CG Oncology(CGON) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Condensed Consolidated Financial Statements (unaudited) The company reported a $34.5 million net loss in Q1 2025, holding $688.4 million in cash and marketable securities Condensed Consolidated Balance Sheets Total assets decreased to $728.2 million, with liabilities at $23.4 million and equity at $704.8 million Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $41,472 | $257,068 | | Marketable securities | $646,962 | $484,930 | | Total current assets | $701,192 | $754,210 | | Total assets | $728,181 | $754,797 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $22,642 | $21,368 | | Total liabilities | $23,423 | $21,420 | | Accumulated deficit | $(252,433) | $(217,981) | | Total stockholders' equity | $704,758 | $733,377 | | Total liabilities and stockholders' equity | $728,181 | $754,797 | Condensed Consolidated Statements of Operations and Comprehensive Loss Net loss increased to $34.5 million in Q1 2025, driven by higher R&D and G&A expenses, while revenue declined Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | License and collaboration revenue | $52 | $529 | | Research and development | $27,467 | $17,210 | | General and administrative | $14,789 | $5,788 | | Total operating expenses | $42,256 | $22,998 | | Loss from operations | $(42,204) | $(22,469) | | Interest income, net | $7,747 | $5,544 | | Net loss and comprehensive loss | $(34,452) | $(16,934) | | Net loss per share, basic and diluted | $(0.45) | $(0.36) | Condensed Consolidated Statements of Cash Flows Net cash used in operations was $29.3 million, with a $215.6 million overall decrease in cash and equivalents Summary of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(29,277) | $(26,012) | | Net cash used in investing activities | $(186,769) | $(307,444) | | Net cash provided by financing activities | $450 | $402,658 | | Net (decrease) increase in cash and cash equivalents | $(215,596) | $69,202 | | Cash and cash equivalents at end of period | $41,472 | $77,468 | Notes to Condensed Consolidated Financial Statements Notes detail the company's clinical-stage focus, 2024 IPO, collaboration agreements, and ongoing legal dispute - The company is a late-stage clinical biopharmaceutical company focused on developing and commercializing its product candidate, cretostimogene grenadenorepvec, for patients with bladder cancer[23] - In January 2024, the company completed its IPO, receiving net proceeds of $399.6 million[25] - A complaint was filed against the company by ANI Pharmaceuticals, Inc. on March 4, 2024, seeking a declaratory judgment regarding royalty obligations on 'net sales' of cretostimogene[48] - Total stock-based compensation expense was $5.2 million and $1.5 million for the three months ended March 31, 2025 and 2024, respectively[82] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses cretostimogene development, BLA submission, increased operating losses, and liquidity funding operations into 2028 - The company is a late-stage clinical biopharmaceutical company focused on developing cretostimogene for bladder cancer, with plans to initiate a BLA submission to the FDA in the second half of 2025[94][95] - The company expects its existing cash, cash equivalents, and marketable securities of $688.4 million (as of March 31, 2025) to be sufficient to fund operations into the first half of 2028[99][100][127] - On March 28, 2025, the company entered into an ATM offering agreement with Jefferies LLC to sell up to $250 million of its common stock, though no sales have been made as of the report date[32][125] Results of Operations Net loss increased to $34.5 million in Q1 2025, driven by higher R&D and G&A expenses from clinical activities and headcount Comparison of Results of Operations (in thousands) | Item | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | License and collaboration revenue | $52 | $529 | $(477) | | Research and development | $27,467 | $17,210 | $10,257 | | General and administrative | $14,789 | $5,788 | $9,001 | | Net loss | $(34,452) | $(16,934) | $(17,518) | - The $10.3 million increase in R&D expenses was primarily due to a $5.6 million increase in external clinical trial expenses (higher CRO fees) and a $3.6 million increase in compensation costs from increased headcount[121] - The $9.0 million increase in G&A expenses was mainly due to a $5.3 million increase in compensation costs (including a $2.5 million in stock-based compensation), a $1.4 million increase in professional fees, and a $1.1 million increase in marketing costs[122] Liquidity and Capital Resources Liquidity from public offerings, with $688.4 million in cash and marketable securities, expected to fund operations into 2028 - As of March 31, 2025, the company had cash, cash equivalents, and marketable securities of $688.4 million[124] - Net cash used in operating activities was $29.3 million in Q1 2025, primarily resulting from the net loss of $34.5 million, offset by non-cash charges like stock-based compensation[132] - Net cash provided by financing activities in Q1 2024 was $402.7 million, mainly from the IPO, compared to just $0.5 million in Q1 2025 from option exercises[136][137] Quantitative and Qualitative Disclosures About Market Risk Market risk is limited to interest rate sensitivity on $688.4 million in cash and investments, deemed insignificant due to portfolio profile - The company's primary market risk is interest rate sensitivity on its $688.4 million in cash, cash equivalents, and marketable securities[145] - Due to the short-term duration and low-risk profile of the investment portfolio, the company believes its exposure to interest rate risk is not significant[146] Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal controls - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[149] - There were no material changes in the company's internal control over financial reporting during the three months ended March 31, 2025[150] PART II. OTHER INFORMATION Legal Proceedings The company is defending a legal proceeding by ANI Pharmaceuticals regarding cretostimogene royalty obligations, with a trial set for July 2025 - On March 4, 2024, ANI Pharmaceuticals, Inc. filed a complaint against the company seeking a declaratory judgment for royalty payments on 'net sales' of cretostimogene[153] - The company disputes the allegations and is vigorously defending the matter. A trial date has been set for July 21, 2025[153] Risk Factors No material changes have occurred to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's 2024 Annual Report[155] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity sales; $156.0 million of IPO proceeds used for R&D, manufacturing, and pre-commercial activities for cretostimogene - The company's IPO in January 2024 resulted in net proceeds of approximately $399.6 million[158] - Approximately $156.0 million of the IPO proceeds have been used for R&D, manufacturing, and pre-commercial activities for cretostimogene[158] Other Information No Section 16 officers or directors adopted, modified, or terminated Rule 10b5-1 trading arrangements during Q1 2025 - During Q1 2025, no officers or directors adopted, modified, or terminated any Rule 10b5-1 or similar trading arrangements[161] Exhibits This section lists exhibits filed with Form 10-Q, including corporate documents, a promissory note, and CEO/CFO certifications