Beyond Air, Inc. — Form 10-Q Summary
Reporting period: Fiscal first quarter ended June 30, 2021; comparative results are for the three months ended June 30, 2020. Beyond Air is a clinical-stage medical device and biopharmaceutical company developing nitric-oxide delivery systems. It had no product sales during the period.
Financial results and liquidity
| Metric | Three months ended June 30, 2021 | Three months ended June 30, 2020 |
|---|---|---|
| License revenue | $0 | $229,161 |
| Research and development expense | $2.74 million | $4.33 million |
| General and administrative expense | $3.85 million | $2.49 million |
| Operating loss | $6.59 million | $6.60 million |
| Net loss | $6.74 million | $6.74 million |
| Basic and diluted loss per share | $0.31 | $0.41 |
| Net cash used in operating activities | $3.92 million | $5.49 million |
| Net cash provided by financing activities | $8.31 million | $4.71 million |
Gross margin is not meaningful because the company reported no product revenue. Cash, cash equivalents and restricted cash totaled $39.63 million at June 30, 2021, including $38.58 million in cash and cash equivalents. Accumulated deficit was $87.20 million. Management estimated available liquidity would fund operations for at least one year from the filing date, while noting that future funding needs depend on development, regulatory and commercialization costs.
At quarter-end, the company reported $5.0 million face value of long-term debt (carrying value $4.51 million), a $349,165 short-term insurance-premium loan, and $1.91 million of operating lease liabilities. The long-term loan carries 10% stated annual interest, with a 13.3% effective rate. The company raised $8.51 million net from common-stock issuance through its ATM and Lincoln Park agreements; 1,439,405 shares were issued through those arrangements during the quarter.
Changes versus the prior-year quarter
- Net loss was essentially unchanged, while loss per share narrowed from $0.41 to $0.31, reflecting a higher weighted-average share count.
- R&D expense fell by $1.59 million, primarily because PPHN costs declined following submission of the PMA in November 2020 and non-cash compensation decreased.
- G&A expense rose by $1.36 million, attributed mainly to legal counsel and professional fees, commercial-launch preparation, salaries and benefits, and insurance.
- Operating cash use improved by approximately $1.57 million. Financing proceeds increased, and cash, cash equivalents and restricted cash rose by $4.36 million during the quarter.
Outlook, programs and notable items
- PPHN: The company submitted a LungFit PH PMA to the FDA in November 2020 and anticipated an FDA response toward the end of calendar Q3 2021. It expected EU CE marking around year-end 2021 and, if approved, a U.S. launch in Q4 2021. These were management expectations, not assured outcomes.
- Acute viral pneumonia, including COVID-19: An ongoing pilot trial had interim data for 19 patients. The company reported no treatment-related or possibly related adverse events in that interim analysis and described efficacy findings as encouraging; the small interim dataset does not establish efficacy.
- Bronchiolitis: The program’s pivotal study was on hold because of the COVID-19 pandemic. The filing described prior pilot-study results as supportive of continued development.
- NTM: A clinical trial was underway, supported by a Cystic Fibrosis Foundation grant of up to $2.17 million. The company anticipated interim data in fall 2021 and, if successful, a pivotal study in the first half of 2023. The grant includes capped royalties on sales of products developed under the program.
- Solid tumors: The program remained preclinical; management targeted regulatory authorization to begin a first-in-human trial by year-end 2021. The COPD program remained preclinical and was subject to additional financing.
- Funding and risks: The company had approximately $29.9 million remaining under its $50 million ATM and $28.2 million available under its $40 million Lincoln Park purchase agreement. It could require further financing, which may not be available on acceptable terms. Key risks include FDA and other regulatory outcomes, trial execution, commercialization, supplier dependence and potential COVID-19 disruption.
- Legal matter: The Empery warrant litigation remained unresolved after trial, with a decision reserved following briefing. An unfavorable outcome could result in material loss, warrant dilution and constraints on financing. The filing also identifies a May 2021 settlement with Circassia but does not state its financial terms in the provided text.
The company reported no material changes to previously disclosed risk factors, no material change in contractual obligations, and effective disclosure controls at June 30, 2021.
Important facts for investors to verify
- FDA timing and outcome for the LungFit PH PMA, and whether the anticipated launch and EU certification timelines remain achievable.
- Clinical-trial enrollment, safety and efficacy data, including the complete COVID-19 and NTM results and the status of the paused bronchiolitis program.
- Cash runway assumptions, cash burn, and the amount and potential dilution associated with further ATM, Lincoln Park or debt financing.
- Current status and potential financial and dilution consequences of the Empery litigation and any warrant adjustments.
- Financial terms and any continuing obligations under the Circassia settlement, which are not clearly stated in the provided filing text.