Aura Biosciences, Inc. — Q3 2023 Form 10-Q
Reporting period: Three and nine months ended September 30, 2023. Aura is a clinical-stage biotechnology company with no approved products and no product revenue. Its lead and only product candidate is belzupacap sarotalocan (bel-sar), a targeted therapy being developed for ocular cancers and bladder cancer.
Financial performance and position
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $15.4 million | $11.3 million | $45.0 million | $29.1 million |
| General and administrative expense | $5.1 million | $4.8 million | $15.3 million | $13.6 million |
| Operating loss | $20.5 million | $16.1 million | $60.2 million | $42.7 million |
| Net loss | $18.5 million | $15.9 million | $54.3 million | $42.2 million |
| Net loss per share, basic and diluted | $0.48 | $0.54 | $1.43 | $1.44 |
| Net cash used in operating activities | — | — | $46.5 million | $36.6 million |
At September 30, 2023, cash and cash equivalents were $55.6 million and marketable securities were $93.5 million, totaling $149.1 million. Total assets were $179.8 million; total liabilities were $28.0 million, including $20.2 million of operating lease liabilities. The filing reports no long-term debt. Accumulated deficit was $265.2 million. Gross profit and operating margins are not applicable because the company had no revenue.
Cash, cash equivalents and restricted cash decreased by $66.0 million over the first nine months to $56.4 million. Investing cash outflow was $23.8 million, largely reflecting purchases of marketable securities, partly offset by maturities; financing provided $4.3 million, including ATM share sales, option exercises and ESPP proceeds.
Changes versus comparable periods
Q3 operating expenses rose $4.4 million year over year, mainly due to higher clinical-trial and bel-sar manufacturing-development costs; R&D expense increased $4.1 million. Q3 net loss increased $2.6 million, partly offset by higher interest income. For the nine-month period, operating expenses rose $17.5 million and net loss increased $12.1 million. R&D accounted for most of the expense increase, reflecting Phase 2 activity, CRO costs supporting Phase 3 startup, and manufacturing development. Interest income increased to $6.0 million from $0.8 million over the nine-month period.
Clinical progress, outlook and risks
- The company reported Phase 2 suprachoroidal bel-sar results presented November 6, 2023: in the specified Cohorts 5 and 6 subgroup with 12-month follow-up, tumor control was 80% (8/10) and visual acuity preservation was 90% (9/10). These are company-reported clinical results and are not pivotal-trial outcomes. The filing reports a favorable tolerability profile as of August 3, 2023, with no dose-limiting toxicities or treatment-related serious adverse events reported.
- The FDA agreed under a Special Protocol Assessment to the design and planned analysis of the global Phase 3 CoMpass trial in early-stage choroidal melanoma. The trial is planned to enroll approximately 100 patients, with a sham comparator and a primary endpoint of time to tumor progression. Aura aimed to dose the first patient in Q4 2023. The SPA does not guarantee approval or a successful trial.
- For choroidal metastasis, Aura said it was on track to start a Phase 2 trial in 2024, with initial data expected by year-end 2024. The NMIBC Phase 1 trial had completed enrollment in the injection-without-light cohort and progressed to light-activation cohorts; preliminary results in the first light-activated patient showed a clinical complete response on histopathology.
- On November 9, 2023, after quarter-end, Aura completed a follow-on offering of 11.0 million shares at $9.00 per share, raising $99.0 million gross and approximately $92.6 million net. Underwriters received a 30-day option for up to 1.65 million additional shares. The company said existing funds plus the offering proceeds were expected to fund operations into the second half of 2026; this estimate depends on assumptions and is not assured. The ATM prospectus was suspended and terminated November 6, 2023, so ATM sales cannot resume unless a new prospectus or registration statement is filed.
- Aura expects continued operating losses and substantial spending as it advances clinical programs and manufacturing. It stated that funding will be needed beyond its current runway and that it may seek equity, debt or collaboration financing, which could dilute shareholders, restrict operations or require granting rights.
- Key risks include dependence on bel-sar, clinical and regulatory failure or delay, unproven pivotal-trial performance, reliance on third-party CROs and single-source manufacturing, the need for additional capital, and possible dilution. The company also disclosed a long-term Boston office and laboratory lease with $31.7 million in undiscounted future payments. It reported no litigation expected to have a material adverse effect and no material change in internal control over financial reporting.
Important facts for investors to verify
- Whether CoMpass began enrollment and dosed its first patient on the stated timeline, and whether trial conduct remains consistent with the SPA design.
- Final and complete Phase 2 data, including patient counts, follow-up, safety, and how the reported subgroup results compare with the full study population.
- Net proceeds and any exercise of the underwriters’ option in the November 2023 offering, and the resulting share count and dilution.
- Whether the stated runway into the second half of 2026 remains current as clinical-trial, manufacturing and operating costs evolve.
- Progress on commercial-process transfer, manufacturing comparability and supply arrangements, as well as the choroidal metastasis and NMIBC programs.