Disc Medicine(US:IRON)2022-08-11 12:30Financial Performance - The company has not generated any revenue since inception and does not expect to do so in the near future[137]. - The net loss for the six months ended June 30, 2022, was $22.3 million, compared to a net loss of $35.5 million for the same period in 2021, an improvement of $13.2 million[163]. - The company reported net cash used in operating activities of $25.8 million for the six months ended June 30, 2022, compared to $30.9 million for the same period in 2021, a decrease of $5.1 million[168]. - Total operating expenses for the six months ended June 30, 2022, were $22.4 million, down from $32.8 million in 2021, a reduction of $10.4 million[158]. - Interest expense decreased to $0.1 million for the six months ended June 30, 2022, from $2.0 million in the same period of 2021, a decrease of $1.9 million[161]. - The accumulated deficit as of June 30, 2022, was $207.0 million[163]. - As of June 30, 2022, the company had cash and cash equivalents of $108.7 million, down from $137.0 million at the end of 2021[165]. - As of June 30, 2022, the company had cash and cash equivalents of $108.7 million, expected to fund operating expenses for at least the next twelve months[176]. - Net cash used in financing activities for the six months ended June 30, 2022, was $2.5 million, compared to $193.9 million provided in the same period of 2021[172]. Expenses - Research and development expenses are anticipated to decrease in 2022 compared to 2021 due to reduced clinical efforts and restructuring plans[140]. - General and administrative expenses are also expected to decrease in 2022 as compared to 2021 due to implemented restructuring plans[144]. - Research and development expenses decreased to $2.6 million for the three months ended June 30, 2022, from $10.8 million in the same period of 2021, a reduction of $8.2 million[155]. - General and administrative expenses were $4.7 million for the three months ended June 30, 2022, down from $5.5 million in 2021, a decrease of $0.8 million[156]. - The company anticipates a decrease in expenses for 2022 compared to 2021 due to reduced clinical efforts and restructuring implementations[174]. Merger and Strategic Plans - The company has entered into a merger agreement with Disc Medicine, Inc., with the transaction expected to close in Q4 2022, subject to stockholder approvals and customary closing conditions[122]. - The merger agreement includes potential termination fees of $3 million for the company and $7.8 million for Disc under certain circumstances[122]. - The company is highly dependent on the success of the proposed merger transaction with Disc, which is subject to shareholder approval[167]. - The company may explore strategic alternatives, including another strategic transaction or dissolution, if the merger with Disc is not completed[125]. - The Disc Merger Agreement was entered into on August 9, 2022, with the merger subject to stockholder approval and customary closing conditions[188]. Research and Development - The company has devoted substantially all efforts and financial resources to research and development activities since its inception in 2015[126]. - The company is working to advance GEM307 towards IND filing, which could be effective for treating systemic diseases[128]. - The company has not successfully completed any pivotal clinical trials or obtained regulatory approvals for its product candidates[127]. - The company recorded accrued expenses of approximately $0.8 million for expenditures incurred by contract research organizations (CROs) and contract manufacturing organizations (CMOs) as of June 30, 2022[187]. - The company may need to raise substantial additional funds to achieve business objectives, as product candidates may not achieve commercial success[175]. Financing and Capital Structure - The company entered into a term loan facility of up to $10.0 million, with $2.9 million principal outstanding as of June 30, 2022[181]. - The term loan matures in January 2023 and accrues interest at a floating rate, with a final end of term charge of 4.0% of the original principal amount[183]. - The company expects to finance operations through equity offerings, debt financings, and strategic alliances until substantial product revenue is generated[177]. Impact of COVID-19 - The ongoing COVID-19 pandemic has not significantly impacted the company's financial results in Q2 2022, but future impacts remain uncertain[130]. Company Classification - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of certain reduced disclosure obligations[194][195].