Pluri Inc. (formerly Pluristem Therapeutics Inc.) — Form 10-K summary
Reporting period: Fiscal year ended June 30, 2021; comparative period is the year ended June 30, 2020. The request metadata says “2020 Q4,” but the supplied filing is an FY2021 annual report, not a Q4 report. Unless stated otherwise, financial figures below are in U.S. dollars.
Business context
Pluri is a development-stage biotechnology company focused on placenta-derived, off-the-shelf cell therapy candidates. Its programs address muscle recovery after hip-fracture surgery, COVID-19-associated acute respiratory distress syndrome (ARDS), hematologic recovery after transplantation, chronic graft-versus-host disease, and acute radiation syndrome. The company had no meaningful commercial product revenue and depended on financing, grants, and potential collaborations.
Financial performance and liquidity
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $0 | $23,000 |
| Research and development, net | $30.066 million | $21.577 million |
| General and administrative expense | $20.557 million | $7.922 million |
| Operating loss | $50.623 million | $29.476 million |
| Financial income, net | $758,000 | $324,000 |
| Net loss | $49.865 million | $29.152 million |
| Basic and diluted loss per share | $1.77 | $1.60 |
| Cash used in operating activities | $30.910 million | $26.369 million |
Gross and operating margins are not useful indicators because revenue was nil in FY2021 and only $23,000 in FY2020. At June 30, 2021, current assets were $67.371 million and current liabilities were $11.517 million, giving working capital of $55.854 million. Cash and cash equivalents were $31.241 million; including restricted cash, the cash-flow statement reports $31.838 million. Short-term deposits were $33.709 million and long-term deposits were $23.269 million; cash, cash equivalents, and deposits totaled approximately $88.219 million.
Financing activities provided $61.402 million in FY2021: $36.589 million net from share issuances and warrant exercises, and $24.449 million from the first EIB loan tranche. The EIB loan balance was $23.850 million at year-end, with 4% annual interest for the first tranche and repayment due June 1, 2026. The agreement permits up to €50 million in three milestone-dependent tranches and includes revenue-based royalties. Share-based compensation was $13.968 million, up from $2.562 million.
Material changes and developments
- Net loss increased by $20.713 million year over year. R&D spending rose 39%, primarily from COVID-19 ARDS trial costs, payroll and share-based compensation, partly offset by lower travel; grant participation also declined.
- General and administrative expense rose 159%, mainly due to executive and employee compensation, RSU expense, and directors’ and officers’ insurance. The higher loss per share reflected increased losses, partly offset by a larger weighted-average share count.
- The company raised equity through an ATM program and a February 2021 registered direct offering. Common shares outstanding increased from 25.493 million at June 30, 2020 to 31.958 million at June 30, 2021.
- The pivotal Phase III critical limb ischemia study was terminated in December 2020 after the independent monitoring committee concluded it was unlikely to meet its primary endpoint.
Outlook, pipeline, and risks
- Management said it did not expect significant product-sales revenue in the next 12 months; licensing or other commercial revenue might not exceed operating costs in the short or medium term. It stated that available resources were expected to fund operations for at least 12 months from the financial-statement issuance date, while noting no assurance of adequate long-term funding.
- The multinational Phase III hip-fracture recovery study was more than 95% enrolled. The company reported that its U.S., European, and Israeli Phase II COVID-19 ARDS studies were moving to readout based on 89 patients and expected topline results in Q4 2021. It discontinued plans to expand that program in Mexico.
- The PLX-R18 Phase I study in incomplete recovery after hematopoietic cell transplantation enrolled 21 patients. Six-month data were available for 14 patients; the company reported favorable tolerability and blood-count improvements, but follow-up was ongoing.
- Key risks include clinical failure or delays, regulatory uncertainty, lack of commercial-scale manufacturing experience, limited revenue and continued losses, need for additional capital and potential dilution, dependence on collaborators and suppliers, reimbursement and market acceptance, intellectual-property challenges, foreign-exchange exposure, EIB covenants, IIA restrictions, and geopolitical or operational disruption in Israel. COVID-19 had delayed enrollment and could further disrupt trials and operations.
- The financial statements received an unqualified audit opinion; the auditor reported no critical audit matters. The auditor was not engaged to audit internal control, while management stated its controls were effective. No legal proceedings were reported.
Important facts for investors to verify
- Whether the Q4 2021 COVID-19 ARDS topline results were released and how final results compare with the preliminary analysis.
- Progress, enrollment completion, timing, and outcomes for the hip-fracture Phase III study, including any effects of trial delays.
- Cash burn, usable cash and deposits, and whether management’s stated 12-month funding outlook remains valid.
- Milestone requirements and availability of the remaining EIB tranches, along with loan repayment, royalty terms, and covenant restrictions.
- Potential dilution from further equity sales, outstanding warrants and options, and unvested RSUs; also reconcile the large FY2021 share-based compensation charge.
- Whether the PLX-R18 HCT findings hold up with complete follow-up and larger studies, and the status of development plans for acute radiation syndrome.