PIERIS PHARMACEUTICALS, INC. — Q1 2023 Form 10-Q
Filing identity: The submitted filing identifies the registrant as Pieris Pharmaceuticals, Inc. (Nasdaq: PIRS), not Palvella Therapeutics, Inc. It covers the three months ended March 31, 2023; financial amounts below are in U.S. dollars.
Business context and reporting period
Pieris is a clinical-stage biopharmaceutical company developing Anticalin-based therapies. Its programs include partnered elarekibep for asthma, proprietary respiratory candidates PRS-220 and PRS-400, and partnered immuno-oncology programs. It has no product-sales revenue; reported revenue comes from collaborations and licenses.
Financial performance and liquidity
| Metric | Q1 2023 | Q1 2022 / comparison |
|---|---|---|
| Revenue | $1.9 million | $11.0 million; down $9.1 million |
| Operating expenses | $17.4 million | $18.4 million |
| Research and development | $13.4 million | $14.1 million |
| General and administrative | $4.0 million | $4.4 million |
| Operating loss | $15.5 million | $7.5 million |
| Net loss | $13.2 million; $0.18 per share | $5.1 million; $0.07 per share |
| Operating cash flow | $(11.0) million | $(22.6) million |
| Cash, cash equivalents and investments | $48.4 million at March 31 | $59.2 million at December 31, 2022 |
| Total liabilities | $66.8 million | $67.6 million at December 31, 2022 |
Q1 revenue included $2.0 million of customer revenue and $(0.1) million of collaboration revenue. Grant income was $2.0 million and interest income was $0.4 million. The filing does not present a conventional gross margin measure. No borrowings are listed; liabilities include $13.1 million in operating lease liabilities and deferred revenue.
Material changes versus the prior comparable period
- Revenue fell primarily because the prior-year period included revenue recognized following discontinuation of an AstraZeneca program and higher Servier and Genentech revenue.
- Net loss widened despite lower operating expenses, reflecting substantially lower revenue. Respiratory R&D spending rose by $1.9 million, while immuno-oncology R&D fell by $1.9 million, primarily as cinrebafusp alfa clinical costs declined.
- Operating cash use improved year over year. Investing activities provided $11.9 million, mainly reflecting investment maturities; there were no financing proceeds in Q1 2023, versus $6.6 million in Q1 2022 from ATM sales and option exercises.
- Cash and investments declined from $59.2 million at year-end to $48.4 million at quarter-end. Accumulated deficit reached $303.6 million.
Outlook, management commentary and risks
- Management says available funds, under its approved 2023 budget and planned spending controls, are expected to fund limited operations for at least 12 months from the filing date. The company says it would need additional capital to maintain its then-current R&D activity across all active programs; without financing or spending reductions, substantial doubt exists about its ability to continue as a going concern.
- Management is pursuing equity financing, the $75 million ATM program, collaborations, licensing, grants and milestone payments. No shares were sold through the ATM in Q1. There is no assurance that financing will be available on acceptable terms. If needed, the company may defer or limit projects and reduce spending.
- The stated priority is obtaining data from AstraZeneca’s elarekibep Phase 2a asthma study. AstraZeneca narrowed the efficacy focus to the 3 mg cohort; topline results were expected by mid-2024. The filing also describes potential co-development and U.S. co-commercialization options for Pieris.
- PRS-220 Phase 1 results were expected in the second half of 2023. Management said PRS-220 Phase 2-readiness work and PRS-400 IND-enabling work could be gated to conserve resources.
- After quarter-end, Genentech and Pieris discontinued an ophthalmology discovery program, and AstraZeneca and Pieris discontinued one discovery-stage program. Related revenue recognition was expected in Q2 2023. The companies continued the Genentech respiratory program; Pieris retained options concerning AstraZeneca’s remaining discovery-stage program.
- Other risks include clinical and regulatory uncertainty, dependence on partners and third parties, the need for further capital, and foreign-exchange exposure. The filing reports no material pending legal proceedings and no material changes to the risk factors in the 2022 Form 10-K.
Important facts for investors to verify
- Confirm the registrant identity: this filing is for Pieris Pharmaceuticals, Inc., despite the request metadata naming Palvella Therapeutics.
- Track financing runway, cash use, ATM availability and any announced spending reductions or capital raises.
- Monitor elarekibep Phase 2a enrollment, timing and results, and any decisions on co-development or commercialization options.
- Check progress and funding plans for PRS-220, PRS-400, PRS-344/S095012 and other partnered programs, including subsequent program discontinuations or milestone payments.
- Review the Q2 accounting effects of the post-quarter Genentech and AstraZeneca program discontinuations.