Filing Summary: GlycoMimetics, Inc. — Q1 2016 Form 10-Q
Issuer identification: The supplied filing is for GlycoMimetics, Inc., not Crescent BioPharma, Inc. It covers the quarter ended March 31, 2016; the interim financial statements are unaudited.
Business context
GlycoMimetics is a clinical-stage biotechnology company developing glycomimetic drugs and has no approved products or product-sales revenue. Pfizer holds worldwide rights to rivipansel and is responsible for its further development and commercialization. The company is advancing GMI-1271 in clinical studies and developing GMI-1359, for which it anticipated an IND filing in the third quarter of 2016.
Financial results and liquidity
| Metric | Q1 2016 | Q1 2015 / comparison |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $5.52 million | $5.21 million; up 6% |
| General and administrative expense | $2.06 million | $1.90 million; up 8% |
| Net loss | $7.55 million | $7.11 million |
| Basic and diluted loss per share | $0.40 | $0.37 |
| Operating cash used | $9.23 million | $8.71 million |
- Cash and cash equivalents were $38.83 million at March 31, down from $46.80 million at December 31, 2015. Management estimated existing cash would fund operations and capital needs through Q1 2017, subject to assumptions and trial timing.
- Net cash used in investing activities was $17,270; financing provided $1.27 million, principally from at-the-market (ATM) stock sales and option exercises. No material interest-bearing debt is reported. Total liabilities were $5.93 million, including $5.68 million current liabilities.
- No meaningful operating margin can be assessed because the company had no revenue. Its accumulated deficit was $94.72 million.
Changes, financing and other notable items
- R&D expense rose $311,000. Clinical-development costs increased, while manufacturing and formulation costs declined. By program, GMI-1359 expense rose to $1.06 million from $209,000, while GMI-1271 expense fell to $2.07 million from $2.79 million.
- G&A expense increased $151,000, primarily due to personnel and stock-based compensation. Stock-based compensation totaled $728,000, versus $588,000 a year earlier.
- The company paid the University of Basel $2.0 million in February 2016, representing its contractual 10% share of Pfizer’s 2015 rivipansel milestone payment.
- Under a new Cowen ATM agreement, the company may sell up to $40 million of common stock, subject to offering limits and prospectus supplements. During Q1 it sold 206,500 shares for approximately $1.1 million net proceeds; through May 2, cumulative sales were 348,677 shares for $2.0 million net proceeds. The post-quarter portion included 142,177 shares and $864,756 net proceeds.
- A lease amendment added space through October 2023. Future minimum lease payments under the amended lease totaled $7.49 million.
Outlook, risks and contingencies
Management expects expenses and operating losses to continue and R&D spending to increase as programs progress. The company may need additional capital; future financing may dilute shareholders or be unavailable on acceptable terms. Pfizer milestone and royalty receipts are possible but uncertain. Development, trial enrollment, regulatory approval, manufacturing, intellectual-property protection and commercialization all present substantial risks. The filing reports no material change to the risk factors in the 2015 annual report, no material legal proceedings, and effective disclosure controls as of quarter-end.
Pfizer’s agreement includes potential development milestones up to $115 million, regulatory milestones up to $70 million, sales milestones up to $135 million, and tiered royalties; these are contingent, not assured. The filing states that Pfizer triggered a $20 million milestone in June 2015, recognized as revenue then; no milestone revenue was recorded in Q1 2016.
Investor facts to verify
- Confirm the issuer: the filing is for GlycoMimetics, Inc., notwithstanding the request metadata naming Crescent BioPharma, Inc.
- Track cash burn and financing needs against management’s Q1 2017 runway estimate, including further ATM sales and dilution.
- Monitor clinical and regulatory progress for GMI-1271 and GMI-1359, and Pfizer’s rivipansel Phase 3 program and any milestone developments.
- Review the amended lease’s $7.49 million payment commitment and the uncertainty of future milestone and royalty receipts.