Key Highlights

  • Second-quarter net loss was $19.6 million, or $0.11 per share, versus $9.9 million and $0.11 a year earlier.
  • Cash, equivalents and marketable securities were $159.0 million at June 30, down from $170.4 million at March 31.
  • Research and development expense was $13.4 million, up from $5.3 million.
  • RA Capital paid $50 million gross for 25.0 million shares in July.
  • Phase 3 IMPROVE-PAH has approvals in 26 countries and 43 recently initiated sites.

Inhibikase Earnings: Is Cash Enough to Reach Phase 3 Data After a $19.6 Million Quarterly Loss?

Inhibikase Therapeutics (NASDAQ:IKT) had not published third-quarter results as of Wednesday, October 28, and its filings show no report on Tuesday, October 27. The latest release, dated August 11, covers the quarter ended June 30 and reported a net loss of $19.6 million, or $0.11 per share. A year earlier the loss was $9.9 million, also $0.11 per share, because the share count has grown.

As screened, consensus was a loss of $0.12 against a reported $0.11, matching that second-quarter figure. Cash, equivalents and marketable securities were $159.0 million at June 30, consisting of about $31.2 million in cash and $127.8 million in securities. The company's stated view is that its funding, including the July financing, should last through topline data from Part B of its Phase 3 study, assuming full and timely exercise of outstanding Series A and B warrants.

Burn Rate and Spending: Why Did Research Costs More Than Double?

Inhibikase is a clinical-stage company developing IKT-001, a once-daily oral anti-proliferative for pulmonary arterial hypertension. Research and development expense was $13.4 million in the second quarter, up from $5.3 million, as the Phase 3 program ramped. Selling, general and administrative expense was $7.7 million versus $5.9 million.

For the six months, the net loss was $36.0 million, or $0.21 per share, against $23.6 million and $0.26. Research and development was $24.2 million, up from $15.8 million, and selling, general and administrative expense was $15.0 million versus $11.2 million, which included $1.0 million of severance for prior senior executives.

The first quarter had a net loss of $16.4 million and cash of $170.4 million, so cash and securities declined by about $11.4 million (calculated) in the second quarter.

IMPROVE-PAH Progress: What Did the Phase 3 Update Add?

The European Medicines Agency confirmed in April that the study could start. Approvals have been obtained in 26 countries, three more are pending and four further submissions are planned, with 43 clinical sites recently initiated.

Part A is double-blind and placebo-controlled in about 140 patients, with change in pulmonary vascular resistance at Week 24 as the primary endpoint. Part B follows seamlessly with about 346 patients and a primary endpoint of change in six-minute walk distance at Week 24. No timing for topline data was given.

The FDA granted orphan drug designation in July, which may bring tax credits, user fee exemptions and potential seven years of market exclusivity upon approval. Data presented in May pointed to a potentially improved gastrointestinal side-effect profile compared with imatinib.

Financing and Share Count: What Should Investors Watch Before the Next Report?

In July, RA Capital bought 25.0 million shares through the company's at-the-market facility for $50 million gross, and 18.03 million of those shares were later exchanged for pre-funded warrants. At June 30 there were 132.0 million common shares and 42.5 million pre-funded warrants outstanding. The company gave no formal financial guidance.

Next come the third-quarter report, the pending country approvals, enrollment progress in Part A and any warrant exercises. Last year the third-quarter report arrived on November 14.