Phio Pharmaceuticals Reports Third Quarter 2026 Financial Results and Business Update as It Advances PH-762 Toward Phase 2b Study Initiation

Phio's cash burn accelerates as PH-762 advances, with FDA feedback due this month.

What the company is saying

Phio Pharmaceuticals, led by CEO Robert J. Bitterman, frames this update as a successful execution of critical milestones for its lead program, PH-762. The company highlights the completion and shipment of commercial-scale drug substance, submission of detailed Phase 1b data to the FDA, and readiness for Phase 2b study initiation. Management emphasizes the strategic importance of these steps and the strengthening of its intellectual property, now at 56 issued patents and 34 pending applications, with protection through at least 2038 and possibly to 2044. The tone is factual, with clear acknowledgment of rising research and development costs, which management attributes to increased toxicology, drug substance, and clinical supply expenses. The company expects FDA feedback on its Phase 2b plans by the end of November 2026 and positions the release of its first commercial-scale cGMP batch as a key CMC milestone. General and administrative expense trends are discussed, with a decrease in the quarter due to lower consulting spend but a year-to-date increase from higher employee and stock-based compensation costs.

What the data suggests

Cash and cash equivalents dropped from $21.0 million at December 31, 2025, to $10.6 million at September 30, 2026, reflecting a rapid cash burn. Research and development expenses rose 159% year-over-year for the quarter to $3.0 million, driven by a $1.5 million increase in nonclinical toxicology, drug substance, and clinical supplies, and a $0.3 million rise in other development costs. For the nine months, R&D expenses reached $8.9 million, up $5.8 million or 180%, with $4.5 million attributed to PH-762 program advancement. General and administrative expenses fell by $100,000 or 9% in the quarter to $1.2 million, but rose 6% year-to-date due to a $1.2 million increase in employee costs (including $0.7 million in stock-based compensation), partially offset by a $1.1 million reduction in outside services. Net loss widened to $4.2 million for the quarter and $12.3 million for the nine months, both up sharply from the prior year. Total assets declined to $11.3 million, liabilities rose to $2.7 million, and equity fell to $8.6 million. The company completed its Phase 1b trial (22 patients) and submitted results to the FDA, with Phase 2b initiation targeted for Q1 2027. No revenue is reported, and ongoing expenses are expected to rise as development continues.

Analysis

The announcement is measured and factual, with most claims supported by concrete disclosures: completion of Phase 1b, submission of data to the FDA, and shipment of commercial-scale drug substance. Forward-looking statements are limited to expectations for FDA feedback (by end of November 2026), initiation of Phase 2b (Q1 2027), and continued R&D expense increases. The tone is not exaggerated; language such as 'executed critical development objectives' is justified by the completion of key milestones. However, the company is pre-revenue, burning cash rapidly, and the next value inflection point (Phase 2b initiation) is still several months away, with no guarantee of FDA approval or clinical success. The capital intensity flag is true: significant R&D outlays are ongoing, with no immediate earnings impact and only long-term, uncertain returns. There is little narrative inflation; the gap between narrative and evidence is minimal.

Risk flags

• ●Cash burn is accelerating, with cash and equivalents halved from $21.0 million to $10.6 million in nine months, raising the risk of near-term financing needs if spending continues at this pace.
• ●The company remains pre-revenue and is dependent on successful clinical progression and regulatory feedback; failure to secure timely FDA approval or positive Phase 2b outcomes would jeopardize the PH-762 program and future funding.
• ●R&D expenses are rising sharply, up 159% for the quarter and 180% year-to-date, driven by the capital-intensive nature of advancing PH-762, which may further pressure liquidity and increase dilution risk.
• ●The timeline for value realization is contingent on FDA response and successful Phase 2b initiation, both of which carry execution and regulatory risks that could delay or derail progress.
• ●While the patent portfolio is broad, there is no guarantee of commercial success or market exclusivity translating into revenue without clinical and regulatory milestones being met.

Bottom line

Phio Pharmaceuticals is advancing its PH-762 cancer program, having completed Phase 1b and submitted results to the FDA, with feedback expected by the end of November 2026 and Phase 2b initiation targeted for early 2027. The company's financials show a rapid increase in R&D spending and a shrinking cash position, with net loss widening to $4.2 million for the quarter and $12.3 million for the nine months. The business remains pre-revenue and will likely require additional capital to sustain operations before any commercial inflection point. The next critical catalyst is the FDA's response, which will determine the feasibility and timing of Phase 2b. Investors should focus on the company's ability to secure regulatory progress and manage cash burn, as ongoing losses and capital intensity heighten financing and dilution risks. The most important takeaway is that near-term FDA feedback will set the direction for both the PH-762 program and the company's financial viability.

Announcement summary

(NASDAQ:PHIO) Phio Pharmaceuticals Corp. reported financial results for the quarter ended September 30, 2026, and provided a business update. Robert J. Bitterman, President and Chief Executive Officer, stated that the company has executed critical development objectives to advance the PH-762 program toward Phase 2b study initiation. Commercial-scale drug substance manufacturing for PH-762 was completed and shipped to the drug product manufacturer for clinical trial supply preparation. Detailed information, including the final analysis of the Phase 1b clinical trial and fundamentals of the intended Phase 2b study, was submitted to the FDA. The Phase 1b clinical trial (NCT 06014086) enrolled 22 patients (20 with cutaneous squamous cell carcinoma, one with melanoma, and one with Merkel cell carcinoma) and was completed in June 2026. The final clinical study report was submitted to the FDA with a meeting request and briefing document outlining nonclinical and clinical pharmacology programs, rationale for continued development, completed Phase 1b results, and details of the planned Phase 2b neoadjuvant study in cSCC. The company expects a response from the FDA by the end of November 2026. The first commercial-scale cGMP batch of PH-762 drug substance was released, supporting the planned Phase 2b clinical program, which is expected to be initiated in the first quarter of 2027. During the quarter, PH-762 Phase 1b clinical trial data was presented at several scientific and investor conferences, including the Life Sciences Future Conference, H.C. Wainwright Conference, NIBA 153rd Conference, Life Sciences Virtual Investor Conference, and Renmark Financial Virtual Non-Deal Roadshows. The company strengthened its intellectual property position, with a patent portfolio of 56 issued patents and 34 pending applications worldwide, providing protection through at least 2038 and potentially into 2044. As of September 30, 2026, cash and cash equivalents were $10.6 million, compared to $21.0 million at December 31, 2025. Research and development expenses for the three months ended September 30, 2026, were $3.0 million, an increase of $1.9 million or 159% compared to the prior year period, primarily due to a $1.5 million increase in nonclinical toxicology study costs, drug substance costs, and clinical supplies costs, and a $0.3 million increase in other development-related costs. For the nine months ended September 30, 2026, research and development expenses were $8.9 million, an increase of $5.8 million or 180% compared to the prior year period, driven by a $4.5 million increase in nonclinical toxicology study costs, drug substance costs, and clinical supplies costs, $0.3 million related to employee headcount costs, $0.6 million related to outside services and consultants, and $0.2 million related to patent activity. Management expects research and development expenses to continue increasing as the PH-762 program advances. General and administrative expenses for the three months ended September 30, 2026, were $1.2 million, a decrease of $100 thousand or 9% compared to the prior year period, mainly due to reduced outsourced consulting services. For the nine months ended September 30, 2026, general and administrative expenses increased by 6% or $200 thousand, primarily due to a $1.2 million increase in employee costs (including $0.7 million in increased stock-based compensation), partially offset by a $1.1 million decrease in outside services and consultant expenses. Net loss for the three months ended September 30, 2026, was $4.2 million, compared to $2.4 million for the same period in 2025, attributable to higher research and development expenses. For the nine months ended September 30, 2026, net loss was $12.3 million, compared to $6.3 million for the same period in 2025. As of September 30, 2026, total assets were $11.3 million, total liabilities were $2.7 million, and total stockholders' equity was $8.6 million. The company had 11,951,632 shares of common stock issued and outstanding as of September 30, 2026.

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