C4 Therapeutics, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. C4 Therapeutics is a clinical-stage biopharmaceutical company developing targeted protein degraders using its TORPEDO platform. It has not generated product-sales revenue and remains dependent on collaborations and external financing.
Key financial metrics
| Metric | Q1 2024 | Q1 2023 / prior period |
|---|---|---|
| Collaboration revenue | $3.0 million | $3.8 million |
| Research and development expense | $22.5 million | $29.0 million |
| General and administrative expense | $10.3 million | $10.9 million |
| Restructuring expense | $2.4 million | None |
| Net loss | $28.4 million | $34.8 million |
| Net loss per share, basic and diluted | $0.41 | $0.71 |
| Cash used in operating activities | $18.1 million | $33.1 million |
At March 31, 2024, cash and cash equivalents were $89.7 million, marketable securities were $209.5 million, and cash, cash equivalents and marketable securities totaled $299.2 million. Total current assets were $279.6 million and current liabilities were $55.0 million. Total liabilities were $140.1 million, including operating lease liabilities; the balance sheet reports no long-term debt balance. Stockholders’ equity was $258.3 million. The company’s accumulated deficit was $556.7 million.
Changes and business developments
- Revenue declined $0.7 million year over year, principally because Biogen revenue fell $1.5 million as research activities on nominated targets were completed; higher Roche revenue partly offset the decrease. Q1 revenue included $1.5 million from Roche, $0.9 million from Biogen, $0.6 million from Merck, and $0.1 million from MKDG.
- R&D expense decreased $6.5 million, primarily from lower preclinical spending and personnel costs, partly offset by increased clinical costs for cemsidomide and CFT1946. G&A expense decreased $0.7 million.
- In January, the company announced a workforce reduction of 30%, or 45 positions, to align staffing and reduce costs. The quarter included $2.4 million in restructuring charges.
- Financing included $20.0 million from the Betta stock purchase agreement and $14.1 million in net ATM proceeds. The company issued 5.6 million shares to Betta Investment and 2.5 million shares through the ATM program during the quarter.
Liquidity, outlook and risks
- Management expects continued operating losses and substantial future spending on research, clinical development, the TORPEDO platform, and potential commercialization. The filing’s liquidity note says available cash, cash equivalents and marketable securities are expected to fund operations for at least 12 months from issuance of the financial statements; the risk discussion separately says the company believes its resources and restructuring savings will fund planned operating expenses into 2027. Both estimates depend on assumptions and could prove inaccurate.
- The company says additional financing will be needed to complete development and commercialization; no committed external funding source was reported. Future equity financing could dilute shareholders, while collaborations may require relinquishing rights.
- In March, MKDG agreed to pay $16.0 million upfront and fund discovery research for two targets. C4T may receive approximately $740 million in aggregate milestones plus tiered royalties, but these contingent payments depend on future development and sales. MKDG is responsible for development and commercialization costs.
- In April 2024, C4T earned an $8.0 million Biogen payment following acceptance of a development candidate; the company expected payment in the quarter ending June 30, 2024 and said it would recognize the amount as revenue upon receipt. This is a subsequent-period event, not Q1 revenue.
- Clinical programs include cemsidomide (CFT7455) in Phase 1/2 development for multiple myeloma and non-Hodgkin lymphomas, and CFT1946 in a Phase 1/2 trial for BRAF V600X-mutant tumors. CFT8919 is partnered with Betta Pharma in Greater China; the company expects development outside that territory to follow Betta’s Phase 1 dose-escalation trial. CFT8634 clinical development was stopped.
- Key risks include clinical failure or delay, uncertain safety and efficacy of the novel protein-degradation approach, reliance on collaborators and third-party manufacturers, competition, intellectual-property challenges, and the need for additional capital. The company reported no material legal proceedings and no off-balance-sheet arrangements.
Important facts for investors to verify
- Whether the stated runway into 2027 remains achievable as clinical costs, collaboration receipts, and restructuring savings evolve.
- Progress, safety, enrollment, and efficacy data from the cemsidomide and CFT1946 trials, and the timing and scope of Betta’s CFT8919 trial.
- Receipt and revenue recognition of the $8.0 million Biogen payment, and the timing of revenue recognition for MKDG, Merck, and Betta deferred amounts.
- Future cash burn and the impact of the workforce reduction, including whether lower spending affects program execution.
- Share dilution from the Betta issuance and ATM program; shares outstanding were 68.8 million at March 31 and 68.8 million as of April 30, 2024.