Filing summary
Entity discrepancy: The request identifies Crescent Biopharma, Inc., but the supplied Form 10-Q is for GlycoMimetics, Inc. This summary reflects the filing text provided, not Crescent Biopharma.
Business context and reporting period
Unaudited results cover the quarter and nine months ended September 30, 2018; the filing was signed November 2, 2018. GlycoMimetics is a clinical-stage biotechnology company developing glycomimetic drug candidates. It had no approved products and no commercial drug sales. Its principal programs included uproleselan for hematologic cancers, GMI-1359, and rivipansel, which Pfizer licensed and is responsible for further development and potential commercialization.
Financial results and liquidity
| Metric | Q3 2018 | Q3 2017 | Nine months 2018 | Nine months 2017 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $9.7 million | $5.8 million | $28.1 million | $17.4 million |
| General and administrative expense | $2.8 million | $2.4 million | $8.5 million | $7.0 million |
| Net loss | $11.6 million | $8.0 million | $34.4 million | $24.0 million |
| Net loss per share | $0.27 | $0.24 | $0.85 | $0.86 |
| Operating cash used | Not stated by quarter | $33.4 million | $21.4 million |
Gross and operating margins are not meaningful given the absence of revenue. Other income, primarily interest income, was $0.9 million for Q3 and $2.2 million for the nine-month period. Cash and cash equivalents were $219.8 million at September 30, 2018, versus $123.9 million at December 31, 2017. Total assets were $225.2 million and total liabilities were $7.1 million; the filing reports no borrowings. The company had $6.4 million in current liabilities and $222.4 million in current assets.
For the first nine months, investing cash use was $0.1 million and financing provided $129.3 million, primarily from the March public offering, which raised $128.4 million net. Cash increased by $95.9 million. Shares outstanding rose from 34.36 million at year-end 2017 to 43.14 million at September 30, 2018.
Changes versus prior comparable periods
- Q3 net loss increased by $3.6 million year over year; nine-month net loss increased by $10.3 million.
- R&D expense rose 68% in Q3 and 61% year to date. Management attributed the increases mainly to uproleselan manufacturing and clinical-supply costs, plus Phase 3 start-up expenses. Nine-month manufacturing and formulation costs increased by $9.7 million.
- G&A expense increased 16% in Q3 and 21% year to date, principally due to higher legal and patent expenses and personnel-related costs.
- Operating cash use increased by $12.0 million year over year for the nine-month period, while financing inflows rose, chiefly reflecting the 2018 equity offering.
Outlook, risks, and notable items
- Management expected uproleselan Phase 3 enrollment to begin in Q4 2018, with preliminary results expected by the end of 2020. The filing also described planned trials with NCI/Alliance and HOVON, and anticipated initial multiple-myeloma trial data in the first half of 2019.
- Management stated available cash was expected to fund operations for at least 12 months from the filing date. Elsewhere, it said existing cash was expected to fund operations at least through preliminary results from the uproleselan Phase 3 trial. Trial timing, expenses, and cash needs are uncertain.
- The company expects continued operating losses and negative operating cash flows and may need additional capital. It warned that financing may be unavailable on acceptable terms, and equity financing could dilute shareholders. Future Pfizer milestones and royalties are contingent and uncertain; no Pfizer revenue was recognized in the first nine months of 2018 or 2017.
- Key risks include clinical-trial enrollment, safety and efficacy outcomes, regulatory approval, manufacturing, commercialization, reimbursement, and intellectual-property protection. The company said risk factors had not materially changed from its 2017 Form 10-K. It reported no material legal proceedings and no off-balance-sheet arrangements.
- The company reported effective disclosure controls and no material change in internal control over financial reporting during the quarter. It was evaluating the expected balance-sheet effect of adopting the new lease accounting standard.
Important facts for investors to verify
- Confirm the intended issuer: the supplied filing is GlycoMimetics, Inc., not Crescent Biopharma, Inc.
- Review subsequent disclosures for actual uproleselan trial start, enrollment, milestones, data timing, and cash runway.
- Assess whether the stated cash runway through preliminary Phase 3 results remains achievable given the expected end-2020 data timing and rising development and manufacturing costs.
- Verify remaining financing capacity and potential dilution; the filing said $80 million remained available under the at-the-market sales agreement at September 30, 2018.
- Monitor Pfizer’s rivipansel Phase 3 progress and the likelihood and timing of any contingent milestones or royalties.