Pliant Therapeutics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Pliant is a clinical-stage biopharmaceutical company developing fibrosis therapies; it had no product sales. Financial figures below are unaudited and in U.S. dollars.
Financial performance and position
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | $1.2 million | $2.2 million; down $0.9 million |
| Research and development expense | $20.9 million | $18.5 million; up $2.4 million |
| General and administrative expense | $8.6 million | $6.6 million; up $2.0 million |
| Total operating expenses | $29.5 million | $25.1 million |
| Net loss | $28.1 million | $22.9 million |
| Basic and diluted net loss per share | $0.78 loss | $0.64 loss |
| Net cash used in operating activities | $20.5 million | $13.7 million |
| Cash, cash equivalents and short-term investments | $178.3 million at March 31, 2022 | $200.6 million at December 31, 2021 |
Revenue was primarily Novartis-funded research and development services for PLN-1474; the decrease reflected services that were substantially complete in Q1 2021. R&D expense rose mainly due to third-party preclinical costs, including manufacturing, and employee costs, partly offset by lower clinical-trial expenses. G&A growth was primarily employee-related. The filing does not present a meaningful product gross margin. Accumulated deficit was $243.2 million. Pliant reported no debt at March 31, 2022.
Cash and cash equivalents were $32.5 million and short-term investments were $145.7 million at quarter-end. Cash used in investing activities was $1.5 million, and financing activities used $0.2 million. The quarter included a $0.7 million unrealized loss on short-term investments in other comprehensive loss.
Material changes and outlook
- Compared with Q1 2021, revenue declined while operating expenses and net loss increased; operating cash use also increased by $6.8 million.
- Management expected R&D and G&A expenses to increase as clinical and preclinical programs advance and the company expands its operations. Pliant provided no revenue or earnings guidance.
- Management estimated existing resources together with proceeds available under the May 2022 Oxford loan facility would fund operations to mid-2024. The filing cautions that this estimate depends on assumptions and development milestones; without achieving all predetermined loan milestones, available resources were expected to cover at least 12 months from the report date.
- After quarter-end, Pliant entered into an Oxford term loan facility of up to $100 million and drew $10 million at closing. A further $15 million of the initial $25 million tranche was available through year-end; up to $75 million more was subject to specified development conditions and lender discretion. The loan bears interest at one-month term SOFR plus 8.5%, subject to a floor and cap. It has an interest-only period through July 2026, potentially extendable, and no warrants or financial covenants. Borrowings are secured by substantially all assets, with intellectual property excluded subject to specified rights and a negative pledge.
Programs, risks and notable items
- PLN-74809, an oral dual integrin inhibitor for idiopathic pulmonary fibrosis (IPF) and primary sclerosing cholangitis (PSC), was the lead wholly owned candidate. The INTEGRIS-IPF Phase 2a trial had completed treatment, with data anticipated in mid-2022. A separate 320 mg IPF trial was enrolling. Topline INTEGRIS-PSC data were expected in the first half of 2023.
- The company reported a positive independent safety-monitoring review recommending the INTEGRIS-IPF trial continue without modification, with no safety concerns identified by the board to date. It also reported Phase 1b findings of TGF-β inhibition in healthy participants; these are not evidence of clinical efficacy in patients.
- PLN-74809 received FDA Fast Track designation for IPF in April 2022 and EMA orphan designation for PSC. These designations do not assure approval or commercial success. Pliant expected to submit IND applications for preclinical oncology and muscular-dystrophy programs by year-end 2022.
- PLN-1474 is partnered with Novartis for NASH-related liver fibrosis. Novartis is responsible for its development, manufacturing and commercialization. Pliant had received $25 million in contingent payments, with $391 million in potential milestones remaining; none were recognized in Q1 2022. Approximately $1.2 million of research and development funding remained available under the arrangement.
- Key risks include continued substantial losses and the need for additional capital; uncertain clinical efficacy, safety, trial enrollment and regulatory outcomes; reliance on third-party manufacturers and service providers; competition; intellectual-property risks; and possible COVID-19-related disruption. Pliant reported slower-than-expected enrollment in some trials due in part to the pandemic.
- No material legal proceedings were reported. Disclosure controls were assessed as effective at a reasonable assurance level, and no material change in internal control over financial reporting was identified for the quarter.
Important facts for investors to verify
- Whether PLN-74809’s upcoming trial readouts support safety, tolerability and efficacy, and how results affect subsequent development plans.
- Actual cash burn and remaining liquidity, including availability and conditions for undrawn Oxford loan tranches; the stated mid-2024 runway is an estimate, not a guarantee.
- Clinical-trial enrollment, timelines and potential COVID-19 or manufacturing-related delays.
- Progress of Novartis’s PLN-1474 program and whether any milestone payments become payable; the potential milestone amount is contingent, not contracted near-term revenue.
- Future financing needs and potential dilution, including possible use of the $150 million at-the-market equity program, which had not been used as of the filing.