Pluri Inc. — Form 10-Q Summary
Reporting period: The filing covers the three and six months ended December 31, 2023, the second quarter and first half of Pluri’s fiscal year 2024. The request labels the period “2023 Q2,” but the filing period is the quarter ended December 31, 2023. Financial amounts below are in U.S. dollars; statements present amounts in thousands unless stated otherwise.
Business context and results
Pluri is a biotechnology company developing cell-based products using a 3D cell-expansion platform and an in-house GMP manufacturing facility. Its activities include regenerative medicine, food technology, agtech and CDMO services. The company reported one operating segment.
| Metric | Three months ended Dec. 31, 2023 | Three months ended Dec. 31, 2022 | Six months ended Dec. 31, 2023 | Six months ended Dec. 31, 2022 |
|---|---|---|---|---|
| Revenue | $105 | $2 | $159 | $89 |
| Net R&D expense | $2,964 | $3,785 | $5,957 | $8,056 |
| General and administrative expense | $2,354 | $2,896 | $4,792 | $5,635 |
| Operating loss | $5,213 | $6,679 | $10,590 | $13,602 |
| Net loss | $4,994 | $8,254 | $10,092 | $14,523 |
| Net loss per share, basic and diluted | $0.12 | $0.24 | $0.24 | $0.44 |
Revenue remained very small and was mainly associated with process and product development services in CDMO and agtech. The filing does not provide gross profit or a clear gross-margin value.
Liquidity, cash flow and debt
- At December 31, 2023, current assets were $32.252 million and current liabilities were $4.530 million, giving reported working capital of $27.722 million. Total assets were $41.564 million; total equity was $6.617 million, including $2.218 million of non-controlling interests.
- Cash and cash equivalents were $5.468 million. Including short-term bank deposits of $25.152 million, restricted cash of $0.373 million and restricted bank deposits of $0.645 million, the company reported a total cash and deposit position of $31.638 million.
- Operating cash use was $9.506 million in the six months, versus $13.889 million in the prior-year period. Investing activities provided $9.721 million, primarily reflecting net withdrawals of short-term deposits. There were no financing cash flows in the period. Cash, cash equivalents and restricted cash ended the period at $6.486 million; this cash-flow measure does not include short-term bank deposits.
- The EIB loan liability was $24.401 million, including $22.121 million of linked principal and $2.280 million of accrued interest. The loan is due June 1, 2026, bears 4% annual interest payable with principal, and carries revenue-based royalties through fiscal 2030. The company does not expect further EIB funding.
- Management said current resources and its operating plan should fund obligations for at least 12 months from issuance of the financial statements. The company nevertheless reported recurring losses and negative operating cash flows since inception, an accumulated deficit of $409.450 million, and a need for additional resources for longer-term development and commercialization.
Changes versus the prior comparable period
- First-half revenue increased to $159,000 from $89,000; second-quarter revenue increased to $105,000 from $2,000. Management attributed the increase to its revised strategy and collaborations, particularly in CDMO and agtech.
- Net R&D expense fell 26% for the first half and 22% for the quarter. Management cited completed clinical studies, lower headcount and cost-reduction efforts, partly offset by lower grant participation, including completion of the Horizon 2020 program.
- G&A expense declined 15% for the first half and 19% for the quarter. Management cited cost reductions, lower insurance costs and reduced share-based compensation expense. It also noted the CEO’s salary reduction and conversion of compensation to equity awards.
- Net loss narrowed to $10.092 million for the first half from $14.523 million, and to $4.994 million for the quarter from $8.254 million. Lower operating expenses and improved financial income contributed; the weighted-average share count increased year over year, reflecting the December 2022 private placement and equity awards.
- Total assets declined to $41.564 million from $50.797 million at June 30, 2023, while total equity declined to $6.617 million from $15.300 million. Short-term deposits decreased by $9.659 million over that period.
Outlook, commentary and risks
- Pluri said it does not expect significant product-sale revenue in the next 12 months. Collaboration and technology-licensing revenue may be generated, but management expects such revenue in the short and medium term to be unlikely to exceed operating costs. No numerical revenue or earnings guidance was provided.
- In July 2023, Pluri signed a three-year, $4.2 million NIAID contract to advance PLX-R18 for hematopoietic acute radiation syndrome. The filing reports approximately $382,000 received by December 31, 2023, with approximately $343,000 expected in addition. A one-year performance period may be extended for two years.
- After the quarter, Pluri announced the launch of PluriCDMO on January 8, 2024, and a cell-based coffee activity under PluriAgtech on January 23, 2024. Ever After, its cultivated-meat joint venture, had completed a proof of concept. A proposed $2.5 million SAFE investment in Ever After had been terminated and was not received by December 31, 2023.
- Nasdaq had granted an extension through April 15, 2024, for Pluri to regain compliance with the $1.00 minimum bid-price requirement after transferring to the Nasdaq Capital Market. The filing states that the shares were trading below $1.00 as of the filing date; failure to regain compliance could lead to delisting. The company said it may consider measures including a reverse stock split.
- Pluri operates in Israel. Management reported no material operational impact from the Israel-Hamas conflict as of the filing, but warned that escalation, travel or movement restrictions, supply delays, reservist call-ups, or difficulty raising capital could disrupt operations. The company also highlighted uncertainty around future grants and funding.
- Other financial obligations include contingent IIA royalties, reported at $27.669 million before applicable interest, payable only if qualifying products or services generate sales; and a maximum aggregate royalty of approximately $500,000 related to a cGVHD agreement. The EIB loan also imposes restrictions on certain business, asset, financing and corporate actions.
Important facts for investors to verify
- Whether cash burn, deposit balances and planned financing are consistent with management’s stated minimum 12-month liquidity outlook.
- Progress and revenue conversion from the NIAID contract, CDMO launch, agtech activity and other collaborations, given the very low reported revenue and lack of expected significant product sales.
- Nasdaq bid-price compliance status and any actions taken to avoid delisting.
- The terms, timing and potential cash impact of the EIB loan, IIA royalty obligations and other contingent commitments.
- Whether the Israel conflict, operating costs, grant funding or clinical-development progress materially changes the company’s outlook or risks.