Rezolute(RZLT) - 2024 Q4 - Annual Report

Market Opportunity - The addressable market for congenital hyperinsulinism (HI) in the U.S. is estimated to be more than 1,500 individuals[11]. - The total addressable market for tumor HI is estimated to be approximately 1,500 patients in the U.S., including around 500 with islet cell tumor hypoglycemia and approximately 1,000 with non-islet cell tumor hypoglycemia[20]. Clinical Trials - The Phase 3 sunRIZE study of ersodetug aims to enroll approximately 56 participants aged 3 months to 45 years, with topline results expected in the second half of calendar 2025[15]. - FDA clearance for the Phase 3 registrational study of ersodetug for tumor HI was announced on August 5, 2024, with patient enrollment planned to commence in the first half of calendar 2025[20]. - The primary endpoint of the Phase 3 registrational study for tumor HI is the change in Level 2 and Level 3 hypoglycemia events as measured by self-monitored blood glucose[21]. - The company is actively enrolling participants in the pivotal Phase 3 clinical study for congenital HI, which is a randomized, double-blind, placebo-controlled trial[14]. - The Phase 3 study for tumor HI will include a randomized 1:1 allocation to receive ersodetug 9 mg/kg per week or matched placebo[21]. Drug Designation and Development - Ersodetug has received Orphan Drug Designation in the U.S. and European Union for the treatment of congenital HI, and Rare Pediatric Disease Designation in the U.S.[12]. - The company has received and approved several requests for the use of ersodetug in patients with tumor HI caused by metastatic insulinomas, indicating a growing interest in the treatment[24]. - The company is actively engaged in conversations with potential partners to further develop RZ402[27]. Financial Performance - The company incurred approximately $55.7 million and$43.8 million in research and development expenses for the fiscal years ended June 30, 2024, and 2023, respectively, representing a year-over-year increase of 27.5%[34]. - Operating expenses rose to $70,423,000 in 2024, up from$55,990,000 in 2023, marking a 25.8% increase[187]. - Net loss for the fiscal year 2024 was $68,459,000, compared to a net loss of$51,787,000 in 2023, reflecting a 32.2% increase in losses[187]. - Cash and cash equivalents significantly increased to $70,396,000 in 2024 from$16,036,000 in 2023, a growth of 338.5%[185]. - Total current assets increased to $128,653,000 in 2024 from$104,910,000 in 2023, representing a 22.6% growth[185]. - Total liabilities increased to $11,734,000 in 2024 from$7,549,000 in 2023, indicating a 55.0% rise[185]. - The company reported a basic and diluted net loss per common share of $1.33 in 2024, compared to$1.01 in 2023[187]. - The company experienced a net unrealized gain on marketable debt securities of $272,000 in 2024, compared to a loss of$351,000 in 2023[187]. Cash Flow and Investments - Cash used in operating activities for 2024 was $57,368,000, an increase from$44,481,000 in 2023, indicating a 29% rise in cash outflow[192]. - Total cash provided by investing activities was $48,699,000 in 2024, a significant improvement compared to cash used of$101,464,000 in 2023[192]. - As of June 30, 2024, investments in marketable debt securities totaled $56.7 million, with short-term investments of$56.5 million scheduled to mature during the 12-month period ending June 30, 2025[223]. - During the fiscal year ended June 30, 2024, marketable debt securities for $115.1 million matured, with approximately$66.4 million of the proceeds reinvested[224]. Shareholder and Stock Information - The weighted average number of common shares outstanding increased to 51,465,000 in 2024 from 51,187,000 in 2023[187]. - The Company completed a 2024 Underwritten Offering in June 2024, resulting in the issuance of approximately 13.0 million shares of common stock and 3.8 million pre-funded warrants for net proceeds of $62.6 million[220]. - The Company is obligated to make milestone payments totaling up to$30 million under the XOMA License Agreement, with $5 million due upon dosing of the last patient in the ongoing Phase 3 clinical trial for ersodetug[233]. - As of June 30, 2024, the total number of authorized shares under the stock option plans is 11.233 million, with 10.891 million outstanding and 342,000 available for future grants[248]. Regulatory and Compliance - The company is subject to rigorous regulatory approval processes for its pharmaceutical products, which is a significant factor in their development and marketing[32]. - The company identified a material weakness in internal control related to pre-funded warrant accounting, which was remediated by June 30, 2024[305]. Patent and Licensing - The company holds a worldwide, exclusive license from XOMA for the ersodetug molecule, which includes 37 issued patents worldwide, expiring between 2030 and 2036[29]. - The company has a worldwide, exclusive license from ActiveSite for RZ402, which includes 9 issued international patents and 7 issued U.S. patents, expected to expire between 2040 and 2043[30]. - Under the ActiveSite License Agreement, the Company has milestone payments up to$46.5 million, with $5 million due upon the first dosing of a patient in a Phase 3 clinical trial for RZ402[234]. Employee and Compensation - As of June 30, 2024, the company had 59 full-time employees, with 42 engaged in research and development and clinical operations[35]. - The company reported an annual base salary of$460,000 for its Chief Financial Officer, with a target bonus of 40%[297]. - The total share-based compensation expense for the fiscal year ended June 30, 2024, is $7.36 million, compared to$7.27 million for the previous year[257].