Protara Therapeutics(TARA) - 2025 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements Q1 2025 unaudited condensed consolidated financial statements report a $11.9 million net loss, increased cash usage, and decreased total assets Condensed Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $168.6 million, primarily due to a significant reduction in cash and cash equivalents, while liabilities and equity also declined Condensed Consolidated Balance Sheets (in thousands) | | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $91,461 | $162,798 | | Total current assets | $126,532 | $172,155 | | Total assets | $168,559 | $181,454 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $7,018 | $10,961 | | Total liabilities | $10,075 | $14,320 | | Total stockholders' equity | $158,484 | $167,134 | | Total liabilities and stockholders' equity | $168,559 | $181,454 | Condensed Consolidated Statements of Operations and Comprehensive Loss For Q1 2025, the net loss increased to $11.9 million due to higher operating expenses, primarily from increased research and development activities, resulting in a net loss per share of $(0.29) Condensed Consolidated Statements of Operations (in thousands) | | For the Three Months Ended March 31, | | :--- | :--- | :--- | | | 2025 | 2024 | | Research and development | $9,148 | $7,748 | | General and administrative | $4,976 | $4,103 | | Total operating expenses | $14,124 | $11,851 | | Income (Loss) from operations | $(14,124) | $(11,851) | | Other income (expense), net | $2,210 | $756 | | Net income (loss) | $(11,914) | $(11,095) | | Net income (loss) per share, basic and diluted | $(0.29) | $(0.97) | | Weighted-average shares outstanding, basic and diluted | 40,707,937 | 11,420,948 | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $14.7 million in Q1 2025, with a significant shift to cash used in investing activities, resulting in a net decrease of $71.3 million in cash and equivalents Condensed Consolidated Statements of Cash Flows (in thousands) | | For the Three Months Ended March 31, | | :--- | :--- | :--- | | | 2025 | 2024 | | Net cash provided by (used in) operating activities | $(14,713) | $(10,379) | | Net cash provided by (used in) investing activities | $(58,354) | $23,100 | | Net cash provided by (used in) financing activities | $1,730 | $(76) | | Net increase (decrease) in cash and cash equivalents and restricted cash | $(71,337) | $12,645 | | Cash and cash equivalents and restricted cash - beginning of period | $163,543 | $40,331 | | Cash and cash equivalents and restricted cash - end of period | $92,206 | $52,976 | Notes to Unaudited Condensed Consolidated Financial Statements The notes describe the company as a clinical-stage biopharmaceutical firm with no revenue, detailing recent capital raises and R&D expense drivers, while affirming sufficient financial resources for the next twelve months - The company is a clinical-stage biopharmaceutical company focused on therapies for cancer and rare diseases, including TARA-002 for NMIBC and LMs, and IV Choline Chloride for patients on parenteral support[26] - The company believes its current financial resources are sufficient to fund operations for at least twelve months from the financial statement issuance date[28] - In April 2024, the company completed a private placement, resulting in net proceeds of approximately $42.0 million[68] - In December 2024, the company closed a public offering with net proceeds of approximately $93.4 million. In January 2025, the underwriters partially exercised their option, providing additional net proceeds of approximately $2.5 million[79][83] R&D Expenses by Program (in thousands) | Program | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | TARA-002 in NMIBC | $3,557 | $2,789 | | TARA-002 in LMs | $549 | $933 | | IV Choline Chloride | $2,515 | $258 | | Other research and development | $2,335 | $3,394 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses clinical program advancements, increased R&D expenses, a $11.9 million net loss, and $157.5 million in cash, deemed sufficient for the next year Overview and Clinical Program Updates Protara, a clinical-stage biopharmaceutical company, is advancing TARA-002 for NMIBC and LMs, and IV Choline Chloride, with positive interim Phase 2 data and plans for a registrational Phase 3 trial in Q3 2025 - The lead oncology program is TARA-002 for NMIBC. The ADVANCED-2 Phase 2 trial is ongoing, with Cohort B expected to be registrational[117][119] - Interim data from the ADVANCED-2 trial (BCG-Unresponsive cohort) showed a 100% complete response (CR) rate at six months (5/5 patients) and 67% at 12 months (2/3 patients)[120] - The company plans to initiate THRIVE-3, a registrational Phase 3 trial for IV Choline Chloride, in the third quarter of 2025[130] - The STARBORN-1 Phase 2 trial for TARA-002 in LMs is ongoing, with interim data showing two of three patients achieved a complete response after one injection[132][133] Results of Operations Total operating expenses increased to $14.1 million in Q1 2025, driven by higher R&D costs for the IV Choline Chloride program and increased G&A expenses, while other income also rose Comparison of Operations (in thousands) | | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $9,148 | $7,748 | $1,400 | | General and administrative | $4,976 | $4,103 | $873 | | Total operating expenses | $14,124 | $11,851 | $2,273 | | Net income (loss) | $(11,914) | $(11,095) | $(819) | - The increase in R&D expenses was primarily due to a $2.6 million increase in direct expenses for product candidates, mainly a $2.3 million increase for the IV Choline Chloride program[146] - The increase in G&A expenses was primarily due to a $0.4 million increase in personnel-related expenses and a combined $0.4 million increase in market development and investor relations activities[147] Liquidity and Capital Resources As of March 31, 2025, the company held $157.5 million in unrestricted cash and marketable securities, with $14.7 million used in operations, and believes current resources are sufficient for the next twelve months - As of March 31, 2025, the company had $157.5 million in unrestricted cash and cash equivalents and marketable debt securities[149] - The company believes its current financial resources are sufficient to satisfy estimated liquidity needs for at least twelve months[151] Cash Flow Summary (in thousands) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(14,713) | $(10,379) | | Net cash (used in) provided by investing activities | $(58,354) | $23,100 | | Net cash provided by (used in) financing activities | $1,730 | $(76) | - The $81.5 million change in investing cash flow was primarily due to a $65.8 million increase in purchases of marketable debt securities and a $15.6 million decrease in proceeds from maturities[155] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not applicable to the company for this reporting period - Not applicable[164] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[166] - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[168] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business - The company is not currently a party to any legal proceedings that management believes would likely have a material adverse effect on the business[170] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - There were no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[171] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During Q1 2025, 1,191 shares of Series 1 Convertible Preferred Stock were converted into 1,190,996 shares of common stock, stemming from a January 2020 private placement - During the three months ended March 31, 2025, 1,191 shares of Series 1 Convertible Preferred Stock were converted into 1,190,996 shares of common stock[172] Item 5. Other Information During the first quarter of 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter[176] Item 6. Exhibits This section provides an index of all exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate governance documents, agreements related to securities, and officer certifications