Neumora Therapeutics, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; filed May 7, 2024. Financial statements are unaudited. Neumora is a clinical-stage biopharmaceutical company with seven neuroscience programs (three clinical and four preclinical) and no product revenue.
Financial performance and liquidity
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Product revenue | None | None |
| Research and development expense | $45.8 million | $29.5 million; up 55% |
| General and administrative expense | $14.3 million | $9.7 million; up 48% |
| Total operating expenses / operating loss | $60.1 million | $39.2 million |
| Interest income | $6.4 million | $3.6 million |
| Net loss | $53.7 million | $35.6 million; loss increased $18.1 million |
| Basic and diluted loss per share | $0.34 | $1.22; weighted-average shares were 157.9 million versus 29.3 million, largely reflecting the 2023 IPO and preferred-stock conversion |
| Cash used in operating activities | $43.0 million | $33.0 million |
| Cash, cash equivalents and marketable securities | $423.0 million at March 31, 2024 | $463.8 million at December 31, 2023 |
At March 31, 2024, total assets were $450.2 million, current assets $442.8 million, total liabilities $25.7 million, and stockholders’ equity $424.5 million. The filing reports no debt balance. Current liabilities were $24.6 million. The company stated that available cash, cash equivalents and marketable securities should fund operations for at least 12 months from issuance of the financial statements; it also expects to need additional financing to execute its longer-term plan.
Changes and cash flows
- R&D expense rose primarily as navacaprant Phase 3 trials ramped up: direct external navacaprant costs increased $21.8 million year over year. G&A growth mainly reflected higher personnel costs and stock-based compensation.
- Stock-based compensation was $7.4 million, versus $2.2 million a year earlier.
- Investing activities used $150.0 million, principally because the company purchased $185.8 million of marketable securities, partly offset by $36.6 million of sales and maturities. This treasury activity drove much of the $191.1 million decline in cash, cash equivalents and restricted cash; operating cash use was $43.0 million.
- There is no meaningful gross-margin comparison because the company has not generated product sales.
Outlook, risks and notable items
- Clinical outlook: Neumora expected topline results from the navacaprant KOASTAL-1 Phase 3 study in Q4 2024, and from KOASTAL-2 and KOASTAL-3 in the first half of 2025. It expected to start a Phase 2 navacaprant study in bipolar depression in Q2 2024, with results anticipated in 2025. These are forward-looking expectations, not reported outcomes.
- Clinical hold: In April 2024, after quarter-end, the FDA placed the NMRA-266 Phase 1 trial on clinical hold following convulsions observed in rabbit nonclinical studies. The company said it was working with the FDA to assess resolution. The filing also describes an earlier partial hold on NMRA-511, removed after a protocol amendment added tremors as a stopping criterion.
- Funding and spending: Management expects losses and R&D spending to increase as programs advance. Future capital needs depend on trial results, development costs, regulatory requirements and other factors; financing may be unavailable, dilutive or on unfavorable terms.
- Contingent obligations: Potential acquisition and license milestone, royalty and other obligations could require substantial cash or equity. Examples include BlackThorn navacaprant milestones (up to $365 million in development/regulatory milestones and $450 million in sales milestones), Amgen commercial milestones (up to $720 million across the CK1δ and GCase programs), and Vanderbilt milestones (up to $42.4 million in development and $380 million in commercial milestones), plus potential royalties. These amounts are contingent, not current recorded liabilities simply by virtue of being potential payments.
- Unusual funding agreement: Parkinson’s Research Ventures provided a first tranche of £0.9 million (reported as $1.1 million); a further £1.2 million may be available on milestones. Triggered repayments may reach up to £8.4 million.
- Other: No material legal proceedings were reported. Management concluded disclosure controls were effective as of March 31, 2024 and reported no material changes in internal control over financial reporting during the quarter.
Most important facts for investors to verify
- Whether the KOASTAL-1, -2 and -3 readouts occurred on the stated timelines and what the complete clinical results show.
- The status and implications of the NMRA-266 clinical hold, and any material safety or regulatory updates for other programs.
- Whether the stated cash runway remains supportable as trial spending rises, and when or on what terms additional financing may be needed.
- The expected timing, settlement method and potential dilution or cash impact of contingent milestone and royalty obligations.
- A wording inconsistency in MD&A: it refers to the navacaprant Phase 3 dosing milestone as paid in the fourth quarter of 2024, while the financial-statement notes say it was settled in December 2023. Confirm the correct period; the notes describe the settlement as occurring in December 2023.