Exicure, Inc. (Nasdaq: XCUR), an early-stage biotechnology
company historically focused on developing nucleic acid therapies
targeting ribonucleic acid against validated targets, today
reported financial results for the quarter ended September 30, 2022
and provided an update on its business strategy and corporate
progress.
Corporate Update
- As previously reported, on September 26, 2022, the Company
announced its commitment to a plan to wind down the Company’s
existing preclinical programs, including the development of its
SCN9A program, to suspend all of its research and development
activities, including suspension of all partnered programs, and to
implement a reduction in force where the Company reduced
approximately 66% of its then-existing workforce, as well as other
cost-cutting measures (collectively, the “Plan”). The purpose of
the Plan was to decrease expenses, thereby, extending the Company’s
cash runway, and enable the Company to maintain a streamlined
organization to support key corporate functions while it continues
to actively pursue strategic alternatives to maximize stockholder
value.
- The reduction in force announced on September 26, 2022 is now
substantially complete.
- The Company continues to actively pursue out-license
opportunities for its clinical asset, cavrotolimod, as well as for
its preclinical candidates, including the SCN9A program for
neuropathic pain, and to pursue all strategic alternatives with the
goal of maximizing stockholder value.
- As also previously reported, on September 26, 2022, the Company
entered into a securities purchase agreement with CBI USA, Inc.
(“CBI USA”), pursuant to which it agreed to issue and sell to CBI
USA in a private placement an aggregate of 3,400,000 shares of
Exicure's common stock, par value $0.0001 per share, at a purchase
price of $1.60 per share (the “Private Placement”).
- The Private Placement is expected to close in the fourth
quarter of 2022, subject to the satisfaction of certain closing
conditions, including the Company’s stockholders voting in favor of
the Private Placement. On November 10, 2022, the Company has filed
and mailed its definitive proxy statement in connection with the
special meeting to be held on December 15, 2022 at which the
Company’s stockholders will be asked to vote on approval of the
Private Placement.
- Immediately following the closing of the Private Placement, CBI
USA will hold approximately 50.4% of the shares of the Company’s
common stock. The Company expects to receive aggregate gross
proceeds from the Private Placement of approximately $5.4 million,
before deducting estimated offering expenses payable by
Exicure.
“We look forward to the possibility of working with CBI USA to
potentially pursue strategic transactions,” commented Matthias
Schroff, Ph.D., Chief Executive Officer of Exicure. “While awaiting
shareholder approval of the private placement transaction with CBI
USA, Exicure continues to explore strategic alternatives for its
existing clinical and preclinical programs to maximize stockholder
value.”
Third Quarter 2022 Financial Results
Cash Position: Cash, cash equivalents and short-term
investments, and restricted cash were $16.8 million as of September
30, 2022, as compared to $48.3 million as of December 31, 2021. The
Company expects that its existing cash and cash equivalents (which
excludes expected proceeds from the Private Placement as the
Private Placement has not closed) will enable it to fund its
current operations into the second quarter of 2023.
Revenue: Revenue was $2.0 million for the quarter ended
September 30, 2022, reflecting an increase of $5.7 million from
revenue of $(3.7) million for the quarter ended September 30, 2021.
The increase in collaboration revenue of $5.7 million is mostly due
to an increase in revenue related to the Company's collaboration
with AbbVie, Inc. ("AbbVie") of $5.1 million, as well as an
increase in revenue related to the Company's collaboration with
Ipsen Biopharm Limited of $0.6 million. Revenue recognized under
the Company's collaboration with AbbVie for the three months ended
September 30, 2021 reflected the cumulative catchup adjustment
(reduction) of revenue of $(4.5) million in connection with the
change in estimate that resulted from a change in workplan during
the third quarter of 2021.
Research and Development (R&D) Expense: Research and
development expenses were $4.8 million for the quarter ended
September 30, 2022, as compared to $16.5 million for the quarter
ended September 30, 2021. The decrease in R&D expense for the
three months ended September 30, 2022 of approximately $11.7
million reflects fewer clinical, preclinical, and discovery program
activities and a reduction in headcount resulting from the
strategic restructuring activities and discontinuation of
cavrotolimod program that were announced in December 2021.
General and Administrative (G&A) Expense: General and
administrative expenses were $2.4 million for the quarter ended
September 30, 2022, as compared to $2.9 million for the quarter
ended September 30, 2021. The decrease in G&A expense of
approximately $0.5 million for the three months ended September 30,
2022 was mostly due lower compensation and related costs in
connection with a lower headcount during the period resulting from
the restructuring activities that were announced in December 2021
and lower accrued bonus expense in the current year period
resulting from the reduction of the estimated 2022 bonus liability,
as well as lower accounting costs. These lower costs in the current
year period were partially offset by higher legal, consultant, and
advisory costs incurred.
Net Loss: The Company had a net loss of $5.2 million for
the quarter ended September 30, 2022, as compared to a net loss of
$23.5 million for the quarter ended September 30, 2021. The
decrease in net loss was primarily driven by lower R&D expense
and higher non-cash revenue during the period.
Going Concern: Given the Company’s current cash position,
operating plans and forecasted negative cash flows from operating
activities over the next twelve months, management believes there
is substantial doubt regarding the Company’s ability to continue as
a going concern within one year after the date that its unaudited
condensed consolidated financial statements for the quarter ended
September 30, 2022 are issued. The Company will require substantial
additional financing to address the Company’s working capital and
other financing needs to pursue its business strategy. There is a
significant likelihood that, without the consummation of the
Private Placement, the Company will need to seek bankruptcy
protection in the near term, which may result in its stockholders
receiving no or very little value in respect of their shares of the
Company's common stock.
About Exicure
Exicure, Inc. is an early-stage biotechnology company
historically focused on developing nucleic acid therapies targeting
ribonucleic acid against validated targets. The Company continues
to actively pursue out-license opportunities for its clinical
asset, cavrotolimod, as well as for its preclinical candidates,
including the SCN9A program for neuropathic pain, and to pursue all
strategic alternatives with the goal of maximizing stockholder
value. For further information, see www.exicuretx.com.
Additional Information and Where to Find It
This communication is being made in respect of a proposed
transaction between CBI USA and the Company. This document does not
constitute an offer to sell or exchange, or the solicitation of an
offer to buy or exchange, any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, sale or
exchange would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. The Company has
filed a proxy statement, which has been sent to all Company
stockholders. The Company may also file other documents regarding
the proposed transaction with the Securities and Exchange
Commission (the “SEC”). BEFORE MAKING ANY VOTING DECISION,
INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE
PROXY STATEMENT, AS MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO
TIME, AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED
WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION AS THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION AND THE PARTIES THERETO.
Investors and security holders will be able to obtain free
copies of the proxy statement and all other relevant documents
filed or that will be filed with the SEC by the Company through the
website maintained by the SEC at www.sec.gov. In addition, the
documents filed by the Company may be obtained free of charge from
the Company’s website at investors.exicuretx.com or by written
request to the Company at Corporate Secretary, c/o Exicure, Inc.,
at 2430 N. Halsted Street, Chicago, Illinois 60614.
Participants in Solicitation
The Company, its directors, executive officers and employees may
be deemed to be participants in the solicitation of proxies from
the Company’s stockholders in connection with the proposed
transaction. Information about the Company’s directors and
executive officers and their ownership of the Company’s securities
is set forth in the Company’s definitive proxy statement for its
special meeting of stockholders filed with the SEC on November 10,
2022. To the extent that holdings of the Company’s securities have
changed since the amounts reflected in the Company’s proxy
statement, such changes have been or will be reflected on
Statements of Change in Ownership on Form 4 filed with the SEC.
Additional information regarding the interests of those persons and
other persons who may be deemed participants in the proposed
transaction may be obtained by reading the proxy statement
regarding the proposed transaction. You may obtain free copies of
these documents as described in the above paragraph.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements in this press release other than statements of
historical fact may be deemed forward looking including, but not
limited to, statements regarding: the Company’s current business
plans and objectives, including the pursuit of strategic
alternatives to maximize stockholder value; the expected
cost-savings from the workforce reduction and estimated extended
cash runway post-workforce reduction; the substantial doubt about
the Company’s ability to continue as a going concern; the Company’s
ability and timing to obtain stockholder approval for the
completion of the Private Placement; the likelihood that the
Company would need to seek bankruptcy protection without the
consummation of the Private Placement and the value that the
Company’s shareholders would receive in bankruptcy; the Company’s
requirements for substantial additional financing to address the
Company’s working capital and other financing needs; the Company’s
anticipated cash runway; and the future prospects of the Company,
including of the outlicensing of its cavrotolimod program. Words
such as “plans,” “expects,” “will,” “anticipates,” “continue,”
“advance,” “believes,” “target,” “may,” “intend,” “could,” and
other words and terms of similar meaning and expression are
intended to identify forward-looking statements, although not all
forward-looking statements contain such terms. Forward-looking
statements are based on management’s current beliefs and
assumptions that are subject to risks and uncertainties and are not
guarantees of future performance. Actual results could differ
materially from those contained in any forward-looking statement as
a result of various factors, including, without limitation: market
and other conditions; the risks that the ongoing COVID-19 pandemic
and worsening global macroeconomic conditions may disrupt the
Company’s business and/or the global healthcare system (including
its supply chain) more severely than they have to date or more
severely than anticipated; unexpected costs, charges or expenses
that reduce the Company’s capital resources; the ability of the
Company to obtain future collaborations, licenses or contractual
relationships and/or collaborate successfully with strategic
partners; regulatory developments; exposure to litigation,
including patent litigation, and/or regulatory actions; the ability
of the Company to protect its intellectual property rights; the
effect of the announcement of the Plan or reduction in force on the
ability of Exicure to retain and hire key personnel; significant
transaction costs, fees, expenses and charges; and the risk of
litigation and/or regulatory actions related to the Plan; the risks
associated with governance and control matters in controlling
investments; the failure to obtain stockholder approval of the
Private Placement or the failure to satisfy any of the other
conditions to the completion of the Private Placement; and the
ability of the Company to comply with continued listing standards.
Given these risks and uncertainties, you are cautioned not to place
undue reliance on such forward-looking statements. For a discussion
of other risks and uncertainties, and other important factors, any
of which could cause the Company’s actual results to differ from
those contained in the forward-looking statements, see the section
titled “Risk Factors” in the Company’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2022 filed with the
Securities and Exchange Commission on November 14, 2022, as updated
by the Company’s subsequent filings with the Securities and
Exchange Commission. All information in this press release is as of
the date of the release, and the Company undertakes no duty to
update this information or to publicly announce the results of any
revisions to any of such statements to reflect future events or
developments, except as required by law.
EXICURE, INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands, except share
and per share data)
September 30,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents
$
15,646
$
34,644
Short-term investments
—
4,497
Prepaid expenses and other assets
1,552
4,525
Total current assets
17,198
43,666
Property and equipment, net
3,032
3,927
Right-of-use asset.
7,435
7,950
Other noncurrent assets
1,277
9,325
Total assets
$
28,942
$
64,868
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
EQUITY
Current liabilities:
Current portion of long-term debt
$
—
$
6,873
Accounts payable
920
3,413
Accrued expenses and other current
liabilities
3,016
6,464
Deferred revenue, current
21,774
17,317
Total current liabilities
25,710
34,067
Deferred revenue, noncurrent
—
11,509
Lease liability, noncurrent
6,935
7,404
Other noncurrent liabilities
—
656
Total liabilities
32,645
53,636
Stockholders’ (deficit) equity:
Preferred stock, $0.0001 par value per
share; 10,000,000 shares authorized, no shares issued and
outstanding, September 30, 2022 and December 31, 2021
—
—
Common stock, $0.0001 par value per share;
200,000,000 shares authorized, 4,964,313 issued and outstanding,
September 30, 2022; 3,626,073 issued and outstanding, December 31,
2021
—
—
Additional paid-in capital
187,343
181,301
Accumulated other comprehensive loss
(1
)
(2
)
Accumulated deficit
(191,045
)
(170,067
)
Total stockholders' (deficit) equity
(3,703
)
11,232
Total liabilities and stockholders’
(deficit) equity
$
28,942
$
64,868
EXICURE, INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share
and per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Revenue:
Collaboration revenue
$
2,016
$
(3,677
)
$
7,052
$
(2,601
)
Total revenue
2,016
(3,677
)
7,052
(2,601
)
Operating expenses:
Research and development expense
4,805
16,457
18,694
37,562
General and administrative expense
2,416
2,947
8,783
8,937
Total operating expenses
7,221
19,404
27,477
46,499
Operating loss
(5,205
)
(23,081
)
(20,425
)
(49,100
)
Other income (expense), net:
Dividend income
41
2
59
5
Interest income
4
8
7
139
Interest expense
—
(455
)
(595
)
(1,314
)
Other expense, net
—
(5
)
(24
)
(7
)
Total other income (expense), net
45
(450
)
(553
)
(1,177
)
Net loss before provision for income
taxes
(5,160
)
(23,531
)
(20,978
)
(50,277
)
Provision for income taxes
—
—
—
—
Net loss
$
(5,160
)
$
(23,531
)
$
(20,978
)
$
(50,277
)
Basic and diluted loss per common
share
$
(1.04
)
$
(8.01
)
$
(4.66
)
$
(17.14
)
Weighted-average basic and diluted common
shares outstanding
4,963,344
2,936,823
4,502,962
2,933,365
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221114005962/en/
Media: Karen Sharma MacDougall 781-235-3060
ksharma@macdougall.bio
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