Astria Therapeutics(ATXS) - 2023 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents Astria Therapeutics' unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, changes in stockholders' equity, cash flows, and related notes for the periods ended June 30, 2023 Condensed Consolidated Balance Sheets As of June 30, 2023, total assets decreased to $207.1 million from $230.6 million at year-end 2022, driven by reduced short-term investments, while total liabilities and stockholders' equity also decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $133,958 | $20,525 | | Short-term investments | $69,000 | $205,912 | | Total Assets | $207,053 | $230,633 | | Liabilities & Equity | | | | Total current liabilities | $6,598 | $9,060 | | Total Liabilities | $6,651 | $9,417 | | Total Stockholders' Equity | $200,402 | $221,216 | Condensed Consolidated Statements of Operations The company reported a net loss of $12.6 million for Q2 2023, an increase from the prior year, while the six-month net loss decreased to $23.8 million due to higher other income Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $9,089 | $6,617 | $17,122 | $16,975 | | General and administrative | $6,013 | $4,832 | $11,473 | $9,852 | | Loss from operations | ($15,102) | ($11,449) | ($28,595) | ($26,827) | | Total other income, net | $2,536 | $199 | $4,841 | $253 | | Net loss | ($12,566) | ($11,250) | ($23,754) | ($26,574) | | Net loss per share | ($0.45) | ($0.86) | ($0.85) | ($2.04) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $23.9 million for the six months ended June 30, 2023, offset by $137.1 million from investing activities, resulting in a $113.4 million net increase in cash Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($23,949) | ($22,620) | | Net cash provided by (used in) investing activities | $137,072 | ($33,899) | | Net cash provided by financing activities | $310 | $0 | | Net increase (decrease) in cash | $113,433 | ($56,519) | Notes to Condensed Consolidated Financial Statements These notes detail the company's biopharmaceutical focus on rare diseases, particularly STAR-0215 for HAE, and confirm $203.0 million in cash and investments are sufficient for at least twelve months of operations - The company is a biopharmaceutical firm focused on developing novel therapeutics for rare and niche allergic and immunological diseases, with its lead product candidate, STAR-0215, in clinical development for hereditary angioedema (HAE)[29] - As of June 30, 2023, the company had $203.0 million in cash, cash equivalents, and short-term investments, which management estimates is sufficient to sustain operations for at least twelve months from the financial statement issuance date[31] - The company maintains an at-the-market (ATM) offering program with Jefferies, with $50.0 million of common stock available for sale as of June 30, 2023; no sales were made under this program during the first six months of 2023[30] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition and operations, highlighting STAR-0215 clinical progress, increased operating expenses, and liquidity, with cash expected to fund operations through the first half of 2025 Overview Astria Therapeutics focuses on rare allergic and immunological diseases, with STAR-0215 as its lead candidate for HAE, having completed Phase 1a and initiated the Phase 1b/2 ALPHA-STAR trial - The company's lead product candidate is STAR-0215, a monoclonal antibody inhibitor of plasma kallikrein for the treatment of hereditary angioedema (HAE)[78] - The vision for STAR-0215 is to become the first-choice preventative HAE treatment with administration every three or six months, aiming to normalize patients' lives[79] - The company initiated the Phase 1b/2 ALPHA-STAR trial in February 2023 and expects initial data from single and multiple dose cohorts in mid-2024; a long-term open-label trial, ALPHA-SOLAR, is planned to start in Q4 2023[81][83] Results of Operations Q2 2023 R&D expenses increased 37% to $9.1 million and G&A expenses rose 24% to $6.0 million, while other income significantly increased due to financing proceeds - Research and development expenses for Q2 2023 increased by $2.5 million (37%) year-over-year, primarily due to the advancement of the STAR-0215 program into two clinical trials (Phase 1a and Phase 1b/2)[101] - General and administrative expenses for Q2 2023 increased by $1.2 million (24%) year-over-year, mainly due to higher professional services and employee-related costs to support clinical trial initiation and company growth[102][103] - Other income, net, increased by $4.6 million for the six months ended June 30, 2023, compared to the same period in 2022, primarily due to higher investment and interest income from the net proceeds of the December 2022 Financing[108] Liquidity and Capital Resources As of June 30, 2023, the company held $203.0 million in cash and investments, expected to fund operations through the first half of 2025, bolstered by $107.6 million from December 2022 financing - The company had $203.0 million in cash, cash equivalents, and short-term investments as of June 30, 2023[109] - Based on the current operating plan, the company expects its existing cash to be sufficient to fund operating expenses and capital expenditure requirements through the first half of 2025[111] - In December 2022, the company closed an underwritten public offering with net proceeds of $107.6 million, significantly strengthening its capital resources[113] Item 4. Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control over financial reporting during the quarter - Management, with the participation of the principal executive officer and principal financial officer, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2023[129] - There were no changes in internal control over financial reporting during the six months ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[130] PART II. OTHER INFORMATION Item 1A. Risk Factors This section refers readers to the comprehensive risk factors detailed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - The report refers stakeholders to the detailed risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022[132] Item 6. Exhibits This section provides an index of exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, material agreements, and officer certifications - An index of exhibits filed with the Form 10-Q is provided, including corporate bylaws, certificates of incorporation, material agreements, and required officer certifications under the Sarbanes-Oxley Act[133][134]