Centessa Pharmaceuticals(CNTA) - 2022 Q1 - Quarterly Report

Financial Position - As of March 31, 2022, the company had cash and cash equivalents of $544.5 million, expected to fund operations to mid-2024 without additional capital [131]. - As of March 31, 2022, the Company had cash and cash equivalents of $544.5 million, following a $250.0 million Series A convertible preferred financing and an IPO that generated net proceeds of $344.1 million [156][164]. - The company had $75 million in debt principal outstanding under the Oberland Facility as of March 31, 2022 [186]. - Interest income from cash and cash equivalents was $0.1 million for the three months ended March 31, 2022 [185]. - Approximately 48% of the company's cash-based costs are denominated in currencies other than the US dollar, primarily GBP and Euro [187]. Revenue and Profitability - The company has not generated any revenue and relies on successful development and commercialization of product candidates for future profitability [133]. - The successful development of current or future product candidates remains highly uncertain, with numerous risks affecting costs and timelines [137]. Research and Development - The company aims to have four registrational programs by 2024, with ongoing trials for lixivaptan in Autosomal Dominant Polycystic Kidney Disease and planned trials for SerpinPC in Hemophilia B [114][116]. - The company has two programs with established clinical proof of concept and anticipates four emerging programs to achieve clinical proof of concept within the next 18 months [114]. - The company is pursuing opportunities for rapid development, including orphan drug designation and fast track designation, for its product candidates [114]. - Research and development expenses for the Company (Successor) for the three months ended March 31, 2022, were $36.9 million, a significant increase from $10.1 million for the same period in 2021 [151]. - The increase in research and development expenses was primarily due to higher development costs for Lixivaptan ($8.0 million) and increased personnel costs ($5.9 million) attributed to a rise in headcount and share-based compensation [151]. - The Company expects research and development expenses to increase significantly over the next several years due to rising personnel costs and clinical trial expenses [136]. - The Company participates in research tax incentive programs, which may provide cash refunds that reduce research and development expenses [140]. Financial Performance - The net loss for the Company (Successor) for the three months ended March 31, 2022, was $54.5 million, compared to a net loss of $238.7 million for the same period in 2021 [148]. - During the three months ended March 31, 2022, the Company used $50.0 million in net cash for operating activities, reflecting a net loss of $54.5 million [161]. - The Company reported a net cash used in investing activities of $(0.2) million for the three months ended March 31, 2022, primarily due to the purchase of property and equipment [163]. - Financing activities provided $0.1 million in net cash during the three months ended March 31, 2022, mainly from the exercise of stock options [164]. - The Company recorded noncash net charges of $6.8 million for share-based compensation and other adjustments during the three months ended March 31, 2022 [161]. Operational Challenges - The company has incurred recurring losses and negative cash flows from operations since inception, primarily funded through the sale of common and convertible preferred stock [131]. - The company has discontinued several programs, including small molecule inhibitors for Non-Small Cell Lung Cancer, and is winding down operations of certain subsidiaries [125]. - The company is actively monitoring the impact of COVID-19 on its clinical programs, with some modest delays in enrollment rates and supply chain activities [129]. - The Company anticipates that its funding requirements will increase significantly due to various factors, including clinical trial costs and regulatory review processes [166][167]. - The Company is unable to estimate exact working capital requirements due to uncertainties in research, development, and commercialization of product candidates [167]. Leadership and Governance - The company has strengthened its leadership team with key appointments, including Antoine Yver as Executive Vice President and Javad Shahidi as Chief Medical Officer [118]. Debt and Financing - The Company has entered into a Note Purchase Agreement with Oberland Capital for up to $300.0 million in senior secured notes, with an initial interest rate of 8.0% per annum [177]. - The fair value of the Note Purchase Agreement is based on estimated future payments, including interest and contingent milestone payments [179]. - The interest rate for the Notes was 8.00% per annum in the first quarter of 2022, with a potential increase of $750k annually for a 100 basis points rise in interest rates [186].