Pluri Inc. — Form 10-Q summary
Reporting period: Quarter and nine months ended March 31, 2023 (fiscal third quarter 2023); filed May 9, 2023. The request metadata says “2022 Q3,” but the filing covers fiscal 2023 Q3. Financial statement amounts below are in U.S. dollars, thousands, unless stated otherwise.
Business context
Pluri is a biotechnology company developing a 3D cell-expansion platform for regenerative medicine, food technology and other applications. Its activities include research, manufacturing, clinical studies, and collaborations. The company reported $160,000 of nine-month revenue related to its API collaboration and noted that its Ever After Foods joint venture had completed a cultivated-meat proof of concept.
Financial performance
| Metric | Three months ended March 31, 2023 | Three months ended March 31, 2022 | Nine months ended March 31, 2023 | Nine months ended March 31, 2022 |
|---|---|---|---|---|
| Revenue | $87 | $234 | $176 | $234 |
| Net R&D expense | $4,167 | $6,156 | $12,223 | $19,016 |
| General and administrative expense | $3,020 | $4,553 | $8,655 | $13,929 |
| Operating loss | $7,100 | $10,475 | $20,702 | $32,711 |
| Net loss | $7,758 | $9,918 | $22,281 | $32,290 |
| Net loss per share, basic and diluted | $0.19 | $0.31 | $0.63 | $1.00 |
Revenue remained very limited; the filing does not present meaningful profit margins. Lower operating costs and net losses chiefly reflected reduced clinical-trial activity, fewer employees, lower share-based compensation, and the cost-reduction plan. Nine-month other financial expense was $956, compared with $1,097 of financial income in the prior-year period, primarily reflecting euro/U.S. dollar movements on the EIB loan.
Cash, liquidity and debt
- At March 31, 2023, cash and cash equivalents were $3,677; short-term bank deposits were $40,491; and current and long-term restricted cash/deposits totaled $906. The company’s stated total cash position, including these balances, was $45,074.
- Current assets were $46,687 and current liabilities $5,377, for working capital of $41,310. Total assets were $56,241 and total equity was $20,881, including $1,817 attributable to non-controlling interests.
- Nine-month operating cash use was $19,960, versus $28,074 a year earlier. Investing activities provided $5,374, mainly from withdrawals of short-term deposits; financing provided $8,034 from the December 2022 share-and-warrant private placement. Cash, cash equivalents and restricted cash decreased by $6,830 during the period.
- The EIB loan liability was $23,346, including accrued interest. The first tranche is due June 1, 2026 and bears 4% annual interest; the company does not expect additional EIB funding. Lease liabilities totaled $6,654. EIB revenue-based royalties are also due for fiscal years 2024–2030, subject to the agreement’s terms.
Material changes and outlook
- In December 2022, Pluri issued 8,155,900 shares and warrants in a private placement, receiving $8,034 net. Issued and outstanding shares rose to 41,072,224 at March 31, 2023, from 32,507,491 at June 30, 2022. The warrants became exercisable May 1, 2023, after shareholders approved increasing authorized shares from 60 million to 300 million.
- Management said it did not expect significant product-sale revenue in the next 12 months; licensing revenue was possible but was unlikely to exceed operating costs in the short and medium term. It expects to fund operations through existing resources, grants, collaborations/licensing and equity sales as needed, and believes current resources and its operating plan are sufficient for at least 12 months from issuance of the statements. This is not a guarantee of longer-term funding.
- Pluri announced PluriMatrix, a manufacturing development it says may enable industrial-scale cell production. The filing describes potential applications, not established commercial results.
- On April 19, 2023, Nasdaq notified Pluri that its bid price had been below $1 for 30 consecutive trading days. The compliance period was scheduled to end October 16, 2023; the company said it might consider a reverse stock split. Delisting could adversely affect share liquidity and access to financing.
Risks, contingencies and other notable items
- The company has an accumulated deficit of $393,125 and recurring operating losses and negative operating cash flows. It cautioned that adequate long-term financing is not assured.
- Potential IIA royalty obligations were $27,574, excluding applicable interest, payable only if qualifying products or services generate sales. A separate marketing-grant royalty contingency was $52; the filing also describes a limited cGVHD royalty obligation.
- Cash and deposits of $907 were pledged for bank guarantees and hedging credit facilities.
- Management cited risks to development, clinical studies, regulatory approvals, grant funding and commercialization. It also identified potential effects of Israeli judicial-system changes on the business environment, investment, currency and interest rates.
- Disclosure controls were assessed as effective, and the filing reported no material change in internal control over financial reporting during the quarter.
Investor verification priorities
- Confirm the company’s cash runway against actual operating burn, restricted balances and future funding needs.
- Track revenue conversion and commercial milestones from the API collaboration, PluriMatrix and Ever After.
- Review the terms and potential dilution from the private-placement warrants, employee awards and expanded authorized share count.
- Monitor Nasdaq bid-price compliance and any reverse-split or listing actions.
- Assess clinical and regulatory progress, grant receipts, and the timing and potential cost of IIA and EIB royalty obligations.