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Aligos Therapeutics(ALGS) - 2024 Q2 - Quarterly Report
ALGSAligos Therapeutics(ALGS)2024-08-06 20:14

Cash and Cash Equivalents - Cash and cash equivalents decreased from 135,704thousandto135,704 thousand to 45,078 thousand, a significant drop of 66.8%[26] - Cash and cash equivalents decreased by 90.6millionto90.6 million to 45.1 million as of June 30, 2024[38] - Fair value of cash equivalents as of June 30, 2024: 45.1million[82]−Unrestrictedcash,cashequivalents,andinvestmentstotaled45.1 million[82] - Unrestricted cash, cash equivalents, and investments totaled 94.5 million as of June 30, 2024[47] - As of June 30, 2024, the company had cash, cash equivalents, and investments of 94.5million[139]−AsofJune30,2024,thecompanyhadtotalstockholders′equityof94.5 million[139] - As of June 30, 2024, the company had total stockholders' equity of 67.2 million and cash, cash equivalents, and investments of 94.5million[168][172]TotalCurrentAssetsandLiabilities−Totalcurrentassetsdeclinedfrom94.5 million[168][172] Total Current Assets and Liabilities - Total current assets declined from 141,084 thousand to 99,570thousand,adecreaseof29.499,570 thousand, a decrease of 29.4%[26] - Total liabilities decreased from 59,447 thousand to 41,582thousand,areductionof30.141,582 thousand, a reduction of 30.1%[26] - Accrued liabilities decreased from 16.842 million as of December 31, 2023 to 12.064millionasofJune30,2024[63]ResearchandDevelopmentExpenses−Researchanddevelopmentexpensesincreasedfrom12.064 million as of June 30, 2024[63] Research and Development Expenses - Research and development expenses increased from 16,781 thousand to 21,099thousand,up25.721,099 thousand, up 25.7% for the three months ended June 30, 2024[28] - Research and development expenses increased by 4.3 million during the three months ended June 30, 2024, compared to the same period in 2023[134] - Total direct research and development expenses for the six months ended June 30, 2024 were 20.13million,comparedto20.13 million, compared to 14.73 million in 2023[125] Net Income and Loss - Net income for the three months ended June 30, 2024 was 5,061thousand,comparedtoanetlossof5,061 thousand, compared to a net loss of 18,791 thousand in the same period last year[28] - Net loss for the six months ended June 30, 2023, was 41.7million[38]−NetincomeforthethreemonthsendedJune30,2024,was41.7 million[38] - Net income for the three months ended June 30, 2024, was 5.06 million, compared to a net loss of 18.79millionforthesameperiodin2023[106]−NetlossforthesixmonthsendedJune30,2024,was18.79 million for the same period in 2023[106] - Net loss for the six months ended June 30, 2024, was 29.80 million, compared to a net loss of 41.75millionforthesameperiodin2023[106]−Thecompanyincurrednetlossesof41.75 million for the same period in 2023[106] - The company incurred net losses of 29.8 million and 41.7millionforthesixmonthsendedJune30,2024and2023,respectively[119]−Thecompanyincurredanetlossof41.7 million for the six months ended June 30, 2024 and 2023, respectively[119] - The company incurred a net loss of 29.8 million for the six months ended June 30, 2024, and 87.7millionfortheyearendedDecember31,2023[168]Stock−BasedCompensation−Stock−basedcompensationexpenserelatedtoemployeestockawardswas87.7 million for the year ended December 31, 2023[168] Stock-Based Compensation - Stock-based compensation expense related to employee stock awards was 1,918 thousand for the three months ended June 30, 2024[31] - Stock-based compensation expense for the six months ended June 30, 2023, was 6.9million[38]−Stockoptioncompensationexpensewas6.9 million[38] - Stock option compensation expense was 4.4 million for the six months ended June 30, 2024, down from 6.5millioninthesameperiodof2023[72]−Employeestockpurchaseplanstock−basedcompensationexpenseforthesixmonthsendedJune30,2024:6.5 million in the same period of 2023[72] - Employee stock purchase plan stock-based compensation expense for the six months ended June 30, 2024: 0.3 million[77] - Total stock-based compensation expense for the six months ended June 30, 2024: 4.7million[78]RevenueandCollaborations−RevenuefromcollaborationsforthesixmonthsendedJune30,2024was4.7 million[78] Revenue and Collaborations - Revenue from collaborations for the six months ended June 30, 2024 was 292 thousand, down 94.4% from 5,175thousandinthesameperiodlastyear[28]−Revenuefromcollaborationsdecreasedby5,175 thousand in the same period last year[28] - Revenue from collaborations decreased by 2.6 million and 4.9million,respectively,forthethreeandsixmonthsendedJune30,2024[132]−Revenuefromcustomersdecreasedby4.9 million, respectively, for the three and six months ended June 30, 2024[132] - Revenue from customers decreased by 3.2 million and 2.7million,respectively,forthethreeandsixmonthsendedJune30,2024[133]−Thecompanyrecognized2.7 million, respectively, for the three and six months ended June 30, 2024[133] - The company recognized 0.3 million in revenue from collaborative arrangements related to upfront payments during the three months ended June 30, 2024[93] - The company recognized 1.8millioninrevenuefromcustomersrelatedtoupfrontpaymentsduringthethreemonthsendedJune30,2024[101]AccumulatedDeficit−Accumulateddeficitincreasedfrom1.8 million in revenue from customers related to upfront payments during the three months ended June 30, 2024[101] Accumulated Deficit - Accumulated deficit increased from 486,797 thousand to 516,599thousand,reflectinga6.1516,599 thousand, reflecting a 6.1% increase in losses[26] - Accumulated deficit increased to 516.6 million as of June 30, 2024[46] - The company has an accumulated deficit of 516.6millionasofJune30,2024[119]StockandEquity−Weightedaveragesharesofcommonstock,basicincreasedfrom43,215,478to156,444,408,asignificantriseof261.9516.6 million as of June 30, 2024[119] Stock and Equity - Weighted average shares of common stock, basic increased from 43,215,478 to 156,444,408, a significant rise of 261.9%[28] - Total stockholders' equity decreased from 92,080 thousand to 67,229thousand,adeclineof27.067,229 thousand, a decline of 27.0%[26] - The company increased authorized voting common stock from 300 million to 500 million shares on June 27, 2024[64] - In October 2023, the company raised 92.1 million through a PIPE offering, issuing common stock, pre-funded warrants, and common warrants[66] - Pre-funded warrants outstanding decreased from 81,054,686 at January 1, 2024 to 76,929,155 at June 30, 2024 due to exercises[68] - Common warrant liability decreased from 27.596millionatJanuary1,2024to27.596 million at January 1, 2024 to 11.490 million at June 30, 2024 due to fair value changes[69] - Outstanding options as of June 30, 2024: 10,041,963 with a weighted average exercise price of 2.04andaremainingcontractualtermof8.20years[73]−OptionsvestedandexercisableasofJune30,2024:3,436,608withaweightedaverageexercisepriceof2.04 and a remaining contractual term of 8.20 years[73] - Options vested and exercisable as of June 30, 2024: 3,436,608 with a weighted average exercise price of 3.70 and a remaining contractual term of 5.97 years[73] - Weighted-average grant date fair value of options granted during the six months ended June 30, 2024: 0.74pershare[73]−StockoptionexchangeprograminJanuary2024:3,880,332eligibleoptionscanceledand1,906,153replacementoptionsgranted[74]−RestrictedstockunitsunamortizedexpensebalanceasofJune30,2024:0.74 per share[73] - Stock option exchange program in January 2024: 3,880,332 eligible options canceled and 1,906,153 replacement options granted[74] - Restricted stock units unamortized expense balance as of June 30, 2024: 43 thousand to be amortized over 3.0 years[75] - The company raised 92.1millioningrossproceedsfromaprivateplacementinOctober2023[172]PropertyandEquipment−Totalpropertyandequipmentnetvaluedecreasedfrom92.1 million in gross proceeds from a private placement in October 2023[172] Property and Equipment - Total property and equipment net value decreased from 3.259 million as of December 31, 2023 to 2.797millionasofJune30,2024[57]−DepreciationexpenseforthesixmonthsendedJune30,2024was2.797 million as of June 30, 2024[57] - Depreciation expense for the six months ended June 30, 2024 was 0.5 million, compared to 0.9millionforthesameperiodin2023[57]InterestIncomeandExpense−Thecompanyrecordedinterestincomeof0.9 million for the same period in 2023[57] Interest Income and Expense - The company recorded interest income of 0.9 million for the six months ended June 30, 2024, down from 1.7millioninthesameperiodof2023[61]−Interestincome,netdecreasedby1.7 million in the same period of 2023[61] - Interest income, net decreased by 0.6 million and 0.8millionforthethreeandsixmonthsendedJune30,2024,respectively,duetoageneraldecreaseinmarketinterestrates[138]OtherIncomeandExpenses−Otherincome,netincreasedby0.8 million for the three and six months ended June 30, 2024, respectively, due to a general decrease in market interest rates[138] Other Income and Expenses - Other income, net increased by 31.2 million and 17.6millionforthethreeandsixmonthsendedJune30,2024,respectively,duetothechangeinfairvalueofCommonWarrants[138]−Thecompanyrecordedincometaxexpenseof17.6 million for the three and six months ended June 30, 2024, respectively, due to the change in fair value of Common Warrants[138] - The company recorded income tax expense of 213.0 thousand for the six months ended June 30, 2024, primarily related to international operations[104] Cash Flow - Operating activities utilized 42.2millionofcashduringthesixmonthsendedJune30,2024,primarilyduetoanetlossof42.2 million of cash during the six months ended June 30, 2024, primarily due to a net loss of 29.8 million[150] - Investing activities used 48.6millionofcashduringthesixmonthsendedJune30,2024,primarilydueto48.6 million of cash during the six months ended June 30, 2024, primarily due to 88.6 million in purchases of short-term investments[151] - Net cash provided by financing activities was 262.0thousandduringthesixmonthsendedJune30,2024,primarilyfromESPPpurchases[152]−Maturitiesofshort−terminvestmentsprovided262.0 thousand during the six months ended June 30, 2024, primarily from ESPP purchases[152] - Maturities of short-term investments provided 45.0 million in cash during the six months ended June 30, 2023[38] Future Funding and Capital Requirements - The company expects its existing cash and investments to fund operations for at least 12 months[49] - The company may seek additional funding through equity offerings, debt financings, or collaborations[49] - The company believes its existing cash, cash equivalents, and investments will fund planned operating expenses and capital expenditures for at least the next twelve months[143] - The company may raise additional capital on an opportunistic basis to fund operations[143] - The company's existing cash, cash equivalents, and investments are expected to fund operations for at least 12 months following the report date[175] - The company's future capital requirements depend on factors such as clinical trial costs, regulatory approval timelines, and commercialization expenses[173] - The company's ability to raise additional funds may be limited by market conditions and SEC regulations, potentially impacting its development and commercialization efforts[176][177] Clinical Trials and Drug Development - The company is focused on developing therapeutics for viral and liver diseases, including MASH, CHB, and coronaviruses[44] - The company has not generated any product revenue to date[45] - ALG-055009, the company's potential best-in-class THR-β agonist for MASH, completed Phase 1 studies and initiated Phase 2a HERALD study with topline data expected in early Q4 2024[113] - ALG-000184, the company's CAM-E for CHB, demonstrated sustained HBV DNA suppression in 90% of HBeAg-positive CHB subjects and complete suppression in 100% of HBeAg-negative CHB subjects in Phase 1b studies[116] - The company received supportive feedback from the FDA regarding chronic suppressive therapy with ALG-000184, with the potential for superiority to standard of care in future clinical studies[116] - The company selected two lead molecules for small molecule inhibitors of PD-L1 and completed scale-up for further advancement towards clinical development[116] - ALG-097558 is at least 6-fold more potent than nirmatrelvir and other PIs in clinical development against SARS-CoV-2 variants, including Omicron[117] - The projected efficacious dose range for ALG-097558 to treat SARS-CoV-2 is 200-600 mg Q12 x 5 days[117] - The company expects to receive approximately 13.8millioninfundsfromNIHawardsandcontractstosupportcoronavirus−relatedactivities[118]−ThecompanyenteredintoaclinicaltrialcollaborationandsupplyagreementwithAmoytopinJuly2024toevaluatetheefficacyandsafetyofALG−000184incombinationwithPEGBING®inCHBpatientsinChina[111]−ThecompanyhalteddevelopmentofALG‑010133inJanuary2022duetoinsufficientHBsAgreductionatprojectedefficaciousdoses,anddiscontinuedALG‑020572inMarch2022duetoseriousadverseevents[210]−ThesiRNAdrugcandidateALG−125755showedevidenceofHBsAgloweringinPhase1studies,butfurtheradvancementrequiresadditionalexternalfunding[211]−ThecompanyisinvestingsignificantresourcesindevelopingtreatmentsforMASH,includingALG−055009,currentlyinPhase2atrials,butsuccessisnotguaranteed[220]RegulatoryandCompliance−Thecompanyhasnotpreviouslysubmittedanewdrugapplication(NDA)totheFDA,andregulatoryapprovalfordrugcandidatesisuncertain[197]−ThecompanyplanstoseekregulatoryapprovalfordrugcandidatesintheUnitedStatesandselectforeigncountries,requiringcompliancewithvaryingregulatoryrequirements[199]−RegulatoryapprovalprocessesbytheFDA,EMA,andotherauthoritiesarelengthy,unpredictable,andmayrequireadditionalstudiesortrialsbeyondinitialplans[204][206]−Thecompanymayfailtoobtainregulatoryapprovalifclinicaltrialresultsdonotmeetstatisticalsignificanceorifmanufacturingprocessesaredeemeddeficient[206]−Evenifapproved,regulatoryauthoritiesmaylimitindications,requirecostlypost−marketingtrials,orrestrictlabelingclaims,impactingcommercializationprospects[208]−Thecompanyhasnotyetobtainedregulatoryapprovalforanydrugcandidate,andthereisnoguaranteethatcurrentorfuturecandidateswillbeapproved[205]−Delaysorfailuresinclinicaltrialscouldsignificantlyharmthecompany′sbusiness,financialcondition,andabilitytogeneraterevenue[209]−FailuretocomplywithNasdaq′scontinuedlistingrequirementscouldresultindelisting,negativelyimpactingthecompany′sstockpriceandaccesstocapitalmarkets[181][182]−Thecompany′scommonstockbegantradingontheNasdaqCapitalMarketonMarch6,2024,withacomplianceperiodendingonSeptember3,2024,toregaintheminimumbidpricerequirementof13.8 million in funds from NIH awards and contracts to support coronavirus-related activities[118] - The company entered into a clinical trial collaboration and supply agreement with Amoytop in July 2024 to evaluate the efficacy and safety of ALG-000184 in combination with PEGBING® in CHB patients in China[111] - The company halted development of ALG‑010133 in January 2022 due to insufficient HBsAg reduction at projected efficacious doses, and discontinued ALG‑020572 in March 2022 due to serious adverse events[210] - The siRNA drug candidate ALG-125755 showed evidence of HBsAg lowering in Phase 1 studies, but further advancement requires additional external funding[211] - The company is investing significant resources in developing treatments for MASH, including ALG-055009, currently in Phase 2a trials, but success is not guaranteed[220] Regulatory and Compliance - The company has not previously submitted a new drug application (NDA) to the FDA, and regulatory approval for drug candidates is uncertain[197] - The company plans to seek regulatory approval for drug candidates in the United States and select foreign countries, requiring compliance with varying regulatory requirements[199] - Regulatory approval processes by the FDA, EMA, and other authorities are lengthy, unpredictable, and may require additional studies or trials beyond initial plans[204][206] - The company may fail to obtain regulatory approval if clinical trial results do not meet statistical significance or if manufacturing processes are deemed deficient[206] - Even if approved, regulatory authorities may limit indications, require costly post-marketing trials, or restrict labeling claims, impacting commercialization prospects[208] - The company has not yet obtained regulatory approval for any drug candidate, and there is no guarantee that current or future candidates will be approved[205] - Delays or failures in clinical trials could significantly harm the company's business, financial condition, and ability to generate revenue[209] - Failure to comply with Nasdaq's continued listing requirements could result in delisting, negatively impacting the company's stock price and access to capital markets[181][182] - The company's common stock began trading on the Nasdaq Capital Market on March 6, 2024, with a compliance period ending on September 3, 2024, to regain the minimum bid price requirement of 1.00 per share[183] - A reverse stock split is expected to be completed in August 2024, aiming to achieve a share price exceeding 1.00tocomplywithNasdaqlistingstandards[185]−ThecompanyfacespotentialdelistingfromNasdaq,whichcouldnegativelyimpactstockliquidity,tradingvolume,andtheabilitytoraisecapital[187]RisksandUncertainties−Thecompanyexpectstocontinueincurringsignificantlossesfortheforeseeablefutureandmayneverachieveprofitability[166][168]−Thecompany′sabilitytogeneraterevenuedependsonsuccessfulcompletionofclinicaltrials,regulatoryapprovals,andcommercializationofdrugcandidates[169][170]−Thecompany′soperatingresultsmayfluctuatesignificantlyduetofactorssuchasclinicaltrialenrollment,regulatoryapprovals,andmanufacturingcosts[178][179]−Healthpandemicsorepidemicscouldmateriallyadverselyaffectthecompany′sbusiness,particularlyinregionswithsignificantmanufacturingfacilitiesorclinicaltrialsites[188]−COVID−19−relatedrestrictions,includingshelter−in−placeorders,havepreviouslydisruptedthecompany′soperationsandcouldcontinuetoimpactproductivityandclinicalprograms[189]−Supplychaindisruptionsduetohealthpandemicsorepidemicsmaydelayorlimitthecompany′sabilitytoobtainmaterialsfordrugcandidates[190]−Clinicaltrialsmaybedelayedduetohealthpandemics,affectingsiteinitiation,patientenrollment,andtheabilitytorecruitandretaininvestigators[191]−Thecompany′sdrugcandidatesareinearly−stagedevelopment,withclinicaltrialsinitiatedinmultiplecountries,butthereisnoguaranteeofefficacyorsafety[194]−ClinicaltrialsfordrugcandidatesarebeingconductedinmultiplecountriesincludingNewZealand,HongKong,andtheUnitedKingdom,withpotentialfuturetrialsinadditionalregions[214]−Delaysinclinicaltrialscouldharmthecommercialprospectsofdrugcandidates,increasecosts,andallowcompetitorstobringproductstomarketfirst[215]−Potentialdisruptionsfromanotherpandemicorepidemiccouldaffectclinicaltrialsites,patientenrollment,andsupplychainformaterials,particularlyimpactingtrialsforALG‑055009,ALG−000184,andALG−097558[216]−TheBIOSECUREAct,ifenacted,couldrestrictthecompany′sabilitytocollaboratewithcertainChinesebiotechnologycompanies,potentiallyimpactingcontractualrelationships[217]−Principalinvestigatorsforclinicaltrialsmayhavefinancialrelationshipswiththecompany,whichcouldraiseconcernsaboutdataintegrityandregulatoryapproval[218]LicensingandCollaborationAgreements−LicenseagreementwithEmoryUniversity:potentialmilestonepaymentsupto1.00 to comply with Nasdaq listing standards[185] - The company faces potential delisting from Nasdaq, which could negatively impact stock liquidity, trading volume, and the ability to raise capital[187] Risks and Uncertainties - The company expects to continue incurring significant losses for the foreseeable future and may never achieve profitability[166][168] - The company's ability to generate revenue depends on successful completion of clinical trials, regulatory approvals, and commercialization of drug candidates[169][170] - The company's operating results may fluctuate significantly due to factors such as clinical trial enrollment, regulatory approvals, and manufacturing costs[178][179] - Health pandemics or epidemics could materially adversely affect the company's business, particularly in regions with significant manufacturing facilities or clinical trial sites[188] - COVID-19-related restrictions, including shelter-in-place orders, have previously disrupted the company's operations and could continue to impact productivity and clinical programs[189] - Supply chain disruptions due to health pandemics or epidemics may delay or limit the company's ability to obtain materials for drug candidates[190] - Clinical trials may be delayed due to health pandemics, affecting site initiation, patient enrollment, and the ability to recruit and retain investigators[191] - The company's drug candidates are in early-stage development, with clinical trials initiated in multiple countries, but there is no guarantee of efficacy or safety[194] - Clinical trials for drug candidates are being conducted in multiple countries including New Zealand, Hong Kong, and the United Kingdom, with potential future trials in additional regions[214] - Delays in clinical trials could harm the commercial prospects of drug candidates, increase costs, and allow competitors to bring products to market first[215] - Potential disruptions from another pandemic or epidemic could affect clinical trial sites, patient enrollment, and supply chain for materials, particularly impacting trials for ALG‑055009, ALG-000184, and ALG-097558[216] - The BIOSECURE Act, if enacted, could restrict the company's ability to collaborate with certain Chinese biotechnology companies, potentially impacting contractual relationships[217] - Principal investigators for clinical trials may have financial relationships with the company, which could raise concerns about data integrity and regulatory approval[218] Licensing and Collaboration Agreements - License agreement with Emory University: potential milestone payments up to 125.0 million and tiered single-digit royalties on net sales[86] - License agreement with Luxna Biotech: potential milestone payments up to 55.5millionandlow−singledigitroyaltypercentageonnetsales[90]−ThecompanyenteredintoaResearch,LicensingandCommercializationAgreementwithKULeuven,withpotentialpaymentstotalingupto55.5 million and low-single digit royalty percentage on net sales[90] - The company entered into a Research, Licensing and Commercialization Agreement with KU Leuven, with potential payments totaling up to 62.0 million for commercial sales and development milestones, and a low-to-mid-single digit royalty percentage on net sales[91] - The company received an upfront payment of 12millionfromMerckandiseligibleforupto12 million from Merck and is eligible for up to 458.0 million in development and commercialization milestones, plus tiered royalties on net sales[92] - The company received an additional upfront payment of 15millionfromMerckforasecondMASHtarget,withpotentialpaymentsofupto15 million from Merck for a second MASH target, with potential payments of up to 460.0 million in milestones and tiered royalties[93] - The company received an upfront payment of 7.0millionfromAmoytop,withpotentialpaymentsofupto7.0 million from Amoytop, with potential payments of up to 109.0 million in development and commercialization milestones and tiered royalties[100] - The company received an additional upfront payment of 1.5millionfromAmoytopinMay2024foranine−monthextensionoftheDevelopmentAgreement[100]GrantsandAwards−Thecompanywasawardeda1.5 million from Amoytop in May 2024 for a nine-month extension of the Development Agreement[100] Grants and Awards - The company was awarded a 1.1 million grant by the NIH in 2022, with additional grants of 1.4millionin2023and1.4 million in 2023 and 1.5 million in 2024[95][97] - The company was awarded an 8.5millioncontractbytheNIAIDin2023,withanadditional8.5 million contract by the NIAID in 2023, with an additional 1.3 million awarded in 2024, bringing the total contract value to 9.8million[97]−Thecompanyexpectstoreceiveapproximately9.8 million[97] - The company expects to receive approximately 13.8 million in funds from NIH awards and contracts to support coronavirus-related activities[118] General and Administrative Expenses - General and administrative expenses decreased by 2.9millionduringthethreemonthsendedJune30,2024,comparedtothesameperiodin2023[135]−Generalandadministrativeexpensesdecreasedby2.9 million during the three months ended June 30, 2024, compared to the same period in 2023[135] - General and administrative expenses decreased by 4.7 million during the six months ended June 30, 2024, primarily due to reduced legal and IP spend, facility expenses, and employee-related costs[137] Nonclinical Development - Nonclinical development is a complex and lengthy process, often taking several years or more per program, with potential delays due to regulatory requirements, study design consensus, and global-scale events[203]