Filing summary
Issuer mismatch: The supplied filing is Millendo Therapeutics, Inc.’s Form 10-Q for the quarter ended June 30, 2020, not a filing identified as Tempest Therapeutics, Inc. Verify the issuer before relying on this summary.
Business context and reporting period
Millendo is a clinical-stage biopharmaceutical company with no approved products and no product-sales revenue. Its remaining lead program was MLE-301, a selective NK3 receptor antagonist being developed for menopausal vasomotor symptoms. This unaudited report covers the three and six months ended June 30, 2020, with comparisons to 2019.
Key financial metrics
| Metric | Q2 2020 / June 30, 2020 | Comparable period / prior year-end |
|---|---|---|
| Revenue | No product-sales revenue | No product-sales revenue |
| Operating expenses | $10.6 million for Q2; $22.7 million for six months | $10.2 million and $20.8 million, respectively, in 2019 |
| Net loss | $10.7 million for Q2; $22.7 million for six months | $9.9 million and $20.2 million, respectively, in 2019 |
| Net loss per share | $0.56 for Q2; $1.21 for six months | $0.74 and $1.51, respectively, in 2019 |
| Cash, cash equivalents and restricted cash | $51.0 million | $63.5 million at December 31, 2019 |
| Operating cash flow | $(18.0) million for six months | $(21.2) million for six months in 2019 |
| Total assets / liabilities | $57.1 million / $12.2 million | $75.0 million / $15.1 million at December 31, 2019 |
| Debt | Approximately $0.4 million outstanding | Approximately $0.4 million at December 31, 2019 |
No meaningful operating margin is available because the company reported no product-sales revenue. Current liabilities were $10.1 million; total stockholders’ equity was $44.9 million. The filing says cash and restricted cash were expected to fund current planned operations into 2022, subject to the operating plan and excluding potential additional funding.
Material changes versus prior periods
- Q2 research and development expense rose 8% to $6.5 million; six-month R&D expense rose 15% to $14.0 million. Increased MLE-301 spending and program closeout costs contributed.
- Q2 net loss increased 8% year over year; six-month net loss increased 12%. Lower interest income partly reflected lower cash balances and interest rates.
- In April, Millendo discontinued livoletide for Prader-Willi syndrome after Phase 2b results did not show statistically significant improvement in the primary measure versus placebo. The company recorded $3.1 million of Q2 closeout costs and said it expected no future material program expenses.
- In June, the company ceased investing in nevanimibe for congenital adrenal hyperplasia following an interim Phase 2b review and a changing competitive environment. It reported that 1 of 10 treated subjects met the primary endpoint and was exploring an out-license.
- The company eliminated positions representing approximately 30% of prior headcount and recorded $1.1 million in Q2 termination benefits.
- Millendo raised approximately $5.7 million net through its ATM facility in March, issuing 719,400 shares. Cash and restricted cash declined by $12.5 million over the first half.
Outlook, commentary and risks
- The company had filed an IND for MLE-301 and planned to begin a first-in-human Phase 1 trial in Q3 2020. It expected MLE-301 R&D costs to rise and personnel costs to fall following the workforce reduction.
- Management was conducting a strategic review, supported by SVB Leerink, to prioritize MLE-301 and potential future pipeline assets and seek to maximize stockholder value.
- Management stated that available cash was expected to fund planned operations into 2022, but emphasized that plans could change and additional capital would ultimately be required. Financing may dilute shareholders or be unavailable on acceptable terms.
- COVID-19 had caused limited financial impact as of the report, but could delay trial startup, enrollment, assessments, supply, regulatory interactions and development timelines, including for MLE-301.
- Risks include clinical and regulatory failure, competition, reliance on third-party manufacturers and CROs, financing needs, and intellectual-property and licensing issues. The company noted that the nevanimibe license could become revocable beginning January 1, 2021 if development timelines are not met.
- Three shareholder matters relating to OvaScience’s historic business remained disclosed. The company said it could not estimate potential losses; an adverse outcome in the Dahhan class action could materially affect financial position and results.
Most important facts for investors to verify
- Confirm the filing belongs to the intended issuer: this document names Millendo Therapeutics, Inc., not Tempest Therapeutics, Inc.
- Check subsequent disclosures on the MLE-301 Phase 1 start, trial progress and any COVID-related delays.
- Assess the assumptions behind the stated cash runway into 2022, including actual burn, closeout costs, and any strategic-review or pipeline decisions.
- Review the status of the nevanimibe out-license and the University of Michigan license, as well as the Roche license terms for MLE-301.
- Track developments and any potential financial exposure from the disclosed shareholder litigation.