Finch Therapeutics (FNCH) - 2023 Q3 - Quarterly Report

Financial Position - As of September 30, 2023, the company has cash and cash equivalents of $28.8 million, expected to fund operations into 2025[81] - As of September 30, 2023, the company had cash and cash equivalents of $28.8 million, down from $71.0 million as of December 31, 2022[130] - The company has not engaged in trading or speculative investments, focusing instead on capital preservation with short-term maturities[130] - A one percentage point change in interest rates is not expected to materially affect the fair market value of the company's investment portfolio[130] - The company's market risk exposure is primarily due to interest rate sensitivities, which could impact financial position[129] Revenue and Expenses - The company reported no revenue for the three months ended September 30, 2023, compared to $138,000 in collaboration revenue for the same period in 2022[99][100] - Total revenue for the nine months ended September 30, 2023 was $0.1 million, down from $0.9 million in 2022, primarily due to the termination of the collaboration agreement with Takeda[107] - Total operating expenses for the three months ended September 30, 2023, were $3.78 million, a significant decrease from $40.77 million in the same period in 2022[99] - General and administrative expenses decreased to $3.7 million in Q3 2023 from $9.6 million in Q3 2022, a reduction of $5.8 million primarily due to lower professional fees and personnel expenses[102] - Research and development expenses were $0 for the three months ended September 30, 2023, down from $11.86 million in the same period in 2022, due to a strategic shift in focus[101] - Research and development expenses for the nine months ended September 30, 2023 were $7.2 million, a decrease of $34.1 million from $41.3 million in 2022, driven by a significant scaling back of development efforts[109] - Cash used in operating activities decreased to $27.8 million in 2023 from $60.6 million in 2022, reflecting reduced expenses and headcount[119] Loss and Impairment - The company recorded a net loss of $2.42 million for the three months ended September 30, 2023, compared to a net loss of $40.37 million in the same period in 2022[99] - Impairment charges recognized in 2023 included $32.9 million for IPR&D and $13.1 million for long-lived assets, with no such charges in 2022[112][113] - No goodwill impairment charge was recognized for the three months ended September 30, 2023, compared to an $18.1 million charge in the same period of 2022[103] Strategic Decisions - The company discontinued its Phase 3 clinical trial of CP101 for the prevention of recurrent CDI, reflecting a broader strategy to wind down development efforts[77][88] - The company is focusing on realizing the value of its intellectual property and other assets after scaling back its development initiatives[76] - The company does not expect to generate revenue from product sales in the near future, focusing instead on the enforcement and out-licensing of its intellectual property[117] - The company expects to finance cash needs through equity offerings, debt financings, or other capital sources, as it does not anticipate generating significant revenue in the near future[80] - The company may pursue dissolution and liquidation if unable to secure additional funding as needed[80] Other Financial Activities - The company has made payments of $5.0 million under the OpenBiome Agreement and may incur additional milestone payments up to $26.0 million[86] - Restructuring expenses for the nine months ended September 30, 2023 were $4.1 million, up from $2.2 million in 2022, due to higher costs associated with expense reduction measures[114] - The company voluntarily prepaid all outstanding amounts under the Loan Agreement on January 25, 2023, indicating a proactive approach to debt management[131] Company Classification - The company is classified as an emerging growth company and will maintain this status until December 31, 2026, or until certain revenue or market value thresholds are met[128] - The company expects to utilize the extended transition period for new or revised accounting standards while remaining an emerging growth company[127]