Business Context and Reporting Period
ProMIS Neurosciences Inc. is a pre-revenue biotechnology company developing antibody therapies, vaccines and other antibody-based therapies for neurodegenerative and protein-misfolding diseases, focused on Alzheimer’s disease, amyotrophic lateral sclerosis and multiple system atrophy. Lead programs include PMN310, PMN267 and PMN442. This unaudited Form 10-Q covers the three months ended March 31, 2024, with U.S. dollar reporting and U.S. GAAP accounting.
The company had 18,961,116 common shares outstanding as of March 31, 2024 and is listed on Nasdaq under PMN.
Financial Performance and Position
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $2.1 million | $3.5 million |
| General and administrative expense | $1.6 million | $1.5 million |
| Total operating expenses | $3.7 million | $5.0 million |
| Net loss | $3.6 million | $5.0 million |
| Net loss per share, basic and diluted | $0.19 | $0.58 |
| Net cash used in operating activities | $10.3 million | $2.6 million |
- Other income, net, was $41,563, including $132,470 of other income, $76,775 of interest expense and a $14,132 increase in the fair value of the warrant liability.
- Cash was $2.5 million at March 31, 2024, compared with $12.6 million at December 31, 2023. Short-term investments were $32,358.
- Total current assets were $3.5 million and total current liabilities were $2.6 million, implying working capital of approximately $0.9 million.
- Total liabilities were $3.5 million, including $1.4 million of accounts payable, $1.2 million of accrued liabilities, a $716,969 share-based compensation liability and a $108,318 warrant liability. The filing does not identify conventional long-term debt.
- Cash used in operations included approximately $5.9 million to settle previously deferred vendor obligations. Financing activities provided $190,274 from the at-the-market offering.
- Accumulated deficit was $97.1 million at March 31, 2024. The company has no revenue and continues to depend on external financing.
Material Changes Versus the Prior Comparable Period
- Research and development expense declined $1.4 million, or 39%, primarily because the prior-year period included higher preparation costs for the PMN310 investigational new drug submission and initial drug-product manufacturing. PMN310 expense was approximately $1.5 million in Q1 2024, primarily related to its Phase 1a trial.
- General and administrative expense increased approximately $92,000, or 6%, driven mainly by higher professional and consulting fees, including legal, audit, tax and investor-relations costs. Lower employee, share-based compensation, patent and facility expenses partly offset the increase.
- Net loss improved by $1.3 million, but operating cash use increased $7.7 million because of the $5.9 million vendor settlement and other working-capital movements.
- Weighted-average shares outstanding increased to 19.5 million from 8.6 million, primarily reflecting prior equity financings and share issuances. Common shares outstanding increased modestly from 18.9 million at December 31, 2023.
- The company sold 75,862 common shares under its new $25.0 million ATM facility for net proceeds of $190,274 during the quarter.
Guidance, Outlook, Risks and Unusual Items
- Management expects topline data from PMN310 Phase 1a single-ascending-dose cohorts in mid-2024. A PMN310 Phase 1b proof-of-concept trial in Alzheimer’s patients is expected to begin in the second half of 2024, subject to sufficient resources.
- PMN267 and PMN442 are prepared to advance to IND-enabling studies, but further development is dependent on available funding. The company also selected PMN400 as a lead vaccine candidate for synucleinopathies.
- Management expects continuing net losses and increasing research and development and general and administrative expenses as clinical development advances. The company does not expect near-term product revenue.
- The financial statements state that substantial doubt exists regarding the company’s ability to continue as a going concern over the next twelve months. Management expects the $2.5 million of cash at March 31, 2024 to be insufficient to fund operating expenses for at least twelve months from the issuance of the financial statements.
- Additional capital may be sought through equity or debt financings, collaborations, strategic alliances and licensing transactions. The company warns that financing may be unavailable or obtainable only on unfavorable terms, potentially requiring delays, reductions or cancellations of development programs.
- As of March 31, 2024, the company had 13.5 million outstanding warrants, 1.2 million stock options, 1.2 million Series 2 convertible preferred shares and other share equivalents, for total common share equivalents of approximately 34.7 million.
- The company made no material subsequent-event disclosures through May 14, 2024 and reported no material litigation. Disclosure controls and procedures were assessed as effective.
Key Facts for Investors to Verify
- Cash runway and the timing, size and terms of required additional financing, including use of the remaining ATM capacity.
- PMN310 Phase 1a topline results and whether the planned Phase 1b trial begins in the second half of 2024.
- Ability to manage near-term obligations after the March 2024 settlement of approximately $5.9 million in deferred vendor payables.
- Potential dilution from outstanding warrants, options, convertible preferred shares and future equity offerings.
- Clinical, regulatory and financing milestones required to advance PMN267, PMN442 and PMN400.
- The going-concern disclosure and whether subsequent financing or strategic transactions alleviate the reported substantial doubt about continued operations.