Lisata Therapeutics(LSTA) - 2025 Q1 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements Forward-Looking Statements Overview The report contains forward-looking statements, which are predictions subject to inherent uncertainties and risks - Forward-looking statements are subject to uncertainties and known/unknown risks that could cause actual results to differ materially[7] - Key risk factors include the ability to obtain sufficient capital, build human resources, establish a market for products, navigate scientific/regulatory developments, secure intellectual property, realize benefits from licensing agreements, diversify the pipeline, complete clinical trials, and manage impacts from public health crises[9] - The company undertakes no obligation to update any forward-looking statements, except as required by law[10] Part I - Financial Information Item 1. Financial Statements Unaudited consolidated financial statements for Lisata Therapeutics, Inc. and its subsidiaries are presented Consolidated Balance Sheets | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Cash and cash equivalents | $20,217 | $16,209 | | Marketable securities | $5,616 | $15,036 | | Total current assets | $28,617 | $34,578 | | Total assets | $28,981 | $35,002 | | Total current liabilities | $3,807 | $5,613 | | Total liabilities | $3,879 | $5,685 | | Total stockholders' equity | $25,356 | $29,571 | | Total equity | $25,102 | $29,317 | - Total assets decreased from $35.0 million at December 31, 2024, to $29.0 million at March 31, 2025[16] - Total current liabilities decreased from $5.6 million to $3.8 million, primarily due to reductions in accounts payable and accrued liabilities[16] Consolidated Statements of Operations | Metric (in thousands, except per share) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Research and development | $2,602 | $3,241 | | General and administrative | $3,245 | $3,360 | | Total operating expenses | $5,847 | $6,601 | | Operating loss | $(5,847) | $(6,601) | | Net loss | $(4,724) | $(5,401) | | Basic and diluted loss per share | $(0.55) | $(0.65) | - Net loss decreased from $5.4 million in Q1 2024 to $4.7 million in Q1 2025, a 12.5% improvement[19] - Operating expenses decreased by $0.8 million (11.4%) year-over-year, driven by lower R&D and G&A costs[19] Consolidated Statements of Comprehensive Loss | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(4,724) | $(5,401) | | Total other comprehensive gain (loss) | $3 | $(62) | | Comprehensive loss attributable to Lisata Therapeutics, Inc. common stockholders | $(4,721) | $(5,463) | - Total other comprehensive gain (loss) improved from a loss of $62 thousand in Q1 2024 to a gain of $3 thousand in Q1 2025, primarily due to a positive foreign currency translation adjustment[21] Consolidated Statements of Equity | Metric (in thousands, except shares) | March 31, 2025 | December 31, 2024 | | :----------------------------------- | :------------- | :---------------- | | Common Stock (Shares) | 8,621 | 8,410 | | Common Stock (Amount) | $9 | $8 | | Additional Paid-in Capital | $578,923 | $578,418 | | Accumulated Deficit | $(552,790) | $(548,066) | | Total Stockholders' Equity | $25,356 | $29,571 | - Total stockholders' equity decreased from $29.6 million at December 31, 2024, to $25.4 million at March 31, 2025, primarily due to the net loss[23] - The company issued $211 thousand in net proceeds from common stock issuances and $8 thousand from option exercises during Q1 2025[23] Consolidated Statements of Cash Flows | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(5,402) | $(7,027) | | Net cash provided by investing activities | $9,431 | $6,436 | | Net cash used in financing activities | $(23) | $(142) | | Net increase (decrease) in cash and cash equivalents | $4,008 | $(788) | | Cash and cash equivalents at end of period | $20,217 | $21,805 | - Net cash used in operating activities decreased from $7.0 million in Q1 2024 to $5.4 million in Q1 2025[25] - Net cash provided by investing activities increased significantly to $9.4 million in Q1 2025, primarily from net sales of marketable securities[25] Notes to Unaudited Consolidated Financial Statements Note 1 – Description of Business Lisata Therapeutics, Inc. is a clinical-stage pharmaceutical company focused on innovative therapies for solid tumors - Lisata Therapeutics, Inc. is a clinical-stage pharmaceutical company focused on innovative therapies for solid tumors and other major diseases[28] - Its investigational product, certepetide, activates a novel uptake pathway to enhance co-administered anti-cancer drug penetration into solid tumors and modifies the tumor microenvironment[28] - Certepetide is currently in several Phase 2 clinical studies globally for various solid tumor types, including metastatic pancreatic ductal adenocarcinoma (mPDAC), cholangiocarcinoma, appendiceal cancer, colon cancer, and glioblastoma multiforme[28] - The company has a history of net operating losses and negative cash flows, with $25.8 million in cash, cash equivalents, and marketable securities as of March 31, 2025, and believes it has sufficient cash for the next year but will need additional long-term financing[30] Note 2 – Summary of Significant Accounting Policies Financial statements are prepared under U.S. GAAP, with the company operating as one R&D segment - The financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC Regulation S-X[31] - The company operates as one operating segment focused on the research and development of its investigational drug product[34] - All marketable securities are classified as available-for-sale and carried at estimated fair values, with unrealized gains/losses reported in accumulated other comprehensive income (loss)[40][41] - Research and development expenses are expensed as incurred, and grants are accounted for as a deduction to related R&D expenses[47][48] - The company recognized no revenue for the three months ended March 31, 2025, and 2024, and has not recognized any royalty revenue to date[52][54] Note 3 – Available-for-Sale Securities The fair value of available-for-sale securities decreased, with a shift towards money market funds | Security Type (in thousands) | March 31, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :--------------------------- | :-------------------------- | :----------------------------- | | Corporate debt securities | $10,295 | $16,021 | | Money market funds | $12,129 | $6,614 | | Agency bonds | $0 | $613 | | Treasury bills | $0 | $1,496 | | Municipal debt securities | $560 | $905 | | Total | $22,984 | $25,649 | - The total estimated fair value of available-for-sale securities decreased from $25.6 million at December 31, 2024, to $23.0 million at March 31, 2025[55] - There was a significant shift from corporate debt, agency bonds, and treasury bills to money market funds during the quarter[55] Note 4 – Property and Equipment Net property and equipment remained stable, with minor depreciation expense for the quarter | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Computer equipment | $617 | $589 | | Leasehold improvements | $72 | $72 | | Property and equipment, gross | $689 | $661 | | Accumulated depreciation | $(615) | $(589) | | Property and equipment, net | $74 | $72 | - Net property and equipment remained relatively stable at $74 thousand as of March 31, 2025, compared to $72 thousand at December 31, 2024[58] - Depreciation expense was $26 thousand for Q1 2025, a slight decrease from $29 thousand in Q1 2024[58] Note 5 – Income (Loss) Per Share Due to net losses, no common stock equivalents were included in diluted loss per share calculations - Due to net losses, no common stock equivalents were utilized in the calculation of diluted loss per share as they were anti-dilutive[59] | Potentially Dilutive Securities (in thousands) | March 31, 2025 | March 31, 2024 | | :--------------------------------------------- | :------------- | :------------- | | Stock options | 1,529 | 1,454 | | Warrants | 1,497 | 1,422 | | Restricted stock units | 325 | 354 | Note 6 – Fair Value Measurements Fair value measurements are classified into Level 1 (cash equivalents) and Level 2 (marketable securities) - The company classifies fair value measurements into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[60][61] | Financial Assets (in thousands) | March 31, 2025 (Level 1) | March 31, 2025 (Level 2) | December 31, 2024 (Level 1) | December 31, 2024 (Level 2) | | :------------------------------ | :----------------------- | :----------------------- | :-------------------------- | :-------------------------- | | Cash equivalents | $17,368 | $0 | $10,613 | $0 | | Marketable securities | $0 | $5,616 | $0 | $15,036 | | Total | $17,368 | $5,616 | $10,613 | $15,036 | - Cash equivalents are primarily Level 1, while marketable securities are Level 2[63] Note 7 – Accrued Liabilities Total accrued liabilities decreased by $1.1 million, mainly due to reduced employee-related costs | Accrued Liability (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------- | :------------- | :---------------- | | Salaries, employee benefits, and related taxes | $1,532 | $2,640 | | Clinical and R&D related liabilities | $1,166 | $1,333 | | Accounting & tax consulting liabilities | $133 | $55 | | Operating lease liabilities — current | $92 | $137 | | Other | $282 | $164 | | Total | $3,205 | $4,329 | - Total accrued liabilities decreased by $1.1 million (26%) from December 31, 2024, to March 31, 2025, primarily due to a reduction in salaries, employee benefits, and related taxes[64] Note 8 – Operating Leases The company maintains an operating lease for one office, expiring in September 2025 - The company has an operating lease for one office expiring on September 30, 2025[65] | Lease Metric (in thousands) | March 31, 2025 | | :-------------------------- | :------------- | | Right-of-Use Assets | $93 | | Operating Lease Liabilities | $92 | | Weighted average remaining lease term | 0.50 years | | Weighted average discount rate | 9.625% | Note 9 – Stockholders' Equity Total stockholders' equity decreased due to net loss, with some common stock issued under an ATM agreement - The company has an At The Market (ATM) Offering Agreement to sell up to $50.0 million in common stock, subject to a 'Baby Shelf Limitation' of one-third of its public float ($9.9 million currently)[69][135] - During Q1 2025, 55,578 shares were issued under the ATM Agreement for net proceeds of $211,369[69][135] | Equity Instrument (in thousands) | Outstanding at March 31, 2025 | Outstanding at December 31, 2024 | | :------------------------------- | :---------------------------- | :------------------------------- | | Stock Options (Shares) | 1,529 | 1,441 | | Warrants (Shares) | 1,497 | 1,497 | | Restricted Stock Units (Shares) | 85 | 104 | - The company granted 111,400 stock options and 215,550 restricted stock shares during Q1 2025[71][72] Note 10 – Share-Based Compensation Total share-based compensation expense increased year-over-year, with unrecognized costs remaining | Expense Category (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------ | :-------------------------------- | :-------------------------------- | | Research and development | $126 | $86 | | General and administrative | $404 | $368 | | Total share-based compensation expense | $530 | $454 | - Total share-based compensation expense increased by $76 thousand (16.7%) year-over-year[76] | Unrecognized Compensation Cost (in thousands) | Stock Options | Restricted Stock Units | Restricted Stock | | :-------------------------------------------- | :------------ | :--------------------- | :--------------- | | Unrecognized compensation cost | $393 | $251 | $925 | | Expected weighted-average period (years) | 2.21 | 0.75 | 2.32 | Note 11 – Income Taxes The company has a full valuation allowance against deferred tax assets and sold New Jersey NOLs - The company has a full valuation allowance against its net deferred tax assets due to uncertainty regarding future utilization[79] - In January 2025, the company sold $10.7 million of New Jersey net operating losses (NJ NOLs) for net proceeds of $871 thousand, resulting in a $962 thousand deferred income tax benefit[88] - As of December 31, 2024, the company had $57.9 million in Federal NOLs, $0.5 million in federal R&D credit carryforwards, and $0.1 million in state R&D credit carryforwards[80][83] Note 12 – Segment Information The company operates as a single R&D segment, with the CEO reviewing consolidated financial information - The company operates as one operating segment: the research and development of its investigational drug product[89] - The CEO, as the Chief Operating Decision Maker (CODM), reviews financial information on a consolidated basis, using net loss as a measure of profit/loss and assessing performance through clinical development goals[89] | Operating Expense (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $2,602 | $3,241 | | General and administrative | $3,245 | $3,360 | | Net loss | $(4,724) | $(5,401) | | Cash and marketable securities | $25,833 | $43,349 | Note 13 – Australia Research and Development Tax Incentive The Australian subsidiary is eligible for a refundable R&D tax incentive, with a receivable recorded - The company's Australian subsidiary is eligible for a refundable tax incentive (43.5% to 48.5%) for qualified R&D activities[92] - As of March 31, 2025, and December 31, 2024, the company had $0.6 million recorded as an income tax incentive receivable[92] Note 14 – Contingencies The company settled a litigation threat from Lingmed Limited in March 2024 for $0.5 million - The company settled a litigation threat from Lingmed Limited in March 2024, agreeing to pay $0.5 million and 5.0% of future milestone payments under the Qilu Agreement, plus an additional $250 thousand for the first future milestone[94] - The legal action was dismissed with prejudice on April 9, 2024[94] Note 15 – Technology Transfer Agreement Rights to the TPN platform were transferred to Impilo Therapeutics, with the company owning 38.6% - In July 2023, the company transferred rights to its tumor penetrating nanocomplex (TPN) platform to Impilo Therapeutics, receiving 574,500 shares of Impilo's pre-seed preferred stock[95] - The company purchased Simple Agreements for Future Equity (SAFE) from Impilo for $100 thousand in March 2024 and an additional $30 thousand in July 2024[96] - As of March 31, 2025, and December 31, 2024, the company owned 38.6% of Impilo[96] Note 16 – License Agreements The company holds an exclusive worldwide license from SBP for certepetide, involving fees and royalties - The company holds an exclusive, worldwide, royalty-bearing license from Sanford Burnham Prebys (SBP) for certepetide-related patent rights and know-how[97] - Consideration for the SBP license includes annual maintenance fees, potential milestone payments up to $10.6 million, 4% royalties on net sales, and 25% of sublicensing income[97] Note 17 – Research Collaboration and License Agreements Exclusive license agreements for certepetide are in place with Qilu Pharmaceutical and Kuva Labs - The company has an exclusive license and collaboration agreement with Qilu Pharmaceutical for certepetide development and commercialization in Greater China, with potential milestone payments up to $96.0 million (development) and $125.0 million (commercial), plus tiered royalties (10-15%) and sublicensing revenues (12-35%)[101] - An exclusive license and collaboration agreement was granted to Kuva Labs, Inc. in November 2024 for certepetide with Kuva's NanoMark™ imaging technology, with potential milestone payments up to $1.5 million (development) and $17.5 million (commercial), 5.0% royalty on net sales, and 50% sublicensing revenues[104] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, operations, business overview, clinical progress, and liquidity outlook Overview Lisata Therapeutics is a clinical-stage pharmaceutical company developing innovative therapies for solid tumors - Lisata Therapeutics is a clinical-stage pharmaceutical company focused on developing innovative therapies for solid tumors, with certepetide as its primary investigational product[106] - Certepetide is designed to enhance the penetration of anti-cancer drugs into solid tumors and modify the tumor microenvironment, making tumors more susceptible to immunotherapies[106] - The company's goal is to develop and commercialize products addressing unmet medical needs, leveraging its leadership team's extensive biopharmaceutical development experience[107] Targeted Solid Tumor Penetration via CendR Active Transport Certepetide activates the CendR active transport mechanism to enhance anti-cancer drug penetration into solid tumors - Solid tumors like PDAC and cholangiocarcinoma are often hindered by dense fibrotic tissue (tumor stroma) and an immunosuppressive tumor microenvironment (TME), limiting therapy efficacy[108] - Certepetide activates the C-end rule (CendR) active transport mechanism in a tumor-specific manner, enabling more selective and efficient uptake of systemically administered anti-cancer drugs[109] - Co-administration of certepetide with anti-cancer therapies is the initial approach, offering a faster path to market compared to creating new chemical entities (NCEs)[109] Certepetide as a treatment for solid tumor cancers in combination with other anti-cancer agents Certepetide modifies the tumor microenvironment and shows promising efficacy in clinical trials for solid tumors - Certepetide modifies the TME, making it less immunosuppressive and inhibiting the metastatic cascade, by targeting integrins and neuropilin-1 upregulated in solid tumors[112] - In a Phase 1b/2a trial for first-line mPDAC, certepetide combined with standard-of-care chemotherapy showed an Objective Response Rate (ORR) of 59% and a Disease Control Rate (DCR) of over 79%, significantly higher than the MPACT trial's 23% ORR and 48% DCR[113] - Preliminary data from Cohort A of the ASCEND trial in mPDAC showed a median overall survival (mOS) of 12.68 months for the certepetide group versus 9.72 months for placebo, with 6.2% complete responses in the certepetide group[115] Additional Out-licensing Opportunities The company's intellectual property portfolio includes programs available for out-licensing and partnering - The company's intellectual property portfolio includes programs available for out-licensing and/or partnering to augment or continue clinical development[119] - The long-term strategy focuses on advancing therapies through development to obtain market authorizations and commercialization, either alone or with partners[119] Results of Operations Net losses improved by $0.7 million, driven by decreased operating expenses year-over-year | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change ($) | Change (%) | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Research and development | $2,602 | $3,241 | $(639) | -19.7% | | General and administrative | $3,245 | $3,360 | $(115) | -3.4% | | Total operating expenses | $5,847 | $6,601 | $(754) | -11.4% | | Net loss | $(4,724) | $(5,401) | $677 | -12.5% | - Net losses improved by $0.7 million, from $5.4 million in Q1 2024 to $4.7 million in Q1 2025[120] Operating Expenses Total operating expenses decreased by $0.8 million, primarily due to reduced R&D and G&A costs - Total operating expenses decreased by $0.8 million (11.4%) to $5.8 million in Q1 2025[121] - Research and development expenses decreased by $0.6 million (19.7%) due to reduced CRO and site expenses for the Bolster trial and lower spend on chemistry, manufacturing, and controls (CMC)[123] - General and administrative expenses decreased by $0.1 million (3.4%) due to one-off settlement costs in the prior year, partially offset by increased consulting and severance costs in the current year[123] Other Income (Expense) Other income is mainly from investment income, offset by losses on sales of New Jersey NOLs - Total other income is primarily derived from investment income from cash, cash equivalents, and marketable securities, and losses on sales of New Jersey net operating losses[122] Income Tax Benefit The company recognized an income tax benefit from the sale of New Jersey net operating losses - In January 2025, the company received final approval to sell $10.7 million of NJ NOLs for net proceeds of $0.9 million, resulting in a $1.0 million income tax benefit and a $0.1 million loss on sale[123][124] - In March 2024, the company sold NJ NOLs for net proceeds of $0.7 million, resulting in a $0.8 million income tax benefit and a $0.1 million loss on sale[125] Analysis of Liquidity and Capital Resources Cash and marketable securities are sufficient for the next 12 months, with future capital needs dependent on financing | Cash Flow Activity (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(5,402) | $(7,027) | | Net cash provided by investing activities | $9,431 | $6,436 | | Net cash used in financing activities | $(23) | $(142) | - As of March 31, 2025, the company had $25.8 million in cash, cash equivalents, and marketable securities, with working capital of $24.8 million[126] - Net cash used in operating activities decreased by $1.6 million year-over-year, while net cash provided by investing activities increased by $3.0 million, primarily from marketable securities sales[128][130] - The company believes its current cash and marketable securities are sufficient to fund operating expenses for at least the next 12 months[134] - Future capital requirements will depend on strategic transactions, collaboration partnerships, and the ability to raise additional financing through debt, equity, or asset sales[134] Off-Balance Sheet Arrangements The company does not have any off-balance sheet arrangements to report - The company does not have any off-balance sheet arrangements[137] Critical Accounting Policies and Estimates No material changes occurred in critical accounting policies and estimates during the quarter - There have been no material changes in critical accounting policies and estimates during the three months ended March 31, 2025, compared to those reported in the 2024 Form 10-K[138] Item 3. Quantitative and Qualitative Disclosures About Market Risk There are no applicable quantitative and qualitative disclosures about market risk for the company - The company has no applicable quantitative and qualitative disclosures about market risk[139] Item 4. Controls and Procedures Disclosure controls and procedures were effective, with no material changes in internal control over financial reporting Disclosure Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective - As of March 31, 2025, management, including the CEO and SVP of Finance, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[141][142] - Disclosure controls are designed to ensure information required for SEC reports is recorded, processed, summarized, and reported timely, and communicated to management for disclosure decisions[140] Changes in Internal Control over Financial Reporting No material changes occurred in internal control over financial reporting during the quarter - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that materially affected or are reasonably likely to materially affect internal control over financial reporting[143] Part II - Other Information 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[145] Item 1A. Risk Factors No material changes to the risk factors previously reported in the 2024 Form 10-K - No material changes to the risk factors previously reported in the 2024 Form 10-K[146] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported during the period - None to report for unregistered sales of equity securities and use of proceeds[146] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported during the period - None to report for defaults upon senior securities[147] Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[148] Item 5. Other Information No director or officer adopted, modified, or terminated trading arrangements during the quarter - No director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[149] Item 6. Exhibits The Exhibit Index, including certifications and XBRL documents, is incorporated by reference - The Exhibit Index, including certifications and XBRL documents, is incorporated by reference[150][155]