GH Research PLC — FY2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023; this is an annual report, not a quarterly filing. GH Research is an Ireland-incorporated clinical-stage biopharmaceutical company developing mebufotenin (5-MeO-DMT) therapies. Financial statements are in U.S. dollars and prepared under IFRS.
Financial performance and position
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $29.8 million | $20.5 million |
| General and administrative expense | $11.4 million | $10.1 million |
| Operating loss | $41.2 million | $30.6 million |
| Net loss | $35.6 million | $22.5 million |
| Basic and diluted loss per share | $0.68 | $0.43 |
| Net cash used in operating activities | $33.3 million | $26.2 million |
Expenses exceeded revenue in both years, so operating margins are not meaningful. Net finance income rose to $8.3 million from $0.9 million, while foreign exchange changed from a $7.2 million gain to a $2.6 million loss; these items partly offset the higher operating loss. FY2023 comprehensive loss was $33.2 million, compared with $29.0 million in FY2022.
At year-end, cash and cash equivalents were $78.4 million, other financial assets $55.6 million, and marketable securities $88.7 million, totaling $222.7 million in these reported resources. Total assets were $226.3 million; total liabilities were $7.3 million, including $1.0 million of lease liabilities. The company reported no bank loans or other interest-bearing debt. Accumulated deficit was $67.9 million. Management believes available resources will fund operating and capital needs for at least 12 months from issuance of the statements, but cautions that estimates rely on assumptions and additional funding may be needed.
Material changes and business developments
- Net loss increased by $13.1 million year over year. R&D expense rose $9.3 million, mainly from clinical trials, device development, and drug substance and product development; G&A expense increased $1.3 million.
- Operating cash use increased by $7.1 million. Investing cash use declined to $54.1 million from $84.7 million, reflecting the prior-year purchase of marketable securities and FY2023 investment of $54.0 million in a money market fund.
- The pipeline comprises GH001, inhaled; GH002, intravenous; and GH003, intranasal. GH001 is the lead program, GH002 completed a Phase 1 healthy-volunteer trial, and GH003 remained in preclinical development.
Outlook, commentary, and key risks
- GH001 U.S. clinical hold: The FDA placed the proposed GH001 IND study on hold in September 2023 and requested additional inhalation toxicology studies, device design verification information, and investigator brochure updates. The company had initiated the requested studies and planned to update investors on its response submission in Q2 2024. No assurance was given that the hold would be lifted.
- Clinical timelines stated in the filing: Management expected the GH001 Phase 2b TRD double-blind phase to complete in Q3 2024, with top-line data in Q3 or Q4 2024. It expected GH001 postpartum-depression Phase 2a completion and top-line data in Q3 2024. Recruitment delays at trial sites affected both postpartum-depression and bipolar-II studies; no updated timeline was provided for the latter.
- Development risks: Programs are early-stage, with small and short-duration studies and no pivotal trial completed. The company relies on third parties for clinical studies, manufacturing, supplies, and devices. The proprietary GH001 delivery device remains under development; the company also lacks a commercial supply agreement for the third-party vaporization device used in European trials.
- Funding and regulatory risks: The company has no product revenue and expects significant ongoing losses and rising development costs. It may need additional capital, potentially on dilutive or restrictive terms. Mebufotenin is Schedule I in the U.S.; approval would require rescheduling, alongside substantial controlled-substance requirements. Safety, efficacy, device, manufacturing, reimbursement, and market acceptance remain uncertain.
- Financial reporting controls: Management concluded disclosure controls and internal control over financial reporting were ineffective at December 31, 2023. Material weaknesses related to insufficient trained accounting personnel, formal processes, review controls, segregation of duties, and IT controls. Remediation efforts were underway; the weaknesses were also identified for 2021 and 2022. Management reported no resulting material misstatement. The auditor issued an unmodified IFRS financial-statement opinion but did not attest to internal-control effectiveness.
- Other considerations: The company reported no material litigation, contingencies requiring financial-statement disclosure, or post-reporting-date events requiring disclosure. It believes it was a PFIC for 2023 and expects likely PFIC status in 2024, with potential adverse U.S. tax consequences for U.S. investors.
Most important facts for investors to verify
- Whether the FDA clinical hold was lifted, and what additional studies, device work, costs, or delays were required.
- Current enrollment, completion dates, and final results for GH001 TRD, postpartum-depression, and bipolar-II trials; compare final data with small, open-label early studies.
- Updated cash runway and spending rate, including the liquidity and maturity profile of marketable securities and other financial assets.
- Progress on the proprietary GH001 device and availability of reliable, qualified clinical and potential commercial supply.
- Remediation and independent testing of the disclosed material weaknesses in financial reporting controls.
- Potential dilution from future financing and the implications of PFIC status for U.S. shareholders.