Aura Biosciences, Inc. — 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. The filing was signed March 15, 2023. This is an annual report, not a standalone fourth-quarter report.
Business context and reporting period
Aura is a clinical-stage biotechnology company with no approved products and no product revenue. Its lead candidate, bel-sar (AU-011), is a virus-like drug conjugate being developed first for early-stage choroidal melanoma, with additional programs in choroidal metastasis and non-muscle-invasive bladder cancer (NMIBC).
Financial performance and liquidity
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $42.2 million | $25.2 million |
| General and administrative expense | $18.1 million | $10.1 million |
| Total operating expenses / operating loss | $60.3 million | $35.3 million |
| Net loss | $58.8 million | $35.3 million |
| Net loss per share, basic and diluted | $1.96 | $8.95 |
| Net cash used in operating activities | $54.6 million | $32.4 million |
Margins are not meaningful because Aura has no revenue. Research and development growth reflected Phase 2 activity, Phase 3 startup and CRO costs, manufacturing development, and higher personnel expense. General and administrative expense rose with staffing and public-company costs. Interest income increased to $1.9 million from a nominal amount in 2021.
At December 31, 2022, cash and cash equivalents were $121.6 million and marketable securities were $67.2 million, totaling $188.8 million. Current assets were $196.7 million; current liabilities were $10.5 million. The company reported no long-term debt. Operating lease liabilities totaled $20.9 million, with $33.9 million of undiscounted future lease payments.
Management stated that available cash and marketable securities were expected to fund operations into 2025, based on its current plan and assumptions. The financial-statement note separately states resources should cover operating expenses and capital needs for at least 12 months from issuance. Aura expects to need additional capital to complete development and commercialize bel-sar.
Material changes versus the prior comparable period
- Net loss increased by $23.5 million, while operating cash use increased by $22.2 million.
- Operating expenses rose by $25.0 million, led by a $17.1 million increase in R&D and a $8.0 million increase in G&A.
- Investing cash outflow increased to $67.9 million, principally reflecting purchases of marketable securities and property and equipment.
- Financing provided $95.6 million in 2022, primarily from a December follow-on offering and ATM sales. The follow-on offering generated $86.7 million net proceeds; ATM sales generated $8.5 million net proceeds.
- Common shares outstanding increased to 37.8 million from 29.2 million, reflecting equity financing and other share activity.
- A new Boston office and laboratory lease commenced in August 2022, with a 10-year initial term; the prior Cambridge lease was terminated.
Outlook, risks, contingencies and unusual items
- Clinical outlook: Aura planned to start dosing in its global Phase 3 choroidal melanoma trial in the first half of 2023. It planned a Phase 2 choroidal metastasis study and initial NMIBC Phase 1 data in the second half of 2023. These are forward-looking plans, not reported outcomes.
- Interim clinical findings: In February 2023, Aura presented interim suprachoroidal Phase 2 data for a small subgroup matching planned Phase 3 criteria (n=8): 100% tumor control, vision preservation in 7 of 8 patients, and a statistically significant tumor-growth-rate reduction versus each patient’s documented baseline. The filing cautions that interim results may change; they are not pivotal-trial evidence.
- Regulatory uncertainty: Bel-sar is unapproved. The Phase 3 trial uses an adaptive design and sham control; regulators may require a second pivotal trial. Its drug-device-laser combination may add review complexity.
- Development and supply risks: The company relies on third parties for clinical trials and manufacturing and reported a single source for key bel-sar manufacturing stages. Commercial-process transfer and comparability remain important potential schedule risks.
- Funding and dilution: Aura has recurring losses, expects losses to continue, and has no committed external funding. Further equity financing could dilute shareholders; the company also has a $75 million ATM program.
- Bank exposure: Following the March 2023 Silicon Valley Bank closure, Aura reported that 15% of its cash, cash equivalents and marketable securities had been held at SVB. The filing cites the government statement that SVB depositors would have access to their funds, but investors should confirm Aura’s actual access and any resulting exposure.
- Other items: Marketable securities had $0.1 million of unrealized losses, attributed to interest-rate increases; management did not expect to sell them before recovery of amortized cost. A $0.3 million loss related to termination of the former lease was recorded in 2022.
- Contingencies and controls: Aura reported no legal proceeding expected to have a material adverse effect and no subsequent events requiring disclosure. Management concluded disclosure controls and internal control over financial reporting were effective; the auditor did not attest to internal controls because of the company’s emerging-growth-company status.
Most important facts for investors to verify
- Whether the planned Phase 3 trial started on schedule, its enrollment and design, and whether regulators will accept one trial or require another.
- How the small, interim Phase 2 subgroup findings compare with complete follow-up and controlled pivotal results, including safety and vision outcomes.
- Current cash runway, quarterly burn, and the company’s actual access to funds reported at SVB after the bank closure.
- Manufacturing-transfer progress, supply availability, and whether Aura has established backup sources for critical materials and production.
- Potential dilution from future fundraising and ATM issuance, and the terms and timing of any financing.