Newamsterdam Pharma Co N.V. quarterly report, Q1 FY2024

Business context and reporting period

NewAmsterdam Pharma Company N.V. is a late-stage, clinical-stage biopharmaceutical company developing obicetrapib, an oral CETP inhibitor for LDL-C lowering, alone and with ezetimibe. The unaudited quarter ended March 31, 2024; financial statements are presented under U.S. GAAP, adopted retrospectively after the company ceased qualifying as a foreign private issuer effective January 1, 2024. The company has no approved products and has generated no product-sale revenue.

Financial results and position

Amounts below are in U.S. dollars; financial-statement figures are rounded to millions.

Revenue was entirely from the Menarini license agreement; the quarter’s $1.4 million reflected deferred license consideration. The company reported no income tax expense. Operating and net loss margins are not especially informative given the absence of product sales and the small amount of license revenue.

At March 31, total assets were $488.5 million, total liabilities $76.7 million, and shareholders’ equity $411.8 million. Current liabilities were $59.7 million. The balance sheet reports no conventional borrowing; major liabilities include $33.1 million of derivative warrant liabilities and a $16.5 million derivative earnout liability. These fair-value liabilities are not equivalent to funded debt.

Financing cash flow was $198.2 million, including approximately $190.0 million net proceeds from a February public offering and proceeds from warrant and option exercises. Investing cash outflow was $0.4 million. The filing does not provide a specific cash-runway estimate.

Material changes versus the prior comparable period

• Revenue fell $7.2 million, primarily because Q1 2023 included $5.4 million of Menarini milestone revenue; no milestone was achieved in Q1 2024.
• R&D expense increased $2.0 million, mainly as Phase 3 clinical costs rose $7.3 million, partly offset by a $5.0 million reduction in drug-substance validation costs.
• SG&A expense increased $6.4 million, reflecting higher personnel, public-company and commercial-preparation costs, including a $3.5 million increase in marketing and communications.
• Net loss increased $51.7 million. In addition to higher operating costs and lower revenue, results included a $39.0 million unrealized fair-value loss on warrants and earnout liabilities, versus $6.2 million in Q1 2023, and a $2.4 million foreign-exchange loss versus a $3.1 million gain.
• Operating cash used increased $22.7 million. The February offering materially strengthened quarter-end cash, while the offering and exercises increased the share count and potential dilution.

Outlook, commentary, risks and unusual items

• Management expects significant R&D spending and losses to continue; clinical-trial costs may rise as programs advance. SG&A may also increase with organizational growth and commercial preparedness. No specific revenue, earnings, cash-runway or clinical-readout guidance is provided.
• In March, the company dosed the first patient in TANDEM, a Phase 3 trial of obicetrapib plus ezetimibe, with approximately 400 U.S. patients planned. After quarter-end, PREVAIL reached its 9,000-patient enrollment target; enrollment was extended through April, with more than 9,500 patients randomized.
• Management says $481.1 million of cash was sufficient for disclosed service-provider commitments estimated at up to $19.2 million, including cancellation-related obligations. The company nevertheless warns it may need additional capital, and future financing may dilute shareholders or impose restrictions.
• Obicetrapib is the company’s sole product candidate and remains subject to clinical, regulatory, safety, manufacturing, reimbursement and commercial-adoption risks. The company relies on third parties for clinical-trial manufacturing and expects Menarini to commercialize in certain European territories if approved; the company plans to pursue U.S. commercialization itself.
• Material weaknesses in internal control over financial reporting remained unremediated at quarter-end, and disclosure controls were deemed ineffective. Management reports remediation work is underway but still being tested; it believes the filed financial statements are fairly stated in all material respects.
• Other investor considerations include possible dilution from outstanding options and warrants, registered resale shares, foreign-exchange exposure (net exposure of $98.3 million, mainly euros), and the risk that the company may need substantial additional capital. No material pending legal proceedings were reported.

Important facts for investors to verify

• Progress, final results and regulatory implications of PREVAIL and the other Phase 3 studies, including TANDEM; enrollment completion alone is not evidence of efficacy or approval.
• The timing and adequacy of any regulatory submissions, and whether safety, efficacy, manufacturing and reimbursement support eventual commercialization.
• Cash use and financing needs against the $481.1 million quarter-end balance, particularly as trial and commercial-preparation spending increases; no quantified runway is supplied.
• Remediation and independent testing of the disclosed material weaknesses, including controls over financial reporting, accounting review and information technology.
• Potential dilution and market overhang from the offering, 4.7 million pre-funded warrants, 3.0 million other warrants outstanding at quarter-end, options, and registered resale securities.
• Menarini’s performance and the terms and likelihood of future license milestones, royalties and cost-sharing payments; these amounts are contingent and are not assured revenue.