Cue Biopharma, Inc. — Q3 2021 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2021. Cue Biopharma is a clinical-stage biopharmaceutical company developing Immuno-STAT biologics. It had no commercial product revenue and reported collaboration revenue from Merck and LG Chem.
Financial performance and liquidity
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Collaboration revenue | $2.395m | $0.704m | $6.687m | $2.679m |
| Research and development | $11.288m | $7.517m | $29.846m | $25.542m |
| General and administrative | $4.125m | $3.318m | $12.660m | $11.205m |
| Operating loss | $(13.018)m | $(10.131)m | $(35.819)m | $(34.068)m |
| Net loss | $(12.993)m | $(10.031)m | $(35.777)m | $(33.682)m |
| Basic and diluted loss per share | $(0.41) | $(0.34) | $(1.16) | $(1.20) |
At September 30, cash and cash equivalents were $67.633m, with no marketable securities; current assets were $70.255m and current liabilities $15.355m. Working capital was approximately $54.9m. Total liabilities were $15.355m, principally contract and operating lease liabilities; the filing reports no debt. Cash used in operating activities was $28.192m for the nine months, versus $25.495m in the prior-year period. Financing provided $11.851m, primarily from ATM share sales and option exercises. No gross margin is presented; product sales had not begun.
Changes versus prior periods
- Revenue increased, reflecting higher collaboration revenue recognized under the Merck and LG Chem agreements.
- Q3 operating expenses increased 42% year over year, primarily as R&D rose with laboratory, drug-substance manufacturing and clinical costs. Nine-month operating expenses rose approximately 16%.
- Q3 net loss widened to $12.993m from $10.031m; nine-month net loss increased to $35.777m from $33.682m.
- Cash and cash equivalents fell from $74.866m at December 31, 2020 to $67.633m at September 30, 2021. The company redeemed its $10m short-term investment during the period.
- ATM proceeds were $10.357m net in the first nine months of 2021, compared with $56.682m in the prior-year period.
Outlook, management commentary and risks
- Management said September 30 cash was expected to fund operations for at least 12 months from the financial statements’ issuance date, while noting the estimate depends on assumptions and additional capital will be needed to fund future operations.
- Management planned to prioritize CUE-101 and other CUE-100 oncology candidates and seek third-party relationships to advance CUE-200, CUE-300 and CUE-400 programs. R&D and G&A expenses were expected to rise as development and operations expand.
- CUE-101 was in Phase 1 monotherapy and combination trials. Management reported no dose-limiting toxicities in the first two combination cohorts and tumor-lesion reductions in all three patients in cohort two; these are early, small-cohort observations, not established efficacy.
- CUE-102’s IND timing was delayed by contract-manufacturer supply constraints associated with COVID-19 priorities. The filing gives differing timing descriptions: first quarter 2022 in one passage and first half 2022 in another.
- LG Chem’s option under the global agreement expired in April 2021, and the parties let the second additional antigen selection period expire without selecting a target. The company retains rights outside the LG Chem Territory.
- In October 2021, the company entered a new ATM agreement allowing up to $80m of gross share sales, terminated its prior ATM agreement, and had raised approximately $1.4m net by November 1. It also extended its Cambridge lease to March 2024, with increased rent.
- Principal risks include clinical and regulatory uncertainty, reliance on third-party manufacturers and trial operators, ongoing operating losses and future financing needs, potential equity dilution, collaboration restrictions, and COVID-19-related disruptions. The company reported no material legal proceedings and no off-balance-sheet arrangements.
Important facts for investors to verify
- Whether cash, anticipated spending and financing access support the stated runway, and the pace and dilution impact of the new ATM program.
- Updated CUE-101 trial enrollment, safety and efficacy data, and the timing and progress of the CUE-102 IND filing.
- The differing CUE-102 IND timing statements in the filing and any subsequent company clarification.
- The balance-sheet share count appears as 31,361,995 in one passage, while the stockholders’ equity statement reports 31,631,995 at September 30, 2021; confirm the correct figure.