Cue Biopharma(CUE) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements The unaudited condensed consolidated financial statements for the period ended June 30, 2025, show an increase in cash and total assets, primarily driven by financing activities, with the company continuing to incur net losses, reporting a loss of $20.7 million for the six months ended June 30, 2025, and notes highlight substantial doubt about the company's ability to continue as a going concern due to recurring losses and the need for additional capital Condensed Consolidated Balance Sheets As of June 30, 2025, the company's total assets increased to $40.7 million from $32.2 million at year-end 2024, primarily due to a rise in cash and cash equivalents, while total liabilities also grew to $22.5 million from $14.7 million, largely driven by an increase in research and development contract liability, and total stockholders' equity saw a slight increase to $18.2 million Condensed Consolidated Balance Sheets (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Assets | | | | Cash and cash equivalents | $27,492 | $22,459 | | Total current assets | $30,844 | $25,138 | | Total assets | $40,707 | $32,191 | | Current Liabilities | | | | Research and development contract liability, current portion | $9,579 | $85 | | Total current liabilities | $19,254 | $13,689 | | Total liabilities | $22,548 | $14,692 | | Total stockholders' equity | $18,159 | $17,499 | Condensed Consolidated Statements of Operations and Comprehensive Loss For the six months ended June 30, 2025, collaboration revenue decreased to $3.4 million from $4.4 million year-over-year, total operating expenses were reduced to $24.3 million from $27.4 million, primarily due to lower research and development costs, and consequently, the net loss for the six-month period narrowed to $20.7 million from $22.5 million in the prior year Condensed Consolidated Statements of Operations (in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Collaboration revenue | $2,954 | $2,658 | $3,374 | $4,375 | | Research and development | $7,910 | $9,530 | $16,457 | $19,729 | | Total operating expenses | $11,589 | $13,041 | $24,309 | $27,426 | | Loss from operations | $(8,635) | $(10,383) | $(20,935) | $(23,051) | | Net loss | $(8,482) | $(10,171) | $(20,739) | $(22,518) | | Net loss per common share | $(0.09) | $(0.24) | $(0.20) | $(0.45) | Condensed Consolidated Statements of Stockholders' Equity For the six months ended June 30, 2025, stockholders' equity increased from $17.5 million to $18.2 million, driven by the issuance of common stock, warrants, and pre-funded warrants, which provided net proceeds of $18.8 million, offset by a net loss of $20.7 million and balanced by stock-based compensation - During the first six months of 2025, the company raised approximately $18.8 million through the issuance of common stock, warrants, and pre-funded warrants, net of costs[23] - The accumulated deficit increased by $20.7 million during the first half of 2025, reaching $362.6 million due to continued net losses[23] Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities was $11.6 million, a significant improvement from $19.8 million in the same period of 2024, while net cash provided by financing activities was $16.8 million, primarily from stock offerings, leading to a net increase in cash of $5.0 million, compared to a net decrease of $18.5 million in the prior year period Summary of Cash Flows (in thousands) | | Six Months Ended June 30, | | :--- | :--- | :--- | | | 2025 | 2024 | | Net cash used in operating activities | $(11,587) | $(19,774) | | Net cash used in investing activities | $(177) | $(65) | | Net cash provided by financing activities | $16,798 | $1,354 | | Net increase (decrease) in cash | $5,034 | $(18,485) | | Cash at end of period | $27,645 | $30,180 | Notes to the Condensed Consolidated Financial Statements The notes detail significant accounting policies and provide context for the financial statements, including the company's conclusion that there is substantial doubt about its ability to continue as a going concern, details of recent financing activities including an $18.0 million offering in April 2025, and information on collaboration agreements, notably a new agreement with Boehringer Ingelheim (BI) which included a $10.1 million upfront payment - The company's recurring losses and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern within one year[31] - In April 2025, the company completed an underwritten public offering, receiving net proceeds of $18.0 million from the sale of shares and warrants[38] - The company entered into a collaboration and license agreement with Boehringer Ingelheim (BI) in April 2025, receiving an upfront payment of $10.1 million (net of withholding taxes) and recognizing $2.9 million in revenue for the quarter[123][125][127] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's strategic focus on its autoimmune disease pipeline (CUE-401 and CUE-500 series) while seeking partners for its oncology assets (CUE-100 series), with the analysis of financial results showing a decrease in net loss driven by lower R&D spending, and the company's liquidity position detailed, with existing cash expected to fund operations into the second quarter of 2026, which raises substantial doubt about its ability to continue as a going concern without additional financing Overview and Plan of Operation Cue Biopharma is a clinical-stage company developing therapeutics for autoimmune disease and cancer using its Immuno-STAT® platform, strategically prioritizing its autoimmune programs, including CUE-401 and the CUE-500 series, while seeking collaborations for its CUE-100 series oncology assets, with a plan to file an IND for CUE-401 in Q2 2026 and leverage partnerships, such as the recent agreement with Boehringer Ingelheim for CUE-501 - The company is prioritizing its autoimmune programs, CUE-401 and the CUE-500 series, over its CUE-100 series oncology programs[8][164] - Cue Biopharma plans to file an Investigational New Drug (IND) application for its autoimmune candidate CUE-401 in the second quarter of 2026[157][166] - The company is actively seeking collaborations for its oncology assets, CUE-101 and CUE-102, to fund the advancement of its autoimmune pipeline[168] Results of Operations For the six months ended June 30, 2025, collaboration revenue decreased by $1.0 million year-over-year due to the timing of activities under different collaboration agreements, research and development expenses fell by $3.3 million, primarily from reduced clinical trial costs for the CUE-100 series, and general and administrative expenses remained relatively flat, resulting in a lower net loss of $20.7 million compared to $22.5 million in the prior-year period Comparison of Results of Operations (in thousands) | | Six Months Ended June 30, | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | | 2025 | 2024 | | | | Collaboration revenue | $3,374 | $4,375 | $(1,001) | -22.9% | | Research and development | $16,457 | $19,729 | $(3,272) | -16.6% | | General and administrative | $7,852 | $7,697 | $155 | +2.0% | | Net loss | $(20,739) | $(22,518) | $1,779 | -7.9% | - The decrease in R&D expenses was primarily due to reduced clinical trial costs for the CUE-100 series as activities shifted to patient survival monitoring[207] Liquidity and Capital Resources The company's primary sources of liquidity are equity offerings and collaboration payments, with cash and cash equivalents of $27.5 million as of June 30, 2025, which management believes will support operations into Q2 2026, but this runway of less than 12 months raises substantial doubt about the company's ability to continue as a going concern, necessitating additional capital raising, with recent financing including an $18.0 million net proceeds from an offering in April 2025 and sales under an ATM program - The company's existing cash and cash equivalents of $27.5 million as of June 30, 2025, are expected to fund operations into the second quarter of 2026[16][225] - The company's limited cash runway raises substantial doubt about its ability to continue as a going concern, necessitating additional capital raising[219][225] - In April 2025, the company raised approximately $18.0 million in net proceeds from an underwritten public offering of common stock and warrants[218] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Cue Biopharma is not required to provide the information for this item - The company is not required to provide quantitative and qualitative disclosures about market risk as it qualifies as a smaller reporting company[231] Item 4. Controls and Procedures Management, including the principal executive and financial officers, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[233] - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[235] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reports that it is not currently a party to any material legal proceedings - As of the reporting date, the company is not involved in any material legal proceedings[237] Item 1A. Risk Factors This section highlights significant risks to the business, with the primary risk being the substantial doubt regarding the company's ability to continue as a going concern due to recurring losses and the need for additional capital, and other key risks including potential delisting from Nasdaq for failing to meet the minimum bid price requirement, and uncertainties related to U.S. trade policy and changes in tax laws - The company's recurring losses and need for additional capital raise substantial doubt about its ability to continue as a going concern[239] - On May 12, 2025, the company received a deficiency notice from Nasdaq for failing to maintain a minimum bid price of $1.00 per share, posing a risk of delisting[247] - Uncertainty surrounding U.S. trade policy, including tariffs, could negatively impact material costs and supply chains[241][244] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the period - None[252] Item 5. Other Information No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarterly period - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[255] Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications and amendments to agreements - The report includes a list of exhibits filed, such as the Second Amendment to the License Agreement with MIL 40G, LLC, and various required certifications[257]