Chemomab Therapeutics(CMMB) - 2023 Q1 - Quarterly Report

PART I. – FINANCIAL INFORMATION Item 1. Financial Statements This chapter presents the company's unaudited condensed consolidated interim financial statements, reflecting a net loss of 8,753 thousand USD for Q1 2023 and total assets of 35,013 thousand USD as of March 31, 2023, with ongoing operational losses and no approved products - The company is a clinical-stage biotechnology firm with no approved products for sale, primarily funded by shareholders, and has incurred operating losses every year since inception[16][150] Condensed Consolidated Interim Balance Sheets As of March 31, 2023, total assets decreased to 35,013 thousand USD from 43,063 thousand USD at year-end 2022, primarily due to reduced short-term bank deposits, while total liabilities slightly increased to 7,059 thousand USD, and shareholders' equity declined to 27,954 thousand USD due to accumulated losses Key Balance Sheet Items (in thousand USD) | Item | March 31, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | Cash and cash equivalents | 20,765 | 13,519 | | Total current assets | 33,778 | 41,736 | | Total assets | 35,013 | 43,063 | | Total current liabilities | 6,997 | 6,749 | | Total liabilities | 7,059 | 6,840 | | Total shareholders' equity | 27,954 | 36,223 | Condensed Consolidated Interim Statements of Operations Net loss for Q1 2023 significantly increased by 71% to 8,753 thousand USD from 5,104 thousand USD in the prior year, primarily driven by a 151% surge in R&D expenses to 6,887 thousand USD, resulting in a basic and diluted loss per share of 0.040 USD Summary of Operating Results (in thousand USD, except per share amounts) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Research and development expenses | 6,887 | 2,745 | | General and administrative expenses | 2,162 | 2,575 | | Operating loss | 9,049 | 5,320 | | Net loss | 8,753 | 5,104 | | Basic and diluted loss per share | 0.040 USD | 0.022 USD | Condensed Consolidated Interim Statements of Cash Flow Net cash used in operating activities increased by 94% to 7,186 thousand USD in Q1 2023 due to expanded net loss, while net cash provided by investing activities surged to 14,432 thousand USD from bank deposit withdrawals, increasing total cash, cash equivalents, and restricted cash to 20,842 thousand USD at period-end Summary of Cash Flows (in thousand USD) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | (7,186) | (3,711) | | Net cash provided by investing activities | 14,432 | 2,382 | | Net cash provided by financing activities | - | - | | Change in cash, cash equivalents, and restricted cash | 7,246 | (1,329) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and operating results, highlighting its focus on developing innovative therapies for fibrotic and inflammatory diseases with lead product CM-101 in Phase 2 clinical studies, ongoing losses, and reliance on external financing, with current cash projected to fund operations until June 30, 2024 Overview Chemomab is a clinical-stage biotechnology company focused on developing innovative therapies for fibrotic and inflammatory diseases, with its lead candidate CM-101, a monoclonal antibody targeting CCL24, currently in Phase 2 clinical studies for rare diseases like Primary Sclerosing Cholangitis (PSC) and Systemic Sclerosis (SSc) - The company is a clinical-stage biotechnology firm focused on discovering and developing innovative therapies for fibrotic and inflammatory diseases[127] - The company's lead clinical candidate, CM-101, is a first-in-class humanized monoclonal antibody designed to attenuate the fundamental function of CCL24 (eotaxin-2) as a key regulator of inflammatory and fibrotic pathways[105] - The company is conducting a Phase 2 clinical study of CM-101 in Primary Sclerosing Cholangitis (PSC) and plans to initiate a Phase 2 clinical trial in Systemic Sclerosis (SSc) in mid-2023[105][157] Recent Developments The company reported positive topline results from its Phase 2a liver fibrosis biomarker trial of CM-101 in NASH patients, meeting primary safety and tolerability endpoints and showing encouraging activity across multiple fibrosis-related biomarkers, alongside FDA approval for its IND application to conduct a Phase 2 trial of CM-101 in Systemic Sclerosis (SSc) patients - On January 3, 2023, the company reported positive topline results from its Phase 2a liver fibrosis biomarker trial of CM-101 in NASH patients, meeting the primary endpoints of safety and tolerability[31][130] - In the NASH trial, nearly 60% of CM-101 treated patients showed improvement in at least three biomarkers, compared to no patients in the placebo group[19] - On February 21, 2023, the company reported FDA approval of its Investigational New Drug (IND) application to conduct a Phase 2 trial of CM-101 in adult Systemic Sclerosis (SSc) patients[30][158] Results of Operations Operating loss for Q1 2023 increased by 70% to 9,049 thousand USD from 5,320 thousand USD in the prior year, primarily due to a 151% surge in R&D expenses to 6,887 thousand USD driven by increased clinical and preclinical activities, while general and administrative expenses decreased by 16% Operating Performance Comparison (in thousand USD) | Item | Q1 2023 | Q1 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development expenses | 6,887 | 2,745 | 4,142 | 151% | | General and administrative expenses | 2,162 | 2,575 | (413) | (16)% | | Operating loss | 9,049 | 5,320 | 3,729 | 70% | | Net loss | 8,753 | 5,104 | 3,649 | 71% | - Research and development expenses increased by approximately 4,100 thousand USD (151%), primarily due to increased clinical and preclinical activities[41] - General and administrative expenses decreased by approximately 400 thousand USD (16%), mainly due to lower non-cash share-based compensation and insurance expenses[26] Liquidity and Capital Resources Since inception, the company has generated no revenue and incurred continuous operating losses, accumulating 73,000 thousand USD in deficits as of March 31, 2023, primarily funding operations through equity securities sales, with existing cash projected to support operations until June 30, 2024, though substantial additional financing will be required for future clinical trials and potential commercialization - As of March 31, 2023, the company had accumulated 73,000 thousand USD in deficits, with operations primarily funded by the sale of ADS and other equity securities[27] - The company believes its existing liquidity resources as of March 31, 2023, will enable it to fund operations until June 30, 2024[16][169] Summary of Cash Flow Activities (in thousand USD) | Item | March 2023 | March 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (7,186) | (3,711) | (3,475) | (94)% | | Net cash provided by investing activities | 14,432 | 2,382 | 12,050 | 506% | | Net increase (decrease) in cash, cash equivalents, and restricted cash | 7,246 | (1,329) | 8,575 | (645)% | Item 3. Quantitative and Qualitative Disclosures About Market Risk As an emerging growth company, the company is not required to provide information under this item - The company is an emerging growth company and is therefore not required to provide information under this item[69] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, with no significant changes in internal control over financial reporting during the most recent fiscal quarter - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[50] - No changes in the company's internal control over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[51] PART II. – OTHER INFORMATION Item 1. Legal Proceedings Management believes there are no pending claims or litigation that could have a material adverse effect on the company's operating results, financial position, or cash flows - Management believes there are no pending claims or litigation whose ultimate outcome could have a material adverse effect on the company's operating results, financial condition, or cash flows[53] Item 1A. Risk Factors No material changes have occurred compared to the information disclosed in the 'Item 1A. Risk Factors' section of the company's 2022 Annual Report - No material changes have occurred compared to the information listed in the 'Item 1A. Risk Factors' section of the company's 2022 Annual Report[54] Other Information Items This section covers other statutory disclosures, confirming no unregistered sales of equity securities, material defaults on senior securities, mine safety disclosures, or other reportable information not otherwise disclosed, and lists required exhibits and certifications filed with this quarterly report - During the period covered by this report, the company had no unregistered sales of equity securities, material defaults on senior securities, mine safety disclosures, or other information required to be reported[55][56][57][58] - The report includes required exhibits such as executive certifications and XBRL data files[78]