Janux Therapeutics(JANX) - 2023 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements Unaudited condensed financial statements for Q3 2023 reflect increased assets, a net loss of $46.5 million, and $58.7 million in financing cash flow Condensed Balance Sheets As of September 30, 2023, total assets increased to $386.9 million, driven by short-term investments, with equity rising to $348.9 million Condensed Balance Sheet Summary (in thousands) | Account | September 30, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $17,152 | $51,426 | | Short-term investments | $332,560 | $275,590 | | Total current assets | $355,195 | $332,439 | | Total assets | $386,850 | $364,010 | | Liabilities & Equity | | | | Total current liabilities | $14,471 | $16,507 | | Total liabilities | $37,902 | $43,270 | | Total stockholders' equity | $348,948 | $320,740 | | Accumulated deficit | ($157,005) | ($110,470) | Unaudited Condensed Statements of Operations and Comprehensive Loss For Q3 2023, net loss improved to $11.6 million; for nine months, net loss was $46.5 million, comparable to prior year due to increased interest income Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $2,517 | $1,813 | $5,622 | $5,767 | | Research and development | $11,892 | $13,737 | $42,681 | $38,007 | | General and administrative | $6,438 | $6,098 | $19,783 | $16,585 | | Loss from operations | ($15,813) | ($18,022) | ($56,842) | ($48,825) | | Interest income | $4,245 | $1,326 | $10,307 | $1,831 | | Net loss | ($11,568) | ($16,696) | ($46,535) | ($46,994) | | Net loss per share | ($0.25) | ($0.40) | ($1.08) | ($1.13) | Unaudited Condensed Statements of Cash Flows For nine months ended Sep 30, 2023, net cash used in operations was $40.7 million, investing $52.3 million, with financing providing $58.7 million from a stock offering Cash Flow Summary (Nine Months Ended September 30, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($40,674) | ($31,009) | | Net cash provided by (used in) investing activities | ($52,317) | $59,870 | | Net cash provided by financing activities | $58,717 | $309 | | Net decrease (increase) in cash | ($34,274) | $29,170 | - Financing activities in 2023 were primarily driven by $56.5 million in net proceeds from the issuance of common stock and pre-funded common stock warrants[19] Notes to Unaudited Condensed Financial Statements Notes detail accounting policies, liquidity, an accumulated deficit of $157.0 million, sufficient capital for 12 months, and $56.5 million net proceeds from a July 2023 offering - The company is a clinical-stage biopharmaceutical firm developing immunotherapies using its TRACTr and TRACIr platforms, having incurred net losses since inception, with an accumulated deficit of $157.0 million as of September 30, 2023[22][23] - Management believes the company has sufficient capital to fund operations for at least 12 months from the financial statement issuance date[23] - In July 2023, the company closed an underwritten offering of common stock and pre-funded warrants, resulting in net proceeds of $56.5 million[79] - Revenue of $5.6 million was recognized under the Merck Agreement for the nine months ended September 30, 2023, with remaining performance obligations for the Second Collaboration Target expected to be completed over the next 0.9 years[99] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses clinical-stage platforms, increased R&D and G&A expenses for nine months ended Sep 30, 2023, and strengthened liquidity with $350.5 million sufficient through 2027 - The company is a clinical-stage biopharmaceutical company focused on its TRACTr and TRACIr platforms, with lead candidates JANX007 (PSMA-TRACTr) for prostate cancer and JANX008 (EGFR-TRACTr) for multiple solid cancers, both in Phase 1 clinical trials[101] Comparison of Operating Results (Nine Months Ended September 30, in thousands) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Collaboration Revenue | $5,622 | $5,767 | ($145) | | Research and Development | $42,681 | $38,007 | $4,674 | | General and Administrative | $19,783 | $16,585 | $3,198 | | Loss from Operations | ($56,842) | ($48,825) | ($8,017) | | Other Income | $10,307 | $1,831 | $8,476 | | Net Loss | ($46,535) | ($46,994) | $459 | - The increase in R&D expenses for the nine months ended Sep 30, 2023 was primarily due to a $5.0 million increase in indirect costs (personnel, facilities) and a $1.8 million increase in direct costs for JANX007, offset by a decrease in costs for JANX008[127] - As of September 30, 2023, the company had cash, cash equivalents, restricted cash, and short-term investments of $350.5 million, which management believes are sufficient to meet operating expenses and capital requirements through 2027[131][141] Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as Janux Therapeutics qualifies as a smaller reporting company - The company has indicated that quantitative and qualitative disclosures about market risk are not applicable as it is a smaller reporting company[149] Controls and Procedures Management concluded disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting - Management concluded that as of the end of the period, the company's disclosure controls and procedures were effective[150] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[151] PART II. OTHER INFORMATION Legal Proceedings The company reports that it is not currently a party to any material legal proceedings - As of the filing date, the company is not involved in any material legal proceedings[154] Risk Factors Key risks include limited operating history with net losses, need for additional capital, early-stage product candidates, reliance on third parties, and challenges in regulatory approval and intellectual property - The company has a limited operating history, has incurred net losses since inception (net loss of $46.5 million for the nine months ended Sep 30, 2023), and anticipates continued significant losses[157][159] - The company is in the early stages of development, with its product candidates based on novel technologies, making it difficult to predict the timing, cost, and likelihood of success in clinical trials and regulatory approval[157][177] - The company relies on third parties for conducting clinical trials and manufacturing, which introduces risks related to performance, quality, and supply chain continuity[157][208][212] - The company's ability to obtain and maintain sufficient intellectual property protection for its platform and product candidates is critical and uncertain, facing risks from competitors and complex patent laws[157][306] Unregistered Sales of Equity Securities and Use of Proceeds This section addresses the use of proceeds from the June 2021 IPO, with no net proceeds used as of September 30, 2023, and funds held in marketable securities - The company's IPO in June 2021 generated gross proceeds of $222.9 million[415] - As of September 30, 2023, the company has not used any of the proceeds from its IPO, and there has been no material change in the planned use of these funds[416] Other Information During Q3 2023, no director or officer adopted or terminated any Rule 10b5-1 or other non-Rule 10b5-1 trading arrangements - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement during the three months ended September 30, 2023[417] Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including corporate documents, stock forms, underwriting agreements, and officer certifications - This section provides a list of all exhibits filed as part of the Form 10-Q[419]