Aligos Therapeutics, Inc. — Q2 2021 Form 10-Q
Reporting period: Three and six months ended June 30, 2021. Unaudited interim financial statements. Aligos is a clinical-stage biopharmaceutical company developing treatments for viral and liver diseases; it has no approved products and has generated no product sales revenue.
Key financial metrics
| Metric | Q2 2021 | Q2 2020 | First half 2021 | First half 2020 |
|---|---|---|---|---|
| Collaboration revenue | $1.5 million | None | $2.5 million | None |
| Research and development expense | $24.6 million | $17.2 million | $47.4 million | $34.5 million |
| General and administrative expense | $6.6 million | $4.1 million | $12.3 million | $7.5 million |
| Net loss | $29.8 million | $20.8 million | $57.5 million | $40.8 million |
| Net loss per share, basic and diluted | $0.79 | $7.40 | $1.53 | $14.96 |
| Cash used in operating activities | Not separately presented | Not separately presented | $52.8 million | $38.0 million |
Revenue is collaboration revenue, not product revenue. Gross margin is not meaningfully reported. The sharp year-over-year change in loss per share reflects a substantially higher weighted-average share count following the October 2020 IPO; net loss increased.
At June 30, 2021, cash and cash equivalents were $187.7 million and short-term investments were $3.0 million, or $190.7 million combined; restricted cash was $0.2 million. Total current assets were $196.6 million and current liabilities were $30.1 million. Total liabilities were $43.0 million. The company reported no debt outstanding apart from ordinary-course payables; lease liabilities totaled approximately $12.5 million.
Accumulated deficit was $232.2 million. Stockholders’ equity was $168.9 million. Management stated that existing cash, cash equivalents and investments were expected to fund operations for at least 12 months following issuance of the financial statements. On July 6, 2021, after quarter-end, the company completed a follow-on offering of 4.4 million shares for net proceeds of $77.9 million.
Changes versus the prior comparable period
- Q2 operating expenses rose 46% to $31.1 million; first-half operating expenses rose 42% to $59.8 million. Management attributed the increases mainly to higher personnel and stock-based compensation, third-party program costs, and public-company and administrative expenses.
- First-half operating cash use increased to $52.8 million from $38.0 million. Cash and cash equivalents plus restricted cash declined by $33.1 million during the first half, partly offset by investment maturities.
- Collaboration revenue began in 2021 from the Merck research collaboration; revenue is recognized based on project progress. The company reported $2.5 million of collaboration revenue for the first half.
Outlook, commentary and risks
- Management expects significant expenses and operating losses for at least the next several years, with spending driven by clinical and nonclinical development. No profitability or product revenue guidance was provided.
- ALG-010133 and ALG-000184 were in Phase 1 development, with patient dosing ongoing. Management reported ALG-010133 was generally tolerated in healthy volunteers, though injection-site reactions occurred; one was considered severe by surface-area criteria. Preliminary ALG-000184 data included a mean 2.9-log reduction in HBV DNA in eight subjects treated for 14 days. These are early findings and may not predict later results.
- The company had filed a clinical trial application for ALG-020572 and targeted an ALG-125755 CTA filing in the first half of 2022. It planned to file a CTA for ALG-055009 in Q3 2021. These are management plans, not guaranteed milestones.
- Key risks include clinical and regulatory uncertainty, potential adverse effects, reliance on third-party manufacturers and CROs, COVID-19-related disruption, competition, need for future financing, and collaboration and licensing obligations. The filing notes that the company had no issued patents specifically claiming its named drug candidates and identifies potential third-party patent risks.
- No material legal proceeding or contingency requiring accrual was reported at June 30, 2021. The company reported effective disclosure controls and no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Progress, safety and complete data from ALG-010133 and ALG-000184 trials; confirm whether preliminary efficacy and tolerability findings hold as studies advance.
- Actual cash burn, spending plans and financing runway, including the effect of the July 2021 offering and any subsequent changes in development plans.
- Timing and status of the stated ALG-020572, ALG-125755 and ALG-055009 development milestones.
- Merck collaboration economics, milestone conditions and revenue-recognition progress, as well as future licensing or milestone obligations.
- Patent coverage, third-party intellectual property exposure and whether any disputes or licensing developments affect candidate development.