Filing summary
Entity note: The supplied filing is Millendo Therapeutics, Inc.’s Form 10-Q, not a filing under the name Tempest Therapeutics, Inc. It covers the quarter ended June 30, 2019; the company signed it on August 12, 2019. Confirm the issuer before relying on this summary.
Business context and reporting period
Millendo was a clinical-stage biopharmaceutical company developing treatments for rare endocrine diseases. It had no approved products and generated no product revenue. Its lead candidate was livoletide for Prader-Willi syndrome (PWS); it was also developing nevanimibe for congenital adrenal hyperplasia (CAH) and MLE-301, an NK3 receptor antagonist, for vasomotor symptoms.
Amounts below are in U.S. dollars. Financial statements are unaudited. The 2018 comparison follows the December 2018 reverse merger and recapitalization; the filing says pre-merger results relate to Private Millendo, so comparisons and per-share figures warrant care.
Financial performance and liquidity
| Metric | Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $6.0 million | $3.2 million | $12.2 million | $6.0 million |
| General and administrative expense | $4.2 million | $1.8 million | $8.6 million | $3.4 million |
| Net loss | $9.9 million | $5.0 million | $20.2 million | $9.4 million |
| Operating cash used | — | $21.2 million | $9.7 million |
For the six-month period, R&D rose 104% year over year, mainly due to livoletide development and higher staffing; G&A rose 154%, reflecting compensation, public-company professional fees, insurance, and facilities. There were no meaningful product margins because there were no product sales.
At June 30, 2019, cash and cash equivalents were $55.3 million, restricted cash was $1.4 million, and marketable securities were zero; combined cash, cash equivalents, marketable securities, and restricted cash totaled $56.6 million. Total assets were $68.3 million, total liabilities $13.3 million, and total stockholders’ equity $55.0 million. Debt was approximately $0.5 million, principally the non-interest-bearing Bpifrance advance. Operating lease liabilities totaled $3.4 million.
Six-month investing activities provided $4.1 million, mainly from $4.4 million of marketable-security proceeds, partly offset by $0.3 million of equipment purchases. Financing activities used $38,000. Cash, cash equivalents, and restricted cash fell $17.1 million to $56.6 million. The company reported an accumulated deficit of $184.3 million.
Material changes and developments
- Livoletide’s pivotal Phase 2b/3 PWS trial began in March 2019. Topline results from its Phase 2b portion were expected in the first half of 2020. The FDA designated the program Fast Track on July 29, 2019.
- By August 8, 26 clinical sites were recruiting for the livoletide trial. The company planned a protocol amendment to allow enrollment of children ages 4–7.
- In the CAH Phase 2b trial, three of six participants starting at 1,000 mg twice daily discontinued after non-serious adverse events, primarily rash, painful urination, or diarrhea. The company submitted an amendment to start at 500 mg twice daily and escalate over a longer treatment period; recruitment resumed under the amended protocol. It expected to update timelines in the second half of 2019.
- In August 2019, after the reporting date, Millendo discontinued its Phase 2 Cushing’s syndrome trial and suspended nevanimibe development for that indication because enrollment was slower than expected. It said discontinuation costs were not expected to be material.
- MLE-301 remained preclinical; first-in-human studies were expected to begin in 2020.
- The company entered a $50 million at-the-market equity distribution agreement in April 2019, but had sold no shares under it by the filing date.
Outlook, risks, contingencies, and unusual items
Management expected the $56.6 million of cash and restricted cash resources to fund current operating plans into the fourth quarter of 2020 and through the expected livoletide Phase 2b topline results. It anticipated rising R&D and public-company costs and said additional capital would likely be required. If financing is unavailable or unfavorable, programs could be delayed, reduced, or stopped; equity financing could dilute shareholders.
Key risks include clinical-trial enrollment, tolerability and efficacy; regulatory decisions and additional study requirements; the need for future financing; dependence on third-party manufacturers, CROs, and licensors; competition; and the lack of approved products or product revenue. The company disclosed shareholder litigation related to legacy OvaScience matters, including a class action in discovery and derivative actions stayed or otherwise pending; potential losses were not estimable. Several merger-related suits had been dismissed or settled as to fees and costs.
The company adopted the new lease accounting standard on January 1, 2019, recognizing lease right-of-use assets and liabilities. It reported effective disclosure controls as of June 30, 2019 and no material quarter-on-quarter change in internal control over financial reporting. Its risk factors also noted that management had not completed the required internal-control assessment for year-end 2018 and intended to conduct its first assessment as of December 31, 2019.
Important facts for investors to verify
- Confirm the filing issuer: the document identifies Millendo Therapeutics, Inc. (ticker MLND), not Tempest Therapeutics, Inc.
- Check subsequent livoletide trial enrollment, the proposed pediatric amendment, and whether Phase 2b results arrived on the expected schedule.
- Verify the amended CAH trial’s recruitment, tolerability, and timeline, and distinguish that program from the discontinued Cushing’s indication.
- Track cash burn, the stated fourth-quarter 2020 runway, and any ATM or other financing activity after the filing.
- Review developments in the disclosed litigation and the planned year-end 2019 internal-control assessment.