Business context and reporting period
Vera Therapeutics, Inc. filed this unaudited Form 10-Q for the quarter ended March 31, 2022. The clinical-stage biotechnology company has no approved products and generated no product revenue. Its principal programs are atacicept, being developed for IgA nephropathy (IgAN) and lupus nephritis (LN), and MAU868 for BK virus infection.
Financial and operating performance
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $12.5 million | $2.9 million |
| General and administrative expense | $4.5 million | $1.8 million |
| Total operating expenses | $17.0 million | $4.7 million |
| Net loss | $17.1 million | $4.7 million |
| Net cash used in operations | $9.0 million | $4.1 million |
- Operating margins are not meaningful because the company has no revenue.
- At March 31, 2022, cash and cash equivalents were $111.5 million and marketable securities were $39.4 million, totaling $150.9 million. Current assets were $157.7 million and current liabilities were $20.0 million.
- Debt had a $5.0 million principal balance and a $4.9 million net carrying value. The Oxford facility provides up to $45.0 million of additional borrowing capacity, at the company’s option through December 2022.
- Net loss per share was $0.71, versus $12.23 in Q1 2021. The share base changed substantially, including through the 2021 IPO, so the per-share comparison is not directly indicative of the change in underlying performance.
Material changes versus the prior comparable period
- Net loss increased by $12.4 million year over year as operating expenses rose 261%. R&D increased 328%, primarily with advancing atacicept trials, manufacturing clinical supply and development of MAU868. G&A increased 151%, including higher personnel, insurance and public-company costs.
- Q1 2022 R&D included $7.0 million related to the MAU868 asset acquisition: $5.0 million paid to Amplyx and a $2.0 million probable milestone obligation recognized as an assumed liability.
- Operating cash use increased to $9.0 million. Investing activities used $39.5 million, primarily for purchases of short-term marketable securities. Financing activities provided $80.3 million, principally from the February follow-on offering; the company reported approximately $80.0 million in net proceeds.
- The February offering issued 5,742,026 Class A shares at $15 per share, increasing cash and stockholders’ equity. The company also adopted lease accounting guidance in January and recognized operating lease assets and liabilities.
Outlook, risks and unusual items
- Management expected available cash, cash equivalents and marketable securities to fund operations for at least 12 months from the filing date. It also expected continued losses and negative operating cash flows for at least several years and said additional capital will be needed to achieve longer-term objectives.
- Management expected ORIGIN, the Phase 2b atacicept IgAN trial, to complete enrollment in mid-2022 and report topline results in Q4 2022. A Phase 3 IgAN trial was planned for 2023 if results were positive. The company planned a Phase 3 LN trial, based on FDA feedback, and expected to report full interim MAU868 data in June 2022 and begin a Phase 2b or Phase 3 trial in 2023. These are forward-looking plans, not assurances.
- Key risks include clinical-trial and regulatory uncertainty, patient enrollment and retention, competition, dependence on third-party and single-source manufacturing, COVID-19-related disruption, and the need for substantial additional capital. Failure to obtain funding could delay, reduce or end programs.
- The Oxford loan is secured by company assets (with intellectual property subject to a negative pledge), includes operating restrictions and a final payment fee, and may be accelerated following specified defaults. It has no financial covenants.
- Other notable Q1 items included a $0.3 million unrealized loss on NeuBase shares and adoption of lease accounting. The filing reports no material legal proceedings. Management concluded disclosure controls were effective as of March 31, 2022, with no material control changes during the quarter.
Important facts for investors to verify
- Review final ORIGIN results and enrollment timing against the stated Q4 2022 topline target, and confirm whether the data support a pivotal trial.
- Check the full MAU868 interim results and subsequent trial plans, and assess safety and efficacy evidence for both programs.
- Track quarterly cash burn, trial and manufacturing spending, and whether the stated 12-month liquidity outlook remains supportable.
- Confirm whether the remaining Oxford facility is drawn and review the loan’s interest, fees, collateral and default provisions.
- The cover page reports May 12, 2022 shares outstanding of 26,769,188 Class A and 309,238 Class B, but its stated total of 27,065,473 does not equal those components. Verify the correct share count.