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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 14, 2022

 

 

PROKIDNEY CORP.

(Exact name of Registrant as Specified in Its Charter)

 

 

Cayman Islands			001-40560	98-1586514
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
2000 Frontis Plaza Blvd. Suite 250
Winston-Salem, North Carolina				27103
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: ( 336) 999-7029

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A ordinary shares, $0.0001 par value per share		PROK		The Nasdaq Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02 Results of Operations and Financial Condition.

On November 14, 2022, ProKidney Corp. issued a press release to announce the financial results of ProKidney LP and its subsidiaries for the third quarter ended September 30, 2022. A copy of the press release is furnished as Exhibit 99.1.

 

The information in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed to be “filed” for purposes of Section 18, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.	Description
99.1	Press Release dated November 14, 2022
104	Cover Page Interactive Data File (embedded within Inline XBRL document)

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			PROKIDNEY CORP.
Date:	November 14, 2022	By:	/s/ James Coulston
			James Coulston Chief Financial Officer

 

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Exhibit 99.1

 

ProKidney Reports Third Quarter 2022 Financial Results and Recent Corporate Highlights

 

WINSTON-SALEM, N.C. – November 14, 2022 – ProKidney Corp. (Nasdaq: PROK) (“ProKidney” or the “Company”), a leading late clinical-stage cellular therapeutics company focused on chronic kidney disease (CKD), today announced financial results for the third quarter ended September 30, 2022, and provided an update on recent corporate developments.

 

“During the third quarter of 2022, we made significant advancement in our mission to improve the lives and outcomes for people with CKD. In July, ProKidney listed on the Nasdaq exchange and raised capital that optimally positions us to meet our anticipated clinical milestones. This capitalization moves us closer to bringing REACT® to patients in need as we report data from ongoing studies of REACT, advance additional studies, and launch our second global Phase 3 study, proact 2 (formerly REGEN-016). We believe that the steps we are taking today will help set the stage for a successful year ahead,” said Dr. Tim Bertram, Chief Executive Officer of ProKidney.

 

Dr. Libbie McKenzie, Chief Medical Officer at ProKidney, commented, “Throughout 2022, we have continued to execute on our clinical development and regulatory strategy, furthering enrollment in our ongoing REACT studies including our first global Phase 3 study, proact 1 (formerly REGEN-006), highlighting the proactive nature of REACT to potentially stabilize or improve kidney function and reduce the risk of kidney failure. Our Phase 2 clinical trial, REGEN-007, remains on track to report interim data by the third quarter of 2023. We are grateful to our investigators, the patients and their caregivers for their continued support and look forward to sharing data as it becomes available.”

 

Corporate Highlights and REACT® Clinical Development Program

 

 

 

 

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Third Quarter Financial Highlights

 

Cash Position: Cash and cash equivalents as of September 30, 2022, was $506.3 million, compared to $20.6 million on December 31, 2021. In connection with the closing of the business combination with Social Capital Suvretta Holding Corp. III (SCS), on July 11, 2022, ProKidney received gross proceeds of $596.5 million. A portion of these proceeds was used to repay $35.2 million of related party notes and $49.4 million of expenses previously incurred by SCS and fees incurred in connection with the PIPE placement.

 

R&D Expenses: Research and development expenses were $21.1 million for the three months ended September 30, 2022, compared to $14.7 million for the same period in 2021. The increase of $6.4 million was driven by a $2.0 million increase in cash-based compensation costs, driven primarily by the

 

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hiring of additional members of the management team and other senior positions to strengthen our internal resources as we enter Phase 3 development and prepare for commercialization. Other research and development costs related to professional fees, quality control and manufacturing improvements increased by approximately $2.1 million. Further, non-cash costs of $1.7 million were recorded for equity-based compensation related to awards granted during 2022.

 

G&A Expenses: General and administrative expenses were $14.4 million and $2.3 million for the three months ended September 30, 2022, and 2021, respectively. The increase of $12.1 million was primarily driven by increases in non-cash equity-based compensation expenses of approximately $2.6 million due to additional awards granted during 2022, increases of approximately $2.0 million in professional service fees associated with the SCS business combination, increases of approximately $4.5 million related to director and officer insurance coverage associated with our operations as a public company including the costs related to a director and officers tail insurance policy with respect to SCS, increases in cash-based compensation expenses of $0.7 million, due to the hiring of additional personnel and increases in legal and professional service fees of approximately $1.9 million primarily driven by costs associated with operating as a public company.

 

Net Loss Before Noncontrolling Interest: Net loss before noncontrolling interest was $33.9 million and $17.1 million for the three months ended September 30, 2022, and 2021.

 

 

About ProKidney

ProKidney, a pioneer in the treatment of CKD through innovations in cellular therapy, was founded in 2015 after a decade of research. ProKidney’s lead product candidate, REACT® (Renal Autologous Cell Therapy), is a first-of-its-kind, patented, autologous cellular therapy with the potential to not only slow and stabilize the progression of CKD, but in some cases potentially drive meaningful improvement in kidney function. Late-stage CKD patients, Stage 3b - 4, are a key target population for REACT therapy. REACT has received Regenerative Medicine Advanced Therapy (RMAT) designation, as well as FDA and EMA guidance, supporting its ongoing Phase 3 clinical program that launched in January 2022. For more information, visit www.prokidney.com.

 

About CKD

There are no therapies that effectively reverse late-stage CKD. CKD is a serious diagnosis with significant morbidity and mortality. Notably, the 5-year mortality of newly diagnosed Stage 4 CKD is higher than that of newly diagnosed non-metastatic cancer. CKD most often presents as a progressive decline in kidney function, ultimately resulting in the failure of the kidneys and the need for renal replacement therapy, such as hemodialysis or kidney transplant. One in three Americans is at risk for CKD which currently affects approximately 75 million people in the United States and Europe and over 400 million across Asia. CKD is among the largest single expenses incurred by the U.S. health care system.

 

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

 

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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, 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 combined 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 impact of COVID-19 or geo-political conflict such as the war in Ukraine on the Company’s business; and other risks and uncertainties indicated from time to time in the Company’s 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.

 

Contacts:

Corporate:

Glenn Schulman, PharmD, MPH

SVP, Investor Relations

glenn.schulman@prokidney.com

 

Investors:

 

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Burns McClellan

Lee Roth

Lroth@burnsmc.com

 

Media:

Burns McClellan

Selina Husain / Robert Flamm, Ph.D.

Shusain@burnsmc.com / rflamm@burnsmc.com

 

 

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ProKidney Corp. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

	September 30, 2022				December 31, 2021
	(Unaudited)
Assets
Cash and cash equivalents	$	506,327			$	20,558
Prepaid assets		3,549				588
Prepaid clinical		9,337				6,100
Other current assets		158				25
Total current assets		519,371				27,271
Fixed assets, net		10,695				11,358
Right of use assets, net		2,105				1,241
Intangible assets, net		267				428
Total assets	$	532,438			$	40,298
Liabilities and Equity
Accounts payable	$	3,453			$	2,834
Lease liabilities		426				267
Accrued expenses and other		5,962				9,213
Total current liabilities		9,841				12,314
Income tax payable, net of current portion		309				–
Lease liabilities, net of current portion		1,717				1,067
Total liabilities		11,867				13,381
Commitments and contingencies
Redeemable noncontrolling interest		1,616,896				–
Shareholders’ deficit / members' equity:
Class A units (186,500,000 issued and outstanding at December 31, 2021)		–				186,500
Class B units (7,767,122 issued and outstanding at December 31, 2021)		–				1,927
Class A ordinary shares, $0.0001 par value; 500,000,000 shares    authorized; 61,540,231 issued and outstanding as of September    30, 2022		6				–
Class B ordinary shares, $0.0001 par value; 500,000,000 shares    authorized; 171,210,060 issued and outstanding as of September    30, 2022		18				–
Additional paid-in capital		1,456				–
Accumulated deficit		(1,097,805	)			(161,510	)
Total shareholders' deficit / members’ equity		(1,096,325	)			26,917
Total liabilities and equity	$	532,438			$	40,298

 

 

 

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ProKidney Corp. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except for share and per share data)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Operating expenses
Research and development		$	21,132			$	14,742			$	61,180			$	35,570
General and administrative			14,440				2,339				61,592				5,831
Total operating expenses			35,572				17,081				122,772				41,401
Operating loss			(35,572	)			(17,081	)			(122,772	)			(41,401	)
Other income (expense):
Interest income			1,581				—				1,581				1
Interest expense			(29	)			(1	)			(213	)			–
Net loss before income taxes			(34,020	)			(17,082	)			(121,404	)			(41,400	)
Income tax (benefit) expense			(75	)			60				2,158				76
Net and comprehensive loss before noncontrolling    interest			(33,945	)			(17,142	)			(123,562	)			(41,476	)
Net loss and comprehensive loss attributable to    noncontrolling interest			(22,017	)			–				(22,017	)			–
Net loss and comprehensive loss available to Class A    ordinary shareholders		$	(11,928	)		$	(17,142	)		$	(101,545	)		$	(41,476	)
Weighted average Class A ordinary shares outstanding: (1)
Basic and diluted			61,540,231								61,540,231
Net loss per share attributable to Class A ordinary shares: (1)
Basic and diluted		$	(0.13	)						$	(0.13	)

 

(1) For the three and nine months ended September 30, 2022, net loss per Class A ordinary share and weighted average Class A ordinary shares outstanding is representative of the period from July 11, 2022 through September 30, 2022, the period following the Business Combination,

 

 

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ProKidney Corp. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

		Nine Months Ended September 30,
		2022				2021
Cash flows from operating activities
Net loss before noncontrolling interest		$	(123,562	)		$	(41,476	)
Adjustments to reconcile net loss before noncontrolling interest to net cash flows used    in operating activities:
Depreciation and amortization			2,245				1,397
Equity-based compensation			65,529				524
Gain on disposal of equipment			–				1
Changes in operating assets and liabilities
Prepaid and other assets			(5,810	)			(1,819	)
Accounts payable and accrued expenses			(39	)			4,064
Income taxes payable			309				–
Net cash flows used in operating activities			(61,328	)			(37,309	)
Cash flows used in investing activities
Net cash from SCS			108				–
Purchase of equipment and facility expansion			(1,540	)			(4,652	)
Net cash flows used in investing activities			(1,432	)			(4,652	)
Cash flows from financing activities
Payments on finance leases			(24	)			(22	)
Proceeds from Business Combination, including PIPE financing, net of associated costs    of $37,856			542,503				–
Borrowings under related party notes payable			35,000				–
Repayment of related party notes payable			(35,000	)			–
Net cash contribution			6,050				41,500
Net cash flows provided by financing activities			548,529				41,478
Net change in cash and cash equivalents			485,769				(483	)
Cash, beginning of period			20,558				4,578
Cash, end of period		$	506,327			$	4,095
Supplemental disclosure of non-cash investing activities:
Right of use assets obtained in exchange for lease obligations		$	1,124			$	–
Impact of equity transactions and compensation on redeemable noncontrolling interest		$	3,084			$	–
Equipment and facility expansion included in accounts payable and    accrued expenses		$	380			$	1,339

 

 

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