Spruce Biosciences(SPRB) - 2024 Q2 - Quarterly Report

Clinical Development - Tildacerfont, an oral antagonist of the CRF1 receptor, is being developed for classic congenital adrenal hyperplasia (CAH), polycystic ovary syndrome (PCOS), and major depressive disorder (MDD) with over 400 subjects administered in clinical trials[49] - In the CAHmelia-203 trial, 96 subjects had a mean baseline androstenedione (A4) level of 1,151 ng/dL, but the primary efficacy endpoint was not achieved, showing a placebo-adjusted reduction of -2.6% at week 12[49] - The CAHmelia-204 trial is ongoing with 100 adult patients, and topline results are expected in Q4 2024, with a mean baseline A4 level of 224 ng/dL[50] - The CAHptain-205 trial for pediatric patients showed that 73% of 30 children met the efficacy endpoint of A4 or glucocorticoid reduction at 12 weeks[50] - Tildacerfont demonstrated significant reduction in DHEAS levels in women with PCOS, with a p-value of 0.020, and an increase in sex hormone binding globulin (SHBG) with a p-value of 0.012[50] - A license agreement with HMNC Holding GmbH will fund a Phase 2 study of tildacerfont in MDD patients, utilizing the Cortibon Genetic Selection Tool for patient screening[50] - The company is advancing clinical development of tildacerfont in additional indications, including PCOS and MDD, and plans to build a specialized commercial organization if approved[51] Financial Performance - The company has no products approved for commercial sale and has not generated any product revenue to date, continuing to incur significant research and development expenses[50] - The company incurred net losses of $20.8 million and$25.6 million for the six months ended June 30, 2024 and 2023, respectively, with cash used in operations of $26.1 million and$9.8 million[51] - As of June 30, 2024, the company had an accumulated deficit of $218.0 million, up from$197.2 million as of December 31, 2023[51] - The company raised aggregate gross proceeds of $293.1 million since inception, including$15.0 million from the Kaken License Agreement in April 2023[51] - The company expects to continue incurring significant losses and does not anticipate positive cash flows from operations for the foreseeable future[51] - The company has cash and cash equivalents of $69.7 million as of June 30, 2024, which is projected to fund operations for at least 12 months[51] - The company has not generated any revenues from the commercial sale of approved products and does not expect to do so in the foreseeable future[57] - Collaboration revenue for the three months ended June 30, 2024, was$1.6 million, down from $2.2 million in the same period of 2023, a decrease of 26$5.0 million to $8.1 million for the three months ended June 30, 2024, compared to$13.1 million in 2023, a reduction of 38%[62] - General and administrative expenses increased by $0.5 million to$3.6 million for the three months ended June 30, 2024, compared to $3.0 million in 2023, an increase of 18$9.2 million, improved from a net loss of $12.8 million in the same period of 2023, a reduction of 28$11.6 million, down from $16.1 million in 2023, a decrease of 28$3.6 million, down from $4.1 million in 2023, a decrease of 12$18.4 million, down from $24.8 million in 2023, a decrease of 26$1.4 million to $7.9 million for the six months ended June 30, 2024, compared to$6.5 million in 2023, an increase of 22%[66] - As of June 30, 2024, the company had cash and cash equivalents of $69.7 million, down from$96.3 million as of December 31, 2023[69] - The company expects its cash and cash equivalents will be sufficient to fund operations for at least 12 months following the issuance date of the financial statements[69] - Net cash used in operating activities increased by $16.3 million for the six months ended June 30, 2024, compared to the same period in 2023[76] - The company anticipates significant increases in research and development expenses as it continues to invest in tildacerfont[72] Licensing and Royalties - Under the Kaken License Agreement, the company is entitled to receive up to approximately$65.0 million upon achieving specified milestones related to tildacerfont in Japan[54] - The company will receive tiered double-digit royalties on net sales of tildacerfont in Japan, with rates based on annual sales[54] - The company is obligated to make up to $23.0 million in milestone payments under the Lilly License Agreement[75] Debt and Financing - The company has entered into a Loan Agreement with Silicon Valley Bank, with an outstanding principal of$2.6 million as of June 30, 2024[56] - Future payments of principal and interest on the Term Loan as of June 30, 2024, were $2.8 million[74] - The company has total undiscounted lease payments for its non-cancelable operating lease of$1.3 million as of June 30, 2024[75] - The SEC declared effective a Shelf Registration covering the sale of up to $200.0 million of securities in February 2022[70] - In February 2023, the company sold 16,116,000 shares of common stock and warrants for gross proceeds of$53.6 million[71] Economic Factors - The company does not expect anticipated changes in inflation to have a material effect on its business or financial condition[85] - Inflation has increased costs related to labor and clinical trials, but is not expected to have a significant impact on future financial results[85] - The company anticipates continued record inflation due to geopolitical and macroeconomic events, but does not expect it to materially affect business operations[85] - There was no material impact on operating results due to foreign currency exchange rate fluctuations[84] - A hypothetical 1% change in interest rates would not have a material effect on the financial statements as of June 30, 2024, and December 31, 2023[83] - The company does not currently engage in hedging transactions to manage exposure to interest rate risk[83]