Aligos Therapeutics, Inc. — 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; comparisons are with the year ended December 31, 2022. The company is a clinical-stage biopharmaceutical developer focused on MASH, chronic hepatitis B (CHB) and coronaviruses. It has no approved products and has never generated product-sales revenue.
Financial performance and liquidity
| Metric | 2023 | 2022 |
|---|---|---|
| Collaboration revenue | $9.3 million | $13.9 million |
| Revenue from customers | $6.2 million | None |
| Total reported revenue | $15.5 million | $13.9 million |
| Research and development expense | $73.0 million | $85.1 million |
| General and administrative expense | $30.6 million | $26.4 million |
| Operating loss | $88.1 million | $97.6 million |
| Net loss | $87.7 million | $96.0 million |
| Net loss per share, basic and diluted | $1.36 | $2.25 |
| Cash used in operating activities | $79.0 million | $79.4 million |
At year-end, cash and cash equivalents were $135.7 million, with no investments reported on the balance sheet; total assets were $151.5 million and stockholders’ equity was $92.1 million. Current assets were $141.1 million versus current liabilities of $23.9 million. Total liabilities were $59.4 million, including a $27.6 million warrant liability and operating and finance lease liabilities; the filing does not report conventional borrowings. The company reported $1.2 million of income tax expense, primarily foreign tax, and no gross-margin measure is presented.
Operating cash use was broadly flat year over year. Investing activities provided $45.0 million, primarily from investment maturities; financing activities provided $88.3 million, mainly from the October 2023 private placement. Management stated existing cash, cash equivalents and investments were expected to fund operations for at least 12 months following issuance of the financial statements, but cautioned that plans could change and further financing may be needed.
Material changes and financing
- Total revenue increased by $1.6 million, as $6.2 million of customer revenue—primarily recognized under the 2023 Amoytop agreement—more than offset a $4.6 million decline in collaboration revenue. Collaboration revenue fell partly because the original Merck agreement was completed in the first quarter of 2023.
- R&D expense declined $12.0 million, primarily reflecting reduced spending on discontinued STOPs and ASO programs, partly offset by CHB clinical work, MASH development and a $2.0 million KU Leuven milestone payment following first patient dosing in a Phase 1 trial.
- G&A expense rose $4.2 million, mainly due to higher legal and patent-attorney costs. Other income and expense included a $3.1 million net expense, primarily associated with the fair-value accounting and issuance costs for common warrants.
- The October 2023 private placement generated approximately $86.2 million in net proceeds. It included 31.4 million common shares, 81.1 million immediately exercisable pre-funded warrants at $0.0001 per share, and 56.2 million immediately exercisable common warrants at $0.7568 per share. The common warrants expire October 25, 2030. Potential warrant exercise represents substantial dilution.
- Merck gave notice in February 2023 terminating one collaboration target. The Janssen intellectual-property dispute was settled in October 2023, with both sides dismissing claims and releasing the other.
Pipeline, outlook and principal risks
- MASH: ALG-055009 completed Phase 1 evaluation, with reported tolerability, dose-proportional pharmacokinetics and expected lipid-related effects at the studied doses. The planned Phase 2a HERALD study is a 12-week, placebo-controlled trial of four doses in approximately 100 participants with presumed F1–F3 MASH. Management anticipated dosing in Q2 2024 and topline safety and 12-week MRI-PDFF data in Q4 2024. These are forward-looking targets, not reported outcomes.
- CHB: ALG-000184 Phase 1b cohorts are ongoing, including dosing with or without entecavir for up to 96 weeks. Company-reported interim data included mean HBV DNA reductions of 6.8 log10 IU/mL in specified 300 mg combination cohorts and dose-related reductions in viral antigens. Results are preliminary and remain subject to further study. ALG-125755 showed HBsAg lowering in a single-dose Phase 1 study, but further development is not prioritized without additional external funding. Two PD-1/PD-L1 inhibitor leads are in preclinical advancement.
- Coronavirus: ALG-097558 is in Phase 1. Management reported tolerability at single doses up to 2,000 mg and at 350 mg twice daily for seven days in an ongoing multiple-dose cohort; topline data were anticipated in Q2 2024. NIH/NIAID awards and contracts were expected to provide approximately $11.0 million for specified studies; additional funding is being sought for later-stage studies.
- Funding and execution: The company expects continued losses and substantial R&D spending and may require additional capital. Financing could dilute shareholders or require rights to be licensed or partnered. Clinical success, regulatory approval, commercialization and profitability are uncertain; all candidates remain investigational.
- Other significant risks: Clinical and safety setbacks, competition, reliance on third-party manufacturers and trial providers, intellectual-property challenges, collaboration termination, reimbursement and pricing uncertainty, and the ability to retain key staff. Nasdaq notified the company of a minimum-bid-price deficiency in September 2023; after transfer to the Nasdaq Capital Market in March 2024, the company had until September 3, 2024 to regain compliance.
- Unusual items and controls: The company recorded a $0.7 million impairment charge after vacating leased office space. Management concluded disclosure controls and internal control over financial reporting were effective at December 31, 2023; the auditor did not attest to internal-control effectiveness. The auditor issued an unqualified opinion on the financial statements.
Most important facts for investors to verify
- Whether the stated cash runway remains adequate as clinical spending, enrollment and program priorities evolve, and what financing is required next.
- Final HERALD trial initiation and readout timing, and whether ALG-055009 produces meaningful efficacy and acceptable safety in MASH patients.
- Complete, longer-duration ALG-000184 safety and efficacy results, including viral antigen changes and evidence of resistance or breakthrough.
- Whether ALG-097558’s Phase 1 findings support further development and whether expected government funding is received and sufficient.
- The economic and dilution effects of outstanding warrants: 81.1 million pre-funded warrant shares and 56.2 million common-warrant shares were outstanding at year-end.
- Nasdaq bid-price compliance status and any resulting effect on trading liquidity or access to capital.
- Whether collaboration revenue and potential milestone or royalty opportunities can replace funding as existing research payments are recognized or programs change.