Business context and reporting period
This is Millendo Therapeutics, Inc.’s unaudited Form 10-Q for the three months ended March 31, 2020—not a Tempest Therapeutics filing, despite the request metadata. Millendo was a clinical-stage biopharmaceutical company with no approved products and no product revenue. Its programs included nevanimibe for congenital adrenal hyperplasia (CAH) and MLE-301 for menopausal vasomotor symptoms.
Financial results and position
| Metric | Q1 2020 | Q1 2019 or comparison |
|---|---|---|
| Revenue | None from product sales | None |
| Research and development expense | $7.54 million | $6.20 million; up 21.5% |
| General and administrative expense | $4.60 million | $4.45 million; up 3.2% |
| Operating loss | $12.14 million | $10.66 million |
| Net loss | $12.00 million | $10.37 million |
| Net loss per share | $0.65 | $0.78 |
| Cash used in operating activities | $10.16 million | $10.60 million |
| Cash, cash equivalents and restricted cash | $58.88 million | $63.51 million at December 31, 2019 |
At March 31, 2020, total assets were $68.05 million, total liabilities $13.41 million, and stockholders’ equity $54.64 million. Debt totaled approximately $0.37 million, comprising $0.26 million current and $0.11 million long-term. Current assets were $64.62 million and current liabilities $11.21 million. The quarter’s $4.64 million net cash decline included $5.72 million of net proceeds from ATM share sales; the company issued 719,400 shares through that facility.
Material changes and notable developments
- R&D expense rose by $1.34 million, mainly because of higher preclinical and clinical development spending related to livoletide. Livoletide expenses were $4.85 million versus $3.00 million a year earlier.
- G&A increased modestly: higher compensation and stock-based compensation were largely offset by lower professional fees than in the post-merger first quarter of 2019.
- In April 2020, after quarter-end, Millendo discontinued livoletide development for Prader-Willi syndrome. The Phase 2b study did not show statistically significant improvement in hyperphagia and food-related behaviors versus placebo.
- Following the discontinuation, the company began eliminating positions representing about 30% of its prior headcount, with most reductions completed in April. It estimated approximately $1.0 million in second-quarter termination benefits.
Outlook, risks and contingencies
- Management said the March 31 cash balance was expected to fund planned operations into 2022; the financial-statement note separately says cash was sufficient for at least 12 months after issuance. Both estimates depend on current plans and may change; the company expects to need additional capital for development and commercialization.
- COVID-19 had paused new enrollment in the nevanimibe Phase 2b CAH study and could disrupt assessment of enrolled patients, trial timelines, regulatory interactions, supply chains, and access to financing. Management expected an interim review of enrolled-patient data by the third quarter of 2020 and expected MLE-301 first-in-human studies to begin in the second half of 2020.
- Millendo reported no material impact to internal controls from remote work and stated disclosure controls were effective at a reasonable assurance level.
- Three shareholder matters relating to OvaScience’s historical activities remained disclosed. Potential losses were not estimable; the company said an adverse outcome in the Dahhan class action could materially affect its financial position and results.
- The company had no off-balance-sheet arrangements. It disclosed continued operating losses, dependence on external financing, clinical and regulatory uncertainty, and risks from the pandemic and its third-party development and manufacturing partners.
Important facts for investors to verify
- Confirm the filing issuer: the supplied 10-Q is for Millendo Therapeutics, Inc. (ticker MLND), not Tempest Therapeutics, Inc.
- Track the nevanimibe trial pause, patient assessments, and timing and results of the anticipated interim review; verify whether the MLE-301 clinical-start expectation was met.
- Assess the financial impact of ending livoletide, including restructuring costs, reduced program spending, and any effects on French research tax credits.
- Reconcile the stated cash runway into 2022 with the note’s “at least 12 months” statement and monitor cash burn and financing needs.
- Monitor the disclosed shareholder litigation, for which potential losses were not estimable.