Milestone Pharmaceuticals Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. Unless stated otherwise, financial amounts are in U.S. dollars. Milestone is a clinical-stage biopharmaceutical company developing etripamil, a self-administered nasal spray for cardiovascular arrhythmias; it had no approved products or product-sales revenue.
Financial performance and liquidity
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Revenue | $0 | $1.0 million, a Ji Xing collaboration milestone |
| Research and development, net | $3.6 million | $10.3 million; down 64.5% |
| General and administrative | $4.0 million | $3.9 million; up 1.7% |
| Commercial expenses | $2.9 million | $2.4 million; up 22.4% |
| Operating loss | $10.5 million | $15.5 million |
| Interest income / expense | $1.0 million / $0.9 million | $0.6 million / $0.03 million |
| Net loss; loss per share | $10.4 million; $0.21 | $15.0 million; $0.35 |
| Operating cash used | $8.9 million | $13.9 million |
Margins are not meaningful because the company reported no revenue in Q1 2024. The lower operating loss reflected substantially lower clinical development spending, partly offset by increased commercial expense and debt interest.
- At March 31, cash and cash equivalents were $10.1 million and short-term investments were $79.4 million, totaling $89.5 million in cash, cash equivalents and short-term investments. Accumulated deficit was $336.4 million.
- Senior secured convertible notes had a $50.6 million carrying value. The notes bear 6% interest, mature in 2029, and are secured by substantially all company and subsidiary-guarantor assets. Interest may be paid in kind at the company’s option for the first three years.
- Q1 financing activities provided $32.3 million, primarily from a public offering of common shares and pre-funded warrants. The company reported 53.25 million common shares outstanding and 12.91 million pre-funded warrants at quarter-end; the filing reports 53.26 million common shares outstanding as of May 13, 2024.
- Investing activities used $27.0 million, primarily reflecting purchases of short-term investments net of redemptions; this should be distinguished from operating cash burn.
Material changes and business developments
- Research and development expense decreased $6.6 million year over year, mainly because Phase 3 studies were completed, clinical and related personnel costs declined, and manufacturing spending was delayed following the FDA’s Refusal to File (RTF) on the original PSVT NDA.
- In Q1, Milestone resubmitted its NDA for etripamil for paroxysmal supraventricular tachycardia (PSVT), after revising data files concerning adverse-event timing. Following a February Type A meeting, the FDA indicated the timing data had minimal impact on the overall safety characterization and did not request additional efficacy or safety data. A standard review is expected only if the NDA is accepted for filing; the filing does not provide an acceptance or action date.
- In Q1, the FDA discussed a potential supplemental NDA pathway for atrial fibrillation with rapid ventricular rate (AFib-RVR), including key proposed study elements. The company anticipated an End-of-Phase-2 meeting in mid-2024 to help finalize a Phase 3 protocol; the study design and timing remain subject to FDA alignment.
- Reported prior trial results included a significant PSVT conversion benefit in Phase 3 RAPID and a ventricular-rate reduction in Phase 2 ReVeRA for AFib-RVR. These are clinical-trial results, not evidence of regulatory approval or commercial performance.
- After quarter-end, the company announced April 2024 NODE-303 results for recurrent PSVT, including median conversion time of 17.0 minutes. This is a subsequent development, not a Q1 financial-period result.
Outlook, risks and contingencies
- Management expects existing cash, cash equivalents and short-term investments to fund operations for at least 12 months from issuance of the interim financial statements and reported no substantial doubt about going concern for that period. The company expects continued losses and negative operating cash flows for at least the next several years; it cannot reliably estimate when, if ever, it will become profitable.
- Cash-conservation measures, including program deferrals and team restructuring, were substantially completed in Q1. The measures were partly offset by $1.1 million of restructuring termination benefits.
- Commercial spending may rise if the FDA approves the NDA, as the company plans to invest in launch infrastructure. R&D spending may also increase with AFib-RVR development; future spending depends on trials, regulatory review and commercialization plans.
- A contingent $75 million payment under the RTW royalty purchase agreement is conditional on FDA approval and other closing conditions, including marketing approval by September 30, 2025. In exchange, RTW would receive tiered U.S. sales royalties; the agreement was not recognized in these interim financial statements.
- Key risks include regulatory acceptance and approval, clinical and manufacturing execution, financing needs and potential shareholder dilution, and the possibility that future financing may not be available on acceptable terms. The company also cited macroeconomic and geopolitical uncertainties. It reported no material change to the risk factors in its 2023 Form 10-K, no material legal proceedings, and no material change in contractual obligations.
Important facts for investors to verify
- Whether the FDA accepted the resubmitted PSVT NDA for filing, and any resulting review timetable or information requests.
- Cash consumption, investment maturities and operating runway relative to clinical, regulatory and launch spending needs.
- Potential dilution from the Q1 offering, outstanding pre-funded warrants, options and any further financing.
- Terms and deadline conditions for the contingent $75 million RTW payment, and the future royalty burden if it closes.
- FDA alignment, design, cost and timing of the planned AFib-RVR Phase 3 study.