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Zura(ZURA) - 2024 Q2 - Quarterly Report
ZURAZura(ZURA)2024-08-13 20:06

Financial Performance - The company reported a net loss of 10.3millionforthethreemonthsendedJune30,2024,and10.3 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 121.6millionasofJune30,2024[107].Thenetlossattributabletoordinaryshareholderswas121.6 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 41.3million(7641.3 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 43.8millionforthesameperiodin2023[164][165].ThenetlossattributabletoOrdinaryShareholdersoftheCompanywas43.8 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 21.4million(4821.4 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 56.7millioninnetproceedsfromtheBusinessCombinationcompletedonMarch20,2023[110].AsofJune30,2024,thecompanyhadcashandcashequivalentsof56.7 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 112.5millionprivateplacement[155].NetcashprovidedbyfinancingactivitiesforthesixmonthsendedJune30,2024,was112.5 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 125.4millioninthesameperiodof2023[166][167].ExpensesResearchanddevelopmentexpensesdecreasedby125.4 million in the same period of 2023[166][167]. Expenses - Research and development expenses decreased by 22.7 million (80%) to 5.5millionforthethreemonthsendedJune30,2024,primarilyduetoa5.5 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 0.5million(100.5 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 2.5million(292.5 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 21.5million(5221.5 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 440millionbasedonnetsalesthresholdsforproductsdevelopedfromZB106[117].ThecompanyenteredintoalicenseagreementwithLillyfortheexclusiverightstodevelop,manufacture,andcommercializeabispecificantibody,ZB106,withaninitialpaymentof440 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 11.6million,comparedto11.6 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 5.0million,slightlylowerthan5.0 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 6.7million,primarilyfromsharebasedcompensationof6.7 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].