Finch Therapeutics Reports First Quarter 2023 Financial Results and Provides Business Updates
May 10 2023 - 7:00AM
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 first quarter 2023 financial results and provided business
updates.
“Finch has continued to execute on its strategy to advance its
novel microbiome technology through partnerships and
collaborations, highlighted by the recent investigator-sponsored
clinical trial agreement with Brigham and Women’s Hospital to
evaluate CP101 for the treatment of ulcerative colitis and an
amended license agreement with the University of Minnesota,” said
Mark Smith, PhD, Chief Executive Officer of Finch Therapeutics. “I
am also pleased to welcome Matthew Blischak and Lance Thibault,
Finch’s incoming CEO and CFO, who each bring significant experience
in the biotechnology and pharmaceutical industry that we believe
will be invaluable to the Company going forward.”
Recent Corporate Updates
- Announced Clinical Trial
Agreement with Brigham and Women’s Hospital to Evaluate CP101 in
Ulcerative Colitis, Building on a Significant Body of Published
Literature, Including Recently Published Data from the University
of Minnesota (UMN): Under the clinical trial agreement,
Brigham and Women’s Hospital will conduct an investigator-sponsored
trial to compare two doses of CP101, Finch’s Complete Consortia
microbiome therapeutic, in patients with mild-to-moderate
ulcerative colitis. The study is designed to expand on a robust
body of evidence supporting the role of the microbiome in improving
patient outcomes with ulcerative colitis, including the promising
results presented by Dr. Daphne Moutsoglou of UMN as a
late-breaking oral presentation on May 7th at Digestive Disease
Week. The UMN study demonstrated a statistically significant
difference in clinical response among ulcerative colitis patients
treated with an orally administered, lyophilized microbial
composition similar to CP101 relative to patients treated with
placebo. Building on this work, the Brigham and Women’s study is
designed to generate data on safety, pharmacokinetics,
pharmacodynamics, and clinical efficacy of CP101 in participants
with ulcerative colitis. Topline data from the Brigham and Women’s
clinical study is anticipated in 2025.
- Amended License Agreement
with UMN: Finch’s long-standing relationship with UMN
includes a license agreement through which Finch has exclusively
licensed from UMN 13 issued patents and 7 patent applications
covering specific approaches to formulations comprising human fecal
microbes, methods of increasing microbiota diversity, and methods
of decreasing the relative abundance of certain bacteria. In April,
Finch amended its license agreement with UMN, with a key feature of
the amendment allowing Finch to satisfy certain performance
milestones through sublicensing agreements, aligning with Finch’s
new strategic focus on collaborations and partnerships.
- Implementing Executive
Leadership Transition: Effective May 16, 2023, Matthew P.
Blischak and Lance Thibault will be joining the Finch executive
leadership team as Chief Executive Officer and Chief Financial
Officer, respectively. Mark Smith, PhD, will complete his time as
Chief Executive Officer and a member of the Company’s board of
directors and Marc Blaustein will complete his time as Chief
Operating Officer and principal financial officer on May 15, 2023.
Mr. Blischak and Mr. Thibault are experienced executives who
together bring over 40 years of experience in the life sciences
industry to their roles at Finch.
- Safety Analysis from
Discontinued PRISM4 Phase 3 Clinical Trial of CP101 in
Recurrent C. difficile Infection
(CDI): Following the completion of all site close-out
visits for PRISM4 and database lock for the trial, today Finch
provided a safety analysis for patients enrolled in the PRISM4
trial. The safety analysis of 19 patients, including 12 patients
treated with CP101, showed no drug-related serious adverse events
(SAEs).
First Quarter 2023 Financial Results
- Finch reported a net loss of $63.9
million for the first quarter of 2023, compared to a net loss of
$24.6 million for the same period in 2022. The increase in net loss
was primarily due to a charge of $32.9 million for the full
impairment of the Company’s in-process research and development
(IPR&D) asset, in addition to an expense of $13.1 million for
the impairment of long-lived assets, both in the first quarter of
2023. Finch also recorded $3.2 million in restructuring related
charges during the first quarter of 2023 and an income tax benefit
of $3.5 million, which reflects the removal of the deferred tax
liability on the IPR&D that was written off during the quarter.
Research and development (R&D) expenses decreased by $6.9
million following the Company’s January 2023 announcement that it
would discontinue its Phase 3 clinical trial in CP101 and related
R&D development activities, while general and administrative
(G&A) expenses remained relatively flat
quarter-over-quarter.
- Research and development expenses
were $8.6 million for the first quarter of 2023, compared to $15.5
million for the same period in 2022. The decrease was primarily due
to a reduction in platform-related costs, in addition to reductions
in the Company’s autism spectrum disorder, inflammatory bowel
diseases, and hepatitis B programs. This was partially offset by
increases in unallocated costs due to a change in allocation of
personnel related expenses, and an increase in expenses related to
our CP101 program, as the program and Phase 3 clinical trial were
incurring expenses through the January 2023 discontinuation
announcement.
- General and administrative expenses
were $9.6 million for the first quarter of 2023, compared to $9.4
million for the same period in 2022. The change was primarily due
to increases in professional fees and facility- and supply-related
costs, partially offset by a decrease in personnel expenses due to
lower headcount, and a decrease in other expenses.
- Finch’s cash and cash equivalents as
of March 31, 2023 were $41.7 million, compared to $71.0 million as
of December 31, 2022, which reflects, among other things, Finch’s
payment of $16.2 million in January 2023 to fully satisfy the
Company’s obligations under its loan agreement with Hercules
Capital, Inc. Finch believes its cash and cash equivalents on hand
as of March 31, 2023 will be sufficient to fund its operating
expenses and capital expenditures into 2025.
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 in executing its strategy to
advance its novel microbiome technology through partnerships and
collaborations; the potential outcomes and timelines associated
with the investigator-sponsored clinical trial with Brigham and
Women’s Hospital; Finch’s anticipated cash runway and its potential
to support the Company’s operations; and Finch’s ability to realize
the value of its intellectual property estate and other assets.
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;
conditions and events that raise substantial doubt about Finch’s
ability to continue as a going concern; the possibility that Finch
may be unable to raise additional capital to finance its
operations, as needed; Finch’s ability to retain the services of
the key remaining members of its management team or attract and
retain qualified personnel necessary to oversee and implement its
business strategy; 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, 2022 filed with the SEC on March 23, 2023,
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 JasperGilmartin Group(858)
525-2047stephen@gilmartinir.com
Media and Collaborator Contact:
info@finchtherapeutics.com
Finch Therapeutics Group, Inc. |
Condensed Consolidated Statements of Operations
(Unaudited) |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
FOR THE THREE MONTHSENDED
MARCH 31, |
|
|
|
2023 |
|
|
2022 |
|
Revenue: |
|
|
|
|
|
|
Collaboration revenue |
|
$ |
107 |
|
|
$ |
354 |
|
Total
revenue |
|
|
107 |
|
|
|
354 |
|
Operating
expenses: |
|
|
|
|
|
|
Research and development |
|
|
8,588 |
|
|
|
15,530 |
|
General and
administrative |
|
|
9,617 |
|
|
|
9,404 |
|
Impairment of IPR&D |
|
|
32,900 |
|
|
|
— |
|
Impairment of long-lived
assets |
|
|
13,141 |
|
|
|
— |
|
Restructuring expense |
|
|
3,236 |
|
|
|
— |
|
Total operating
expenses |
|
|
67,482 |
|
|
|
24,934 |
|
Loss from operations |
|
|
(67,375 |
) |
|
|
(24,580 |
) |
Other income |
|
|
(25 |
) |
|
|
13 |
|
Income tax benefit |
|
|
3,461 |
|
|
|
— |
|
Net loss |
|
$ |
(63,939 |
) |
|
$ |
(24,567 |
) |
Net loss per share
attributable to common stockholders—basic and diluted |
|
$ |
(1.33 |
) |
|
$ |
(0.52 |
) |
Weighted-average common stock
outstanding—basic and diluted |
|
|
48,085,547 |
|
|
|
47,528,948 |
|
Finch Therapeutics Group, Inc. |
Condensed Consolidated Balance Sheet Data
(Unaudited) |
(in thousands) |
|
|
|
|
|
|
|
|
|
MARCH 31,2023 |
|
|
DECEMBER 31,2022 |
|
Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
41,684 |
|
|
$ |
71,038 |
|
Other assets |
|
|
37,356 |
|
|
|
91,901 |
|
Total assets |
|
$ |
79,040 |
|
|
$ |
162,939 |
|
Liabilities,
redeemable convertible preferred stock and stockholders'
equity |
|
|
|
|
|
|
Liabilities |
|
|
46,088 |
|
|
|
67,228 |
|
Stockholders' equity |
|
|
32,952 |
|
|
|
95,711 |
|
Total liabilities and stockholders' equity |
|
$ |
79,040 |
|
|
$ |
162,939 |
|
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