MAIA Biotechnology, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. MAIA is a clinical-stage oncology biotech developing cancer therapies, with THIO-101, a Phase 2 study of THIO in advanced non-small cell lung cancer (NSCLC), its lead program. The company had no revenue through March 31.
Financial results and liquidity
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $2.20 million | $2.08 million |
| General and administrative expense | $1.99 million | $1.37 million |
| Total operating expenses | $4.18 million | $3.44 million |
| Net loss | $4.12 million | $3.41 million |
| Net loss attributable to MAIA shareholders | $4.12 million | $3.86 million |
| Basic and diluted loss per share | $0.38 | $0.50 |
| Cash used in operating activities | $3.36 million | $2.81 million |
At March 31, cash was $7.59 million, down from $10.95 million at December 31, 2022. Current assets were $8.33 million and current liabilities $3.77 million, for working capital of approximately $4.57 million. Total liabilities were $3.99 million, including a $224,399 warrant liability; the filing reports no conventional borrowings. Accumulated deficit was $48.32 million.
Changes and management commentary
- Operating expenses rose 22% year over year. R&D increased 6%, primarily due to higher payroll and bonuses, partly offset by lower THIO-101 start-up and consulting costs. G&A rose 46%, reflecting payroll and public-company costs, partly offset by lower stock compensation and professional fees.
- Net loss increased by $703,000 year over year. The prior-year attributable loss included a $450,578 deemed dividend on warrant modification; excluding that item, the comparison is a larger operating loss in 2023.
- MAIA recorded $67,374 of other income, including Australian R&D incentives and a gain from remeasuring warrant liabilities. Stock-based compensation was $537,522.
- Management said ongoing clinical-trial spending and lack of revenue will continue to drive operating losses and negative operating cash flow. The filing states there is substantial doubt about the company’s ability to continue as a going concern within one year after issuance; additional equity or debt financing is needed, and cannot be assured.
Outlook, developments, and risks
- After quarter-end, on April 27, 2023, MAIA sold 2,555,500 shares at $2.25 per share, generating approximately $5.1 million net proceeds. Proceeds are intended for THIO trials, preclinical development, R&D, and general corporate purposes. The offering also included underwriter warrants for up to 127,775 shares at $2.8125. The financing provides additional capital but dilutes shareholders.
- Management reported that the first two European patients were dosed in THIO-101 in early March and nine sites had been activated in Hungary, Poland, and Bulgaria. Post-quarter announcements reported topline safety-lead-in results and preliminary survival observations for two patients; these are early clinical findings, not established efficacy.
- Under the Regeneron agreement, MAIA bears the trial costs while Regeneron supplies cemiplimab without charge. The agreement gives Regeneron NSCLC development exclusivity for the trial period, limiting MAIA’s ability to conduct NSCLC trials with another checkpoint inhibitor during that time.
- UT Southwestern license agreements include potential milestone payments, with stated milestones ranging from $1 million to $50 million and combined caps of up to $112 million, as well as royalties. No milestones had been achieved and no milestone payments were due as of March 31, 2023.
- Management disclosed ineffective disclosure controls due to material weaknesses in segregation of duties and review of complex transactions. Remediation is ongoing, including hiring a Corporate Controller and using external technical-accounting support; there is no assurance the weaknesses will be fully remediated.
- The company terminated planned research activities in Russia amid uncertainty related to the war in Ukraine. It reported no material change to the risk factors in its 2022 Form 10-K and no material legal proceedings.
Key facts for investors to verify
- Cash runway and expected spending on THIO-101, especially in light of the going-concern warning and the timing and net proceeds of the April 2023 offering.
- Enrollment, follow-up, safety, and efficacy results from THIO-101; distinguish preliminary post-quarter announcements from results reported for the quarter.
- Progress in remediating internal-control material weaknesses and the reliability of future financial reporting.
- Potential dilution from shares and warrants, and the terms and potential obligations under the UTSW licenses and Regeneron agreement.