Oric Pharmaceuticals, Inc. — Q1 2023 Form 10-Q Summary
Business context and reporting period
ORIC is a clinical-stage biopharmaceutical company focused on therapies intended to overcome cancer treatment resistance. The company has no approved products and has not generated revenue from product sales. The report covers the three months ended March 31, 2023, compared with the same period in 2022.
- Lead clinical programs: ORIC-533, ORIC-114 and ORIC-944, each in Phase 1b development.
- ORIC-533: Phase 1b trial in relapsed/refractory multiple myeloma; Canadian CTA cleared in Q1 2023.
- ORIC-114: Phase 1b trial in advanced solid tumors with EGFR or HER2 exon 20 alterations or HER2 amplifications, including certain CNS metastases.
- ORIC-944: Phase 1b trial in advanced prostate cancer.
Financial results and liquidity
| Metric | Q1 2023 | Q1 2022 | Change |
|---|---|---|---|
| Revenue | $0 | $0 | No revenue generated |
| Research and development expense | $19.5 million | $16.8 million | +$2.7 million |
| General and administrative expense | $6.2 million | $6.4 million | -$0.3 million |
| Total operating expenses | $25.7 million | $23.3 million | +$2.4 million |
| Interest income, net | $1.7 million | $0.1 million | +$1.6 million |
| Net loss | $23.9 million | $23.2 million | Loss increased $0.8 million |
| Basic and diluted loss per share | $0.53 | $0.59 | Per-share loss improved |
| Net cash used in operating activities | $20.6 million | $22.7 million | Use decreased $2.1 million |
Research and development spending increased primarily from higher external costs for ORIC-114, ORIC-944, and preclinical activities, partly offset by lower ORIC-533 manufacturing costs and reduced ORIC-101 costs after that program was discontinued. Stock-based compensation was $3.6 million, compared with $3.9 million in Q1 2022.
- Cash and cash equivalents at March 31, 2023: $59.0 million.
- Short-term investments: $130.6 million; long-term investments: $19.3 million.
- Total cash, cash equivalents and investments: approximately $208.9 million.
- Total assets: $226.6 million; total liabilities: $23.8 million; stockholders’ equity: $202.8 million.
- The filing reports no debt financing or material outstanding borrowings; liabilities primarily consist of accounts payable, accrued liabilities and lease-related obligations.
- Net decrease in cash, cash equivalents and restricted cash was $7.9 million, compared with $113.4 million in Q1 2022. Q1 2023 investing cash flow was positive $12.8 million because investment maturities exceeded purchases.
Material changes versus the prior comparable period
- R&D expense increased 16% to $19.5 million, reflecting continued advancement of the clinical pipeline.
- Interest income increased substantially because of the company’s larger investment portfolio and higher interest rates.
- Net loss increased modestly despite lower operating cash use, while weighted-average shares increased to 45.1 million from 39.4 million.
- Cash, cash equivalents and investments declined from approximately $228.2 million at December 31, 2022 to $208.9 million at March 31, 2023.
- The company entered into a Pfizer clinical development collaboration in December 2022 for a potential ORIC-533 combination study and sold Pfizer 5.4 million shares for gross proceeds of $25.0 million. The filing does not report collaboration revenue for Q1 2023.
Guidance, outlook, risks and unusual items
Management expects current cash, cash equivalents and investments to fund the current operating plan into the first half of 2025, although this estimate is subject to clinical, regulatory, spending and financing risks. The company expects significant losses and negative cash flows to continue and expects R&D expenses to increase as programs advance. Additional capital will likely be required through equity, debt, collaborations, licensing or other financing sources.
- Management expected to report initial data from the ORIC-533, ORIC-114 and ORIC-944 Phase 1b programs in the second half of 2023.
- Key risks include clinical-trial failure or delays, patient enrollment, adverse events, regulatory approval uncertainty, reliance on single-source third-party manufacturers and CROs, intellectual-property challenges, competition, inflation, cybersecurity and market volatility.
- The company disclosed exposure to banking-system risk following the March 2023 failure of Silicon Valley Bank, including the possibility that access to uninsured or otherwise unprotected funds could be delayed or impaired.
- The company reported no material litigation. It disclosed an SEC civil enforcement action against its Chief Business Officer relating to matters unrelated to ORIC; the SEC had concluded its investigation of the Chief Financial Officer without recommending further action.
- As of March 31, 2023, the company had an accumulated deficit of $358.2 million and stated that its financial statements were prepared on a going-concern basis with sufficient working capital for at least the next twelve months.
Important facts for investors to verify
- Clinical enrollment, safety findings and initial data timing for ORIC-533, ORIC-114 and ORIC-944.
- Whether the projected funding runway through the first half of 2025 remains valid as trial costs increase.
- Future financing needs, potential dilution and remaining availability under the $150 million ATM agreement.
- Terms, milestones and execution status of the Pfizer collaboration, including any future combination study of ORIC-533.
- Manufacturing capacity, supply redundancy and reliance on third-party CROs and manufacturers.
- Progress on regulatory submissions, intellectual-property protection and any developments related to the disclosed SEC enforcement action or potential confidentiality claims.