Jasper Therapeutics, Inc. — Q2 2023 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2023. Jasper is a clinical-stage biotechnology company developing briquilimab and other mast-cell and hematopoietic stem-cell therapies. It has no approved products and reported no product revenue.
Financial results and liquidity
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $13.3 million | $8.1 million | $23.1 million | $16.3 million |
| General and administrative expense | $4.5 million | $3.8 million | $8.7 million | $8.4 million |
| Net loss | $16.1 million | $10.4 million | $30.3 million | $12.6 million |
| Net loss per share, basic and diluted | $0.15 | $0.29 | $0.31 | $0.35 |
| Net cash used in operating activities | Six-month figure: $23.6 million | $23.6 million | $23.6 million |
As of June 30, cash and cash equivalents were $115.8 million, versus $38.3 million at year-end 2022; total assets were $124.2 million and total liabilities were $14.0 million. Jasper had no outstanding debt. Lease liabilities totaled $3.2 million, including $0.9 million current. No meaningful gross or operating margin is available because the company has no product revenue.
Cash, cash equivalents and restricted cash increased $77.6 million in the first half. Financing provided $101.2 million, mainly from $101.5 million net proceeds from January common-stock offerings, partly offset by operating cash use. The January financing included 69.0 million shares sold in an underwritten offering and 2.3 million shares through the ATM. Shares issued and outstanding rose to 110.8 million from 38.0 million at December 31, 2022.
Changes versus the prior comparable period
- Q2 operating expenses rose 49% to $17.8 million, principally as R&D expense increased 63%. Management attributed the R&D increase primarily to manufacturing and clinical-development costs, including higher briquilimab-related activity.
- First-half operating expenses rose 28% to $31.8 million. First-half net loss increased to $30.3 million from $12.6 million; the prior-year period included substantial non-cash gains from changes in the fair values of warrant and earnout liabilities.
- Interest income rose to $1.4 million in Q2 and $2.5 million for the first half, reflecting higher cash balances and interest rates.
- In January 2023, the common-stock warrant liability was reclassified to equity after the company no longer had non-voting common shares; warrants are no longer remeasured as a liability. The earnout liability was $0.4 million at June 30.
Outlook, commentary and risks
- Management expects June 30 cash and cash equivalents to fund its current operating plan for at least 12 months from the filing date. Jasper nevertheless expects substantial future losses and says it will need additional financing to continue development and operations. Additional capital is not assured; absent funding, programs or operations may need to be curtailed, delayed or discontinued.
- The company expects expenses to increase as it advances clinical and preclinical programs, develops manufacturing supply, expands operations and pursues potential regulatory approvals. Its pipeline includes briquilimab programs in chronic spontaneous urticaria, lower-to-intermediate-risk MDS and transplant conditioning, including a Phase 1/2 SCID trial.
- Key risks include clinical safety, efficacy and timing; regulatory approval; dependence on contract manufacturers and other vendors; access to capital and potential dilution; intellectual-property protection; and stock-price volatility. The filing also discusses financial-services-sector risk. Jasper reported full access to its cash and investments, including balances held at Silicon Valley Bridge Bank.
- After quarter-end, the company amended its Stanford license in July 2023 and a $0.3 million Stanford sponsored-research milestone was achieved. The Stanford license includes up to $9.0 million in development and sales milestones, plus royalties if products are commercialized.
- There were no material legal proceedings. Management concluded disclosure controls were effective; no material changes to internal control over financial reporting were reported.
Important facts for investors to verify
- Whether clinical-trial progress, results, enrollment and timelines support the company’s development plans and expected spending.
- Whether the stated 12-month cash-funding outlook remains achievable as operating costs change, and the timing and terms of any additional financing.
- Potential dilution from future equity sales, the effective $250 million shelf registration and $75 million ATM capacity, as well as outstanding options, warrants and restricted stock units.
- Manufacturing and supply arrangements, license obligations and milestones, including the July 2023 Stanford amendment and achieved milestone.
- The treatment and availability of cash held at financial institutions, and the assumptions used to value the earnout liability.