COCP — Q2 2026 Financial Report Analysis

Spending rose as the norovirus trial got going, and the cash nearly ran out

Cocrystal Pharma is a small antiviral drug developer with no approved products. Its lead drug, CDI-988, is a pill meant to prevent and treat norovirus (the "stomach bug" behind outbreaks on cruise ships and in nursing homes), and there is currently no approved treatment or vaccine for it. In the quarter ended June 30, 2026, research spending almost doubled because CDI-988 entered a human challenge trial at Emory University, and the net loss widened to $3.2 million. The bigger story is the balance sheet: cash fell to $2.2 million, roughly two-thirds of one quarter's spending, and the company raised $5.0 million on July 31 by selling shares to OPKO Health, a company run by Cocrystal's co-founder and principal stockholder Dr. Phillip Frost.

At a glance

• Net loss of $3.2 million, up 54% from $2.1 million. Almost all of the increase is trial spending on CDI-988; the business is a research program, not a revenue-generating company.
• $2.2 million of unrestricted cash at June 30, down from $7.0 million at the start of the year. That is the money the company had left to operate with before the July share sale.
• 5.47 million new shares sold at $0.9134 each in July, raising the share count 39.7%. Existing holders now own a smaller slice, and management still says the cash will not last 12 months.

The numbers

"Net loss" is what's left after all expenses are subtracted from the little income the company has; for a drug developer it is effectively the cost of running its research for the quarter. "Burn" is the cash that actually left the bank.

Operating margin isn't meaningful here: expenses were about 31 times revenue.

For the first half of 2026, the net loss was $5.463 million versus $4.356 million a year earlier (+25.4%), and the loss per share was $(0.40) versus $(0.43).

What drove the quarter

Research spending. The 10-Q attributes the $1.02 million rise in quarterly R&D "primarily" to costs of CDI-988 entering the norovirus clinical trial in 2026. The trial is a "challenge study": healthy volunteers are deliberately infected with a norovirus strain (GII.2, known as Snow Mountain Virus) and given either CDI-988 or a placebo, so researchers can see within days whether the drug reduces symptoms. First subjects were enrolled in March 2026, and in April the FDA granted CDI-988 Fast Track status, which allows earlier and more frequent contact with the agency and a rolling review of an eventual application.

Overhead. General and administrative costs rose $161,000, which the company attributes to higher professional fees and insurance.

Revenue. The $105,000 of revenue is not product sales. It comes from a fixed-price $498,000 research contract with the National Institute of Allergy and Infectious Diseases (part of the NIH) to work on an oral flu drug, with work running through September 29, 2026. It is small and close to finished.

What the headline numbers hide

• The share-count increase flatters the per-share loss. Net loss grew 54%, but the loss per share grew only 15%, because the average number of shares rose 35.5% (from 10.17 million to 13.79 million) after an earlier share sale. Per-share figures will be diluted further from Q3: the July sale brought shares outstanding to about 19.26 million as of August 13.
• Cash burn looked better than it was because bills went unpaid longer. Cash used in operations fell 4.7% to $4.856 million for the six months, even though the net loss grew 25%. The 10-Q says the improvement was "primarily due to increases in accounts payable and accrued expenses": unpaid bills rose $388,000 this year versus a $613,000 paydown in the same period of 2025. That is timing, not savings, and those bills still have to be paid.
• Going-concern warning, in both the auditor's report and this filing. The 10-Q states that recurring losses "raise substantial doubt about the Company's ability to continue as a going concern" (accounting language for "the company may not have enough money to keep operating for the next year without raising more"). Management also writes that June 30 cash plus the July raise "will not be sufficient" for the 12 months after filing.
• Shareholders' equity nearly ran out. Book equity (assets minus liabilities) fell to $1.04 million at June 30 from $6.33 million at December 31. The July raise restores some of it, but at the current loss rate it erodes by roughly $3 million a quarter.
• More dilution is already sitting on the books. At June 30 there were 7.22 million warrants outstanding (rights to buy new shares at a fixed price), none of which existed a year earlier, plus 1.07 million stock options and 219,000 restricted stock units. Together those equal about 44% of the 19.26 million shares now outstanding. The 10-Q itself warns that any further equity financing "may be very dilutive."
• The July raise was priced below $1 and came from an insider. OPKO paid $0.9134 per share, the market bid price on the closing day, below the $1.05 close on June 30. Because the buyer is controlled by a Cocrystal co-founder and principal stockholder, it is a related-party deal; it was done at market price with no discount disclosed, but it also means the company's lifeline is concentrated in one backer. A share price below $1 is also worth watching because Nasdaq requires listed stocks to stay above $1; the 10-Q does not mention any listing notice.
• A $6.3 million dispute is a possible upside, not an asset. Cocrystal says the UK research firm that ran its Phase 2a flu-drug trial (oral CC-42344) breached its contract; the trial produced unusable efficacy data because too few volunteers actually got infected. Cocrystal is seeking a refund of the $6.309 million it paid or a redone study, and has started arbitration; the research firm is seeking about $600,000 more. Nothing is recorded for a recovery, and the outcome is uncertain.
• No one-offs or accounting adjustments to strip out. There is no "adjusted" figure here; the GAAP loss is the whole story. The tax rate was 0% and interest income fell to $10,000 from $28,000 as the cash pile shrank.

Takeaway: Cocrystal is now a bet on a single readout. It spent about $3.3 million in Q2 to run the CDI-988 norovirus challenge trial, ended June with $2.2 million, and raised $5.0 million from an insider at under $1 a share. That money should roughly cover the company through the trial's preliminary results, but not much further, so whatever the data shows will largely decide the price of the next capital raise, and how much existing shareholders get diluted to pay for it.

Outlook

What management has said. No financial guidance is given. On September 9, 2026, the company said the last subject in the Phase 1b norovirus challenge study had been dosed, with no serious adverse events reported to date, and that preliminary efficacy results are expected in late 2026 or early 2027. The study's main test is whether CDI-988 reduces the share of infected volunteers who develop symptoms compared with placebo; secondary measures are viral shedding and disease severity.

Our read on the runway. Adding the July raise to June 30 cash gives roughly $7.2 million before offering costs. Against $3.3 million of quarterly operating expenses (and $4.9 million of operating cash burn in the first half), that points to cash lasting into the first half of 2027, which matches management's statement that it cannot cover 12 months. Spending may ease as the trial winds down, which would stretch this a little, but the government contract revenue ends in September.

What to watch next:

• The CDI-988 challenge-study readout (late 2026 or early 2027). A clear reduction in symptoms versus placebo would be the first efficacy evidence for an oral norovirus drug and the basis for a larger trial or a partnership. A miss would leave the company with little cash and a flu program still stalled.
• The Q3 10-Q (expected around mid-November 2026): cash after the July raise, and whether R&D falls back as trial dosing ended.
• The next financing: its size, price and whether it again depends on OPKO or Dr. Frost.
• The CRO arbitration over the flu trial, where a recovery of even part of the $6.3 million would materially extend the runway for a company this size.
• The share price relative to $1, given Nasdaq's minimum-price rule.