Pliant Therapeutics, Inc. — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 30, 2022. The company is a clinical-stage biotechnology company developing therapies for fibrosis; it has no product-sales revenue. Financial statements are unaudited.
Financial performance and position
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $1.5 million | $1.6 million | $7.7 million | $5.6 million |
| Research and development | $24.6 million | $21.1 million | $71.8 million | $58.8 million |
| General and administrative | $8.8 million | $7.7 million | $25.7 million | $19.7 million |
| Operating loss | $31.9 million | $27.1 million | $89.8 million | $72.9 million |
| Net loss | $30.6 million | $27.0 million | $88.3 million | $72.7 million |
| Net loss per share, diluted | $0.65 | $0.75 | $2.22 | $2.03 |
The company reported no product-sales revenue; revenue is from its Novartis collaboration. No product gross margin is reported. Q3 net loss widened year over year, while reported loss per share narrowed for the quarter, in part alongside a higher weighted-average share count.
At September 30, 2022, cash and cash equivalents were $44.6 million and short-term investments were $315.6 million, totaling $360.2 million. Current assets were $366.0 million, current liabilities $26.2 million, total liabilities $40.2 million, and stockholders’ equity $337.0 million. Accumulated deficit was $303.4 million.
For the first nine months, operating cash use was $63.4 million, compared with $55.6 million in 2021. Investing activities used $170.2 million, primarily reflecting purchases of short-term investments; financing provided $226.6 million, including $215.4 million net proceeds from the July equity offering and a $10.0 million term-loan draw. Cash and cash equivalents decreased $7.0 million during the period. Short-term investments had $2.3 million of net unrealized losses recorded in other comprehensive loss.
Changes versus the prior comparable period
- Nine-month revenue increased $2.1 million, mainly because Novartis exercised an option on a research target, triggering a $4.0 million validation fee; lower research-services revenue partly offset the increase. Q3 revenue declined $0.1 million.
- Nine-month R&D expense rose $13.0 million, principally from third-party preclinical and manufacturing costs and employee-related costs; lower clinical-trial expense partly offset the increase.
- Nine-month G&A expense rose $6.0 million, reflecting employee costs, professional services, and charitable contributions.
- The July public offering issued 12.4 million shares at $18.50 per share, generating approximately $215.4 million net proceeds. Shares outstanding were 48.75 million at September 30, versus 36.08 million at December 31, 2021.
- The company entered into a new Oxford term-loan facility in May 2022 and had $9.9 million of loan carrying value at quarter-end.
Outlook, developments, and risks
- Management said existing cash, cash equivalents and investments, together with the July offering proceeds and available or contingently available Oxford borrowings, were expected to fund projected operating requirements into the middle of 2025. Management cautioned that assumptions may prove wrong and additional capital will be needed to complete development programs.
- In October 2022, after quarter-end, the Oxford facility was amended to extend the draw period for the first two tranches to mid-February 2023. The company said it could draw an additional $40 million during that period; a further $50 million depends on a development milestone and lender discretion. The facility is secured by substantially all assets, bears interest at one-month SOFR plus 8.5% subject to a floor and cap, and has an effective rate of 12.45%. Interest-only payments are scheduled through July 2026, with extensions possible; the loan matures in May 2027, also extendable. The filing reports no warrants or financial covenants.
- Management reported positive 12-week Phase 2a INTEGRIS-IPF safety and efficacy signals at 40, 80 and 160 mg of bexotegrast, and said the independent safety board recommended continuing the trial without modification. The 320 mg cohort’s 12-week data were expected early in Q1 2023; 24-week data were expected in the first half of 2023. These are company-reported trial updates, not regulatory approval or proof of efficacy.
- The INTEGRIS-PSC safety board also recommended continuing without modification; topline data were expected in Q3 2023. The oncology program’s IND submission was expected by year-end 2022, and the muscular-dystrophy program’s in 2023.
- Management expects R&D and G&A expenses to increase as programs advance and the company expands. The company expects continued significant losses and has not generated product revenue.
- Key risks include clinical failure, adverse events, patient-enrollment and COVID-19-related delays, reliance on third-party manufacturers (including a sole supplier for bexotegrast), dependence on Novartis for PLN-1474, competition, intellectual-property challenges, additional financing needs and Oxford-loan restrictions. No material legal proceedings were reported.
Important facts for investors to verify
- Whether subsequent bexotegrast IPF and PSC trial results meet the company’s stated timelines and support the early-stage signals reported here.
- Whether clinical, manufacturing, enrollment, or regulatory developments change the projected cash runway to mid-2025 or require additional financing.
- Availability and conditions for Oxford’s remaining loan tranches, including the amended draw deadline, interest terms, collateral, and repayment schedule.
- Novartis program progress, remaining milestone eligibility, research funding, and potential royalties; the filing states $387.0 million in contingent payments remained eligible.
- The effect of the July offering and future equity awards or financing on dilution; also note that the filing reports 48,759,419 shares outstanding as of November 4, 2022.