	Our headquarters and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel.

	●	Conditions in Israel, including the armed conflict between Israel and Hamas, Hezbollah and other terrorist organizations from the Gaza Strip and Lebanon.

	●	continue the research and development of our RA product candidate or any other product candidate;

	●	expand the scope of our current clinical studies for our RA product candidate or any other product candidate;

	●	seek regulatory and marketing approvals for our product candidates that successfully complete clinical studies;

	●	seek to maintain, protect, and expand our intellectual property portfolio;

	●	seek to attract and retain skilled personnel; and

	●	create additional infrastructure to support our operations as a reporting company and our product candidate development and planned future commercialization efforts.

	●	obtaining favorable results from and progress the pre-clinical and clinical development of our product candidate(s);

	●	developing and obtaining regulatory approval for registration studies protocols for our product candidate(s);

	●	subject to successful completion of registration and clinical trials of our RA product candidate, applying for and obtaining marketing approval;

	●	establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products, and at acceptable costs, to support market demand for our product candidates, if marketing approval is received;

	●	identifying, assessing, acquiring and/or developing new product candidate(s);

	●	accurately identifying demand for our product candidate(s);

	●	continued consumer interest in treatments to the symptoms of RA;

	●	obtaining market acceptance of our product candidates, if approved for marketing, as viable treatment options;

	●	negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; and

	●	attracting, hiring and retaining qualified personnel.

	●	our clinical trial results;

	●	the cost, timing and outcomes of seeking marketing approval of any product candidate for which we may seek marketing approval and the costs associated with our plans to have third parties commercialize any approved product candidate(s);

	●	the cost of filing and prosecuting patent applications and the cost of defending patents, if any;

	●	development of other early-stage development product candidates;

	●	subject to receipt of marketing approval, revenue received from sales of approved products, if any, in the future;

	●	any product liability or other lawsuits related to our products;

	●	the expenses needed to attract and retain skilled personnel; and

	●	the costs associated with being a reporting company.

	●	we may be unable to demonstrate to the FDA or comparable foreign regulatory authorities that a product candidate’s safety-benefit ratio for its proposed indication is acceptable;

	●	the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical studies;

	●	the data collected from clinical studies of our product candidates may not be sufficient to support the submission of a new drug application, or NDA, in the U.S. or elsewhere;

	●	the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and

	●	the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

	●	inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of human clinical studies;

	●	delays in reaching a consensus with regulatory agencies on study design;

	●	delays in reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical study sites;

	●	delays in obtaining required IRB approval at each clinical study site;

	●	imposition of a clinical hold by regulatory agencies, after review of an IND, application, or equivalent application, or an inspection of our clinical study operations or study sites;

	●	delays in recruiting suitable patients to participate in our clinical studies;

	●	difficulty collaborating with patient groups and investigators;

	●	failure by our CROs, other third parties or us to adhere to clinical study requirements;

	●	failure to perform in accordance with the FDA’s Good Clinical Practices, or GCP, requirements, or applicable regulatory guidelines in other countries;

	●	delays in having patients complete participation in a study or return for post-treatment follow-up;

	●	patients dropping out of a study;

	●	occurrence of serious adverse events associated with the product candidate that are viewed to outweigh its potential benefits;

	●	changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;

	●	the cost of clinical studies of our product candidates being greater than we anticipate;

	●	clinical studies of our product candidates producing negative or inconclusive results, which may result in us deciding, or regulators requiring us, to conduct additional clinical studies or abandon product candidate development programs; and

	●	regulatory authorities may withdraw approvals of such product candidate;

	●	regulatory authorities may require additional warnings on the label;

	●	we may be required to create a Risk Evaluation and Mitigation Strategy, or REMS, plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers and/or other elements to assure safe use;

	●	we could be sued and held liable for harm caused to patients; and

	●	our reputation may suffer.

	●	issue warning letters;

	●	impose civil or criminal penalties;

	●	suspend or withdraw regulatory approval;

	●	suspend any of our ongoing clinical studies;

	●	refuse to approve pending applications or supplements to approved applications submitted by us;

	●	impose restrictions on our operations, including closing our contract manufacturers’ facilities; or

	●	seize or detain product candidates, or require a product candidate recall.

	●	the safety and efficacy of the product as demonstrated in clinical studies and potential advantages over competing treatments;

	●	the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling;

	●	the clinical indications for which approval is granted;

	●	relative convenience and ease of administration;

	●	the cost of treatment, particularly in relation to competing treatments;

	●	the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

	●	the strength of marketing and distribution support and timing of market introduction of competitive products;

	●	publicity concerning our products or competing products and treatments; and

	●	sufficient third-party insurance coverage and reimbursement.

	●	our research or business development methodology or search criteria and process may be unsuccessful in identifying potential product candidates;

	●	we may not be able or willing to assemble sufficient resources to acquire or discover additional product candidates;

	●	our product candidates may not succeed in preclinical or clinical testing;

	●	our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval;

	●	competitors may develop alternatives that render our product candidates obsolete or less attractive;

	●	product candidates we develop may be covered by third parties’ patents or other exclusive rights;

	●	the market for a product candidate may change during our program so that such a product may become unreasonable to continue to develop;

	●	a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and

	●	a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.

	●	the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;

	●	federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other third-party payors that are false or fraudulent;

	●	the Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;

	●	HIPAA, as amended by the Health Information Technology and Clinical Health Act, and its implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information;

	●	the federal physician sunshine requirements under the Affordable Care Act requires manufacturers of drugs, devices and medical supplies to report annually to the U.S. Department of Health and Human Services information related to payments and other transfers of value to physicians, other healthcare providers and teaching hospitals and ownership and investment interests held by physicians and other healthcare providers and their immediate family members and applicable group purchasing organizations; and

	●	state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers, state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

	●	multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;

	●	failure by us to obtain regulatory approvals for the use of our products in various countries;

	●	additional potentially relevant third-party patent rights;

	●	complexities and difficulties in obtaining protection and enforcing our intellectual property;

	●	difficulties in staffing and managing foreign operations;

	●	complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems;

	●	limits in our ability to penetrate international markets;

	●	financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations;

	●	natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions;

	●	certain expenses including, among others, expenses for travel, translation and insurance; and

	●	regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the U.S. Foreign Corrupt Practices Act, or FCPA, its books and records provisions or its anti-bribery provisions.

	●	Reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements;

	●	Not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002; and

	●	Reduced disclosure obligations for our annual and quarterly reports, proxy statements and registration statements.

	For the Year Ended December 31,			For the Year Ended December 31,
	2024			2023
	U.S. dollars in thousands (except for share and per share data)
Operating expenses:
Research and development expenses	$	(776	)	$	(569	)
General and administrative expenses		(733	)		(763	)

Operating loss		(1509			(1332	)

Financial expense, net		(10	)		(12	)

Net loss and comprehensive loss	$	(1519	)	$	(1334	)

Basic and diluted net loss per share	$	(0.08	)	$	(0.08	)

Weighted average number of shares of ordinary shares used in computing basic and diluted net loss per share		18,674,136			16,716,905

Name	Age	Position
Ajay Kumar Dhadha	79	Director and Chairman of the Board of Directors
Shlomo Pilo	71	Chief Executive Officer and Director
Guy Ofir	52	Chief Financial Officer and Director
Dr. Igal Louria Hayon	52	Chief Technology Officer and Director
Dr. Yehuda Eliya	51	Director

Name and principal position	Year (1)	Salary ($)		Bonus ($)	Stock awards ($)		Option awards ($)			Non-equity incentive plan compensation ($)	Nonqualified deferred compensation earnings ($)	All other compensation ($)	Total ($)
Shlomo Pilo	2024	$	240,000				$	-					$	240,000
	2023	$	244,000				$	-					$	244,000

Guy Ofir	2024	$	144,000		$	-	$	-					$	144,000
	2023	$	149,000		$	-	$	-					$	149,000

Dr. Igal Louria-Hayoun	2024	$	-				$	350,000	(2)				$	350,000
	2023	$	-				$	-					$	-

(1)	Amounts in this column represent warrants granted to each of the directors pursuant to their respective service agreements.

(2)	Unless otherwise indicated, all of the warrants vested upon granting and are exercisable immediately.

Name	Fees earned or paid in cash ($)		Option / Warrant Awards ($)⁽¹⁾		All other compensation ($)		Total ($)

Igal Louria Hayon		-	$	350,000		-	$	350,000