Instil Bio, Inc. — Form 10-Q Summary
Reporting period: First quarter ended March 31, 2022. Instil Bio is a clinical-stage biopharmaceutical company developing autologous tumor-infiltrating lymphocyte (TIL) cell therapies. It has no approved products and has not generated revenue from product sales.
Financial performance and position
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | No product revenue | No product revenue |
| Research and development expense | $39.2 million | $14.4 million; up $24.8 million |
| General and administrative expense | $15.1 million | $9.0 million; up $6.1 million |
| Total operating expenses | $54.3 million | $23.4 million; up $30.9 million |
| Net loss | $54.1 million | $23.1 million |
| Net loss per share, basic and diluted | $0.42 | $0.66; weighted-average shares rose from 35.0 million to 129.1 million following the 2021 IPO |
| Cash used in operating activities | $55.1 million | $17.7 million |
| Cash, cash equivalents and marketable securities | $379.5 million, plus $0.5 million restricted cash; $380.0 million including restricted cash | At March 31, 2022 |
| Total assets / total liabilities | $564.9 million / $56.4 million | At March 31, 2022 |
Expense growth reflected increased research and clinical staffing, clinical-trial and manufacturing activity, and facilities costs. Stock-based compensation was $7.5 million, versus $2.8 million a year earlier. No interest-bearing borrowings are shown in the balance sheet; lease liabilities were $8.4 million at quarter-end, including current and non-current amounts.
Investing activities provided $77.9 million net, primarily because Treasury bill maturities exceeded purchases, partly offset by $20.2 million of property and equipment purchases. The company reported a $0.3 million unrealized loss on available-for-sale securities in other comprehensive loss. Capital spending included construction of the Tarzana manufacturing facility.
Material changes and liquidity
- Operating expenses and operating cash use increased substantially year over year as the company expanded clinical development and manufacturing activities.
- Cash and cash equivalents increased to $61.5 million from $37.6 million at year-end 2021, while marketable securities decreased to $318.0 million from $416.5 million, reflecting investment purchases and maturities.
- Management estimated that existing resources would fund operating expenses and capital expenditure requirements into 2024, subject to assumptions that could prove incorrect. The company expects losses and expenses to rise as development, staffing and facility investment continue.
- The company filed an automatic shelf registration statement on Form S-3 on April 1, 2022; it had not sold securities under it as of the filing.
- Reported commitments include $52.0 million for the Tarzana development project and approximately $47.2 million for future clinical-trial services, the latter dependent on milestones. Future operating lease payments were $9.6 million. The maximum remaining contingent acquisition consideration was $14.5 million.
Outlook, commentary and risks
- Instil expected topline safety and efficacy data from the Phase 2 DELTA-1 trial of ITIL-168 in advanced melanoma in 2023. It planned to initiate DELTA-2, a Phase 1 ITIL-168 plus pembrolizumab trial in additional cancer indications, in 2022, and anticipated initiating a trial of lead CoStAR-TIL candidate ITIL-306 in 2022.
- ITIL-168 had received FDA Fast Track designation for metastatic melanoma and orphan designation for malignant melanoma stages IIB to IV. These designations do not ensure faster review or approval.
- A key execution risk is manufacturing transfer: the ITIL-168 process transfer from Manchester to the Tarzana facility was still underway, and the company stated it had not yet successfully produced a batch at the new facility. Product comparability and successful scale-up remain important uncertainties.
- Management said COVID-19 had not materially affected results or ongoing key activities to date, but future trial enrollment, operations and timelines could be affected.
- The company cited substantial clinical, regulatory, manufacturing, funding, competition and commercialization risks. Results from earlier compassionate-use experience may not predict trial outcomes, and the company may need additional capital before generating product revenue.
- Management concluded disclosure controls and procedures were effective as of March 31, 2022; no material change in internal control over financial reporting was reported. The company reported no material legal proceedings.
Important facts for investors to verify
- Whether clinical enrollment and the stated 2022 trial starts and 2023 DELTA-1 data timeline remain on schedule.
- Progress, yield and comparability results for ITIL-168 manufacturing at Tarzana, and the facility’s construction and validation costs.
- Actual cash burn and whether available liquidity continues to support management’s runway estimate into 2024.
- Whether the Tarzana, clinical-trial and contingent-consideration commitments change or require additional funding.
- Future clinical safety and efficacy data, regulatory requirements, and the availability of financing if development or capital needs exceed current assumptions.