ProKidney Reports Business Updates and Second Quarter 2024 Financial Results
- Reported interim REGEN-007 data that demonstrate rilparencel’s potential to preserve kidney function in patients with diabetes and advanced CKD
- Restarted manufacturing and resumed PROACT 1 and PROACT 2 Phase 3 trials
- Closed $140 million upsized underwritten public offering and concurrent registered direct offering
- Ended the second quarter with $431.5 million in cash and cash equivalents and marketable securities, supporting operations through projected Phase 3 enrollment completion in mid-2026
WINSTON-SALEM, N.C., Aug. 09, 2024 (GLOBE NEWSWIRE) -- ProKidney Corp. (Nasdaq: PROK) (“ProKidney” or the “Company"), a leading late clinical-stage cellular therapeutics company focused on chronic kidney disease (CKD), today reported business updates and financial results for the second quarter ended June 30, 2024.
“The interim results of REGEN-007 as presented in June support rilparencel’s potential to preserve kidney function in patients with diabetes and advanced CKD,” said Bruce Culleton, M.D., Chief Executive Officer. “In addition to positive clinical data, the second quarter marked several critical milestones. Manufacturing has restarted, both Phase 3 studies have resumed, and we completed a $140 million equity offering to extend our runway into mid-2026. We are resolutely focused on executing our Phase 3 program as we seek to address the unmet need in late-stage CKD patients who have limited therapeutic options before dialysis or kidney transplant.”
Clinical, Corporate, and Operational Updates
- In June, we presented interim Phase 2 REGEN-007 data that showed kidney function stabilization for 18 months in patients with diabetes and advanced CKD who received rilparencel and a safety profile consistent with prior studies and comparable to kidney biopsy
- Manufacturing restarted in June and the QP Declaration of Equivalence to EU GMPs was received in July, allowing ProKidney to ship rilparencel to clinical study sites in Europe
- PROACT 1 and PROACT 2 Phase 3 trials resumed; patients have begun enrolling in PROACT 1 under the amended protocol that enriches for more advanced CKD patients
- Announced closing of an upsized $140 million underwritten public offering and concurrent registered direct offering in June, extending cash runway into mid-2026 and through the expected full enrollment of the Phase 3 studies
- Appointed Carla Poulson as Chief People Officer in May. Ms. Poulson brings approximately 25 years of experience in human resources, talent acquisition, and management development. Prior to ProKidney, Ms. Poulson served as Chief People Officer at UniQure Therapeutics, Mersana Therapeutics, Akcea Therapeutics and 10 years in senior HR leadership positions at Vertex Pharmaceuticals
Second Quarter 2024 Financial Highlights
Liquidity: Cash, cash equivalents and marketable securities as of June 30, 2024, totaled $431.5 million, compared to $363.0 million on December 31, 2023. We expect that our existing cash, cash equivalents and marketable securities held on June 30, 2024, will enable us to fund our operating expenses and capital expenditure requirements into mid-2026.
R&D Expenses: Research and development expenses were $29.4 million for the three months ended June 30, 2024, compared to $26.4 million for the same period in 2023. The increase of $3.0 million was driven primarily by increases in cash compensation costs of approximately $3.2 million as we continue to hire additional personnel in the areas of clinical development, quality, manufacturing, and biostatistics to support our ongoing clinical trials. Further, we have seen increases in professional fees of approximately $1.6 million related to the remediation of quality and manufacturing compliance deficiencies. Lastly, we have experienced increased costs for clinical operations, materials and facilities totaling approximately $2.2 million related to preparations for the restart of activities for our PROACT studies. These increases have been offset by decreased spending on manufacturing improvements and equity-based compensation costs of approximately $2.9 million and $1.3 million, respectively.
G&A Expenses: General and administrative expenses were $13.7 million for the three months ended June 30, 2024 compared to $13.5 million for the same period in 2023. The increase of $0.2 million has been primarily driven by increases in cash compensation of approximately $2.2 million. This increase has been offset by decreases in equity-based compensation of approximately $2.1 million.
Net Loss Before Noncontrolling Interest: Net loss before noncontrolling interest was $38.5 million and $34.8 million for the three months ended June 30, 2024 and 2023, respectively.
Shares outstanding: Class A and Class B ordinary shares outstanding as of June 30, 2024, totaled 289,674,830.
About ProKidney Corp.
ProKidney, a pioneer in the treatment of chronic kidney disease through innovations in cellular therapy, was founded in 2015 after a decade of research. ProKidney’s lead product candidate, rilparencel (also known as REACT®), is a first-of-its-kind, patented, proprietary autologous cellular therapy being evaluated to potentially preserve kidney function in patients with diabetes and advanced CKD. Rilparencel has received Regenerative Medicine Advanced Therapy (RMAT) designation, as well as FDA and EMA guidance, supporting its ongoing Phase 3 clinical program.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. ProKidney’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to financial results and expected cash runway, future performance, development and commercialization of products, if approved, the potential benefits and impact of the Company’s products, if approved, potential regulatory approvals, the size and potential growth of current or future markets for the Company’s products, if approved, the advancement of the Company’s development programs into and through the clinic and the expected timing for reporting data, the making of regulatory filings or achieving other milestones related to related to the Company’s product candidates, and the advancement and funding of the Company’s developmental programs generally. Most of these factors are outside of the Company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: the inability to maintain the listing of the Company’s Class A ordinary shares on the Nasdaq; the inability to implement business plans, forecasts, and other expectations or identify and realize additional opportunities, which may be affected by, among other things, competition and the ability of the Company to grow and manage growth profitably and retain its key employees; the risk of downturns and a changing regulatory landscape in the highly competitive biotechnology industry; the inability of the Company to raise financing in the future; the inability of the Company to obtain and maintain regulatory clearance or approval for its products, and any related restrictions and limitations of any cleared or approved product; the inability of the Company to identify, in-license or acquire additional technology; the inability of Company to compete with other companies currently marketing or engaged in the biologics market and in the area of treatment of kidney diseases; the size and growth potential of the markets for the Company’s products, if approved, and its ability to serve those markets, either alone or in partnership with others; the Company’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing; the Company’s financial performance; the Company’s intellectual property rights; uncertainties inherent in cell therapy research and development, including the actual time it takes to initiate and complete clinical studies and the timing and content of decisions made by regulatory authorities; the fact that interim results from our clinical programs may not be indicative of future results; the impact of geo-political conflict on the Company’s business; and other risks and uncertainties included under the heading “Risk Factors” in the Company’s most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. The Company cautions readers that the foregoing list of factors is not exclusive and cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.
Investor Contacts:
ProKidney
Ethan Holdaway
Ethan.Holdaway@prokidney.com
LifeSci Advisors, LLC
Daniel Ferry
Daniel@lifesciadvisors.com
| ProKidney Corp. and Subsidiaries Consolidated Balance Sheets (in thousands, except for share data) | |||||||
| June 30, 2024 | December 31, 2023 | ||||||
| (Unaudited) | |||||||
| Assets | |||||||
| Cash and cash equivalents | $ | 214,508 | $ | 60,649 | |||
| Marketable securities | 217,023 | 302,301 | |||||
| Interest receivable | 2,748 | 1,375 | |||||
| Prepaid assets | 3,532 | 3,399 | |||||
| Prepaid clinical | 12,451 | 6,413 | |||||
| Other current assets | — | 9 | |||||
| Total current assets | 450,262 | 374,146 | |||||
| Fixed assets, net | 42,567 | 42,143 | |||||
| Right of use assets, net | 6,334 | 4,263 | |||||
| Total assets | $ | 499,163 | $ | 420,552 | |||
| Liabilities and Shareholders' Deficit | |||||||
| Accounts payable | $ | 2,933 | $ | 5,098 | |||
| Lease liabilities | 1,032 | 803 | |||||
| Accrued expenses and other | 15,109 | 17,665 | |||||
| Income taxes payable | 1,515 | 1,472 | |||||
| Total current liabilities | 20,589 | 25,038 | |||||
| Income tax payable, net of current portion | 568 | 568 | |||||
| Lease liabilities, net of current portion | 5,640 | 3,610 | |||||
| Total liabilities | 26,797 | 29,216 | |||||
| Commitments and contingencies | |||||||
| Redeemable noncontrolling interest | 1,444,737 | 1,494,732 | |||||
| Shareholders’ deficit | |||||||
| Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 125,856,877 and 59,880,347 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 13 | 6 | |||||
| Class B ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 163,817,953 and 168,297,916 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 16 | 17 | |||||
| Additional paid-in capital | 189,267 | 36,114 | |||||
| Accumulated other comprehensive (loss) gain | (6 | ) | 130 | ||||
| Accumulated deficit | (1,161,661 | ) | (1,139,663 | ) | |||
| Total shareholders' deficit | (972,371 | ) | (1,103,396 | ) | |||
| Total liabilities and shareholders' deficit | $ | 499,163 | $ | 420,552 | |||
| ProKidney Corp. and Subsidiaries Consolidated Statements of Operations and Comprehensive Loss (in thousands, except for share and per share data) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | $ | 29,404 | $ | 26,364 | $ | 56,637 | $ | 51,981 | ||||||||
| General and administrative | 13,652 | 13,455 | 26,495 | 28,714 | ||||||||||||
| Total operating expenses | 43,056 | 39,819 | 83,132 | 80,695 | ||||||||||||
| Operating loss | (43,056 | ) | (39,819 | ) | (83,132 | ) | (80,695 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 4,537 | 5,965 | 9,380 | 11,262 | ||||||||||||
| Interest expense | (3 | ) | (4 | ) | (5 | ) | (7 | ) | ||||||||
| Net loss before income taxes | (38,522 | ) | (33,858 | ) | (73,757 | ) | (69,440 | ) | ||||||||
| Income tax (benefit) expense | (56 | ) | 965 | 42 | 2,292 | |||||||||||
| Net loss before noncontrolling interest | (38,466 | ) | (34,823 | ) | (73,799 | ) | (71,732 | ) | ||||||||
| Net loss attributable to noncontrolling interest | (25,960 | ) | (25,705 | ) | (51,801 | ) | (52,949 | ) | ||||||||
| Net loss available to Class A ordinary shareholders | $ | (12,506 | ) | $ | (9,118 | ) | $ | (21,998 | ) | $ | (18,783 | ) | ||||
| Weighted average Class A ordinary shares outstanding: | ||||||||||||||||
| Basic and diluted | 75,908,017 | 64,562,209 | 68,429,869 | 64,551,281 | ||||||||||||
| Net loss per share attributable to Class A ordinary shares: | ||||||||||||||||
| Basic and diluted | $ | (0.16 | ) | $ | (0.14 | ) | $ | (0.32 | ) | $ | (0.29 | ) | ||||
| ProKidney Corp. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) | |||||||||||
| Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash flows from operating activities | |||||||||||
| Net loss before noncontrolling interest | $ | (73,799 | ) | $ | (71,732 | ) | |||||
| Adjustments to reconcile net loss before noncontrolling interest to net cash flows used in operating activities: | |||||||||||
| Depreciation and amortization | 2,372 | 1,702 | |||||||||
| Equity-based compensation | 15,489 | 24,222 | |||||||||
| Gain on marketable securities, net | (3,802 | ) | (1,981 | ) | |||||||
| Loss on disposal of equipment | 131 | 3 | |||||||||
| Changes in operating assets and liabilities | |||||||||||
| Interest receivable | (1,373 | ) | (8,090 | ) | |||||||
| Prepaid and other assets | (6,162 | ) | 2,256 | ||||||||
| Accounts payable and accrued expenses | (5,838 | ) | 12,430 | ||||||||
| Income taxes payable | 43 | 282 | |||||||||
| Net cash flows used in operating activities | (72,939 | ) | (40,908 | ) | |||||||
| Cash flows from investing activities | |||||||||||
| Purchases of marketable securities | (82,880 | ) | (261,847 | ) | |||||||
| Sales and maturities of marketable securities | 171,445 | 60,768 | |||||||||
| Purchase of equipment and facility expansion | (1,596 | ) | (4,686 | ) | |||||||
| Net cash flows provided by (used in) investing activities | 86,969 | (205,765 | ) | ||||||||
| Cash flows from financing activities | |||||||||||
| Proceeds from sales of Class A ordinary shares, net of offering costs | 139,855 | – | |||||||||
| Payments on finance leases | (26 | ) | (26 | ) | |||||||
| Net cash flows provided by (used in) financing activities | 139,829 | (26 | ) | ||||||||
| Net change in cash and cash equivalents | 153,859 | (246,699 | ) | ||||||||
| Cash, beginning of period | 60,649 | 490,252 | |||||||||
| Cash, end of period | $ | 214,508 | $ | 243,553 | |||||||
| Supplemental disclosure of non-cash investing and financing activities: | |||||||||||
| Right of use assets obtained in exchange for lease obligations | $ | 2,621 | $ | 714 | |||||||
| Exchange of Class B ordinary shares | $ | 14,902 | $ | – | |||||||
| Impact of equity transactions and compensation on redeemable noncontrolling interest | $ | 16,708 | $ | 380 | |||||||
| Change in redemption value of noncontrolling interest | $ | – | $ | 230,209 | |||||||
| Equipment and facility expansion included in accounts payable and accrued expenses | $ | 780 | $ | 689 | |||||||
