Immunic, Inc. — Form 10-Q Summary
Reporting period: Quarter ended September 30, 2022; filed November 3, 2022. Immunic is a clinical-stage biopharmaceutical company developing oral therapies for inflammatory and autoimmune diseases. It has no approved products and no product-sales revenue.
Financial performance and liquidity
| Metric | Three months ended September 30 | Nine months ended September 30 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $16.5 million (2022); $15.5 million (2021) | $50.5 million (2022); $42.7 million (2021) |
| General and administrative expense | $3.6 million (2022); $2.9 million (2021) | $11.6 million (2022); $10.0 million (2021) |
| Net loss | $21.2 million (2022); $19.3 million (2021) | $63.9 million (2022); $71.8 million (2021) |
| Net loss per share, basic and diluted | $0.69 (2022); $0.76 (2021) | $2.16 (2022); $3.33 (2021) |
| Operating cash used | Not separately reported in the statement for the quarter | $50.0 million (2022); $59.6 million (2021) |
For Q3, operating expenses rose 9% and net loss increased 10% year over year, chiefly reflecting higher development and personnel costs. For the first nine months, expenses and net loss were lower than in 2021, principally because 2021 included a $17.25 million 4SC royalty settlement; R&D and G&A expenses nevertheless increased.
At September 30, cash and cash equivalents were $72.8 million, down from $86.9 million at December 31, 2021. Current assets were $86.6 million and current liabilities $11.5 million. Total liabilities were $12.3 million, including $1.3 million of operating lease liabilities; the balance sheet reports no separate borrowings. Stockholders’ equity was $108.8 million and accumulated deficit was $260.8 million. The filing gives no meaningful product margin; the company has no product-sales revenue.
Nine-month investing cash use was $0.1 million and financing cash provided was $39.7 million, largely from ATM share sales. Cash fell by $14.1 million over the period, including a $3.7 million adverse effect from exchange-rate changes. The company reported $2.7 million of non-cancelable development-program obligations expected to be paid over the following 12 months.
Material developments and outlook
- Post-quarter financing: A private placement closed October 12, 2022, raising approximately $60 million gross and $56.4 million net. It comprised common shares and pre-funded warrants, creating potential dilution. Management said the September cash balance plus the October proceeds should fund operations beyond 12 months from issuance of the financial statements.
- IMU-935 psoriasis update: An interim group-level analysis announced October 20 found that active-treatment groups did not separate from placebo on PASI reductions at four weeks, partly because placebo improvement was greater than expected. The trial remained blinded and ongoing; the company reported no new safety signals and planned further analysis.
- Expected goodwill impairment: After the IMU-935 announcement and share-price decline, the company expected a full impairment of approximately $33 million in Q4 2022. This would be a non-cash charge, subject to the subsequent accounting assessment.
- Other programs: Vidofludimus calcium’s Phase 2 CALDOSE-1 ulcerative-colitis trial missed its primary endpoint; the company said it would not continue IBD development without a partner. Phase 3 studies in relapsing multiple sclerosis continued, with the first ENSURE trial readout targeted for end-2025 and CALLIPER interim data targeted for the second half of 2023. Initial IMU-856 celiac-disease results were expected in 2023.
- Operating outlook and risks: Management expects significant expenses and operating losses to continue as development advances. It cited inflation and supply-chain costs, dependence on additional funding, clinical-trial and regulatory uncertainty, and foreign-exchange exposure. It warned that equity financing may be more difficult after the share-price decline and that debt could be more costly. No committed external funding source was reported.
Investor verification points
- Confirm the terms, net proceeds, share and warrant dilution, and registration status of the October 2022 private placement.
- Track subsequent IMU-935 psoriasis trial analysis and whether the program’s development plan changes.
- Verify whether and when the anticipated approximately $33 million goodwill impairment was recorded.
- Monitor cash burn, clinical spending, and management’s stated runway against actual funding needs and trial timelines.
- Assess the implications of CALDOSE-1’s missed endpoint and the decision to require a partner for further IBD development.
- Review foreign-exchange impacts: management estimated a 10% adverse currency move could reduce foreign subsidiaries’ net current assets by about $4.3 million and affect nine-month net loss by about $5.3 million.