Orchestra BioMed (US:OBIO)2025-08-12 12:00PART I. FINANCIAL INFORMATION Financial Statements Orchestra BioMed's H1 2025 financials show decreased assets, a $38.1 million net loss, and $32.1 million cash used in operations Condensed Consolidated Balance Sheets Total assets decreased to $42.8 million by June 30, 2025, from $76.2 million at year-end 2024, mainly due to reduced cash and marketable securities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $18,749 | $22,261 | | Marketable securities | $15,175 | $44,551 | | Total current assets | $35,882 | $69,171 | | Total Assets | $42,825 | $76,173 | | Liabilities & Equity | | | | Total current liabilities | $17,061 | $16,207 | | Total Liabilities | $42,530 | $43,215 | | Accumulated deficit | $(347,996) | $(309,878) | | Total Stockholders' Equity | $295 | $32,958 | Condensed Consolidated Statements of Operations and Comprehensive Loss Net losses for Q2 and H1 2025 increased to $19.4 million and $38.1 million, driven by a 35% rise in R&D expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $836 | $778 | $1,704 | $1,398 | | Research and development | $13,853 | $11,126 | $27,335 | $20,238 | | Selling, general and administrative | $6,264 | $6,467 | $12,527 | $12,364 | | Loss from operations | $(19,327) | $(16,859) | $(38,248) | $(31,282) | | Net loss | $(19,363) | $(15,980) | $(38,118) | $(29,443) | | Net loss per share (basic and diluted) | $(0.50) | $(0.45) | $(0.99) | $(0.82) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $32.1 million for H1 2025, with a $3.5 million net decrease in cash and cash equivalents Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(32,143) | $(23,320) | | Net cash provided by investing activities | $29,355 | $16,285 | | Net cash (used in) provided by financing activities | $(724) | $189 | | Net decrease in cash and cash equivalents | $(3,512) | $(6,846) | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail accounting policies, strategic partnerships, financing, and subsequent events, confirming sufficient capital for at least one year of operations - The company's flagship products are AVIM therapy for hypertension and Virtue SAB for atherosclerotic artery disease, developed through partnerships with Medtronic and Terumo, respectively22 - Management has concluded that based on cash, cash equivalents, marketable securities as of June 30, 2025, and subsequent proceeds, there is sufficient capital to fund operations for at least one year from the issuance date of the financial statements30 - The company is in a mediation procedure with Terumo to potentially resolve disagreements regarding the Virtue SAB commercialization agreement, expected to be completed by the end of Q3 202577 - Under the Medtronic agreement for AVIM therapy, the company reimburses Medtronic for certain R&D expenses, which increased significantly to approximately $7.4 million for H1 2025 from $3.1 million in H1 202493 - Subsequent to the quarter end, the company executed several major financing and strategic transactions in July and August 2025, including a revenue sharing agreement with Ligand, a loan agreement with Medtronic, a public offering, and amendments to its debt facility with Hercules150158170 Management's Discussion and Analysis of Financial Condition and Results of Operations The 29% increase in H1 2025 net loss is due to a 35% rise in R&D expenses, with $76.2 million in post-quarter financing extending the cash runway into H2 2027 Results of Operations H1 2025 revenue increased 22% to $1.7 million, but a 35% rise in R&D expenses led to a $38.1 million net loss Comparison of Six Months Ended June 30, 2025 and 2024 (in thousands) | Metric | YTD 2025 | YTD 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $1,704 | $1,398 | $306 | 22% | | Research and development | $27,335 | $20,238 | $7,097 | 35% | | Selling, general and administrative | $12,527 | $12,364 | $163 | 1% | | Net loss | $(38,118) | $(29,443) | $(8,675) | (29)% | - The $7.1 million (35%) increase in R&D expenses for H1 2025 was primarily due to increased clinical development costs ($3.0 million), higher personnel and consulting costs ($2.2 million), and increased non-clinical development costs ($1.1 million) to advance the BACKBEAT and Virtue SAB studies220 Comparison of Three Months Ended June 30, 2025 and 2024 (in thousands) | Metric | Q2 2025 | Q2 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $836 | $778 | $58 | 7% | | Research and development | $13,853 | $11,126 | $2,727 | 25% | | Selling, general and administrative | $6,264 | $6,467 | $(203) | (3)% | | Net loss | $(19,363) | $(15,980) | $(3,383) | (21)% | Liquidity and Capital Resources As of June 30, 2025, the company held $33.9 million in liquid assets, with $76.2 million received post-quarter and $35 million committed for 2026, extending the cash runway into H2 2027 - As of June 30, 2025, the company held $18.7 million in cash and cash equivalents and $15.2 million in marketable securities239 - On August 4, 2025, the company received $76.2 million from a combination of a public offering, private placements with Medtronic and Ligand, and a revenue sharing agreement with Ligand239 - The company expects to receive an additional $35.0 million in committed capital in 2026, consisting of $20.0 million from a loan agreement with Medtronic and $15.0 million from Ligand239 - Based on current plans and recent financing, the company projects its cash runway is sufficient to fund operations into the second half of 2027241 Critical Accounting Policies and Estimates Critical accounting policies involve significant judgment in revenue recognition for the Terumo partnership and stock-based compensation, with estimates impacting financials - Revenue from the Terumo Agreement is recognized using a proportional performance model, relying on management's estimate of total costs to complete the performance obligation, which can affect revenue recognition timing266268 - Stock-based compensation expense totaled $6.2 million for H1 2025, with $16.8 million of unrecognized expense remaining as of June 30, 2025, to be recognized over 2.3 years282 Quantitative and Qualitative Disclosures About Market Risk Quantitative and qualitative disclosures regarding market risk are not applicable for this reporting period - The company has indicated that quantitative and qualitative disclosures about market risk are not applicable290 Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective293 - No material changes to the company's internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025294 PART II. OTHER INFORMATION Legal Proceedings The company is not currently involved in any material legal proceedings, nor is it aware of any pending or threatened actions - As of the filing date, the company reports no material legal proceedings297 Risk Factors No material changes to previously disclosed risk factors have occurred since the last annual and quarterly reports - The company states there are no material changes to its previously disclosed risk factors298 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported during the period - None reported for the period299 Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the second quarter of 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the second quarter of 2025302 Exhibits This section lists exhibits filed with the Form 10-Q, including corporate governance documents, financing agreements, and officer certifications