Cardiff Oncology, Inc. — Q1 2022 Form 10-Q
Period: Three months ended March 31, 2022; unaudited. Cardiff Oncology is a clinical-stage biotechnology company developing onvansertib, an oral PLK1 inhibitor, in combination with other therapies for cancer. Its programs include KRAS-mutated metastatic colorectal cancer (mCRC), metastatic pancreatic cancer (mPDAC), and metastatic castration-resistant prostate cancer (mCRPC).
Financial performance and position
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Royalty revenue | $0.074 million | $0.072 million |
| Research and development expense | $7.208 million | $3.279 million |
| Selling, general and administrative expense | $3.940 million | $2.235 million |
| Operating loss | $11.074 million | $5.442 million |
| Net loss | $10.993 million | $5.179 million |
| Net loss attributable to common stockholders | $10.999 million; $0.25 per share | $5.185 million; $0.14 per share |
| Net cash used in operating activities | $10.249 million | $5.884 million |
Revenue is immaterial and consists of royalties on licenses unrelated to onvansertib; the filing does not provide a meaningful gross-margin measure. Operating expenses were $11.148 million, up from $5.514 million. R&D growth was primarily attributed to outside services for chemistry, manufacturing and controls and pharmacology, as well as higher headcount and stock-based compensation. SG&A growth mainly reflected outside services, including strategic valuation consulting, and higher stock-based compensation.
At March 31, 2022, cash and cash equivalents were $20.052 million and short-term investments were $109.310 million, totaling $129.362 million (reported by management as $129.4 million). Working capital was $129.1 million, versus $139.6 million at year-end 2021. Total assets were $139.2 million and total liabilities were $9.1 million. The filing reports no borrowings; operating lease liabilities totaled $3.103 million. Cash and cash equivalents increased by $8.109 million during the quarter, with $18.358 million provided by investing activities, largely reflecting investment maturities and sales net of purchases. Financing activities provided no cash.
Material changes and notable items
- Net loss attributable to common stockholders increased by $5.814 million year over year, primarily due to higher operating expenses. Weighted-average shares increased to 43.231 million from 37.164 million; management cited approximately 5.8 million common shares issued from April 2021 through March 2022 as a primary factor in the per-share loss increase.
- Common shares outstanding were 43.306 million at March 31, 2022, compared with 41.964 million at December 31, 2021. During the quarter, 1.342 million common shares were issued upon conversion of Series E preferred stock.
- Unrealized losses on available-for-sale securities were $0.606 million for the quarter. Stock-based compensation expense was $1.152 million, compared with $0.268 million a year earlier.
- Pfizer purchased 2.4 million Cardiff shares in November 2021 for approximately $15 million gross proceeds. Under an information-rights agreement, Cardiff provides Pfizer certain onvansertib preclinical and clinical data and results at least two business days before providing them to third parties, through May 17, 2024.
Outlook, programs and risks
Management stated that available cash, cash equivalents and short-term investments were sufficient to meet funding requirements for at least 12 months following issuance of the financial statements. The company expects continued losses and operating cash outflows for the foreseeable future and expects to need additional capital to advance its clinical programs. It cautioned that financing may not be available on acceptable terms or at all, and equity financing could dilute stockholders. No financial guidance or forecast was provided.
- mCRC: In an update announced January 18, 2022, 12 of 35 patients treated per protocol at the recommended Phase 2 dose had a complete or partial response (34%); across all dose levels, 17 of 48 patients had a response (35%). Median progression-free survival across response-evaluable patients was 9.4 months and had not been reached at the recommended dose. The company reported the combination was well tolerated, with no major or unexpected toxicities attributed to onvansertib.
- mPDAC: The Phase 2 trial of onvansertib with nanoliposomal irinotecan, leucovorin and fluorouracil began dosing its first patient in June 2021 and was expected to enroll approximately 45 patients.
- mCRPC: Data presented at the April 2022 AACR meeting reported PSA stabilization of 29% to 45% and radiographic stable disease of 53% to 75% across two dosing arms. Reported median progression-free survival was 4.1 months in Arm A and 13.2 months to date in Arm C. The filing describes these as clinical-trial findings; they are not guarantees of future results.
Key risks include the clinical and regulatory uncertainty inherent in drug development, the possibility that trials will not demonstrate adequate safety or efficacy, competition, and the need for additional capital. Management reported no material change to the risk factors in its 2021 Form 10-K. It reported no material legal proceedings or contingencies requiring accrual or disclosure, and no material change in internal control over financial reporting. Disclosure controls were assessed as effective as of March 31, 2022.
Important facts for investors to verify
- Current enrollment, trial design, follow-up, and independently assessable efficacy and safety results for each onvansertib program.
- Whether the reported clinical response and progression-free survival results remain consistent as trials mature, and how patient populations and dosing arms compare.
- Cash burn and investment balances in subsequent filings, and whether management’s stated 12-month funding runway remains adequate relative to trial plans.
- Potential financing needs and dilution, including the effects of outstanding options, warrants and preferred-stock conversion rights.
- The scope and practical implications of Pfizer’s data access and first-access rights through May 17, 2024.