LAVA Therapeutics(LVTX) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements The unaudited condensed consolidated financial statements for Q1 2025 reflect a decrease in total assets to $71.2 million, a net loss of $3.5 million, and a $5.2 million gain on debt extinguishment Condensed Consolidated Balance Sheets (Unaudited) As of March 31, 2025, total assets decreased to $71.2 million, liabilities to $45.4 million, and equity to $25.8 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $39,674 | $35,015 | | Short-term investments | $26,883 | $41,561 | | Total current assets | $69,780 | $79,297 | | Total assets | $71,156 | $80,831 | | Liabilities & Equity | | | | Total current liabilities | $10,366 | $18,006 | | Non-current portion of deferred revenue | $35,000 | $35,000 | | Total liabilities | $45,372 | $53,086 | | Total shareholders' equity | $25,784 | $27,745 | Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) For Q1 2025, the company reported no revenue, a net loss of $3.5 million (or ($0.13) per share), and a $5.2 million gain on debt extinguishment Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $0 | $6,992 | | Research and development | ($4,156) | ($5,648) | | General and administrative | ($3,432) | ($3,380) | | Operating loss | ($7,588) | ($2,036) | | Gain on extinguishment of borrowings | $5,203 | $0 | | Net loss | ($3,479) | ($608) | | Net loss per share, basic and diluted | ($0.13) | ($0.02) | Condensed Consolidated Statements of Cash Flows (Unaudited) For Q1 2025, net cash used in operating activities increased to $11.6 million, and net cash provided by investing activities was $15.2 million Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($11,645) | ($843) | | Net cash provided by investing activities | $15,159 | $694 | | Net cash provided by financing activities | $0 | $8 | | Net increase (decrease) in cash | $3,514 | ($141) | Notes to the Condensed Consolidated Financial Statements (Unaudited) Notes detail the company's Gammabody® platform, liquidity, key revenue events, and significant restructuring activities during the period - The company believes its cash, cash equivalents, and short-term investments are sufficient to fund operations for at least the next twelve months from the financial statement issuance date[28] - In March 2024, Pfizer achieved a clinical development milestone, resulting in a $7,000 thousand payment to the company, with no revenue recognized under the Pfizer agreement in Q1 2025[49][104] - In February 2025, the company initiated a restructuring plan, reducing its global workforce by approximately 30% and incurring $500 thousand in associated costs during Q1 2025[55] - In March 2025, a remaining loan balance of $5,200 thousand from RVO was permanently waived, resulting in a gain on extinguishment of debt[58] - Subsequent to quarter end, in May 2025, the company approved a further restructuring plan to eliminate remaining Netherlands employee positions and terminate a lease, with expected costs of approximately $2,000 thousand[70] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the Gammabody® platform, LAVA-1266 clinical trial, 2025 restructuring, and Q1 2025 financial performance and liquidity Overview LAVA Therapeutics focuses on its Gammabody® platform and LAVA-1266 clinical development, initiating 2025 restructuring plans to extend capital - The company is conducting a Phase 1 study of LAVA-1266 in patients with AML or MDS, with the first patient dosed in December 2024 and initial data expected by year-end 2025[82] - In February 2025, the company implemented a restructuring plan including a 30% workforce reduction to align resources with its focus on LAVA-1266[73] - In December 2024, the company announced the discontinuation of the Phase 1 clinical trial for LAVA-1207 in mCRPC after it did not meet internal benchmarks[84] Results of Operations Q1 2025 results show revenue decreased to zero, R&D expenses declined, and other income increased due to a $5.2 million gain on debt extinguishment Comparison of Results of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $0 | $6,992 | $(6,992) | | Research and development | $(4,156) | $(5,648) | $(1,492) | | General and administrative | $(3,432) | $(3,380) | $52 | | Operating loss | $(7,588) | $(2,036) | $5,552 | | Net loss | ($3,479) | ($608) | $2,871 | - Revenue was $0 in Q1 2025 compared to $7,000 thousand in Q1 2024, with the 2024 revenue stemming from a clinical development milestone payment from Pfizer[103][104] - R&D expenses decreased by $1,492 thousand, mainly due to a $2,300 thousand reduction in pre-clinical and clinical trial expenses following the discontinuation of the LAVA-1207 trial[106][107] Liquidity and Capital Resources As of March 31, 2025, the company held $66.6 million in cash and investments, deemed sufficient to fund operations for at least 12 months - As of March 31, 2025, the company had cash, cash equivalents, and short-term investments totaling $66,600 thousand[116] - Management believes the current cash position is sufficient to fund projected cash requirements for at least 12 months from the date of the report[116] - In March 2025, a $5,200 thousand Innovation Credit balance was permanently waived, which was recognized as a non-cash gain[112] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, LAVA Therapeutics is not required to provide quantitative and qualitative disclosures about market risk[129] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[130] - No changes in internal control over financial reporting occurred during Q1 2025 that materially affected, or are reasonably likely to materially affect, internal controls[132] PART II. OTHER INFORMATION Legal Proceedings The company is not currently subject to any material legal proceedings - The company is not currently a party to any material legal proceedings[133] Risk Factors No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for 2024 were reported - No material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024, were reported[134] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities and no material change in the planned use of IPO proceeds - There were no unregistered sales of equity securities in the quarter[135] - There has been no material change in the planned use of proceeds from the company's IPO[136] Other Information This section incorporates details on the company's restructuring and confirms no Rule 10b5-1 trading plan changes by directors or officers - Information regarding the restructuring plan, closure of Netherlands operations, and workforce reduction is incorporated by reference from Note 10 of the financial statements[139] - During the fiscal quarter ended March 31, 2025, no directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement[140]