Alpha Tau Medical Ltd. — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter filing. Financial amounts below are in U.S. dollars; unless stated otherwise, figures are in millions. The financial statements were prepared under U.S. GAAP and audited by EY member firm Kost, Forer, Gabbay & Kasierer.
Business context
Alpha Tau is a clinical-stage oncology company developing Alpha DaRT, a localized radiation therapy that uses radium-224 sources to deliver alpha radiation into solid tumors. The company had no product sales revenue. It received marketing authorization in Israel for certain skin and oral-cavity squamous cell carcinomas, but reported that the authorization was under renewal and the product had not been commercialized there. It had no FDA marketing authorization.
Financial performance and position
| Metric | FY2021 | FY2022 | Change / context |
|---|---|---|---|
| Product revenue | None | None | Company reported no revenue to date. |
| Research and development, net | $11.447 | $20.890 | Up 82.5%, primarily from personnel, operating, preclinical and clinical-trial costs. |
| Marketing expense | $0.482 | $0.974 | Up 102.1%. |
| General and administrative expense | $1.861 | $10.272 | Up 452.0%; increases included professional fees, D&O insurance, compensation and business-combination costs. |
| Total operating expenses / operating loss | $13.790 | $32.136 | Operating loss more than doubled; margins are not meaningful without revenue. |
| Net financial expense | $13.474 | $1.606 | Lower mainly because warrant remeasurement expense declined and interest income increased. |
| Net loss | $27.271 | $33.762 | Loss increased 23.8%. |
| Net loss per share, basic and diluted | $(0.67) | $(0.53) | Weighted-average shares increased from 40.5 million to 63.5 million. |
| Net cash used in operating activities | $11.812 | $23.879 | Cash outflow increased as operating activity expanded. |
| Cash, restricted cash and short-term deposits at year-end | $31.934 | $105.380 | FY2022 total included $98.694 million of short-term deposits. |
At December 31, 2022, total assets were $120.149 million, total liabilities $14.492 million, and shareholders’ equity $105.657 million; accumulated deficit was $86.602 million. The balance sheet reported $5.630 million of warrant liabilities and $5.193 million of operating lease liabilities. No conventional borrowings were identified in the supplied filing text. The company reported $6.973 million of undiscounted lease payments, including $0.688 million due in 2023.
Investing cash outflow was $89.936 million, mainly reflecting investment in short-term bank deposits. Financing cash inflow was $96.905 million, including $93.543 million of net proceeds from the March 2022 SPAC merger and PIPE financing. Short-term deposits should not be conflated with immediately available cash: balance-sheet cash and cash equivalents were $5.836 million at year-end.
Material changes and unusual items
- The March 2022 business combination converted preferred shares into ordinary shares and brought in net merger and PIPE proceeds. Ordinary shares outstanding rose from 40.529 million at year-end 2021 to 69.105 million at year-end 2022.
- FY2022 included $6.748 million of share-based compensation, compared with $0.812 million in FY2021, contributing to higher operating expenses.
- Net financial expense fell substantially from FY2021, when warrant remeasurement was a major expense. FY2022 still included $3.788 million of warrant remeasurement expense and $1.790 million of interest income from deposits.
- The company adopted lease accounting standard ASC 842 in 2022, recognizing $5.810 million of right-of-use assets at year-end and lease liabilities on the balance sheet.
Outlook, management commentary and risks
- Management estimated that available capital would fund operating and capital expenditure requirements for at least two years, also describing the expected runway as into 2025. This is an estimate subject to trial costs, spending and other assumptions; management expected to need substantial additional funding over time.
- The ReSTART pivotal trial for recurrent cutaneous squamous cell carcinoma was designed to enroll up to 86 patients. The first patient was treated in March 2023; management expected recruitment to finish in 2023 and results in 2024. These are forward-looking expectations, not FY2022 outcomes.
- As of early 2023, the company reported ten ongoing clinical studies worldwide. It cited preliminary response results in superficial tumors, including a pooled 97% overall response rate and 78% complete response rate among lesions reaching the relevant evaluation endpoint. These are company-reported, non-pivotal findings and should not be treated as proof of approval or commercial efficacy.
- Key risks include clinical-trial failure or delay, uncertain FDA and other regulatory pathways, limited reimbursement prospects, no product revenue, future financing and dilution needs, dependence on radioisotope and other suppliers, manufacturing scale-up, intellectual-property challenges, and execution of commercialization plans. The novel localized alpha-radiation approach also carries uncertain long-term safety and adoption risks.
- Other exposures include currency movements—the company reported that a 10% unfavorable exchange-rate move would have increased operating expenses by approximately 6.4% in 2022—and political and security conditions in Israel. The company said it did not hedge foreign-exchange risk.
- The company reported effective disclosure controls and internal control over financial reporting as of year-end 2022; the auditor did not provide an internal-control attestation because of the company’s emerging-growth-company exemption.
Most important facts for investors to verify
- Whether the $98.694 million in short-term deposits is accessible on the expected timetable and how quickly operating cash burn is changing.
- Whether ReSTART enrollment, timing and endpoints remain on plan, and how complete trial results compare with preliminary response data.
- The status of the Israeli authorization renewal and the regulatory evidence and pathway required for U.S. and other-market authorization.
- Future funding requirements, potential equity dilution, and the effect of outstanding warrants, options and restricted share units.
- Manufacturing capacity, reliable radium-224/ thorium-228 supply, and the company’s ability to deliver patient-specific sources consistently and within their usable window.
- Commercial reimbursement, pricing, adoption and sales-channel assumptions; the filing reports no product revenue and no established commercial sales operation.