10-Q: Elicio Therapeutics Reports Q1 2025 Financial Results, Cites Going Concern Uncertainty

Sentiment:

Quarterly Report 13 May 2025 4:31 PM

📋All filings for Elicio Therapeutics, INC

Elicio Therapeutics reports a net loss of $11.2 million for Q1 2025 and expresses substantial doubt about its ability to continue as a going concern.

Capital raiseThe company plans to address this condition through the sale of common stock or other securities in public offerings and/or private placements, debt financings, or through other capital sources, including licensing arrangements, partnerships and collaborations with other companies or other strategic transactions.

Worse than expectedThe company's financial results indicate a net loss and raise substantial doubt about its ability to continue as a going concern, suggesting worse than expected performance.

Summary

Elicio Therapeutics, a clinical-stage biotechnology company, reported its financial results for the first quarter of 2025.
The company is focused on developing immunotherapies for cancer patients.
Elicio has experienced net losses and negative cash flows since its inception, leading to an accumulated deficit of $205.3 million as of March 31, 2025.
The company's cash and cash equivalents totaled $18.4 million as of March 31, 2025.
Elicio anticipates that its operating losses and negative cash flows will persist as it continues to develop its product candidates.
The company expects to incur substantial expenditures for the development of its product candidates and will require additional financing.
Elicio plans to seek additional funding through various means, including the sale of common stock, debt financings, licensing arrangements, and collaborations.
There is substantial doubt about the company's ability to continue as a going concern due to its financial condition.
The company's net loss for Q1 2025 was $11.2 million, compared to $11.8 million for Q1 2024.
Research and development expenses were $7.8 million for Q1 2025, compared to $7.6 million for Q1 2024.
General and administrative expenses were $3.0 million for Q1 2025, compared to $2.7 million for Q1 2024.
The company believes its cash on hand will fund operations into the fourth quarter of 2025.
Elicio is currently evaluating ELI-002 in a Phase 2 study, with an interim analysis expected in the third quarter of 2025.
The company is also advancing preclinical programs for ELI-007 and ELI-008.
Elicio identified material weaknesses in its internal control over financial reporting related to insufficient resources with knowledge and expertise in U.S. GAAP and insufficient financial reporting and close controls to ensure that incurred expenses are accrued at period end and deliverables from third party contractors are reviewed for accuracy.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the company's financial losses, going concern uncertainty, and material weaknesses in internal control. However, the progress of the ELI-002 clinical trial and preclinical programs provide some positive aspects.

Positives

Research and development expenses remained relatively stable at $7.8 million in Q1 2025 compared to $7.6 million in Q1 2024.
The ELI-002 Phase 2 study is progressing, with an interim analysis expected in Q3 2025.
The company is advancing preclinical programs for ELI-007 and ELI-008.
The company issued 3,500,573 shares of its common stock to GKCC in exchange for the principal balance of $20.0 million plus $0.3 million in accrued interest, in satisfaction in full of the Convertible Note.

Negatives

Elicio Therapeutics reported a net loss of $11.2 million for Q1 2025.
The company has an accumulated deficit of $205.3 million as of March 31, 2025.
Elicio expresses substantial doubt about its ability to continue as a going concern.
The company's cash and cash equivalents were $18.4 million as of March 31, 2025, which is projected to fund operations only into the fourth quarter of 2025.
Elicio identified material weaknesses in its internal control over financial reporting related to insufficient resources with knowledge and expertise in U.S. GAAP and insufficient financial reporting and close controls to ensure that incurred expenses are accrued at period end and deliverables from third party contractors are reviewed for accuracy.

Risks

The company's ability to continue as a going concern is uncertain.
Elicio needs to raise additional capital to fund its operations beyond the fourth quarter of 2025.
Clinical trials may not demonstrate the safety and efficacy of product candidates.
Regulatory approvals may be delayed or not obtained.
The company may face challenges in manufacturing and commercializing its product candidates.
Elicio may be unable to attract and retain key personnel.
The company faces competition from other therapies.
Global economic and political developments could negatively impact the business.
The company has material weaknesses in its internal control over financial reporting.

Future Outlook

The company expects to incur substantial expenditures in the foreseeable future for the development of its product candidates and will require additional financing to continue this development. The company believes its cash on hand will enable it to fund operations into the fourth quarter of 2025. An interim analysis of the ELI-002 Phase 2 study is expected in the third quarter of 2025.

Management Comments

Our management, including our Chief Executive Officer and our Chief Strategy and Financial Officer, has concluded that, notwithstanding the identified material weaknesses in our internal control over financial reporting, the financial statements in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.

Industry Context

The company operates in the competitive biotechnology industry, focused on developing immunotherapies for cancer. The success of Elicio's product candidates depends on their ability to demonstrate superior efficacy and safety compared to existing and emerging therapies.

Comparison to Industry Standards

It is difficult to compare Elicio's results directly to industry standards without knowing the specific stage of development and focus of comparable companies.
However, other clinical-stage biotech companies with similar cash positions often face similar challenges in securing funding and managing operating expenses.
Companies like Gritstone Bio and BioNTech are also developing cancer immunotherapies, but their specific financial situations and clinical programs may differ significantly from Elicio's.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Amended and Restated Non-Employee Director Compensation Policy	The compensation described in this Policy shall be paid or be made, as applicable, automatically and without further action of the Board, to each member of the Board who is not an employee of the Company or any parent or subsidiary of the Company (each, a Non-Employee Director) who may be eligible to receive such compensation, unless such Non-Employee Director declines the receipt of such compensation by written notice to the Company; provided, however, that Non-Employee Directors shall not be eligible to receive cash or equity compensation under the Policy (but shall be entitle to receive reimbursement pursuant to Section 3 below) if and while they are receiving other compensation (including severance compensation) from the Company resulting from their former employment with the Company.	2025-04-23	The impact of the amended policy is to clarify and update the compensation structure for non-employee directors, ensuring alignment with industry standards and incentivizing their contributions to the company's governance and strategic direction.

Related Party Transactions

In March 2024, the Company entered into the March Subscription Agreement with GKCC, an entity controlled by a member of the Companys board of directors.
As part of the Public Offering described in Note 6, Yekaterina Chudnovsky, a member of the Companys board of directors, and Jay Venkatesan, a member of the Companys board of directors, and trusts affiliated with Jay Venkatesan, purchased 1,600,000 July Pre-Funded Warrants and accompanying July Common Warrants and 200,000 July Pre-Funded Warrants and accompanying July Common Warrants, respectively, with such July Pre-Funded Warrants and July Common Warrants subject to the terms and conditions of the July Pre-Funded Warrants and July Common Warrants.
In August 2024, the Company entered into the Securities Purchase Agreement with GKCC, pursuant to which the Company issued the Convertible Note in the principal amount of $20.0 million pursuant to the Note Financing.
In March 2025, the Company exercised its right under the Convertible Note to require GKCC to convert the full amount of the Convertible Note, including all accrued and unpaid interest, into shares of the Companys common stock.

Stakeholder Impact

Shareholders face significant risk due to the company's financial condition and potential need for further dilution.
Employees may be affected by potential cost-cutting measures or restructuring.
The company's ability to advance its product candidates could impact patients with limited treatment options.
Suppliers and creditors may face increased risk of non-payment.

Next Steps

Continue development of ELI-002 and other product candidates.
Seek additional financing to fund operations.
Address material weaknesses in internal control over financial reporting.
Conduct interim analysis of ELI-002 Phase 2 study in Q3 2025.

Key Dates

Date	Description
2022-05-31	Company filed a registration statement on Form S-3 (the Prior Shelf Registration Statement) with the SEC.
2022-05-31	Company entered into an At-the-Market Equity Offering Sales Agreement with Stifel, Nicolaus & Company, Incorporated and Virtu Americas LLC, as sales agents, that provided for the issuance and sale of up to $21 million of shares of common stock from time to time in at-the-market offerings under the Prior Shelf Registration Statement and related prospectus filed with the Prior Shelf Registration Statement (the 2022 ATM Program).
2022-09-3	Former Elicio entered into a grant agreement with the Gastro-Intestinal (GI) Research Foundation.
2023-06-3	The remaining $0.5 million was received in June 2023 with the completion of the development efforts as defined in the grant agreement.
2023-09-3	The Company entered into a second grant agreement with the GI Research Foundation for $3.1 million, with such amount received net of the $0.5 million credit, described above.
2024-03-31	For the three months ended March 31, 2024, the Company incurred $1.4 million in research and development expenses related to this project, of which $0.1 million was reimbursed from available grant funds.
2024-03-31	As of March 31, 2024, the grant funds available for the second grant agreement were $0.7 million and the deferred research obligation was $0.6 million.
2024-03-31	During the three months ended March 31, 2024, the Company issued and sold a total of 615,363 shares of common stock under the 2022 ATM Program for aggregate net sale proceeds of approximately $5.1 million after deducting sales commissions.
2024-03-31	Basic and diluted net loss per share attributable to common stockholders was calculated for the three months ended March 31, 2025 and 2024 as follows (in thousands, except share and per share data): Three Months Ended March 31, 2025 2024 Numerator Net loss $ (11,209) $ (11,827) Denominator: Weighted-average shares used in computing net loss per share, basic and diluted 12,950,574 10,273,925 Net loss per share, basic and diluted $ (0.87) $ (1.15)
2024-03-31	For the three months ended March 31, 2025, net cash used in operating activities was $10.1 million, which consisted of a net loss of $11.2 million, changes in our assets and liabilities of $0.3 million, and non-cash charges of $1.4 million.
2024-03-31	For the three months ended March 31, 2024, net cash used in operating activities was $12.1 million, which consisted of a net loss of $11.8 million and changes in our assets and liabilities of $2.8 million, partially offset by non-cash charges of $2.5 million.
2024-03-31	For the three months ended March 31, 2025, net cash provided by financing activities was $10.3 million as a result of the issuance of $0.8 million of our common stock under our at-the-market offering program with JonesTrading Institutional Services LLC, as agent, $9.1 million from the January Offering, and $0.4 million from the exercise of common warrants and stock options.
2024-03-31	For the three months ended March 31, 2024, net cash provided by financing activities was $11.0 million, primarily as a result of the issuance of $5.1 million of our common stock under our at-the-market offering program with Stifel, Nicolaus & Company, Incorporated and Virtu Americas LLC, as sales agents, and $6.0 million of the March Pre-Funded Warrants in the March Offering.
2024-03-31	Although we have initiated efforts to remediate these material weaknesses, the material weaknesses have not been fully remediated as of March 31, 2025 and continue to be disclosed as material weaknesses in this Quarterly Report on Form 10-Q for the three month period ended March 31, 2025.
2024-03-01	In March 2024, the Company entered into a subscription agreement (the March Subscription Agreement) with GKCC, an entity controlled by a member of the Companys board of directors, providing for the issuance and sale by the Company to GKCC of pre-funded warrants (the March Pre-Funded Warrants) (the March Offering).
2024-05-31	In May 2024, the 2022 ATM Program was terminated by the Company.
2024-06-3	In June 2024, the Company filed a registration statement on Form S-3 (the 2024 Registration Statement) with the SEC that registered the offering, issuance, and sale of an amount of common stock, preferred stock, debt securities, warrants to purchase common stock, preferred stock and/or debt securities, and/or units consisting of any combination of such securities, not to exceed an aggregate initial offering price of $200 million.
2024-06-3	Simultaneously, the Company entered into the Capital on Demand TM Sales Agreement with JonesTrading Institutional Services LLC, as agent, to provide for the issuance and sale of up to $40 million of shares of common stock from time to time in at-the-market offerings under the 2024 Registration Statement and related prospectus filed with the 2024 Registration Statement (the 2024 ATM Program).
2024-07-02	As part of the Public Offering described in Note 6, Yekaterina Chudnovsky, a member of the Companys board of directors, and Jay Venkatesan, a member of the Companys board of directors, and trusts affiliated with Jay Venkatesan, purchased 1,600,000 July Pre-Funded Warrants and accompanying July Common Warrants and 200,000 July Pre-Funded Warrants and accompanying July Common Warrants, respectively, with such July Pre-Funded Warrants and July Common Warrants subject to the terms and conditions of the July Pre-Funded Warrants and July Common Warrants.
2024-07-31	In July 2024, the Company closed the Public Offering, which resulted in net proceeds of $10.9 million to the Company, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.
2024-08-31	In August 2024, the Company entered into a securities purchase agreement (the Securities Purchase Agreement) with GKCC, an entity controlled by a member of the Companys board of directors, pursuant to which the Company issued a 3% Senior Secured Convertible Promissory Note due February 15, 2026 (the Convertible Note) in the principal amount of $20.0 million (the Note Financing).
2025-01-31	In January 2025, the Company entered into a securities purchase agreement with certain institutional investors (each an Investor and, collectively, the Investors), pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investors (the January Offering): (i) an aggregate of 1,261,830 shares of the Companys common stock (the January Shares) and (ii) common warrants to purchase up to an aggregate of 1,261,830 shares of common stock (the January Common Warrants).
2025-03-05	In March 2025, the Company exercised its right under the Convertible Note to require GKCC to convert the full amount of the Convertible Note, including all accrued and unpaid interest, into shares of the Companys common stock.
2025-03-31	As of March 31, 2025, the Company had an accumulated deficit of $205.3 million.
2025-03-31	As of March 31, 2025, the Company had $18.4 million in cash and cash equivalents.
2025-03-31	As of March 31, 2025, there is an aggregate of 1,035,544 shares of common stock available for issuance under the Companys equity incentive plans, including 471,889 shares available for future grants under the Companys 2021 Incentive Award Plan, 176,323 shares available for future grants under the Companys 2022 Equity Incentive Plan, as amended, and 387,332 shares available for future grants issuance under the Companys 2024 Inducement Incentive Award Plan.
2025-03-31	As of March 31, 2025, 275,309 shares remained available for purchase under the ESPP and no offerings have been authorized.
2025-03-31	As of March 31, 2025, the Company has no outstanding debt.
2025-03-31	As of March 31, 2025, maturities of lease liabilities were as follows (in thousands):
2025-03-31	Based on the evaluation of our disclosure controls and procedures, our President and Chief Executive Officer and our Chief Strategy and Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Quarterly Report on Form 10-Q as a result of our material weaknesses in our internal control over financial reporting.
2025-03-31	Although we have initiated efforts to remediate these material weaknesses, the material weaknesses have not been fully remediated as of March 31, 2025 and continue to be disclosed as material weaknesses in this Quarterly Report on Form 10-Q for the three month period ended March 31, 2025.
2025-05-09	The number of shares of the registrants common stock outstanding as of May 9, 2025 was 15,996,976.
2025-05-13	Amended and Restated Non-Employee Director Compensation Policy amended as of April 23, 2025.

Keywords

Elicio Therapeutics, financial results, immunotherapies, cancer, ELI-002, clinical trials, going concern, net loss, cash runway, research and development, warrants, internal control

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