Milestone Pharmaceuticals Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021; balance-sheet comparisons are with December 31, 2020. Amounts are in U.S. dollars. Milestone is a clinical-stage biopharmaceutical company developing etripamil, a self-administered nasal spray, primarily for paroxysmal supraventricular tachycardia (PSVT) and also for atrial fibrillation with rapid ventricular rate (AFib-RVR). It had no approved products and reported no revenue.
Financial results and liquidity
| Metric | Q1 2021 | Q1 2020 or prior balance-sheet date |
|---|---|---|
| Research and development expense, net | $8.595 million | $11.872 million |
| General and administrative expense | $2.633 million | $2.703 million |
| Commercial expense | $1.366 million | $2.183 million |
| Total operating expenses / operating loss | $12.594 million | $16.758 million |
| Interest income, net of bank charges | $0.080 million | $0.415 million |
| Net loss | $12.514 million | $16.343 million |
| Basic and diluted net loss per share | $0.30 loss | $0.67 loss |
| Net cash used in operating activities | $12.470 million | $18.079 million |
| Cash and cash equivalents at period end | $71.859 million | $72.310 million at Dec. 31, 2020 |
| Short-term investments at period end | $58.000 million | $70.000 million at Dec. 31, 2020 |
- Cash, cash equivalents and short-term investments totaled $129.9 million at March 31, 2021. Cash and cash equivalents declined by $0.451 million in the quarter; the company also received $12.0 million from maturities of short-term investments.
- Total assets were $138.443 million, current liabilities $5.816 million, and total liabilities $6.451 million. Liabilities included operating lease obligations; the filing reports no material changes in contractual obligations and no off-balance-sheet arrangements.
- Accumulated deficit was $176.0 million. The filing does not provide a meaningful operating margin because the company had no product revenue.
Material changes and operating developments
- Total operating expenses decreased 24.9% year over year, and net loss narrowed 23.4%. R&D expense fell 27.6%, commercial expense fell 37.4%, and G&A expense declined 2.6%. Management attributed lower commercial spending to 2020 cost reductions focused on the revised etripamil development pathway; interest income declined with lower investment rates.
- NODE-301, the first part of the Phase 3 PSVT program, had not met its original five-hour primary endpoint. Applying the revised analysis plan retrospectively, 54% of etripamil patients versus 35% of placebo patients converted within 30 minutes (hazard ratio 1.87; p=0.02). FDA discussions indicated that NODE-301 and RAPID could potentially together fulfill the efficacy requirement for a planned NDA.
- RAPID was amended to evaluate single or repeat dosing, with a repeat dose after ten minutes for patients without symptom relief. The company revised its expected topline timing to the second half of 2022, citing COVID-related site-startup and enrollment challenges.
- The Phase 2 ReVeRA study of etripamil for AFib-RVR began enrollment in Q1 2021 and is expected to enroll approximately 50 patients. Management expects to report its data after RAPID topline results. NODE-302 was completed in late 2020; NODE-303 is ongoing, with the company expecting its size to be reduced and subject to further regulatory discussions.
Outlook, risks and subsequent event
- Management expects continuing operating losses and significant expenses for the foreseeable future, with R&D spending expected to increase as development advances. It stated that available resources were sufficient for at least 12 months and, including the subsequent Ji Xing transaction, expected to support operations into mid-2023.
- On May 15, 2021, after quarter-end, Milestone signed an exclusive license and collaboration agreement with Ji Xing Pharmaceuticals for etripamil development and potential commercialization in China and Taiwan. Consideration includes $15 million cash upfront and a $5 million equity investment by RTW; Milestone may also receive development and sales milestones and royalties. Ji Xing is responsible for territory development and commercialization costs, while Milestone will supply drug and delivery devices.
- COVID-19 disrupted clinical-site initiation, enrollment and follow-up, and could further delay development, regulatory activity or study-drug supply. Other significant risks include clinical and regulatory uncertainty, manufacturing and vendor execution, intellectual-property protection, and the possibility that additional financing may be needed. The company reported no material changes to the risk factors in its 2020 Form 10-K.
- No material legal proceedings were reported. Management concluded disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2021.
Important facts for investors to verify
- RAPID site activation, enrollment and the revised second-half-2022 topline target, including the continuing effects of COVID-19.
- Whether RAPID and NODE-301 results satisfy FDA requirements for a PSVT NDA, and the outcome of future regulatory discussions on study design and NODE-303.
- Execution and financial contribution of the Ji Xing collaboration, including receipt of upfront consideration and the terms and potential realization of milestones and royalties.
- Cash burn and the stated runway into mid-2023, which depends in part on the post-quarter Ji Xing transaction and RTW investment.
- Potential dilution: 29.846 million common shares were outstanding at March 31, 2021, alongside 11.417 million pre-funded warrants and 5.632 million outstanding stock options.