Vera Therapeutics, Inc. — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 30, 2022. Financial statements are unaudited. Vera is a clinical-stage biotechnology company with no approved products and no product-sales revenue.
Key financial metrics
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $19.7 million | $3.6 million | $42.3 million | $9.7 million |
| General and administrative expense | $5.6 million | $3.7 million | $15.0 million | $8.1 million |
| Net loss | $24.7 million | $7.6 million | $56.6 million | $15.8 million |
| Net loss per share, basic and diluted | $0.91 | $0.36 | $2.16 | $1.46 |
| Net cash used in operating activities | Not separately provided for the quarter | $46.4 million | $17.3 million |
At September 30, 2022, cash and cash equivalents were $30.5 million and marketable securities were $83.9 million, for combined liquidity of $114.4 million. Total assets were $131.4 million, total liabilities $25.7 million, and stockholders’ equity $105.7 million. Long-term debt had a $5.0 million principal balance ($5.0 million net carrying amount). The company had an accumulated deficit of $180.7 million. Profitability and operating margins are not applicable given the absence of revenue.
Material changes versus the prior comparable period
- Q3 operating expenses increased 248% to $25.2 million; R&D rose 452% to $19.7 million, principally as atacicept trials and manufacturing advanced and MAU868 milestone expense was recorded.
- Q3 net loss increased to $24.7 million from $7.6 million. For the nine-month period, net loss increased to $56.6 million from $15.8 million.
- Nine-month operating cash use increased to $46.4 million from $17.3 million. Investing activities used $84.0 million, primarily to purchase short-term marketable securities; financing provided $81.2 million, primarily from the February 2022 follow-on offering.
- Cash and cash equivalents declined from $79.7 million at December 31, 2021 to $30.5 million at September 30, 2022, while marketable securities increased from none to $83.9 million. Combined cash, cash equivalents and marketable securities therefore rose to $114.4 million from $79.7 million.
Outlook, management commentary, and risks
- Atacicept: The Phase 2b ORIGIN IgAN trial had completed enrollment; management expected topline results in Q1 2023 and, if supportive, planned to start a pivotal Phase 3 trial in 2023. The Phase 3 COMPASS trial in lupus nephritis had been initiated.
- MAU868: Management reported that interim Phase 2 data in kidney-transplant recipients showed tolerability and a clinically significant reduction in virologic activity. Following additional FDA feedback expected in early 2023, it planned to initiate a Phase 2b or Phase 3 trial in 2023.
- Management expected continued losses and negative operating cash flows for at least several years, with higher development and operating expenses. It stated that September 30 liquidity was expected to fund operations for at least 12 months from the filing date, while also noting that substantial additional capital will be needed and that failure to obtain it could delay, reduce, or terminate programs. The filing cautions that long-term ability to continue as a going concern may be uncertain.
- Subsequent borrowing: On November 4, 2022, after quarter-end, Vera amended its Oxford loan agreement and drew an additional $20.0 million. The amendment extended availability of the remaining facility through December 29, 2023 and replaced LIBOR with a SOFR-based rate. The facility permits up to $50.0 million in total principal; $25.0 million had been funded after the November draw.
- The Oxford facility is secured by company assets, includes a final payment fee and prepayment fees, and has restrictive covenants and default provisions, though the filing says it has no financial covenants. The interest rate is floating, with an 8.25% floor.
- Major execution risks include clinical efficacy and safety uncertainty, trial enrollment and timing, reliance on third-party and single-source manufacturing, regulatory approval, competition, intellectual-property and license obligations, and need for additional capital. COVID-19, inflation, interest rates, supply-chain disruption, and geopolitical uncertainty could add pressure.
- No material legal proceedings were reported. Management concluded disclosure controls were effective as of September 30, 2022; no material changes in internal control over financial reporting were identified during the quarter.
Important facts for investors to verify
- Whether ORIGIN topline results and the planned atacicept IgAN Phase 3 program proceed on the stated timeline, and whether results support the proposed development path.
- Updated clinical data, FDA feedback, and timing and design of the planned MAU868 trial and atacicept lupus-nephritis program.
- Cash burn, development spending, and runway assumptions, including the effect of the November 2022 $20.0 million borrowing and any further facility draws.
- Terms and potential dilution of future financing, including the unused $150.0 million at-the-market facility as of September 30, 2022.
- Milestone, royalty, and other obligations under the Ares and Novartis/Amplyx licenses, and the ability to meet them as development progresses.