Pluri Inc. (formerly Pluristem Therapeutics Inc.) — Form 10-Q summary
Reporting period: Quarter and six months ended December 31, 2020. This is fiscal Q2 2021, notwithstanding the “2020 Q2” request metadata. Unaudited figures are in U.S. dollars; financial statement amounts below are in millions unless stated otherwise.
Business context
Pluri develops placenta-based cell therapy candidates for inflammatory, hematologic, muscle-trauma and radiation-related conditions. It reported no material product revenue and remains dependent on financing to fund research, clinical trials and operations.
Financial results and liquidity
| Metric | Three months ended Dec. 31, 2020 | Six months ended Dec. 31, 2020 | Comparable 2019 period |
|---|---|---|---|
| Revenue | $0 | $0 | $0.023 million in each period |
| Net R&D expense | $7.977 million | $13.915 million | $4.640 million / $10.022 million |
| G&A expense | $5.097 million | $7.896 million | $1.750 million / $3.563 million |
| Operating loss | $13.074 million | $21.811 million | $6.368 million / $13.563 million |
| Net loss | $12.554 million | $21.043 million | $6.370 million / $13.509 million |
| Basic and diluted loss per share | $0.49 | $0.82 | $0.40 / $0.86 |
- Six-month operating cash use was $13.984 million, versus $13.542 million in 2019. Investing activities provided $11.771 million, largely from withdrawals of bank deposits; financing activities provided $1.284 million.
- At December 31, cash and cash equivalents were $7.824 million; short-term deposits $35.228 million; restricted current cash $0.040 million; and long-term deposits and restricted deposits $3.152 million. The company reported total cash and deposits of approximately $46.244 million.
- Current assets were $45.250 million and current liabilities $9.996 million, for working capital of $35.254 million. Shareholders’ equity was $41.148 million and accumulated deficit $301.199 million.
- No EIB loan proceeds had been received and no funded borrowing debt is reported on the balance sheet; lease liabilities were $1.291 million in total. The EIB facility is conditional and is not assured funding.
Changes and notable developments
- Six-month net R&D expense increased 39% and G&A increased 122% year over year. Management attributed higher R&D costs mainly to COVID-19 ARDS trial subcontractors, production materials, payroll and share-based compensation, partly offset by lower travel and depreciation and reduced grant participation. G&A rose primarily due to share-based compensation, payroll and executive-chair consulting adjustments, directors’ and officers’ insurance, and EIB-related legal fees.
- Quarterly net loss increased to $12.554 million from $6.370 million, while six-month net loss rose to $21.043 million from $13.509 million. The six-month loss per share improved to $0.82 from $0.86 despite a larger total loss, alongside a rise in weighted-average shares from 15.7 million to 25.6 million.
- In December 2020, following an interim review, the independent monitoring committee concluded the Phase III critical limb ischemia study was unlikely to meet its primary endpoint; Pluri stopped enrollment.
- Pluri was enrolling patients in a Phase III hip-fracture recovery study and two Phase II COVID-19-related ARDS studies. It also described programs in incomplete recovery after bone marrow transplantation, chronic graft-versus-host disease and acute radiation syndrome.
- Shares outstanding were 25.839 million at December 31, 2020, compared with 25.493 million at June 30, 2020. By February 4, 2021, reported shares outstanding were 31.529 million.
Outlook, risks and contingencies
- Management stated that existing resources, subsequent financing, potential EIB proceeds and other funding sources were expected to cover obligations for at least 12 months from issuance of the financial statements. It cautioned that there is no assurance of adequate long-term funding.
- The company did not expect significant product-sale revenue in the next 12 months and said licensing revenue in the short and medium term was unlikely to exceed operating costs. Additional liquidity may be needed to support commercialization, R&D and clinical trials.
- The EIB agreement provides for up to €50 million in three milestone-dependent tranches. It also provides for deferred/fixed interest and potential royalties on future revenues; no tranche had been drawn by December 31.
- After quarter-end, Pluri sold 928,076 shares under its ATM for gross proceeds of $7.867 million from January 1 through February 8, 2021, and completed a registered direct offering of 4,761,905 shares for gross proceeds of $30 million on February 2. These financings increase liquidity but dilute existing shareholders.
- Contingent royalty obligations include approximately $27.574 million related to IIA grants, plus obligations under other grant and collaboration programs; payments generally depend on future sales. The filing reports no off-balance-sheet arrangements.
- Clinical development, regulatory approvals, trial outcomes, milestone-dependent funding, foreign-exchange movements and the ability to secure additional capital remain material uncertainties. The filing states that actual results may differ from forward-looking statements.
Important facts for investors to verify
- Current cash runway after the February 2021 ATM sales and $30 million offering, including subsequent cash use and offering costs.
- Whether and when Pluri meets EIB milestones and receives any tranche, and the resulting repayment and royalty terms.
- Clinical enrollment, timing and results for the hip-fracture and COVID-19 ARDS studies, and implications of the discontinued CLI enrollment.
- Expected operating expenses and share-based compensation, including the impact of the substantial RSU grants and potential future dilution.
- Terms and potential future payments associated with IIA, other grant royalties, leases and remaining contingencies.