Pliant Therapeutics(PLRX) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Financial Statements (Unaudited) Unaudited condensed financial statements for June 30, 2025, show total assets decreased to $299.8 million and a net loss of $99.5 million for the six-month period, reflecting operational cash usage and reduced R&D Condensed Balance Sheets As of June 30, 2025, total assets decreased to $299.8 million from $396.9 million, primarily due to reduced cash and investments, reflecting net losses Condensed Balance Sheet Highlights (In thousands) | Balance Sheet Highlights | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $86,820 | $71,188 | | Short-term investments | $176,053 | $284,536 | | Total Assets | $299,824 | $396,949 | | Liabilities & Equity | | | | Total Liabilities | $79,742 | $92,868 | | Total Stockholders' Equity | $220,082 | $304,081 | | Total Liabilities and Stockholders' Equity | $299,824 | $396,949 | Condensed Statements of Operations and Comprehensive Loss Net loss for Q2 2025 improved to $43.3 million from $55.9 million in Q2 2024, primarily due to decreased R&D expenses, with a six-month net loss of $99.5 million Condensed Statements of Operations (In thousands) | Statement of Operations | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $(32,198) | $(45,617) | $(75,634) | $(82,763) | | General and administrative | $(13,394) | $(15,022) | $(28,893) | $(30,268) | | Loss from operations | $(45,592) | $(60,639) | $(104,527) | $(113,031) | | Net loss | $(43,300) | $(55,854) | $(99,466) | $(102,809) | | Net loss per share | $(0.71) | $(0.92) | $(1.62) | $(1.71) | Condensed Statements of Stockholders' Equity Total stockholders' equity decreased to $220.1 million from $304.1 million, primarily due to a $99.5 million net loss, partially offset by stock-based compensation Stockholders' Equity Movement (In thousands) | Stockholders' Equity Movement | Amount | | :--- | :--- | | Balance at December 31, 2024 | $304,081 | | Net loss (Six months ended June 30, 2025) | $(99,466) | | Stock-based compensation expense | $15,291 | | Issuance of common stock under benefit plans | $498 | | Net unrealized loss on short term investments | $(322) | | Balance at June 30, 2025 | $220,082 | Condensed Statements of Cash Flows Net cash used in operating activities increased to $89.5 million for the six months ended June 30, 2025, with investing activities providing $104.6 million, leading to a $15.6 million net cash increase Cash Flow Summary (In thousands) | Cash Flow Summary | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(89,467) | $(75,568) | | Net cash provided by investing activities | $104,601 | $70,248 | | Net cash provided by financing activities | $498 | $22,472 | | Net increase in cash and cash equivalents | $15,632 | $17,152 | Notes to Condensed Financial Statements Key notes highlight the discontinuation of the bexotegrast program, a 45% workforce reduction incurring $3.8 million in restructuring costs, and the adoption of a stockholder rights agreement - In June 2025, the company announced the discontinuation of the development of bexotegrast in Idiopathic Pulmonary Fibrosis (IPF) after the Phase 2b BEACON-IPF trial demonstrated an unfavorable risk-benefit profile[35] - On May 1, 2025, the company announced a workforce reduction impacting approximately 45% of its employees, with an expected total cost of about $3.8 million[91] - In March 2025, the company's board adopted a stockholder rights agreement (a "poison pill") intended to reduce the likelihood of a hostile takeover, expiring on March 11, 2026[64][65] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the discontinuation of bexotegrast, strategic restructuring to extend cash runway, and focus on oncology and muscular dystrophy programs, with $264.4 million in cash as of Q2 2025 Overview and Recent Developments The company discontinued bexotegrast development in IPF due to an unfavorable risk-benefit profile and initiated strategic restructuring, while advancing its oncology program PLN-101095 - Bexotegrast development in IPF was discontinued following an analysis of the full safety and efficacy data from the BEACON-IPF Phase 2b/3 trial, which showed an unfavorable risk-benefit profile[100] - The Phase 1 trial of PLN-101095 in solid tumors is ongoing, with initial data from the two highest dose cohorts expected by the end of 2025[101] - A strategic restructuring of the workforce and other cost-saving actions were largely completed by the end of Q2 2025 to extend the company's cash runway[102] Results of Operations R&D expenses decreased by $13.4 million for Q2 2025 due to the discontinuation of the BEACON-IPF trial, with general and administrative expenses also decreasing by $1.6 million R&D Expense Breakdown (In thousands) | R&D Expense Breakdown | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | | :--- | :--- | :--- | :--- | | Bexotegrast - clinical trial costs | $13,359 | $26,360 | $(13,001) | | Other pipeline programs | $2,019 | $1,673 | $346 | | Unallocated internal expenses | $16,820 | $17,584 | $(764) | | Total R&D Expenses | $32,198 | $45,617 | $(13,419) | - General and administrative expenses decreased by $1.6 million for the three months ended June 30, 2025, primarily due to reduced employee-related costs following the workforce reduction[113] Liquidity and Capital Resources As of June 30, 2025, the company held $264.4 million in cash and investments, deemed sufficient for over 12 months, despite increased cash used in operating activities to $89.5 million - The company had $264.4 million in cash, cash equivalents, and short-term investments as of June 30, 2025[121] - Management believes existing capital resources are sufficient to fund anticipated operating expenses and capital requirements for the next 12 months and beyond[123] - Net cash used in operating activities increased by $13.9 million for the six months ended June 30, 2025, primarily due to settling payables related to the bexotegrast program close-out[127] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate fluctuations on its investment portfolio and variable-rate term loan, though a 100 basis point change is not expected to be material - The company's main market risk is interest rate sensitivity on its $264.4 million of cash, cash equivalents, and short-term investments, and its $30.0 million term loan[137] - Due to the short-term nature of its investments, the company believes a hypothetical 10% change in interest rates would not have had a material impact on its financial statements[138] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - As of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[140] - No changes to internal control over financial reporting occurred during the quarter ended June 30, 2025, that would be reasonably likely to have a material effect[141] PART II. OTHER INFORMATION Item 1. Legal Proceedings As of the filing date, the company is not a party to any material legal matters or claims, though future involvement in ordinary course legal matters is acknowledged - The company is not currently party to any material legal matters or claims[144] Item 1A. Risk Factors The company faces significant financial, R&D, commercialization, intellectual property, third-party reliance, operational, and stock-related risks, including a history of losses and high dependence on early-stage candidates - Financial Risk: The company has incurred significant net losses since inception ($809.5 million accumulated deficit as of June 30, 2025) and expects to continue incurring losses, requiring substantial additional capital[147][151] - R&D Risk: The business is highly dependent on the success of its remaining clinical-stage product candidates after discontinuing bexotegrast in IPF, with drug discovery being an unproven, lengthy, expensive, and uncertain process[165][169][170] - Third-Party Reliance Risk: The company relies on single-source third-party suppliers, including some located in China, to manufacture its drug candidates, posing disruption risks from business or geopolitical events[17][317][318] - Operational Risk: The recent restructuring and 45% workforce reduction may increase dependence on remaining key personnel and could lead to loss of institutional knowledge, decreased morale, or attrition[333] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the reporting period - No unregistered sales of equity securities occurred during the period[400] Item 5. Other Information No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading plan during the quarter[403] Item 6. Exhibits This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications and interactive data files (XBRL) - The report includes certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, along with other corporate documents and XBRL data[405]