ACELYRIN(SLRN) - 2025 Q1 - Quarterly Report

PART I Item 1. Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, showing a net loss of $55.3 million for the quarter and a decrease in total assets Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2025, shows total assets decreased to $436.5 million from $491.1 million at year-end 2024, primarily due to reduced cash and marketable securities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $58,271 | $73,890 | | Short-term marketable securities | $352,321 | $373,990 | | Total current assets | $429,492 | $480,987 | | Total assets | $436,504 | $491,141 | | Liabilities & Equity | | | | Total current liabilities | $23,303 | $26,578 | | Total liabilities | $29,273 | $32,848 | | Total stockholders' equity (deficit) | $407,231 | $458,293 | Condensed Consolidated Statements of Operations and Comprehensive Loss The company reported a net loss of $55.3 million for the three months ended March 31, 2025, an increase from $35.0 million in the prior year, despite a decrease in total operating expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $42,138 | $58,032 | | General and administrative | $17,717 | $24,742 | | Total operating expenses | $59,855 | $82,774 | | Loss from operations | ($59,855) | ($82,774) | | Interest income | $4,658 | $9,150 | | Other income (expense), net | ($67) | $38,651 | | Net loss | ($55,264) | ($34,973) | | Net loss per share, basic and diluted | ($0.55) | ($0.36) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities improved to $39.0 million in Q1 2025 from $57.3 million in Q1 2024, with overall cash decreasing by $15.6 million during the quarter Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($38,955) | ($57,299) | | Net cash provided by investing activities | $23,331 | $100,896 | | Net cash provided by financing activities | $5 | $2,807 | | Net (decrease) increase in cash | ($15,619) | $46,404 | | Cash at end of period | $58,815 | $264,501 | Notes to Condensed Consolidated Financial Statements The notes detail liquidity, accounting policies, and significant events, including the termination of the izokibep license, the merger agreement with Alumis Inc., and a $2.9 million impairment charge - The company's $411.1 million in cash, cash equivalents, and short-term marketable securities as of March 31, 2025, are deemed sufficient to fund operations for at least the next 12 months[33] - The License and Collaboration Agreement with Affibody for izokibep was terminated on January 31, 2025, eliminating future material financial obligations[79] - A merger agreement with Alumis Inc. was entered into on February 6, 2025, approved by stockholders on May 13, 2025, and is expected to close in Q2 2025[125][126] - A non-cash impairment expense of $2.9 million was recorded for the sublease of the South San Francisco office space[90] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and results, highlighting the pending merger with Alumis, the strategic shift to lonigutamab, and decreased operating expenses due to restructuring - The merger agreement with Alumis Inc. was approved by stockholders and is expected to close in Q2 2025, delaying the Phase 3 program for lonigutamab until completion[130][131][137] - Following an August 2024 restructuring, the company ceased izokibep development to focus primarily on its lonigutamab clinical program for Thyroid Eye Disease (TED)[138] - As of March 31, 2025, the company held $411.1 million in cash, cash equivalents, restricted cash, and short-term marketable securities, sufficient to fund operations for at least the next 12 months[144] Results of Operations Total operating expenses decreased by 28% to $59.9 million in Q1 2025, driven by reduced R&D and G&A costs, while total other income significantly declined due to the absence of prior-year non-recurring income Operating Expenses Comparison (in thousands) | Expense Category | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $42,138 | $58,032 | ($15,894) | (27%) | | General and administrative | $17,717 | $24,742 | ($7,025) | (28%) | | Total operating expenses | $59,855 | $82,774 | ($22,919) | (28%) | CRO and CMO Expenses by Program (in thousands) | Program | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Izokibep | $8,124 | $39,229 | | Lonigutamab | $20,229 | $2,052 | | Total | $28,324 | $41,384 | - The decrease in G&A expenses was primarily due to a $13.2 million reduction in stock-based compensation, partially offset by a $4.9 million increase in professional services fees related to the merger[172][173] Liquidity, Capital Resources and Capital Requirements The company's liquidity, primarily from its May 2023 IPO, totals $411.1 million as of March 31, 2025, deemed sufficient for 12 months, with future needs dependent on clinical trials and the Alumis merger - The company's primary liquidity sources include its May 2023 IPO and sales of redeemable convertible preferred stock[177] - Future funding needs are subject to risks such as clinical trial timing and results, restructuring costs, and the consummation of the Merger[182] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Acelyrin is not required to provide quantitative and qualitative disclosures about market risk[193] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[195] - No material changes occurred during the quarter affecting the company's internal control over financial reporting[196] PART II OTHER INFORMATION Item 1. Legal Proceedings The company faces a federal securities class action lawsuit regarding izokibep trial statements and two stockholder complaints seeking to enjoin the Alumis merger due to alleged disclosure failures - A federal securities class action lawsuit (Boukadoum v. Acelyrin, Inc. et al.) was filed alleging violations related to the izokibep Phase 2b trial, with a motion to dismiss pending[199] - Two stockholder complaints were filed in April 2025, alleging material disclosure failures regarding the Alumis merger and seeking to enjoin it[200][201] Item 1A. Risk Factors This section outlines significant investment risks, including uncertainties surrounding the Alumis merger, the company's history of losses, dependence on lonigutamab, substantial financing needs, and various operational and market challenges - The pending merger with Alumis is subject to closing conditions and uncertainties, and its non-completion could negatively impact financial performance and stock price[223][224] - The company is a clinical-stage biopharma with no approved products, a history of substantial losses, including a $792.2 million accumulated deficit as of March 31, 2025, and expects further losses[210][230] - Future success is substantially dependent on the ability to develop and commercialize the lead product candidate, lonigutamab, for Thyroid Eye Disease (TED)[216] - Substantial additional financing will be required, and failure to obtain it could lead to delays, reductions, or termination of product development[212] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the reported period - There were no unregistered sales of equity securities in the reported period[491] Item 5. Other Information This section discloses the termination of a Rule 10b5-1 trading plan by the Chief Medical Officer and the approval of an amended severance plan contingent on the merger closing - Chief Medical Officer Shephard Mpofu, M.D., terminated his Rule 10b5-1 trading plan on March 11, 2025, with no shares sold under it[493] - Contingent on the merger closing, the board approved an Amended Severance Plan on May 8, 2025, enhancing severance benefits and extending vested stock option exercise periods for eligible employees[494][495] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including certifications and interactive data files, and incorporates previously filed documents by reference