Immunic, Inc. — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2023. The company is a clinical-stage biotechnology developer with no approved products and no product-sales revenue. Financial statements are unaudited.
Financial performance and liquidity
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Revenue from product sales | $0 | $0 | $0 | $0 |
| Research and development expense | $19.8m | $16.5m | $63.9m | $50.5m |
| General and administrative expense | $3.8m | $3.6m | $11.9m | $11.6m |
| Total operating expense | $23.6m | $20.1m | $75.8m | $62.2m |
| Net loss | $22.8m | $21.2m | $72.0m | $63.9m |
| Basic and diluted loss per share | $0.51 | $0.69 | $1.63 | $2.16 |
| Operating cash used | Not provided for quarter | Not provided for quarter | $56.8m | $50.0m |
At September 30, cash and cash equivalents were $59.7m, down from $106.7m at December 31, 2022. The company also reported $65.2m of current assets, $17.8m of current liabilities, and $66.98m of total assets. Cash flows included $9.6m provided by investing activities, mainly from sale of time deposits, and $0.4m provided by financing activities. Cash ended the nine-month period at $59.7m, versus $72.8m at September 30, 2022.
No borrowings are reported. Long-term liabilities were $0.8m, consisting of operating lease liabilities; total operating lease obligations had a present value of $1.45m. The company had an accumulated deficit of $389.3m. No profitability or product revenue outlook is provided.
Changes versus comparable periods
- Q3 operating expenses increased 17% year over year, driven primarily by higher clinical and drug-supply spending on vidofludimus calcium; net loss widened 7% to $22.8m.
- For the first nine months, operating expenses increased 22% and net loss increased 13%. R&D expense rose 27%, principally due to Phase 3 and Phase 2 multiple-sclerosis trial costs, drug supply, IMU-856 work, and personnel.
- Higher interest income and lower foreign-exchange losses improved other income versus 2022, partly offsetting increased operating costs.
- Cash used in operations rose to $56.8m from $50.0m. Financing proceeds fell to $0.4m from $39.7m; 2023 ATM proceeds were $0.3m, compared with $39.6m net proceeds under the ATM in the first nine months of 2022.
- Common shares outstanding increased to 44.6m at September 30 from 39.3m at December 31, 2022, including exercise of 5.1m pre-funded warrants in January 2023. The filing reports 45.1m shares outstanding as of October 31.
Outlook, developments, and risks
- Liquidity and going concern: Management states that available funds are insufficient to fund operations for at least 12 months from issuance of the financial statements without additional capital, which is not within the company’s control. This raises substantial doubt about its ability to continue as a going concern. The company may need equity, debt, collaborations, or licensing; funding may be unavailable or dilutive, and failure to obtain funds could force it to curtail development or cease operations.
- Capital access: As of October 31, 2023, $75m remained on a shelf registration set to expire November 24, 2023; the company planned to file a replacement. Remaining ATM capacity was $8.1m on the December 2020 facility and $80m on the May 2022 facility.
- Pipeline: Vidofludimus calcium is in Phase 3 ENSURE trials for relapsing MS and the Phase 2 CALLIPER trial for progressive MS. CALLIPER enrollment of 467 patients was completed; top-line results were expected in April 2025. The company expected an ENSURE interim futility analysis in late 2024 and the first trial readout at year-end 2025.
- After quarter-end, the company reported positive interim CALLIPER biomarker data, including a 6.7% reduction in serum NfL versus a 15.8% increase for placebo at 24 weeks in the overall population (p=0.01, post hoc). These are interim, company-reported findings; the full trial results were pending.
- IMU-856 was being prepared for Phase 2 testing in active celiac disease following positive company-reported Phase 1 results. IMU-381 remained in preclinical testing. The clinical portion of izumerogant (IMU-935) was deprioritized in April 2023 to focus resources on the other programs.
- Management identifies trial failure, regulatory approval, and funding as major risks. Clinical trials may face delays and higher costs from the war in Ukraine and conflict in the Middle East; Ukraine accounted for an expected 15%–20% of ENSURE-1 and ENSURE-2 participants. Foreign-exchange exposure is also material: management estimated a 10% currency move could affect nine-month net loss by about $6.3m.
- There were no material pending or threatened legal proceedings reported. Management stated disclosure controls were effective and reported no material change in internal control over financial reporting.
Key facts for investors to verify
- Whether the company secured sufficient financing after September 30, 2023, and the resulting dilution, terms, and cash runway.
- Progress and timing of ENSURE and CALLIPER, including full CALLIPER results and the planned ENSURE milestones; distinguish interim biomarker findings from clinical outcomes.
- Whether IMU-856 advances into Phase 2 and whether its early celiac-disease findings are confirmed in larger studies.
- Actual spending and cash burn relative to the disclosed $5.1m of near-term development-program contractual commitments.
- Effects of trial-site disruption, foreign-exchange movements, and other operational risks on timelines, costs, and liquidity.