Unicycive Therapeutics, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022; filed August 15, 2022. Unicycive is a clinical-stage biotechnology company developing Renazorb for hyperphosphatemia in chronic kidney disease and UNI-494 for acute kidney injury. It has not generated revenue.
Financial results and liquidity
| Metric | Q2 2021 | Q2 2022 | Six months 2021 | Six months 2022 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $0.5 million | $1.9 million | $0.9 million | $3.8 million |
| General and administrative expense | $0.3 million | $1.8 million | $0.6 million | $3.4 million |
| Total operating expenses / net loss | $0.8 million / $1.1 million | $3.6 million / $3.6 million | $1.5 million / $2.1 million | $7.2 million / $7.2 million |
| Net loss per share | $(0.13) | $(0.24) | $(0.24) | $(0.48) |
| Operating cash flow | — | $(0.9) million | $(6.0) million |
At June 30, 2022, cash was $10.6 million, current assets $12.6 million, total assets $12.8 million, current liabilities $2.8 million, and total liabilities $2.9 million. Liabilities were primarily accounts payable, accruals, and operating lease obligations; the lease liability totaled $232,000. The company reported no financing cash flows in the first half of 2022. Its accumulated deficit was $23.1 million. Gross margin is not applicable given the absence of revenue.
Changes and notable developments
- Q2 operating expenses rose 367% year over year; first-half expenses rose 375%. Management attributed the increases mainly to drug-development spending and higher personnel, insurance, consulting, and professional costs.
- Net loss increased to $7.2 million for the first half from $2.1 million a year earlier. Prior-period interest expense ceased after convertible notes converted to equity in connection with the July 2021 IPO.
- Cash declined $6.0 million during the first half. The company said its June 30 cash balance and current spending imply a need for funding before the end of Q2 2023.
- Subsequent to quarter-end, Unicycive entered a Renazorb license agreement with Lee’s Pharmaceutical for China, Hong Kong, and certain Asian markets. It received $1.0 million upfront, may receive up to $1.0 million in launch milestones, and is eligible for tiered royalties.
Outlook, risks, and controls
Management expects substantial continuing losses and higher research and development and public-company costs. It plans to fund operations through possible equity or debt offerings, collaborations, or other sources, but gives no assurance financing will be available on acceptable terms or at all. The filing states there is substantial doubt about the company’s ability to continue as a going concern for one year after the financial statements became available to be issued. Failure to raise capital could force delays, reductions, or termination of development programs.
Key risks include clinical and regulatory outcomes, development and manufacturing costs, financing access, competition, intellectual-property matters, and reliance on third-party service providers. The company said potential COVID-19 and climate-related disruptions could delay trials or increase costs, but their effects could not be quantified. No material legal proceedings were reported. Disclosure controls and internal control over financial reporting were deemed ineffective due to a material weakness involving insufficient accounting staffing, review, and formal controls. Management planned remediation, including hiring and third-party assistance, by year-end 2022.
Investor facts to verify
- Whether the company obtained financing after quarter-end and whether its stated funding timeline changed.
- Clinical and regulatory progress, timing, and spending for Renazorb and UNI-494.
- Terms and potential economics of the Lee’s Pharmaceutical agreement, including milestones and royalties.
- Progress and completion of the disclosed internal-control remediation.
- Cash usage, development commitments, and any changes to the going-concern assessment.