Chemomab Therapeutics Ltd. — FY 2022 Form 10-K
Reporting period: Year ended December 31, 2022; comparison with FY 2021. The filing was signed March 20, 2023. Chemomab is an Israeli clinical-stage biotechnology company developing CM-101, an antibody targeting CCL24 for fibrotic and inflammatory diseases. It has no approved products and has generated no product revenue.
Financial performance and position
| Metric | FY 2022 / Dec. 31, 2022 | FY 2021 / Dec. 31, 2021 |
|---|---|---|
| Revenue | No product revenue | No product revenue |
| Research and development expense | $17.0 million | $6.3 million |
| General and administrative expense | $11.6 million | $6.0 million |
| Total operating expenses | $28.5 million | $12.4 million |
| Net loss | $27.6 million | $12.5 million |
| Net loss per ordinary share | $0.121 | $0.060 |
| Net cash used in operating activities | $20.4 million | $12.4 million |
| Cash, cash equivalents and short-term deposits | $39.9 million | $61.2 million |
| Total assets / total liabilities | $43.1 million / $6.8 million | $64.4 million / $2.9 million |
- R&D expense rose 168%, primarily from increased headcount and clinical and preclinical contractor costs. G&A rose 92%, mainly due to headcount, professional fees, insurance and share-based compensation. Net loss more than doubled year over year.
- Operating cash use increased by $8.0 million. Investing activities provided $19.5 million in 2022, primarily reflecting movements in short-term deposits; this was not operating cash generation. Financing activities used $0.8 million, including a $1.2 million share repurchase.
- Cash, cash equivalents and deposits were approximately $40 million; the company reported no borrowings. Liabilities consisted mainly of payables, accruals, employee expenses and lease obligations. Current liabilities were $6.7 million.
- Accumulated deficit was $63.8 million. Management expects existing liquidity to fund operations at least through March 31, 2024, subject to assumptions and potential changes in spending. The company expects continued losses and says it will need substantial additional funding.
Business, developments and outlook
- CM-101 is being developed for primary sclerosing cholangitis (PSC) and systemic sclerosis (SSc), both areas of significant unmet need. The Phase 2 PSC SPRING study was recruiting across the U.S., Europe and Israel. The company added a 20 mg/kg dose arm and an open-label extension; the double-blind treatment period is 15 weeks. The filing describes the planned dose focus as 10 and 20 mg/kg.
- After year-end, the FDA cleared the IND for a Phase 2 SSc study. The planned ABATE study is expected to enroll 45 patients, use 10 mg/kg IV every three weeks, and include a 24-week blinded period followed by a 24-week open-label extension. Enrollment was targeted for mid-2023 and topline data for the second half of 2024.
- In January 2023, Chemomab reported topline results from a 23-patient Phase 2a NASH liver-fibrosis study. It met its primary safety and tolerability endpoint; the company reported favorable biomarker and liver-stiffness signals on secondary measures. These results are preliminary evidence, not proof of clinical benefit. Treated patients had higher baseline fibrosis than placebo patients, and the impact of this imbalance is unknown.
- A 16-patient, open-label, single-arm investigator-initiated COVID-19 lung-injury study reported tolerability and reductions in selected biomarkers after one CM-101 dose. Its uncontrolled, small design limits conclusions about efficacy.
- Management expects development costs to rise as clinical programs advance. It is assessing the subcutaneous formulation and potential partnerships, licensing or other financing. No revenue or profitability guidance was provided.
Risks, contingencies and unusual items
- Clinical, regulatory and funding risk is substantial: CM-101 remains in early development, later-stage trials may fail, and the company depends heavily on a single candidate. Management warns that additional capital may not be available on acceptable terms, with potential delays, program reductions or dilution.
- Clinical supply is outsourced, and the company relies on a sole supplier for CM-101. Trial enrollment, manufacturing, regulatory review and the transition to commercial capability may delay development.
- The Israeli Tax Authority assessed $1.046 million following a VAT audit. Chemomab appealed and recorded a provision; the eventual outcome may differ from the estimate.
- In November 2022, the company repurchased 582,023 ADSs from co-founders for approximately $1.218 million to help address their tax-related share-sale needs. The company said it did not expect the transaction to change its cash runway.
- Other material risks include competitive and reimbursement pressures, intellectual-property challenges, foreign-currency exposure, geopolitical and political conditions in Israel, and potential Nasdaq listing issues. The company reported $609,000 of foreign-currency transaction losses in 2022 and no hedging contracts.
- The auditor gave an unqualified opinion on the financial statements. Management assessed disclosure controls and internal control over financial reporting as effective; no auditor attestation on internal controls was included because the company is an emerging growth company.
Important facts for investors to verify
- Confirm cash, deposits, operating burn and financing assumptions supporting the stated runway through March 31, 2024; assess expected dilution from future fundraising.
- Track PSC and SSc enrollment, trial timelines, dose selection and whether regulators accept the available lower-dose evidence.
- Review final and complete NASH data, including the baseline imbalance, and distinguish biomarker changes from demonstrated clinical outcomes.
- Monitor the VAT appeal, recorded provision and any change in the estimated exposure.
- Check subsequent share issuance, treasury-share treatment and Nasdaq listing compliance; year-end ordinary shares net of treasury shares were 220,996,240.