The Offer

Company Overview

Jupiter Neurosciences, Inc. is a clinical-phase exploration and advancement pharmaceutical corporation positioned in Jupiter, Florida. In January 2016, the Company was set up in Delaware. The Company has created a distinctive resveratrol platform product that focuses on treating neuroinflammation. The business is focusing on Mucopolysaccharidoses Type 1, Friedreich's Ataxia, MELAS, and ALS at an earlier stage of research, among other rare illnesses, for which the pharmaceutical candidate, known as JOTROL, has numerous possible indications of usage. The company's early development effort in TBI/concussions is largely aimed toward Mild Cognitive Impairment/early Alzheimer's disease in the more widespread disease regions.

Key Highlights

Primary Offering: The Company is accepting applications for 2,500,000 Shares and expects the IPO price to be in the range of USD 5.00 - USD 7.00, therefore taking USD 6.00 per share as a mid-point to raise USD 15,000,000. After deducting projected underwriting discounts and commissions (7.00% of the gross proceeds of the offering) and the firm's expected offering expenses of USD 744,370, the business anticipates receiving net proceeds from this offering of around USD 13,205,630.

Use of proceeds:

Dividend policy: Since inception, the firm has neither declared nor distributed any cash dividends on its capital stock. JUNS does not currently plan to pay any cash dividends and currently aims to keep any potential future earnings.

Industry & Market Overview:

• Both small and major pharmaceutical corporations as well as academic organizations have been researching resveratrol for more than 50 years. Over 9,000 scholarly articles provide comprehensive documentation of the several functions of resveratrol. Numerous of these papers discuss how normal resveratrol is no longer used medically and has never gotten regulatory clearance for any reason due to its low bioavailability.
• The Phase I trial, according to JUNS, shows that the company has overcome the problem of inadequate bioavailability with JOTROL. Due to its pharmacological potential, resveratrol is a nutraceutical that has lately received a lot of study interest. Early studies revealed that UV-treated, diseased, and damaged leaves had high levels of resveratrol. Resveratrol is also present in substantial amounts in processed plant products.
• Resveratrol appears to be an activator of SIRT1, one of the mammalian forms of the sirtuin family of proteins, according to the existing scientific literature. Metabolism, stress resistance, cell survival, cellular senescence, inflammation/immune function, endothelial functions, and circadian rhythms are all impacted by the SIRT1-regulated pathway. Resveratrol is expected to help treat disorders characterized by aberrant metabolic regulation, inflammation, and cell cycle problems since it has been shown in the scientific literature to activate SIRT1, NrF2, NLR3P inflammasomes and have an epigenetic mechanism. 
• Since the existing natural supplements can't provide high enough levels of resveratrol in blood plasma to be able to provide a therapeutically effective dose without causing severe gastrointestinal side effects, resveratrol has never been developed with all the necessary steps to achieve an approval as a pharmaceutical product. This implies that to receive marketing clearance, the business must submit JOTROL through the whole regulatory NDA (New Drug Application) procedure.

Product pipeline:

The table below provides the company’s current estimate of its timeline:

Financial Highlights (Expressed in USD):

• Decreasing revenues: The company's grants and other revenues have decreased from USD 638,037 in H1FY21 to USD 233,281 in H1FY22, as shown in the table above, representing a decrease of almost 63.44%. Furthermore, there were no revenues in the Q2FY22 as the company is currently focused on R&D, with the above numbers being the federal grant income respectively for award number R44AG067907-01A1 for a Phase I dose-finding pharmacokinetics study.
• Increased loss from operations: In H1FY22, the company reported an operating loss of USD 1,567,351, against USD 1,100,036 reported in H1FY21, depicting an increase in the operational loss by around 42.48%, due to increased general and administrative expenses in the H1FY22, partially offset by decreased R&D expenses.
• Lowered profitability efficiency by increasing net losses: The company has been unsuccessful in bringing down the net losses, USD 1,651,025 in H1FY22 from USD 1,103,876 in H1FY21, depicting a decrease in operational efficiency for the company. The company’s other expenses also increased, leading to basic and diluted net loss per share from negative USD 0.18 per share in H1FY21 to USD 0.25 per share in H1FY22.

Key Management Highlights

Risk Associated (High)

Investment in the IPO of “JUNS” is exposed to a variety of risks such as:

• Regulatory risk: Clinical drug development is a time-consuming, expensive procedure with no guarantee of success. The outcomes of preclinical studies and early clinical trials may not be indicative of future outcomes, and the clinical trials of JUNS's product candidate may not demonstrate safety and efficacy to the satisfaction of the FDA, EMA, or other comparable foreign regulatory authorities, or otherwise yield positive results. JUNS could have to spend more money, run into delays, or eventually fail to finish the research and commercialization of its product prospects.
• Profitability risk: The business has so fa reported negative cash flows from operating activities and net losses. The business anticipates that it will continue to experience operating losses and further considerable outlays for its growing activities. The pace of future expenses and its capacity for income generation will both have an impact on how much money it loses. Because JUNS is still in the early stages of development, has a short working history, and has no products that have been approved for commercial sale, it may be challenging to assess the company's present operations, success prospects, and long-term sustainability.
• Balance sheet risk: JUNS has an outstanding debt with a principal balance of USD 1,063,319 as of August 26, 2022, and accumulated interest of around USD 27,950. The quantity of the debt that JUNS owes makes it more likely that the business won't have the cash on hand to compensate the loan's principal, interest, and other obligations when they're due.

Conclusion

JUNS’ performance in the first half of FY22 shows increased expenses compared to the corresponding period of the previous financial year, resulting in increased operating losses and net losses for the company. Revenues, operating losses, and net losses all have worsened during the six months ended June 30, 2022, with currently no revenues from product sales in Q2FY22. Although it is anticipated that JUNS will have opportunities to expand using IPO funds, the success of the company's entire operation is dependent on the outcome of the current trial for its drug JOTROL.

Hence, given the financial performance of the company in the six months ended June 30, 2022, increasing losses, and associated risks “Jupiter Neurosciences Inc (JUNS)” IPO seems “Neutral" at the IPO price.