Finch Therapeutics (FNCH) - 2023 Q2 - Quarterly Report

Financial Position - As of June 30, 2023, the company reported cash and cash equivalents of $34.1 million, expected to fund operations into 2025[83] - As of June 30, 2023, the company had cash and cash equivalents of $34.1 million, down from $71.0 million as of December 31, 2022[128] - Cash used in operating activities decreased to $22.5 million for the six months ended June 30, 2023, from $41.5 million in 2022, primarily due to reduced expenses from winding down development efforts[117] - Net cash used in financing activities was $16.2 million for the six months ended June 30, 2023, primarily due to repaying the outstanding balance under the Loan Agreement[119] Revenue and Expenses - The company generated no revenue for the three months ended June 30, 2023, compared to $0.4 million in the same period of 2022, primarily due to the termination of the Takeda Agreement[101] - Total revenue for the six months ended June 30, 2023, was $0.1 million, a decrease of $0.6 million from $0.7 million in the same period of 2022, primarily due to the termination of the collaboration agreement with Takeda[107] - Total operating expenses for the three months ended June 30, 2023, were $9.9 million, a decrease from $22.99 million in the same period of 2022[100] - General and administrative expenses increased to $8.9 million for the three months ended June 30, 2023, from $8.2 million in the same period of 2022, reflecting a $0.7 million increase primarily due to a $2.4 million rise in professional fees[103] - Research and development expenses significantly decreased to $0.2 million for the three months ended June 30, 2023, from $13.9 million in the same period of 2022, reflecting a strategic shift in focus[102] - Research and development expenses significantly decreased to $7.2 million for the six months ended June 30, 2023, from $29.5 million in 2022, reflecting a $22.3 million reduction as the company scaled back its development efforts[108] Losses and Impairments - The company recorded a net loss of $6.95 million for the three months ended June 30, 2023, compared to a net loss of $22.7 million in the same period of 2022[100] - The company expects to continue incurring significant losses as it focuses on realizing the value of its intellectual property estate and other assets[120] - Impairment charges included $32.9 million for IPR&D and $13.1 million for long-lived assets for the six months ended June 30, 2023, as certain assets were deemed to have no value[110][111] Strategic Focus - The company has no products approved for commercial sale and does not expect to generate revenue from product sales in the foreseeable future[84] - The company is focusing on realizing the value of its intellectual property and other assets after scaling back development efforts and reducing headcount[78] - The company may require additional funding to support operations as it seeks to realize value from its intellectual property estate[82] Restructuring and Management - The company incurred restructuring expenses of $0.8 million for the three months ended June 30, 2023[100] - Restructuring expenses decreased to $0.4 million for the three months ended June 30, 2023, compared to $0.9 million for the same period in 2022, due to lower costs associated with expense reduction measures[104] - The company expects general and administrative expenses to continue decreasing due to reduced headcount[91] Debt Management - On January 25, 2023, the company voluntarily prepaid all outstanding principal and interest under the Loan Agreement, indicating a proactive approach to managing debt[129] Market Position - The company will remain an emerging growth company until December 31, 2026, or until certain revenue or market value thresholds are met, including total annual gross revenues of at least $1.235 billion or a market value exceeding $700 million[126] - The company's exposure to interest rate sensitivity is primarily due to changes in U.S. bank interest rates, but it does not expect significant effects on operating results or cash flows from a one percentage point change in interest rates[128]