Immunic, Inc. — Q2 2023 Form 10-Q
Reporting period: Three and six months ended June 30, 2023. Immunic is a clinical-stage biotechnology company developing oral therapies for inflammatory and autoimmune diseases. It has no approved products and reported no product revenue.
Financial performance and position
| Metric | Q2 2023 | Six months 2023 |
|---|---|---|
| Revenue | No product revenue | No product revenue |
| Research and development expense | $21.2 million | $44.1 million |
| General and administrative expense | $3.8 million | $8.1 million |
| Total operating expenses | $25.0 million | $52.3 million |
| Operating loss | $25.0 million | $52.3 million |
| Net loss | $24.0 million | $49.3 million |
| Basic and diluted loss per share | $0.54 | $1.12 |
| Cash used in operating activities | Not separately stated | $39.5 million |
At June 30, cash and cash equivalents were $77.3 million, down from $106.7 million at December 31, 2022. Current assets were $86.6 million and current liabilities $18.2 million. Total liabilities were $19.5 million, primarily operating lease and other current liabilities; the filing does not report borrowings. Accumulated deficit was $366.6 million. Management said available funds were expected to fund operations beyond 12 months from issuance of the statements. No meaningful product gross margin was reported because the company has no product sales.
Changes versus prior-year comparable periods
- Q2 R&D expense rose 28% year over year, while total operating expenses rose 21%; six-month R&D and total operating expenses increased 30% and 24%, respectively. Higher spending primarily reflected vidofludimus calcium MS trials, IMU-856 development, drug supply, and R&D staffing.
- Q2 net loss increased 10% to $24.0 million; six-month net loss increased 15% to $49.3 million.
- Other income improved to $1.0 million in Q2 from expense of $1.3 million, and to $3.0 million for six months from expense of $0.7 million. Drivers included higher interest income, lower foreign-exchange losses, and government research support.
- Operating cash use increased to $39.5 million from $36.4 million for the first half. Investing activities provided $9.7 million, largely from maturity/sale of time deposits; financing provided $0.1 million, compared with $39.7 million in the prior-year period, chiefly from ATM stock sales.
Outlook, developments, and risks
- Vidofludimus calcium is in Phase 3 ENSURE trials for relapsing MS and a Phase 2 CALLIPER trial for progressive MS. Management expected CALLIPER interim data in fall 2023 and top-line results at year-end 2024; ENSURE interim data in late 2024 and the first trial readout at year-end 2025. These timelines depend on factors outside the company’s control.
- Management reported positive Phase 1 celiac-disease results for IMU-856 and was preparing a Phase 2 trial in active celiac disease. IMU-381 remained in preclinical development.
- The company deprioritized clinical development of izumerogant (IMU-935) in psoriasis and prostate cancer to focus resources on vidofludimus calcium and IMU-856.
- Management expects significant expenses and operating losses to continue and anticipates needing additional capital over time. Funding could come from equity, debt, collaborations, or licensing, but no external funding source is committed. Additional equity could dilute shareholders; financing may be unavailable or costly.
- As of July 28, 2023, remaining capacity was $75.0 million on the shelf registration statement, $8.1 million on the December 2020 ATM, and $80.0 million on the May 2022 ATM. No ATM sales occurred in the first half of 2023.
- Key risks include clinical-trial failure or delay, regulatory approval uncertainty, need for future financing, foreign-currency exposure, and potential disruption or restricted access to funds at financial institutions. The company reported no material litigation and no material change in internal control; disclosure controls were deemed effective.
Investor verification priorities
- Confirm clinical-trial enrollment, interim analyses, readout timing, and whether subsequent data support management’s expectations.
- Track cash burn, cash runway, and whether management’s stated runway remains achievable as trial spending progresses.
- Monitor use and terms of ATM or other financing capacity, share-count changes, and resulting dilution.
- Assess the durability and composition of other income, including interest, government support, and foreign-exchange effects.
- Review clinical, regulatory, funding, and banking risks, including the status of IMU-856’s planned Phase 2 program and IMU-935’s deprioritization.