Mural Oncology plc(US:MURA)2024-03-26 20:42Part I Business Overview Mural Oncology, a clinical-stage company spun off from Alkermes, focuses on cytokine-based immunotherapies, with lead candidate nemvaleukin in registrational trials for melanoma and ovarian cancer Overview and Strategy Mural Oncology is a clinical-stage immunotherapy company focused on advancing its lead IL-2 candidate, nemvaleukin, and developing IL-18 and IL-12 programs - The company's lead product candidate is nemvaleukin alfa ("nemvaleukin"), an engineered interleukin-2 (IL-2) cytokine19 - Nemvaleukin is currently in two potentially registrational studies: ARTISTRY-6 for mucosal melanoma (monotherapy) and ARTISTRY-7 for platinum-resistant ovarian cancer (PROC) in combination with pembrolizumab19 - The company is also developing engineered therapies targeting the IL-18 and IL-12 pathways, with plans to nominate a product candidate in each program in 20241940 - Key strategic elements include progressing nemvaleukin to commercialization, expanding its development into additional tumor types, exploring next-generation dosing, and advancing the IL-18 and IL-12 programs41 Nemvaleukin Program The nemvaleukin program focuses on an engineered IL-2 designed to enhance anti-tumor activity with reduced toxicity, advancing through two registrational trials - Nemvaleukin is engineered to selectively bind to the intermediate-affinity IL-2 receptor, aiming to expand CD8+ T cells and NK cells while minimizing expansion of Tregs2562 Key Upcoming Nemvaleukin Clinical Milestones | Trial | Indication | Key Milestone | Expected Timing | | :--- | :--- | :--- | :--- | | ARTISTRY-7 | Platinum-Resistant Ovarian Cancer (PROC) | Topline OS results (interim analysis) | Q1 2025 | | ARTISTRY-6 (Cohort 2) | Mucosal Melanoma | Topline results | H1 2025 | | ARTISTRY-7 | Platinum-Resistant Ovarian Cancer (PROC) | Final OS data | Q2 2026 | ARTISTRY-1 Monotherapy Results in Melanoma (as of Mar 27, 2023) | Melanoma Subtype | Evaluable Patients (n) | Objective Response Rate (ORR) | Disease Control Rate (DCR) | | :--- | :--- | :--- | :--- | | All Melanoma | 46 | 13.0% | 78.3% | | Mucosal Melanoma | 6 | 33.3% | 66.7% | ARTISTRY-1 Combination Results in PROC (as of Mar 27, 2023) | Metric | Result | | :--- | :--- | | Evaluable Patients (n) | 14 | | Objective Response Rate (ORR) | 28.6% (2 CRs, 2 PRs) | | Disease Control Rate (DCR) | 71.4% | | Median Duration of Response | 65.5 weeks | - The FDA has granted Orphan Drug Designation (ODD) and Fast Track Designation (FTD) for nemvaleukin in mucosal melanoma. It also received FTD for nemvaleukin in combination with pembrolizumab for PROC349094 Early-Stage Pipeline (IL-18 and IL-12) The company is advancing discovery-phase IL-18 and IL-12 programs, aiming to nominate product candidates in 2024, focusing on enhanced anti-tumor activity and reduced systemic toxicity - IL-18 Program: Engineering an IL-18 variant resistant to IL-18BP neutralization, with an extended half-life to enhance anti-tumor activity139143 - IL-12 Program: Developing a tumor-targeted split IL-12 where two inactive subunits are administered sequentially and designed to assemble and activate within the tumor, aiming to reduce systemic toxicity149154 - The company plans to nominate a product candidate for both the IL-18 and IL-12 programs in 2024148160 Competition, Manufacturing, and Intellectual Property Mural faces significant competition, relies on third-party manufacturing, and protects its pipeline, including nemvaleukin, with patents expiring from 2033 to 2043 - The company faces competition from other IL-2 based therapies (e.g., Proleukin®, Anaveon, Roche, Sanofi), as well as therapies for melanoma (BMS, Merck) and ovarian cancer (Immunogen, Merck)163164 - The company relies entirely on third parties for the manufacturing of its product candidates for both clinical development and potential commercialization, and does not own or operate any manufacturing facilities169 - The nemvaleukin patent portfolio includes five issued U.S. patents and numerous pending applications, with patent terms expected to expire between 2033 and 2043177181184 - The company has pending patent applications for its IL-18 and IL-12 programs, with potential patent expirations in 2043 and 2042, respectively178179 Government Regulation The company's products are subject to extensive FDA and international regulations covering development, approval, manufacturing, and post-market activities, including pricing impacts from the Inflation Reduction Act - Biological products are regulated by the FDA under the FD&C Act and PHS Act, requiring an IND before clinical testing and an approved BLA for marketing193 - The company has received Fast Track Designation for nemvaleukin in mucosal melanoma and PROC, and Orphan Drug Designation for mucosal melanoma, which can offer benefits like market exclusivity and expedited review pathways213216368 - The company is subject to healthcare laws including the Anti-Kickback Statute, False Claims Act, and privacy laws like HIPAA and GDPR, which regulate interactions with healthcare providers and patient data228229235 - Recent legislation, particularly the Inflation Reduction Act (IRA), will impact pricing and reimbursement by allowing Medicare to negotiate prices for certain drugs and imposing rebates for price increases that outpace inflation268398 Risk Factors The company faces significant financial, clinical, regulatory, and commercialization risks, compounded by reliance on third parties and potential liabilities from its Alkermes separation - Financial Risk: The company has a history of significant losses and will need to raise additional funding to advance its product candidates, which may not be available on acceptable terms282283 - Clinical & Regulatory Risk: The business is highly dependent on the success of nemvaleukin. Biopharmaceutical development is lengthy, expensive, and uncertain, with a high risk of failure in clinical trials or inability to obtain regulatory approval292341 - Third-Party Reliance: The company relies on third parties for manufacturing and to conduct clinical trials. Any failure by these parties to perform their duties could significantly delay development and commercialization338411417 - Separation & Tax Risk: The company may not achieve all expected benefits of the separation from Alkermes. If the separation does not qualify as tax-free, the company could be required to indemnify Alkermes for material taxes489505 - Commercialization Risk: Even if approved, product candidates may fail to achieve market acceptance by physicians and payors. The company faces substantial competition and challenges in obtaining favorable pricing and reimbursement378385402 Cybersecurity The company manages cybersecurity risks through IT processes, Board oversight, security tools, and training, currently assessing no material threats - The company's cybersecurity risk management is overseen by the audit committee of the Board of Directors, with day-to-day management handled by the Vice President, Information Technology (VP IT)566567 - The company uses security tools, employee training, and third-party vendors to manage cybersecurity risks and has processes for assessing threats associated with third-party service providers562563565 - The company states that it does not believe there are currently any known risks from cybersecurity threats that are reasonably likely to materially affect the company564 Properties The company leases approximately 180,000 square feet of office and lab space in Waltham, Massachusetts, under a lease assigned from Alkermes expiring in 2026 - The company leases approximately 180,000 square feet of office and laboratory space in Waltham, Massachusetts. The lease expires in 2026 and was assigned from its former parent, Alkermes568 Legal Proceedings As of the report date, Mural Oncology plc is not currently subject to any material legal proceedings - The company is not currently subject to any material legal proceedings569 Part II Market for Common Equity and Related Matters Mural Oncology's shares began trading on Nasdaq in November 2023, and the company does not intend to pay cash dividends due to business needs and Irish legal restrictions - Ordinary shares are listed on the Nasdaq Global Market under the symbol "MURA" since November 16, 2023572 - The company has never declared or paid cash dividends and does not intend to in the foreseeable future574 - Payment of dividends is restricted by Irish law, which requires "distributable reserves." The company currently has no distributable reserves and does not intend to seek court approval to create them at this time574 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) The company reported a $207.4 million net loss in 2023, with increased G&A expenses, and received a $275.0 million cash contribution, expecting to fund operations into Q4 2025 - On November 14, 2023, in connection with the separation from Alkermes, the company received a cash contribution of $275.0 million587 Comparison of Results of Operations (2023 vs. 2022) | (in millions) | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development | $165.5 | $167.2 | ($1.7) | | General and administrative | $30.7 | $17.7 | $13.0 | | Operating loss | ($196.2) | ($184.9) | ($11.3) | | Income tax provision | ($12.2) | ($4.9) | ($7.3) | | Net loss | ($207.4) | ($189.8) | ($17.6) | - The increase in G&A expenses was primarily due to higher allocable costs from the Former Parent, professional service fees, and one-time increases in employee-related expenses, including non-cash share-based compensation related to the Separation600 - The company believes its cash and cash equivalents of $270.9 million as of December 31, 2023, will be sufficient to fund operations into the fourth quarter of 2025283605 Summary of Cash Flows (2023 vs. 2022) | (in millions) | 2023 | 2022 | | :--- | :--- | :--- | | Cash used in operating activities | ($194.2) | ($168.6) | | Cash used in investing activities | ($3.5) | ($5.5) | | Cash provided by financing activities | $468.8 | $174.1 | Financial Statements and Supplementary Data Mural's 2023 consolidated financial statements, reflecting its post-separation operations, show a $207.4 million net loss and $270.9 million in cash and cash equivalents at year-end Consolidated Balance Sheets Consolidated Balance Sheet Data (as of Dec 31) | (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $270,852 | $0 | | Total current assets | $277,337 | $4,817 | | Total assets | $301,745 | $33,750 | | Total current liabilities | $29,017 | $41,560 | | Total liabilities | $37,928 | $55,406 | | Total equity (deficit) | $263,817 | ($21,656) | Consolidated Statements of Operations and Comprehensive Loss Consolidated Statement of Operations Data (for the year ended Dec 31) | (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Research and development | $165,532 | $167,191 | | General and administrative | $30,706 | $17,732 | | Total operating expenses | $196,238 | $184,923 | | Operating loss | ($196,238) | ($184,923) | | Net loss | ($207,447) | ($189,807) | Consolidated Statements of Cash Flows Consolidated Statement of Cash Flows Data (for the year ended Dec 31) | (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Cash flows used in operating activities | ($194,249) | ($168,588) | | Cash flows used in investing activities | ($3,452) | ($5,511) | | Cash flows provided by financing activities | $468,811 | $174,099 | Controls and Procedures Management deemed disclosure controls effective as of December 31, 2023, with the company exempt from internal control reporting as a new public entity - Management concluded that disclosure controls and procedures were effective as of December 31, 2023764 - The company is exempt from management's assessment of internal control over financial reporting and the auditor's attestation report for this annual report due to its status as a newly public company765766 Other Information In Q4 2023, the Chief Medical Officer and Chief Legal Officer adopted Rule 10b5-1 plans for RSU "sell-to-cover" tax transactions - In Q4 2023, the Chief Medical Officer and Chief Legal Officer each adopted a Rule 10b5-1 trading plan for "sell-to-cover" transactions to automatically satisfy tax withholding obligations upon the vesting of RSUs770 Part III Items 10-14, covering governance, compensation, and ownership, are incorporated by reference from the company's definitive proxy statement Directors, Compensation, Ownership, and Related Transactions Information for Directors, Executive Officers, Compensation, Security Ownership, and Related Transactions is incorporated by reference from the 2024 proxy statement - The information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's definitive proxy statement to be filed later775777778779780 Part IV This section lists the financial statements, schedules, and exhibits filed with the Annual Report on Form 10-K Exhibits and Financial Statement Schedules This section lists all exhibits filed with the Form 10-K, including key agreements related to the Alkermes separation and governance documents - This section contains the list of all exhibits filed with the Form 10-K, including key agreements related to the company's separation from Alkermes and its governance documents782