Regulus(RGLS) - 2025 Q1 - Quarterly Results

Executive Summary & Key Highlights Regulus Therapeutics reported significant strategic and clinical progress in the first quarter of 2025, including a definitive acquisition agreement with Novartis for up to $1.7 billion and positive Phase 1b data for farabursen in ADPKD, leading to a planned Phase 3 trial in Q3 2025 - Regulus entered into an agreement to be acquired by Novartis for an initial $7.00 per share in cash, with a potential additional $7.00 per share through a Contingent Value Right (CVR), valuing the deal at up to approximately $1.7 billion[2][8] - Positive topline data from the fourth cohort of the Phase 1b study of farabursen showed a mechanistic dose response and suggested a halt in kidney volume growth, supporting the initiation of a Phase 3 trial in Q3 2025[2][4][5] - The acquisition by Novartis is expected to be completed in the second half of 2025, subject to customary closing conditions[2][9] Program Updates The company's lead program, farabursen for Autosomal Dominant Polycystic Kidney Disease (ADPKD), showed positive results in its Phase 1b Multiple-Ascending Dose (MAD) study. The data confirmed the appropriateness of a 300 mg fixed dose for the upcoming Phase 3 trial, for which the company has aligned with the FDA on key design elements Farabursen for ADPKD - In the completed fourth cohort of the Phase 1b MAD study (26 subjects), a fixed dose of 300 mg of farabursen every other week for three months demonstrated a favorable safety profile[5] - Efficacy data from the fourth cohort showed a mechanistic response based on urinary polycystins 1 and 2 (PC1 and PC2) levels and a mean halting of height-adjusted total kidney volume (htTKV) growth over the study period[5] - Regulus has confirmed alignment with the FDA on the design of a single, pivotal Phase 3 study, planned for initiation in Q3 2025. The trial will use a 12-month htTKV endpoint for potential Accelerated Approval and a 24-month eGFR endpoint for Full Approval[7] Corporate Developments The primary corporate highlight is the definitive merger agreement with Novartis. The transaction, unanimously approved by both boards, is structured with an upfront cash payment and a contingent value right (CVR) tied to a regulatory milestone for farabursen Acquisition by Novartis Novartis Acquisition Terms | Metric | Value | | :--- | :--- | | Upfront Payment per Share | $7.00 in cash | | Contingent Value Right (CVR) per Share | $7.00 in cash | | Upfront Consideration | $0.8 billion | | Total Potential Consideration (including CVR) | Approx. $1.7 billion | | Expected Closing | Second half of 2025 | - The CVR payment is contingent upon achieving a specific regulatory approval milestone for farabursen[8] - Completion is subject to customary closing conditions, including the tender of a majority of Regulus' outstanding shares and receipt of regulatory approvals[9] Financial Results For the first quarter ended March 31, 2025, Regulus reported a net loss of $9.6 million. The company's cash, cash equivalents, and short-term investments stood at $65.4 million, which is expected to fund operations into early 2026. Both R&D and G&A expenses increased compared to the same period in the prior year Q1 2025 Financial Performance - As of March 31, 2025, the company held $65.4 million in cash, cash equivalents, and short-term investments, with an expected cash runway into early 2026[10] Q1 2025 vs Q1 2024 Financials (in millions) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | R&D Expenses | $6.8 | $6.0 | +$0.8 | | G&A Expenses | $3.7 | $2.8 | +$0.9 | | Net Loss | $9.6 | $8.5 | +$1.1 | | Net Loss per Share | $0.15 | $0.29 | - | Condensed Financial Statements Selected Financial Information (In thousands, except per share data) | | Three months ended March 31, | | As of | | :--- | :--- | :--- | :--- | | | 2025 | 2024 | | | Operating Expenses: | | | | | Research and development | $6,819 | $6,040 | | | General and administrative | $3,719 | $2,786 | | | Total operating expenses | $10,538 | $8,826 | | | Loss from operations | $(10,538) | $(8,826) | | | Other income, net | $904 | $357 | | | Net loss | $(9,634) | $(8,469) | | | Net loss per share, basic and diluted | $(0.15) | $(0.29) | | | | | | March 31, 2025 | Dec 31, 2024 | | Cash, cash equivalents and short-term investments | | | $65,368 | $75,777 | | Total assets | | | $74,826 | $84,181 | | Stockholders' equity | | | $69,028 | $76,408 | Company & Disease Background This section provides context on Autosomal Dominant Polycystic Kidney Disease (ADPKD), a common genetic disorder with significant unmet medical need, detailing the mechanism of action for farabursen and Regulus Therapeutics' focus on microRNA-targeting medicines About ADPKD - ADPKD is a common monogenic disorder caused by PKD1 or PKD2 gene mutations, leading to kidney cysts and end-stage renal disease in about 50% of patients by age 60. It affects approximately 160,000 people in the U.S.[13] About Farabursen (RGLS8429) - Farabursen is a next-generation oligonucleotide designed to treat ADPKD by inhibiting miR-17, with a preferential targeting of the kidney. Clinical data to date shows it is well-tolerated and has a positive impact on disease biomarkers and kidney volume[14] About Regulus Therapeutics - Regulus Therapeutics is a San Diego-based biopharmaceutical company that focuses on discovering and developing innovative medicines that target microRNAs[15] Legal Disclosures This section contains important legal information for investors, outlining the status of the tender offer by Novartis and including a standard forward-looking statements disclaimer detailing risks and uncertainties Important Information About the Tender Offer - The tender offer has not yet commenced. Investors are strongly advised to read the tender offer statement on Schedule TO and the solicitation/recommendation statement on Schedule 14D-9, once they are filed with the SEC, as they will contain important information[16][17] Forward-Looking Statements - The press release contains forward-looking statements regarding the Novartis transaction, the potential of farabursen, and clinical trial plans. These statements are subject to significant risks and uncertainties[18] - Key risks include uncertainties in closing the transaction, failure to meet the CVR milestone, disruption to business operations, and potential for clinical development setbacks or regulatory hurdles[18]