Pliant Therapeutics, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021; comparison is with the three months ended March 31, 2020. Pliant is a clinical-stage biopharmaceutical company developing therapies for fibrosis. It has no product sales; reported revenue is collaboration-related.
Key financial metrics
| Metric | Q1 2021 | Q1 2020 / prior balance |
|---|---|---|
| Related-party revenue | $2.2 million | $28.9 million |
| Research and development expense | $18.5 million | $13.9 million |
| General and administrative expense | $6.6 million | $4.0 million |
| Operating loss | $22.9 million | Operating income of $11.0 million |
| Net loss | $22.9 million; $0.64 per share | Net income of $11.0 million; no income attributable to common stockholders after preferred-stock allocation |
| Net cash used in operating activities | $13.7 million | $12.8 million |
| Cash, cash equivalents and short-term investments | $264.1 million | $276.9 million at December 31, 2020 |
| Total assets / total liabilities | $275.3 million / $11.1 million | $295.5 million / $12.5 million at December 31, 2020 |
Amounts are rounded; financial statements report dollars in thousands. There is no product gross margin to report because Pliant had no product-sales revenue. The filing reports no outstanding debt. Management stated that existing cash, cash equivalents and investments were expected to fund planned operations, commitments and contractual obligations for at least one year after the report date and into 2023, while noting that additional capital would be needed to complete clinical development.
Changes and notable financial items
- Revenue fell $26.8 million year over year, principally because Q1 2020 included a $25 million Novartis milestone for first-patient dosing in the PLN-1474 Phase 1 trial. Q1 2021 revenue primarily reflected $2.2 million for research and development services; no contingent milestone was recognized.
- R&D expense increased $4.6 million, mainly from higher employee-related and clinical-trial costs as PLN-74809 Phase 2 studies progressed. G&A expense rose $2.6 million, including higher employee and public-company costs.
- Investing activities provided $12.2 million, mainly as investment maturities exceeded purchases. Financing provided $1.4 million from stock-option exercises; the prior-year period included $52.0 million of Series C preferred-stock proceeds.
- The University of California license agreement was terminated effective in Q1 2021; the filing says no further obligations or financial commitments survive. No material changes in contractual obligations were reported.
Outlook, operations and risks
- PLN-74809: The company was recruiting for two Phase 2a IPF trials and one Phase 2a PSC trial. It expected preliminary data from the PET imaging trial in the first half of 2021, IPF trial enrollment completion by year-end 2021, and PSC trial enrollment completion in the first half of 2022. These are management expectations, not guaranteed outcomes.
- PLN-1474: The Phase 1 study in healthy volunteers was completed; the IND was transferred to Novartis in Q1 2021, and Novartis assumed responsibility for future development, manufacturing and commercialization. Pliant remained eligible for up to $391 million in additional contingent milestones and royalties, subject to agreement terms and achievement of milestones.
- The filing also describes a Phase 2a PLN-74809 trial for COVID-19-related ARDS. COVID-19 had delayed or slowed clinical activity and enrollment, and could further increase timelines and costs. Pliant relied on third parties for trials and manufacturing, including a sole supplier for PLN-74809.
- Pliant expected losses and expenses to continue increasing as it advanced development. Key risks include clinical failure or adverse events, patient-enrollment delays, uncertain regulatory outcomes, reliance on collaborators and contractors, competition, intellectual-property challenges and the need for future financing. No formal financial guidance was provided.
- The company reported no material legal proceedings. Management concluded disclosure controls and procedures were effective at a reasonable-assurance level as of March 31, 2021.
Important facts for investors to verify
- Progress, enrollment and data timing for the PLN-74809 IPF, PSC and COVID-19 ARDS trials, including the expected PET-trial data.
- Cash burn and whether the $264.1 million liquidity position continues to support the stated runway into 2023 as development costs evolve.
- Novartis’s progress with PLN-1474 and the conditions and timing for potential milestone or royalty receipts.
- Any effects of COVID-19, trial-site capacity or the sole-source supply arrangement on trial schedules and drug availability.
- Future financing needs and potential dilution, given continuing losses and the company’s expectation that additional capital will be required for full clinical development.