Business context and reporting period
Lisata Therapeutics, Inc. is a clinical-stage pharmaceutical company developing LSTA1 for solid tumors and maintaining autologous CD34+ cell-therapy programs. This 10-Q covers the quarter ended March 31, 2023, compared with the quarter ended March 31, 2022. The request metadata says “2022 Q1,” but the filing itself is for 2023 Q1. The 2022 comparison predates Lisata’s September 2022 merger with Cend; the merger was accounted for as an asset acquisition, with $30.4 million allocated to in-process research and development.
Financial results and liquidity
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $3.179 million | $3.283 million |
| General and administrative expense | $3.665 million | $3.337 million |
| Total operating expenses / operating loss | $6.844 million | $6.620 million |
| Investment income, net | $670,000 | $63,000 |
| Net loss | $6.187 million | $4.226 million |
| Basic and diluted loss per share | $0.77 | $1.05 |
| Operating cash used | $8.196 million | $5.642 million |
At March 31, 2023, cash and cash equivalents were $28.2 million and marketable securities were $32.9 million, totaling $61.1 million. Working capital was approximately $60.0 million; total liabilities were $5.6 million, including $421,000 of operating lease liabilities. The balance sheet reports no debt. Stockholders’ equity was $61.0 million. As a pre-revenue company, profit margins are not meaningful.
Cash and cash equivalents decreased $4.0 million during the quarter. Investing activities provided $4.3 million, primarily from net sales of marketable securities; financing activities used $85,000. Management said existing cash and marketable securities were expected to fund operating expenses for at least 12 months following issuance of the financial statements.
Changes versus the prior comparable period
- Operating expenses rose 3.4%: R&D decreased by $104,000, largely as prior-year XOWNA trial spending ended, while current-period spending included LSTA1 trial start-up, ASCEND enrollment, and manufacturing work. G&A increased $328,000, primarily due to added personnel after the Cend merger and higher legal, accounting, and tax fees.
- Net loss increased $1.961 million, despite higher investment income. A key comparison item was the $2.479 million income-tax benefit recognized in Q1 2022 in connection with New Jersey NOL proceeds; there was no corresponding tax benefit in Q1 2023.
- Operating cash use increased $2.554 million year over year. Cash and marketable securities together declined from $69.2 million at December 31, 2022 to $61.1 million at March 31, 2023.
Outlook, risks, contingencies, and unusual items
- Development: LSTA1 is being studied in Phase 1b/2a and Phase 2b programs, including the ASCEND study and a planned Phase 2 proof-of-concept basket trial. Management described prior clinical results as favorable, but LSTA1 remains investigational.
- Funding and runway: Management expects to use available cash and securities and may seek financing, partnerships, grants, or asset sales. It cautioned that additional capital may not be available on acceptable terms; equity financing could dilute shareholders and debt could impose payment obligations and covenants.
- Other programs: XOWNA’s FREEDOM trial enrollment was suspended. Further development depends on finding a strategic partner to fund a redesigned trial; no partner is assured. HONEDRA enrollment in Japan was suspended, and the company is pursuing regulatory discussions and a Japanese partner.
- Subsequent event: After quarter-end, Lisata received final approval and sold a portion of its New Jersey NOLs for net proceeds of $2.2 million.
- Management change: On May 1, 2023, the company eliminated its President and Chief Business Officer position and terminated David Slack’s employment; disclosed severance and bonus payments total $717,600, plus COBRA assistance and other specified compensation.
- Contingency: Cend faces a lawsuit from Lingmed alleging breach of contract, fraud, and declaratory relief relating to a claimed success fee under the Qilu collaboration. Lisata denies the allegations and intends to defend the claim; the filing does not provide a clear estimate of potential exposure.
- Other principal risks include clinical and regulatory uncertainty, trial enrollment and execution, reliance on financing and strategic partners, and integration and advancement of Cend programs. Management reported disclosure controls were effective and no material changes to internal control over financial reporting.
Important facts for investors to verify
- Confirm the filing period: the document is for Q1 2023, notwithstanding the request metadata identifying Q1 2022.
- Track cash burn and the stated minimum 12-month runway, including the effect of the $2.2 million post-quarter NOL sale and future trial spending.
- Monitor LSTA1 trial progress and whether Lisata secures funding or partners for planned studies and paused programs.
- Review subsequent SEC filings for developments in the Lingmed litigation, NOL-sale accounting, and Mr. Slack’s separation costs.
- Assess the effect of the large potentially dilutive option, warrant, and restricted-stock balances; diluted loss per share excludes them as anti-dilutive.