CalciMedica, Inc. — Q1 2023 Form 10-Q
Business context and reporting period
For the quarter ended March 31, 2023, CalciMedica was a clinical-stage biopharmaceutical company developing calcium release-activated calcium (CRAC) channel inhibitors for inflammatory illnesses. Its lead candidate, intravenous Auxora (zegocractin), is in clinical development. The company completed its merger with Graybug Vision on March 20, 2023, and changed its name to CalciMedica. The merger was accounted for as a reverse recapitalization, with Private CalciMedica as the accounting acquirer. Accordingly, Q1 2023 includes Graybug activity only from March 21–31, while Q1 2022 reflects standalone Private CalciMedica; year-over-year comparisons are therefore affected by the merger and are not fully comparable.
Financial performance and liquidity
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $6.5 million | $2.9 million |
| General and administrative expense | $15.8 million | $1.3 million |
| Total operating expenses / operating loss | $22.3 million | $4.2 million |
| Net loss | $19.3 million | $3.6 million |
| Net loss per share, basic and diluted | $23.43 | $46.13 |
| Cash used in operating activities | $5.4 million | $3.6 million |
Q1 2023 operating expenses included $16.2 million of merger-related one-time charges: $10.5 million for accelerated vesting of Graybug stock awards and $5.7 million for severance. No product revenue or profit was reported; margins are not meaningful for this pre-commercial company. Net loss included $3.2 million of net gains from fair-value changes in financial instruments.
At March 31, 2023, cash and cash equivalents were $24.4 million and short-term investments were $9.8 million, totaling approximately $34.2 million. Current assets were $34.5 million, current liabilities $12.7 million, and stockholders’ equity $22.0 million; accumulated deficit was $131.0 million. There were no convertible promissory notes or warrant liabilities outstanding at quarter-end: the notes and warrants converted in connection with the merger. Financing activities provided $23.5 million, including $14.9 million of net cash acquired in the merger and $10.3 million of private-placement proceeds, partially offset by transaction costs.
Material changes, outlook and risks
- Operating expenses rose substantially from the prior-year quarter, primarily due to merger-related stock compensation and severance, alongside higher personnel costs. Research and development expense increased 122% and general and administrative expense increased 1,132%.
- Management said available cash and investments were expected to fund operations beyond 12 months from issuance of the statements; its MD&A estimates funding into the second half of 2024, including Auxora clinical milestones in acute pancreatitis (AP) and asparaginase-associated pancreatitis (AAP) through 2023 and the first half of 2024. Management cautioned that the funds will not support any candidate through regulatory approval and additional capital will be needed.
- The company is conducting a Phase 2b AP trial (CARPO) and expects topline results in Q1 2024. The first cohort of its AAP study was completed; reported preliminary observations were unpublished and from a single-arm study. The company planned to submit an acute kidney injury IND in the second half of 2023 and noted a Phase 2 trial would depend on additional funding.
- CalciMedica reported no effective disclosure controls because of a material weakness in review of valuation inputs and assumptions for convertible notes and warrant liabilities. It described remediation steps, but gave no assurance they would succeed. The weakness was associated with a restatement of 2022 financial statements disclosed in a May 2023 filing.
- Nasdaq suspended trading in the company’s shares on March 31, 2023; shares began trading on OTCQB under CALC on April 26. The company withdrew its Nasdaq appeal on May 1 and said it intended to pursue a new listing application, with no assurance of success.
- Four merger-related stockholder lawsuits were voluntarily dismissed after supplemental proxy disclosures. The company and opposing counsel executed a settlement resolving a mootness-fee demand on May 3, 2023. The filing says litigation outcomes can still entail costs and other adverse effects.
- Key risks include clinical-trial uncertainty, reliance on third-party manufacturers and trial operators, need for substantial additional financing, possible dilution or restrictions from future financing, and limited liquidity in OTC trading.
Important facts for investors to verify
- Review CARPO timing and results, and distinguish unpublished preliminary AAP observations from controlled clinical evidence.
- Assess cash burn, assumptions behind the projected runway into the second half of 2024, and the timing and terms of any required financing.
- Check progress and costs for planned trials and the proposed AKI IND, including whether additional funding is secured.
- Review the 2022 restatement and subsequent remediation of the valuation-related material weakness.
- Confirm Nasdaq relisting progress, OTCQB trading liquidity, and the potential impact of outstanding options, warrants and future equity issuance.