Cartesian Therapeutics(RNAC) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenue for the three months ended September 30, 2024, was $6.551 million, compared to $17.738 million for the same period in 2023, representing a decrease of approximately 63.1%[12] - Operating expenses for the three months ended September 30, 2024, were $19.616 million, down from $67.822 million in the same period in 2023, a reduction of about 72.6%[12] - The net loss for the three months ended September 30, 2024, was $24.183 million, compared to a net loss of $42.052 million for the same period in 2023, indicating an improvement of approximately 42.5%[12] - The company reported a net loss of $67,171,000 for the nine months ended September 30, 2024, compared to a net loss of $42,052,000 for the same period in 2023, indicating an increase in losses of approximately 59.8%[21] - The company reported a net loss of $24.2 million for the three months ended September 30, 2024, compared to a net loss of $9.0 million for the same period in 2023[41] - Net loss for the nine months ended September 30, 2024 was $67.2 million, an increase of $25.1 million or 60% compared to a net loss of $42.1 million for the same period in 2023, primarily due to changes in the fair value of the CVR liability and Series A Preferred Stock forward contract liability[183] Revenue Sources - The company reported collaboration and license revenue of $39.111 million for the nine months ended September 30, 2024, compared to $17.738 million for the same period in 2023, an increase of approximately 120.5%[12] - Collaboration and license revenue for the three months ended September 30, 2024 was $0, a decrease of $6.6 million or 100% compared to $6.6 million for the same period in 2023, primarily due to reduced revenue from the Sobi License and Astellas Agreement[160] - Collaboration and license revenue for the nine months ended September 30, 2024 was $39.1 million, an increase of $21.4 million or 121% compared to $17.7 million for the same period in 2023, driven by revenue from the Sobi License and Astellas Agreement[172] Expenses - Research and development expenses for the nine months ended September 30, 2024, totaled $33.799 million, down from $49.408 million in the same period in 2023, a decrease of about 31.6%[12] - Research and development expenses for the three months ended September 30, 2024 were $11.4 million, a decrease of $1.6 million or 12% from $13.0 million in the same period in 2023, mainly due to reductions in clinical expenses[162] - General and administrative expenses remained consistent at $6.6 million for the three months ended September 30, 2024, compared to the same period in 2023[164] - General and administrative expenses increased to $23.0 million for the nine months ended September 30, 2024, up from $18.4 million in the same period in 2023, reflecting higher personnel and professional fees related to the Merger[176] Cash and Liquidity - The company had cash, cash equivalents, and restricted cash of $220,867,000 at the end of the reporting period, compared to $80,980,000 at the end of the previous year, representing an increase of approximately 172.5%[21] - As of September 30, 2024, the Company reported cash, cash equivalents, and restricted cash totaling $220.9 million, with $1.7 million restricted for lease commitments[27] - The company anticipates that its existing cash resources will fund operations for at least the next 12 months, but may need to seek additional financing sooner if actual results differ from management's estimates[193] Shareholder Equity and Stock - The weighted-average common shares outstanding for the three months ended September 30, 2024, were 21,471,408, compared to 5,160,150 for the same period in 2023, reflecting a significant increase in share count[12] - The company executed a 1-for-30 reverse stock split on April 4, 2024, affecting all share-related figures in the financial statements[19] - The Company has authorized shares of common stock for future issuance totaling 13,215,543 as of September 30, 2024, including 974,954 for warrants and 5,544,719 for Series A Preferred Stock[89] Acquisitions and Mergers - The Company acquired the assets of Old Cartesian on November 13, 2023, in a stock-for-stock transaction, issuing 224,099 shares of common stock and 384,930.724 shares of Series A Preferred Stock[34] - The total purchase price for the acquisition of Old Cartesian was $168.5 million, allocated as follows: $2.7 million for common stock forward contracts, $155.3 million for Series A Preferred Stock forward contracts, and $10.4 million for stock options[37] - The net assets acquired from Old Cartesian were valued at $168.5 million after accounting for the liabilities[39] Future Outlook and Risks - The company is focused on maximizing the value of its pipeline of product candidates and expects to incur losses in the future as it continues its development activities[5] - The ongoing geopolitical tensions and macroeconomic conditions, including inflation and interest rates, are expected to impact the company's operations and financial position[5] - The Company anticipates continued operating losses due to research and development costs[29] Collaboration Agreements - The Company entered into a License and Development Agreement with Astellas Gene Therapies in January 2023, indicating ongoing collaboration efforts[101] - The Company received a $10.0 million upfront payment from Astellas for the exclusive license of its IdeXork technology, with potential future payments of up to $340.0 million based on development and sales milestones[102] - The Company has a collaboration with Ginkgo Bioworks, with potential milestone payments of up to $85 million in cash under the First Ginkgo Agreement and up to $207 million in cash under the Second Ginkgo Agreement[120][121] Debt and Financing - The company extinguished the 2020 Term Loan with a total payoff amount of $22.3 million, including a principal amount of $19.8 million and a final payment fee of $2.3 million[76] - The company completed a private placement in July 2024, resulting in gross proceeds of approximately $130.0 million from the issuance of 3,563,247 shares of common stock and 2,937,903 shares of Series B Preferred Stock[144] Research and Development - The company is developing its lead product candidate, Descartes-08, for myasthenia gravis, with positive results observed in a Phase 2 clinical trial[142] - The company has not generated any revenue from product sales and relies on collaboration and license revenue, which fluctuates based on the timing of fees and reimbursements[148]