Cardiff Oncology, Inc. — FY 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; filed February 24, 2022. Cardiff is a clinical-stage oncology company developing onvansertib, an oral PLK1 inhibitor, in combination with standard cancer therapies. It has no approved products and generated only limited royalty revenue from legacy intellectual property unrelated to onvansertib.
Financial and operating performance
- Revenue: $359,000, down from $366,000 in 2020. Revenue was royalties from legacy licenses.
- Expenses: Research and development was $17.4 million, up from $11.2 million, mainly due to activity across three onvansertib clinical programs. Selling, general and administrative expense was $11.8 million, up from $8.2 million, reflecting higher stock-based compensation and outside services.
- Loss: Operating loss was $28.9 million versus $19.1 million. Net loss was $28.3 million versus $19.3 million; net loss attributable to common stockholders was $28.3 million versus $22.6 million. Loss per share was $0.73 versus $1.08, with the per-share improvement reflecting a substantially higher weighted-average share count and the absence of 2020 preferred-stock deemed dividends—not improved operating performance.
- Cash flow: Net cash used in operations was $23.0 million, compared with $16.3 million in 2020. Investing activities used $131.4 million, primarily reflecting purchases of short-term investments; financing provided $35.5 million.
- Liquidity and debt: At year-end, cash and cash equivalents were $11.9 million and short-term investments were $128.9 million, totaling $140.8 million; working capital was $139.6 million. The company reported no outstanding borrowing at year-end; its $305,000 PPP loan was repaid in 2020. Management believed available funds would cover requirements for at least 12 months following issuance of the financial statements.
- Balance sheet: Total assets were $149.5 million, total liabilities $9.1 million, and stockholders’ equity $140.4 million. Accumulated deficit was $259.8 million. There is no meaningful product gross margin because the company has no marketed product.
Material changes and developments
- R&D expense rose about 55% year over year as clinical trial and outside-service costs increased. SG&A rose about 44%.
- In 2021, the company sold 2.0 million shares through its sales agreement for gross proceeds of approximately $20 million and sold 2.4 million shares to Pfizer for approximately $15 million. It also received proceeds from warrant exercises. Common shares outstanding were 41.964 million at December 31, 2021 and 43.306 million as of February 17, 2022.
- Pfizer’s investment was part of its Breakthrough Growth Initiative. Pfizer received specified information rights, including first access to onvansertib preclinical or final clinical data at least two business days before disclosure to a third party, through May 17, 2023. Pfizer also joined the company’s Scientific Advisory Board; its shares were subject to a 180-day transfer restriction.
- Operating cash use increased from 2020, while cash and cash equivalents declined as funds were shifted into short-term investments. Working capital increased to $139.6 million from $127.2 million.
Pipeline, outlook and risks
- Programs: The company reported three ongoing onvansertib combination studies: Phase 1b/2 in KRAS-mutated metastatic colorectal cancer (mCRC), Phase 2 in metastatic pancreatic ductal adenocarcinoma (mPDAC), and Phase 2 in metastatic castration-resistant prostate cancer (mCRPC). The mPDAC trial began dosing its first patient in June 2021 and expected to enroll about 45 patients.
- Clinical data: In an update announced January 18, 2022—after the fiscal year-end—12 of 35 patients treated per protocol at the recommended Phase 2 dose in the mCRC study had a complete or partial response; across dose levels, 17 of 48 had a response. Median progression-free survival across response-evaluable patients was 9.4 months and had not been reached for the recommended-dose group. The company described the combination as well tolerated, with no major or unexpected toxicities attributed to onvansertib. These are interim, non-randomized trial results and are not proof of efficacy or approval.
- For mCRPC, data as of July 2, 2021 showed disease control at 12 weeks in 29%, 40% and 54% of patients in Arms A, B and C, respectively. The company noted that the more continuous schedule in Arm C had shown an increase in disease stabilization to date.
- Outlook: Management expects continued losses and operating cash outflows for several years and says additional capital will be needed to advance clinical programs. It provided no specific revenue, earnings, or trial-completion guidance. Future financing may dilute shareholders; funding may not be available on acceptable terms.
- Key risks: Onvansertib remains investigational, and early trial results may not predict later results. Clinical, regulatory, enrollment, manufacturing, vendor, and COVID-19 disruptions could delay development or increase costs. The company relies on third parties for clinical trials and drug supply, and licenses critical onvansertib rights from Nerviano; a material breach could jeopardize those rights. Other risks include competition, intellectual-property challenges, and the need for additional capital.
- Contingencies and controls: Management reported no legal claims expected to have a material adverse effect and no material COVID-19 impact on 2021 financial statements. The financial statements received an unqualified audit opinion; management concluded disclosure controls and internal control over financial reporting were effective at year-end. The auditor identified accrued clinical trial expenses ($1.6 million) as a critical audit matter because estimating unbilled trial costs required significant judgment.
Investor verification priorities
- Review subsequent mCRC trial updates, patient follow-up, response durability, safety, and whether results are confirmed in larger or controlled studies.
- Check current cash, investment balances, operating cash burn, financing needs, and dilution since the February 2022 filing.
- Track enrollment, timelines, and results for the mPDAC and mCRPC programs, including whether interim findings translate into clinically meaningful benefit.
- Understand the scope and duration of Pfizer’s data-access rights and any future partnership or financing implications.
- Review the full risk disclosures and notes for license obligations, clinical-trial accrual estimates, preferred-stock rights, and potential dilution from options and warrants.