Catalyst Biosciences, Inc.(CBIO) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements Presents Gyre Therapeutics' unaudited condensed consolidated financial statements for Q1 2025, covering Balance Sheets, Operations, Equity, Cash Flows, and notes Condensed Consolidated Balance Sheets Total assets increased to $129.8 million from $125.4 million, driven by cash, while liabilities decreased and equity grew to $104.3 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $15,045 | $11,813 | | Total current assets | $68,448 | $64,786 | | Total assets | $129,790 | $125,406 | | Liabilities & Equity | | | | Total current liabilities | $18,991 | $19,516 | | Total liabilities | $25,488 | $27,004 | | Total stockholders' equity | $104,302 | $98,402 | | Total liabilities and stockholders' equity | $129,790 | $125,406 | Condensed Consolidated Statements of Operations and Comprehensive Income Q1 2025 revenues decreased to $22.1 million and net income to $3.7 million, with basic EPS at $0.03 Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $22,058 | $27,172 | | Income from operations | $2,273 | $8,071 | | Net income | $3,734 | $9,935 | | Net income attributable to common stockholders | $2,698 | $7,532 | | Basic EPS | $0.03 | $0.09 | | Diluted EPS | $0.00 | $0.03 | Condensed Consolidated Statements of Cash Flows Net cash used in operations was $0.1 million in Q1 2025, a significant change from $2.9 million provided in Q1 2024, with cash ending at $15.0 million Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(129) | $2,884 | | Net cash provided by (used in) investing activities | $1,967 | $(7,220) | | Net cash provided by financing activities | $1,344 | $658 | | Net increase (decrease) in cash and cash equivalents | $3,232 | $(3,724) | | Cash and cash equivalents at end of period | $15,045 | $29,785 | Notes to the Unaudited Condensed Consolidated Financial Statements Detailed notes cover accounting policies, business operations, liquidity, fair value, revenue concentration, intangible assets, R&D commitments, and segment reporting - The company is a commercial-stage biotechnology firm focusing on anti-inflammatory and anti-fibrotic drugs, holding a 65.2% indirect interest in its PRC-based subsidiary, Gyre Pharmaceuticals[16][17] - Management believes existing cash, cash flows from operations, and capital market access are sufficient to fund operations for at least 12 months from the financial statement issuance date[18] - For Q1 2025, three customers (Sinopharm, Resources Pharmaceutical, Shanghai Pharmaceuticals) accounted for 50.3%, 15.5%, and 12.4% of total revenue, respectively[30] - In March 2025, the company acquired technology rights for Nintedanib for approximately $4.9 million, which is recorded as an intangible asset[56] - The company has future commitments including $12.7 million for the F351 program and an additional $20.0 million for other R&D activities[96] - The company operates in two reportable segments: Gyre Pharmaceuticals (operations in China) and Gyre (operations in the U.S.). Gyre Pharmaceuticals generated all of the company's $22.1 million in revenue for Q1 2025[105][109] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial condition and operations, including commercialization, pipeline, financial results, liquidity, and funding Overview Gyre, a commercial-stage biotech, focuses on anti-fibrotic drugs, expanding its portfolio and advancing F351 in Phase 3 and Phase 2 trials - The company is planning to initiate commercialization of Nintedanib in the PRC in Q2 2025 to offset declines in ETUARY sales and drive revenue growth[116] - Topline results for the Phase 3 trial of F351 in CHB-associated liver fibrosis are expected in Q2 2025[120] - A Phase 2 trial of F351 for MASH-associated liver fibrosis is expected to begin in the U.S. in 2025, pending IND approval[121] - The company initiated commercialization of avatrombopag maleate tablets in the PRC in March 2025 for treating thrombocytopenia[123] Results of Operations Q1 2025 revenues decreased 19% to $22.1 million, with R&D and G&A expenses rising, resulting in a 72% drop in operating income Comparison of Operations for the three months ended March 31 (in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $22,058 | $27,172 | $(5,114) | (19)% | | Gross profit | $21,164 | $26,193 | $(5,029) | (19)% | | Research and development | $3,095 | $2,182 | $913 | 42% | | General and administrative | $4,955 | $3,398 | $1,557 | 46% | | Income from operations | $2,273 | $8,071 | $(5,798) | (72)% | | Net income | $3,734 | $9,935 | $(6,201) | (62)% | - The 19% decrease in revenue was anticipated, attributed to a one-time marketing campaign in early 2024 that was not repeated, weaker economic conditions in China, and increased competition[151] - R&D expenses increased by $0.9 million (42%), mainly due to a $1.3 million increase in clinical research expenses for F351 data analysis[155] Liquidity and Capital Resources The company holds $15.0 million in cash and believes current resources are sufficient for 12 months, with future funding dependent on clinical trials and M&A - The company believes its existing cash of $15.0 million, plus other deposits and operational cash flow, will be sufficient to fund operations for at least the next 12 months[161] Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(129) | $2,884 | | Net cash provided by (used in) investing activities | $1,967 | $(7,220) | | Net cash provided by financing activities | $1,344 | $658 | - As of March 31, 2025, the company has committed $32.7 million for future R&D activities and $4.8 million for property and equipment purchases[175][176] - PRC regulations restrict the transfer of $64.3 million in capital and statutory reserves from the Chinese subsidiary, but this is not expected to materially impact the company's ability to meet cash obligations[171] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide market risk disclosures - As a smaller reporting company, Gyre Therapeutics is not required to provide quantitative and qualitative disclosures about market risk[181] Controls and Procedures Management concluded disclosure controls were effective as of March 31, 2025, with no material changes in internal control over financial reporting - Based on an evaluation as of March 31, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[183] - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[184] PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings - As of the report date, the company is not involved in any material legal proceedings[186] Risk Factors No material changes to risk factors previously disclosed in the Annual Report on Form 10-K - The company states there have been no material changes from the risk factors disclosed in its Annual Report[187] 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 reported[188] Other Information No director or executive officer adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025 - No director or executive officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[191] Exhibits Lists exhibits filed as part of the Quarterly Report on Form 10-Q, including CEO and CFO certifications - The report includes a list of all exhibits filed, such as agreements and officer certifications pursuant to the Sarbanes-Oxley Act[192][193][194]