10-Q: Lisata Therapeutics Reports Q2 2025 Results, Advances Certepetide Trials

Lisata Therapeutics reported a reduced net loss in Q2 2025, driven by lower operating expenses and initial revenue, while advancing its lead oncology drug, certepetide, and securing a new patent.

Summary

• Net loss for the three months ended June 30, 2025, was $4.7 million, an improvement from $5.0 million in the same period of 2024.
• Net loss for the six months ended June 30, 2025, was $9.4 million, an improvement from $10.4 million in the same period of 2024.
• Revenue for both the three and six months ended June 30, 2025, totaled $70 thousand, compared to $0 in the prior year periods, from an upfront license fee.
• Operating expenses decreased by $0.6 million (10.6%) to $4.9 million for the three months ended June 30, 2025, and by $1.3 million (11.0%) to $10.8 million for the six months ended June 30, 2025.
• Research and development expenses decreased by $0.3 million (13.4%) to $2.3 million for the three months and by $1.0 million (16.9%) to $4.9 million for the six months, primarily due to reduced patient treatment costs, CRO expenses for the Bolster trial, and lower CMC spend.
• General and administrative expenses decreased by $0.2 million (8.1%) to $2.7 million for the three months and by $0.4 million (5.6%) to $5.9 million for the six months, due to employee position elimination and lower consulting/travel expenses, partially offset by severance costs.
• Cash, cash equivalents, and marketable securities totaled approximately $22.0 million as of June 30, 2025.
• The company believes it has sufficient cash to meet funding requirements for the next 12 months.
• Preliminary data from Cohort A of the ASCEND trial showed a median overall survival (mOS) of 12.68 months for the certepetide group versus 9.72 months for placebo, with 6.2% complete responses in the certepetide group.
• Preliminary data from Cohort B of the ASCEND trial demonstrated a six-month progression-free survival (6MPFS) of 60.8% for the certepetide group versus 25% for placebo, and a median PFS of 7.5 months versus 4.7 months, respectively.
• Cohort B also showed an objective response rate (ORR) of 45.2% for the certepetide group compared to 19% for placebo.
• A U.S. patent (No. 12,351,653) covering the composition of matter of certepetide was issued on July 15, 2025, expiring in March 2040.
• The FORTIFIDE study remains on hold, and commencement of certain Phase 3 readiness activities related to chemistry, manufacturing, and controls (CMC) has been delayed.

Sentiment

Score: 7

Explanation: The company reported improved financial metrics with reduced net losses and operating expenses, coupled with positive, clinically meaningful preliminary data from a key Phase 2 trial for its lead asset, certepetide. The new patent further strengthens its position. However, ongoing net losses, a need for future capital, and delays in certain development activities temper the overall positive sentiment.

Positives

• Net loss decreased for both the three-month ($4.7M vs $5.0M) and six-month ($9.4M vs $10.4M) periods ended June 30, 2025, compared to the prior year.
• Generated $70 thousand in revenue from an upfront license fee in Q2 2025, compared to no revenue in Q2 2024.
• Operating expenses decreased by $0.6 million in Q2 2025 and $1.3 million in H1 2025, reflecting cost-saving measures.
• Preliminary data from Cohort A of the ASCEND trial showed a numerical trend in median overall survival (12.68 months vs. 9.72 months) and complete responses (6.2% vs. 0%) favoring certepetide.
• Preliminary data from Cohort B of the ASCEND trial demonstrated clinically meaningful improvements in 6-month progression-free survival (60.8% vs. 25%), median PFS (7.5 months vs. 4.7 months), and objective response rate (45.2% vs. 19%) for certepetide.
• Certepetide continues to show a benign safety profile in clinical trials.
• A new U.S. patent (No. 12,351,653) for certepetide's composition of matter was issued, extending intellectual property protection until March 2040.
• Sold $10.7 million of New Jersey net operating losses for $871 thousand in net proceeds, resulting in a $962 thousand deferred income tax benefit.

Negatives

• The company continues to incur significant net operating losses ($4.7 million in Q2 2025, $9.4 million in H1 2025) and negative cash flows from operating activities.
• Cash, cash equivalents, and marketable securities decreased from $25.6 million at December 31, 2024, to $17.2 million at June 30, 2025 (excluding cash and cash equivalents, marketable securities decreased from $15.0M to $5.1M).
• The FORTIFIDE study remains on hold, and Phase 3 readiness activities for CMC have been delayed.
• Investment income, net, decreased to $216 thousand in Q2 2025 from $493 thousand in Q2 2024, and to $482 thousand in H1 2025 from $1.082 million in H1 2024.
• The company will need additional financing by the fourth quarter of 2026 to meet long-term liquidity needs.
• The company is subject to the 'Baby Shelf Limitation' on its ATM offering, limiting capital raises to one-third of its public float (currently $9,855,890).

Risks

• Ability to obtain sufficient capital or strategic business arrangements to fund operations and expansion plans, including collecting amounts owed and meeting financial obligations.
• Ability to build and maintain the necessary management and human resources infrastructure.
• Uncertainty regarding market establishment for products and ability to capture a meaningful share.
• Scientific, regulatory, and medical developments beyond the company's control.
• Ability to obtain and maintain governmental licenses, accreditations, or certifications, and comply with healthcare laws and regulations.
• Uncertainty regarding patent applications resulting in issued patents, their scope, and the ability to commercialize products without infringing third-party patents.
• Uncertainty regarding the realization of potential strategic or financial benefits from various licensing agreements.
• Ability to diversify the pipeline of development product candidates, including through acquisitions, mergers, or in-licenses, and whether such efforts will add shareholder value.
• Uncertainty regarding the results of development activities.
• Ability to complete planned clinical trials in estimated timelines due to patient enrollment delays, competition, site availability, and patient inclusion criteria.
• Potential impact of future public health crises on business, clinical trials, and financial condition.
• History of operating losses and liquidity challenges may make it difficult to raise capital on acceptable terms.
• Additional equity financing may be dilutive to stockholders.
• Debt financing, if available, may involve significant cash payment obligations and restrictive covenants.
• Stock price may not reach levels necessary to induce option or warrant exercises.
• Asset sales may not be possible on acceptable terms.

Future Outlook

The company anticipates incurring additional losses until it can generate significant revenues from its products in development. It believes existing cash and marketable securities are sufficient for the next 12 months but expects to need additional financing by the fourth quarter of 2026. Future capital requirements are difficult to forecast and depend on strategic transactions, collaboration partnerships, and the ability to advance product candidates to significant development milestones. The company will continue to seek grants and non-dilutive funding. The impact of the One Big Beautiful Bill Act (OBBBA) on deferred tax balances is still being evaluated but is not expected to be material.

Management Comments

• Our leadership team has amassed several decades of collective biopharmaceutical and pharmaceutical product development experience across a variety of therapeutic categories and at all stages of development, ranging from preclinical through to product registration and launch.
• Our goal is to develop and commercialize products that address important unmet medical needs.
• We believe that we are well-positioned to realize potentially meaningful value increases within our own proprietary pipeline if we are successful in advancing our product candidates to their next significant development milestones.
• We believe that our cash on hand and marketable securities will enable us to fund current operating expenses for at least the next 12 months following the issuance of our financial statements.

Industry Context

Lisata Therapeutics operates in the highly competitive and capital-intensive clinical-stage pharmaceutical industry, specifically focusing on oncology and drug delivery for solid tumors. The company's lead product, certepetide, aims to overcome common challenges in solid tumor treatment, such as dense fibrotic tissue (stroma) and immunosuppressive tumor microenvironments, which limit the efficacy of conventional and emerging anti-cancer therapies. The strategy of co-administering certepetide with existing anti-cancer drugs, rather than creating new chemical entities, positions it for potentially faster regulatory pathways and market entry. The ongoing Phase 2 trials across various solid tumor types, including pancreatic cancer, align with the industry's focus on developing novel combination therapies to improve patient outcomes in difficult-to-treat cancers. The issuance of a new patent strengthens its intellectual property in a competitive landscape.

Comparison to Industry Standards

• The ASCEND trial's Cohort B results for metastatic pancreatic ductal adenocarcinoma (mPDAC) show a 6MPFS of 60.8% and mPFS of 7.5 months for the certepetide-treated group, compared to 25% and 4.7 months for placebo. These results are clinically meaningful and provide compelling support for continued investigation, especially given mPDAC's notoriously poor prognosis and the high unmet medical need in this indication.
• The objective response rate (ORR) of 45.2% in Cohort B for certepetide-treated mPDAC patients is a strong indicator of efficacy when compared to the 19% ORR in the placebo group, suggesting a significant enhancement of standard-of-care chemotherapy.
• The median overall survival (mOS) of 12.68 months in Cohort A and 10.32 months in Cohort B for certepetide-treated mPDAC patients, compared to 9.72 months and 9.23 months for placebo, respectively, indicates a positive trend, though mPDAC remains a challenging disease with typically short survival rates even with advanced therapies.
• The benign safety profile of certepetide observed in both Cohorts A and B is a critical advantage, as many oncology treatments are limited by severe adverse events. This could position certepetide favorably for combination therapies.

Management Changes

Corporate Governance

Legal Proceedings

• Settlement agreement reached with Lingmed Limited on March 25, 2024, resolving a breach of contract, fraud, and declaratory relief claim. The company paid $0.5 million on April 4, 2024. Lingmed is also entitled to 5.0% of any future milestone payments received by the company under the Qilu Agreement, plus an additional $250 thousand from the first future milestone. The action was dismissed with prejudice on April 9, 2024.

Related Party Transactions

• The company owns 38.6% of Impilo Therapeutics, an equity method investment. It purchased Simple Agreements for Future Equity (SAFE) from Impilo for $100 thousand on March 15, 2024, and an additional $30 thousand on July 12, 2024.

Stakeholder Impact

• Shareholders: Potential for dilution from future equity raises, but also potential for value creation from positive clinical trial results and intellectual property protection. Reduced net losses and operating expenses are positive, but ongoing liquidity needs are a concern.
• Employees: Executive employment agreements were updated, providing clarity on compensation and severance. Cost-saving measures included the elimination of an employee position, which could impact employee morale.
• Customers/Patients: Continued development of certepetide offers potential new treatment options for solid tumors, particularly mPDAC, with promising efficacy and a benign safety profile.
• Creditors: The company's liquidity position and future capital raise plans are relevant for assessing credit risk.
• Partners (Qilu Pharmaceutical, Kuva Labs, SBP, AGITG): Ongoing collaborations and licensing agreements are critical for advancing certepetide development and commercialization, with potential milestone and royalty payments.

Next Steps

• Final data and key findings from both cohorts of the ASCEND study are anticipated to be available later this year.
• Continued and expedited investigation of certepetide as a novel therapeutic agent for the treatment of metastatic pancreatic cancer.
• Seeking additional financing by the fourth quarter of 2026 through debt, equity, partnerships, collaborations, or asset sales.
• Monitoring the possible future impact of changes in tax legislation, specifically the One Big Beautiful Bill Act (OBBBA).

Key Dates

Recommendation

Lisata Therapeutics shows promising clinical data for certepetide in mPDAC, with Cohort B results indicating clinically meaningful improvements in PFS and ORR, and a new patent strengthening its IP. The company also demonstrated improved financial performance with reduced net losses and operating expenses. However, it remains a clinical-stage company with a history of losses and negative cash flows, requiring significant future capital by Q4 2026. The 'Baby Shelf Limitation' restricts immediate capital raising flexibility. While the clinical progress is encouraging, the inherent risks of drug development, coupled with the need for substantial future financing, suggest a 'hold' recommendation. Investors should monitor further clinical trial results, progress on capital raises, and the company's ability to manage its liquidity needs before considering a stronger position.

Keywords

Lisata Therapeutics, certepetide, LSTA1, CEND-1, oncology, solid tumors, pancreatic cancer, mPDAC, cholangiocarcinoma, appendiceal cancer, colon cancer, glioblastoma multiforme, clinical trials, Phase 2, drug development, biopharmaceutical, tumor microenvironment, TME, CendR active transport, iRGD peptide, immunotherapies, chemotherapeutics, RNA-based therapeutics, SEC filing, 10-Q, financial results, liquidity, capital raise, patent, corporate governance, executive compensation