Cue Biopharma, Inc. — FY2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020. This is an annual report, not a quarterly report. Cue is a clinical-stage biopharmaceutical company developing its Immuno-STAT platform; it has no product-sales revenue or approved commercial products.
Financial results and liquidity
| Metric | FY2020 | FY2019 | Change |
|---|---|---|---|
| Collaboration revenue | $3.15 million | $3.46 million | Down 9% |
| Research and development expense | $33.55 million | $27.49 million | Up 22% |
| General and administrative expense | $14.65 million | $12.74 million | Up 15% |
| Total operating expenses | $48.20 million | $40.23 million | Up 20% |
| Net loss | $44.78 million | $36.70 million | Loss increased 22% |
| Basic and diluted loss per share | $1.56 | $1.66 | Lower loss per share as weighted-average shares increased |
| Cash used in operating activities | $32.49 million | $30.80 million | Cash use increased |
At year-end, cash and cash equivalents were $74.87 million and marketable securities were $10.00 million, totaling $84.87 million in unrestricted liquid resources, versus $59.41 million a year earlier. Current assets were $87.53 million and current liabilities $16.32 million (approximately 5.4x current ratio). Total liabilities were $20.62 million, including lease and research-and-development contract liabilities. The filing reports no debt financing or off-balance-sheet arrangements. No product-sales gross margin is reported; collaboration revenue did not cover operating costs. Management said year-end resources were expected to fund operations for at least 12 months from the March 9, 2021 filing date, while noting that additional capital would be needed longer term.
Business progress, outlook and risks
- CUE-101: The lead candidate remained in Phase 1 monotherapy testing for HPV16-driven recurrent/metastatic head and neck cancer. The company described early tolerability, pharmacokinetic/pharmacodynamic and anti-tumor findings as encouraging; the filing does not provide a clear quantitative clinical efficacy result. A first-line combination study with Merck’s KEYTRUDA was initiated in Q4 2020, with its first patient dosed in Q1 2021.
- Other programs: CUE-102 was in preclinical development, with an IND filing anticipated in the first half of 2022 after a manufacturing delay. The filing gives differing timing descriptions: the MD&A says first quarter 2022, while other sections say first half 2022. CUE-103, KRAS G12V, Neo-STAT, CUE-200, CUE-300 and CUE-401 were research or preclinical programs, not established clinical-stage assets.
- Collaborations: Merck extended its autoimmune research collaboration through December 31, 2021. LG Chem’s regional oncology collaboration includes potential milestone payments and royalties; its option for an additional worldwide program was extended to April 30, 2021. These potential payments are contingent and not assured revenue.
- Funding and dilution: Financing cash flow was $58.61 million, primarily from ATM stock sales. The company sold shares under several ATM programs during 2020; year-end common shares outstanding rose to 30.35 million from 26.56 million. Further equity financing could dilute shareholders.
- COVID-19 and execution: Management said remote-work measures had not significantly affected productivity to date, but warned of possible trial, supply-chain and financing disruption. A CUE-102 contract-manufacturing delay attributed to Defense Production Act priorities pushed back the expected IND filing.
- Principal risks: Clinical and regulatory uncertainty, dependence on external manufacturers and clinical-trial organizations, limited operating history and ongoing losses, need for future capital, competition, intellectual-property protection, and reliance on collaborators. The company stated that CUE-101 was its only candidate in clinical trials.
Investor facts to verify
- Latest CUE-101 trial data, including safety, dose selection and evidence of clinical activity; distinguish early signals from demonstrated efficacy.
- The actual CUE-102 manufacturing and IND schedule, given the filing’s differing first-quarter versus first-half 2022 descriptions.
- Quarterly cash burn, unrestricted liquidity and financing needs relative to management’s 12-month runway estimate.
- Subsequent ATM issuance and share-count changes, and the status and economics of LG Chem’s additional-program option.
- Auditor’s opinion and controls: the financial statements received an unqualified audit opinion; management reported effective controls, but the auditor did not attest to internal-control effectiveness.