Immuneering Corporation — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. The filing was signed May 10, 2022. Immuneering is a clinical-stage oncology and neuroscience drug developer using a translational bioinformatics platform; it has no approved products and is winding down much of its services business.
Financial results and liquidity
| Metric | Q1 2022 | Q1 2021 | Change |
|---|---|---|---|
| Revenue | $0.184 million | $0.748 million | Down 75.4% |
| Gross profit / gross margin | $0.093 million / 50.5% | $0.339 million / 45.3% | Gross profit down 72.6% |
| Research and development | $9.059 million | $5.391 million | Up 68.0% |
| General and administrative | $3.952 million | $1.184 million | Up 233.8% |
| Operating loss | $12.926 million | $6.236 million | Loss increased |
| Net loss | $12.896 million | $6.230 million | Loss increased |
| Basic and diluted loss per share | $0.49 | $1.26 | Lower loss per share, with a much larger weighted-average share count in 2022 |
| Cash used in operating activities | $12.281 million | $6.140 million | Cash use increased |
At March 31, cash and cash equivalents were $75.2 million and marketable securities were $62.6 million, totaling approximately $137.8 million. Current assets were $139.5 million and current liabilities were $3.7 million. The balance sheet reports no borrowings; lease liabilities totaled $5.0 million, including $0.3 million current. Management estimates existing cash and securities can fund planned operations into Q3 2024, subject to assumptions and execution.
Material changes and operating context
- Revenue declined as customer service work decreased; management said it had deprioritized new services work to focus on its wholly owned pipeline. R&D and G&A spending rose with employee costs, stock-based compensation, facilities and other operating needs.
- IMM-1-104, designed as a dual-MEK inhibitor for advanced solid tumors with RAS mutations, was in IND-enabling work. IMM-6-415 was in IND-enabling studies; other oncology and neuroscience programs remained in discovery.
- BioArkive, acquired in December 2021 for stock with a recorded purchase price of $7.875 million, was being integrated to support internal preclinical oncology research. The acquisition added lease obligations and goodwill.
- Accumulated deficit was $72.2 million. Stock-based compensation was $0.9 million for the quarter, versus $0.2 million a year earlier.
Outlook, risks and unusual items
- Management planned to submit the IMM-1-104 IND in Q3 2022 and anticipated enrolling the first Phase 1 patient in Q4 2022, assuming regulatory clearance. Supply-chain constraints had delayed these milestones from earlier expectations. The company planned an IMM-6-415 IND in 2023 and at least one additional oncology IND in 2024.
- Management expected services revenue to continue declining, with computational biology services expected to end by year-end 2022; external BioArkive biosample-storage services were expected to be discontinued in the second half of 2022.
- The company expects continuing losses and increasing R&D, G&A and capital needs. It may require additional financing; no committed external funding source was disclosed. Failure to raise capital could lead to delayed, reduced or discontinued programs.
- Key risks include clinical and regulatory uncertainty, manufacturing and supply constraints, reliance on third parties, patient enrollment, competition, intellectual-property protection and possible COVID-19-related disruption.
- The company disclosed that its market capitalization had declined after year-end and could be an impairment indicator; further decline or other indicators could require an interim goodwill or long-lived-asset impairment analysis. No material legal proceedings were reported. The Via Frontera lease was modified to end early, and the company subleased that space; lease modification reduced the related asset and liability by $0.35 million.
Important facts for investors to verify
- Whether cash burn and development spending remain consistent with management’s runway estimate into Q3 2024, and what financing would be needed thereafter.
- Progress against the delayed IMM-1-104 IND and Phase 1 enrollment schedule, including supply availability and regulatory status.
- The pace and financial effect of winding down service and external biosample-storage revenue.
- Whether the market-capitalization decline leads to a goodwill or other asset impairment, and how BioArkive integration affects costs and lease commitments.
- Potential dilution from outstanding options: 3.72 million options were outstanding at quarter-end, with $13.2 million of unrecognized compensation expense remaining.