MEI Pharma(MEIP) - 2025 Q3 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements The company's financial statements show a net loss of $13.3 million and reduced assets amid a strategic shift Condensed Consolidated Balance Sheets Total assets decreased to $20.8 million and stockholders' equity fell to $19.5 million due to cash usage Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | June 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $20,472 | $3,705 | | Short-term investments | $0 | $34,640 | | Total current assets | $20,779 | $40,769 | | Total assets | $20,779 | $41,375 | | Total current liabilities | $1,238 | $8,355 | | Total liabilities | $1,238 | $8,355 | | Total stockholders' equity | $19,541 | $33,020 | Condensed Consolidated Statements of Operations The company reported a nine-month net loss of $13.3 million on zero revenue, a reversal from prior-year income Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Q3 2025 | Q3 2024 | 9 Months 2025 | 9 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $0 | $0 | $0 | $65,297 | | Research and development | $369 | $5,220 | $3,840 | $12,617 | | General and administrative | $2,405 | $4,609 | $10,737 | $19,158 | | (Loss) income from operations | $(2,774) | $(9,829) | $(14,577) | $33,522 | | Net (loss) income | $(2,573) | $(9,127) | $(13,257) | $36,184 | | Net (loss) income per share | $(0.39) | $(1.37) | $(1.99) | $5.43 | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity declined to $19.5 million, primarily driven by the period's net loss of $13.3 million - Stockholders' equity fell to $19.5 million as of March 31, 2025, from $33.0 million at June 30, 2024, mainly due to the cumulative net loss for the period[15] - In the prior year, a cash dividend of $1.75 per share, totaling $11.7 million, was declared and paid in the quarter ended December 31, 2023[15] Condensed Consolidated Statements of Cash Flows Cash from investing activities offset operating cash use, resulting in a $16.8 million net increase in cash Cash Flow Summary for the Nine Months Ended March 31 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(18,383) | $(32,474) | | Net cash provided by investing activities | $35,150 | $29,596 | | Net cash used in financing activities | $0 | $(11,660) | | Net increase (decrease) in cash | $16,767 | $(14,538) | | Cash and cash equivalents at end of period | $20,472 | $2,368 | Notes to Condensed Consolidated Financial Statements The company is evaluating strategic alternatives after discontinuing voruciclib development and has sufficient cash for 12 months - In July 2024, the Board initiated an evaluation of strategic alternatives, including a potential orderly wind-down, and discontinued clinical development of voruciclib[21] - The company sold its ME-344 asset to Aardvark Therapeutics on October 22, 2024, for an initial payment of $0.5 million, recognizing a gain of the same amount[96][97] - The company terminated its lease agreement effective September 30, 2024, paying a termination fee of approximately $11.1 million in the fiscal year ended June 30, 2024[77] - As of March 31, 2025, the company had $20.5 million in cash and cash equivalents and believes this is sufficient to fund operations for at least the next 12 months[27] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the strategic shift, cessation of clinical development, and resulting operational changes Overview and Strategic Alternatives The company is evaluating strategic alternatives, has discontinued voruciclib development, and reduced its workforce - On July 22, 2024, the company announced it would evaluate strategic alternatives to maximize stockholder value, including potential transactions or an orderly wind-down[101] - As part of the strategic review, the company discontinued clinical development of voruciclib and initiated a reduction-in-force (RIF) starting August 1, 2024[101] Clinical Development Programs All clinical development for voruciclib has ceased, the ME-344 asset was sold, and the zandelisib program was previously discontinued - Voruciclib, an oral CDK9 inhibitor, has ceased all ongoing clinical trial efforts[106][122] - ME-344, a mitochondrial inhibitor, was sold in October 2024[125][129] - The zandelisib (PI3Kδ inhibitor) program was discontinued globally, and the development and commercialization agreement with Kyowa Kirin was terminated in July 2023[145][148] Results of Operations Operating expenses decreased significantly following the cessation of clinical activities and cost-cutting measures Comparison of Three Months Ended March 31 (in thousands) | Expense Category | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $369 | $5,220 | $(4,851) | (92.9)% | | General and administrative | $2,405 | $4,609 | $(2,204) | (47.8)% | Comparison of Nine Months Ended March 31 (in thousands) | Category | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $0 | $65,297 | $(65,297) | (100.0)% | | Research and development | $3,840 | $12,617 | $(8,777) | (69.6)% | | General and administrative | $10,737 | $19,158 | $(8,421) | (44.0)% | Liquidity and Capital Resources The company holds $20.5 million in cash, deemed sufficient for at least 12 months of operations - The company had $20.5 million in cash and cash equivalents as of March 31, 2025, and expects this to be sufficient to fund operations for at least the next 12 months[159][160] - Net cash used in operating activities was $18.4 million for the nine months ended March 31, 2025, compared to $32.5 million in the prior-year period[161] - The company terminated its office lease on September 30, 2024, after paying a termination fee of $11.1 million in the fiscal year ended June 30, 2024, and has no further obligations[164] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, MEI Pharma is not required to provide this information - The company is not required to provide information for this item as it qualifies as a smaller reporting company[171] Item 4. Controls and Procedures Management concluded that disclosure controls and internal controls over financial reporting were effective - 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[172] - No material changes occurred during the fiscal quarter ended March 31, 2025, that affected the company's internal control over financial reporting[173] PART II OTHER INFORMATION Item 1. Legal Proceedings The company reports no legal proceedings - None[177] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report - There have been no material changes in risk factors from those included in the 2024 Annual Report[178] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities - None[179] Item 5. Other Information No executive officers or directors have adopted, modified, or terminated any Rule 10b5-1 trading plans - No executive officers or directors adopted, modified, or terminated any Rule 10b5-1 trading plans during the nine months ended March 31, 2025[182] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including agreements and officer certifications