Filing summary
Entity mismatch: The request identifies Chemomab Therapeutics Ltd., but the supplied Form 10-Q is for Anchiano Therapeutics Ltd. This summary reflects the filing provided, not Chemomab.
Business context and reporting period
Unaudited results cover the three months ended March 31, 2020; balance-sheet comparisons are to December 31, 2019. Anchiano was a preclinical biopharmaceutical company developing small-molecule pan-mutant RAS inhibitors and PDE10/β-catenin pathway inhibitors under a license agreement with ADT Pharmaceuticals. The company reported no revenue to date.
Key financial metrics
| Metric (US$ thousands, except per-share data) | Q1 2020 | Q1 2019 / prior balance date |
|---|---|---|
| Revenue | None | None to date |
| Research and development expense | 1,050 | 4,135 |
| General and administrative expense | 1,825 | 1,291 |
| Restructuring expense | 670 | — |
| Total operating expenses | 3,545 | 5,426 |
| Net loss | 3,535 | 9,913 |
| Basic and diluted loss per share | $0.10 | $0.38 |
| Net cash used in operating activities | 3,536 | 3,122 |
| Cash and cash equivalents at period end | 14,009 | 17,575 at Dec. 31, 2019 |
| Total assets / total liabilities | 15,183 / 3,623 | 19,755 / 4,846 at Dec. 31, 2019 |
Amounts are in thousands of U.S. dollars unless noted. No gross profit or operating margins are meaningful because the company had no revenue. The filing reports no borrowings; liabilities principally included payables, accruals, and operating lease obligations. Cash, cash equivalents, and restricted cash totaled $14.135 million at quarter-end.
Material changes versus the prior comparable period
- R&D expense fell 75%, primarily because clinical trial and manufacturing costs declined after the Phase 2 Codex study was discontinued; this was partly offset by costs for the RAS program.
- G&A expense increased 41%, reflecting personnel, insurance, and professional costs to support a U.S. public-company infrastructure.
- Q1 2020 included $670,000 of restructuring expense. Q1 2019 included $4.487 million of net finance expense, chiefly warrant revaluation; Q1 2020 recorded $10,000 of net finance income.
- Operating cash use rose by $414,000 year over year. There were no financing proceeds in Q1 2020, compared with $27.819 million of net financing cash in Q1 2019, largely from the IPO.
- Cash and cash equivalents declined $3.566 million from year-end 2019. The accumulated deficit was $108.966 million at March 31, 2020.
Outlook, risks, and unusual items
- Going concern and funding: Management estimated existing cash would fund projected needs only through Q1 2021 and stated that substantial doubt existed about the company’s ability to continue as a going concern. Additional equity, debt, or strategic financing would be needed; availability and terms were uncertain.
- Restructuring and strategy: After discontinuing the Phase 2 Codex trial in November 2019 because of a low probability of clearing its futility threshold, the company approved closure of its Israeli office and laboratories in January 2020. It expected closure in Q2 2020, with lease payments continuing through October 2020. Restructuring liabilities were $1.412 million at March 31, 2020.
- Development: The ADT agreement covers research-stage RAS and PDE10/β-catenin compounds. The company paid a $3 million upfront fee in 2019 and may owe additional transfer, milestone, and royalty payments. It can terminate the agreement with 90 days’ notice.
- Nasdaq: In April 2020, the company received a deficiency letter concerning minimum bid-price requirements and said it would work to regain compliance; failure could have a material adverse effect.
- COVID-19: As of May 7, 2020, operations had not been significantly affected, but the company could not predict the pandemic’s full impact, including on planned and ongoing preclinical work.
- Subsequent event: On April 23, 2020, shareholders approved increasing authorized ordinary shares from 100 million to 500 million. The filing reported 37,099,352 shares outstanding as of May 7, 2020.
- Management said disclosure controls were effective at the reasonable-assurance level and reported no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Confirm the intended issuer: the supplied filing is Anchiano Therapeutics Ltd., not Chemomab Therapeutics Ltd.
- Review the cash runway assumptions and the company’s ability to secure additional funding before the stated Q1 2021 runway end.
- Check the status and costs of the Israeli-site closure, restructuring obligations, and remaining lease payments.
- Confirm Nasdaq bid-price compliance progress and any resulting listing consequences.
- Assess development progress, funding requirements, and potential payment obligations under the ADT license agreement.