Pliant Therapeutics, Inc. — Q2 2021 Form 10-Q
Reporting period: Three and six months ended June 30, 2021. Pliant is a clinical-stage biotechnology company developing therapies for fibrosis; it had no product-sales revenue.
Financial performance
| Metric | Q2 2021 | Q2 2020 | Six months 2021 | Six months 2020 |
|---|---|---|---|---|
| Related-party revenue | $1.8 million | $3.6 million | $4.0 million | $32.5 million |
| Research and development expense | $19.2 million | $17.5 million | $37.7 million | $31.5 million |
| General and administrative expense | $5.5 million | $3.0 million | $12.0 million | $7.1 million |
| Net loss | $22.8 million | $17.0 million | $45.7 million | $6.0 million |
| Net loss per share | $0.64 | $1.39 | $1.28 | $0.85 |
| Cash used in operating activities | — | $33.1 million | $5.0 million |
The company reported an accumulated deficit of $163.5 million. Cash, cash equivalents and short-term investments totaled approximately $244.0 million at June 30, 2021, compared with $276.9 million at December 31, 2020. Total liabilities were $11.7 million; the company reported no outstanding debt. No operating margin is presented; the company recorded operating losses.
Changes and unusual items
- Six-month related-party revenue fell by $28.6 million, mainly because 2020 included a $25.0 million Novartis milestone payment. Q2 revenue also declined as PLN-1474 Phase 1 development work had been completed.
- Six-month R&D expense rose $6.3 million, primarily from higher personnel and clinical-trial costs, partly offset by the absence of a $2.4 million University of California license milestone expense recorded in 2020.
- Six-month G&A expense increased $5.0 million, reflecting higher personnel and public-company costs. Operating cash use increased by $28.1 million versus the prior-year period.
- Investing activities provided $15.8 million in the first half, principally because investment maturities exceeded purchases. Financing activities provided $1.6 million, mostly from stock-option exercises.
Business, outlook and risks
- PLN-74809, the wholly owned oral dual integrin inhibitor, is being studied in Phase 2a trials for idiopathic pulmonary fibrosis (IPF) and primary sclerosing cholangitis (PSC). Management said IPF enrollment was on track for completion by year-end 2021 and PSC enrollment by the first half of 2022. The filing also reported generally dose-proportional pharmacokinetics and tolerability in extended Phase 1a dosing, with no severe or serious adverse events reported.
- Management anticipated preliminary analysis from the PLN-74809 PET trial after completion of image analysis; a 320 mg cohort had begun dosing. PLN-1474’s Phase 1 trial was complete, and its IND had transferred to Novartis, which is responsible for subsequent development, manufacturing and commercialization.
- The company discontinued enrollment in its PLN-74809 COVID-19-related ARDS Phase 2a trial as the number of severe and critical cases declined, redeploying resources to IPF and PSC.
- Management expected R&D and G&A expenses to increase as development progresses. Based on its current operating plan, it expected existing cash and investments to fund operations into 2023, while stating additional capital would be needed to complete development of its programs. A post-quarter ATM facility permits sales of up to $150 million of common stock; no shares had been sold under it as of the filing.
- Key risks include clinical-trial efficacy, safety, enrollment and timing; COVID-19 disruption; dependence on third parties and Novartis; reliance on a sole supplier for PLN-74809; and the potential need for additional financing and resulting dilution. The company reported no material legal proceedings. Future lease payments totaled $8.7 million as of June 30, 2021; additional Novartis milestone payments are contingent on specified achievements.
Investor verification points
- Check enrollment progress and results for the IPF, PSC and PET studies, including whether management’s stated enrollment timelines were achieved.
- Monitor cash burn, investment balances and the timing or terms of any ATM share sales; runway estimates depend on trial costs and operating plans.
- Verify PLN-74809 safety and efficacy as controlled-trial data emerge, and track Novartis’s progress with PLN-1474 and any related milestones or royalties.
- Assess the impact of supplier concentration, COVID-19-related delays and the company’s continuing need for capital.