Finch Therapeutics (US:FNCH)2022-11-10 12:12Financial Performance - Total revenue for the three months ended September 30, 2022, was $0.1 million, a decrease of 98.8% compared to $11.3 million for the same period in 2021, primarily due to the termination of the collaboration agreement with Takeda [155]. - For the nine months ended September 30, 2022, total revenue was $0.9 million, a decrease of 94.9% from $17.7 million in the same period in 2021, again due to the termination of the Takeda collaboration [163]. - The company reported a net loss of $87.6 million for the nine months ended September 30, 2022, compared to a net loss of $39.1 million for the same period in 2021 [180]. - General and administrative expenses increased to $9.6 million for the three months ended September 30, 2022, up 67.1% from $5.7 million in the same period in 2021, primarily due to a $3.0 million increase in professional fees [158]. - General and administrative expenses for the nine months ended September 30, 2022, were $27.2 million, an increase of 67.9% from $16.2 million in the same period in 2021, driven by higher professional fees and other expenses [167]. - Total other income for the three months ended September 30, 2022, was $0.3 million, compared to an expense of approximately $22,000 for the same period in 2021, primarily due to sublease income [159]. - Total other income for the nine months ended September 30, 2022, was $0.2 million, a decrease of $1.6 million from $1.8 million in the same period in 2021, primarily due to the prior year's forgiveness of a PPP Loan [168]. Research and Development - Research and development expenses for the three months ended September 30, 2022, were $11.9 million, down 23.6% from $15.5 million in the same period in 2021, driven by reduced costs in the CP101 program and the suspension of the HBV and ASD programs [156][165]. - Research and development expenses for the nine months ended September 30, 2022, were $41.3 million, a slight decrease of 2.7% from $42.5 million in the same period in 2021, with significant reductions in IBD and HBV program expenses [164]. - The company anticipates topline data from its Phase 3 clinical trial of CP101, referred to as the PRISM4 trial, to be available in the first half of 2024 [127]. - The company is exploring strategic options to advance its autism spectrum disorder program after suspending efforts to initiate a Phase 1 clinical trial [128]. Cash and Funding - As of September 30, 2022, the company reported cash and cash equivalents of $85.3 million, which is expected to fund operations into the second quarter of 2024 [135]. - Cash used in operating activities for the nine months ended September 30, 2022, was $60.6 million, an increase from $53.3 million in 2021 [173][175]. - Net cash provided by financing activities for the nine months ended September 30, 2022, was $14.8 million, significantly lower than $119.0 million in 2021 [177][178]. - The company has raised approximately $177.0 million from the sale of convertible preferred stock and $14.0 million in collaboration revenue from Takeda [172]. - Cash used in investing activities was $2.1 million for the nine months ended September 30, 2022, down from $13.9 million in 2021 [176]. - Borrowings under the Term Loan totaled $15.0 million with an average interest rate of 8.65% as of September 30, 2022 [190]. Impairments and Restructuring - A goodwill impairment charge of $18.1 million was recognized for the three months ended September 30, 2022, due to a decline in market conditions affecting the company's market capitalization [160]. - For the nine months ended September 30, 2022, the company recognized a goodwill impairment charge of $18.1 million due to a decline in market conditions [169]. - Restructuring expenses for the three months ended September 30, 2022, were $1.3 million, compared to zero in the same period in 2021, reflecting costs associated with expense reduction measures [161]. - Restructuring expenses for the nine months ended September 30, 2022, were $2.2 million, compared to zero for the same period in 2021 [170]. Collaboration and Agreements - The collaboration agreement with Takeda Pharmaceutical Company Limited terminated on November 17, 2022, allowing the company to regain full rights to develop and commercialize its microbiome product candidates FIN-524 and FIN-525 [129]. - The company has received a total of $14 million from Takeda, including a one-time upfront payment of $10 million and $4 million in milestone payments [140]. - The company has made payments of $5 million to OpenBiome related to the OpenBiome Agreement, with potential future milestone payments up to $26 million [143]. - The company has not recognized any revenue related to the LMIC Agreement with OpenBiome for the three and nine months ended September 30, 2022, as there are currently no products available for sale [142].