Jasper Therapeutics(JSPR) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION The financial information section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures Item 1. Financial Statements The unaudited condensed consolidated financial statements for the period ended June 30, 2025, show a significant increase in net loss and cash used in operations compared to the prior year, with substantial doubt about the company's ability to continue as a going concern Condensed Consolidated Balance Sheets Balance Sheet Items (in thousands) | Balance Sheet Items (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $39,510 | $71,637 | | Total current assets | $42,966 | $75,811 | | Total assets | $46,466 | $79,899 | | Liabilities & Equity | | | | Total current liabilities | $20,500 | $15,237 | | Total liabilities | $22,965 | $18,225 | | Accumulated deficit | $(288,833) | $(240,869) | | Total stockholders' equity | $23,501 | $61,674 | - Cash and cash equivalents decreased by 44.8% from $71.6 million at the end of 2024 to $39.5 million as of June 30, 2025, reflecting significant cash burn from operations[10] - Total stockholders' equity declined by 61.9% to $23.5 million from $61.7 million at year-end 2024, primarily driven by the net loss incurred during the first six months of 2025[10] Condensed Consolidated Statements of Operations and Comprehensive Loss Operating Results (in thousands) | Operating Results (in thousands) | 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 | $21,196 | $11,296 | $37,353 | $21,594 | | General and administrative | $5,880 | $4,697 | $11,525 | $9,471 | | Total operating expenses | $27,076 | $15,993 | $48,878 | $31,065 | | Loss from operations | $(27,076) | $(15,993) | $(48,878) | $(31,065) | | Net loss | $(26,723) | $(14,583) | $(47,964) | $(28,311) | - Net loss for the second quarter of 2025 increased by 83.2% year-over-year to $26.7 million, driven by an 87.6% increase in Research and Development expenses[13] Per Share Data | Per Share Data | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss per share, basic and diluted | $(1.74) | $(0.97) | $(3.16) | $(2.00) | Condensed Consolidated Statements of Cash Flows Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(38,295) | $(27,416) | | Net cash provided by (used in) investing activities | $5 | $(182) | | Net cash provided by financing activities | $6,163 | $47,530 | | Net (decrease) increase in cash | $(32,127) | $19,932 | | Cash at beginning of period | $72,054 | $87,304 | | Cash at end of period | $39,927 | $107,236 | - Net cash used in operating activities increased by 39.7% to $38.3 million for the first six months of 2025, compared to $27.4 million in the same period of 2024, reflecting higher operating losses[20] - Cash from financing activities was significantly lower in the first half of 2025 ($6.2 million from ATM offering) compared to the first half of 2024 ($47.5 million from an underwritten offering), contributing to the large net decrease in cash[20] Notes to Condensed Consolidated Financial Statements - The company has concluded that substantial doubt exists about its ability to continue as a going concern, as existing cash and cash equivalents of $39.5 million are not sufficient to fund operating plans for at least twelve months from the financial statement issuance date[28][30] - In July 2025, the company implemented a corporate reorganization, including a workforce reduction of approximately 50%, to extend its cash runway, focusing on briquilimab clinical programs in chronic urticaria and halting other programs, with an estimated cost of $1.9 million for the reduction[100][101] - The company operates as a single reportable segment focused on the research and development of therapeutic products for chronic urticaria and asthma, with total program costs of $25.5 million for the six months ended June 30, 2025, a 107% increase from $12.3 million in the prior year period[98][99] - The company entered into an Open Market Sale Agreement (ATM Offering) in March 2025, raising net proceeds of approximately $5.9 million by June 30, 2025, with $94.1 million remaining available under the ATM prospectus as of that date[76][77] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's focus on developing briquilimab for mast cell driven diseases, highlighting recent clinical data, an investigation into a drug product lot, and a subsequent corporate reorganization to extend the cash runway, while reiterating substantial doubt about the company's ability to continue as a going concern Overview and Recent Developments - The company is a clinical-stage biotech focused on developing briquilimab, a monoclonal antibody targeting the c-Kit receptor on mast cells for diseases like Chronic Spontaneous Urticaria (CSU), Chronic Inducible Urticaria (CIndU), and asthma[110][111] - An investigation is underway for a specific drug product lot used in the BEACON (CSU) and ETESIAN (asthma) studies, which showed an atypical lack of efficacy in certain patient cohorts, leading to halting enrollment in the ETESIAN study[116][119] - On July 8, 2025, the company implemented a corporate reorganization, reducing its workforce by approximately 50% to extend its cash runway and focus resources on its chronic urticaria clinical development programs[122] Results of Operations Expense Comparison (in thousands) | Expense Comparison (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Research and development | $21,196 | $11,296 | +88% | | General and administrative | $5,880 | $4,697 | +25% | | Total operating expenses | $27,076 | $15,993 | +69% | - The 88% increase in Q2 2025 R&D expenses was driven by a $9.6 million rise in program costs, including a $4.1 million increase in CRO expenses and a $5.1 million increase in CMO manufacturing costs to support clinical programs[143][146] Expense Comparison (in thousands) | Expense Comparison (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Research and development | $37,353 | $21,594 | +73% | | General and administrative | $11,525 | $9,471 | +22% | | Total operating expenses | $48,878 | $31,065 | +57% | - For the first six months of 2025, R&D expenses grew by $15.8 million (73%) year-over-year, primarily due to a $13.2 million increase in program costs related to advancing the CSU and asthma trials and higher CMO manufacturing expenses[151][154] Liquidity and Capital Resources - As of June 30, 2025, the company had cash and cash equivalents of $39.5 million[158] - Management has concluded there is substantial doubt about the company's ability to continue as a going concern within one year, given recurring losses and the current cash position relative to its operating plan[163] - The company will need to raise substantial additional funding to continue operations, with future financing potentially coming from equity or debt offerings, collaborations, or other arrangements, though there is no assurance of success[162][163] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company states that there have been no material changes to its market risk during the six months ended June 30, 2025 - There have been no material changes to the company's market risk exposure during the first six months of 2025[182] Item 4. Controls and Procedures Management, including the CEO and CFO, 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 principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[184] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[185] PART II. OTHER INFORMATION This section covers other important information including legal proceedings, updated risk factors, equity sales, other disclosures, and a list of exhibits Item 1. Legal Proceedings The company reports that it is not currently a party to any material legal proceedings - As of the filing date, the company is not involved in any material legal proceedings[187] Item 1A. Risk Factors This section updates and reiterates key risks to the business, including financial concerns about going concern, operational risks from clinical trial delays and reorganization, reliance on third parties, and market-related risks - Financial Risk: The company has a history of significant net losses and negative cash flows, expects to incur losses for the foreseeable future, and has substantial doubt about its ability to continue as a going concern[189][201] - Clinical Development Risk: Delays in clinical trials are a major risk, highlighted by the investigation into a drug product lot used in the BEACON and ETESIAN studies that demonstrated an atypical absence of efficacy[206][208] - Operational Risk: The July 2025 corporate reorganization and ~50% workforce reduction may have unintended consequences, such as loss of expertise and reduced morale, and may not achieve the anticipated benefits[203] - Third-Party Reliance Risk: The company relies heavily on third parties like CROs to conduct clinical trials, and failures by these parties, such as potential manufacturing variability in the investigated drug lot, could substantially harm the business[221][224] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable for the reporting period - Not applicable[242] Item 5. Other Information During the quarter, no directors or officers adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the fiscal quarter ended June 30, 2025[245] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer - The report includes a list of exhibits filed, such as corporate governance documents and officer certifications required by the Sarbanes-Oxley Act[246]