Cue Biopharma, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. The filing was signed March 28, 2024. Cue is a clinical-stage biopharmaceutical company with no product sales or approved products; reported revenue came from collaborations.
Financial performance and liquidity
| Metric | 2023 | 2022 |
|---|---|---|
| Collaboration revenue | $5.49 million | $1.25 million |
| Research and development expense | $40.80 million | $38.58 million |
| General and administrative expense | $16.68 million | $16.17 million |
| Operating loss | $52.15 million | $53.23 million |
| Net loss | $50.73 million | $53.01 million |
| Net loss per share, basic and diluted | $1.11 | $1.49 |
| Cash used in operating activities | $39.96 million | $41.81 million |
| Cash, cash equivalents and marketable securities at year-end | $48.51 million | $76.29 million |
Revenue increased mainly because of the Ono agreement; it is collaboration revenue, not commercial product revenue. Operating expenses rose about 5.8%, while the net loss narrowed about 4.3%, aided in part by higher interest income. No product gross margin is reported; the filing does not provide a meaningful commercial margin measure.
At December 31, 2023, total assets were $61.53 million, total liabilities $24.45 million, and stockholders’ equity $37.09 million. Debt had $8.0 million of stated principal outstanding, presented net at $8.17 million including the accrued final payment and issuance costs. The loan bears a floating rate; its rate was 10.75% at year-end. Principal repayment began in 2023, with $4.0 million scheduled in each of 2024 and 2025 and final obligations due December 1, 2025. The loan is secured by substantially all assets, subject to exclusions, and includes cash and other operating covenants.
Management said year-end cash should fund operations into the first quarter of 2025, but concluded that recurring losses and a cash runway of less than 12 months from the financial-statement issuance date raise substantial doubt about the company’s ability to continue as a going concern. Additional financing is required; success and terms are uncertain. The auditor’s opinion was unqualified and included a going-concern emphasis.
Business developments and clinical data
- CUE-101: Phase 1 studies in recurrent/metastatic HPV-positive head and neck cancer. In the 4 mg/kg monotherapy group of 20 patients, Cue reported one confirmed partial response lasting over 36 weeks and six cases of durable stable disease. Median overall survival was reported as 20.8 months; the filing compares this with historical results from other therapies, which are not direct trial comparisons.
- CUE-101 combination: In 24 evaluable patients receiving CUE-101 plus KEYTRUDA, the company reported one complete response, ten partial responses, a 46% overall response rate and 75% disease control rate. Median progression-free survival was reported as 8.3 months in 25 patients, versus a 3.2-month historical KEYTRUDA-alone figure. These are early, company-reported results and should not be treated as evidence of comparative efficacy without further controlled data.
- CUE-102: Phase 1 monotherapy testing for WT1-positive cancers. The filing describes T-cell expansion and tumor-burden reductions in some patients, including cases where new lesions later indicated progression. Cue anticipated expansion of the study to more than one cancer type.
- Ono/CUE-401: Ono funds research through a specified option period of up to 24 months. Cue recognized about $5.17 million in related revenue in 2023 and recorded $2.11 million of short-term R&D contract liabilities. If Ono exercises its license option, potential development and commercial milestones are up to approximately $220 million, plus royalties; these amounts are contingent, not guaranteed revenue.
- LG Chem: 2023 collaboration revenue was approximately $0.32 million. The agreement includes potential milestone payments of up to approximately $400 million and royalties, all subject to future events. The research phase was substantially complete in 2022.
In January 2024, after the fiscal year-end, Cue said it met with the FDA regarding possible registration paths for CUE-101 in monotherapy and combination settings. CUE-101 has FDA Fast Track designation. The filing provides no approved-product guidance or forecast of commercial revenue.
Material changes, risks and unusual items
- Cash and cash equivalents declined from $51.61 million to $48.51 million; marketable securities declined from $24.68 million to zero. Cash used in operations remained substantial. Financing included $13.39 million net from ATM share sales, partly offset by $2.0 million of loan principal repayment.
- Common shares outstanding increased from 43.04 million at year-end 2022 to 47.22 million at year-end 2023. After year-end, Cue sold another 1.43 million ATM shares for about $3.4 million net through March 2024. As of March 25, 2024, 48.64 million shares were outstanding.
- Two clinical-stage programs, CUE-101 and CUE-102, are the company’s principal development focus; other programs remain preclinical or depend on partnerships and financing. Further trials and regulatory review are required, and early-stage results may not predict later outcomes.
- Cue relies on third parties for clinical trials and manufacturing, including Catalent and Ajinomoto. Catalent’s announced acquisition by Novo Holdings was expected to close toward the end of 2024; Cue reported no known disruption as of the filing but could not rule out future effects.
- Other material risks include the need for additional capital and potential dilution, collaboration and licensing dependence, loan covenants and collateral, competition, regulatory and reimbursement uncertainty, and protection of licensed intellectual property. The company reported no material pending legal proceedings and no known cybersecurity risk reasonably likely to materially affect it.
Key facts for investors to verify
- Current cash runway and financing plans, including subsequent ATM sales, potential dilution and any new collaboration or debt financing.
- Whether CUE-101 and CUE-102 clinical findings hold up with mature follow-up, complete datasets and appropriate controlled comparisons; distinguish reported historical benchmarks from head-to-head evidence.
- FDA feedback, trial designs and resource requirements for any registrational path, and the status and timing of further CUE-102 studies.
- Ono’s option decision and future funding, and any changes to the contingent economics or U.S. co-development rights; do not treat milestone ceilings as committed proceeds.
- Debt repayment, floating-rate interest, cash-maintenance covenant compliance and the company’s ability to meet obligations through the stated runway.
- Manufacturing continuity and the effect, if any, of the Catalent transaction on clinical supply and development schedules.