Elevation Oncology(ELEV) - 2025 Q1 - Quarterly Report

Part I Financial Information Condensed Consolidated Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, reflecting a net loss of $14.2 million and a strategic shift to EO-1022 Condensed Consolidated Balance Sheets Total assets decreased to $82.2 million as of March 31, 2025, primarily due to reduced marketable securities, while total stockholders' equity declined to $46.7 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $60,494 | $49,464 | | Marketable securities, available for sale | $20,165 | $43,720 | | Total current assets | $82,194 | $94,726 | | Total assets | $82,223 | $95,626 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $4,236 | $4,467 | | Long-term debt, net of discount | $31,253 | $31,134 | | Total liabilities | $35,489 | $35,601 | | Total stockholders' equity | $46,734 | $60,025 | Condensed Consolidated Statements of Operations and Comprehensive Loss Net loss increased to $14.2 million for the three months ended March 31, 2025, primarily due to $3.4 million in restructuring charges Statement of Operations Summary (in thousands, except per share data) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $6,876 | $6,011 | | General and administrative | $3,965 | $3,858 | | Restructuring charges | $3,375 | $0 | | Total operating expenses | $14,216 | $9,869 | | Loss from operations | ($14,216) | ($9,869) | | Net loss | ($14,211) | ($10,707) | | Net loss per share, basic and diluted | ($0.24) | ($0.21) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $12.7 million, while investing activities provided $23.8 million, leading to an $11.0 million increase in cash and equivalents Cash Flow Summary (in thousands) | Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($12,711) | ($9,575) | | Net cash provided by investing activities | $23,758 | $20,700 | | Net cash (used in) provided by financing activities | ($17) | $30,250 | | Increase in cash and cash equivalents | $11,030 | $41,375 | | Cash and cash equivalents, end of period | $60,494 | $90,630 | Notes to Condensed Consolidated Financial Statements (unaudited) Notes detail the strategic shift to EO-1022, discontinuation of EO-3021, a 70% workforce reduction, $3.4 million in restructuring charges, and debt prepayment - In March 2025, the company discontinued development of EO-3021 (a Claudin 18.2 ADC) and initiated a process to evaluate strategic options. The company is now focusing on advancing EO-1022, a HER3-targeting ADC[20] - The company believes its cash, cash equivalents, and marketable securities of $80.7 million as of March 31, 2025, are sufficient to fund operations through at least 12 months from the financial statement issuance date[23] - In connection with discontinuing EO-3021, the company implemented a 70% workforce reduction and incurred $3.4 million in restructuring charges, including $2.2 million for severance and benefits and $1.2 million in asset write-offs[55][56] - In May 2025, the company voluntarily prepaid its $32.3 million Term Loan with K2HV in full, satisfying all obligations under the Loan Agreement[117] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the strategic shift to focus on EO-1022, the discontinuation of EO-3021, a 70% workforce reduction, and the $14.2 million net loss for Q1 2025 - The company is leveraging its ADC expertise to advance EO-1022, a potentially differentiated HER3 ADC, and expects to file an IND application in 2026[120][121] - In March 2025, the company discontinued development of the Claudin 18.2 ADC, EO-3021, based on data from its Phase 1 trial, which showed an objective response rate of 22.2%[123][125] - The company implemented a workforce reduction of approximately 70% in March 2025, resulting in restructuring charges of $3.4 million in the first quarter[129][148] Results of Operations Comparison (in thousands) | | Three months ended March 31, | | | :--- | :--- | :--- | | | 2025 | 2024 | | Research and development | $6,876 | $6,011 | | General and administrative | $3,965 | $3,858 | | Restructuring charges | $3,375 | $0 | | Net loss | $(14,211) | $(10,707) | - As of March 31, 2025, the company had $80.7 million in cash, cash equivalents, and marketable securities, which is expected to fund operations into the second half of 2026[159][168] Quantitative and Qualitative Disclosures about Market Risk The company's primary market risk is interest rate sensitivity on its $80.7 million in cash, cash equivalents, and marketable securities, with no significant foreign currency risk - The company's primary market risk is interest rate sensitivity on its $80.7 million in cash, cash equivalents, and marketable securities[184] - The company is not currently exposed to significant risk from foreign currency exchange rates[185] 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 - Based on an evaluation as of March 31, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[186] - No changes in internal control over financial reporting occurred during the three months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[188] Part II Other Information Legal Proceedings The company reports no involvement in any legal proceedings - The company reports no legal proceedings[191] Risk Factors Key risks include strategic review uncertainty, limited operating history with significant losses, high dependency on EO-1022, need for additional funding, and potential Nasdaq delisting - The company has initiated a process to evaluate strategic options, but there is no assurance that this will result in a suitable transaction or that it will be completed on attractive terms[194][195] - The company has a limited operating history, has incurred significant losses since inception (accumulated deficit of $254.7 million as of March 31, 2025), and expects to incur continued losses[197] - Future success is highly dependent on a single product candidate, EO-1022, which has not completed clinical development or obtained regulatory approval[215] - The company relies on third parties, some based in China, to manufacture clinical supplies, which increases risks related to supply chain, cost, quality, and geopolitical tensions[332][333][334] - The company's common stock does not meet the Nasdaq minimum bid price requirement. It has until September 15, 2025, to regain compliance or face delisting[488][489] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds from public offerings during the period - There were no unregistered sales of equity securities in the period[499] Defaults Upon Senior Securities The company reported no defaults upon its senior securities - There were no defaults upon senior securities[501] Mine Safety Disclosures This item is not applicable to the company - Not applicable[502] Other Information The company did not report any other information under this item - None[503] Exhibits This section lists exhibits filed with the Form 10-Q, including a separation agreement and SOX certifications by the Principal Executive and Financial Officers - The report includes as exhibits the CEO and CFO certifications required under Sections 302 and 906 of the Sarbanes-Oxley Act[506] - A separation agreement dated March 31, 2025, with Valerie Malyvanh Jansen was filed as Exhibit 10.1[506]