sensei(SNSE) - 2025 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Presents the company's unaudited financial statements, management's analysis, and disclosures on market risk and internal controls Item 1. Condensed Consolidated Financial Statements (Unaudited) The unaudited financial statements for Q1 2025 show a net loss of $6.9 million, a decrease in total assets to $38.3 million, and an accumulated deficit of $268.9 million, raising substantial doubt about going concern Condensed Consolidated Balance Sheets Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $9,877 | $9,994 | | Marketable securities | $24,454 | $31,341 | | Total current assets | $35,682 | $41,929 | | Total assets | $38,273 | $45,361 | | Liabilities & Equity | | | | Total current liabilities | $5,229 | $5,448 | | Total liabilities | $6,286 | $6,975 | | Total stockholders' equity | $31,987 | $38,386 | | Accumulated deficit | $(268,916) | $(262,052) | Condensed Consolidated Statements of Operations and Comprehensive Loss Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Research and development | $3,725 | $4,917 | | General and administrative | $3,549 | $3,813 | | Total operating expenses | $7,274 | $8,730 | | Loss from operations | $(7,274) | $(8,730) | | Net loss | $(6,864) | $(7,992) | | Net loss per common share | $(0.27) | $(0.32) | Condensed Consolidated Statements of Cash Flows Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,094) | $(7,616) | | Net cash provided by investing activities | $7,191 | $5,770 | | Net cash used in financing activities | $(214) | $(209) | | Net decrease in cash and cash equivalents | $(117) | $(2,055) | Notes to Condensed Consolidated Financial Statements - The company is a clinical-stage biotechnology firm focused on cancer therapeutics, but has incurred substantial losses, with an accumulated deficit of $268.9 million as of March 31, 2025[21][22] - Management has concluded there is substantial doubt about the company's ability to continue as a going concern, as available cash is not sufficient to fund operations for more than one year without additional financing[23][24] - In November 2024, the company initiated a restructuring to focus resources on the clinical development of its lead candidate, solnerstotug. This involved closing its Rockville, MD research site and reducing its workforce by approximately 46%[71] Stock-Based Compensation Expense (in thousands) | Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Research and development | $126 | $339 | | General and administrative | $335 | $877 | | Total | $461 | $1,216 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's strategic shift to focus on solnerstotug, resulting in reduced operating expenses and a cash runway into Q2 2026, while reiterating substantial doubt about its going concern ability Overview - The company is a clinical-stage biotechnology company focused on its TMAb™ (Tumor Microenvironment Activated Biologics) platform to develop therapeutics for cancer patients[75] - The lead product candidate, solnerstotug, is in a Phase 1/2 clinical trial for advanced solid tumors. Enrollment in the Phase 1 portion is complete, with updated data expected by the end of 2025[76] - A November 2024 restructuring paused development of preclinical candidates (SNS-102, SNS-103, SNS-201) and reduced the workforce by 46% to focus resources on solnerstotug[77] Results of Operations Comparison of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $3,725 | $4,917 | $(1,192) | | General and administrative | $3,549 | $3,813 | $(264) | | Total operating expenses | $7,274 | $8,730 | $(1,456) | | Net loss | $(6,864) | $(7,992) | $1,128 | - The $1.2 million decrease in R&D expenses was primarily due to lower personnel costs ($0.8M), facilities/equipment costs ($0.4M), and lab supply purchases ($0.3M), partially offset by a $0.7M increase in clinical trial expenses[95] - The $0.3 million decrease in G&A expenses was mainly attributable to lower personnel costs ($0.6M), partially offset by higher consulting and administrative fees[96] Liquidity and Capital Resources - As of March 31, 2025, the company had cash, cash equivalents, and marketable securities of $34.3 million and an accumulated deficit of $268.9 million[99] - The company expects its current cash to fund operating expenses and capital requirements into the second quarter of 2026[112] - There is substantial doubt about the company's ability to continue as a going concern beyond one year from the financial statement issuance date, and additional financing is required to support operations[112] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - Sensei Biotherapeutics is a smaller reporting company as defined by Item 10 of Regulation S-K and is not required to provide quantitative and qualitative disclosures about market risk[127] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2025[130] - There were no material changes in internal control over financial reporting during the three months ended March 31, 2025[131] PART II OTHER INFORMATION Presents other required information including legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings - The company is not currently a party to any material legal proceedings[134] Item 1A. Risk Factors This section details significant risks including financial viability, dependence on solnerstotug, reliance on third parties, regulatory hurdles, commercialization challenges, intellectual property, and operational risks Risks Related to our Financial Position - The company will need substantial additional funding to complete the development of its product candidates and a failure to obtain this capital could force it to delay, limit, or terminate its efforts[141] - The company has a history of significant losses, an accumulated deficit of $268.9 million as of March 31, 2025, and may never achieve profitability[153] - There is substantial doubt about the company's ability to continue as a going concern, as current cash is only expected to fund operations into the second quarter of 2026[161] Risks Related to the Development of our Product Candidates - The company's development efforts are in early stages, and its business is highly dependent on the success of its one clinical candidate, solnerstotug[167][181] - The therapeutic efficacy of solnerstotug is unproven in humans, and there are no currently approved therapies targeting its VISTA checkpoint, making development inherently risky[170] - Clinical trials are difficult, expensive, and have uncertain outcomes. Interim data may change, and failure to demonstrate safety and efficacy could halt development[187][190][193] Risks Related to Manufacturing and our Dependence on Third Parties - The company relies on third-party CROs to conduct clinical trials and on CMOs for the production of solnerstotug, which increases risks related to performance, quality, cost, and supply[213][227] - The clinical trial for solnerstotug is being evaluated in combination with cemiplimab, and the company depends on a supply agreement with Regeneron for this third-party drug[223] Risks Related to Regulatory Approval and Legal Compliance - The company must obtain regulatory approval from the FDA and other authorities, a lengthy and uncertain process, before commercializing any product candidates[245] - Even if approved, the company will be subject to ongoing regulatory obligations, and any approved products could be subject to marketing restrictions, recalls, or withdrawal if safety issues arise[252] - Healthcare legislative reform, such as the Inflation Reduction Act (IRA), could adversely affect the business by impacting drug pricing, reimbursement, and profitability[263][264][266] Risks Related to the Commercialization of our Product Candidates - The company currently has no sales, marketing, or distribution capabilities and will need to build them or partner with third parties to commercialize any approved products[279] - The biopharmaceutical industry is highly competitive, and the company faces competition from major pharmaceutical companies with greater resources[282][285] - Commercial success depends on market acceptance by physicians and patients, as well as securing adequate coverage and reimbursement from government and private payors[289][293] Risks Related to Our Intellectual Property - The company's success depends on its ability to obtain and maintain patent protection for its technology and product candidates, which is an uncertain and expensive process[306] - The company may face lawsuits from third parties alleging infringement of their intellectual property rights, which could be costly and force a halt to commercialization[315] - The company relies on trade secrets and confidentiality agreements, which may be breached or may not provide adequate protection against competitors[330] Risks Related to our Business Operations - The company's success depends on its ability to attract and retain key management and qualified scientific personnel in a highly competitive industry[339] - The November 2024 workforce reduction may have unintended consequences, including loss of institutional knowledge, decreased morale, and failure to achieve anticipated benefits[342] Risks Related to our Securities and our Status as a Public Company - The company's stock price is likely to be highly volatile, and it has received a notice from Nasdaq for failing to meet the minimum $1.00 bid price requirement[348][354] - The company is an "emerging growth company" and a "smaller reporting company," which allows for reduced disclosure requirements that may make its stock less attractive to some investors[365] - Insiders own over 30% of the company's common stock, giving them substantial influence over stockholder matters[379] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the quarter, and the use of IPO proceeds section is not applicable - There were no recent sales of unregistered equity securities during the reported period[404] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[407] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[408] Item 5. Other Information No officers or directors adopted, modified, or terminated Rule 10b5-1 trading arrangements during the quarter - During the quarter ended March 31, 2025, no officers or directors adopted, modified, or terminated a Rule 10b5-1 trading plan[409] Item 6. Exhibits This section lists exhibits filed with the report, including corporate documents and required Sarbanes-Oxley certifications - The exhibits filed with this report include certifications from the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[410]