Lisata Therapeutics, Inc. — Form 10-Q Summary
Reporting period: Quarter and nine months ended September 30, 2023. The supplied filing covers 2023 Q3, although the request metadata labels it 2022 Q3.
Business context
Lisata is a clinical-stage biotechnology company developing LSTA1, an investigational therapy intended to improve delivery of anticancer agents into solid tumors. It is conducting Phase 1b/2a and Phase 2b studies across multiple tumor types and treatment combinations. The company also has autologous CD34+ cell therapy programs that it seeks to partner without additional capital outlay. Lisata reported no revenue in the three- or nine-month periods ended September 30, 2023 or 2022.
Financial results and liquidity
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Research and development expense | $3.4 million | $3.3 million | $9.7 million | $9.9 million |
| General and administrative expense | $2.6 million | $4.0 million | $10.0 million | $10.8 million |
| Total operating expenses | $6.0 million | $37.7 million | $19.7 million | $51.1 million |
| Net loss | $5.3 million | $37.4 million | $15.5 million | $48.2 million |
| Basic and diluted loss per share | $0.65 | $7.88 | $1.92 | $11.28 |
| Net cash used in operating activities | Not stated quarterly | Not stated quarterly | $16.0 million | $14.7 million |
At September 30, 2023, cash and cash equivalents were $32.4 million and marketable securities were $22.0 million, totaling $54.4 million. Working capital was $52.1 million and stockholders’ equity was $53.0 million. Total liabilities were $5.4 million, including $1.3 million of accounts payable and $3.8 million of accrued liabilities; the balance sheet reports no borrowings. The filing gives no meaningful operating margin because the company had no revenue.
For the first nine months, investing activities provided $15.8 million, mainly from net sales of marketable securities, while financing activities provided $0.4 million. Cash and cash equivalents increased by $0.3 million to $32.4 million over the period. Management stated that cash and marketable securities were expected to fund operating expenses for at least 12 months following issuance of the financial statements.
Material changes and unusual items
- Net loss improved substantially versus 2022, primarily because the prior-year period included a $30.4 million in-process research and development charge related to the 2022 Cend acquisition. Excluding that charge, operating expenses declined year over year by 18.6% in Q3 and 4.8% for the nine-month period.
- Q3 R&D expense rose 1.3% year over year, reflecting LSTA1 trial, enrollment, manufacturing and study-startup activity, partly offset in the nine-month comparison by lower spending on ischemic-repair programs.
- Investment income was $2.1 million for the first nine months of 2023, versus $0.5 million in 2022, contributing to higher other income.
- Lisata sold New Jersey net operating losses for $2.2 million net proceeds and recorded a $2.3 million income-tax benefit and a $0.1 million loss on sale.
- In July 2023, Lisata transferred rights to its tumor-penetrating nanocomplex platform to Impilo for preferred shares. In October, the share amount was revised from 766,000 to 574,500; under the SBP sublicense arrangement, 191,500 of those shares went to SBP.
Outlook, risks and contingencies
Management expects to rely on existing cash and marketable securities and may also pursue equity or debt financings, partnerships, collaborations, asset sales and grants. It cautioned that additional capital may not be available on acceptable terms or at all; equity financing could dilute shareholders, while debt could impose payment obligations and covenants. Future capital needs depend partly on clinical development and strategic transactions. No specific revenue or earnings guidance was provided.
Key execution risks include clinical-trial results and enrollment, regulatory developments, the ability to secure partners and funding, and the ability to collect or meet obligations under licensing and strategic arrangements. The company reported no material changes to the risk factors in its 2022 Form 10-K. Lisata is defending a Lingmed lawsuit alleging entitlement to a success fee related to the Qilu agreement; the company denies the allegations, and trial is set for August 2, 2024. Lisata also gave MIT notice that its license will terminate effective December 30, 2023. Management said it was not aware of pending claims expected to materially harm financial condition or operating results.
Management concluded disclosure controls and procedures were effective at the reasonable-assurance level; no material changes to internal control over financial reporting were reported.
Important facts for investors to verify
- Confirm the reporting-period discrepancy in the request metadata: the filing is for the quarter ended September 30, 2023.
- Assess whether the stated liquidity runway of at least 12 months remains adequate against clinical-trial spending and other obligations.
- Track LSTA1 trial progress, enrollment, safety and efficacy data, and anticipated regulatory milestones.
- Review the effect of the Impilo technology transfer and the MIT license termination on Lisata’s retained programs and intellectual-property rights.
- Monitor the Lingmed litigation, potential financing needs, and possible dilution from future equity issuance.