PluriStem Therapeutics Inc. — Form 10-Q Summary
Reporting-period note: The supplied filing is for Pluristem Therapeutics Inc. (now identified in the request metadata as Pluri Inc.) and covers the fiscal quarter ended March 31, 2022, with nine-month results for the period then ended. It is not a 2021 third-quarter filing. Financial statements are unaudited; amounts below are U.S. dollars in thousands unless stated otherwise.
Business context and reporting period
Pluristem is a biotechnology company developing placenta-derived cell therapies and a scalable cell-expansion platform. It reported clinical-stage regenerative medicine programs and a new cultured-meat venture, Plurinuva, formed with Tnuva. The company reported one business segment.
Financial performance and position
| Metric | Three months ended March 31, 2022 | Nine months ended March 31, 2022 |
|---|---|---|
| Revenue | $234 | $234 |
| Net loss | $9,918 | $32,290 |
| Net loss attributable to shareholders | $9,865 | $32,237 |
| Basic and diluted loss per share | $0.31 | $1.00 |
| Operating loss | $10,475 | $32,711 |
| Net R&D expense | $6,156 | $19,016 |
| General and administrative expense | $4,553 | $13,929 |
Revenue came from PLX cell sales for research use and a license agreement with Takeda. Revenue remained immaterial relative to operating costs; the filing does not provide a meaningful operating margin.
For the nine months, operating cash use was $28,074, versus $21,313 in the prior-year period. Investing activities provided $14,738, mainly from withdrawals of long-term deposits; financing activities provided $7,500 from Tnuva’s Plurinuva investment. Cash, cash equivalents and restricted cash ended at $24,930, compared with $12,851 a year earlier.
At March 31, 2022, cash and cash equivalents were $23,791; short-term deposits, $38,189; and long-term deposits, $4,235. Management reported consolidated cash resources of approximately $66,215, excluding restricted cash. Current assets were $64,313 and current liabilities were $7,822, yielding reported working capital of $56,491. Total assets were $79,127; total equity was $40,143, including $2,050 of non-controlling interests. Accumulated deficit was $362,258.
Long-term liabilities included a $22,924 EIB loan balance and $7,271 of operating lease liabilities; current lease liabilities were $669. The EIB’s first tranche was €20 million, due June 1, 2026, with 4% annual interest payable with principal. Additional EIB funding of up to €30 million depends on milestones.
Changes versus the prior comparable period
- Nine-month revenue increased from zero to $234. Net loss narrowed from $35,297 to $32,290, and loss per share improved from $1.31 to $1.00.
- Nine-month net R&D expense fell 12% from $21,581; G&A expense fell 4% from $14,455. Management attributed the R&D decline mainly to lower clinical-trial subcontractor costs and share-based compensation, partly offset by payroll and manufacturing-material costs.
- Quarterly net loss declined from $14,254 to $9,918, and loss per share improved from $0.48 to $0.31. Quarterly net R&D expense decreased 20% and G&A expense decreased 31% year over year.
- Operating cash use increased to $28,074 from $21,313. Cash and cash equivalents declined from $31,241 at June 30, 2021 to $23,791 at March 31, 2022, while deposit balances also shifted between short- and long-term classifications.
- Outstanding shares increased to 32,342,396 from 31,957,782 at June 30, 2021. The nine-month period included share-based compensation and the Plurinuva transaction; no shares were sold under the ATM during the period.
Outlook, developments and risks
- Management said existing resources and its operating plan should fund obligations for at least 12 months from issuance of the statements. It does not expect significant product-sales revenue in the next 12 months and said additional funding may be needed for commercialization, R&D and clinical trials. Future funding sources may include grants, partnerships, licensing, joint ventures, EIB tranches and equity sales.
- The Phase III hip-fracture muscle-recovery study completed enrollment of 240 patients; topline results were expected in calendar Q3 2022. The COVID-19 ARDS studies did not meet their primary endpoint of statistically significant improvement in ventilator-free days at 28 days.
- Pluristem reported positive final Phase I results for PLX-R18 in incomplete hematopoietic recovery following transplantation, including increases in blood-cell measures and reduced transfusion use. The filing describes these findings as study results, not regulatory approval or proof of efficacy in a larger trial.
- Tnuva invested $7,500 in Plurinuva for a 15.79% interest and warrants to invest up to an additional $7,500, subject to terms. Pluristem reported an 80.34% Plurinuva ownership interest after allocating shares to executives. Plurinuva received exclusive worldwide cultured-meat technology rights; Pluristem is entitled to mid-single-digit royalties on future net sales under the license.
- A November 2021 vendor-impersonation cyber incident caused a $616 loss. The company reported recovering the full amount through law-enforcement-assisted recovery and insurance and said no data was stolen or damaged. It cautioned that future attacks may not be prevented.
- Potential obligations include contingent IIA royalties of $27,574, plus applicable interest, payable from qualifying future sales; other grant-related royalty contingencies; and future EIB revenue-based royalties beginning in fiscal 2024. The EIB royalty liability could not be measured at the reporting date.
- The facility lease was extended to December 2026, with an option through December 2031; monthly payments are approximately $94 and rise 10% if the extension option is exercised. Management identified clinical, regulatory, funding, commercialization, currency and cybersecurity uncertainties as relevant risks.
Important facts for investors to verify
- Confirm the filing identity and period: this is Pluristem Therapeutics Inc.’s Form 10-Q for the quarter ended March 31, 2022, not a 2021 Q3 report.
- Check subsequent results and regulatory or commercial progress for the Phase III hip-fracture study and PLX-R18 program; verify whether anticipated trial milestones occurred.
- Track operating cash use, deposits and cash runway against management’s 12-month sufficiency statement, including any new equity issuance, grants or EIB milestone funding.
- Review Plurinuva’s warrant exercise, commercialization agreement, ownership and royalty terms, and whether the venture generates meaningful revenue.
- Assess the impact of contingent grant royalties, EIB revenue-based royalties, lease commitments and any further cybersecurity losses or controls developments.