Aligos Therapeutics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Aligos is a clinical-stage biopharmaceutical company developing treatments for chronic hepatitis B (CHB), NASH and coronaviruses. It has no approved products and has generated no product sales; reported revenue is from collaborations. Financial statements are unaudited.
Financial performance and position
Amounts in millions of U.S. dollars, except per-share data.
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Collaboration revenue | $2.6 | $0.9 |
| Research and development expense | $31.7 | $22.9 |
| General and administrative expense | $6.5 | $5.8 |
| Total operating expenses | $38.1 | $28.7 |
| Loss from operations | $(35.6) | $(27.7) |
| Net loss | $(35.6) | $(27.7) |
| Basic and diluted loss per share | $(0.84) | $(0.74) |
| Net cash used in operating activities | $(20.4) | $(29.8) |
- R&D expense increased 39% year over year, principally from higher third-party development, clinical and manufacturing costs, including costs for discontinued programs. G&A increased 12%; total operating expenses rose 33%.
- At March 31, cash and cash equivalents were $104.6 million, restricted cash $1.6 million, and investments $78.7 million. Unrestricted cash, cash equivalents and investments totaled approximately $183.2 million, versus $205.8 million at December 31, 2021.
- Current assets were $195.1 million and current liabilities $41.4 million. Total liabilities were $57.6 million, including operating and finance lease liabilities and collaboration deferred revenue. The company reported no debt outstanding.
- Operating cash use was lower year over year, helped by a $12.4 million increase in deferred collaboration revenue and other working-capital movements. Investing activities used $60.4 million, mainly for $59.9 million of investment purchases; financing activities used $0.02 million.
Material changes, outlook and notable items
- Management said existing cash, cash equivalents and investments were expected to fund operations for at least 12 months following issuance of the financial statements. The company expects continued losses and substantial R&D spending and may need additional financing; no committed external funding source was disclosed.
- Merck collaboration revenue was $2.6 million in the quarter. A January 2022 amendment expanded the collaboration to include a second undisclosed NASH target and an option for a third target. Aligos may earn milestone payments and royalties, but these are contingent on future progress and sales.
- For ALG-000184, management reported preliminary data available through April 29: daily dosing for up to 28 days was described as well tolerated, with antiviral reductions in reported cohorts. The company anticipated interim data including Cohort 3 at a mid-2022 scientific conference; a 12-week combination-dosing part was planned, with completion expected in Q4 2022 if preceding data remained favorable.
- ALG-055009 was in a Phase 1a/1b study; topline safety, pharmacokinetic and anti-lipid data in hyperlipidemic subjects were anticipated in Q3 2022. For ALG-125755, a clinical trial application and healthy-volunteer dosing were planned for the second half of 2022. ALG-097558 was being advanced toward a Phase 1 application in the second half of 2022.
- Aligos discontinued ALG-010133 after data indicated inadequate expected HBsAg reduction, and discontinued ALG-020572 following significant ALT flares in four subjects, including one serious adverse event and brief hospitalization. The discontinuations led to charges of approximately $3.9 million and $3.4 million, respectively, for non-cancelable purchase obligations. The filing said no dose-limiting safety findings had been identified for ALG-010133.
- Janssen sued Aligos, its CEO and its president, alleging breach of contract and tortious interference concerning inventions allegedly owned by Janssen. Janssen seeks, among other relief, injunctive relief, assignment of certain intellectual property and monetary damages. Aligos disputes the allegations and intends to defend itself. No contingent liability requiring accrual was recorded at quarter-end.
- Management cited clinical, regulatory, financing, competition, third-party manufacturing, intellectual-property and collaboration risks. COVID-19 and the macroeconomic environment could affect operations or access to capital. The filing also said conflict in Ukraine made planned studies in Ukraine and Moldova infeasible, potentially affecting clinical development.
Key facts for investors to verify
- Whether later ALG-000184 and ALG-055009 trial data support the preliminary findings and stated timelines.
- Whether the company’s cash runway remains consistent with its at-least-12-month estimate as development costs and plans evolve.
- Progress and economics of the expanded Merck collaboration, including any target designations, payments and revenue recognition.
- Clinical and financial consequences of the ALG-010133 and ALG-020572 discontinuations, and any further pipeline reprioritization.
- Developments in the Janssen litigation, including potential effects on intellectual property, costs and development programs.
- Potential trial delays from site availability, geopolitical conditions, COVID-19, and reliance on third-party research and manufacturing providers.