Milestone Pharmaceuticals Inc. — 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. Filed March 21, 2024. The company is a clinical-stage biopharmaceutical developer; it had no approved products or product sales during the period. Its lead candidate, self-administered nasal-spray etripamil, is being developed for paroxysmal supraventricular tachycardia (PSVT) and atrial fibrillation with rapid ventricular rate (AFib-RVR).
Financial performance and liquidity
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Revenue | $1.0 million | $5.0 million | Down $4.0 million |
| Research and development expense, net | $31.1 million | $39.8 million | Down 22.0% |
| General and administrative expense | $15.9 million | $15.7 million | Up 1.4% |
| Commercial expense | $15.1 million | $9.1 million | Up 66.2% |
| Total operating expenses | $62.1 million | $64.6 million | Down 3.9% |
| Operating loss | $61.1 million | $59.6 million | Loss widened $1.5 million |
| Net loss | $59.7 million | $58.4 million | Loss widened $1.3 million |
| Net loss per share, basic and diluted | $1.39 | $1.38 | Loss per share increased |
| Net cash used in operating activities | $46.4 million | $52.5 million | Use decreased $6.0 million |
- 2023 revenue was a milestone payment under the Ji Xing license agreement; it is not product-sales revenue. No product-sale revenue is expected in the near term.
- Year-end cash and cash equivalents were $13.8 million and short-term investments were $52.2 million, totaling $66.0 million. Current assets were $73.0 million versus current liabilities of $7.2 million; the filing does not report a conventional operating-business margin.
- At year-end, total liabilities were $58.5 million and shareholders’ equity was $16.8 million. The balance included $49.8 million carrying value of senior secured convertible notes, with $50.0 million original principal.
- The notes bear 6% annual interest, mature March 31, 2029, are secured by substantially all company and subsidiary assets, and are convertible at an initial price of approximately $5.23 per share. Interest may be paid in kind for the first three years.
- Investing activities provided $4.8 million in 2023, primarily reflecting purchases and maturities of short-term investments. Financing activities provided $47.8 million, principally from the notes.
Material changes and developments
- Revenue fell 80%, reflecting lower collaboration milestone revenue: $1.0 million in 2023 versus $5.0 million in 2022.
- R&D expense declined as Phase 3 PSVT studies were completed, while commercial expense rose as the company prepared for a potential launch.
- In October 2023, Milestone submitted an NDA for etripamil for PSVT. In December, FDA issued a refuse-to-file letter because the application needed clarification and reformatting of adverse-event timing data. FDA did not identify concerns about the nature or severity of adverse events.
- After a February 2024 Type A meeting, management said it would restructure and reformat the data and planned to resubmit in Q2 2024. FDA had not requested additional clinical efficacy or safety trials before resubmission; acceptance and approval remain uncertain.
- In February 2024, the company completed a public offering, including the underwriters’ fully exercised option, for approximately $32.4 million net proceeds. The offering included common shares and pre-funded warrants and materially increased potential share dilution.
- The company reported 47 full-time employees at year-end 2023 and a first-quarter 2024 reduction in force that left 27 employees.
Outlook, management commentary and key risks
- Management said cash-conservation measures, including program deferrals and restructuring, were expected to extend available cash into 2026, including through the anticipated FDA review timeline for a resubmitted PSVT NDA. The filing separately states that year-end resources were expected to fund operations for at least 12 months; the longer runway depends on the conservation plan and assumptions.
- If FDA approves etripamil, Milestone expects a conditional $75 million payment under its royalty agreement with RTW, in exchange for tiered royalties on U.S. net sales. The payment requires FDA approval by September 30, 2025 and satisfaction of other conditions; it is not assured funding.
- The Phase 3 RAPID trial met its primary endpoint: conversion to sinus rhythm by 30 minutes was 64.3% with etripamil versus 31.2% with placebo (p<0.001); median conversion time was 17.2 versus 53.3 minutes. A pooled analysis reported fewer additional interventions and emergency-department visits with etripamil.
- The earlier Phase 3 NODE-301 trial did not meet its five-hour primary endpoint, although 30-minute analyses were statistically significant. This mixed pivotal-trial history and the FDA filing issue remain relevant to regulatory risk.
- For AFib-RVR, Phase 2 ReVeRA results showed a placebo-adjusted maximum ventricular-rate reduction of 29.91 beats per minute (p<0.0001). The company planned further FDA discussions and a potential Phase 3 study; timing and design were not finalized.
- Milestone expects continuing operating losses and negative operating cash flows and may require additional financing. Risks include regulatory delay or rejection, clinical and safety uncertainty, commercial adoption and reimbursement, reliance on third-party manufacturers and a single-source nasal device, competition, and potential dilution or restrictions from future financing.
Most important facts for investors to verify
- Whether the PSVT NDA was resubmitted in Q2 2024, accepted for review, and assigned a review timetable; confirm any subsequent FDA requests or decisions.
- Current cash, investment balances, burn rate and runway after the 2024 offering and cost-reduction measures, including assumptions behind the stated extension into 2026.
- Offering-related dilution, including common shares, pre-funded warrants, outstanding options and convertible-note conversion potential.
- Conditions and deadline for the contingent $75 million royalty-sale payment, and the resulting royalty burden if it closes.
- Final and complete clinical safety and efficacy evidence for etripamil, including the differing RAPID and NODE-301 primary-endpoint outcomes and the planned AFib-RVR trial pathway.
- Commercial manufacturing and nasal-device supply readiness, as well as the company’s ability to secure coverage, reimbursement and market uptake if the product is approved.