Cardiff Oncology, Inc. — Q2 2022 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2022. Cardiff is a clinical-stage biotechnology company developing onvansertib, an oral PLK1 inhibitor, in combination regimens for cancer. The statements are unaudited and amounts below are in U.S. dollars.
Financial results and position
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Royalty revenue | $91,000 | $68,000 | $165,000 | $140,000 |
| Research and development expense | $7.45 million | $4.12 million | $14.66 million | $7.40 million |
| Selling, general and administrative expense | $3.09 million | $2.84 million | $7.03 million | $5.07 million |
| Operating loss | $10.44 million | $6.89 million | $21.52 million | $12.33 million |
| Net loss | $10.44 million | $6.76 million | $21.44 million | $11.94 million |
| Net loss per common share | $0.24 | $0.17 | $0.50 | $0.31 |
| Operating cash used | — | — | $16.94 million | $10.19 million |
At June 30, 2022, cash and cash equivalents were $21.0 million and short-term investments were $101.0 million, totaling $122.0 million. Working capital was $118.9 million, down from $139.6 million at year-end 2021. Total liabilities were $10.8 million, including $3.0 million of operating lease liabilities; the filing reports no borrowings. The company had no meaningful commercial product revenue or reported gross-profit margin; royalty revenue is from other intellectual-property licenses, not onvansertib.
Changes versus prior periods
- Q2 net loss increased $3.7 million year over year; first-half net loss increased $9.5 million. Higher operating expenses, principally R&D, drove the deterioration.
- First-half R&D expense rose $7.3 million, mainly due to CMC and clinical pharmacology work supporting onvansertib, clinical-trial and outside-service costs, and additional staff.
- First-half SG&A increased $2.0 million, reflecting higher staffing, stock-based compensation, professional fees, insurance and facility costs.
- First-half operating cash use rose to $16.9 million from $10.2 million. Investing activities provided $26.0 million, mainly because investment sales and maturities exceeded purchases; there were no financing proceeds in the period, versus $20.5 million in the prior-year half.
- Short-term investments declined from $128.9 million at December 31, 2021 to $101.0 million at June 30, 2022. Accumulated unrealized losses on available-for-sale securities were primarily attributed to higher interest rates, rather than increased credit risk.
Outlook, development and risks
- Management said available cash, cash equivalents and short-term investments should fund requirements for at least 12 months after the financial statements’ issuance. It expects continued losses and operating cash outflows for the foreseeable future and anticipates needing additional capital; financing may be unavailable or unacceptable, and equity issuance could dilute shareholders.
- Onvansertib is being studied with standard-of-care treatments in KRAS-mutated metastatic colorectal cancer (mCRC), metastatic pancreatic cancer (mPDAC), and metastatic castration-resistant prostate cancer (mCRPC). The filing describes these as ongoing or recently completed clinical programs, not approved treatments.
- Management cited January 2022 mCRC results: 12 of 35 patients treated per protocol at the recommended Phase 2 dose had a complete or partial response; median progression-free survival for that group had not been reached. These are company-reported clinical findings, and the filing cautions that development outcomes are uncertain.
- The mCRPC trial was closed to enrollment. April 2022 data cited dose-arm differences in disease-control measures and median progression-free survival; the filing reports the highest-dose-density arm’s median as 13.2 months at the data cutoff. These results should be assessed in context of trial design, patient numbers and follow-up.
- Key development risks include clinical efficacy and safety, regulatory review, lengthy development timelines, competition, uncertain program costs and the need to raise capital. The company reported no material change to the risk factors in its 2021 Form 10-K, no legal proceedings, and no material internal-control changes; management concluded disclosure controls were effective.
Important facts for investors to verify
- Current cash runway and actual quarterly cash burn against management’s 12-month funding assessment.
- Updated clinical-trial enrollment, data maturity, safety findings and statistical context for onvansertib, especially the mCRC and mCRPC programs.
- How clinical-trial, CMC and pharmacology spending evolves and whether additional financing or shareholder dilution becomes necessary.
- Composition, duration and market-value sensitivity of the investment portfolio, including the effect of interest rates on unrealized losses.
- Potential obligations under the onvansertib license, including development milestones and royalties; the filing does not provide a clear quantified total for future payments.