Plus Therapeutics(PSTV) - 2024 Q4 - Annual Report

Part I Business The company develops targeted radiotherapeutics for CNS cancers, led by its REYOBIQ™ candidate and supported by the CNSide® diagnostic platform - Plus Therapeutics is a U.S. pharmaceutical company focused on developing targeted radiotherapeutics for central nervous system (CNS) cancers using novel radioactive drug formulations and medical devices[24] - The company's lead radiotherapeutic candidate is REYOBIQ™ (rhenium (186Re) obisbemeda), designed for CNS cancers like recurrent glioblastoma (GBM), leptomeningeal metastases (LM), and pediatric brain cancers (PBC)[27] - In April 2024, the company acquired the CNSide® Platform, a cerebrospinal fluid cancer diagnostic portfolio, and formed a wholly owned subsidiary, CNSide Diagnostics, LLC, to manage it[28] Pipeline The clinical pipeline is centered on REYOBIQ™ trials for various brain cancers and the preclinical 188RNL-BAM for solid organ cancers - The lead investigational drug, REYOBIQ™, has received conditional acceptance of its proprietary name from the FDA and is being developed for GBM, LM, and PBC[30] - The ReSPECT-GBM Phase 1 trial is complete, and Phase 2 is enrolling patients, with full enrollment targeted by the end of 2025[39][40][45] - The ReSPECT-LM Phase 1 trial was completed in February 2025, establishing a recommended Phase 2 dose and supported by a $17.6 million CPRIT grant[44][46][50] - A Phase 1 trial for pediatric brain cancer (ReSPECT-PBC) is planned to begin enrollment in the first half of 2025, supported by a $3.0 million Department of Defense award[54] - The preclinical 188RNL-BAM technology is being developed as a radioembolization therapy for solid organ cancers, with an initial target of liver cancer[55][56][57] - The CNSide™ Test demonstrated over double the diagnostic sensitivity of standard cytology and is planned for U.S. market re-introduction in Q2 2025[58][59] Licensing The company's core technologies are secured through exclusive licensing agreements with milestone and royalty payment structures - The company holds an exclusive, perpetual license from UTHSCSA for the BAM technology, with financial terms based on clinical, regulatory, and sales milestones[60][64][66] - An exclusive license for the REYOBIQ™ platform was acquired from NanoTx, including upfront payments, future milestones, and 15% of non-dilutive grants[67][68] Competition The company faces intense competition from large, well-resourced pharmaceutical and biotech firms across all its target indications - The company faces intense competition from numerous domestic and multinational companies, academic institutions, and research organizations[72] - Key competitors include AstraZeneca, Novartis, and Bristol Myers Squibb for recurrent glioblastoma and Boston Scientific and SIR-TEX for liver radioembolization[74][75][76] Intellectual Property Success depends on a portfolio of licensed and co-owned patents for its key technologies, with expirations from 2025 through the 2040s - The primary U.S. patent covering REYOBIQ™ expires in December 2026, but the company plans to apply for a patent term extension of up to five years[80][82] - 188RNL-BAM is covered by licensed patent families with expected expiration dates in 2040 and 2042[83][84] - The company co-owns patent families for methods of treating cancer with its nanoliposome technology, with expected expiration dates in 2041 and 2043[85][86] - The CNSide™ Platform is protected by a broad portfolio of owned patents with expiration dates ranging from 2025 to 2041[88][92] Government Regulation and Product Approval Products are subject to extensive and stringent regulation by the FDA and other authorities, covering drugs, devices, and diagnostics - The company's products are extensively regulated by the FDA and other global authorities, covering all stages from development to marketing[89] - The FDA is phasing out enforcement discretion for Laboratory Developed Tests (LDTs), which may subject the CNSide™ Test to more rigorous medical device regulations[90][297] - The company has received Fast Track and Orphan Drug designations for REYOBIQ™, providing potential for accelerated review and market exclusivity[37][43][48] - Activities are subject to healthcare laws like the Anti-Kickback Statute and False Claims Act, regulating interactions with providers and payors[147][148][150] Risk Factors The company faces significant financial, operational, regulatory, and intellectual property risks that could impact its viability Risks Related to Financial Position and Capital Requirements A history of losses and a working capital deficit raise substantial doubt about the company's ability to continue as a going concern - The company has incurred losses since inception and expects them to continue, with an accumulated deficit of $493.5 million as of December 31, 2024[200] - There is substantial doubt about the company's ability to continue as a going concern due to its history of losses and insufficient liquidity[204] - The company faces the risk of delisting from Nasdaq for failure to meet minimum stockholders' equity requirements, though it regained compliance in March 2025[207][211][212] - Substantial additional funding is required to continue operations, and failure to secure it may force program delays or eliminations[214] Risks Related to Business and Industry Success depends on developing its lead candidates and monetizing new assets amid regulatory uncertainty and intense competition - The company's future success is largely dependent on the successful development and commercialization of REYOBIQ™ and 188RNL-BAM[232] - 188RNL-BAM will be regulated as a medical device by the FDA, introducing complex and lengthy regulatory pathways[234][235] - The acquisition of the CNSide™ Portfolio presents integration challenges, and changing LDT regulations could impose more stringent requirements[239][240] - Reliance on government funding from CPRIT and the DoD imposes restrictive covenants and potential repayment obligations[251][254][257] - The company faces intense competition from larger companies with greater resources, and its products may not be able to compete effectively[258][259] - Product development is a lengthy, expensive, and uncertain process, and positive early-stage data is not predictive of future success[264][269] Risks Relating to Intellectual Property The company's success is contingent on obtaining and defending its intellectual property rights in an uncertain legal landscape - The company's success depends on its ability to obtain, maintain, and defend patent, trademark, and trade secret protection[350] - The patent landscape is highly uncertain, and changes in patent law could diminish the value of the company's intellectual property[352] - The company may not be able to adequately protect its trade secrets, as confidential information could be disclosed to competitors[356] - The company may incur substantial costs from litigation related to intellectual property rights, either to enforce its patents or defend against infringement claims[358][363] Risks Relating to Capital Stock and Securities Markets Investors face risks of substantial dilution from future equity issuances and outstanding warrants, alongside stock price volatility - Stockholders may experience substantial dilution from future issuances of capital stock needed to fund operations[366][367] - Outstanding warrants contain provisions for exercise price resets and cashless exercise features that could result in substantial additional dilution[369][370][374] - The large number of shares underlying outstanding warrants may depress the market price of the common stock if sold[377] - The company's common stock price is volatile, and it does not intend to pay cash dividends in the foreseeable future[378][386] Cybersecurity The company has implemented a cybersecurity program and incident response plan, with oversight from the Board and a third-party consultant - The company has a cybersecurity program with safeguards such as password protection, multi-factor authentication, and monitoring systems[391] - Cybersecurity risk management is overseen by a third-party consultant (ITFD) who reports to the CFO, with ultimate oversight from the Board of Directors[395][396] - The company maintains a Data Breach Response Policy and an Incident Response Plan to manage potential cybersecurity incidents[393] - As of the report date, the company is not aware of any cybersecurity threats that have materially affected its business, operations, or financial condition[399] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on Nasdaq under the symbol "PSTV", and the company does not anticipate paying cash dividends - The company's common stock trades on the Nasdaq Capital Market under the symbol 'PSTV'[404] - The company has never paid cash dividends and does not intend to pay them in the foreseeable future[405] Management's Discussion and Analysis of Financial Condition and Results of Operations The company reported a $13.0 million net loss for 2024 and faces a going concern risk, relying on grant funding and private placements for liquidity Results of Operations The company's 2024 operating loss widened to $14.7 million on increased R&D and G&A expenses, despite higher grant revenue Comparison of Operations (in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Grant Revenue | $5,824 | $4,913 | | Research and Development Expenses | $10,580 | $9,690 | | General and Administrative Expenses | $9,939 | $8,544 | | Operating Loss | $(14,695) | $(13,321) | | Other Income (Expense) | $1,717 | $5 | | Net Loss | $(12,978) | $(13,316) | - Grant revenue increased to $5.8 million in 2024 from $4.9 million in 2023, primarily from the CPRIT grant[455] - R&D expenses increased by $0.9 million in 2024 due to higher development expenses and professional service fees[460] - G&A expenses increased by $1.4 million in 2024, mainly due to a $1.0 million increase in legal and professional expenses[462] - The company recognized a net fair value gain on warrant liability of $5.7 million and a financing expense of $3.5 million[467] Liquidity and Capital Resources With a $10.3 million working capital deficit, the company's ability to continue as a going concern depends on recent financing and grant funding Key Liquidity Measures (in thousands) | Metric | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $76 | $8,554 | | Current assets | $5,259 | $9,834 | | Current liabilities | $15,551 | $10,727 | | Working capital deficit | $(10,292) | $(893) | - The company's net loss of $13.0 million and net cash used in operations of $10.6 million for 2024 contribute to substantial doubt about its ability to continue as a going concern[471] - In May 2024, the company raised net proceeds of approximately $7.3 million through a private placement[473] - Subsequent to year-end, the company raised approximately $15.0 million in gross proceeds from a private placement in March 2025[477][482][485] - The company is supported by a $17.6 million CPRIT grant and a $3.0 million DoD award[486][487] Critical Accounting Estimates Key estimates involve significant judgment in the valuation of warrant liabilities, grant revenue recognition, and goodwill impairment testing - Warrant Liability: Warrants are classified as liabilities and remeasured to fair value each period, with changes recognized in the statement of operations[511] - Grants and Awards: Government grants are recognized as revenue when the company incurs the related allowable expenses under the contract[514] - Impairment of Goodwill: Goodwill is tested for impairment annually, and the 2024 evaluation determined no impairment existed[516][517] - Share-based Compensation: The company uses the Black-Scholes model to estimate the fair value of stock option awards, requiring subjective assumptions[518] Financial Statements and Supplementary Data The auditor's report highlights a going concern uncertainty, with financial statements showing a net loss of $13.0 million and a stockholders' deficit - The independent auditor's report expresses an opinion that the financial statements are fairly presented but includes a paragraph highlighting substantial doubt about the company's ability to continue as a going concern[522][523] Consolidated Balance Sheet Summary (in thousands) | Metric | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $5,259 | $9,834 | | Total Assets | $6,633 | $11,388 | | Total Current Liabilities | $15,551 | $10,727 | | Total Liabilities | $15,582 | $12,736 | | Total Stockholders' Equity (Deficit) | $(8,949) | $(1,348) | Consolidated Statement of Operations Summary (in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Grant Revenue | $5,824 | $4,913 | | Total Operating Expenses | $20,519 | $18,234 | | Net Loss | $(12,978) | $(13,316) | | Net Loss Per Share (basic) | $(1.95) | $(4.24) | Consolidated Cash Flow Summary (in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(10,554) | $(12,851) | | Net cash used in investing activities | $(4,111) | $(160) | | Net cash provided by financing activities | $6,187 | $3,445 | | Net decrease in cash | $(8,478) | $(9,566) | Controls and Procedures Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of year-end 2024 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[696] - Based on an evaluation using the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2024[698] Part III Directors, Executive Compensation, Security Ownership, and Principal Accountant Fees Required information on directors, compensation, and ownership is incorporated by reference from the forthcoming 2025 Proxy Statement - Information regarding directors, executive officers, corporate governance, executive compensation, security ownership, related transactions, and accountant fees is incorporated by reference from the company's forthcoming 2025 Proxy Statement[707][708][709] Part IV Exhibits, Financial Statement Schedules This section lists the financial statements and provides an index of all exhibits filed with or incorporated into the annual report - This section contains the list of financial statements filed with the report and an index of all exhibits, such as material contracts and certifications[714][716][717]