Gain Therapeutics, Inc. — Q3 2023 Form 10-Q
Reporting period: Three and nine months ended September 30, 2023. Gain Therapeutics is a clinical-stage biotechnology company developing small-molecule therapeutics using its SEE-Tx platform. It has no approved products and no product-sale revenue.
Financial performance and liquidity
| Metric | Q3 2023 | Nine months 2023 | Comparable 2022 |
|---|---|---|---|
| Revenue | $0 | $55,000 | $0 in Q3; $140,000 year to date |
| Research and development expense | $2.37 million | $9.15 million | $1.96 million Q3; $6.10 million year to date |
| General and administrative expense | $2.52 million | $8.75 million | $2.79 million Q3; $7.25 million year to date |
| Net loss | $4.72 million | $17.54 million | $4.56 million Q3; $12.92 million year to date |
| Net loss per share, basic and diluted | $0.37 | $1.42 | $0.38 Q3; $1.09 year to date |
| Cash used in operating activities | Not separately stated for Q3 | $13.21 million | $10.79 million year to date |
- At September 30, cash and cash equivalents were $4.27 million and marketable securities were $7.96 million, totaling approximately $12.23 million. Cash, cash equivalents and restricted cash totaled $4.30 million.
- Total assets were $14.10 million, total liabilities $6.77 million, and stockholders’ equity $7.33 million. Current assets of $13.24 million exceeded current liabilities of $5.76 million.
- Debt was approximately $544,000, consisting of a zero-interest Swiss loan; operating lease liabilities totaled approximately $495,000.
- Nine-month financing included $3.15 million net proceeds from ATM share sales. The company sold 740,131 shares at an average $4.80; $12.5 million of stated ATM capacity remained at quarter-end, subject to applicable offering limits.
- Gross margin is not meaningful because the company reported no product sales and no Q3 revenue.
Changes versus the prior comparable period
- Q3 net loss widened by about $160,000 year over year, while nine-month net loss increased by $4.63 million.
- Nine-month R&D expense rose by $3.04 million, primarily due to third-party research and development support for the Parkinson’s disease program. G&A rose by $1.50 million, reflecting intellectual-property and corporate legal fees, accounting services and personnel costs.
- Q3 G&A fell by about $269,000, mainly due to lower general corporate legal and professional fees.
- Cash, cash equivalents and marketable securities declined from $22.14 million at December 31, 2022 to $12.23 million at September 30, 2023. Operating cash use increased by $2.42 million year over year for the nine-month period.
- Common shares outstanding increased from 11.88 million at year-end 2022 to 12.78 million at September 30, 2023; 12.91 million were outstanding at October 31, 2023.
Outlook, risks and notable items
- Management estimates existing cash and marketable securities will fund anticipated operating and capital requirements through the third quarter of 2024. The filing states that these resources are insufficient for at least 12 months from issuance of the financial statements, and substantial doubt exists about the company’s ability to continue as a going concern.
- Additional capital will be needed beyond Q3 2024. Potential sources include equity or convertible-debt financings, the ATM facility, grants, collaborations and licensing. Management is reviewing costs and seeking efficiencies and strategic opportunities; there is no assurance these efforts will succeed.
- Management expects R&D spending to remain significant and increase as development progresses. No specific financial guidance beyond the stated cash runway is provided.
- GT-02287 received ethics approval for a Phase 1 trial in Australia. The first single-ascending-dose cohort had been completed, with escalation to the second dose level; management reported no drug-related adverse effects to date and expected trial completion in the first half of 2024. These are preliminary, forward-looking statements, not proof of safety or efficacy.
- The company reported $4.6 million in research commitments for work expected within one year. The Zentalis collaboration had concluded. No material legal proceedings were reported.
Investor facts to verify
- Whether the clinical trial progresses as planned, including dose escalation, safety findings, pharmacokinetic and pharmacodynamic results, and the expected completion timing.
- Actual cash burn and whether new funding or cost reductions extend the stated runway; assess the dilution, terms and availability of ATM or other financing.
- Progress and funding for the Parkinson’s, Gaucher and alpha-1 antitrypsin deficiency programs, including collaboration or grant developments.
- Whether research commitments, operating costs and other obligations remain consistent with management’s cash runway estimate.