Vera Therapeutics, Inc. — Q2 2022 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2022. Vera is a clinical-stage biotechnology company developing treatments for serious immunological diseases. It has no approved products and has generated no product revenue.
Financial results and liquidity
| Metric | Three months ended June 30 | Six months ended June 30 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $10.1 million (2021: $3.2 million) | $22.7 million (2021: $6.2 million) |
| General and administrative expense | $4.9 million (2021: $2.6 million) | $9.4 million (2021: $4.4 million) |
| Net loss | $14.9 million (2021: $3.4 million) | $31.9 million (2021: $8.2 million) |
| Basic and diluted loss per share | $0.55 (2021: $0.33) | $1.24 (2021: $1.49) |
| Net cash used in operating activities | Not separately stated | $28.0 million (2021: $11.8 million) |
Profit margins are not meaningful because the company has no product revenue. At June 30, cash and cash equivalents were $50.4 million and marketable securities were $81.5 million, totaling $131.9 million in cash, cash equivalents and marketable securities. Total assets were $148.8 million; total liabilities were $27.3 million; and accumulated deficit was $156.0 million.
Cash, cash equivalents and restricted cash fell by $29.2 million during the first half to $50.7 million. Investing activities used $81.5 million, primarily to purchase short-term marketable securities; financing activities provided $80.3 million, mainly from the February follow-on offering. The company reported $5.0 million of gross debt ($5.0 million principal; $5.0 million net carrying amount rounded) and access to a further $45.0 million under its credit facility. The facility is secured by company assets, bears floating-rate interest, and includes covenants and default provisions.
Changes versus the prior comparable period
- Q2 operating expenses rose 157% to $15.1 million, with R&D up 213%, primarily reflecting expanded clinical development, trial activity, manufacturing and increased headcount.
- Q2 net loss increased to $14.9 million from $3.4 million. The prior-year quarter included a $2.7 million gain on the sale of PNAi technology; 2022 results also included interest income and expense and changes in investment values.
- First-half operating cash use increased to $28.0 million from $11.8 million, reflecting higher development spending and the larger net loss.
- The company raised approximately $80.0 million net in a February 2022 follow-on offering. It also adopted lease accounting guidance in January 2022, recognizing operating lease assets and liabilities.
Outlook, commentary and risks
- Atacicept: The Phase 2b ORIGIN trial in IgA nephropathy (IgAN) had completed enrollment; Vera expected topline results in Q1 2023. If supportive, it planned to initiate a pivotal Phase 3 trial in 2023. Vera was also initiating the Phase 3 COMPASS trial in lupus nephritis, following FDA feedback on prior lupus clinical results.
- MAU868: An interim Phase 2 analysis in BK viremia among kidney transplant recipients, presented in June 2022, showed the candidate was well tolerated and reduced virologic activity. The company expected further FDA feedback later in 2022 and planned to begin a Phase 2b or Phase 3 trial in 2023. Interim findings may change as data mature and undergo verification.
- Management expected continued losses and negative operating cash flows for at least several years, with R&D and G&A expenses expected to rise. It believed available cash, cash equivalents and marketable securities would fund operations for at least 12 months from the filing date, but additional capital will be required for longer-term development and operations. The filing notes substantial doubt about the company’s ability to continue as a going concern over the long term.
- Key risks include clinical-trial efficacy, safety, enrollment and timing; regulatory approval; reliance on third-party manufacturers, CROs and single-source supply chains; competition; intellectual-property and licensing obligations; and the need to raise additional capital. COVID-19, the Ukraine-Russia conflict, inflation and market volatility could affect trials, supply chains and financing access.
- A $400 million shelf registration was in place, including a $150 million at-the-market program; no shares had been sold under the ATM through June 30, 2022. A July 2022 lease amendment added approximately 5,000 square feet of office space.
- Vera reported no material legal proceedings. Management concluded disclosure controls were effective as of June 30, 2022 and reported no material quarterly changes in internal control over financial reporting.
Important facts for investors to verify
- Whether ORIGIN’s topline results arrive as expected and support a pivotal Phase 3 program.
- The design, timing and regulatory pathway for COMPASS and MAU868’s next trial, including the FDA’s feedback.
- Cash-burn trajectory, the timing of additional financing, and remaining availability and terms of the Oxford credit facility.
- Whether preliminary MAU868 results are confirmed in final data and whether any safety or manufacturing issues emerge.
- Clinical-trial enrollment, third-party supply reliability, and the milestones, royalties and other obligations under the Ares and Novartis-related licenses.