Business context and reporting period
Immunic, Inc. is a clinical-stage biopharmaceutical company developing oral therapies for inflammatory and autoimmune diseases. This unaudited Form 10-Q covers the quarter and six months ended June 30, 2022. The company had no approved products and generated no product revenue.
Its three programs were vidofludimus calcium (IMU-838), IMU-935 and IMU-856. The company reported approximately 60 employees and operated primarily from Germany, with headquarters in New York.
Financial performance and position
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Revenue | No product revenue | No product revenue | No product revenue | No product revenue |
| Research and development expense | $16.5 million | $15.7 million | $34.0 million | $27.3 million |
| General and administrative expense | $4.1 million | $3.4 million | $8.1 million | $7.1 million |
| Net loss | $21.9 million | $17.9 million | $42.7 million | $52.5 million |
| Basic and diluted loss per share | $0.72 | $0.82 | $1.49 | $2.44 |
| Operating cash used | Not separately stated | Not separately stated | $36.4 million | $42.0 million |
At June 30, 2022, cash and cash equivalents were $88.1 million, including $63.2 million in money market funds. Total assets were $138.7 million; total liabilities were $10.8 million, comprising $10.4 million current liabilities and $0.4 million long-term lease liabilities. No borrowings are presented on the balance sheet. Stockholders’ equity was $127.8 million, and accumulated deficit was $239.6 million. The filing does not provide a meaningful product gross margin or operating margin because there was no product revenue.
Cash from financing activities was $39.7 million for the six months, primarily from ATM share sales. Investing activities used $0.04 million. Management expected cash on hand to fund operations beyond twelve months from issuance of the financial statements, while noting that additional funding may be needed over the longer term.
Material changes versus prior periods
- Q2 net loss widened by $4.0 million year over year. Operating expenses rose $1.4 million, while other income and expense deteriorated by $2.5 million, mainly due to foreign-exchange losses on intercompany loans.
- Six-month net loss improved by $9.8 million year over year, despite higher R&D and G&A expenses, primarily because the prior-year period included a $17.25 million 4SC royalty settlement expense. That settlement resolved the remaining royalty obligation.
- Six-month R&D expense increased 25%, driven principally by higher spending on the vidofludimus calcium MS trials and IMU-935 studies; reduced COVID-19 and ulcerative colitis trial costs partly offset the increase.
- The company raised $39.6 million net through its December 2020 ATM in the first half, issuing 4.2 million shares. Common shares outstanding increased from 26.3 million at year-end 2021 to 30.6 million at June 30, 2022.
Outlook, developments and risks
- CALDOSE-1 in moderate-to-severe ulcerative colitis missed its primary endpoint. The company reported a possible interaction with concurrent steroid use and said it would not continue IBD development without a partner. It described the treatment as safe and well tolerated, without new safety signals.
- Management targeted interim CALLIPER data in progressive MS in the second half of 2023, CALLIPER top-line data by the end of 2024, and the first ENSURE Phase 3 relapsing-MS trial readout by the end of 2025. These goals depend on factors outside the company’s control.
- Initial psoriasis-patient data from the IMU-935 Phase 1 trial were expected in Q4 2022. The IMU-935 drug-drug interaction study was completed with no relevant interaction signals reported. The IMU-935 mCRPC trial was ongoing; early safety observations were described as promising, but the study remained in dose escalation.
- IMU-856’s Phase 1 trial included celiac-disease patient cohorts; unblinded safety data from healthy-subject dose portions were expected in Q3 2022.
- The company reported that the investigator-sponsored IONIC COVID-19 trial was closing. It was exploring options for antiviral development, including a possible spin-off or licensing transactions.
- Key risks include clinical-trial failure or delay, regulatory uncertainty, and the need for future financing on acceptable terms. The Russia-Ukraine conflict could affect trial enrollment and costs. The company cited foreign-exchange exposure, including an estimated $3.5 million impact on six-month net loss from a hypothetical 10% currency move.
- Goodwill of $33.0 million was not considered impaired at June 30, 2022, but management said it would reassess if the share-price decline persisted. The company also noted that future impairment charges could be substantial.
- Contractual development-program obligations totaled approximately $2.6 million, expected to be paid within twelve months. No material litigation was reported.
Important facts for investors to verify
- Whether subsequent trial data support the stated timelines and whether any trials face enrollment, site or cost disruptions.
- Whether a partner is secured for IBD development and what strategic path is chosen for the antiviral portfolio.
- Cash burn, remaining ATM and shelf capacity, and potential dilution from further equity financing; as of July 31, 2022, $8.4 million remained under the December 2020 ATM and $80.0 million under the May 2022 ATM.
- Whether the stock-price decline triggers another goodwill impairment assessment, and whether foreign-exchange movements materially affect reported results.