Eledon Pharmaceuticals(ELDN) - 2023 Q3 - Quarterly Report

Drug Development and Clinical Trials - Eledon Pharmaceuticals is focusing on the development of tegoprubart, an anti-CD40L antibody, to protect transplanted organs and treat amyotrophic lateral sclerosis (ALS) [102]. - In January 2023, the company decided to prioritize resources on kidney transplantation programs, discontinuing the islet cell transplantation program and deprioritizing the IgA Nephropathy program [106]. - The Phase 1b clinical trial of tegoprubart for kidney transplantation has shown that it is generally safe and well-tolerated, with no cases of hyperglycemia or new onset diabetes reported [110]. - Interim results from the Phase 1b trial indicated that the aggregate mean estimated glomerular filtration rate (eGFR) was above 70 mL/min/1.73m² at all reported time points after day 90, compared to historical averages in the low 50 mL/min/1.73m² range [110]. - The Phase 2 BESTOW trial, initiated in August 2023, aims to enroll 120 participants to evaluate the safety and efficacy of tegoprubart compared to tacrolimus, with the primary objective being eGFR at 12 months post-transplant [111]. - Eledon has received regulatory approvals in Canada, the UK, and Australia for the Phase 1b clinical trial of tegoprubart in kidney transplantation [110]. - The company reported that tegoprubart demonstrated low anti-drug antibody responses and a half-life of up to 26 days in previous studies [116]. - Eledon is unable to continue clinical development of tegoprubart for ALS without additional financing, highlighting the need for funding to progress this program [118]. - The IgA Nephropathy program has been deprioritized, with all related clinical activities and spending to be discontinued in Q4 2023 [122]. - A collaboration agreement with eGenesis was established in January 2023 for preclinical xenotransplantation studies involving tegoprubart [123]. Financial Performance and Funding - The company reported a net loss of $10.3 million for the three months ended September 30, 2023, compared to a net loss of $10.5 million for the same period in 2022, reflecting a $0.1 million improvement [131]. - As of September 30, 2023, the company had cash and cash equivalents and short-term investments of approximately $59.6 million, with significant reliance on future capital raises to fund operations [140]. - The company expects to incur additional losses and requires further financing to advance drug products through clinical development and commercialization efforts [144]. - The company anticipates an increase in operating expenses as it expands its clinical program for tegoprubart and seeks marketing approval for its product candidates [143]. - The company entered into a Securities Purchase Agreement to issue a total of 60,606,072 shares of common stock and warrants in three closings, with the first closing generating $35.0 million in net proceeds [124][125]. - The second and third closings of the Securities Purchase Agreement are contingent upon achieving specified clinical development milestones and share price conditions [128]. - General and administrative expenses rose to $3.3 million for the three months ended September 30, 2023, driven by increased employee compensation [133]. - Other income increased significantly to $849,000 for the three months ended September 30, 2023, primarily due to higher interest income from cash and short-term investments [134]. - For the nine months ended September 30, 2023, the company reported a net cash used in operating activities of $30.4 million, compared to $18.9 million for the same period in 2022 [150][151]. - The company's net cash used in investing activities for the nine months ended September 30, 2023, was $55.4 million, primarily due to the purchase of $60.4 million in short-term investments [152]. - Financing activities provided net cash of $33.0 million for the nine months ended September 30, 2023, from the sale of 8.7 million shares of common stock and 6.4 million pre-funded warrants [153]. - The company experienced a net loss of $30.7 million for the nine months ended September 30, 2023, which included $4.8 million in stock-based compensation [150]. - The company's net change in cash and cash equivalents for the nine months ended September 30, 2023, was a decrease of $52.7 million [148]. - The company’s public float must exceed $75.0 million for it to sell more shares under the Form S-3 registration statement [147]. - The company’s cash flow from financing activities was the only positive cash flow category for the nine months ended September 30, 2023 [153]. - The company is subject to "baby shelf" rules until its public float exceeds $75.0 million, limiting its ability to raise additional capital through equity sales [147]. - The company faces uncertainties due to global economic volatility, which could impact its ability to secure necessary financing [127].