PluriStem Therapeutics Inc. (now identified in the request as Pluri Inc.) — Form 10-Q Summary
Reporting period: Three months ended September 30, 2021, the first quarter of fiscal 2022. The filing is for Pluristem Therapeutics Inc.; it is unaudited and reports U.S. dollars in thousands unless noted otherwise.
Business context and operating performance
The company is a regenerative-medicine biotechnology developer focused on placenta-derived PLX cell therapies. It reported no revenue in either the quarter ended September 30, 2021 or the comparable 2020 quarter.
| Metric | Q1 FY2022 | Q1 FY2021 |
|---|---|---|
| Net R&D expense | $6,353 | $5,938 |
| General and administrative expense | $5,088 | $2,799 |
| Operating loss | $11,441 | $8,737 |
| Net financial income | $9 | $248 |
| Net loss | $11,432 | $8,489 |
| Basic and diluted loss per share | $0.36 | $0.33 |
| Cash used in operating activities | $8,789 | $6,141 |
Margins are not meaningful because the company had no revenue. Net loss per share reflects weighted-average shares of 32.0 million, up from 25.5 million.
Financial position and liquidity
- At September 30, 2021, total assets were $83,747, current assets $62,826, current liabilities $10,365, and working capital $52,461. Shareholders’ equity was $48,907; accumulated deficit was $341,453.
- Cash and cash equivalents were $14,611, compared with $31,241 at June 30, 2021 and $6,625 at September 30, 2020. Cash, cash equivalents and restricted cash together were $15,218 at quarter-end.
- Management reported approximately $79,154 in cash, cash equivalents and short- and long-term bank deposits. Short-term deposits were $46,060 and long-term deposits $18,483.
- Investing activities used $7,240, primarily reflecting $12,084 placed in short-term deposits, partly offset by $4,859 withdrawn from long-term deposits. Financing activities provided no cash.
- The EIB loan was recorded at $23,444, including linked principal and accrued interest. The first €20 million tranche was received in June 2021, is due June 1, 2026, and carries 4% annual interest payable with principal. Further tranches, up to €30 million, depend on milestones.
- Other balance-sheet obligations include operating lease liabilities of $495 in total. There is no separate margin disclosure.
Changes versus the comparable period
- Net loss increased $2,943, or approximately 35%; operating loss increased approximately 31%.
- Net R&D expense rose 7%, mainly due to higher payroll costs, currency effects, and reduced Horizon 2020 grant participation; lower clinical-trial subcontractor and materials costs partly offset the increase.
- G&A expense rose 82%, chiefly because of higher share-based compensation, including RSU grants to the CEO and Executive Chairman, and higher directors’ and officers’ insurance costs.
- Financial expense increased to $254 from $53, primarily because of EIB loan interest. Weighted-average shares increased, reflecting prior share issuances, RSU settlements and warrant and option exercises.
Outlook, risks and notable developments
- Management believes existing resources and its operating plan are sufficient to meet obligations for at least 12 months from issuance of the statements. It also cautions that it may need additional funding for commercialization, R&D and clinical trials, and does not expect significant product-sales revenue in the next 12 months.
- The company is pursuing grants, licensing or other commercial agreements, equity issuance and potential milestone-dependent EIB funding. It reported no ATM share sales in the quarter; the ATM program permits sales up to $75 million, subject to its terms.
- Clinical updates: COVID-19-associated ARDS Phase II studies were proceeding to readout, with topline results expected in calendar Q4 2021; the hip-fracture Phase III study was more than 95% enrolled, with enrollment expected to finish in November 2021. The PLX-R18 HCT Phase I study had completed enrollment and one-year follow-up, and the company had reported positive topline results in April 2021.
- Contingent grant-related royalties include approximately $27,574 payable to the IIA from future qualifying product sales, plus $112 under a Japan marketing grant, $168 under a China/Hong Kong grant and $52 under a U.S. marketing grant. The filing also describes a capped royalty obligation tied to cGvHD product sales. Payments are contingent on applicable revenues.
- The EIB is entitled to future revenue-based royalties of 0.2%–2.3% for fiscal years 2024–2030, based on funds disbursed; the filing says this future liability cannot currently be measured. The company also noted recurring operating losses and negative operating cash flows since inception.
- Management concluded disclosure controls and procedures were effective and reported no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Confirm the filing entity and period: the supplied filing is Pluristem Therapeutics Inc.’s quarter ended September 30, 2021, not a filing labeled Pluri Inc. or a calendar-year Q1.
- Track cash burn and the composition and availability of the approximately $79.2 million reported cash-and-deposit position; cash and cash equivalents alone fell during the quarter.
- Check progress and outcomes of the ARDS and hip-fracture trials, and any resulting regulatory or commercialization milestones.
- Assess access to additional financing, including milestone-dependent EIB tranches and potential equity issuance, alongside the lack of expected significant near-term product revenue.
- Review share-based compensation and dilution, as well as contingent grant royalties and EIB revenue-based royalties.