Jasper Therapeutics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022; comparative period is Q1 2021 unless otherwise noted. Jasper is a clinical-stage biotechnology company developing therapies for hematopoietic stem cell transplantation and gene therapy. It reported no approved products and no product-sales revenue.
Financial performance and liquidity
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | No product-sales revenue | No product-sales revenue |
| Research and development expense | $8.2 million | $4.4 million; up 85% |
| General and administrative expense | $4.6 million | $1.8 million; up 150% |
| Total operating expenses / operating loss | $12.8 million | $6.3 million; operating loss increased 104% |
| Net loss | $2.2 million | $9.8 million |
| Net loss per share, basic and diluted | $0.06 | $4.92 |
| Net cash used in operating activities | $14.2 million | $6.2 million |
| Cash and cash equivalents | $70.4 million at March 31, 2022 | $84.7 million at December 31, 2021 |
| Total current assets / current liabilities | $73.8 million / $6.0 million | At March 31, 2022 |
| Debt | No outstanding debt | At March 31, 2022 |
There are no meaningful product margins to report because the company had no product-sales revenue. Q1 2022 net loss was reduced by $10.6 million in non-cash gains from decreases in the fair values of warrant and earnout liabilities. Excluding those gains, the operating loss was $12.8 million. Cash used in investing activities was $0.03 million; financing provided $0.01 million. Cash, cash equivalents and restricted cash declined $14.2 million during the quarter.
Changes versus the prior comparable period
- Operating expenses more than doubled, reflecting higher clinical-trial and manufacturing spending, R&D hiring and facilities costs, and public-company and professional-service expenses.
- Despite the higher operating loss, reported net loss fell year over year, primarily because Q1 2022 included fair-value gains on warrants and earnout liabilities, while Q1 2021 included a $3.5 million derivative-liability loss.
- Operating cash use increased to $14.2 million from $6.2 million. Management attributed the 2022 use in part to operating spending and vendor-payment timing.
- Cash and cash equivalents were $70.4 million, down from $84.7 million at year-end 2021.
Outlook, commentary and risks
- Going concern: Management stated that available cash is not sufficient to fund operations for at least one year from the financial statements’ issuance date. The filing identifies substantial doubt about Jasper’s ability to continue as a going concern. The company plans to seek additional capital through equity or debt financing, strategic alliances or licensing; no financing is assured. Failure to obtain funds could force delays, reductions or abandonment of programs.
- Development plans: Jasper planned to initiate a registrational JSP191 study in AML patients undergoing stem cell transplantation by the end of Q1 2023, and expected to start a lower-risk MDS pilot study in the second half of 2022. It expected to complete enrollment in its SCID Phase 1/2 trial by mid-2023.
- Clinical commentary: The company reported preliminary results, including donor-cell engraftment in 7 of 10 previously transplanted T-B-NK+ SCID patients and successful primary engraftment in 24 patients in its MDS/AML transplant study. It reported no JSP191 treatment-related serious adverse events to date in these studies. These are early results and do not establish future trial success or regulatory approval.
- Principal risks: JSP191 is the lead and most advanced candidate; clinical, regulatory, safety, enrollment and manufacturing outcomes remain uncertain. Jasper relies on third parties, including a single-source manufacturer for clinical supply, and licenses key JSP191 intellectual property. COVID-19 had previously slowed SCID enrollment and could disrupt trials or supply chains. The company also cited market and financing volatility, including potential effects of the Russia-Ukraine conflict.
- Other items: The Redwood City lease was expanded in January 2022, with additional lease payments estimated at $1.8 million; total discounted operating lease liabilities were $3.9 million at quarter-end. A $2.3 million CIRM grant is milestone-based; $1.7 million remained available for future distribution, subject to milestones and grant terms. Jasper reported no material legal proceedings. Management concluded disclosure controls were effective and reported no material quarterly changes in internal control over financial reporting.
Important facts for investors to verify
- Cash runway assumptions, anticipated operating spend and the timing, amount and terms of any needed financing.
- Progress and enrollment against the stated SCID, MDS/AML and planned registrational-study timelines; whether preliminary clinical findings are confirmed in larger or later-stage trials.
- Clinical-supply capacity and contingency options given reliance on third-party manufacturers, including Lonza.
- Potential dilution from outstanding options and approximately 5.0 million warrants, as well as future equity financing.
- Fair-value assumptions underlying the warrant and earnout liabilities and the extent to which reported net loss is affected by non-cash remeasurement gains.
- Conditions and milestones attached to CIRM grant funding, license obligations and expanded lease commitments.