Century Therapeutics, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022; this is an annual filing, not a standalone fourth-quarter report. Century is a clinical-stage biotechnology company developing iPSC-derived, off-the-shelf cell therapies for cancers. Its lead candidate, CNTY-101, received FDA clearance to proceed in August 2022; patient dosing in its Phase 1 trial began in February 2023, after year-end.
Financial performance and liquidity
| Metric | FY2022 / year-end | FY2021 / prior year-end |
|---|---|---|
| Collaboration revenue | $5.2 million | $0 |
| Research and development expense | $97.2 million | $75.6 million |
| General and administrative expense | $31.9 million | $19.2 million |
| Net loss | $130.9 million | $95.8 million |
| Basic and diluted loss per share | $2.27 | $2.96 |
| Cash and cash equivalents | $84.3 million | $56.4 million |
| Investments | $283.1 million | $302.3 million |
| Debt principal outstanding | $10.0 million | $10.0 million |
Revenue came from the Bristol-Myers Squibb (BMS) collaboration; the company had no product sales and has not established product margins. Its $100 million BMS upfront payment is being recognized over time, not all as FY2022 revenue. The $50 million BMS share purchase was financing, not revenue. At year-end, current assets were $319.7 million and current liabilities were $29.8 million. Cash, cash equivalents and investments totaled $367.4 million; the cash-flow statement reports $86.2 million of cash, cash equivalents and restricted cash.
Net cash from operating activities was $14.1 million, versus $89.0 million used in 2021. The 2022 inflow was largely driven by a $118.0 million increase in deferred revenue associated with BMS, alongside a net loss of $130.9 million; it should not be read as evidence of profitable operations. Investing activities used $13.1 million and financing activities provided $27.2 million. The company reported a $2.5 million accumulated other comprehensive loss, including unrealized investment losses.
Management estimated existing cash, cash equivalents and investments would fund operating and capital needs into 2026, based on assumptions that may prove incorrect. The financial statements say resources are adequate for at least 12 months from issuance. Debt bears a variable rate, reported at 13.8% at year-end; scheduled future payments, including end-of-term fee, were $6.5 million in 2023 and $3.9 million in 2024. Contractual operating lease payments totaled $94.3 million undiscounted.
Material changes and notable items
- Net loss increased by $35.1 million year over year as R&D and G&A costs rose. R&D growth reflected personnel, facilities and research costs, partly offset by lower FCDI collaboration spending.
- FY2022 included a $10 million in-process R&D charge to amend FCDI agreements for Japan rights related to the BMS collaboration.
- In January 2023, Century reprioritized its pipeline: it paused CNTY-103 and a discovery program, prioritized CNTY-101, CNTY-102 and CNTY-107, and planned to continue partnered BMS programs. The restructuring reduced the workforce by approximately 25%, closed Seattle and Hamilton lab operations, and consolidated research in Philadelphia. Expected costs were approximately $2.0 million cash severance and $0.6 million non-cash stock compensation, primarily in 2023.
- Century completed and began operating its 53,000-square-foot Branchburg, New Jersey manufacturing facility. CNTY-101 clinical supply was being sourced from FCDI, and manufacturing scale-up, cryopreservation and product consistency remain development challenges.
Outlook, risks and contingencies
Century expects continued losses and higher spending as it advances clinical and preclinical programs, manufacturing capabilities and regulatory work. It expects to need additional financing over time; no financing was committed, although a $150 million at-the-market facility was available and had not been used through the filing date. Further equity financing could dilute shareholders. There is no product revenue or assurance that any candidate will be approved or commercialized.
Key risks include early-stage clinical uncertainty, safety and efficacy of novel gene-edited cell therapies, manufacturing and cryopreservation reliability, dependence on FCDI and BMS, competition, and the company’s lack of issued patents covering its product candidates. BMS may choose not to exercise license options, and contingent milestone and royalty payments depend on future development and sales. Bayer retains certain bidding rights over qualifying future iNK programs, subject to limitations; CNTY-101 is excluded. No material legal proceedings were reported.
The company disclosed that less than 1% of cash, cash equivalents, restricted cash and investments was held at Silicon Valley Bank at the time of its March 2023 closure, and it established a redundant operating account at another major U.S. bank. Management reported no material inflation impact in FY2022. The independent auditor issued an unqualified opinion on the financial statements; it did not provide an opinion on internal controls, and management concluded those controls were effective at year-end.
Important facts for investors to verify
- Latest cash, investment balances, spending pace and runway assumptions, including the gap between management’s “into 2026” estimate and the financial statements’ 12-month liquidity statement.
- How much of BMS deferred revenue is recognized, the timing and conditions of BMS license options, and whether any milestones or royalties become payable.
- Clinical progress and safety, persistence and efficacy data from the CNTY-101 Phase 1 trial; distinguish preliminary data from final results.
- Execution and cost of the 2023 restructuring, including realized savings and its effect on development timelines and staffing.
- Manufacturing readiness, cryopreserved product stability, FCDI supply arrangements and operational performance of the Branchburg facility.
- Debt repayment and variable-rate exposure, potential use of the ATM facility, and any resulting dilution or financing needs.