Adicet Bio(ACET) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (Unaudited) Adicet Bio's unaudited financials for Q2 2025 show total assets decreased to $163.0 million, with a net loss of $31.2 million and a 30% workforce reduction Consolidated Balance Sheets Total assets decreased to $163.0 million by June 30, 2025, primarily due to a $51.3 million decline in cash and short-term investments Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $34,720 | $56,495 | | Short-term investments | $90,243 | $119,808 | | Total current assets | $127,740 | $180,136 | | Total assets | $162,972 | $220,219 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $17,079 | $19,392 | | Total liabilities | $29,600 | $33,610 | | Total stockholders' equity | $133,372 | $186,609 | | Total liabilities and stockholders' equity | $162,972 | $220,219 | Consolidated Statements of Operations and Comprehensive Loss The company reported a net loss of $31.2 million for Q2 2025 and $59.4 million for the first six months, driven by increased R&D expenses Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $28,424 | $25,901 | $51,238 | $49,797 | | General and administrative | $3,968 | $6,948 | $11,039 | $13,922 | | Total operating expenses | $32,392 | $32,849 | $62,277 | $63,719 | | Loss from operations | ($32,392) | ($32,849) | ($62,277) | ($63,719) | | Net loss | ($31,217) | ($29,901) | ($59,431) | ($57,917) | | Net loss per share | ($0.34) | ($0.33) | ($0.65) | ($0.68) | Consolidated Statements of Cash Flows Net cash used in operating activities was $52.0 million for H1 2025, resulting in a $21.8 million decrease in cash and equivalents Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($52,030) | ($46,271) | | Net cash provided by (used in) investing activities | $30,092 | ($541) | | Net cash provided by financing activities | $163 | $111,170 | | Net change in cash, cash equivalents and restricted cash | ($21,775) | $64,358 | | Cash, cash equivalents and restricted cash at end of period | $37,623 | $224,069 | Notes to Unaudited Consolidated Financial Statements Notes detail liquidity, Nasdaq non-compliance, and a July 2025 strategic pipeline prioritization with a 30% workforce reduction and $2.3 million in restructuring charges - 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[45] - On April 7, 2025, the company received a Nasdaq notification for its stock bid price falling below $1.00 for 30 consecutive business days, with a deadline of October 6, 2025, to regain compliance[48] - In July 2025, the company announced a strategic pipeline prioritization focusing on ADI-001 and ADI-212, discontinued ADI-270, and implemented a workforce reduction of approximately 30%[124][127] - The company expects to incur approximately $2.3 million in personnel-related restructuring charges in Q3 2025 due to the workforce reduction[124] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses pipeline focus on ADI-001 and ADI-212, with Q2 2025 R&D up 10% and G&A down 43%, ending with $125.0 million in cash Overview Adicet Bio focuses on allogeneic gamma delta T cell therapies, with lead candidate ADI-001 in Phase 1 and ADI-212 advancing, while ADI-270 development is discontinued - Lead product candidate ADI-001 is in a Phase 1 clinical trial for autoimmune diseases, with preliminary data from at least 6 patients expected in H2 2025[132] - The company is advancing ADI-212 for mCRPC and expects to submit a regulatory filing in Q1 2026[134] - Development of ADI-270 has been discontinued as part of a strategic pipeline prioritization[135] - In July 2025, the company reduced its workforce by approximately 30% in connection with its strategic pipeline prioritization[136] Results of Operations Q2 2025 R&D expenses increased 10% to $28.4 million, while G&A expenses decreased 43% to $4.0 million, resulting in a $59.4 million net loss for H1 2025 Comparison of Operating Expenses (in thousands) | Expense Category | Q2 2025 | Q2 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $28,424 | $25,901 | $2,523 | 10% | | General and administrative | $3,968 | $6,948 | ($2,980) | (43%) | | Total operating expenses | $32,392 | $32,849 | ($457) | (1%) | Comparison of Operating Expenses - Six Months (in thousands) | Expense Category | H1 2025 | H1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $51,238 | $49,797 | $1,441 | 3% | | General and administrative | $11,039 | $13,922 | ($2,883) | (21%) | | Total operating expenses | $62,277 | $63,719 | ($1,442) | (2%) | - The decrease in G&A expenses for both the three and six-month periods was primarily due to a decrease in stock-based compensation expense[149][156] Liquidity and Capital Resources The company holds $125.0 million in cash and investments, sufficient for 12 months, with an accumulated deficit of $557.3 million as of June 30, 2025 - As of June 30, 2025, the company had cash, cash equivalents, and short-term investments totaling $125.0 million[162] - The company expects its current cash position to be sufficient to fund operations for at least the next twelve months[162][164] - In January 2024, the company raised net proceeds of approximately $91.7 million from an underwritten public offering and $19.3 million from its ATM program[160][161] - The company's accumulated deficit was $557.3 million as of June 30, 2025[163] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate risk on its $125.0 million in investments, but foreign currency and inflation risks are not currently material - The company's primary market risk is interest rate risk on its cash and short-term investments of $125.0 million, but a 10% change in rates is not expected to be material[185] - Foreign currency exchange risk and inflation risk are not considered to have had a material impact on the company's results for the period[187][188] Item 4. Controls and Procedures Disclosure controls were effective as of June 30, 2025, with a previously identified material weakness in cash disbursements remediated - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[189] - A material weakness in internal controls over financial reporting related to unauthorized cash disbursements, identified in Q4 2024, was successfully remediated as of March 6, 2025[189][191] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently subject to any material legal proceedings or claims expected to have a material adverse effect - As of the report date, the company is not subject to any material legal proceedings[193] Item 1A. Risk Factors Significant risks include dependence on ADI-001, substantial net losses, need for financing, clinical and manufacturing challenges, regulatory hurdles, and potential Nasdaq delisting - The business is highly dependent on the success of its most advanced product candidate, ADI-001[202] - The company has incurred net losses since inception, with an accumulated deficit of $557.3 million as of June 30, 2025, and anticipates substantial future losses[197] - Substantial additional financing is required to develop product candidates and implement operating plans[260] - The company's common stock is at risk of being delisted from Nasdaq for failing to maintain a minimum bid price of $1.00 per share[470] - The July 2025 workforce reduction may not result in anticipated savings and could disrupt business operations[272] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the reporting period - No unregistered sales of equity securities occurred during the period[497] Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 trading plans during the fiscal quarter - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the quarter[500] Item 6. Exhibits The report includes key exhibits such as corporate governance documents, license agreements, and officer certifications - Key exhibits filed include license and collaboration agreements with CRISPR Therapeutics AG and City of Hope, along with standard corporate governance documents and officer certifications[503]