PHIO · Phio Pharmaceuticals Corp.

Phio Pharmaceuticals reported deeper Q1 FY2026 losses reflecting accelerated investment in its PH-762 program, a clinical-stage immunotherapy designed to enhance T cell capacity against cancer by decreasing PD-1 expression. Operating income deteriorated to -$4.2 million from -$1.9 million in Q1 FY2025, a -123% change primarily driven by net loss from operations due to increased development spend, as noted in Management's Discussion. This aligns with management's expectation that research and development expenses will continue to rise as PH-762 advances, consistent with the company's history of operating losses and negative cash flows since inception, which are expected to persist.

Net income followed suit, widening to -$4.0 million from -$1.8 million YoY (-126%), with diluted EPS showing relative improvement to -$0.34 from -$0.41 (17% YoY). The less severe EPS decline suggests favorable share count dynamics despite elevated losses. Cash flow from operations mirrored the net loss at -$4.0 million, versus -$1.3 million prior year, with free cash flow identical at -$4.0 million given zero capital expenditures (down from $2 thousand). This burn rate reflects the company's remote business model under a streamlined cost structure, concentrating resources on clinical development programs rather than physical infrastructure.