Business context and reporting period
This is Lisata Therapeutics, Inc.’s Form 10-Q for the quarter ended September 30, 2022, filed November 10, 2022. The request metadata says “2021 Q3,” but the filing covers 2022 Q3 and compares results with 2021. Lisata is a clinical-stage biotechnology company; it reported no revenue for the periods shown.
On September 15, 2022, the former Caladrius Biosciences completed its acquisition of Cend Therapeutics, changed its name to Lisata, and completed a 1-for-15 reverse stock split. The transaction was accounted for as an asset acquisition.
Key financial metrics
Amounts below are in millions of dollars, except per-share data. Parentheses indicate losses or cash outflows.
| Metric | Three months ended Sep. 30, 2022 | Three months ended Sep. 30, 2021 | Nine months ended Sep. 30, 2022 | Nine months ended Sep. 30, 2021 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $3.4 | $4.1 | $9.9 | $13.5 |
| In-process R&D expense | $30.4 | None | $30.4 | None |
| General and administrative expense | $3.9 | $2.8 | $10.8 | $8.7 |
| Net loss attributable to common stockholders | ($37.4) | ($6.9) | ($48.2) | ($20.7) |
| Loss per share, basic and diluted | ($7.88) | ($1.74) | ($11.28) | ($5.76) |
| Operating cash flow | Not provided quarterly | Not provided quarterly | ($14.7) | ($17.6) |
- At September 30, 2022, cash and cash equivalents were $31.5 million and marketable securities were $44.1 million, totaling $75.5 million. Working capital was $70.9 million.
- Total assets were $78.5 million; total liabilities were $6.8 million, including $6.4 million of current liabilities. The filing does not report borrowings or other debt.
- Nine-month investing cash flow was $21.8 million, primarily reflecting net sales of marketable securities; financing cash flow was negative $0.2 million. Cash and cash equivalents increased $6.8 million to $31.5 million.
- Margins are not meaningful given the absence of revenue; the filing does not provide a clear margin measure.
Material changes versus the prior comparable period
- Net loss increased by $30.5 million for Q3 and $27.6 million for the first nine months of 2022. The main driver was a one-time $30.4 million in-process R&D charge associated with the Cend acquisition. Excluding that charge, nine-month operating expenses decreased 6.9% year over year, according to management.
- Q3 R&D expense declined 18.1%, and nine-month R&D declined 26.8%, primarily reflecting suspension and close-out activity for the XOWNA FREEDOM trial and HONEDRA study, partly offset by LSTA1 development work.
- G&A expense rose 39.0% in Q3 and 24.0% for the nine-month period, reflecting merger-related and strategic-transaction costs and equity compensation, among other items.
- The merger added Cend’s development programs and issued 3.77 million shares to Cend stockholders; Lisata also assumed 1.23 million Cend stock options. The transaction’s total consideration was $36.1 million.
Outlook, management commentary, risks and contingencies
- Management stated that available cash was expected to fund operating expenses for at least the 12 months following issuance of the financial statements. Longer-term funding needs remain uncertain; potential sources include equity or debt financing, partnerships, collaborations, grants, and asset sales. Additional capital may not be available on acceptable terms.
- LSTA1 is the lead program, with ongoing and planned studies in solid tumors. Lisata reported that all six subjects in the LSTA201 diabetic kidney disease proof-of-concept study had been treated and anticipated top-line data in Q1 2023.
- XOWNA’s FREEDOM trial enrollment was suspended. Management said further development depends on securing a strategic partner to fund a redesigned trial. HONEDRA enrollment in Japan was suspended amid COVID-related delays; the company was pursuing regulatory consultation and a development partner.
- COVID-19-related disruption, clinical and regulatory uncertainty, capital availability, and the ability to secure partners are key risks. The filing also identifies risks around merger integration, trial enrollment and outcomes, intellectual property, and Nasdaq continued listing.
- Lingmed sued Cend alleging breach of contract, fraud, and declaratory relief concerning a claimed success fee under the Qilu agreement. Lisata disputes the claim; the filing says the outcome cannot be predicted. The company did not believe other pending claims would materially affect its financial condition or operating results.
- Potential future obligations include milestone payments and royalties under license agreements. For example, the Qilu agreement provides for up to $225 million in development and commercial milestones, plus royalties; these are contingent and not reported as current liabilities.
Important facts for investors to verify
- Whether the stated cash runway remains adequate given operating burn, planned clinical programs, and merger integration costs.
- Progress and data timing for LSTA1 and LSTA201, and whether a strategic partner is secured for XOWNA or HONEDRA.
- The potential financial impact and timing of the Lingmed litigation and contingent license milestones or royalties.
- Future dilution and financing capacity, including the status and availability of equity offering arrangements.
- That the requested period is inconsistent with the filing: this summary covers Q3 2022, not Q3 2021.