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Milestone Pharmaceuticals(MIST) - 2022 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Unaudited H1 2022 financial statements reflect a decrease in total assets to $91.3 million and a net loss of $30.7 million Condensed Consolidated Balance Sheets As of June 30, 2022, total assets decreased to $91.3 million, primarily due to reduced cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands of US dollars) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $63,237 | $114,141 | | Total current assets | $90,502 | $118,923 | | Total assets | $91,299 | $119,849 | | Liabilities & Equity | | | | Total current liabilities | $4,256 | $6,775 | | Total liabilities | $4,640 | $7,249 | | Total shareholders' equity | $86,659 | $112,600 | Condensed Consolidated Statements of Earnings (Loss) Q2 2022 net loss was $16.6 million due to no revenue, and H1 2022 net loss increased to $30.7 million Statement of Earnings (Loss) Summary (in thousands of US dollars, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $0 | $15,000 | $0 | $15,000 | | Research and development | $10,657 | $9,427 | $19,425 | $18,022 | | General and administrative | $3,918 | $3,018 | $7,561 | $5,651 | | Commercial | $2,231 | $1,843 | $3,867 | $3,209 | | Net earnings (loss) | $(16,648) | $770 | $(30,655) | $(11,744) | | Net earnings (loss) per share, basic | $(0.39) | $0.02 | $(0.73) | $(0.28) | Condensed Consolidated Statements of Cash Flows H1 2022 net cash used in operations was $28.0 million, resulting in a $50.9 million net decrease in cash and cash equivalents Cash Flow Summary (in thousands of US dollars) | Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(28,034) | $(11,455) | | Net cash provided by (used in) investing activities | $(23,059) | $32,000 | | Cash provided by financing activities | $189 | $4,939 | | Net decrease in cash and cash equivalents | $(50,904) | $25,484 | | Cash and cash equivalents – End of period | $63,237 | $97,794 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail operations, accounting policies, and financial position, including a $237.0 million accumulated deficit and $86.2 million cash - The company is a biopharmaceutical firm focused on developing and commercializing its lead product candidate, etripamil, a nasal spray for treating paroxysmal supraventricular tachycardia (PSVT), atrial fibrillation, and other cardiovascular indications27 - As of June 30, 2022, the company had cash, cash equivalents, and short-term investments of $86.2 million and an accumulated deficit of $237.0 million37 - No revenue was recognized in Q2 2022, unlike Q2 2021 which included $15 million in revenue from a non-refundable upfront cash payment related to a license agreement38 Share-Based Compensation Expense (in thousands of US dollars) | Category | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Administration | $880 | $1,792 | | Research and development | $1,105 | $1,953 | | Commercial activities | $426 | $780 | | Total | $2,411 | $4,525 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses etripamil's clinical progress and H1 2022 financial results, including a $30.7 million net loss Overview and Clinical Program Updates Milestone develops etripamil for cardiac arrhythmias, with the RAPID Phase 3 trial reaching its target events and data expected in H2 2022 - The pivotal Phase 3 RAPID trial for etripamil in PSVT reached its target of 180 confirmed events in July 2022, with topline data anticipated in the mid-second half of 202261 - The open-label safety extension trial, NODE-302, showed a PSVT conversion rate of 60.2% at 30 minutes, with a median time to conversion of 15.5 minutes68 - A Phase 2 proof-of-concept trial (ReVeRA) is ongoing to evaluate etripamil for reducing ventricular rate in patients with atrial fibrillation with rapid ventricular rate (AFib-RVR)74 - Partner Ji Xing Pharmaceuticals initiated a Phase 3 study of etripamil for PSVT in China, enrolling the first patient in July 20227173 Results of Operations Q2 2022 operating loss was $16.8 million due to no revenue, and H1 2022 operating loss increased to $30.9 million Comparison of Operating Results (in thousands of US dollars) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $0 | $15,000 | $0 | $15,000 | | R&D Expenses | $10,657 | $9,427 | $19,425 | $18,022 | | G&A Expenses | $3,918 | $3,018 | $7,561 | $5,651 | | Commercial Expenses | $2,231 | $1,843 | $3,867 | $3,209 | | Earnings (loss) from operations | $(16,806) | $712 | $(30,853) | $(11,882) | - R&D expenses for the six months ended June 30, 2022 increased by $1.4 million (7.8%) year-over-year, primarily due to advancing the RAPID Phase 3 trials for etripamil in PSVT100 - G&A expenses for the six months ended June 30, 2022 increased by $1.9 million (33.8%) year-over-year, mainly from a $1.7 million increase in personnel-related costs and consulting fees103 Liquidity and Capital Resources As of June 30, 2022, the company had $86.2 million in cash and investments, expected to fund operations into H2 2023 - The company had $86.2 million in cash, cash equivalents, and short-term investments as of June 30, 2022107 - Based on the current operating plan, the company expects its existing cash to be sufficient to fund operations into the second half of 2023108 - Future funding needs are expected to be met through equity/debt financing or potential collaboration agreements, similar to the one with Ji Xing113 Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate and foreign currency risks, but a 10% change in either is not expected to be material - The company is exposed to interest rate risk on its $86.2 million in cash, cash equivalents, and short-term investments, but a 10% change in rates is not expected to be material due to the short-term nature of these assets133 - The company is subject to foreign currency risk from transactions in Canadian dollars (CAD); as of June 30, 2022, net monetary exposure in CAD was $2.8 million, and a 10% change is not expected to have a material effect134136 Controls and Procedures Management concluded disclosure controls were effective as of June 30, 2022, with no material changes to internal controls - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2022138 - There were no material changes during the quarter that materially affected the company's internal control over financial reporting139 PART II. OTHER INFORMATION Legal Proceedings The company is not currently involved in any material legal proceedings or aware of any pending actions - The company is not currently involved in any material legal proceedings141 Risk Factors No material changes have occurred in the risk factors since the last Annual Report on Form 10-K - No material changes have occurred in the risk factors since the last Annual Report on Form 10-K142 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None143 Defaults Upon Senior Securities This section is not applicable to the company Mine Safety Disclosures This section is not applicable to the company Other Information This section is not applicable to the company Exhibits The report lists various exhibits filed, including corporate governance documents and CEO/CFO certifications - Exhibits filed include corporate governance documents, CEO/CFO certifications, and XBRL data files146