Adicet Bio(ACET) - 2023 Q3 - Quarterly Report

Financial Performance - The company recorded a net loss of $49.9 million for the three months ended September 30, 2023, compared to a net loss of $22.0 million in the same period in 2022, representing a 127% increase in loss [122]. - The company recognized no revenue for the nine months ended September 30, 2023, a decrease of $25.0 million, or 100%, compared to the same period in 2022 due to the completion of obligations under the Regeneron Agreement [128]. - The company recorded a net loss of $49.9 million for the three months ended September 30, 2023, with an accumulated deficit of $351.3 million as of the same date [142]. - Total operating expenses rose by $29.3 million, or 127%, to $52.3 million for the three months ended September 30, 2023, compared to $23.0 million in the same period in 2022 [122]. - Research and development expenses increased by $35.0 million, or 76%, to $81.3 million for the nine months ended September 30, 2023, compared to $46.2 million in the same period in 2022 [129]. - Net cash used in operating activities was $70.2 million for the nine months ended September 30, 2023, compared to $25.9 million for the same period in 2022 [151][152]. - Net cash provided by financing activities was $0.2 million for the nine months ended September 30, 2023, significantly lower than $41.2 million for the same period in 2022 [155]. Research and Development - The lead product candidate, ADI-001, is in an ongoing Phase 1 study for relapsed or refractory aggressive B-cell non-Hodgkin's lymphoma, with an expansion cohort initiated in November 2023 [102]. - The company plans to transition the ADI-001 program into a potentially pivotal single-arm Phase 2 study based on data from the ongoing trials [102]. - The company has paused preclinical development of ADI-925 to prioritize resources on ADI-270, targeting CD70+ cancers [101]. - The company expects to provide a clinical update from the Phase 1 study in NHL patients in the second half of 2024 [102]. - Research and development expenses consist primarily of employee-related costs, consultant agreements, lab materials, and facility-related costs [112]. Cash and Funding - The company had cash and cash equivalents of $183.3 million as of September 30, 2023, expected to fund operations for at least the next twelve months [136]. - As of September 30, 2023, the company had $12.7 million available under the Term Loan and was in compliance with covenants [141]. - The company anticipates needing to raise substantial additional capital to fund operations and product development, influenced by various factors including clinical trials and regulatory approvals [144]. Expenses and Financial Commitments - General and administrative expenses are expected to increase due to costs associated with operating as a public company, including personnel costs and compliance expenses [116]. - Goodwill impairment charges increased by $19.5 million, or 100%, during the three months ended September 30, 2023, representing the entire balance of goodwill [124]. - The company has ongoing lease agreements with significant financial commitments, including an annual base rent of $1.3 million for the Redwood City Lease [157]. Market and Economic Factors - The company is subject to risks related to the development of new product candidates, which may lead to unforeseen expenses and delays [143]. - The company may need to enter collaborations to supplement funds, which could limit its ability to develop and commercialize its product candidates [147]. - The company's assets are primarily monetary, consisting of cash and cash equivalents, which are not directly affected by inflation [167]. - Incremental inflation related to replacement costs of equipment and office improvements is not expected to materially affect operations [167]. - Inflation generally increases costs related to labor, clinical trials, and manufacturing [167]. - The company does not believe inflation had a material effect on its business, financial condition, or results of operations during Q3 2023 [167]. Revenue and Payments - The company received a non-refundable upfront payment of $25.0 million from Regeneron and an additional $20.0 million for research funding as of September 30, 2023 [109]. - As of September 30, 2023, no shares have been sold under the new prospectus for the ATM program, which allows for the sale of up to $100.0 million in common stock [105].