Astria Therapeutics(ATXS) - 2021 Q1 - Quarterly Report

Acquisition and Product Development - The company acquired Quellis Biosciences in January 2021, resulting in gross proceeds of approximately $110.0 million from a private placement [81]. - QLS-215, the lead product candidate, is a monoclonal antibody in preclinical development for hereditary angioedema (HAE) with a projected IND submission in the first half of 2022 [82]. - Preclinical studies indicate that QLS-215 is approximately 10-fold more potent than lanadelumab in inhibiting bradykinin production, suggesting a superior efficacy profile [83]. - The pharmacokinetics of QLS-215 show a half-life of approximately 34 days, compared to lanadelumab's 10 days, potentially allowing for less frequent dosing [85]. - The company has stopped all activities related to the development of edasalonexent and substantially all activities related to the CAT-5571 program [97]. - The company anticipates significant research and development expenses in future periods related to the development of QLS-215 [98]. Financial Performance and Expenses - Total research and development expenses for the three months ended March 31, 2021, were $2.593 million, a decrease from $5.289 million for the same period in 2020 [96]. - Research and development expenses decreased by 51% to $2.6 million for the three months ended March 31, 2021, down from $5.3 million for the same period in 2020 [109]. - General and administrative expenses increased by 5% to $2.9 million for the three months ended March 31, 2021, compared to $2.8 million for the same period in 2020 [110]. - Acquired in-process research and development (IPR&D) expense was $164.6 million during the three months ended March 31, 2021, resulting from the Quellis Acquisition [111]. - Net cash used in operating activities was $8.7 million for the three months ended March 31, 2021, primarily due to a net loss of $170.1 million [118]. - The accumulated deficit as of March 31, 2021, was $431.0 million, reflecting ongoing operating losses since inception [123]. Cash Position and Funding Needs - As of March 31, 2021, the company had cash and cash equivalents of $146.9 million, expected to support operations through 2023 [90]. - The company anticipates needing substantial additional funding for future clinical trials and pipeline expansion [91]. - The company anticipates financing its cash needs through equity offerings, debt financings, collaborations, and licensing arrangements, with no committed external source of funds currently available [128]. - There is substantial doubt about the company's ability to continue as a going concern within one year from the filing of the Quarterly Report due to potential redemption payments [126]. - The company may need to delay or terminate product development if unable to raise additional funds through equity or debt financings [129]. Stockholder and Regulatory Matters - The Series X Preferred Stock issued in connection with the Quellis acquisition is convertible into common stock, pending stockholder approval [88]. - The company issued Series X Preferred Stock to Quellis stockholders as part of the Quellis Acquisition, which may require stockholder approval for conversion into common stock [125]. Risk Factors and Management - The company faces substantial doubt about its ability to continue as a going concern if it fails to raise necessary capital [92]. - The company has not experienced any material changes to its risk factors since the last annual report [139]. - Management evaluated the effectiveness of disclosure controls and procedures, concluding they were effective at the reasonable assurance level as of March 31, 2021 [135]. - The company’s primary exposure to market risk is interest rate sensitivity, with an immediate 10% change in interest rates not expected to materially affect the fair market value of its investment portfolio [133]. - The company has no material liabilities denominated in foreign currencies as of March 31, 2021 [134]. - The company has no off-balance sheet arrangements as defined under applicable SEC rules [130].