Milestone Pharmaceuticals Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Milestone is a clinical-stage biopharmaceutical company developing etripamil, a self-administered nasal-spray calcium channel blocker, principally for paroxysmal supraventricular tachycardia (PSVT). It had no approved products or product sales.
Financial results and liquidity
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | No product revenue reported | No product revenue reported |
| Research and development, net | $8.8 million | $8.6 million; up 2.0% |
| General and administrative | $3.6 million | $2.6 million; up 38.4% |
| Commercial expense | $1.6 million | $1.4 million; up 19.8% |
| Total operating expenses / operating loss | $14.0 million | $12.6 million; expenses up 11.5% |
| Net loss | $14.0 million | $12.5 million; loss increased 11.9% |
| Net loss per share, basic and diluted | $0.33 | $0.30 |
| Cash used in operating activities | $13.9 million | $12.5 million |
At March 31, 2022, cash and cash equivalents were $92.2 million and short-term investments were $8.0 million, or $100.2 million combined. Total assets were $105.8 million; total liabilities were $5.0 million, including operating lease liabilities. The filing reports no conventional borrowings. Accumulated deficit was $220.3 million. Cash and cash equivalents decreased $21.9 million during the quarter, including an $8.0 million purchase of short-term investments. The company reported no material off-balance-sheet arrangements.
Gross margins are not applicable because the company had no product sales. Management said existing resources were expected to support operations into the second half of 2023 and for at least 12 months from filing; this outlook depends on its operating plan and is subject to clinical, financing, and market uncertainties.
Material changes and business developments
- Net loss increased by $1.5 million year over year. Higher G&A reflected personnel, infrastructure, and other costs; commercial expense rose mainly with personnel costs. R&D increased modestly, as higher regulatory costs were partly offset by lower clinical and manufacturing costs.
- Milestone was conducting Phase 3 PSVT studies RAPID and NODE-303 and a Phase 2 AFib-RVR study, ReVeRA. COVID-19 continued to delay site initiation and patient enrollment, including at RAPID and ReVeRA sites.
- The previously completed NODE-301 Phase 3 study did not meet its original primary endpoint over five hours. After FDA discussions, the company revised the endpoint to time to conversion within 30 minutes. A retrospective analysis under the revised plan showed conversion in 54% of etripamil patients versus 35% of placebo patients (p=0.02). RAPID was designed to use the revised endpoint and permit a repeat dose for patients without relief after ten minutes; topline results were expected in the second half of 2022.
- Management reported NODE-302 open-label safety-extension results: among the described safety population, the 30-minute conversion rate was 60.2%, with median conversion time of 15.5 minutes. The filing characterized etripamil as generally well tolerated; these findings do not establish regulatory approval or success in the pivotal RAPID trial.
Outlook, risks, and other notable items
Management expects operating losses and expenses to increase as clinical development and preparations for potential commercialization continue. It anticipated increased R&D, G&A, and commercial spending; commercial costs could rise substantially in the six to twelve months before an NDA filing. The company did not provide a specific expense or revenue forecast and cannot predict when, if ever, it will generate product revenue or reach profitability.
Key risks include clinical efficacy and safety, regulatory approval, trial enrollment and timing, manufacturing and third-party performance, and the need for future financing. COVID-19 had affected trial recruitment and site activity. Management also cited potential market disruption related to inflation, monetary tightening, and the war in Ukraine, which could constrain access to capital. No material legal proceedings or material changes to previously disclosed risk factors were reported. Disclosure controls were assessed as effective at a reasonable-assurance level.
Important facts for investors to verify
- RAPID trial results and whether the revised 30-minute endpoint and repeat-dose regimen support the planned regulatory pathway.
- FDA and other regulators’ requirements for the efficacy and safety datasets, including final sizing and progress of NODE-303.
- ReVeRA enrollment, timing, and results, and the extent to which COVID-19 or other factors continue to delay trials.
- Whether the projected runway into the second half of 2023 remains achievable given operating burn, development costs, and access to financing.
- Potential dilution: 12.3 million pre-funded warrants were outstanding at quarter-end, in addition to outstanding options.