10-Q: Cue Biopharma Navigates Financial Headwinds, Advances Pipeline

Cue Biopharma reports Q3 2025 results, highlighting a net loss of $7.4 million, reduced R&D expenses, and new collaborations while facing substantial doubt about its ability to continue as a going concern.

Summary

• Net loss for the three months ended September 30, 2025, was $7.448 million, an improvement from $8.660 million for the same period in 2024.
• Net loss for the nine months ended September 30, 2025, was $28.187 million, compared to $31.178 million for the nine months ended September 30, 2024.
• Collaboration revenue decreased to $2.149 million for Q3 2025 from $3.336 million in Q3 2024, and to $5.524 million for the nine months ended September 30, 2025, from $7.711 million in the prior year period.
• Research and Development expenses significantly decreased to $4.754 million for Q3 2025 from $9.381 million in Q3 2024, and to $21.211 million for the nine months ended September 30, 2025, from $29.111 million in the prior year period.
• General and Administrative expenses increased to $4.939 million for Q3 2025 from $2.867 million in Q3 2024, and to $12.792 million for the nine months ended September 30, 2025, from $10.564 million in the prior year period.
• Cash, cash equivalents, and marketable securities totaled $18.7 million as of September 30, 2025.
• The company entered into a Collaboration and License Agreement with ImmunoScape Pte. Ltd. for the CUE-100 series (oncology), receiving $5.0 million upfront and expecting an additional $10.0 million by December 2025 and before the first anniversary of the agreement, plus 40% equity in ImmunoScape and future royalties.
• The BI Collaboration and License Agreement for CUE-501 (B cell depletion) provided an upfront payment of $10.1 million (net of $1.9 million German withholding tax) and potential milestone payments up to $345.0 million.
• The Ono Collaboration and Option Agreement for CUE-401 terminated in March 2025, with the company retaining all rights to CUE-401.
• CUE-401 (autoimmune) is prioritized, with an Investigational New Drug (IND) application expected in Q2 2026, human safety data in H2 2026, and human proof-of-concept data in H2 2027.
• CUE-101 (HPV+ cancers) Phase 1b study completed dosing (80 patients), with database lock expected in Q4 2025, showing a 50% Overall Response Rate (ORR) in treatment-naive patients with CUE-101 + KEYTRUDA (CPS 1) compared to 19% for KEYTRUDA alone historically, and a median Overall Survival (OS) of 32.7 months versus 12.3 months historically.
• CUE-102 (WT1+ cancers) Phase 1b study completed dosing (42 patients), with database lock expected in Q4 2025.
• The company received a Nasdaq deficiency letter for failing to maintain a minimum bid price of $1.00 per share and was granted an extension until May 11, 2026, to regain compliance, with an intention to effect a reverse stock split if necessary.
• Usman Azam, M.D., was appointed President and Chief Executive Officer, effective September 29, 2025, replacing Daniel Passeri, who transitioned to a Strategic Advisor role.

Sentiment

Score: 5

Explanation: The company presents a mixed bag of strong clinical data for CUE-101 and new, potentially lucrative collaborations (BI, ImmunoScape) that could de-risk certain programs and provide substantial future payments. However, these positives are heavily counterbalanced by the explicit 'substantial doubt about its ability to continue as a going concern' and the Nasdaq minimum bid price deficiency, which necessitates a capital raise and potentially a reverse stock split. The CEO transition adds an element of uncertainty.

Positives

• Net loss decreased for both the three and nine months ended September 30, 2025, compared to the same periods in 2024, indicating improved financial performance.
• Research and Development expenses significantly decreased by $4.6 million for Q3 2025 and $7.9 million for the nine months ended September 30, 2025, reflecting cost management or strategic reprioritization.
• Established a new Collaboration and License Agreement with ImmunoScape Pte. Ltd. for the CUE-100 series, including upfront payments totaling $15.0 million and 40% equity in ImmunoScape, providing significant non-dilutive funding and future revenue potential.
• The BI Collaboration and License Agreement for CUE-501 generated an upfront payment of $10.1 million (net) and offers potential milestone payments up to $345.0 million, along with royalties, validating the Immuno-STAT platform's potential.
• Positive clinical data highlights for CUE-101 in HPV+ R/M HNSCC, showing a 50% ORR in treatment-naive patients with CUE-101 + KEYTRUDA (CPS 1) compared to 19% for KEYTRUDA alone, and a median OS of 32.7 months versus 12.3 months historically, suggesting strong efficacy.
• CUE-401 (autoimmune program) is prioritized, with an IND application expected in Q2 2026, indicating progress towards clinical development in a high-value therapeutic area.
• The Nasdaq compliance period for the minimum bid price requirement was extended until May 11, 2026, providing more time to address the listing deficiency.
• The appointment of Usman Azam, M.D., as the new President and CEO, along with a substantial stock option grant, signals new leadership and potential strategic direction.

Negatives

• The company has incurred recurring losses from operations and negative cash flows since inception, raising substantial doubt about its ability to continue as a going concern.
• Existing cash, cash equivalents, and marketable securities, even with expected upfront payments from ImmunoScape, are only projected to fund operations into the third quarter of 2026, necessitating additional capital raises.
• Collaboration revenue decreased by $1.2 million for Q3 2025 and $2.2 million for the nine months ended September 30, 2025, compared to the prior year periods, primarily due to the termination of the Ono Collaboration and timing of activities.
• General and Administrative expenses increased by $2.1 million for Q3 2025 and $2.2 million for the nine months ended September 30, 2025, partly due to a one-time employee severance accrual and increased professional fees.
• The company is not in compliance with Nasdaq's minimum bid price requirement and faces potential delisting if it fails to regain compliance by May 11, 2026, which may require a reverse stock split.
• The Ono Collaboration and Option Agreement for CUE-401 was terminated in March 2025, although the company retained rights to the program.
• The CUE-100 series (oncology programs CUE-101 and CUE-102) have been deprioritized and licensed out, shifting the company's primary focus away from these clinical-stage assets.
• The loan agreement with First Citizens Bank requires full repayment of outstanding principal and accrued interest by December 1, 2025, and mandates maintaining significant cash deposits, potentially limiting financial flexibility.
• Future equity offerings, which are necessary for funding, will dilute the ownership interest of current stockholders.

Risks

• Recurring losses from operations raise substantial doubt regarding the company's ability to continue as a going concern.
• The company is a clinical-stage biopharmaceutical company with no history of generating commercial revenue and may never achieve or maintain profitability.
• The company currently does not have, and may never develop, any FDA-approved or commercialized products.
• Substantial dependence on the success of drug product candidates, only two of which are currently being tested in clinical trials, with significant additional research, development, and clinical testing required for regulatory approval or commercialization.
• Limited experience in conducting clinical trials and no history of commercializing biologic products, which may make it difficult to evaluate future viability.
• Success in preclinical studies or early clinical trials may not be indicative of results obtained in later trials.
• Inability to establish or maintain collaborations or strategic alliances, or established relationships may not provide expected benefits.
• Inability to identify additional drug product candidates, or incorrect prioritization decisions due to limited resources and access to capital.
• Significant competition from other biotechnology and pharmaceutical companies, with competitors potentially developing superior compounds or drugs.
• Reliance on third parties to conduct clinical trials, with risks if these parties do not successfully carry out contractual duties or meet deadlines.
• Complete reliance on third parties to manufacture preclinical and clinical drug supplies.
• Inability to protect intellectual property could adversely affect financial condition, results of operations, and the value of technology and potential products.
• Even with marketing approvals, ongoing regulation could require substantial resource expenditure and limit manufacturing and marketing, impairing revenue generation.
• Need for substantial additional financing to support growth and ongoing operations, which may be difficult to obtain, restrict operations, require relinquishing rights, encumber assets, or result in dilution.
• Loan agreement requires meeting certain operating covenants and places restrictions on operating and financial flexibility.
• Changes in and uncertainty surrounding U.S. trade policy (e.g., tariffs, trade restrictions) could materially and adversely impact business, financial condition, and results of operations, including costs of materials, production processes, and supply chain disruptions.
• Changes in tax laws or their implementation/interpretation (e.g., Inflation Reduction Act, One Big Beautiful Bill Act) could adversely affect business and financial condition, including effective tax rate, tax liabilities, and cash tax obligations.
• Failure to comply with Nasdaq continued listing requirements (e.g., Minimum Bid Requirement) could lead to delisting, negatively impacting common stock price and ability to access capital markets.

Future Outlook

The company expects to finance its future cash needs through a combination of equity offerings, collaborations, and strategic alliances. It is prioritizing the development of CUE-401, with an IND application anticipated in Q2 2026, human safety data in H2 2026, and human proof-of-concept data in H2 2027, believing it could establish new standards of care in autoimmune diseases. The CUE-500 series is also seen as having broad therapeutic potential. General and administrative expenses are expected to remain consistent, while overall expenses are projected to increase due to ongoing research, development, and clinical trial activities. Existing cash resources, combined with expected upfront payments from ImmunoScape, are projected to fund operations into Q3 2026, but substantial additional capital will be required thereafter.

Management Comments

• Our Immuno-STAT platform is designed to selectively modulate disease-relevant T cells, enhancing efficacy while minimizing off-target effects.
• We believe our Immuno-STAT platform holds the promise of producing drug product candidates with the potential of establishing new standards of care in the treatment of autoimmune disease and cancer.
• We believe these results [CUE-101 data], along with advances in the manufacturing of CUE-401, have substantially reduced the risk profile for the development of this program and we have selected a lead candidate molecule.
• We believe the preclinical data generated to date for CUE-401 and the CUE-500 series demonstrates the intended mechanistic effect of these novel approaches for the potential treatment of autoimmune disease, and each represent potential breakthrough therapeutic opportunities for significant patient populations and potential near-term value creation opportunities for our shareholders.
• We believe that our science is derisked with clinical tolerability and activity from our Phase 1 clinical trials of CUE-101 and CUE-102, with the potential for significant market opportunities.
• Our corresponding strategic plans position us well to optimize shareholder value.
• We intend to maximize this value by focusing on the development of CUE-401.
• We currently believe that our existing cash, cash equivalents and marketable securities, as of September 30, 2025, along with the upfront payments we have received and are entitled to receive from IMSCP will allow us to fund operations into the third quarter of 2026.

Industry Context

Cue Biopharma operates in the highly competitive and capital-intensive biopharmaceutical sector, specializing in precision immunotherapies for autoimmune diseases and cancer. The company's Immuno-STAT platform aims to differentiate itself by selectively modulating T cells, a novel approach compared to broader immune activation strategies. The strategic collaborations with Boehringer Ingelheim and ImmunoScape reflect a common industry trend of partnering to de-risk and accelerate drug development, especially for clinical-stage companies. The focus on CUE-401 for autoimmune diseases aligns with a growing market need for targeted therapies in this area. The strong clinical data for CUE-101 in HPV+ HNSCC positions it favorably against existing treatments like KEYTRUDA, indicating potential for market disruption. However, like many clinical-stage biotechs, the company faces significant financial challenges, including recurring losses and the need for substantial additional capital, exacerbated by broader macroeconomic conditions and evolving trade/tax policies.

Comparison to Industry Standards

• CUE-101 in HPV+ R/M HNSCC demonstrated an Overall Response Rate (ORR) of 50% in treatment-naive patients treated with CUE-101 and KEYTRUDA (CPS 1), which compares favorably to an ORR of 19% observed with KEYTRUDA alone in the historical KEYNOTE-048 trial.
• The 12-month Overall Survival (OS) for CUE-101 in the same patient group was 88%, significantly higher than the 57% observed with KEYTRUDA alone in the historical KEYNOTE-048 trial, representing an unprecedented reduction in the risk of death (hazard ratio of 0.23).
• Median OS for CUE-101 was 32.7 months, substantially exceeding the 12.3 months reported in the historical KEYNOTE-048 trial.
• The CUE-500 series, including CUE-501, is believed to be significantly differentiated from competing approaches such as bifunctional antibody drug conjugates, pan-T cell engagers, IL-2 muteins, TNFR2 agonists, and CAR-T therapies, by selectively targeting disease-causing cells via anti-viral memory T cells, aiming for effective killing with reduced side effects.

Management Changes

Legal Proceedings

• Not currently a party to any material legal proceedings or threatened legal proceedings, the adverse outcome of which would have a material adverse effect on its business, financial condition or results of operations.

Stakeholder Impact

• Shareholders face potential significant dilution from future equity offerings and the risk of delisting from Nasdaq due to non-compliance with the minimum bid price requirement.
• Shareholders may benefit from the long-term value creation if the prioritized drug candidates, particularly CUE-401, succeed in clinical development and commercialization, and from the potential milestone payments and equity from new collaborations.
• Employees may be impacted by workforce adjustments, as indicated by a one-time employee severance accrual, and by the change in executive leadership.
• Patients and potential customers could benefit from the development of new, differentiated treatments for autoimmune diseases and cancer if the Immuno-STAT platform's drug candidates are successfully developed and commercialized.
• Creditors, specifically First Citizens Bank, are impacted by the upcoming repayment deadline of December 1, 2025, for the outstanding term loans.
• Collaborators (Boehringer Ingelheim and ImmunoScape) are key stakeholders, with their partnerships being crucial for funding, development, and potential future revenue streams for the company.

Next Steps

• Complete database lock preparations for the CUE-101 and CUE-102 Phase 1b studies (expected Q4 2025).
• File an Investigational New Drug (IND) application for CUE-401 (expected Q2 2026).
• Obtain human safety data for CUE-401 (anticipated H2 2026).
• Obtain human proof-of-concept data for CUE-401 (anticipated H2 2027).
• ImmunoScape Pte. Ltd. will further develop and potentially commercialize molecules from the CUE-100 series for oncology indications.
• Boehringer Ingelheim International GmbH will be responsible for further research, preclinical and clinical development, manufacturing, regulatory approvals, and commercialization of BI Licensed Products (including CUE-501).
• Actively monitor the closing bid price of common stock and evaluate options, including a reverse stock split, to regain compliance with Nasdaq's minimum bid price requirement by May 11, 2026.
• Raise additional capital through equity offerings, collaborations, and other strategic alliances to fund operations beyond Q3 2026.
• Repay all outstanding principal and accrued unpaid interest under the Term Loans by December 1, 2025.

Key Dates

Recommendation

The company presents a mixed bag of strong clinical data for CUE-101 and new, potentially lucrative collaborations (BI, ImmunoScape) that could de-risk certain programs and provide substantial future payments. However, these positives are heavily counterbalanced by the explicit 'substantial doubt about its ability to continue as a going concern' and the Nasdaq minimum bid price deficiency, which necessitates a capital raise and potentially a reverse stock split. The CEO transition adds an element of uncertainty. While the long-term potential of the Immuno-STAT platform remains, the immediate financial and operational challenges suggest a 'Hold' recommendation, advising investors to monitor the company's ability to secure additional financing, resolve the Nasdaq listing issue, and advance its prioritized CUE-401 program before making further investment decisions.

Keywords

Biopharmaceutical, Immuno-STAT, Autoimmune Disease, Cancer, CUE-401, CUE-501, CUE-101, CUE-102, Clinical-stage, T cells, B cell depletion, Oncology, HPV+ HNSCC, WT1+ cancers, Collaboration, Licensing, SEC filing, 10-Q, Financial results, Going concern, Nasdaq delisting, Capital raise, Drug development, Preclinical, Clinical trials