Cingulate Inc. — FY2022 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2022, compared with 2021. This is an annual filing; the provided text does not give standalone fourth-quarter results. Filing signed March 10, 2023.
Business context
Cingulate is a pre-revenue biopharmaceutical company developing once-daily, precision-timed release drug candidates using its proprietary PTR platform. Its lead program, CTx-1301, and CTx-1302 target ADHD; CTx-2103 targets anxiety. No candidate had FDA approval or generated product revenue as of the filing.
Financial performance and position
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $9.0 million | $8.4 million |
| General and administrative expense | $8.5 million | $12.3 million |
| Operating loss | $17.5 million | $20.7 million |
| Net loss | $17.7 million | $20.7 million |
| Basic and diluted loss per share | $1.56 | $2.79 |
| Cash used in operating activities | $15.9 million | $10.4 million |
| Cash used in investing activities | $0.2 million | $0.8 million |
| Cash provided by financing activities | $4.9 million | $26.5 million |
Margins are not meaningful because the company had no revenue. The net loss narrowed by $3.0 million, or 14.6%, year over year. Lower G&A—especially the absence of a large, one-time noncash profits-interest modification charge recorded in 2021—more than offset increased clinical and manufacturing spending. Operating cash use nevertheless rose, reflecting development spending and working-capital changes.
At December 31, 2022, cash and cash equivalents were $5.36 million; current assets were $7.87 million and current liabilities $7.01 million. Total assets were $11.41 million, total liabilities $7.52 million, and stockholders’ equity $3.88 million. The company reported an accumulated deficit of $69.4 million.
Debt included a $5.0 million unsecured related-party note from Werth Family Investment Associates, bearing 15% annual interest. Principal and accrued interest are due August 8, 2025, subject to WFIA’s right, beginning April 1, 2023, to demand repayment with 120 days’ notice. Year-end accrued interest was approximately $0.29 million.
Material changes and financing
- R&D expense increased 7.0% as Cingulate completed the CTx-1301 food-effect study, initiated its adult Phase 3 study, and manufactured clinical supplies. Clinical operations costs rose to $3.5 million and manufacturing/formulation costs to $2.8 million.
- G&A expense fell 30.7%, primarily because 2021 included a $8.1 million noncash personnel charge related to profits-interest modification; insurance and professional fees increased in 2022.
- 2021 financing included approximately $20.4 million net IPO proceeds and $7.1 million in members’ contributions. 2022 financing was primarily the $5.0 million WFIA note.
- After year-end, Cingulate entered an ATM agreement allowing up to $2.65 million of common-stock sales; it reported no ATM sales as of the filing. The sales agent commission is 3% of gross proceeds.
- In March 2023, the company agreed that Indegene may provide CTx-1301 commercialization services, if approved, under future statements of work with fees to be agreed.
Liquidity, outlook, risks and contingencies
Management estimated year-end cash would fund operating expenses and capital needs only into the second quarter of 2023, and estimated approximately $23.3 million of additional capital would be needed to reach a planned CTx-1301 NDA filing in the first half of 2024. Additional funding is also needed for other programs and commercialization. The auditor’s report and management disclosures state that substantial doubt exists about the company’s ability to continue as a going concern; the financial statements contain no adjustments for a possible failure to continue operations.
- CTx-1301: Phase 3 adult dose-optimization study began in December 2022; initial cohort dose optimization was underway. Results were expected in Q3 2023. A pediatric/adolescent fixed-dose Phase 3 study was planned for mid-2023, with results expected in Q1 2024. Conditional on positive results, management planned an NDA in the first half of 2024 and cited potential FDA approval in the first half of 2025. The 2022 food-effect study indicated the candidate could be taken with or without food.
- CTx-2103: A 2022 human formulation study showed the intended triple-release buspirone profile, according to the company. A Pre-IND meeting was expected in Q3 2023 and a potential IND filing in Q4 2023.
- CTx-1302: A Phase 1/2 bioavailability study was planned for mid-2024; pivotal Phase 3 trials were contemplated for late 2024 or early 2025, contingent on successful results.
- Execution risks: The company relies on third parties for clinical trials, API supply, manufacturing and prospective commercialization. It disclosed prior CTx-1301 manufacturing delays, including delays associated with its former manufacturer and establishment of processes at new CDMO Societal.
- Other key risks: Clinical or regulatory failure, uncertainty around the 505(b)(2) pathway, Schedule II controlled-substance quotas and compliance, dependence on limited suppliers, patent challenges, competition, reimbursement and pricing pressure, and the need to raise capital. The $5.0 million related-party note adds repayment and liquidity risk.
Management reported effective disclosure controls and effective internal control over financial reporting as of December 31, 2022. The company was exempt from auditor attestation of internal control under emerging-growth-company provisions. No material legal proceeding is identified in the provided filing text; contingencies are described generally.
Most important facts for investors to verify
- Current cash, subsequent financing, ATM utilization, cash runway and the company’s ability to fund operations and the CTx-1301 program.
- Terms and status of the WFIA note, including any repayment demand, accrued interest and related-party governance.
- Actual enrollment, timing, results and safety findings from CTx-1301 Phase 3 trials, and whether FDA feedback supports the proposed NDA path and timetable.
- Societal’s manufacturing readiness, supply continuity, required controlled-substance quotas and any further trial or filing delays.
- Future Indegene statements of work and fees, plus the potential cost and timing of commercialization and payer access.
- Any milestone payments, royalties, dilution, or other financing obligations arising as programs advance.