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Metsera Inc(MTSR) - 2024 Q4 - Annual Report
Metsera IncMetsera Inc(US:MTSR)2025-03-26 11:30

Part I Business Overview Metsera is a clinical-stage biotechnology company developing next-generation injectable and oral NuSH analog peptides to treat obesity and related conditions, leveraging proprietary platforms - Metsera is a clinical-stage biotechnology company developing next-generation injectable and oral NuSH analog peptides to treat obesity, overweight, and related conditions, targeting a market of approximately 2.5 billion people worldwide18 - The company utilizes three proprietary platforms: the MINT peptide library, the HALO half-life extending platform, and the MOMENTUM oral delivery platform to develop its product candidates1854 Our Strategy Metsera's strategy focuses on advancing lead injectable and oral candidates for obesity, leveraging proprietary platforms and strategic manufacturing partnerships - Advance MET-097i as a monthly injectable GLP-1 RA monotherapy for obesity, with ongoing Phase 2b trials (VESPER-1, VESPER-2) and a planned monthly dosing trial (VESPER-3)2728 - Develop MET-233i, an ultra-long acting amylin analog, for use as a monotherapy and in combination with MET-097i, with a Phase 1 trial ongoing28 - Utilize the MOMENTUM platform to advance oral GLP-1 RA candidates (MET-224o, MET-097o) and other NuSH pathways to provide injectable-like performance with oral administration28 - Establish scaled manufacturing through a strategic supply agreement with Amneal to build a dedicated facility, aiming to address potential market shortages and ensure commercial launch capacity29 The Obesity and Overweight Market and Treatment Landscape The global obesity market is substantial and growing, with current GLP-1 RA therapies facing limitations in dosing, tolerability, and manufacturing, indicating a significant unmet need - Obesity and overweight affect approximately 2.5 billion adults globally and are projected to impact nearly half of Americans by 203031 - The global GLP-1 RA market was approximately $36 billion in 2023 and is estimated to reach $170 billion by 203041 - Key limitations of current approved GLP-1 RA treatments include the need for weekly injections, prolonged titration, poor tolerability (nausea, vomiting), insufficient weight loss for many patients, and manufacturing scalability challenges leading to drug shortages424344 Our Pipeline and Programs Metsera's pipeline features advanced injectable and oral NuSH analog peptides, including the lead monthly GLP-1 RA MET-097i in Phase 2b, and next-generation programs Metsera's Development Pipeline | STRATEGY | PROGRAM | DISCOVERY IND / CTA-ENABLING | PHASE I | PHASE 2 | PHASE 3 | ANTICIPATED MILESTONES | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | FULLY BIASED, MONTHLY GLP-I RA | MET-097i (Fully Biased GLP-1 RA) | | | Phase 2b ongoing | | Phase 2b weekly preliminary readout mid 2025. Phase 2b monthly preliminary readout year end 2025 / early 2026. | | MONTHLY AMYLIN AGONISM + GLP-I RA | MET-233i (Amylin Analog) | | Phase 1 ongoing | | | Phase 1 preliminary readout mid 2025 | | | MET-233i + MET-097i | | | | | Phase 1 preliminary readout late 2025 | | ORAL PEPTIDE PLATFORM (MOMENTUM) | MET-2240 / MET-0970 (Fully Biased GLP-1 RAs) | IND-enabling studies ongoing | | | | Phase 1/2 preliminary readout of MET-2240 late 2025 | | | MET-002o (GLP-1 RA) | | Phase 1 ongoing | | | | | NEXT-GENERATION PROGRAMS | MET-034i (GIP RA) | IND-enabling studies ongoing | | | | Phase 1 preliminary readout late 2025 | | | MET-067i (Glucagon Analog) | IND-enabling studies ongoing | | | | | | | MET-815i (MET-097i prodrug) | IND-enabling studies ongoing | | | | | - MET-097i, a monthly injectable GLP-1 RA, demonstrated a half-life of 15-16 days and achieved 11.3% placebo-adjusted body weight loss after 12 weekly doses of 1.2 mg in a Phase 1/2 trial. A Phase 2b trial (VESPER-1) is fully enrolled with data expected mid-20252067145 - MET-233i is an ultra-long acting amylin analog in a Phase 1 trial, with preliminary data expected mid-2025. It is designed for monotherapy or combination with MET-097i21155 - Oral candidates MET-224o and MET-097o are being developed using the MOMENTUM platform. A formulation optimization trial with prototype MET-002 is ongoing in Canada, with preliminary data for MET-224o expected in late 202523188209 Licensing, Partnerships and Collaborations Metsera has strategic licensing agreements with D&D Pharmatech and Imperial College for key product candidates, alongside a crucial supply partnership with Amneal for manufacturing - Entered a license agreement with D&D Pharmatech for exclusive worldwide rights to develop and commercialize certain oral peptide agonists, including MET-002 and MET-224o. The deal includes a $10 million upfront payment, potential development and regulatory milestones up to $52 million per product, and tiered royalties231236 - Acquired an exclusive license from Imperial College (via the Zihipp acquisition) for NuSH analog peptides including MET-097i and MET-233i. Terms include up to £20.5 million in milestones and tiered low-single-digit royalties on net sales242244 - Signed a Development and Supply Agreement with Amneal, designating them as the preferred supplier. Metsera will provide up to $100 million to support construction of new manufacturing facilities in India, for which it will receive rebates on manufactured units247250 Intellectual Property Metsera's intellectual property strategy combines owned and in-licensed patents, with 42 issued patents and 127 pending applications covering key product candidates until 2040-2046 - As of March 7, 2025, Metsera owned or licensed 42 issued patents and 127 pending patent applications worldwide. There are no issued patents covering the product candidates currently in development256 Key Patent Portfolio Expiration Outlook | Product Candidate | Patent Family Status | Expected Expiration (excluding extensions) | | :--- | :--- | :--- | | MET-097i | Owned & In-licensed (IP2IPO) | 2045 & 2041 | | MET-233i | In-licensed (IP2IPO) | 2043 | | MET-233i/MET-097i Combo | Owned | 2045 | | MET-067i | In-licensed (IP2IPO) | 2040 | | MET-034i | In-licensed (IP2IPO) | 2044 or 2045 | | MET-815i | Owned | 2046 | | MET-224o | Jointly owned (D&D) | 2045 | | MET-002 | In-licensed (D&D) | 2041 & 2042 | Manufacturing Metsera's manufacturing strategy leverages HALO and MOMENTUM platforms for scalability, relying on CMOs for clinical supply and a strategic partnership with Amneal for commercial production - The company's technology platforms (HALO and MOMENTUM) are designed to improve scalability by increasing half-life and bioavailability, thereby reducing the required API for both oral and injectable products268269 - Metsera relies on third-party CMOs for current clinical trial manufacturing and has a strategic collaboration with Amneal to build new peptide synthesis and sterile fill-finish facilities in India for future clinical and commercial supply271272 Government Regulation Metsera's products face extensive FDA and global regulation, including complex pathways for drugs, biologics, and combination products, alongside healthcare laws impacting pricing and reimbursement - The company's product candidates are regulated by the FDA under the FDCA and PHSA, requiring extensive preclinical and clinical trials to demonstrate safety and efficacy before an NDA (drug) or BLA (biologic) can be approved280 - Biologics approved under a BLA may be eligible for 12 years of reference product exclusivity in the U.S., a potential advantage over the shorter exclusivity periods for drugs25315 - Some product candidates are combination products (e.g., drug-biologic or biologic-device), which may require coordinated review by different FDA centers and could lead to additional regulatory complexities and delays304307398 - The business is subject to healthcare cost-containment measures, including the Affordable Care Act (ACA) and the Inflation Reduction Act (IRA), which empowers Medicare to negotiate drug prices and imposes inflation-based rebates325327 Risk Factors The company faces substantial risks including limited operating history, significant financial losses, uncertain clinical development, reliance on third parties, intense competition, and intellectual property challenges - Financial Risk: The company is a clinical-stage entity with a limited operating history, no commercial products, and has incurred significant operating losses ($209.1 million in 2024). It will require substantial additional capital to fund operations340341 - Development and Regulatory Risk: The company's business depends entirely on the success of its product candidates, which are in early stages of development. Clinical development is a lengthy, expensive, and uncertain process with a high historical failure rate351356 - Third-Party Reliance: Metsera relies on third parties like CROs to conduct clinical trials and on partners like Amneal for manufacturing, which increases risks related to quality control, supply chain, and timeline adherence411414 - Commercialization and Competition Risk: The company faces intense competition from large pharmaceutical companies with established obesity treatments (e.g., Wegovy, Zepbound). Commercial success will depend on market acceptance, pricing, and reimbursement from payors428435437 - Intellectual Property Risk: The company's ability to protect its technology through patents and trade secrets is critical. It faces risks of its patents not being granted, being challenged, or being circumvented by competitors513514 Cybersecurity Metsera's cybersecurity program, based on NIST 800-53 and overseen by the Board, has not experienced material incidents to date, but acknowledges inherent cyber threat risks - The company's cybersecurity program is designed and assessed based on the NIST 800-53 framework and is integrated into its overall enterprise risk management609610 - The Board of Directors oversees the cybersecurity program, receiving annual reports and updates from management. A Senior Director of Information and Cyber Security, with over 25 years of experience, is responsible for managing cybersecurity risks612614 - To date, no known cybersecurity threats or incidents have materially affected the company's operations, business strategy, or financial condition611 Properties Metsera's principal office is leased at 3 World Trade Center, New York, under a shared arrangement expiring in November 2026, deemed sufficient for current needs - Metsera's principal office is leased under a shared space arrangement at 3 World Trade Center, New York, NY, with the lease expiring on November 30, 2026617 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Metsera's common stock began trading on Nasdaq in January 2025, following $398 million in 2024 private placements and a $288.4 million IPO in February 2025, with no dividends planned - The company's common stock began trading on the Nasdaq Global Select Market on January 31, 2025, under the symbol "MTSR"622 - In 2024, the company issued an aggregate of $398 million in Series A, A-1, and B preferred stock through private placements to accredited investors625626627 - The company completed its IPO on February 3, 2025, selling 17,569,444 shares at $18.00 per share, resulting in net proceeds of approximately $288.4 million631633 - The company has never declared or paid cash dividends and intends to retain future earnings to support operations624 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Metsera reported a $209.1 million net loss in 2024, driven by increased R&D and contingent consideration, with $352.4 million cash at year-end, sufficient to fund operations into 2027 - The company believes its existing cash and cash equivalents, including IPO proceeds, are sufficient to fund operations into 2027642679 Results of Operations Comparison (in thousands) | | Year ended December 31, 2024 | Year ended December 31, 2023 | $ Change | | :--- | :--- | :--- | :--- | | Total operating expenses | $224,833 | $43,669 | $181,164 | | Research and development | $107,517 | $15,564 | $91,953 | | General and administrative | $26,797 | $15,042 | $11,755 | | Change in fair value of contingent consideration | $90,429 | $2,884 | $87,545 | | Loss from operations | ($224,833) | ($43,669) | ($181,164) | | Net loss | ($209,127) | ($47,206) | ($161,921) | Cash Flow Summary (in thousands) | | Year ended December 31, 2024 | Year ended December 31, 2023 | | :--- | :--- | :--- | | Cash used in operating activities | ($100,039) | ($35,393) | | Cash used in investing activities | ($43) | ($28,242) | | Cash provided by financing activities | $378,198 | $123,683 | | Net increase in cash and cash equivalents | $277,252 | $60,215 | Results of Operations Operating expenses surged to $224.8 million in 2024, primarily due to a $91.9 million increase in R&D and a $90.4 million non-cash charge for contingent consideration - Research and development expenses increased by $91.9 million to $107.5 million in 2024, primarily due to the ramp-up of preclinical, clinical, and manufacturing activities for the company's injectable and oral programs664 - General and administrative expenses increased by $11.8 million to $26.8 million in 2024, driven by a $5.5 million increase in professional fees for IPO preparation and a $4.8 million increase in personnel-related costs666 - A $90.4 million expense was recognized for the change in fair value of contingent consideration, primarily due to the pursuit of a new product and an increased probability of success for milestones related to the Zihipp acquisition667 Liquidity and Capital Resources Metsera held $352.4 million cash at year-end 2024, bolstered by a $288.4 million IPO in 2025, with $100.0 million cash used in operations for 2024 - The company had cash and cash equivalents of $352.4 million as of December 31, 2024673 - In February 2025, the company completed its IPO, raising net proceeds of $288.4 million673 - Cash used in operating activities was $100.0 million for the year ended December 31, 2024, compared to $35.4 million in 2023681682 - Net cash provided by financing activities was $378.2 million in 2024, mainly from the sale of Series A, A-1, and B convertible preferred stock684 Contractual Obligations and Commitments Metsera's contractual obligations include $1.5 million in lease commitments, significant contingent payments for acquisitions and licenses, and a $100 million commitment for an Amneal manufacturing facility - As of December 31, 2024, the company had future minimum lease commitments of $1.5 million for office space687 - The company has contingent payment obligations from the Zihipp acquisition, including up to $52.5 million for initial development milestones and up to $30.0 million for initial regulatory milestones, plus royalties690 - Under the D&D license agreement, D&D is eligible for up to $123.0 million in development/regulatory milestones and up to $337.5 million in commercial milestones, plus royalties814 - The Amneal supply agreement requires Metsera to finance up to $100.0 million for the construction of a new manufacturing facility in India821 Financial Statements and Supplementary Data Audited financial statements show $451.0 million in total assets and a $209.1 million net loss for 2024, with $352.4 million in cash and equivalents Key Financial Data (Year Ended Dec 31, 2024) | Metric | Amount (in thousands) | | :--- | :--- | | Balance Sheet (as of Dec 31, 2024) | | | Cash and cash equivalents | $352,447 | | Total Assets | $450,988 | | Total Liabilities | $163,638 | | Accumulated Deficit | ($257,146) | | Statement of Operations (Year 2024) | | | Research and Development Expense | $107,517 | | General and Administrative Expense | $26,797 | | Net Loss | ($209,127) | | Statement of Cash Flows (Year 2024) | | | Net cash used in operating activities | ($100,039) | | Net cash provided by financing activities | $378,198 | Part III Directors, Executive Officers and Corporate Governance Metsera's leadership includes key executives and a Board with Audit, Compensation, and Nominating committees, guided by a Code of Business Conduct and Ethics - The executive team is led by Clive A. Meanwell, M.B., Ch.B., M.D. (Executive Chairman) and Christopher Whitten Bernard (President, CEO, and Director)865866867 - The Board has established Audit, Compensation, and Nominating and Corporate Governance committees876 - The Audit Committee members are Joshua Pinto, Ph.D. (Chair), Kristina M. Burow, and Paul L. Berns. Mr. Pinto is designated as the 'audit committee financial expert'878 Executive Compensation 2024 executive compensation for NEOs, led by CEO Christopher Bernard at $5.97 million, primarily comprised of stock options and 100% target bonuses, with new 2025 equity plans adopted 2024 Summary Compensation Table (in $) | Name and Principal Position | Salary | Bonus | Option Awards | Total | | :--- | :--- | :--- | :--- | :--- | | Christopher Whitten Bernard (President & CEO) | 521,538 | 241,644 | 5,206,040 | 5,969,222 | | Clive A. Meanwell, M.B., Ch.B., M.D. (Executive Chairman) | 83,077 | 59,836 | 1,716,704 | 1,859,617 | | Christopher Visioli (CFO, CBO) | 102,308 | 190,000 | 2,746,711 | 3,039,019 | | Brian Hubbard, Ph.D. (CSO) | 401,539 | 181,430 | 613,963 | 1,196,932 | | Gbola Amusa, M.D. (Former CFO) | 363,462 | 133,336 | 1,255,355 | 1,752,153 | - Discretionary annual cash bonuses for 2024 were approved at 100% of each NEO's target bonus based on company performance891897 - The company adopted a new 2025 Incentive Award Plan and a 2025 Employee Stock Purchase Plan (ESPP) following its IPO, ceasing new grants under the 2023 Plan905925938 Security Ownership As of March 7, 2025, Metsera's ownership is concentrated, with ARCH Venture Partners holding 25.5%, Validae Health 12.2%, FMR LLC 10.5%, and all executive officers and directors holding 39.2% collectively Security Ownership of 5%+ Beneficial Owners and Management (as of March 7, 2025) | Name of Beneficial Owner | Percentage Ownership | | :--- | :--- | | Entities Affiliated with ARCH Venture Partners | 25.5% | | Validae Health, L.P. | 12.2% | | Entities Affiliated with FMR LLC | 10.5% | | All current executive officers and directors as a group (8 persons) | 39.2% | Related Party Transactions and Director Independence Metsera engaged in related party transactions, including $6.1 million paid to Validae Health in 2024, with key investors participating in financings, and the Board affirming independence of certain directors - The company has a services agreement with Validae Health, L.P., an entity affiliated with Executive Chairman Dr. Meanwell and CEO Mr. Bernard. Metsera paid Validae $6.1 million in fees and reimbursements in 2024977 - Entities affiliated with ARCH Venture Partners, where directors Paul Berns and Kristina Burow are managing directors, participated significantly in the Series Seed, A, and B preferred stock financings973 - The Board of Directors has determined that Paul L. Berns, Kristina M. Burow, and Joshua Pinto, Ph.D. are independent directors under Nasdaq rules980 Principal Accountant Fees and Services Ernst & Young LLP provided accounting services, with total fees of $1,300,000 in 2024, including $1,260,000 for audit services and $40,000 for tax services, all pre-approved by the Audit Committee Accountant Fees (2024 vs 2023) | Fee Category | 2024 | 2023 | | :--- | :--- | :--- | | Audit Fees | $1,260,000 | $480,000 | | Tax Fees | $40,000 | $0 | | Total Fees | $1,300,000 | $480,000 |