Executive Summary

Q1 2024 was dominated by strategic actions: ARCA announced a definitive merger agreement with Oruka Therapeutics, appointed its COO as President, and highlighted that future operations are highly dependent on consummating the merger .
Operating expenses rose year over year due to merger-related professional fees; G&A increased to $2.3M (+$0.9M YoY), while R&D declined to $0.2M as the company continued to scale back development spend .
Net loss widened to $2.0M (EPS -$0.14) vs. $1.3M (EPS -$0.09) in Q1 2023, with cash and equivalents at $35.9M and runway guided through mid-2025, contingent on strategic outcomes and capital needs .
No Wall Street consensus estimates were available via S&P Global for Q1 2024; no earnings call transcript was available in our document set, so the analysis relies on the company’s press releases and 8-Ks .

What Went Well and What Went Wrong

What Went Well
- Announced the Oruka merger to create a combined company focused on dermatology biologics, a potential strategic unlock; management emphasized dependence on the merger to determine future operations .
- Cash runway communicated as sufficient through the middle of 2025, providing visibility amid strategic transition: “ARCA believes that its current cash and cash equivalents… will be sufficient to fund its operations through the middle of 2025.” .
- R&D spending fell YoY as ARCA reduced headcount and curtailed grants, consistent with lower development activity while exploring alternatives .
What Went Wrong
- Net loss widened YoY to $2.0M from $1.3M, driven primarily by higher G&A tied to merger and advisory fees, diluting near-term P&L optics .
- G&A expense is expected to be higher in 2024 vs. 2023 due to the merger process, implying continued elevated overhead during the transaction period .
- Future viability explicitly tied to successful completion of the merger; if the merger fails, ARCA may pursue another transaction or dissolution and liquidation, underscoring binary risk .

Financial Results

Q1 2024 vs. prior year and prior quarter context (no product revenue reported; company presents only expenses, loss, and interest income).

Metric	Q1 2023	Q3 2023	Q1 2024
General & Administrative Expense ($M)	$1.41	$1.62	$2.32
Research & Development Expense ($M)	$0.39	$0.32	$0.17
Total Operating Expenses ($M)	$1.80	$1.94	$2.48
Interest and Other Income ($M)	$0.45	$0.51	$0.47
Net Loss ($M)	$(1.35)	$(1.42)	$(2.01)
Diluted EPS	$(0.09)	$(0.10)	$(0.14)

Cash and liquidity

Metric	Q3 2023	Q4 2023	Q1 2024
Cash & Cash Equivalents ($M)	$38.49	$37.43	$35.90
Working Capital ($M)	$37.90	$36.96	$35.09
Total Stockholders’ Equity ($M)	$37.97	$37.02	$35.13

Estimate comparisons

S&P Global consensus for Q1 2024 EPS and revenue was unavailable, so no beat/miss analysis can be provided for this quarter.

Drivers and context

YoY G&A increase largely reflects +$1.1M in professional fees primarily related to the merger, partially offset by lower termination benefits and personnel costs; R&D decline was driven by decreased headcount and elimination of certain academic research grants .
Cash burn reflected higher operating costs and advisory fees as strategic activities advanced, with runway framed to mid-2025 subject to outcomes and capital requirements .

Guidance Changes

Metric	Period	Previous Guidance/Commentary	Current Guidance/Commentary	Change
Cash Runway	Company-level	“Through the end of 2024” (Q3 2023 PR)	“Through the middle of 2025” (FY 2023 PR and reiterated with Q1 2024)	Raised vs. Q3 2023; Maintained vs. FY 2023
G&A Expense	FY 2024 vs. FY 2023	Expected consistent with 2023 (FY 2023 PR)	Expected higher than 2023 due to merger-related professional fees	Raised
R&D Expense	FY 2024 vs. FY 2023	Expected lower than 2023 (FY 2023 PR)	Expected lower than 2023	Maintained

Note: ARCA does not provide revenue, margin, or tax-rate guidance; guidance focuses on operating expense trajectory and cash runway .

Earnings Call Themes & Trends

No Q1 2024 earnings call transcript was available in our document set; themes below reflect company press releases and 8-Ks.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q1 2024)	Trend
Strategic Alternatives / M&A	Ongoing strategic review; evaluating merger/asset sale options (Q3 2023) . FY 2023 PR reaffirmed strategic review .	Definitive merger agreement with Oruka; future operations highly dependent on successful close .	Escalating (from review to definitive deal)
Cost Structure (G&A/R&D)	G&A stable YoY in Q3 2023; R&D lower due to headcount reductions .	G&A up YoY on merger-related professional fees; R&D down YoY due to reduced headcount and grants .	Mixed: G&A up, R&D down
Cash Runway	Sufficient through end of 2024 (Q3 2023) .	Sufficient through mid-2025 (reiterated) .	Improved vs. Q3 2023; maintained vs. FY 2023
Leadership / Governance	Strategic review overseen by Board/Special Committee (Q3 2023; FY 2023 PR) .	CEO separation; COO appointed President and PEO effective April 3, 2024 .	Transition to transaction-focused leadership
Pipeline / Operations	Limited R&D activity; post-trial wind-down mentioned historically .	Emphasis on merger to pivot to Oruka’s dermatology pipeline; ARCA development activity remains de-emphasized .	Strategic pivot underway

Management Commentary

“ARCA believes that its current cash and cash equivalents… will be sufficient to fund its operations through the middle of 2025.”
“The Company’s future operations are highly dependent on the success of the Merger and there can be no assurances that the Merger will be successfully consummated.”
On operating expenses: “G&A expenses… primarily a result of a $1.1 million increase in professional fees primarily related to the Merger Agreement… R&D expense… expected to be lower than 2023 while we explore strategic alternatives.”
Leadership: “Effective as of April 3, 2024, the Board appointed Thomas A. Keuer… to serve as ARCA’s President and principal executive officer… [He] will not receive any additional compensation in connection with his appointment.”

Q&A Highlights

No earnings call transcript was available in our document set for Q1 2024; analysis is based on the furnished 8-K and press releases .

Estimates Context

S&P Global (Capital IQ) consensus estimates for Q1 2024 EPS and revenue were unavailable for ABIO, reflecting limited analyst coverage during the strategic transition.

Key Takeaways for Investors

The quarter’s narrative is deal-centric: the definitive Oruka merger agreement is the core catalyst; the investment case pivots from ARCA’s historical cardiovascular focus to Oruka’s dermatology biologics platform pending close .
Operating expense mix is shifting: G&A rising on transaction costs while R&D remains suppressed; expect continued elevated advisory spend until closing .
Cash runway to mid-2025 provides a bridge to transaction milestones, but management clearly frames runway and viability as linked to strategic outcomes and potential capital raises .
Leadership changes (CEO separation; COO elevated to President/PEO) align the organization to execute the merger; role ends upon closing, emphasizing near-term transaction execution focus .
Absence of product revenue and no quarterly guidance beyond OpEx/cash underscores binary path dependency on closing the Oruka deal; failure to close could lead to alternative transactions or dissolution/liquidation .
No consensus estimates or call transcript reduce near-term trading visibility; stock catalysts concentrate around merger approvals, S-4 effectiveness, and closing timeline updates .

Additional Supporting Materials Used

Q1 2024 8-K + Press Release tables (April 25, 2024) .
FY 2023 8-K (February 1, 2024) for prior commentary and balance sheet data .
Q3 2023 8-K for historical quarterly context .
Merger press release (Oruka/ARCA) for transaction context .

ARCA biopharma, Inc. (ABIO)·Q1 2024 Earnings Summary