Aura Biosciences, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Aura is a clinical-stage biotechnology company with no approved products and no revenue to date. Its lead candidate, bel-sar (AU-011), is being developed primarily for choroidal melanoma, with additional programs in choroidal metastasis and non-muscle invasive bladder cancer (NMIBC).
Financial performance and position
| Metric | Q1 2023 | Q1 2022 / prior period |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $14.4 million | $8.3 million |
| General and administrative expense | $5.0 million | $4.5 million |
| Total operating expenses / operating loss | $19.4 million | $12.8 million |
| Net loss | $17.5 million | $12.8 million |
| Net loss per share, basic and diluted | $0.46 | $0.44 |
| Net cash used in operating activities | $16.4 million | $15.2 million |
Gross profit and operating margins are not meaningful because Aura has no product revenue. Interest income, including marketable-security accretion, was $2.0 million, compared with $0.03 million in Q1 2022, partly offsetting the operating loss.
- At March 31, 2023, cash and cash equivalents were $38.5 million and marketable securities were $135.0 million, totaling $173.5 million; this compares with $188.8 million at December 31, 2022. Marketable securities increased from $67.2 million as cash was deployed into investments.
- Cash, cash equivalents and restricted cash declined by $83.1 million during the quarter. Investing cash outflow was $66.9 million, primarily from marketable-security purchases; financing provided $0.2 million.
- Total liabilities were $25.8 million, including operating lease liabilities of $20.6 million. The filing reports no long-term debt or finance leases. Contractual operating lease payments total $33.2 million.
Material changes and business developments
- Net loss increased by $4.6 million year over year. R&D expense rose by $6.1 million, reflecting Phase 2 clinical activity, CRO costs associated with Phase 3 trial start-up, bel-sar manufacturing development and higher personnel costs. G&A increased by $0.5 million.
- Aura reported enrollment complete in its Phase 2 study evaluating suprachoroidal bel-sar. Interim data presented in February 2023 covered eight patients matching the planned Phase 3 criteria, with an average nine months of follow-up: reported tumor control was 8/8, visual acuity was preserved in 7/8, and no posterior inflammation or treatment-related serious adverse events had been reported as of January 10, 2023. These are interim results, not pivotal-trial evidence.
- The planned global Phase 3 choroidal melanoma trial is designed to enroll approximately 100 patients and compare therapeutic-dose bel-sar, low-dose bel-sar and sham control. Aura said start-up was underway and targeted first dosing in the first half of 2023; updated Phase 2 data were expected in the second half of 2023.
- Aura planned Phase 2 start-up activities for choroidal metastasis in the second half of 2023 and expected initial data from its ongoing NMIBC Phase 1 trial in the second half of 2023.
Outlook, risks and contingencies
- Management expects continuing losses and rising expenses as clinical development advances. Aura stated that its cash and marketable securities were expected to fund operating expenses and capital needs into 2025; the financial-statement notes also state they should cover at least 12 months from issuance. The company cautions that these estimates depend on assumptions and that further capital will be needed beyond that period.
- Aura has no approved products and depends heavily on bel-sar. Clinical efficacy and safety, regulatory approval, manufacturing scale-up, market acceptance and reimbursement remain uncertain. The filing emphasizes that early and interim trial findings may change and may not predict pivotal-trial outcomes.
- The company relies on third parties for clinical trials and manufacturing, and reported single-source reliance for certain bel-sar manufacturing inputs. It had experienced minor manufacturing delays from a vendor supply constraint.
- At the time of the March 2023 bank disruptions, Aura reported that 15% of its cash, cash equivalents and marketable securities were held at Silicon Valley Bank in operating accounts and money-market funds; it also had a lease-related letter of credit and restricted deposit there. The filing describes industry-wide access risks but does not clearly quantify any loss or subsequent recovery for Aura.
- No material litigation was reported. The filing identifies potential milestone, maintenance-fee and royalty obligations under license agreements, including development and commercial milestones whose timing and amounts are uncertain.
Important facts for investors to verify
- Whether the planned Phase 3 trial began dosing on schedule, and the trial’s enrollment, design and regulatory status.
- Final and fuller follow-up results from the Phase 2 study, including safety, vision outcomes and tumor control.
- Actual cash runway and spending trajectory relative to management’s “into 2025” estimate, including future financing and dilution needs.
- The status of Aura’s SVB-held funds and lease-related credit support after the bank receivership.
- Manufacturing readiness, supply concentration and any clinical comparability work required for commercial-scale production.