Exicure, Inc. (Nasdaq: XCUR), historically an early-stage
biotechnology company focused on developing nucleic acid therapies
targeting ribonucleic acid against validated targets, today
reported financial results for the year ended December 31, 2022 and
provided an update on its business strategy and corporate
progress.
Corporate Update
As previously reported, in September 2022, we announced a
significant reduction in force, suspension of preclinical
activities and halting of all research and development, and that we
were exploring strategic alternatives to maximize stockholder
value. With respect to our historical assets, this includes
continuing to explore out-licensing opportunities for cavrotolimod,
our clinical-stage asset in immuno-oncology, as well as for our
preclinical candidate associated with the SCN9A program for
neuropathic pain.
While the foregoing efforts with respect to our historical
assets are continuing, we do not expect they will generate
significant value for stockholders, at least in the near term.
Therefore, we are engaging in a broader exploration of strategic
alternatives. This effort involves exploring growth through
transactions with potential partners that see an opportunity in
joining an existing, publicly-traded organization. We are exploring
transactions both within our historical biotechnology and life
science industry, as well as in other industries unrelated to our
historical operations.
On February 24, 2023, we closed our private placement (the
“Private Placement”) to CBI USA, Inc. Following the closing of the
Private Placement, CBI USA is the beneficial owner of approximately
50.4% of the Company’s outstanding shares. At closing, CBI USA
designated three members to the Company’s board of directors
effective as of February 24, 2023. Additional directors were
subsequently appointed by the board, and our board of directors
currently includes 6 members, only one of which (Matthias Schroff,
Exicure's Chief Executive Officer) was a director prior to the
closing of the Private Placement. The Company is currently relying
on Nasdaq’s “controlled company” exemption from the requirements
that a majority of its board be independent and that it has an
independent compensation committee and an independent nominating
committee or function.
The Company currently expects to focus its efforts on the
following:
- Continue to implement its previously announced restructuring
plan and efforts to maximize stockholder value that can be derived
from historical biotechnology assets. The Company expects to
evaluate on an ongoing basis whether the resources dedicated to
these activities are sustainable and commensurate with the
potential value that can be derived from them.
- Explore growth through transactions with potential partners
that see opportunity in joining an existing, publicly-traded
organization. The board of directors will consider any promising
transactions that it believes can create value for stockholders. We
are exploring transactions both within our historical biotechnology
and life science industry and in other industries unrelated to our
historical operations. The Company expects these efforts may be
focused in Asia where CBI USA’s affiliates have relationships and
business connections, although domestic transactions are also being
considered. Transactions that may be explored could include reverse
mergers or share exchanges, as well as acquisitions of other
businesses or investments. There can be no assurance that any
agreement, arrangement or understanding with respect to such a
transaction will be reached, or the potential structure or
financial and other terms of any agreement, arrangement or
understanding that may be reached.
- Seek additional financing for the Company as needed to support
these activities. Without a current source of revenue or committed
financing, the Company believes that it will be necessary to obtain
substantial additional financing in the next few months in order to
provide sufficient runway to continue operating and pursue these
activities. There can be no assurance that such financing, or
financing in sufficient amounts or on acceptable terms, will be
received.
"On behalf of the board of directors, I look forward to working
with Exicure and CBI USA, now the majority controlling shareholder,
to continue to explore strategic transactions and alternatives to
maximize stockholder value," said Seung Soo Shin, Chairman of the
Board of Directors of Exicure.
2022 Financial Results
Cash Position: Cash, cash equivalents, and restricted
cash were $9.8 million as of December 31, 2022. Subsequent to
December 31, 2022, the Company raised gross proceeds of $5.4
million on the closing of the Private Placement (or net proceeds of
approximately $4.6 million after transaction expenses) and the
Company expects to use the net proceeds for general working capital
purposes as it pursues strategic alternatives as well as for the
payout for warrant put rights that were exercised as a result of
the change of control. The Company believes that its existing cash
and cash equivalents (including the proceeds received in February
2023 in connection with the closing of the Private Placement) could
enable the Company to fund its operating expenses into the
beginning of the fourth quarter of 2023. However, this estimate is
based on assumptions about how the Company can limit spending that
may prove to be wrong and it is very difficult to project the
Company's current cash burn rate given the transitional status of
the Company as it explores strategic alternatives and this estimate
may prove inaccurate and the Company may expend its limited
resources sooner.
Revenue: Revenue was $28.8 million for the year ended
December 31, 2022, reflecting an increase of $29.3 million from
revenue of $(0.5) million for the year ended December 31, 2021. The
increase in collaboration revenue of $29.3 million is due to the
recognition of the remaining deferred revenue related to the AbbVie
Collaboration Agreement of $13.9 million and the Ipsen
Collaboration Agreement of $15.4 million in connection with the
terminations of those collaboration agreements in December 2022.
This revenue resulted from an accounting adjustment, did not
reflect any new cash proceeds to the Company and will not recur.
Following these terminations, the Company currently has no source
of revenues.
Research and Development (R&D) Expense: Research and
development expense was $19.8 million for the year ended December
31, 2022, reflecting a decrease of $29.2 million, or 60%, from
research and development expense of $49.0 million for the year
ended December 31, 2021. The decrease in research and development
expense for the year ended December 31, 2022 of $29.2 million
reflects fewer clinical, preclinical, and discovery program
activities and a reduction in headcount resulting from the
restructuring activities that were announced in December 2021 and
September 2022.
General and Administrative (G&A) Expense: General and
administrative expense was $10.9 million for the year ended
December 31, 2022, representing a decrease of $2.2 million, or 17%,
from $13.1 million for the year ended December 31, 2021. The
decrease for the year ended December 31, 2022 is mostly due to
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, as well as lower
costs for accounting, director fees, and investor relations. These
lower costs in the current year period were partially offset by
higher retention award expense, as well as higher consultant and
advisory costs.
Net Loss: The Company had a net loss of $2.6 million for
the year ended December 31, 2022, as compared to a net loss of
$64.1 million for the year ended December 31, 2021. The decrease in
net loss was primarily driven by higher non-cash revenue and lower
R&D expense 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
consolidated financial statements for the year ended December 31,
2022 are issued. As a result, substantial additional financing will
be needed by the Company within the next few months to pay its
expenses, fund its ongoing exploration of strategic alternatives
and pursue any alternatives that it identifies.
About Exicure
Exicure, Inc. has historically been an early-stage biotechnology
company focused on developing nucleic acid therapies targeting
ribonucleic acid against validated targets. Following its recent
restructuring and suspension of clinical and development
activities, the Company is exploring strategic alternatives to
maximize stockholder value, both with respect to its historical
biotechnology assets and more broadly. For further information, see
www.exicuretx.com.
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 substantial doubt
about the Company’s ability to continue as a going concern;; and
the Company’s requirements for substantial additional financing to
address the Company’s working capital and other financing needs;
the Company’s expectations regarding the timing thereof and cash
runway. 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: substantial uncertainties regarding our exploration of
strategic alternatives to maximize stockholder value; our ability
to generate any meaningful value from sales, out-licensing or other
transactions involving our historical assets; our ability to raise
the substantial additional capital that is needed within the next
few months; our ability to remain listed on The Nasdaq Capital
Market; unexpected costs, liabilities and/or delays associated with
strategic alternatives we may identify and pursue and/or that they
may not deliver anticipated benefits to our stockholders; our
estimates of expenses, use of cash, timing of future cash needs,
ongoing losses and capital requirements, including our expectations
relating to our needs for additional financing and the timing
thereof may prove to be inaccurate; uncertainty about reaction from
investors and potential business partners to our recent change of
control, “controlled company” status and board composition and the
future direction of the Company; the effects of potential turnover
of senior management in the near term, and any inability to attract
and retain qualified management and other key personnel; our
ability to comply with all applicable laws, which may be
particularly challenging given the recent turnover in our board,
potential turnover in management, significant reductions in force,
limited resources and the potential to enter into new business
areas with which we have no past experience; our ability to obtain
and maintain intellectual property protection for our technologies
and our ability to operate our business without infringing the
intellectual property rights of others; the impact of worsening
macroeconomic conditions, including rising global inflation,
actions taken by central banks to counter inflation, capital market
and bank instability, exchange rate fluctuations, supply chain
disruptions and energy and fuel prices; the impact of government
laws and regulations as well as developments relating to our
competitors or our industry; and other factors that may impact our
financial results and condition and our ongoing strategic efforts.
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 Annual Report on Form 10-K
for the year ended December 31, 2022 to be filed with the
Securities and Exchange Commission on March 27, 2023, 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)
December 31,
2022
2021
ASSETS
Current assets:
Cash and cash equivalents
$
8,577
$
34,644
Short-term investments
—
4,497
Prepaid expenses and other assets
1,474
4,525
Total current assets
10,051
43,666
Property and equipment, net
2,530
3,927
Right-of-use asset
7,257
7,950
Other noncurrent assets
3,490
9,325
Total assets
$
23,328
$
64,868
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Current portion of long-term debt
$
—
$
6,873
Accounts payable
361
3,413
Accrued expenses and other current
liabilities
1,278
6,464
Deferred revenue, current
—
17,317
Total current liabilities
1,639
34,067
Deferred revenue, noncurrent
—
11,509
Lease liability, noncurrent
6,767
7,404
Other noncurrent liabilities
—
656
Total liabilities
$
8,406
$
53,636
Stockholders’ equity:
Preferred stock, $0.0001 par value per
share; 10,000,000 shares authorized, no shares issued and
outstanding, December 31, 2022 and December 31, 2021
—
—
Common stock, $0.0001 par value per share;
200,000,000 shares authorized, 4,965,901 issued and outstanding,
December 31, 2022; 3,626,073 issued and outstanding, December 31,
2021
—
—
Additional paid-in capital
187,571
181,301
Accumulated other comprehensive loss
—
(2
)
Accumulated deficit
(172,649
)
(170,067
)
Total stockholders' equity
14,922
11,232
Total liabilities and stockholders’
equity
$
23,328
$
64,868
EXICURE, INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share
and per share data)
Year Ended December
31,
2022
2021
Revenue:
Collaboration revenue
$
28,826
$
(483
)
Total revenue
28,826
(483
)
Operating expenses:
Research and development expense
19,767
48,979
General and administrative expense
10,890
13,087
Total operating expenses
30,657
62,066
Operating loss
(1,831
)
(62,549
)
Other (expense) income, net:
Dividend income
78
8
Interest income
15
141
Interest expense
(595
)
(1,691
)
Other expense, net
(40
)
(11
)
Total other expense, net
(542
)
(1,553
)
Net loss before provision for income
taxes
(2,373
)
(64,102
)
Provision for income taxes
209
—
Net loss
$
(2,582
)
$
(64,102
)
Basic and diluted loss per common
share
$
(0.56
)
$
(21.70
)
Weighted-average basic and diluted common
shares outstanding
4,619,471
2,953,901
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version on businesswire.com: https://www.businesswire.com/news/home/20230327005525/en/
Karen Sharma MacDougall 781-235-3060 ksharma@macdougall.bio
Exicure (NASDAQ:XCUR)
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