Zura(US:ZURA)2024-08-13 20:06Financial Performance - The company reported a net loss of $10.3 million for the three months ended June 30, 2024, and $18.1 million for the six months ended June 30, 2024, with an accumulated deficit of $121.6 million as of June 30, 2024[107]. - The net loss attributable to ordinary shareholders was $13.4 million for the six months ended June 30, 2024, a decrease of $41.3 million (76%) compared to the same period in 2023[144]. - The company incurred a net loss before redeemable noncontrolling interest of $18.1 million for the six months ended June 30, 2024, compared to a net loss of $43.8 million for the same period in 2023[164][165]. - The net loss attributable to Ordinary Shareholders of the Company was $12.7 million for the three months ended June 30, 2024, a decrease of $21.4 million (48%) compared to the prior year[134]. Revenue and Sales - The company has not generated any revenue from product sales and has a limited operating history focused on business planning and raising capital[106]. - The company has not generated any revenue since inception and does not expect to do so for at least the next few years[157]. Capital and Financing - The company raised a total of $112.5 million in gross proceeds from the April 2024 Private Placement, issuing 18,732,301 Class A Ordinary Shares and pre-funded warrants[111]. - The company generated approximately $56.7 million in net proceeds from the Business Combination completed on March 20, 2023[110]. - As of June 30, 2024, the company had cash and cash equivalents of $188.4 million, funded through various financing activities including a $112.5 million private placement[155]. - Net cash provided by financing activities for the six months ended June 30, 2024, was $105.3 million, a decrease of 15.9% from $125.4 million in the same period of 2023[166][167]. Expenses - Research and development expenses decreased by $22.7 million (80%) to $5.5 million for the three months ended June 30, 2024, primarily due to a $27.2 million expense related to an IPR&D license acquisition in the prior year[134][136]. - General and administrative expenses increased by $0.5 million (10%) to $6.2 million for the three months ended June 30, 2024, driven by higher compensation and professional fees[137]. - The Company anticipates a substantial increase in research and development expenses as it continues to develop product candidates and manufacturing processes[131]. - General and administrative expenses increased by $2.5 million (29%) for the six months ended June 30, 2024, mainly due to a $2.0 million increase in compensation-related expenses[148]. - Total operating expenses decreased by $21.5 million (52%) for the six months ended June 30, 2024, compared to the same period in 2023[144]. Future Outlook - The company plans to raise substantial additional capital in the future to support ongoing clinical development and operational needs[131]. - Future operations are dependent on the ability to finance cash requirements for ongoing research and development activities[156]. - The company anticipates ongoing increases in expenses related to research and development and administrative costs as it seeks marketing approval for product candidates[158]. Agreements and Obligations - The company is obligated to make development milestone payments to Lilly of up to $155.0 million and sales milestone payments of up to $440 million based on net sales thresholds for products developed from ZB-106[117]. - The company entered into a license agreement with Lilly for the exclusive rights to develop, manufacture, and commercialize a bispecific antibody, ZB-106, with an initial payment of $5.0 million made during the six months ended June 30, 2024[114]. - The company entered into a Lonza License agreement, which includes potential annual payments of up to middle six-figure amounts per sublicense and royalties of up to low-single digit percentages of net sales[169]. - A master services agreement with WuXi Biologics was established in July 2023, obligating the company to pay service fees as specified in each work order[170]. Operational Changes - The company has incurred significant operating losses since inception and anticipates expenses will increase significantly as it advances preclinical and clinical development of product candidates[107]. - The company has a new CEO, Robert Lisicki, effective April 8, 2024, following a transition from founder Someit Sidhu[123]. - The Company commenced an exchange offer for outstanding IPO warrants, offering 0.30 Class A ordinary shares for each warrant tendered[124]. - The Exchange Offer and Consent Solicitation resulted in 6,703,428 public warrants (approximately 97.2%) and 4,080,580 private placement warrants (approximately 69.0%) being validly tendered[125]. - The Company issued 3,235,184 Class A ordinary shares in exchange for 10,784,008 IPO warrants, with a mandatory exchange ratio of 0.27 Class A ordinary shares for each remaining IPO warrant[126]. Economic Impact - Macroeconomic conditions, including geopolitical conflicts and inflation, continue to impact the Company's business and may materially affect future results[127]. - Cash used in operating activities for the six months ended June 30, 2024, was $11.6 million, compared to $8.4 million for the same period in 2023, reflecting an increase of 38.1%[164][165]. - Cash used in investing activities for the six months ended June 30, 2024, was $5.0 million, slightly lower than $5.8 million in the same period of 2023[166]. Non-Cash Charges - Non-cash charges for the six months ended June 30, 2024, included $6.7 million, primarily from share-based compensation of $5.3 million[164]. Company Classification - The company remains classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of reduced disclosure requirements[177][179].