Finch Therapeutics Reports Fourth Quarter and Full Year 2022 Financial Results and Provides Business Updates
23 Marzo 2023 - 9:05PM
Finch Therapeutics Group, Inc. (“Finch”, “Finch Therapeutics” or
the “Company”) (Nasdaq: FNCH), a microbiome technology company with
a portfolio of intellectual property and microbiome assets, today
reported fourth quarter and full year 2022 financial results and
provided business updates.
“We believe that Finch has made significant progress towards
restructuring the business to maximize value for shareholders
through our robust intellectual property estate, including by
continuing to support the advancement of our microbiome technology
through partnerships and collaborations,” said Mark Smith, PhD,
Chief Executive Officer of Finch Therapeutics. “As part of our
restructuring, we have significantly decreased costs by reducing
vendor and employee expenses, extending our expected cash runway
into 2025. We expect this will support company operations well
beyond our anticipated jury trial with Ferring and Rebiotix, which
is scheduled for May 2024, over what we believe is their ongoing
unauthorized use of our intellectual property. In addition to these
recent developments, we continue to pursue partnerships with
leading research institutions to explore new opportunities for our
microbiome technology to address a variety of important unmet
clinical needs.”
Recent Corporate Updates
- Milestone Reached in Ongoing Patent
Litigation: Finch’s patent litigation against Ferring and
Rebiotix reached an important milestone on February 28, 2023, when
the court entered an order resolving the parties’ disputes
concerning the meaning of certain claim terms of the Finch and
exclusively-licensed University of Minnesota patents that Finch
alleges are infringed by Ferring and Rebiotix. The court adopted
Finch’s proposed definitions for seven out of the eight terms at
issue, broadly rejecting Ferring and Rebiotix’s arguments for those
terms. The court also denied without prejudice Ferring and
Rebiotix’s arguments that the claims should be held invalid due to
indefiniteness, including on the eighth term at issue. The Company
considers this to be a significant inflection point in this
litigation.
- Update on Discontinuation of PRISM4
Phase 3 Clinical Trial of CP101 in Recurrent C. difficile
Infection (CDI): Today, Finch announced that it has
completed all site close out visits for PRISM4 and completed
database lock for the trial. There have been no treatment-related
serious adverse events (SAEs) reported in the trial. This follows
the Company’s announcement in January 2023, regarding its plans to
discontinue PRISM4 and focus on realizing the value of its
intellectual property estate and other assets. In connection with
this decision, Finch implemented a workforce reduction impacting
approximately 95% of the Company’s employees.
- University of Minnesota (UMN) Conducting Multiple
Investigator Sponsored Clinical Trials Related to Exclusively
Licensed Technology: UMN is conducting multiple
investigator-sponsored clinical studies with MCT-101, an oral,
donor-derived microbiota product candidate developed at UMN.
Finch’s existing license agreement with UMN includes an exclusive
license to patents covering the compositions used in MCT-101. This
product candidate is currently being evaluated through
investigator-initiated clinical trials in a number of therapeutic
areas, including inflammatory bowel disease (NCT05248191,
NCT03948919), oncology (NCT04105270, NCT03678493) and autism
spectrum disorder (NCT03408886, NCT04182633), among others, with
numerous associated clinical readouts anticipated. These
investigator-initiated trials are being executed and funded
independently from Finch.
- Finch Strain Bank Launched: Today, Finch
announced that it has developed a biorepository including thousands
of stool samples collected from study participants and thousands of
bacterial isolates derived from healthy donors, each of which have
the potential to be used in a variety of research applications. The
biorepository can be accessed by collaborators and Finch is
actively evaluating opportunities to license these assets.
- Debt Facility Repaid in Full: In January 2023,
Finch voluntarily paid $16.2 million to Hercules Capital, Inc.,
fully satisfying its obligations to the lender.
- Hood Park Facility Fully Subleased Into the Second Half
of 2025: Finch executed a second sublease covering the
balance of its facilities at Hood Park and began collecting rent on
the entire Hood Park facility in December 2022. The entire Hood
Park space is now sublet into the second half of 2025. The Company
is actively pursuing a sublease for its other location, which has a
total lease liability of less than $5 million through its
expiration in 2026.
Financial Results
- Finch reported a net loss of $27.0 million for the fourth
quarter of 2022, compared to a net loss of $19.1 million for the
same period in 2021. This increased net loss was driven by a $0.8
million decrease in collaboration revenue, in addition to a $5.8
million increase in general and administrative (G&A) expenses,
a $1.8 million increase in research and development (R&D)
expenses and $0.2 million in restructuring expenses incurred in the
fourth quarter of 2022. Finch reported a net loss of $114.6
million for the full year of 2022, compared to a net loss of $58.2
million in the prior year. The increased net loss was driven by a
decrease of $17.7 million in collaboration revenue, a charge of
$18.1 million for the full impairment of the Company’s goodwill in
2022, in addition to an increase in G&A expenses of $16.9
million, restructuring expenses incurred in 2022 of $2.4 million,
and an increase in R&D expenses of $0.6 million. Finch recorded
$6.9 million in a non-cash charge in the fourth quarter of 2022 for
the partial impairment of the right-of-use asset associated with
its lease of space at Hood Park, of which $5.0 million was
allocated to R&D expense and $1.9 million was allocated to
G&A expense.
- R&D expenses were $16.6 million for the fourth quarter of
2022, compared to $14.8 million for the same period in 2021.
R&D expenses were $57.9 million for fiscal year 2022, compared
to $57.3 million for the prior year. The increases in R&D
expenses were primarily due to a non-cash charge in the fourth
quarter of 2022 for the partial impairment of the right-of-use
asset associated with the lease of space at Hood Park and an
increase in stock-based compensation expense. These increases were
partially offset by decreases in expenses related to the IBD, HBV
and ASD programs. Platform related expenses increased in 2022 as
compared to 2021; however, they decreased as compared to the fourth
quarter of 2021, as the company shifted its focus in the fourth
quarter of 2022 to the manufacturing and development of the CP101
program in CDI.
- G&A expenses were $10.9 million for the fourth quarter of
2022, compared to $5.1 million for the same period in 2021. G&A
expenses were $38.1 million for fiscal year 2022, compared to $21.2
million for the prior year. The increases in G&A expenses were
primarily due to an increase in professional fees and facility
related costs, a non-cash charge in the fourth quarter of 2022 for
the partial impairment of the right-of-use asset associated with
the lease of space at Hood Park, and an increase in state excise
tax and business insurance costs. Additionally, there was an
increase in personnel costs due to increased stock-based
compensation expense, partially offset by a decrease in
employee-related costs due to reduced headcount.
- Finch’s cash and cash equivalents as of December 31, 2022 was
$71.0 million, compared to $133.5 million as of December 31, 2021.
Finch expects that the cash and cash equivalents it had on hand as
of December 31, 2022 will be sufficient to fund its operating
expenses and capital expenditures into 2025.
- Finch estimates that its cash and cash equivalents as of
February 28, 2023 was approximately $43.3 million. This estimate is
based on preliminary unaudited information and management
estimates, this is not a comprehensive balance sheet and this
estimate is subject to change. Such changes may be material. The
Company’s independent registered public accounting firm has not
conducted an audit or review of, and does not express an opinion or
provide any other form of assurance with respect to, this
preliminary data.
About Finch Therapeutics
Finch Therapeutics is a microbiome technology company with a
portfolio of intellectual property and microbiome assets. Finch has
a robust intellectual property estate reflecting the Company’s
pioneering role in the microbiome therapeutics field, including
more than 70 issued U.S. and foreign patents with critical
relevance for both donor-derived and donor-independent microbiome
therapeutics in a range of potential indications. Finch’s assets
include CP101, an investigational, orally administered microbiome
candidate with positive clinical date from a Phase 2 randomized,
placebo-controlled trial and a Phase 2 open-label trial in
recurrent C. difficile infection (CDI). Additionally, Finch has
pre-clinical assets that are designed to target ulcerative colitis,
Crohn’s disease, and autism spectrum disorder, along with a
significant biorepository of samples and microbial strains. In
January 2023, Finch announced a decision to discontinue its Phase 3
trial of CP101 in recurrent CDI. Following this decision, Finch is
focused on realizing the value of its intellectual property estate
and other assets, while supporting the advancement of its
microbiome technology through partnerships and collaborations.
Forward-Looking Statements:
This press release includes “forward-looking statements.” Words
such as “will,” "anticipates," "believes," "expects," "intends,"
“plans,” “potential,” "projects,” “would” and "future" or similar
expressions are intended to identify forward-looking statements.
These forward-looking statements include, but are not limited to,
statements regarding: Finch’s progress towards restructuring its
business to maximize value for shareholders; Finch’s anticipated
cash runway and its potential to support company operations;
Finch’s efforts to pursue partnerships with leading research
institutions to explore opportunities for its microbiome
technology;; Finch’s ability to realize the value of its
intellectual property estate and other assets; the likelihood of
Finch’s success in its ongoing patent litigation, including with
respect to the implications of the court’s decision in its recent
claim construction hearing and determination; the potential for
Finch’s microbiome technology to address a variety of important
unmet clinical needs; the potential applications of and timelines
applicable to investigator-sponsored clinical trials involving
MCT-101 being conducted by UMN, and the ability of Finch to benefit
therefrom; and opportunities for Finch to license its biorepository
of proprietary strains and samples. These risks and uncertainties
include, among others, those related to: the possibility that Finch
will not be able to realize the value of its intellectual property
estate and other assets; Finch’s ability to comply with regulatory
requirements; and Finch’s ability to maintain patent and other
intellectual property protection and the possibility that Finch’s
intellectual property rights may be infringed, invalid or
unenforceable or will be threatened by third parties. These and
other risks are described more fully in Finch’s filings with the
Securities and Exchange Commission (“SEC”), including the section
titled “Risk Factors” in Finch’s Annual Report on Form 10-K for the
year ended December 31, 2021 filed with the SEC on March 31, 2022,
as supplemented by Finch’s Quarterly Reports on Form 10-Q filed
with the SEC on May 16, 2022, August 11, 2022 and November 10,
2022, as well as discussions of potential risks, uncertainties, and
other important factors in Finch’s other filings with the SEC. All
forward-looking statements contained in this press release speak
only as of the date on which they were made. Except to the extent
required by law, Finch undertakes no obligation to update such
statements to reflect events that occur or circumstances that exist
after the date on which they were made.
Investor Contact:
Stephen Jasper Gilmartin Group (858) 525-2047
stephen@gilmartinir.com
Media and Collaborator
Contact:info@finchtherapeutics.com
Finch Therapeutics Group,
Inc.Condensed Consolidated Statements of
Operations(in thousands, except share and per
share data)
|
|
FOR THE THREE MONTHSENDED DECEMBER 31, |
|
|
FOR THE YEARENDED DECEMBER 31, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Collaboration revenue |
|
$ |
8 |
|
|
$ |
806 |
|
|
$ |
861 |
|
|
$ |
18,532 |
|
Total
revenue |
|
|
8 |
|
|
|
806 |
|
|
|
861 |
|
|
|
18,532 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
16,581 |
|
|
|
14,803 |
|
|
|
57,893 |
|
|
|
57,279 |
|
General and administrative |
|
|
10,936 |
|
|
|
5,065 |
|
|
|
38,088 |
|
|
|
21,238 |
|
Impairment of goodwill |
|
|
— |
|
|
|
— |
|
|
|
18,057 |
|
|
|
— |
|
Restructuring expense |
|
|
243 |
|
|
|
— |
|
|
|
2,416 |
|
|
|
— |
|
Total operating
expenses |
|
|
27,760 |
|
|
|
19,868 |
|
|
|
116,454 |
|
|
|
78,517 |
|
Loss from operations |
|
|
(27,752 |
) |
|
|
(19,062 |
) |
|
|
(115,593 |
) |
|
|
(59,985 |
) |
Other income |
|
|
744 |
|
|
|
7 |
|
|
|
947 |
|
|
|
1,825 |
|
Net loss |
|
$ |
(27,008 |
) |
|
$ |
(19,055 |
) |
|
$ |
(114,646 |
) |
|
$ |
(58,160 |
) |
Net loss per share attributable
to common stockholders—basic and diluted |
|
$ |
(0.56 |
) |
|
$ |
(0.40 |
) |
|
$ |
(2.40 |
) |
|
$ |
(1.48 |
) |
Weighted-average common stock
outstanding—basic and diluted |
|
|
47,928,312 |
|
|
|
47,491,731 |
|
|
|
47,691,632 |
|
|
|
39,202,086 |
|
Finch Therapeutics Group,
Inc.Condensed Consolidated Balance Sheet
Data(in thousands)
|
|
DECEMBER 31,2022 |
|
|
DECEMBER 31,2021 |
|
Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
71,038 |
|
|
$ |
133,481 |
|
Other assets |
|
|
91,901 |
|
|
|
91,888 |
|
Total assets |
|
$ |
162,939 |
|
|
$ |
225,369 |
|
Liabilities, redeemable
convertible preferred stock and stockholders' equity |
|
|
|
|
|
|
Liabilities |
|
|
67,228 |
|
|
|
23,145 |
|
Stockholders' equity |
|
|
95,711 |
|
|
|
202,224 |
|
Total liabilities and stockholders' equity |
|
$ |
162,939 |
|
|
$ |
225,369 |
|
Grafico Azioni Finch Therapeutics (NASDAQ:FNCH)
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