Filing identity and reporting period
Important discrepancy: The request identifies Lisata Therapeutics, Inc. and 2017 Q3, but the supplied filing is for Caladrius Biosciences, Inc., a Form 10-Q for the quarter ended September 30, 2018. The summary below reflects the supplied filing, not the requested company or period.
Business context
Caladrius is a development-stage biopharmaceutical company advancing cell therapies. Its programs include CLBS12 for critical limb ischemia, CLBS14-CMD for coronary microvascular dysfunction, CLBS14-RfA for refractory angina, and CLBS03 for recent-onset type 1 diabetes. The company sold its PCT business in 2017; that business is reported as discontinued operations.
Financial results and liquidity
| Metric | Three months ended Sep. 30, 2018 | Nine months ended Sep. 30, 2018 | Comparable 2017 period |
|---|---|---|---|
| Revenue from continuing operations | No revenue line reported | No revenue line reported | No revenue line reported |
| Research and development expense | $1.70 million | $6.09 million | $3.19 million and $11.19 million |
| General and administrative expense | $2.06 million | $7.10 million | $2.94 million and $9.08 million |
| Operating loss | $3.76 million | $13.19 million | $6.13 million and $20.27 million |
| Net loss from continuing operations | $3.55 million | $12.61 million | $3.55 million and $12.21 million |
| Net income (loss), including discontinued operations | $(3.55) million | $(12.61) million | $(3.55) million and $25.12 million |
Margins are not meaningful because the filing reports no continuing-operations revenue. The 2017 nine-month net income primarily reflected the PCT sale, including a $51.7 million gain on sale, partly offset by related items and tax expense.
At September 30, 2018, cash and cash equivalents were $14.37 million and marketable securities were $31.78 million, totaling approximately $46.15 million. Working capital was approximately $42.4 million; total assets were $47.85 million, total liabilities $7.04 million, and total stockholders’ equity $40.81 million. Current liabilities were $4.89 million. The balance sheet reported no current notes payable; the filing does not identify material outstanding borrowing at period-end.
For the first nine months of 2018, continuing-operations operating cash use was $16.94 million, investing cash use was $3.64 million, and financing cash provided was $0.79 million. Cash, cash equivalents and restricted cash decreased by $19.79 million. The comparable 2017 continuing-operations figures were $16.27 million used in operations, $23.22 million provided by investing, and $0.68 million used in financing.
Material changes versus prior periods
- Operating expenses fell 39% year over year in the quarter and 35% for the nine-month period. R&D fell as the CLBS03 trial completed enrollment and manufacturing activity wound down; ischemic-repair spending increased with CLBS12, CLBS14-CMD and CLBS14-RfA development.
- Management attributed lower G&A to reduced headcount and corporate activity; the nine-month comparison also reflected a $1.4 million gain on sale of a CFC device.
- Cash and marketable securities declined from approximately $55.1 million at December 31, 2017 to $46.15 million at September 30, 2018. The $5.0 million PCT-sale escrow was released to the company in June 2018.
- Prior-year results included PCT discontinued operations and sale proceeds; comparisons of total net income therefore do not represent a comparable ongoing business.
Outlook, commentary and risks
- Management said existing cash was expected to fund CLBS03 development and other operating expenses for at least 12 months after the financial statements were issued. Further development of CLBS14-RfA and U.S. development of CLBS12 would require future capital raises.
- The company had an at-the-market equity sales agreement of up to $25 million; it had raised approximately $1.0 million net under the agreement through September 30, 2018. Additional equity could dilute shareholders, and financing may not be available on acceptable terms.
- CLBS12 was enrolling in a Phase 2 Japanese study, with potential early conditional approval dependent on a successful outcome. The company continued seeking a Japanese partner.
- CLBS03 enrollment was complete at 110 patients. An interim analysis reported in March 2018 indicated the therapy remained well tolerated and was not futile for therapeutic effect; final trial outcomes remain important.
- CLBS14-RfA received FDA RMAT designation. After quarter-end, management met with the FDA on October 30, 2018 to discuss development requirements; the filing says development paths remained under consideration.
- Key risks include clinical and regulatory uncertainty, patient enrollment and trial execution, intellectual-property and licensing matters, reliance on external financing and grants, and privacy-law compliance concerning sensitive patient data. The company reported no material pending legal claims expected to adversely affect its financial condition or results.
Important facts for investors to verify
- Confirm the filing identity and period: the supplied report is Caladrius Biosciences’ 2018 Q3 filing, not Lisata Therapeutics’ 2017 Q3 filing.
- Review the cash-burn assumptions behind management’s stated 12-month runway and the funding required for planned trials.
- Track CLBS03 final results, CLBS12 enrollment and outcomes, and the FDA-agreed development path for CLBS14-RfA.
- Check subsequent use of the $25 million ATM facility and any resulting share dilution.
- Verify whether the contingent $5.0 million PCT-sale milestone was achieved; the filing valued it at zero at the sale date.