Immuneering Corporation — Q3 2021 Form 10-Q
Business context and period. This unaudited quarterly filing covers the three and nine months ended September 30, 2021, with comparisons to 2020. Immuneering is an early-stage biopharmaceutical company developing oncology and neurology candidates using its computational biology platform. It has no approved products and has not generated product sales; reported revenue comes from computational biology services. The company completed its IPO on August 3, 2021.
Financial results and liquidity
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $0.48 million | $0.68 million | $1.89 million | $1.65 million |
| Gross profit | $0.26 million | $0.37 million | $0.94 million | $0.84 million |
| Gross margin | 54.6% | 53.9% | 49.9% | 51.0% |
| Research and development | $6.21 million | $4.07 million | $18.59 million | $10.11 million |
| General and administrative | $2.60 million | $0.70 million | $5.12 million | $1.97 million |
| Net loss | $8.53 million | $4.40 million | $22.75 million | $11.20 million |
| Net loss per share, basic and diluted | $0.47 | $0.89 | $2.41 | $2.26 |
- At September 30, cash and cash equivalents were $106.9 million and marketable securities were $52.6 million, totaling approximately $159.6 million. Total current assets were $153.3 million; current liabilities were $5.3 million.
- Operating cash use was $21.6 million for the nine months, versus $9.2 million in 2020. Investing cash use was $52.8 million, primarily purchases of marketable securities; financing provided $144.3 million, mainly from the IPO and Series B preferred stock.
- The company reported $5.7 million of total liabilities, principally lease liabilities; the filing reports no borrowings or debt. Lease liabilities totaled $0.56 million.
- Accumulated deficit was $48.5 million. The company reported stockholders’ equity of $158.3 million at quarter-end, versus a deficit of $22.5 million at December 31, 2020.
Material changes versus the prior comparable period
- Q3 revenue declined 29% year over year, partly because certain customer agreements ended in 2020. Nine-month revenue increased 15%, reflecting new and existing customers, partly offset by completed agreements.
- Q3 R&D expense rose 53%; nine-month R&D rose 84%, mainly due to higher outside contract research spending and increased employee costs as discovery programs and later-stage preclinical work expanded.
- Q3 G&A expense increased 272%; nine-month G&A increased 160%, reflecting higher staffing, professional fees and public-company costs.
- IPO proceeds materially strengthened liquidity. The filing describes approximately $120.3 million received after underwriting discounts and commissions but before $2.1 million of offering costs; elsewhere it reports approximately $118.2 million of net proceeds after offering expenses.
- All outstanding preferred shares converted into Class A common stock at the IPO. Class A shares outstanding were 25.94 million at September 30.
Outlook, commentary and risks
- Management expects continued operating losses and increasing R&D and G&A expenses. It estimates current cash, cash equivalents and marketable securities will fund operations into 2024, while cautioning that assumptions may prove incorrect and capital could be consumed sooner.
- The company planned to submit an IND for lead candidate IMM-1-104 in Q1 2022 and, subject to FDA acceptance, begin a Phase 1 trial in the first half of 2022. It anticipated at least two additional oncology IND filings, one in 2023 and one in 2024.
- Management said service revenue may remain similar in the near term but could decrease as the company prioritizes its wholly owned pipeline and gradually winds down service work. No product revenue is expected for several years, if ever.
- Principal risks include clinical and regulatory uncertainty, need for additional capital, reliance on CROs and contract manufacturers, competition, intellectual-property limitations, patient enrollment, and potential COVID-19-related disruption to research, trials and supply chains.
- A related-party CRO provides services; R&D expense for that CRO was $3.27 million for the nine months, and $0.46 million was owed at quarter-end. The filing reports no material legal proceedings and no material changes in contractual commitments.
- Disclosure controls were assessed as effective at the reasonable-assurance level; no material change in internal control over financial reporting was reported. The company does not anticipate paying common-stock dividends in the foreseeable future.
Important facts for investors to verify
- Confirm the IPO proceeds presentation: approximately $120.3 million before offering costs versus approximately $118.2 million after expenses.
- Track the IMM-1-104 IND submission and Phase 1 trial timing against management’s stated 2022 targets, including FDA acceptance and any enrollment or manufacturing delays.
- Monitor operating cash use and the assumptions underlying management’s estimated runway into 2024, especially as development and public-company expenses increase.
- Review progress and spending across preclinical programs, including CRO dependence and the disclosed related-party CRO relationship.
- Assess potential dilution from outstanding options and equity plans, and the effect of the IPO conversion and future share issuance.