Cardiff Oncology, Inc. — Q2 2023 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2023. Cardiff Oncology is a clinical-stage biotechnology company developing onvansertib, a PLK1 inhibitor, in combination with standard-of-care treatments for several cancers. Its reported royalty revenue is from other licensed intellectual property and is not from onvansertib.
Financial performance and liquidity
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Royalty revenue | $0.108 million | $0.091 million | $0.191 million | $0.165 million |
| Research and development expense | $8.020 million | $7.448 million | $17.072 million | $14.656 million |
| Selling, general and administrative expense | $4.296 million | $3.086 million | $7.379 million | $7.026 million |
| Net loss | $11.150 million | $10.443 million | $22.373 million | $21.436 million |
| Net loss per common share | $0.25 | $0.24 | $0.50 | $0.50 |
- Operating expenses were $12.316 million in Q2 and $24.451 million for the first half. The company has no meaningful commercial product revenue or reported operating profit.
- Interest income was $1.053 million in Q2 and $1.993 million for the first half, up from $0.253 million and $0.383 million, respectively, primarily due to higher interest rates.
- At June 30, cash and cash equivalents were $19.369 million and short-term investments were $70.059 million, totaling $89.428 million. Working capital was $83.6 million, down from $103.5 million at year-end 2022.
- First-half operating cash use was $15.791 million, compared with $16.944 million a year earlier. Investing activities provided $18.813 million, mainly reflecting net maturities and sales of investments; financing activities provided no cash.
- Total liabilities were $10.876 million, including $2.436 million in operating lease liabilities. No borrowings are reported. Total assets were $97.455 million and stockholders’ equity was $86.579 million.
Changes versus prior periods and unusual items
- First-half R&D expense increased $2.416 million, mainly from clinical program and outside-service costs and increased staffing. First-half SG&A rose $0.353 million; Q2 SG&A increased $1.210 million, including higher compensation and professional fees.
- Q2 net loss increased $0.707 million year over year, while first-half net loss increased $0.937 million. Higher interest income partly offset operating losses.
- Q2 stock-based compensation included $0.6 million of incremental expense from modifying a departing employee’s stock options. First-half stock-based compensation was $2.645 million, versus $2.207 million.
- Common shares outstanding were 44.677 million at June 30 and August 3, 2023. Potentially dilutive securities are excluded from loss-per-share calculations because they are anti-dilutive.
Outlook, programs and risks
- Management said available cash and investments should fund requirements for at least 12 months from issuance of the financial statements and, based on current projections, operations into 2025. The company expects continuing losses and operating cash outflows for several years and may need additional capital; equity financing could dilute stockholders.
- CRDF-004, a planned Phase 2 trial of onvansertib with standard-of-care treatment for first-line RAS-mutated metastatic colorectal cancer, was expected to begin enrollment in the second half of 2023, with initial data anticipated in mid-2024. Pfizer Ignite is to conduct its clinical activities.
- In an August 7, 2023 update on the single-arm TROV-054 trial, the company reported an objective response rate of 29% and median progression-free survival of 9.3 months among evaluable patients. The reported bevacizumab-naïve subgroup had a 73% response rate and 15-month median progression-free survival, versus 16% and 7.8 months among patients previously treated with bevacizumab. These are trial results, not a randomized comparison; historical controls cited by the company are not direct head-to-head evidence.
- The company discontinued enrollment in the ONSEMBLE trial and chose to initiate CRDF-004 after reviewing TROV-054 data, preclinical evidence and FDA feedback. Other programs include a Phase 2 pancreatic cancer trial and investigator-led trials in triple-negative breast cancer and small cell lung cancer; data timing described in the filing is prospective and uncertain.
- Key risks include clinical and regulatory uncertainty, trial duration and cost, competition, and the uncertain availability and terms of future financing. Management reported no material changes to the risk factors in its 2022 Form 10-K, no material litigation, and effective disclosure controls as of June 30, 2023.
Important facts for investors to verify
- Whether CRDF-004 enrollment and its anticipated data timeline proceeded as planned, and how its design and endpoints compare with prior studies.
- Full TROV-054 results, patient counts and subgroup definitions, and whether findings are confirmed in larger or controlled studies.
- Actual cash burn and clinical spending relative to management’s projected runway into 2025, including any financing or dilution.
- Progress and data timing for the pancreatic cancer, triple-negative breast cancer and small cell lung cancer programs.