Pluri Inc. — Form 10-K summary
Reporting period: Fiscal year ended June 30, 2023, with comparison to the year ended June 30, 2022. Although the request metadata says “2022 Q4,” this filing is an annual report for FY2023. Financial statement amounts below are U.S. dollars; figures are converted from thousands where appropriate.
Business context
Pluri is a development-stage biotechnology company with a 3D cell-expansion platform and in-house GMP manufacturing facility. Its activities center on placenta-derived PLX cell therapies, cultivated-food technology through majority-owned Ever After Foods, and a biologics collaboration. It reported one operating segment and has not yet generated significant or consistent commercial revenue.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $0.287 million | $0.234 million |
| Gross profit | $0.278 million | $0.234 million |
| Research and development, net | $15.745 million | $24.377 million |
| General and administrative expenses | $11.779 million | $17.450 million |
| Operating loss | $27.246 million | $41.593 million |
| Net loss | $28.887 million | $41.374 million |
| Net loss per share | $0.78 | $1.28 |
| Cash used in operating activities | $22.857 million | $36.501 million |
Revenue increased about 23%, but remained small relative to operating costs. Gross profit was $278,000 on $287,000 of revenue; the resulting gross margin is not a meaningful indicator of an established commercial business at this revenue scale. The net loss narrowed about 30%, primarily reflecting lower R&D and G&A spending. Net R&D costs fell 35%, following completed or concluded studies, reduced materials purchases, staffing reductions and lower share-based compensation; G&A fell 32%, mainly due to lower share-based compensation and employee-related expenses.
At June 30, 2023, current assets were $41.409 million and current liabilities were $5.621 million, giving working capital of $35.788 million. Cash and cash equivalents were $5.360 million, restricted cash $0.269 million, short-term bank deposits $34.811 million and long-term restricted deposits $0.627 million. The company reported total cash, deposits and restricted balances of $41.067 million. Cash and cash equivalents plus restricted cash decreased from $10.779 million in FY2022; short-term deposits decreased from $45.244 million. Management reported an accumulated deficit of $399.584 million.
Long-term liabilities included a $23.530 million EIB loan and $5.748 million of operating lease liabilities; current lease liabilities were $0.627 million. The EIB loan’s first tranche was €20 million, bears 4% annual interest and is due June 1, 2026. EIB royalties on future revenue may also apply from FY2024 through FY2030. Pluri received $8.024 million net from its December 2022 share-and-warrant placement. It used $22.857 million of cash in operations in FY2023.
Material developments, outlook and risks
- Clinical results were mixed: the Phase III hip-fracture study showed some muscle-strength findings but missed its primary endpoint; the COVID-19 ARDS Phase II studies did not meet their primary endpoint; and the CLI Phase III study was stopped after an independent monitoring committee judged it unlikely to meet its primary endpoint.
- In July 2023, after year-end, Pluri signed a three-year, $4.2 million NIAID contract to advance PLX-R18 for hematopoietic acute radiation syndrome. The stated initial performance period runs July 2023 to June 2024, with possible extensions; the contract is subject to compliance requirements.
- Ever After Foods completed proof of concept for cultivated meat using Pluri’s platform. In September 2022 Pluri also entered an API collaboration; FY2023 revenue was mainly related to that collaboration. The filing does not provide a clear breakdown of revenue by activity beyond the stated sources.
- Management does not expect significant product-sale revenue in the next 12 months and expects near-term licensing revenue, if any, to be unlikely to exceed operating costs. It said current resources and its operating plan should fund operations for at least 12 months from the financial-statement issuance date, while warning that further resources may be needed for long-term development and commercialization.
- Funding remains a central risk: Pluri may need additional capital, grants, licensing or collaboration proceeds; equity financing could dilute shareholders. A July 2023 shelf registration contemplated offerings of up to $200 million. The ATM agreement with Jefferies was terminated effective September 8, 2023.
- Nasdaq notified Pluri in April 2023 that its share bid price had been below $1 for 30 consecutive trading days. The stated compliance deadline was October 16, 2023; the company said it could consider a reverse stock split and faced possible transfer or delisting if it did not regain compliance.
- Other material exposures include clinical and regulatory uncertainty, reliance on partners and suppliers, evolving cultivated-meat regulation and consumer acceptance, foreign-exchange movements, restrictions attached to IIA grants, EIB covenants, and political and security conditions in Israel. The company also disclosed a 2021 vendor-impersonation fraud loss of about $616,000; it recovered the full amount through recovery efforts and insurance.
- The independent auditor issued an unqualified opinion on the financial statements and reported no critical audit matters. Management concluded disclosure controls and internal control over financial reporting were effective as of June 30, 2023; the auditor did not audit internal control effectiveness.
Key facts for investors to verify
- How long the $41.067 million reported cash-and-deposit position can support operations, accounting for restricted balances, burn rate and the EIB repayment and royalty terms.
- Whether Pluri secures additional financing or commercial partnerships, and the potential dilution and warrant impact from outstanding securities and future offerings.
- Regulatory and clinical next steps for PLX-R18 and other candidates, particularly in light of the missed or terminated prior trial endpoints.
- Actual revenue, costs and commercial progress from the API collaboration, Ever After Foods and other licensing or technology arrangements.
- Subsequent developments concerning Nasdaq listing compliance, the July 2023 NIAID contract and the proposed shelf offering.