Imagenebio, Inc. quarterly report, Q3 FY2022

Business context and reporting period

This is Ikena Oncology, Inc.’s unaudited Form 10-Q for the quarter and nine months ended September 30, 2022. The request metadata names Imagenebio, Inc.; that does not match the registrant shown in the filing and should be verified.

Ikena is a clinical-stage targeted oncology company developing biomarker-driven therapies. Its programs include IK-930 (Hippo pathway), IK-175 and IK-007 (tumor microenvironment), and discovery-stage programs. It had no approved products and no product-sale revenue.

Financial performance and position

Collaboration revenue was Ikena’s only reported revenue; the filing provides no product gross margin. For the nine months, operating cash outflow was $56.5 million, investing cash outflow $109.8 million, and financing cash inflow $1.1 million. Cash, cash equivalents and marketable securities totaled $174.4 million at September 30, 2022; cash and cash equivalents alone were $67.1 million. Current assets were $178.0 million and current liabilities $25.0 million. Total liabilities were $31.7 million, including lease liabilities; the filing reports no borrowings.

Stockholders’ equity was $158.8 million, down from $207.9 million at December 31, 2021. Accumulated deficit was $200.1 million. Available-for-sale securities had $1.2 million of unrealized losses recorded in other comprehensive loss; management considered the losses temporary and recorded no impairment charge.

Material changes versus prior comparable periods

• Q3 collaboration revenue rose 71% year over year, primarily due to increased manufacturing activity and substantial completion of IK-412 manufacturing efforts. Nine-month collaboration revenue declined 6%, partly reflecting a change in the estimate of IK-175 services expected during the collaboration term.
• Nine-month R&D expense increased 40% and G&A increased 34%; management cited increased headcount and overhead, discovery-program spending, manufacturing activity, insurance and public-company legal costs.
• Nine-month net loss increased $17.8 million year over year. Operating cash use rose by $9.6 million.
• Cash and cash equivalents fell from $232.2 million at year-end 2021, while the company shifted excess funds into marketable securities. Cash plus marketable securities declined to $174.4 million from $232.2 million.

Outlook, risks and notable items

Management estimated that existing cash, cash equivalents and marketable securities would fund operating expenses and capital requirements through mid-2024. This estimate depends on assumptions and actual funding needs could arise sooner. The company expects continued operating losses and negative operating cash flows, and anticipates increased R&D spending. It has no committed external funding source. A $300 million shelf registration and a $100 million at-the-market program were available; no ATM shares had been sold as of the filing.

• IK-930 was in a Phase 1 trial, with initial data expected in 2023. It had FDA orphan drug designation for mesothelioma and fast track designation for unresectable NF2-deficient mesothelioma.
• IK-175 was in Phase 1a/1b testing; management planned to present initial data in November 2022 and expected the first patient in a second Phase 1b HNSCC trial by year-end 2022.
• IK-007’s Phase 1b MSS colorectal cancer trial had completed enrollment; a clinical update was expected in Q4 2022. It was also being studied in an investigator-initiated inflammatory breast cancer trial.
• IK-412 development was paused for the remainder of the BMS research term, except committed manufacturing work, after supply-chain-related manufacturing delays. BMS retained its license option.
• The BMS agreement could provide option payments, milestones and tiered royalties if options are exercised and development and commercialization milestones are achieved; these amounts are contingent, not assured.
• Key risks include clinical and regulatory failure, patient-enrollment challenges in biomarker-defined populations, reliance on third-party manufacturers and CROs, single-source API supply, collaboration uncertainty, additional financing needs, competition, and COVID-19 or other supply-chain disruptions. The filing also identifies inflation, capital-market volatility and geopolitical disruption as potential risks.
• Management reported disclosure controls and procedures were effective at the reasonable-assurance level as of September 30, 2022, with no material change in internal control over financial reporting during the quarter. No material litigation was reported.

Important facts for investors to verify

• Confirm the intended issuer: the supplied metadata says Imagenebio, while this filing is for Ikena Oncology, Inc. (Nasdaq: IKNA).
• Review the assumptions behind the mid-2024 cash runway and the pace of cash use, including the $56.5 million nine-month operating cash outflow.
• Track clinical data, trial enrollment and timelines for IK-930, IK-175 and IK-007, and assess whether projected updates were subsequently delivered.
• Monitor BMS’s option decisions and the status of IK-412, including whether manufacturing constraints or the pause affect collaboration economics.
• Assess whether further financing is needed and the potential dilution or other terms, including use of the available ATM or shelf registration.
• Check marketable-security maturity, liquidity and valuation exposure, and confirm any subsequent developments affecting the reported unrealized losses.