10-Q: Pluri Inc. Reports Q3 2024 Results, Highlights New Business Verticals and Patent Approval

Pluri Inc. announced its Q3 2024 financial results, showcasing a decrease in net loss and the launch of new business divisions in CDMO and agtech, alongside a new patent approval.

Summary

• Pluri Inc. reported a net loss of $15.482 million for the nine months ended March 31, 2024, and $5.390 million for the three months ended March 31, 2024.
• The company's revenue for the nine-month period was $230,000 and $71,000 for the three-month period, primarily from CDMO services and an agtech collaboration.
• Research and development expenses decreased by 26% for both the nine-month and three-month periods, attributed to the completion of clinical studies and cost reduction efforts.
• General and administrative expenses also decreased by 16% for the nine-month period and 17% for the three-month period, due to cost-cutting measures and reduced share-based compensation.
• The company's cash position totaled $26.917 million as of March 31, 2024, with a working capital surplus of $22.841 million.
• Pluri launched new business divisions, PluriCDMO for cell therapy manufacturing services and PluriAgtech for cell-based coffee, and secured a new patent for its 3D bioreactor technology.
• The company has a $4.2 million contract with the NIAID to develop PLX-R18 cell therapy for H-ARS and is developing a novel immunotherapy platform based on MAIT cells for solid tumors.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive due to the launch of new business divisions, a new patent approval, and a decrease in net loss. However, the company's accumulated deficit, ongoing losses, and potential delisting risk temper the overall outlook.

Positives

• The company successfully launched new business divisions in CDMO and agtech, diversifying its revenue streams.
• Pluri secured a significant contract with the NIAID, providing funding and validation for its cell therapy research.
• The company obtained a new patent for its 3D bioreactor technology, strengthening its intellectual property portfolio.
• Pluri's net loss decreased significantly compared to the previous year, indicating improved financial performance.
• The company's cash position remains strong, providing a financial buffer for ongoing operations and development.
• The development of a novel immunotherapy platform based on MAIT cells for solid tumors represents a significant advancement in the company's pipeline.
• The company has a working capital surplus of $22.841 million.

Negatives

• Pluri continues to operate with an accumulated deficit of $414.743 million.
• The company's total shareholders equity deficit amounted to $356 as of March 31, 2024.
• The company has incurred recurring operating losses and negative cash flows from operating activities since inception.
• The company's revenue remains low at $230,000 for the nine-month period and $71,000 for the three-month period.
• The company is reliant on external funding sources, including grants, contracts, and equity sales.
• The company is not in compliance with the Nasdaq minimum shareholders equity requirement and anticipates receiving a deficiency letter.

Risks

• The company's failure to meet Nasdaq's continued listing requirements could result in delisting, negatively impacting the share price and ability to raise capital.
• The ongoing armed conflict in Israel could disrupt the company's operations and ability to raise capital.
• The company's reliance on external funding sources poses a risk to its long-term financial stability.
• The company's accumulated deficit and recurring operating losses raise concerns about its long-term viability.
• There is no assurance that the company will be able to obtain the adequate level of financial resources that is required for the long-term development and commercialization of its products.
• The company's insurance does not cover damage or losses that may occur as a result of the current war by Israel against Hamas.

Future Outlook

The company expects to generate revenue from collaborations and licenses, but these are unlikely to exceed operating costs in the short and medium term. Pluri may need additional liquidity to support commercialization and R&D. The company believes it has sufficient cash to fund operations for at least the next twelve months.

Management Comments

• The company's management believes that its current resources, together with its existing operating plan, are sufficient for the Company to meet its obligations as they come due at least for a period of twelve months from the date of the issuance of these condensed consolidated financial statements.
• The company is continually looking for sources of funding, including non-diluting sources such as collaboration with other companies via licensing agreements, service agreements under our CDMO business, joint venture and partnerships, R&D contracts such as our agreement with the NIAID, research grants such as the IIA grants and the European Union grant, and sales of our common shares.

Industry Context

Pluri's expansion into CDMO and agtech reflects a broader trend in the biotechnology industry towards diversification and leveraging core technologies across multiple sectors. The focus on cell-based therapies and sustainable agriculture aligns with growing market demands for innovative solutions in these areas.

Comparison to Industry Standards

• Pluri's R&D spending as a percentage of revenue is high, which is typical for early-stage biotech companies focused on developing novel therapies. For example, companies like CRISPR Therapeutics and Editas Medicine also invest heavily in R&D.
• The launch of PluriCDMO is similar to other biotech companies that have expanded into contract manufacturing to generate revenue while developing their own products, such as Lonza and WuXi Biologics.
• Pluri's move into cell-based coffee production is a unique approach, with few direct comparables. However, the broader trend of using cellular agriculture for food production is gaining traction, with companies like Upside Foods and Aleph Farms leading the way in cultivated meat.
• The company's reliance on grants and contracts for funding is common among early-stage biotech companies, similar to companies like BioNTech and Moderna, which initially relied on government funding and partnerships.
• Pluri's net loss per share of $2.92 for the nine months ended March 31, 2024, is relatively high, reflecting the company's early stage and significant R&D investments. This is comparable to other pre-revenue biotech companies.

Stakeholder Impact

• Shareholders may be concerned about the company's accumulated deficit and potential delisting from Nasdaq.
• Employees may be affected by the company's cost reduction and efficiency plans.
• Customers of PluriCDMO and PluriAgtech may benefit from the company's innovative products and services.
• The company's research and development efforts may lead to new treatments and solutions for patients and other stakeholders.

Next Steps

• The company will continue to develop its cell therapy products and expand its CDMO and agtech businesses.
• Pluri will seek regulatory approvals for its clinical studies.
• The company will continue to explore additional funding opportunities.
• Pluri will work to regain compliance with Nasdaq's listing requirements.

Key Dates

Keywords

cell therapy, regenerative medicine, CDMO, agtech, biotechnology, clinical trials, patents, financial results, research and development, immune cells, MAIT cells, 3D bioreactor, H-ARS, NIAID, PluriCDMO, PluriAgtech