Milestone Pharmaceuticals Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. The filing was signed March 29, 2023. Milestone is a clinical-stage biopharmaceutical company developing etripamil, a self-administered nasal-spray calcium channel blocker. It had no approved products or product-sales revenue at year-end.
Financial performance and liquidity
| Metric | 2022 | 2021 | Change |
|---|---|---|---|
| Revenue, primarily Ji Xing license milestones | $5.0 million | $15.0 million | Down 66.7% |
| Research and development expense, net | $39.8 million | $38.7 million | Up 3.0% |
| General and administrative expense | $15.7 million | $12.4 million | Up 26.8% |
| Commercial expense | $9.1 million | $7.0 million | Up 29.9% |
| Operating loss | $59.6 million | $43.1 million | Loss increased |
| Net loss | $58.4 million | $42.9 million | Loss increased 36.3% |
| Net loss per share | $1.38 | $1.02 | Loss per share increased |
| Net cash used in operating activities | $52.5 million | $33.2 million | Use increased |
At December 31, 2022, cash and cash equivalents were $7.6 million and short-term investments were $56.9 million, totaling $64.5 million. Total assets were $74.5 million, total liabilities $8.1 million, and shareholders’ equity $66.3 million. Liabilities were principally accounts payable, accrued liabilities and operating leases; the filing reports no year-end debt. No product-sales margin is meaningful because the company had no product sales.
Operating cash use rose as clinical-trial spending and other operating costs increased. R&D expense was broadly stable overall, with higher clinical costs for RAPID partly offset by lower manufacturing and regulatory costs. G&A and commercial expense rose with hiring, professional services and pre-commercialization work. Interest income increased to $1.3 million from $0.2 million, reflecting higher rates.
Business developments and comparison with prior period
- In October 2022, the Phase 3 RAPID trial met its primary endpoint: 64.3% of etripamil patients versus 31.2% of placebo patients converted to normal rhythm within 30 minutes (hazard ratio 2.62; p<0.001). Median conversion time was 17.2 minutes versus 53.3 minutes.
- A prespecified pooled analysis of RAPID and NODE-301 reported fewer additional medical interventions with etripamil (14.6% versus 25.4%; p=0.013) and fewer emergency-department visits (13.6% versus 22.4%; p=0.035). The individual trials were not powered to establish differences on these outcomes.
- The earlier Phase 3 NODE-301 trial did not meet its primary endpoint over five hours; analyses at 30 minutes favored etripamil. The contrasting trial outcomes and endpoint context are important when assessing the evidence.
- The company closed the NODE-303 safety study after management concluded the overall program provided the safety and exposure data it believed were needed for an NDA review. Its Phase 2 ReVeRA study of etripamil for AFib-RVR remained in development.
- Revenue fell from $15.0 million to $5.0 million because 2021 included the $15 million Ji Xing upfront payment, while 2022 revenue comprised $5 million in milestone payments. Milestone payments are not recurring product revenue.
Outlook, financing and principal risks
Management planned to submit a U.S. NDA for etripamil for PSVT in mid-2023 and expected continued losses and negative operating cash flows for the foreseeable future. It anticipated higher 2023 G&A and commercial spending in preparation for potential launch. At filing, management said available resources, including the financing arrangements signed in March 2023, were expected to fund operations for at least 12 months; this is not a profitability forecast.
Under March 27, 2023 agreements with RTW affiliates, the company planned to issue $50 million of 6.0% senior secured convertible notes due 2029, with quarterly interest payable in cash or, at the company’s option, in kind for the first three years. The notes are convertible initially at approximately $5.23 per share and are secured by substantially all company and subsidiary assets. A separate $75 million royalty-sale payment is conditional on FDA approval and other conditions; in return, RTW would receive tiered U.S. sales royalties of 7%, 4% and 1% across specified sales bands, with a possible increase in the initial tier if sales thresholds are missed. These are post-year-end arrangements, not year-end cash or debt balances.
- Substantial execution and regulatory risk remains: etripamil is the company’s sole clinical-stage candidate, has not been approved, and the NDA and potential commercialization could be delayed or rejected.
- Other key risks include continued cash burn and need for financing, possible dilution and secured-debt obligations, uncertain market adoption and reimbursement, clinical and safety risks, and dependence on contract manufacturers, CROs and a single-source nasal-spray device supplier.
- The filing reports no material legal proceedings. Management concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2022; the auditor did not provide an internal-control attestation.
Important facts for investors to verify
- Whether and when the NDA was submitted, accepted for review, and decided by the FDA, and whether the final label or any requested additional studies affect the opportunity.
- Final, complete RAPID and NODE-301 data, including safety, endpoint analyses, and the limitations of the pooled healthcare-utilization findings.
- ReVeRA results and any subsequent decision or timeline for a registrational AFib-RVR program.
- Actual cash runway and financing received: confirm closing and terms of the $50 million notes and whether the conditional $75 million royalty-sale payment was triggered.
- Potential dilution from convertible notes, outstanding options and warrants, and the March 2023 exchange warrants; also assess the economic cost of the royalty obligations and secured covenants.
- Commercial manufacturing readiness, device supply redundancy, launch costs, payer coverage and reimbursement assumptions, and whether market estimates translate into demand.