TriSalus Life Sciences, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; comparative figures are for FY2022. The company completed its business combination with MedTech Acquisition Corp. on August 10, 2023, accounted for as a reverse recapitalization. Accordingly, prior-period results reflect Legacy TriSalus.
Business context
TriSalus sells the TriNav pressure-enabled drug delivery device, primarily for liver cancer procedures, and is developing nelitolimod, an investigational immunotherapy, for liver and pancreatic cancers. TriNav generated substantially all revenue; nelitolimod remains in early clinical development and has no regulatory approval.
Key financial results
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $18.5 million | $12.4 million |
| Gross profit | $15.9 million | $10.1 million |
| Gross margin | 85.9% | 81.8% |
| Operating expenses | $70.1 million | $46.6 million |
| Loss from operations | $(54.2) million | $(36.4) million |
| Net loss | $(59.0) million | $(47.2) million |
| Net cash used in operating activities | $(50.0) million | $(32.3) million |
| Cash and cash equivalents at year-end | $11.8 million | $9.4 million |
| Debt | No outstanding debt reported |
FY2023 revenue increased 49.3%, principally on higher TriNav sales volume and the end of distributor discounts. Gross margin improved with production and yield efficiencies. R&D rose 38.2% to $29.5 million, sales and marketing rose 33.7% to $17.0 million, and G&A rose 88.4% to $23.5 million; G&A included $7.9 million of business-combination costs described as nonrecurring. Net loss available to common stockholders was $59.0 million; after preferred-stock deemed and undeclared dividends, net loss attributable to common stockholders was $63.3 million.
Financing cash flow was $54.6 million, including $36.9 million net proceeds from the business combination, $9.2 million from preferred-stock issuance and $9.6 million from warrant exercises. Investing cash outflow was $2.1 million. Cash, cash equivalents and restricted cash totaled $12.1 million at year-end, including $0.35 million restricted cash.
Material changes and notable items
- TriNav revenue was $18.5 million for 2023; the company reported 77% year-over-year growth in fourth-quarter TriNav revenue.
- CMS assigned TriNav a permanent HCPCS code, C9797, effective January 1, 2024, with a 2024 payment rate of $16,724.70 under APC 5194. Continued reimbursement at similar rates is not assured.
- Noncash fair-value movements materially affected results: a $10.9 million loss on tranche and warrant liabilities was partly offset by a $10.3 million gain on the contingent earnout liability. These items are not operating cash flows.
- At December 31, 2023, total liabilities were $51.7 million, including $18.6 million contingent earnout liability and $17.1 million warrant and other long-term liabilities. Stockholders’ deficit was $25.9 million.
- Series A preferred stock carries an 8% cumulative annual dividend; $1.3 million of undeclared cumulative dividends was reported at year-end. Its terms include conversion-price resets and potential dilution.
Outlook, risks and contingencies
Management and the independent auditor state that substantial doubt exists about the company’s ability to continue as a going concern. Management said year-end cash was insufficient for projected liquidity needs over the next 12 months and expected cash to fund operations only into the second quarter of 2024 without additional financing. In March 2024, the company sold 350,000 shares under its standby equity purchase agreement for approximately $3.1 million; it may request up to $30 million under the agreement, subject to conditions. Additional capital is needed, and may not be available on acceptable terms or at all.
Management expected to report PERIO-01 survival and progression-free-survival data in Q2 2024, PERIO-02 data and next-phase plans in the second half of 2024, and PERIO-03 Phase 1 enrollment completion and data in Q4 2024, with Phase 1b enrollment planned for the second half of 2024 if data supported it. These are forward-looking targets, not assurances. The company said an NDA for nelitolimod would be no sooner than 2025 if trials succeed; commercial sales, if approved, could follow thereafter, possibly in 2027.
Key risks include continued dependence on TriNav adoption and reimbursement; ongoing operating losses and financing needs; uncertain clinical outcomes and regulatory approval for nelitolimod; potential milestone payments to Dynavax (up to $157 million in development and regulatory milestones and up to $80 million in commercial milestones, plus royalties); supply and manufacturing reliance; competition; and dilution from equity financing, warrants and equity awards. The company also disclosed ineffective disclosure controls and material weaknesses in internal control over financial reporting, with remediation underway. It filed a late-filing notice and received a 15-day extension, citing stock-compensation data errors during a service-provider transition.
Important facts for investors to verify
- Current cash runway, subsequent financing, SEPA availability and any further dilution.
- Actual reimbursement and hospital adoption under C9797, including the rate and settings in which payment is realized.
- Final clinical data, safety, enrollment and regulatory feedback for PERIO-01, PERIO-02 and PERIO-03.
- Whether internal-control weaknesses are remediated and whether future filings are timely and reliable.
- Terms and potential impact of preferred-stock conversion resets, cumulative dividends, warrants and Dynavax obligations.