ORIC Pharmaceuticals, Inc. — Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2023; filed March 11, 2024. ORIC is a clinical-stage biopharmaceutical company focused on therapies intended to overcome cancer treatment resistance. It has no approved products and has not generated product revenue.
Business Context and Pipeline
- ORIC-114: Brain-penetrant EGFR/HER2 inhibitor targeting exon 20 alterations and other genetically defined tumors. Phase 1b data reported in October 2023 showed preliminary systemic and intracranial activity in heavily pretreated patients.
- ORIC-944: Allosteric PRC2/EED inhibitor being evaluated in advanced prostate cancer. Initial Phase 1b data reported in January 2024 indicated a clinical half-life of more than 10 hours, robust target engagement and a favorable preliminary safety profile.
- ORIC-533: Oral CD73 inhibitor being evaluated in relapsed/refractory multiple myeloma. Initial Phase 1b data reported in December 2023 showed target engagement, immune activation and preliminary antimyeloma activity, with no dose-limiting toxicities reported as of the disclosed cutoff.
- Additional discovery and preclinical programs include ORIC-613, a PLK4 inhibitor targeting TRIM37-amplified tumors, and other undisclosed discovery programs.
- The company had 100 full-time employees at year-end, including 74 in research and development.
Financial and Operating Metrics
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Revenue | None | None | No product revenue |
| Research and development expense | $85.2 million | $61.7 million | +$23.5 million |
| General and administrative expense | $25.6 million | $25.1 million | +$0.5 million |
| Acquired in-process R&D expense | None | $5.0 million | -$5.0 million |
| Total operating expenses | $110.8 million | $91.8 million | +$19.0 million |
| Loss from operations | $(110.8) million | $(91.8) million | Greater operating loss |
| Other income, net | $10.1 million | $2.6 million | +$7.4 million |
| Net loss | $(100.7) million | $(89.1) million | Loss increased $11.6 million |
| Basic and diluted net loss per share | $(1.96) | $(2.25) | Improved due primarily to higher share count |
| Net cash used in operating activities | $(85.7) million | $(75.1) million | Higher cash burn |
Research and development spending increased primarily because of greater external costs for ORIC-114 and ORIC-944, partially offset by lower ORIC-533 manufacturing costs and the discontinuation of ORIC-101. Stock-based compensation totaled $15.2 million, compared with $14.5 million in 2022.
Liquidity, Capital Resources and Debt
- Cash, cash equivalents and investments totaled $235.0 million at December 31, 2023, including $23.4 million of cash and cash equivalents, $184.8 million of short-term investments and $26.9 million of long-term investments.
- Total liabilities were $27.9 million, including $10.2 million of operating lease liabilities. The filing does not disclose material debt financing.
- Net cash used in investing activities was $43.4 million, primarily reflecting purchases of investments, net of maturities.
- Net cash provided by financing activities was $85.7 million, primarily from the June 2023 private placement.
- In January 2024, ORIC raised $125.0 million of gross proceeds, or $124.8 million net, through the sale of 12.5 million shares at $10.00 per share. Management stated that cash, cash equivalents and investments were expected to fund the current operating plan into late 2026.
- The company expects to require substantial additional capital and may use equity, debt, collaborations, licensing arrangements or other financing sources. Additional equity financing would dilute existing holders.
Material Changes Versus the Prior Comparable Period
- Net loss increased from $89.1 million to $100.7 million, while operating expenses increased 20.7% to $110.8 million.
- Research and development expense increased 38.1%, reflecting advancement of ORIC-114 and ORIC-944.
- Other income increased substantially because of higher interest income on cash and investments.
- Operating cash burn increased from $75.1 million to $85.7 million.
- Cash, cash equivalents and restricted cash declined by $43.4 million during 2023, although investment balances increased and the company completed an $85.0 million private placement.
- Shares outstanding increased to 54.9 million at year-end from 45.1 million, before the January 2024 issuance of an additional 12.5 million shares. The June 2023 financing also included pre-funded warrants for 2.9 million shares, all outstanding at year-end.
- ORIC reported initial clinical data for ORIC-114 and ORIC-533 during 2023. ORIC-944 data were reported after year-end in January 2024.
Guidance, Outlook, Risks and Unusual Items
- ORIC expects to initiate ORIC-114 dose-expansion cohorts in mutated NSCLC in the first half of 2024 and report updated Phase 1b data in the first half of 2025.
- ORIC expects to initiate an ORIC-944 combination study with androgen-receptor inhibitors in metastatic prostate cancer in the first half of 2024 and provide a program update in mid-2024.
- ORIC intends to complete ORIC-533 dose escalation in the first quarter of 2024 and evaluate strategic partnerships for combination development.
- All product candidates remain investigational. Preliminary or interim clinical results may change as additional data become available and are audited.
- Key risks include clinical failure, adverse events, patient-enrollment delays, regulatory setbacks, reliance on single-source contract manufacturers, dependence on CROs and other third parties, competition, intellectual-property challenges, companion-diagnostic requirements, cybersecurity incidents and the need for additional financing.
- ORIC relies on third parties for manufacturing and currently lacks redundant suppliers for active pharmaceutical ingredients and drug products.
- ORIC-114 is licensed from Voronoi for territories excluding mainland China, Hong Kong, Macau and Taiwan. The agreement includes potential development and commercial milestone payments totaling up to $336.0 million for the first licensed product, plus potential additional milestones for a second product and royalties on net sales.
- ORIC-944 is licensed worldwide from Mirati on a royalty-free basis. Mirati was acquired by Bristol Myers Squibb in January 2024, and the license remained in effect after the transaction.
- The company disclosed a potential intellectual-property dispute risk relating to an inquiry concerning its CD73 program, although no material litigation was pending as of the filing date.
- Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023. KPMG issued an unqualified audit opinion; no auditor attestation was required because ORIC is an emerging growth company.
Most Important Facts to Verify
- Whether the preliminary efficacy and safety signals for ORIC-114, ORIC-944 and ORIC-533 are confirmed in larger, longer-duration studies.
- The timing, design and enrollment of the planned 2024 dose-expansion and combination studies.
- Whether the stated cash runway into late 2026 remains valid after changes in trial scope, enrollment, manufacturing costs and other operating assumptions.
- The fully diluted share count, including the January 2024 financing, pre-funded warrants, options and restricted stock units.
- The terms, potential economic burden and territorial limitations of the Voronoi and Mirati licenses.
- Manufacturing capacity, supply redundancy and the ability of contract manufacturers to meet clinical and future commercial requirements.
- Potential intellectual-property claims or disputes affecting the CD73 program or other licensed technologies.
- Competitive developments and regulatory approvals involving EGFR/HER2, PRC2/EED and CD73 therapies.