PluriStem Therapeutics Inc. (now Pluri Inc.) — Form 10-K summary
Reporting period: Fiscal year ended June 30, 2020, compared with fiscal 2019. The request metadata says “2019 Q4,” but the supplied filing is an annual report for fiscal 2020, not a quarterly filing.
Business context
The company develops placenta-derived, off-the-shelf cell therapy candidates using proprietary 3D cell-expansion technology. Its business remained research and clinical development-focused, with minimal product revenue and no marketed products. Its principal candidates include PLX-PAD and PLX-R18; manufacturing and R&D operations are based in Haifa, Israel.
- PLX-PAD was in Phase III studies for critical limb ischemia (CLI) and recovery after hip-fracture surgery. A U.S. Phase II study for severe COVID-19 with acute respiratory distress syndrome (ARDS) began in June 2020.
- PLX-R18 was being developed for acute radiation syndrome and incomplete hematopoietic recovery after transplantation. The latter Phase I study had enrolled 20 patients; the company expected top-line results in calendar Q1 2021.
Financial performance and liquidity
| Metric | FY2020 | FY2019 |
|---|---|---|
| Revenue | $23,000 | $54,000 |
| Net R&D expense | $21.577 million | $26.427 million |
| General and administrative expense | $7.922 million | $9.157 million |
| Operating loss | $29.476 million | $35.532 million |
| Net loss | $29.152 million | $35.307 million |
| Net loss per share | $1.60 | $2.90 |
| Cash used in operating activities | $26.369 million | $29.453 million |
Revenue was from PLX cells sold for research use; the filing gives no meaningful basis for assessing commercial margins. The company reported $48.461 million of current assets and $7.987 million of current liabilities at June 30, 2020, yielding $40.474 million of working capital. Cash and cash equivalents plus restricted cash were $9.229 million; including short- and long-term bank deposits, the company reported a total cash position of approximately $58.992 million.
Investing activities used $30.458 million, principally reflecting transfers into short- and long-term deposits, rather than solely operating investment. Financing activities provided $60.870 million, mainly from common-stock sales and warrant exercises. Shares outstanding increased from 15.083 million at June 30, 2019 to 25.493 million at June 30, 2020. No EIB loan had been disbursed by year-end; the company had a conditional facility of up to €50 million, subject to milestones.
Material changes, outlook, and risks
- Net loss narrowed by about $6.2 million year over year, primarily as R&D and G&A expenses declined. Net R&D expense fell 18%; management cited lower materials use, payroll and stock compensation, and clinical-site costs, partly offset by reduced grant participation.
- The company said it did not expect significant product-sale revenue in the next 12 months and anticipated continued operating losses. Management believed available resources were sufficient for at least 12 months from issuance of the financial statements, while also warning that additional funding would likely be needed for longer-term development and commercialization.
- Funding sources include equity issuance, grants, collaborations and licensing, and the milestone-dependent EIB facility. The July 2020 sales agreement permits up to $75 million of additional share sales, creating potential dilution.
- COVID-19 could disrupt trial enrollment, operations, suppliers, regulators, and financing. The company reported precautions and said it had manufactured trial and expanded-access inventory; future impacts remained uncertain.
- Other principal risks include clinical-trial failure or delay, uncertain regulatory approval and reimbursement, limited commercial manufacturing experience, reliance on third-party suppliers and trial sites, competition, patent challenges, foreign-exchange exposure, and concentration of facilities in Israel.
- No legal proceedings were reported. The financial statements received an unqualified audit opinion. Management concluded internal control over financial reporting was effective; the auditor did not express an opinion on internal controls.
Investor verification priorities
- Confirm current cash, deposit maturities and operating cash burn against the stated 12-month runway, and assess whether further equity funding is needed.
- Track Phase III enrollment, interim and final endpoints, regulatory feedback, and any COVID-19-related delays or changes.
- Verify whether EIB milestone conditions are met and whether any tranche is actually drawn; the facility was undisbursed at June 30, 2020.
- Assess dilution from the 2020 equity raises, outstanding warrants and the $75 million ATM authorization.
- Monitor grant availability, manufacturing scale-up and serum-free formulation implementation, and whether any product or device royalties become revenue-generating.