Molecular Partners AG(MOLN) - 2024 Q4 - Annual Report

At a Glance Company Profile & DARPin Therapeutics Molecular Partners AG is a clinical-stage biotech company specializing in the design and development of DARPin (Designed Ankyrin Repeat Protein) therapeutics, a new class of custom-built protein drugs, primarily focusing on oncology by leveraging DARPins' unique properties - The company pioneers DARPin therapeutics, focusing on oncology programs in various stages of pre-clinical and clinical development[4] - DARPin therapeutics are a new class of protein drugs with advantages like multi-target specificity, high affinity, small size, and stability, which have been clinically validated across several therapeutic areas[5] Highlights in 2024 Molecular Partners achieved significant R&D, leadership, and financial milestones in 2024, advancing lead candidates, expanding key collaborations, strengthening leadership, and securing a $20 million capital raise to extend its operational runway into 2027 - Nominated MP0712 (DLL3-targeting) as the first lead Radio-DARPin candidate and advanced it into IND-enabling studies with partner Orano Med[6] - Expanded the strategic collaboration with Orano Med to co-develop up to ten 212Pb-based radiotherapy products[10] - Presented encouraging initial response rate data from cohort 8 of the Phase 1/2a trial of MP0533 for patients with relapsed/refractory AML[10] - Secured a stronger financial position through a $20 million capital raise, extending the cash runway well into 2027[10][11] - Appointed Dr. Philippe Legenne as Chief Medical Officer in August 2024[8] 2025 Outlook Molecular Partners anticipates a productive 2025, with key milestones including first-in-human studies for MP0712, preclinical data for a second Radio-DARPin, and further MP0533 trial data, projecting operating expenses between CHF 55-65 million - Lead Radio-DARPin MP0712 is expected to enter its first-in-human study in 2025, with initial clinical data anticipated by year-end[11] - Data from the Phase 1/2a trial of MP0533, including results from the amended dosing scheme, will be presented in 2025[12] - Preclinical data on the second Radio-DARPin candidate targeting MSLN will be presented in H1 2025[11] - Full-year 2025 operating expenses are expected to be between CHF 55-65 million[11] Shareholder Letter The shareholder letter highlights 2024 achievements and 2025 outlook, including an expanded partnership with Orano Med, progress with MP0533 and the Switch-DARPin platform, and a $20 million capital raise securing funding into 2027 - Expanded partnership with Orano Med to develop up to ten targeted alpha radiotherapy programs, with MP0712 (targeting DLL3) set to enter clinical trials in 2025[17][18] - Presented positive data for MP0533 in AML, with an amended dosing protocol showing increased response rates, and advanced the Switch-DARPin platform with preclinical proof-of-concept[22][23][24] - Strengthened the financial position by raising approximately $20 million, resulting in a cash position of CHF 149 million at year-end 2024, which is expected to fund operations well into 2027[29] - Key upcoming milestones in 2025 include submitting the IND application for MP0712 in H1, presenting data on the amended MP0533 dosing scheme, and initiating an investigator-led trial for MP0317[27][28] Financial Summary Results and Overview The company reported a net loss of CHF 54.0 million for FY 2024, an improvement from the CHF 62.0 million loss in FY 2023, with total revenues decreasing to CHF 5.0 million, operating expenses stable at CHF 66.2 million, and a cash position of CHF 149.4 million providing a runway into 2027 Key Financials (FY 2024 vs FY 2023) | Key Financials (CHF million) | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Total revenues and other income | 5.0 | 7.0 | (2.0) | | Total operating expenses | (66.2) | (68.1) | 1.9 | | Operating result | (61.2) | (61.1) | (0.1) | | Net result | (54.0) | (62.0) | 8.0 | | Basic net result per share (in CHF) | (1.59) | (1.89) | 0.30 | | Net cash from operating activities | (59.2) | (59.0) | (0.2) | | Cash and cash equivalents (incl. short-term deposits) | 149.4 | 186.9 | (37.5) | | Total shareholders' equity | 141.6 | 176.4 | (34.8) | - The Group's cash position of CHF 149.4 million as of December 31, 2024, is expected to support operations well into 2027, excluding potential receipts from R&D partners[38] Financial Performance Details In 2024, revenues of CHF 5.0 million were solely from the Novartis collaboration, which concluded in Q3 2024, while operating expenses decreased slightly to CHF 66.2 million, and a net financial gain of CHF 7.2 million contributed to a reduced net loss of CHF 54.0 million - Total revenues of CHF 5.0 million in 2024 were exclusively from the Novartis radioligand therapy collaboration, which concluded in Q3 2024[39] - Total operating expenses decreased by CHF 1.9 million to CHF 66.2 million. R&D expenses were flat at CHF 48.6 million, while SG&A expenses decreased by 9% to CHF 17.6 million[41][42] - The company recorded a net financial gain of CHF 7.2 million in 2024, a significant turnaround from a loss of CHF 0.9 million in 2023, primarily due to foreign exchange gains and interest income[43] - The net loss for 2024 was CHF 54.0 million, an improvement from the CHF 62.0 million net loss in 2023[45] Balance Sheet and Cash Flow As of December 31, 2024, the Group's balance sheet remained debt-free with total shareholders' equity of CHF 141.6 million, while total cash and short-term deposits decreased by CHF 37.5 million to CHF 149.4 million, and a CHF 14.4 million net cash inflow from financing activities was driven by a capital raise - Total cash and short-term deposits decreased by CHF 37.5 million to CHF 149.4 million at year-end 2024[46] - The balance sheet remained debt-free, with total shareholders' equity at CHF 141.6 million[47] - Net cash outflow from operating activities was CHF 59.2 million, nearly unchanged from CHF 59.0 million in 2023[48] - Net cash inflow from financing activities was CHF 14.4 million, primarily due to the capital raise in October 2024[50] Financial Risk Management The Group's financial risk management focuses on mitigating pre-revenue stage risks, including financing, foreign exchange, and liquidity, through natural hedging, high-rated bank deposits, and a strong cash position funding operations into 2027 - The Group is exposed to financing risk due to a lack of constant revenue, but this is mitigated by a strong cash position[52] - Foreign exchange risk (CHF, EUR, USD) is managed primarily through natural hedging by matching cash flows in different currencies[54] - Credit risk is low as all cash and cash equivalents are held with three major Swiss banks with high credit ratings (A+ to AAA)[58] - Liquidity risk is deemed low, with the CHF 149.4 million cash position expected to fund the Group well into 2027[58] Financial Outlook 2025 and Calendar For FY 2025, Molecular Partners projects total operating expenses between CHF 55-65 million, including approximately CHF 7 million in non-cash costs, and has outlined its financial calendar for the year - Expected total operating expenses for FY 2025 are between CHF 55-65 million, including about CHF 7 million in non-cash costs[55] Financial Calendar 2025 | Date | Event | | :--- | :--- | | March 25, 2025 | Publication of Annual General Meeting Invitation | | April 16, 2025 | Annual General Meeting | | May 15, 2025 | Interim Management Statement Q1 2025 | | August 25, 2025 | Publication of Half-year Results 2025 | | October 30, 2025 | Interim Management Statement Q3 2025 | Research and Development Overview and R&D Strategy Molecular Partners, a clinical-stage biotech, pioneers DARPin therapeutics with an R&D strategy focused on oncology, aiming for early clinical readouts and leveraging partnerships to build a broad pipeline based on DARPins' intrinsic advantages - The company's approach has been validated through seven clinical-stage candidates tested in over 2,500 patients, observed to be highly active and generally well-tolerated[61] - Key intrinsic advantages of DARPins include their derivation from natural binding proteins, high affinity and specificity, small size, multispecificity, 'either-or' specificity for conditional activation, and high stability[63][64][65] - The R&D strategy prioritizes programs that can demonstrate single-agent activity early in clinical development to enable swift decision-making[70][71] - The company seeks to combine its capabilities with world-class partners to accelerate the development of DARPins as a class and deliver a broad pipeline of innovative therapies[72] Pipeline Update The company's oncology pipeline focuses on the Radio-DARPin Therapy (RDT) platform, the tetraspecific T cell engager MP0533, and the next-generation Switch-DARPin platform, with MP0712 and MP0533 as lead candidates - The oncology pipeline is led by the Radio-DARPin Therapy (RDT) platform, T cell engager MP0533, and the Switch-DARPin platform for immune cell engagers[73] Radio-DARPin Therapy (RDT) The RDT platform uses DARPins to selectively deliver radioactive payloads to tumors, with lead candidate MP0712 (targeting DLL3) co-developed with Orano Med for SCLC, and an expanded partnership covering up to ten 212Pb-based RDT programs - MP0712 is the first DLL3-targeting Radio-DARPin, co-developed with Orano Med. An IND application is planned for H1 2025, with a first-in-human study to follow[80][81] - The second RDT program targets mesothelin (MSLN), which is overexpressed in several cancers. Preclinical data will be presented in Q2 2025[83] - The strategic collaboration with Orano Med was expanded in January 2025 to co-develop up to ten 212Pb-based RDT programs[84] MP0533 MP0533, a novel tetra-specific T cell-engaging DARPin for relapsed/refractory AML, is undergoing a Phase 1/2a trial with an amended dosing protocol showing increased response rates, and further data expected in 2025 - MP0533 is a tetra-specific T cell engager targeting three AML antigens (CD33, CD123, CD70) and the T cell activator CD3[88] - The ongoing Phase 1/2a trial is being amended to improve drug exposure based on learnings from dose escalation. Initial data from cohort 8 with more frequent dosing showed increased response rates[90] - Updated data on the amended dosing scheme are expected in 2025[90] Switch-DARPin Platform The Switch-DARPin platform employs a logic-gated design for conditional immune activation, demonstrating preclinical proof-of-concept for potent tumor regression with reduced off-tumor toxicity, while the first program, MP0621, is being evaluated for partnering - The platform uses a dual-binding logic-gated DARPin to provide an 'on/off' function for conditional activation of immune responses[91] - A novel CD3 Switch-DARPin T cell engager showed preclinical proof-of-concept in a solid tumor model, inducing potent tumor regression with reduced off-tumor toxicity. Further data will be presented in Q2 2025[95][96] - The first Switch-DARPin program, MP0621, is being evaluated for partnering after data did not support its use as a treatment for AML[99] MP0317 MP0317 is designed for tumor-localized immune activation by targeting CD40 and FAP, aiming for greater efficacy with fewer side effects, with potential investigator-initiated combination trials under discussion for 2025 - MP0317 is designed to activate immune cells specifically within the tumor microenvironment by targeting both CD40 and FAP[102] - Comprehensive biomarker analyses from the completed Phase 1 dose escalation trial were presented at SITC in November 2024[103] - The company is discussing potential investigator-initiated combination trials for MP0317 in 2025[104] Corporate Sustainability Molecular Partners is committed to corporate sustainability across human capital, product safety, access to medicine, and business ethics, overseen by the Board's Finance and Audit Committee Human Capital and Employee Base The company fosters a supportive work environment with comprehensive benefits, flexible work, and training, while its total full-time equivalent (FTE) employee base decreased by 5% to 158.5 in 2024, with 84% in R&D - Offers generous employee benefits, flexible/hybrid work arrangements, and training programs including LinkedIn Learning[111][113] - Total FTEs reduced by 5% to 158.5, with approximately 84% in R&D roles[116] Product, Data, and Supply Chain Molecular Partners prioritizes data protection and cybersecurity, ensures product quality and safety through a robust QMS, and manages its supply chain with quality audits of Western European CDMOs - Maintains high standards of data protection with cutting-edge IT systems, employee training, and a disaster recovery plan[118][119] - Ensures product quality and safety through a comprehensive QMS, well-trained personnel, and robust oversight of vendors and trials[123] - All CDMOs are based in Western Europe and are audited for quality, focusing on GxP aspects[122] Business Ethics and Access to Medicine The company is committed to global access to medicine, demonstrated by waiving ensovibep royalties in developing regions, and adheres to a strict code of conduct, with its board comprising seven male and one female director as of year-end 2024 - Demonstrated commitment to global access to medicine by waiving future royalties from ensovibep in developing regions during the COVID-19 pandemic[121] - Adheres to a strict code of conduct covering privacy, anti-bribery, whistleblowing, and human rights[126] - As of year-end 2024, the board of directors included seven male and one female director[125] Corporate Governance Report Group Organization and Shareholders Molecular Partners AG, a Swiss company listed on SIX Swiss Exchange and NASDAQ, had a market capitalization of CHF 164 million as of December 31, 2024, with Biotechnology Value Funds and Suvretta Capital Management as significant shareholders - The company is listed on the SIX Swiss Exchange (MOLN) and NASDAQ (MOLN), with a market capitalization of CHF 164 million as of Dec 31, 2024[128][129] Significant Shareholders (as of Dec 31, 2024) | Beneficial Owner | % of Voting Rights | | :--- | :--- | | Mark N. Lampert (Biotechnology Value Funds) | 21.74% | | Suvretta Capital Management, LLC | 10.71% | | UBS Fund Management (Switzerland) AG | 4.82% | | Novartis AG | 4.35% | Capital Structure As of December 31, 2024, the company's issued share capital was CHF 4,036,309.50, divided into 40,363,095 registered shares, with the Board authorized to adjust capital and conditional capital available for employee plans and financing - On Dec 31, 2024, the issued share capital was CHF 4,036,309.50, comprising 40,363,095 registered shares with a par value of CHF 0.10 each[136] - The Board of Directors is authorized to adjust the share capital within a predefined capital range (lower limit: CHF 3.64 million, upper limit: CHF 5.45 million) until April 17, 2029[137] - The company has conditional share capital of CHF 400,000 for employee equity plans and CHF 226,087 for financing purposes[145][148] Board of Directors As of December 31, 2024, the Board of Directors comprised eight members, led by Chairman William M. Burns, with three standing committees overseeing financial reporting, compensation, and R&D strategy - The Board of Directors consists of eight members, with William M. Burns as Chairman. All members except CEO Patrick Amstutz are non-executive[164][183] - The Board has established three committees: Audit and Finance, Nomination and Compensation, and Research and Development[207] - The Audit and Finance Committee, chaired by Sandip Kapadia, oversees financial reporting, internal controls, and the external auditor[209][214] - The Nomination and Compensation Committee, chaired by William M. Burns, supports the Board in compensation strategy and proposals[216][219] - The Research and Development Committee, chaired by Michael Vasconcelles, provides strategic advice on R&D programs and emerging science[220][223] Management Board As of December 31, 2024, the Management Board comprised five members, led by CEO Patrick Amstutz, to whom the Board of Directors has delegated executive and operational management - The Management Board consists of five members: Patrick Amstutz (CEO), Renate Gloggner (EVP People and Community), Philippe Legenne (CMO), Michael Tobias Stumpp (EVP Projects), and Alexander Zürcher (COO)[228][229] - Executive management is delegated by the Board of Directors to the CEO, who is supported by the Management Board[225] - All five members of the Management Board held employment agreements with an indefinite term and a maximum termination notice period of one year[245] Compensation Report Compensation Policy and Governance The company's compensation policy aims to attract and retain talent by promoting an entrepreneurial mindset, with governance overseen by the Nomination and Compensation Committee (NCC) and distinct fixed and variable structures for the Board and Management Board - The Nomination and Compensation Committee (NCC) supports the Board of Directors in establishing compensation strategy and guidelines[267] - Shareholders vote annually on the maximum aggregate compensation for the Board of Directors and the Management Board[279] - Board of Directors' compensation consists of a fixed cash fee (35%) and Restricted Share Units (RSUs, 65%)[283][285] - Management Board's compensation is split into fixed salary (50%), a short-term cash bonus (15%), and long-term Performance Share Units (PSUs, ~35%)[284][285] Compensation Components Compensation components include fixed cash fees and RSUs for the Board, and base salary, variable cash bonuses (target 40-50% of base), and PSUs with three-year cliff vesting for the Management Board, tied to corporate goals and share price performance - The Management Board's cash bonus is determined by achieving annual corporate goals, with a payout between 0% and 150% of the target bonus[293][295] - The 2024 corporate goals were weighted across three categories: strengthening the DARPin portfolio, securing financial runway, and developing the organization[295][296] - Management Board PSUs have a 3-year cliff-vesting period. The final number of shares (0-150% of target) is determined after 12 months based on corporate goal achievement (120% max) and relative share price performance (30% max)[302][305][306] - As of December 31, 2024, there were no more stock options outstanding from the pre-IPO ESOP plans[313] Compensation for Financial Year under Review For FY 2024, total compensation for the Board of Directors was CHF 1.107 million (63% as RSUs), and for the Management Board was CHF 4.137 million (53% variable), with a 90% achievement ratio for corporate goals, all within approved budgets Board of Directors Compensation 2024 (in CHF 1,000) | Member | Total Compensation | | :--- | :--- | | William Burns (Chairman) | 302 | | Steven Holtzman | 135 | | Sandip Kapadia | 130 | | Vito J. Palombella | 125 | | Michael Vasconcelles | 135 | | Agnete Fredriksen | 141 | | Dominik Höchli | 139 | | Total | 1,107 | Management Board Compensation 2024 (in CHF 1,000) | Member | Total Compensation | | :--- | :--- | | Patrick Amstutz (CEO) | 1,095 | | Total Management Board | 4,137 | - The achievement ratio for the 2024 corporate goals was 90%, which directly impacts the cash bonus payout[326][327] - As of December 31, 2024, the company has not granted any loans, credit lines, or post-retirement benefits beyond standard occupational schemes to board or management members[335] Financial Reports IFRS Consolidated Financial Statements The IFRS consolidated financial statements show a net loss of CHF 54.0 million for 2024 (improved from CHF 62.0 million in 2023), with total assets at CHF 158.5 million and a cash runway into 2027, supported by a $20 million capital increase Consolidated Statement of Financial Position (in CHF thousands) | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | 158,528 | 198,352 | | Total current assets | 154,281 | 192,459 | | Total non-current assets | 4,247 | 5,893 | | Total Shareholders' Equity and Liabilities | 158,528 | 198,352 | | Total shareholders' equity | 141,637 | 176,429 | | Total liabilities | 16,891 | 21,923 | Consolidated Statement of Profit or Loss (in CHF thousands) | | 2024 | 2023 | | :--- | :--- | :--- | | Total revenues and other income | 4,970 | 7,038 | | Total operating expenses | (66,187) | (68,146) | | Operating result | (61,217) | (61,108) | | Net result, attributable to shareholders | (54,043) | (61,984) | | Basic net result per share (in CHF) | (1.59) | (1.89) | - Revenue of CHF 5.0 million in 2024 was recognized from the Novartis Radioligand Agreement, with the full upfront payment now recognized as the collaboration activities ended in Q3 2024[436] - The company executed a capital increase in October 2024, issuing 3,642,988 new shares and raising gross proceeds of approximately USD 20 million (net proceeds after costs: CHF 15.6 million)[455][361] Molecular Partners AG Financial Statements The standalone financial statements for Molecular Partners AG report a net loss of CHF 50.6 million for 2024 (improved from CHF 56.3 million in 2023), with total assets at CHF 158.3 million, and a proposed cumulative loss of CHF 199.4 million Molecular Partners AG Income Statement (in CHF thousands) | | 2024 | 2023 | | :--- | :--- | :--- | | Total revenues | 4,970 | 7,038 | | Total operating expenses | (62,789) | (62,448) | | Operating result | (57,819) | (55,410) | | Net result | (50,643) | (56,285) | Molecular Partners AG Balance Sheet (in CHF thousands) | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | 158,309 | 198,248 | | Total Liabilities and Shareholders' Equity | 158,309 | 198,248 | | Total liabilities | 12,228 | 17,164 | | Total shareholders' equity | 146,081 | 181,084 | - The Board of Directors proposes to carry forward the net loss of CHF 50.6 million, increasing the cumulative loss to CHF 199.4 million[644][645]