Milestone Pharmaceuticals Inc. — FY2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020. The filing is an annual report, not a standalone Q4 report; quarterly financial results are not provided here. Filed March 29, 2021.
Business context
Milestone is a clinical-stage biopharmaceutical company developing cardiovascular medicines. Its sole clinical-stage product candidate is etripamil, a rapid-onset, short-acting calcium-channel blocker nasal spray. The lead program is for paroxysmal supraventricular tachycardia (PSVT); the company is also exploring atrial fibrillation with rapid ventricular rate (AFib-RVR). It had no products approved for sale and no product revenue.
Financial performance and liquidity
| Metric | FY2020 | FY2019 |
|---|---|---|
| Revenue | None reported | None reported |
| Research and development expense, net | $34.5 million | $42.0 million |
| General and administrative expense | $10.3 million | $7.0 million |
| Commercial expense | $5.9 million | $8.9 million |
| Total operating expenses | $50.7 million | $57.9 million |
| Operating loss | $50.7 million | $57.9 million |
| Net loss | $50.0 million | $55.2 million |
| Net loss per share, basic and diluted | $1.70 | $3.50 |
| Cash used in operating activities | $50.7 million | $51.2 million |
As a pre-revenue company, conventional revenue and profit margins are not meaningful. Net loss narrowed 10% year over year, largely alongside lower operating expenses; R&D fell 18%, commercial expense fell 33%, and G&A rose 47%. Lower interest income ($0.7 million versus $2.6 million) partly offset the improvement.
At year-end, cash and cash equivalents were $72.3 million and short-term investments were $70.0 million, for total cash, cash equivalents and short-term investments of $142.3 million. Current assets were $148.7 million and current liabilities $6.2 million. Total liabilities were $6.9 million, primarily accounts payable, accruals and operating lease liabilities; the filing reports no financial debt. Operating lease liabilities totaled approximately $0.9 million.
Financing activities provided $73.2 million in 2020, including net proceeds of $24.8 million from a private placement of pre-funded warrants and $48.2 million from an October public offering of common shares and warrants. The company also had an unused at-the-market offering program authorizing up to $50 million. It stated that available resources were expected to fund operations for at least 12 months from the filing date, while warning that additional financing would be needed to support longer-term plans.
Material developments and outlook
- PSVT pivotal trial: The first part of Phase 3 NODE-301 did not meet its original primary endpoint, time to conversion over five hours. A retrospective analysis using a 30-minute endpoint found conversion in 54% of etripamil patients versus 35% of placebo patients (hazard ratio 1.87; p=0.02). This post hoc result does not replace the failed original endpoint.
- RAPID trial: Following FDA discussions, the company amended and expanded the confirmatory study, including a possible repeat 70 mg dose after 10 minutes if symptoms persisted. The FDA indicated that NODE-301 and RAPID could potentially fulfill the efficacy requirement for a planned NDA; approval was not assured. COVID-19-related enrollment and site-startup delays arose in Q4. Management maintained its expectation for RAPID topline data in late 2021 or early 2022.
- Safety studies: NODE-302 completed in late 2020; its safety data were expected in 2021. The size of the ongoing open-label NODE-303 study was expected to be reduced, with final scope subject to regulatory discussions.
- AFib-RVR: The company began enrolling patients in the Phase 2 ReVeRA proof-of-concept trial in Q1 2021. The planned study was approximately 50 patients, with results expected after RAPID topline results.
- COVID-19: The pandemic disrupted trial-site startup, recruitment and follow-up and could further affect clinical timelines, supply, operations and access to capital. Management said the duration and financial impact remained uncertain.
Risks, contingencies and unusual items
- The company had accumulated losses of $163.5 million and expected substantial future losses; its prospects depend heavily on successful development, regulatory approval and commercialization of etripamil.
- Clinical efficacy remains uncertain after NODE-301 missed its prespecified primary endpoint. Etripamil also carries potential risks associated with calcium-channel blockers, including low blood pressure and slowed heart conduction; a Phase 2 patient experienced a possibly treatment-related second-degree AV block that resolved.
- The company relies on third parties for clinical research, manufacturing and the nasal-spray device, and had no formal commercial-supply agreement. COVID-19 and single-source device or supply dependencies could disrupt development or future launch plans.
- Further equity financing could dilute shareholders. At year-end, 11.4 million pre-funded warrants were outstanding, generally exercisable for common shares at $0.01 per share.
- No material legal proceedings were reported. The independent auditor issued an unqualified opinion on the financial statements; it did not audit or opine on internal control effectiveness. Management reported effective internal controls as of year-end.
Important facts for investors to verify
- RAPID enrollment progress, topline timing and results, and whether regulators continue to view the combined efficacy package as potentially sufficient for an NDA.
- Final, complete NODE-301 analyses and the distinction between its missed original primary endpoint and the positive retrospective 30-minute analysis.
- Cash burn, available liquidity and financing requirements as clinical and potential commercialization spending changes.
- Potential dilution from outstanding warrants, stock options and any future equity offerings.
- COVID-19 effects on trial enrollment and timelines, and supply readiness for the nasal device and any future commercial manufacturing.