Pluri Inc. — Form 10-Q Summary
Reporting period: Quarter and six months ended December 31, 2022 (fiscal Q2 2023). Amounts below are U.S. dollars; financial statement figures are generally in millions unless noted. The filing is unaudited.
Business context
Pluri is a biotechnology company developing cell-based products and technologies using a three-dimensional cell-expansion platform. Its activities include regenerative medicine and food technology, alongside a September 2022 collaboration with a European API manufacturer. The company changed its name from Pluristem Therapeutics Inc. to Pluri Inc. in July 2022.
Financial performance and position
| Metric | Three months ended Dec. 31, 2022 | Six months ended Dec. 31, 2022 | Comparable 2021 period |
|---|---|---|---|
| Revenue | $0.002 million | $0.089 million | None |
| Net loss | $8.254 million | $14.523 million | $10.940 million and $22.372 million, respectively |
| Net loss per share | $0.24 | $0.44 | $0.34 and $0.70, respectively |
| Net R&D expense | $3.785 million | $8.056 million | $6.507 million and $12.860 million, respectively |
| General and administrative expense | $2.896 million | $5.635 million | $4.288 million and $9.376 million, respectively |
Revenue was immaterial relative to operating expenses, so operating margins are not meaningful. Operating loss was $6.679 million for the quarter and $13.602 million for the six-month period.
- Cash and liquidity: At December 31, cash and cash equivalents were $8.818 million; short-term deposits were $38.428 million; and restricted cash and deposits totaled $1.350 million. The company reported total cash, cash equivalents, restricted cash and restricted deposits of $10.168 million in its cash-flow reconciliation, and a broader cash position including short-term deposits of $48.596 million. Working capital was $44.856 million.
- Cash flow: Six-month operating cash use was $13.889 million, versus $18.652 million in the prior-year period. Investing activities provided $7.062 million, primarily from withdrawals of short-term deposits; financing activities provided $5.693 million, principally from the December private placement. Cash, cash equivalents and restricted cash decreased $1.245 million over the six months.
- Debt: The EIB loan liability was $22.675 million, including accrued interest. The €20 million first tranche is due June 1, 2026 and carries 4% annual interest. Pluri said it did not expect additional EIB funding. The EIB is also entitled to revenue-based royalties in fiscal years 2024–2030.
- Balance sheet: Total assets were $59.927 million, total liabilities $34.961 million, and total equity $24.966 million at December 31, 2022. Accumulated deficit was $385.501 million.
Material changes and notable items
- Six-month net loss declined 35% year over year, reflecting lower R&D and G&A expenses, cost reductions and the completion or winding down of certain clinical studies. Quarterly net loss declined about 25%.
- Net R&D expense fell 37% for the six months; G&A expense fell 40%. Management cited reduced clinical-study and materials costs, lower staffing and share-based compensation, and increased grant participation. R&D headcount fell to 108 from 137 a year earlier.
- Other financial results shifted to expense: six-month other financial expense was $0.515 million versus income of $0.317 million in 2021; the quarter had expense of $1.363 million versus income of $0.080 million. Pluri attributed the change mainly to euro/U.S. dollar exchange-rate movements on the EIB loan.
- The December 2022 private placement involved agreements for up to 8.156 million shares and warrants. By December 31, 5.550 million shares and warrants had been issued and approximately $5.8 million received; by February 13, 2023, 7.016 million had been issued for $7.3 million gross proceeds. Warrants have three-year terms and are exercisable after six months or when authorized shares are increased. The company agreed to seek shareholder approval to increase authorized shares.
- Plurinuva, the cultivated-meat joint venture with Tnuva, reported proof-of-concept completion in December. Tnuva’s warrants expired unexercised on November 22, 2022.
Outlook, risks and contingencies
Management said existing resources, expected remaining proceeds under the December investment agreements and the operating plan should fund obligations for at least 12 months from issuance of the financial statements. The filing also says Pluri does not expect significant product-sales revenue in the next 12 months; licensing revenue may not exceed operating costs in the short to medium term. Management expects to continue pursuing grants, collaborations, licensing and equity financing. There is no assurance of sufficient long-term funding.
- Pluri has recurring operating losses and negative operating cash flows. The company reported an accumulated deficit of $385.501 million and six-month operating cash use of $13.889 million.
- Contingent IIA royalties were $27.574 million, excluding applicable LIBOR interest, payable only if qualifying products or services generate sales. A further $1.350 million of cash and deposits was pledged for guarantees and hedging-related credit support.
- Key uncertainties include clinical and preclinical outcomes, regulatory approval, commercialization, future financing and grant availability, and foreign-exchange movements. EIB revenue royalties and loan restrictions may also affect future cash flows and business flexibility.
- Management reported effective disclosure controls and procedures and no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Cash runway assumptions, including the timing and amount of remaining private-placement proceeds and expected operating cash burn.
- Shareholder approval and completion of the authorized-share increase, including the resulting dilution from issued shares and warrants.
- Progress, funding allocation and milestones for the API collaboration, Plurinuva cultivated-meat program and clinical pipeline.
- Terms and potential future impact of the EIB loan, revenue royalties and IIA grant-related royalty obligations.
- Whether expense reductions are sustainable and whether Pluri can generate meaningful commercial revenue or secure additional non-dilutive funding.