Opus Genetics, Inc.(IRD) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements The company reported a net loss of $7.4 million for Q2 2025 and $15.6 million for the six months ended June 30, 2025, with cash of $32.4 million and total assets of $38.7 million, and increased liabilities to $21.2 million due to new warrant liabilities Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $38.7 million, driven by cash and cash equivalents of $32.4 million, while total liabilities rose to $21.2 million due to $11.8 million in warrant liabilities, resulting in total stockholders' equity of $17.5 million Condensed Consolidated Balance Sheet Highlights (in thousands of US dollars) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $32,429 | $30,321 | | Total current assets | $38,439 | $36,610 | | Total assets | $38,665 | $36,862 | | Liabilities & Equity | | | | Warrant liabilities | $11,800 | $— | | Total current liabilities | $20,192 | $11,295 | | Total liabilities | $21,192 | $11,295 | | Series A preferred stock | $— | $18,843 | | Total stockholders' equity | $17,473 | $6,724 | Condensed Consolidated Statements of Comprehensive Loss For Q2 2025, net loss was $7.4 million, a slight decrease from Q2 2024 due to a $0.9 million positive change in warrant liabilities, while the six-month net loss increased to $15.6 million due to higher operating expenses Financial Performance Summary (in thousands of US dollars, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | License and collaborations revenue | $2,882 | $1,112 | $7,252 | $2,823 | | General and administrative | $5,766 | $3,354 | $12,112 | $8,024 | | Research and development | $6,022 | $6,086 | $13,975 | $10,835 | | Loss from operations | ($8,906) | ($8,328) | ($18,835) | ($16,036) | | Net loss | ($7,420) | ($7,765) | ($15,614) | ($14,871) | | Net loss per share (basic and diluted) | ($0.12) | ($0.30) | ($0.32) | ($0.59) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operations was $19.3 million, offset by $21.4 million from financing activities, leading to a $2.1 million net cash increase and an ending balance of $32.4 million Cash Flow Summary for the Six Months Ended June 30 (in thousands of US dollars) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(19,263) | $(13,008) | | Net cash used in investing activities | $— | $— | | Net cash provided by financing activities | $21,371 | $3,916 | | Net increase (decrease) in cash | $2,108 | $(9,092) | | Cash and cash equivalents at end of period | $32,429 | $41,409 | - Financing activities in the first six months of 2025 were driven by $5.98 million from the issuance of common stock and pre-funded warrants, and $15.52 million from the issuance of warrants in the March 2025 offerings[20] Notes to Condensed Consolidated Financial Statements The notes detail the company's focus on gene therapies for IRDs, key events including the October 2024 acquisition and March 2025 financing, and confirm sufficient cash to fund operations for at least the next twelve months - The company is a clinical-stage biopharmaceutical company developing gene therapies for inherited retinal diseases (IRDs) and small molecule therapies for other ophthalmic disorders, with its pipeline including OPGx-LCA5 for Leber congenital amaurosis and OPGx-BEST1 for Best Disease[22][24] - As of June 30, 2025, the company had $32.4 million in cash and cash equivalents, which management believes is sufficient to fund planned expenditures for at least the next twelve months[32] - In March 2025, the company raised approximately $21.5 million in gross proceeds through an underwritten public offering and a private placement, issuing common stock, pre-funded warrants, and warrants[102][99] - On May 5, 2025, all 14,145.374 shares of Series A Preferred Stock were converted into 14,145,374 shares of common stock following stockholder approval[98] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management reported increased license and collaboration revenue to $2.9 million for Q2 2025, with rising G&A expenses due to public company costs, stable R&D, and $32.4 million in cash, sufficient for the next twelve months Overview and Recent Developments The company is advancing its gene therapy pipeline, with OPGx-LCA5 showing positive data and receiving RMAT designation, and secured a $2.0 million non-dilutive funding agreement for the MERTK program - The most advanced gene therapy program, OPGx-LCA5, has shown clinical proof-of-concept with visual improvement in adult patients and initial positive data in pediatric patients[189] - On May 6, 2025, the FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to OPGx-LCA5, potentially expediting its development and review[199] - In June 2025, the company entered into a funding agreement with the Foundation Fighting Blindness Retinal Degeneration Fund (RDF) for up to $2.0 million in non-dilutive funding for its MERTK program[196] Results of Operations Q2 2025 revenue increased to $2.9 million, driven by Viatris reimbursements, while G&A expenses rose by $2.4 million due to public company and legal costs, and R&D remained stable, leading to a higher loss from operations Comparison of Three Months Ended June 30 (in thousands of US dollars) | Item | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | License and collaborations revenue | $2,882 | $1,112 | $1,770 | | General and administrative | $5,766 | $3,354 | $2,412 | | Research and development | $6,022 | $6,086 | $(64) | | Loss from operations | $(8,906) | $(8,328) | $(578) | Comparison of Six Months Ended June 30 (in thousands of US dollars) | Item | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | License and collaborations revenue | $7,252 | $2,823 | $4,429 | | General and administrative | $12,112 | $8,024 | $4,088 | | Research and development | $13,975 | $10,835 | $3,140 | | Loss from operations | $(18,835) | $(16,036) | $(2,799) | - The increase in G&A expenses in Q2 2025 was primarily due to higher public company related costs ($1.1 million), legal costs ($0.4 million), patent costs ($0.3 million), and payroll costs ($0.4 million)[221] - R&D spending for the six months ended June 30, 2025, shifted significantly, with spending on IRD programs increasing by $4.1 million and on PS by $4.4 million, while spending on APX3330 decreased by $6.5 million[229] Liquidity and Capital Resources As of June 30, 2025, the company had $32.4 million in cash, sufficient for the next twelve months, bolstered by $21.5 million from March 2025 financings, and terminated its equity line with Lincoln Park - The company's principal source of liquidity as of June 30, 2025, was cash and cash equivalents of $32.4 million[233] - In March 2025, the company raised combined gross proceeds of approximately $21.5 million from an underwritten public offering and a private placement[237] - The common stock purchase agreement with Lincoln Park Capital was terminated by the company effective April 3, 2025[246] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as the company qualifies as a smaller reporting company - Disclosure is not applicable for smaller reporting companies[296] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[300] - 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, the company's internal controls[301] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any legal proceedings expected to have a material effect on its business or financial results - The company is not currently a party to any legal proceedings that management believes are likely to materially affect its business or financial results[303] Item 1A. Risk Factors No material changes to risk factors except for a new risk concerning potential delisting from Nasdaq if the company fails to meet the minimum bid price requirement - A new risk factor has been added regarding the potential delisting from the Nasdaq Capital Market if the company's common stock fails to comply with the continued listing standards, specifically the $1.00 minimum bid price requirement[304][305] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[308] 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 quarter ended June 30, 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[311] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including funding agreements, officer certifications, and XBRL data files - Exhibits filed include a Funding Agreement with the Foundation Fighting Blindness Retinal Degeneration Fund and a Funding and License Agreement with Eyes on the Future and RDH12 Fund for Sight[312]