PART I - FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Skye Bioscience, a clinical-stage biotech, reported an increased net loss in Q1 2025 driven by higher R&D, with total assets decreasing due to cash usage - The company is a clinical-stage biotechnology firm focused on developing molecules to treat obesity and related conditions, and has not yet generated revenue from its principal operations[19](index=19&type=chunk)[20](index=20&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$64.8 million** as of March 31, 2025, from **$72.8 million** at year-end 2024, primarily due to reduced cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $46,421 | $68,416 | | Short-term investments | $12,803 | $0 | | Total current assets | $63,028 | $70,827 | | Total assets | $64,793 | $72,764 | | **Liabilities & Equity** | | | | Total current liabilities | $5,319 | $4,339 | | Total liabilities | $5,543 | $4,612 | | Total stockholders' equity | $59,250 | $68,152 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net loss of **$11.1 million** in Q1 2025, up from **$5.0 million** in Q1 2024, primarily due to increased research and development expenses Condensed Consolidated Statements of Operations (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $7,197 | $1,946 | | General and administrative | $4,562 | $4,206 | | **Operating loss** | **($11,760)** | **($6,152)** | | Total other (income) expense, net | ($658) | ($1,135) | | **Net loss** | **($11,103)** | **($5,020)** | | **Loss per share (basic & diluted)** | **($0.28)** | **($0.18)** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to **$9.2 million** in Q1 2025, with total cash and equivalents decreasing by **$22.0 million** due to investing activities and no financing Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,185) | $(4,708) | | Net cash (used in) provided by investing activities | $(12,809) | $1,142 | | Net cash provided by financing activities | $0 | $85,653 | | **Net (decrease) increase in cash** | **$(21,994)** | **$82,086** | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures include the 'Wendy Cunning vs Skye Bioscience, Inc.' lawsuit with a **$1.9 million** contingency, disaggregated R&D expenses highlighting nimacimab, and details on stock incentive plans - The company is party to the 'Wendy Cunning vs Skye Bioscience, Inc.' lawsuit, where a previous judgment was vacated, a new trial is scheduled for September 2025, and the estimated legal contingency is **$1,913,003** as of March 31, 2025[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) Disaggregated Research and Development Expenses (Q1 2025 vs Q1 2024, in thousands) | Expense Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | nimacimab | $5,184,865 | $129,120 | | Personnel related and stock-based compensation | $1,337,958 | $811,789 | | Other research and development expenses | $669,026 | $144,847 | | SBI-100 | $5,408 | $860,694 | | **Total R&D Expenses** | **$7,197,257** | **$1,946,450** | - As of March 31, 2025, the company had **1,170,197 shares** available for future grant under its Amended and Restated Omnibus Incentive Plan and **230,500 shares** available under its 2024 Inducement Equity Incentive Plan[34](index=34&type=chunk)[35](index=35&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the nimacimab Phase 2a trial, the **270% increase** in R&D expenses to **$7.2 million**, and confirms **$59.2 million** in liquidity is sufficient for the next 12 months - The company's lead candidate, nimacimab, is in a Phase 2a clinical trial for obesity, with top-line data expected in late Q3 or early Q4 2025, and the trial has been extended to 52 weeks to gather longer-term data[57](index=57&type=chunk)[58](index=58&type=chunk) - The company believes its current cash will be sufficient to fund projected operations for at least 12 months from the issuance date of the financial statements[85](index=85&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) R&D expenses surged by **270%** to **$7.2 million** in Q1 2025 due to nimacimab, while G&A expenses increased by **8%**, and other income decreased due to non-recurring gains Change in Research & Development Expenses (Q1 2025 vs Q1 2024, in thousands) | Expense Category | Change | Reason | | :--- | :--- | :--- | | Clinical trial costs | +$1,266,302 | Increased site and patient costs for Nimacimab Phase 2a study | | Contract manufacturing costs | +$2,532,130 | Drug substance and product costs for nimacimab | | Discovery research and development | +$623,020 | Increased work on nimacimab's mechanism of action | - General and administrative expenses increased by **$356,505 (8%)** YoY, primarily due to a **$373,571** increase in investor relations, marketing, and communications expenses[75](index=75&type=chunk)[79](index=79&type=chunk) - Total other income decreased by **$476,476** YoY, mainly because a **$1,145,141** gain on an asset sale in Q1 2024 did not recur, partially offset by a **$435,484** reduction in interest expense and a **$191,500** increase in interest income in Q1 2025[76](index=76&type=chunk)[77](index=77&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$59.2 million** in cash and equivalents as of March 31, 2025, asserting sufficient liquidity for at least 12 months, bolstered by **$83.6 million** from 2024 PIPE financings - The company had unrestricted cash, cash equivalents, and short-term investments of **$59.2 million** as of March 31, 2025, compared to **$68.4 million** as of December 31, 2024[80](index=80&type=chunk) - In January and March 2024, the company raised combined net proceeds of **$83.6 million** from two private placement (PIPE) financings[81](index=81&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,185) | $(4,708) | | Net cash (used in) provided by investing activities | $(12,809) | $1,142 | | Net cash provided by financing activities | $0 | $85,653 | [Quantitative and Qualitative Disclosures about Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is stated as 'Not applicable,' typical for a smaller reporting company with limited market risk exposure - The report states this item is '**Not applicable**'[96](index=96&type=chunk) [Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2025[98](index=98&type=chunk) - **No changes** in internal control over financial reporting occurred during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control[99](index=99&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 7 of the financial statements for details on material legal proceedings, primarily the 'Wendy Cunning vs Skye Bioscience, Inc.' lawsuit - For a description of material legal proceedings, the report refers to Note 7, 'General Litigation and Disputes' in the financial statements[101](index=101&type=chunk) [Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors from the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, have been reported - There have been **no material changes** to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024[102](index=102&type=chunk) [Other Information](index=23&type=section&id=Item%205.%20Other%20Information) Director Deborah Charych and CEO Punit Dhillon adopted Rule 10b5-1 trading plans in February and March 2025, respectively, for potential future stock sales - On February 12, 2025, Director Deborah Charych adopted a Rule 10b5-1 trading plan for the potential sale of up to **58,917 shares**[106](index=106&type=chunk) - On March 28, 2025, CEO Punit Dhillon adopted a Rule 10b5-1 trading plan covering the potential sale of shares from RSUs and his personal holdings through 2025 and 2026[107](index=107&type=chunk) [Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the report, including CEO and CFO certifications and financial statements in Inline XBRL format - The exhibits filed with the report include certifications from the Principal Executive Officer and Principal Financial Officer (pursuant to Rules 13a-14, 15d-14, and Section 906 of Sarbanes-Oxley) and iXBRL data files[108](index=108&type=chunk)

Core Insights - Skye Bioscience, Inc. is making significant progress in its clinical operations and R&D, particularly with its lead candidate nimacimab for obesity treatment [2][3] - The company reported a net loss of $11.1 million for Q1 2025, an increase from $5.0 million in Q1 2024, primarily due to higher R&D expenses [10][8] - Skye's cash and cash equivalents totaled $59.2 million as of March 31, 2025, which is expected to fund operations through at least Q1 2027 [5] Clinical Highlights - The CBeyond™ Phase 2a trial for nimacimab is ongoing, with top-line data expected in late Q3 or early Q4 2025 [6][7] - Nimacimab has shown promising results in preclinical studies, demonstrating over 30% weight loss when combined with tirzepatide and 23.5% weight loss as a monotherapy [7] - The Data Safety Monitoring Committee has completed three safety reviews with no concerns, and the study protocol is being finalized with the FDA for a 52-week open-label study extension [7] Financial Results - R&D expenses for Q1 2025 were $7.2 million, up from $1.9 million in Q1 2024, driven by costs related to the Phase 2a clinical study [8] - General and administrative expenses increased to $4.6 million in Q1 2025 from $4.2 million in Q1 2024, mainly due to investor relations and marketing costs [9] - The total operating expenses for Q1 2025 were $11.8 million, compared to $6.2 million in the same period last year [16] Balance Sheet Highlights - As of March 31, 2025, total assets were $64.8 million, down from $72.8 million at the end of 2024 [19] - Current liabilities increased to $5.3 million from $4.3 million at the end of 2024, reflecting higher accounts payable and accrued liabilities [19] - Stockholders' equity decreased to $59.3 million from $68.2 million at the end of 2024, primarily due to the net loss incurred [19]

Summary of Sky Bioscience Conference Call Company Overview - **Company**: Sky Bioscience - **Focus**: Development of treatments for metabolic diseases, specifically obesity, utilizing a CB1 inhibitor named Nimasumab [3][4] Core Industry Insights - **Obesity Treatment Landscape**: The obesity treatment market is currently dominated by incretin-based therapies, which focus on caloric restriction. Sky Bioscience aims to differentiate itself by targeting a validated mechanism that addresses unmet needs for patients who discontinue incretin therapies [3][12][14]. - **Mechanism of Action**: Nimasumab operates independently of the GLP-1 pathway, focusing on peripheral fat metabolism rather than central nervous system effects, which have historically led to adverse neuropsychiatric events in previous CB1 inhibitors [8][9][10]. Key Points and Arguments - **Differentiation from Previous CB1 Inhibitors**: Previous CB1 inhibitors faced safety concerns leading to withdrawal from the market. Nimasumab is designed to minimize central nervous system engagement, showing a 600-fold reduction in brain activity compared to earlier drugs [8][9]. - **Clinical Development Strategy**: The company is focused on a disciplined capital allocation strategy, with approximately two years of cash runway, allowing for methodical progress in clinical trials without aggressive spending [5][38]. - **Phase 2 Trial Design**: The CBEYOND trial is a four-arm, double-blind, placebo-controlled study comparing Nimasumab to placebo and in combination with GLP-1 therapy (Wegovy). The trial aims to provide comprehensive data on weight loss and safety [25][26][27]. - **Weight Loss Expectations**: The company aims for a significant weight loss of over 5% at 26 weeks, which is considered competitive in the current market landscape [30][31]. Important but Overlooked Aspects - **Chronic Treatment Paradigm**: There is a shift in understanding that obesity treatments should be viewed as chronic therapies rather than short-term solutions. Many patients discontinue current therapies due to various reasons, including side effects and lack of efficacy [12][13]. - **Market Reaction to Competitors**: The recent market reaction to Novo's data highlights the importance of clear communication regarding expectations and outcomes. Sky Bioscience aims to avoid similar pitfalls by maintaining transparency in their clinical data and safety profiles [35][36][37]. - **Real-World Data Insights**: The company has conducted interviews with obesity doctors to gather real-world data, which suggests that their treatment may outperform existing therapies in practical applications [34]. Financial Position - **Cash Runway**: Sky Bioscience expects to maintain its cash runway until Q1 2027, allowing for continued investment in Nimasumab's development without significant interruptions [38]. This summary encapsulates the key insights and strategic direction of Sky Bioscience as discussed in the conference call, highlighting its innovative approach to obesity treatment and the importance of addressing safety and efficacy in its clinical trials.

Core Viewpoint - Skye Bioscience, Inc. is set to discuss its Q1 2025 financial results in a conference call on May 8, 2025, highlighting its focus on therapeutic pathways for obesity and metabolic health disorders [1][2]. Company Overview - Skye Bioscience is a clinical-stage biotechnology company dedicated to developing next-generation molecules that target G-protein coupled receptors for metabolic health [3]. - The company is conducting a Phase 2 clinical trial for nimacimab, an antibody that inhibits CB1, and is also evaluating its combination with a GLP-1R agonist (Wegovy®) [3]. Upcoming Events - A conference call will take place on May 8, 2025, at 1:30 p.m. PT/4:30 p.m. ET to discuss the company's financial results, with an earnings press release to be issued after market close on the same day [1][2].

Core Insights - Skye Bioscience, Inc. is a clinical-stage biotechnology company focused on developing new therapeutic pathways for obesity and metabolic health disorders [1][2] - The company will participate in several upcoming healthcare conferences, including the European Congress on Obesity and the Citizens Life Sciences Conference [1][4] Company Overview - Skye is dedicated to developing next-generation molecules that modulate G-protein coupled receptors, aiming for first-in-class therapeutics with clinical and commercial differentiation [2] - The company is conducting a Phase 2 clinical trial for nimacimab, a negative allosteric modulating antibody that inhibits CB1, and is also assessing its combination with a GLP-1R agonist (Wegovy®) [2] Upcoming Events - Skye will present a poster at the European Congress on Obesity in Malaga, Spain on May 13 [1] - The company will also have a presentation at the Citizens Life Sciences Conference in New York on May 8 and will hold one-on-one meetings at the Craig-Hallum Institutional Investor Conference in Minneapolis on May 28 [4]

Group 1 - Weight loss drug companies have experienced a decline from their peak hype approximately one year ago, with Novo Nordisk A/S, the manufacturer of Ozempic and Wegovy, seeing its stock price cut by more than half [1] Group 2 - The article highlights the author's background as a private investor based in Toronto, Canada, with a focus on capital markets and Canadian small cap stocks [1]

Core Viewpoint - Skye Bioscience, Inc. announced promising preclinical data for its CB1 antibody, nimacimab, indicating significant weight loss in a murine diet-induced obesity model, suggesting potential as a treatment for obesity and metabolic disorders [1][2][5] Group 1: Preclinical Data and Efficacy - Nimacimab demonstrated effective weight loss in a diet-induced obesity model after 25 days of treatment, showing a 23.5% weight loss when used alone, comparable to monlunabant and tirzepatide [5] - When combined with tirzepatide, nimacimab achieved greater than 30% weight loss, indicating an additive effect [5] - The study highlighted that nimacimab's weight loss was associated with beneficial changes in key hormones, glycemic control, and inflammatory markers [1][5] Group 2: Mechanism of Action - Nimacimab employs a non-competitive allosteric binding mechanism to the CB1 receptor, which may provide advantages over small molecules like monlunabant that compete for the receptor's active site [3][7] - In vitro data showed that nimacimab's potency remained stable even at higher concentrations of CB1 agonists, while monlunabant's potency significantly decreased under similar conditions [6][9] - The differentiated mechanism of nimacimab aims to achieve weight loss benefits without the neuropsychiatric side effects associated with current small molecule CB1 inhibitors [7][10] Group 3: Future Developments - Skye anticipates initial data from its Phase 2a study in obesity to be available in late Q3 or early Q4 2025, which will further assess nimacimab's efficacy [2][5] - The company is conducting a Phase 2 clinical trial to evaluate nimacimab's effects both as a monotherapy and in combination with GLP-1 receptor agonists [10]

Company Overview - Skye Bioscience, Inc. is a clinical-stage biopharmaceutical company focused on developing new therapeutic pathways for obesity and metabolic health disorders [2] - The company aims to create first-in-class therapeutics by leveraging biologic targets with substantial human proof of mechanism [2] Clinical Development - Skye is conducting a Phase 2 clinical trial for nimacimab, a negative allosteric modulating antibody that inhibits CB1, specifically targeting obesity [2] - The trial is also assessing the combination of nimacimab with a GLP-1R agonist, Wegovy® [2] Upcoming Events - The executive team of Skye will be available for one-on-one meetings at the Piper Sandler Spring Biopharma Symposium on April 17th in Boston, MA [1]

Financial Data and Key Metrics Changes - Research and development expenses for Q4 2024 were $7.8 million, up from $1.6 million in Q4 2023, primarily due to clinical and manufacturing costs associated with the Phase IIa CBeyond study for nimacimab [30] - For the year ended December 31, 2024, research and development expenses totaled $18.7 million, compared to $5.8 million in 2023, driven by increased clinical costs and employee-related benefits [31] - General and administrative expenses for Q4 2024 were $4.6 million, up from $2.5 million in Q4 2023, mainly due to stock-based compensation and professional services [32] - The net loss for the year ended December 31, 2024, was $26.6 million, a decrease from $37.6 million in 2023, attributed to the expensing of acquisition costs in 2023 [33] Business Line Data and Key Metrics Changes - The company has shifted focus from the development of SBI-100 to nimacimab, reallocating resources to achieve clinical milestones [11] - The CBeyond clinical trial for nimacimab saw over-enrollment, completing enrollment with 136 patients, exceeding the planned 120 patients [9] Market Data and Key Metrics Changes - The company views nimacimab as a differentiated alternative in the obesity treatment market, especially as the GLP-1 receptor agonist space becomes crowded [24] - Recent industry deals highlight the growing interest in non-incretin mechanisms for obesity treatment, validating the potential of CB1 inhibitors like nimacimab [81] Company Strategy and Development Direction - The company plans to engage with regulators for a Phase IIb dose-escalation study anticipated to start in Q2 2026, while also enhancing manufacturing capabilities [22] - The strategic decision to extend the CBeyond trial to 52 weeks aims to gather more comprehensive safety and efficacy data, which will support regulatory discussions [19] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in nimacimab's safety profile, noting no neuropsychiatric side effects in the Phase I study and ongoing positive reviews from the Data Safety Monitoring Board [16][50] - The company anticipates that the additional data from the extended trial will enhance understanding of nimacimab's capabilities and support its regulatory package [19] Other Important Information - The company reported cash and cash equivalents of $68.4 million as of December 31, 2024, with an operating cash burn averaging $6.3 million per quarter [34][36] - The company has eliminated related party balances and remediated litigation matters during 2024, improving its financial position [35] Q&A Session Summary Question: What can be expected from the 26 and 52-week readouts? - Management indicated that the extension study was strategic to gather longer-term efficacy and safety data, which is crucial for regulatory discussions [42][43] Question: How does the removal of the interim analysis affect the study's power? - The removal of the interim analysis preserves the study's power, allowing for a more robust efficacy and safety analysis with a larger patient dataset [60][100] Question: What feedback has been received from investigators regarding the study? - Investigators have shown strong enthusiasm for the obesity trials, contributing to the rapid enrollment pace [96] Question: Will there be additional DEXA scans during the extended study? - Yes, there will be a DEXA scan at the midpoint of the extension and another at the end of the treatment period to assess body composition changes [99] Question: How does the company view the potential for nimacimab in diabetic patients? - The company is excited about testing nimacimab in diabetic populations, as its mechanism may improve insulin sensitivity and address inflammation [132]

Financial Data and Key Metrics Changes - Research and development expenses for Q4 2024 were $7.8 million, up from $1.6 million in Q4 2023, primarily due to clinical and manufacturing costs associated with the Phase IIa CBeyond study for nimacimab [30] - For the year ended December 31, 2024, R&D expenses totaled $18.7 million compared to $5.8 million in 2023, driven by clinical costs and increased discovery research efforts [31] - General and administrative expenses for Q4 2024 were $4.6 million, up from $2.5 million in Q4 2023, mainly due to stock-based compensation and professional services [32] - The net loss for the year ended December 31, 2024, was $26.6 million, a decrease from $37.6 million in 2023, attributed to the acquisition of nimacimab in-process R&D assets in 2023 [33] Business Line Data and Key Metrics Changes - The company has shifted focus from the development of SBI-100 to nimacimab, reallocating resources to achieve clinical milestones [11] - The CBeyond clinical trial for nimacimab saw rapid enrollment, completing 136 patients, exceeding the initial target of 120 [9] Market Data and Key Metrics Changes - The company views nimacimab as a differentiated alternative in the obesity treatment market, especially as the GLP-1 receptor agonist space becomes crowded [24] - Recent industry deals highlight the growing interest in non-incretin mechanisms for obesity treatment, which aligns with the company's strategy [24][81] Company Strategy and Development Direction - The company plans to engage with regulators for a Phase IIb dose-escalation study anticipated to start in Q2 2026, while strengthening manufacturing capabilities [22] - The strategic decision to extend the CBeyond trial to 52 weeks aims to gather more comprehensive safety and efficacy data, enhancing regulatory discussions [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in nimacimab's safety profile, noting no neuropsychiatric side effects in the Phase I study [16] - The company anticipates that the extended trial will yield additional data to support its regulatory package and therapeutic profile [19][20] Other Important Information - The company reported cash and cash equivalents of $68.4 million as of December 31, 2024, with an operating cash burn averaging $6.3 million per quarter [34][35] - The company has eliminated related party balances and remediated litigation matters during 2024 [34] Q&A Session Summary Question: What can be translated from preclinical model work regarding weight loss curves at 26 and 52 weeks? - Management acknowledged the strategic value of the extension for additional efficacy and safety data, but noted it is challenging to extrapolate preclinical data directly to human studies [40][42] Question: Will the DSMB reviews pick up any neuropsychiatric adverse events? - The independent Data Safety Monitoring Board (DSMB) reviews all safety data and has indicated no concerns, allowing the trial to continue as planned [50][51] Question: How does the enrollment completion affect the analysis and Phase IIb plans? - The completion of enrollment with 136 patients enhances the robustness of efficacy and safety analysis, but does not change the regulatory pathway [62][64] Question: What are the expectations for preclinical data to be presented in Q2? - The company plans to share a robust data set that includes biomarker work and differentiation around nimacimab's mechanism of action [68][71] Question: How does the company view the recent obesity deals in relation to nimacimab? - Management noted that the recent deals highlight the industry's shift towards non-incretin mechanisms, which aligns with nimacimab's unique positioning [81][86] Question: What is the plan for testing nimacimab in diabetic patients? - The company is excited about the potential to test nimacimab in diabetic populations, given its mechanism of action related to insulin sensitivity [132][134]