Business context and reporting period
The supplied filing is Pieris Pharmaceuticals, Inc.’s unaudited Form 10-Q for the quarter and nine months ended September 30, 2021—not a filing for Palvella Therapeutics, Inc. Pieris is a clinical-stage biotechnology company developing Anticalin-based respiratory and immuno-oncology therapies. It has no product-sales revenue; reported revenue comes from collaborations and licenses.
Key financial metrics
Amounts in millions of U.S. dollars, except per-share data.
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $4.1 | $2.9 | $23.0 | $27.4 |
| Research and development expense | $18.9 | $11.8 | $51.3 | $35.9 |
| General and administrative expense | $4.1 | $4.1 | $12.5 | $13.0 |
| Operating loss | $(19.0) | $(13.0) | $(40.8) | $(21.5) |
| Net loss | $(16.5) | $(14.3) | $(36.2) | $(22.8) |
| Net loss per share | $(0.24) | $(0.26) | $(0.58) | $(0.42) |
At September 30, cash and cash equivalents were $125.1 million, compared with $70.4 million at December 31, 2020. Working capital was $88.0 million; total liabilities were $110.3 million, including $15.5 million of operating lease liabilities. The filing reports no borrowings or other debt. Nine-month operating cash flow was positive $3.3 million, versus cash used of $32.5 million in 2020; the 2021 result reflected changes in operating assets and liabilities, notably higher deferred revenue. Financing provided $54.2 million. No meaningful product gross margin is reported.
Material changes versus prior comparable periods
- Quarterly revenue increased 38% year over year, while nine-month revenue declined 16%. The nine-month comparison reflects prior-year Seagen and Servier revenue recognition; 2021 included a $13.0 million AstraZeneca phase 2a milestone and new Genentech revenue.
- R&D expense rose 60% for the quarter and 43% for the nine-month period, primarily from increased respiratory and immuno-oncology program costs. Nine-month net loss widened by $13.4 million.
- Cash increased substantially, supported by equity financing and collaboration-related receipts. The company sold 7.6 million shares through ATM programs for $36.7 million gross proceeds during the nine months and raised $23.0 million in private placements from AstraZeneca and Seagen.
- Shares issued and outstanding increased from 56.0 million at year-end 2020 to 71.5 million at September 30, 2021. A further 72.1 million shares were outstanding as of October 29, 2021.
Outlook, commentary, risks and unusual items
- Management said available funds were expected to support operations for at least 12 months from the filing date. Pieris expects substantial losses and increasing cash needs for several years and may need additional financing; future funding is not assured and may dilute existing shareholders or require research and clinical program delays.
- Management reported completion of dosing in part 1a of the AstraZeneca-sponsored phase 2a study of PRS-060/AZD1402, with review to precede a decision on progression to the efficacy portion. It expected PRS-220 clinical development to begin in 2022.
- For cinrebafusp alfa, the company planned initial data from the HER2-low gastric-cancer combination arm in 2022 and expected data from the HER2-high arm in 2023 after focusing enrollment on second-line patients. The FDA granted orphan drug designation in June 2021.
- A Bavarian government grant of up to €14.2 million (approximately $17.0 million) supports qualifying PRS-220 research and development costs through August 2023. Grant income recognized was $1.8 million for Q3 and $2.6 million for the nine-month period.
- Key risks include clinical and regulatory uncertainty, dependence on collaboration partners and third parties, need for additional capital, intellectual-property protection, competition, foreign-exchange exposure, and possible COVID-19 effects. Research and development milestones are generally constrained until a significant revenue reversal is unlikely. No material pending legal proceedings or material changes to the previously disclosed risk factors were reported.
Important facts for investors to verify
- Confirm the intended issuer: the provided filing is for Pieris Pharmaceuticals, not Palvella Therapeutics.
- Assess whether cash, collaboration receipts, and available financing are sufficient for the stated operating runway, given continued losses and rising R&D spending.
- Track clinical readouts and progression decisions for PRS-060/AZD1402, cinrebafusp alfa, PRS-220, and partnered programs; timelines and outcomes are uncertain.
- Review collaboration milestone conditions, termination rights, deferred-revenue recognition, and the PRS-220 grant’s qualifying-cost and reimbursement limits.
- Consider dilution from ATM sales and other equity issuances, alongside the company’s future financing needs.