CalciMedica, Inc. — Q2 2023 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2023. CalciMedica is a clinical-stage biopharmaceutical company developing CRAC-channel inhibitors, led by Auxora. The March 20, 2023 merger with Graybug was accounted for as a reverse recapitalization, with Private CalciMedica as accounting acquirer. Accordingly, pre-merger comparative periods reflect Private CalciMedica on a stand-alone basis; 2023 post-merger results include Graybug only from March 21. The periods are not fully comparable.
Financial performance and position
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | No product revenue | No product revenue | No product revenue | No product revenue |
| Research and development | $3.8 million | $2.3 million | $10.3 million | $5.2 million |
| General and administrative | $2.8 million | $1.3 million | $18.6 million | $2.6 million |
| Total operating expenses | $6.6 million | $3.6 million | $28.9 million | $7.8 million |
| Net loss | $6.3 million | $3.0 million | $25.6 million | $6.7 million |
| Net loss per share, basic and diluted | $1.11 | $36.55 | $7.86 | $82.42 |
Amounts are in U.S. dollars; losses and per-share losses are shown as positive magnitudes. Gross margin is not applicable because the company had no product revenue. As of June 30, cash and cash equivalents were $19.1 million, total assets $20.2 million, current liabilities $4.0 million, and stockholders’ equity $16.2 million. The company reported no convertible notes or warrant liability at quarter-end; the notes converted to common stock in connection with the merger.
- Cash flow, six months: $17.5 million used in operating activities, $14.5 million provided by investing activities, and $20.7 million provided by financing activities. Cash increased by $17.6 million to $19.1 million.
- Accumulated deficit: $137.3 million at June 30, 2023.
- Non-recurring charges: Six-month operating expenses included $16.2 million of merger-related charges: $10.5 million for accelerated vesting of Graybug awards and $5.7 million for severance.
Material changes versus prior comparable periods
- Q2 operating expenses increased 83% year over year, and net loss increased to $6.3 million from $3.0 million. R&D growth principally reflected higher Auxora clinical-trial and preclinical activity; G&A growth included costs of operating as a public company.
- Six-month operating expenses and net loss were substantially higher than in 2022, primarily reflecting merger-related stock-award acceleration and severance, as well as increased personnel, clinical-program, and public-company costs. Comparisons are also affected by the merger accounting and are not like-for-like.
- Six-month other income was $3.3 million, including a $3.2 million net gain from fair-value changes in financial instruments. Such non-cash valuation effects contributed to reported earnings and are not operating revenue.
- The merger, private placement, and conversion of preferred stock and notes materially changed the capital structure. The company had 5,661,933 common shares outstanding as of August 4, 2023.
Outlook, risks, and unusual items
- Management expected June 30 cash to fund operations into the second half of 2024 and to support Auxora clinical milestones in acute pancreatitis and asparaginase-induced pancreatic toxicity through 2023 and the first half of 2024. The financial-statement note separately states funds are expected to last beyond 12 months from issuance. These are estimates based on assumptions; the company says additional capital will be needed to complete development and commercialization.
- Management anticipated continued losses and higher R&D, G&A, and capital spending. It expected topline results from the Phase 2b CARPO acute-pancreatitis trial in the first half of 2024, and planned to submit an IND for acute kidney injury in the second half of 2023, subject to funding, with a potential Phase 2 start in the first half of 2024.
- Management reported preliminary, unpublished CRSPA results for the first cohort of nine pediatric patients; it expected data publication in Q4 2023. These early findings are not definitive evidence of efficacy.
- Financial reporting controls: Disclosure controls were deemed ineffective due to a material weakness in accounting for the fair value of convertible notes and warrant liabilities. Management had begun remediation, but gave no assurance it would be successful. The weakness had also led to restatement of 2022 financial statements.
- Contingency: Merger-related stockholder lawsuits were voluntarily dismissed after supplemental disclosures; a settlement agreement resolved the associated mootness-fee demand on May 3, 2023. The company reported no pending litigation it believed could have a material adverse effect.
- Key risks include dependence on Auxora and clinical-trial outcomes, regulatory uncertainty, patient enrollment and trial execution, reliance on third-party manufacturers and clinical providers, and the need to raise substantial additional capital. The company also noted risks from potential Nasdaq noncompliance, dilution, and possible future financing constraints.
Investor verification priorities
- Confirm the latest cash balance, quarterly cash burn, and runway assumptions, including the different runway descriptions in the financial-statement note and MD&A.
- Track CARPO timing and results, CRSPA cohort data, and any announced IND submission or AKI trial plans; distinguish preliminary findings from controlled clinical evidence.
- Review the amount and composition of merger-related charges and the extent to which stock-based compensation and fair-value gains affect reported losses and cash burn.
- Monitor remediation of the material weakness, subsequent control assessments, and any further restatements or reporting delays.
- Assess future financing needs, potential dilution, share-based awards and warrants, and the company’s continuing Nasdaq listing status.