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AB

Adicet Bio, Inc. (ACET)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 focused on pipeline execution: IND for ADI-270 in RCC on track for 2Q24, and Phase 1 initiation of ADI-001 in lupus nephritis in 2Q24; cash and equivalents rose to $247.6M, extending runway into 2H26 .
  • Operating discipline improved: R&D fell 11% YoY to $23.9M, G&A up modestly to $7.0M; net loss narrowed to $28.0M ($0.35 per share) vs. $30.9M ($0.72) in Q1 2023 .
  • The company reported no product revenue; a third‑party source indicated EPS beat vs. consensus (−$0.35 actual vs. −$0.58 estimate), though S&P Global data was unavailable; treat external estimate with caution .
  • Strategic emphasis: prioritize MCL within ADI-001 oncology program and expand ADI-001 into autoimmune indications; management sees potential best‑in‑class profile given tissue homing, robust B‑cell depletion, off‑the‑shelf availability, and favorable safety .

What Went Well and What Went Wrong

What Went Well

  • Pipeline milestones on track: “We are poised for a transformational year…prepare to initiate a Phase 1 study…in lupus nephritis in the second quarter” (CEO) .
  • Strengthened balance sheet and extended runway: cash/equivalents $247.6M; funding expected into 2H26 .
  • Cost control: R&D down $2.9M YoY, primarily due to $3.1M less CDMO/externally conducted R&D .

What Went Wrong

  • No revenue; continued heavy operating spend: total OpEx $30.9M; net loss −$28.0M (includes $5.7M stock‑based compensation) .
  • Enrollment and competitive dynamics in lupus could slow pace; management acknowledged lupus enrollment is “not as quick…there is competition,” albeit with strong KOL interest .
  • Prior focus in LBCL slowed; program strategically narrowed to MCL given budget and prioritization constraints, highlighting resource intensity across indications .

Financial Results

MetricQ3 2023Q4 2023Q1 2024
Revenue ($USD Millions)$0.0 $0.0 $0.0
R&D Expenses ($USD Millions)$26.2 $24.8 $23.9
G&A Expenses ($USD Millions)$6.6 $6.8 $7.0
Total Operating Expenses ($USD Millions)$52.3 $31.6 $30.9
Interest Income ($USD Millions)$2.5 $2.2 $2.9
Net Loss ($USD Millions)$(49.9) $(29.5) $(28.0)
Diluted EPS ($)$(1.16) $(0.69) $(0.35)
Weighted Avg Shares (Millions)43.0 43.0 79.1
Cash & Cash Equivalents ($USD Millions)$183.3 $159.7 $247.6
Working Capital ($USD Millions)$166.1 $143.0 $232.9
Total Assets ($USD Millions)$233.3 $207.3 $293.1
Total Equity ($USD Millions)$194.7 $170.2 $258.8

Notes:

  • Q3 OpEx includes $19.5M goodwill impairment; Q4 had no impairment .
  • Q1 net loss includes $5.7M stock‑based comp; Q4/Q3 included $4.9M and $5.6M, respectively .

Segment breakdown: Not applicable; no commercial revenue reported .
KPIs: Cash runway expected into 2H26 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
ADI-001 Phase 1 initiation (Lupus Nephritis)2Q 2024Initiation expected 2Q24 (Q4 press release) Initiation on track 2Q24 Maintained
ADI-001 preliminary autoimmune data4Q24–1Q25Preliminary data 4Q24/1Q25 (Q4 press release) Preliminary data 4Q24/1Q25 Maintained
ADI-001 MCL clinical update2H 2024Clinical update in 2H24 Clinical update in 2H24 Maintained
ADI-270 IND submission (RCC)2Q 2024On track to file IND in 2Q24 On track to file IND in 2Q24 Maintained
Cash runwayThrough 2H 2026Extended into 2H26 (post Jan financing) Into 2H26 Maintained
Corporate runway (earlier update)2H 2025Runway “into the second half of ’25” (Jan 4 special call) Superseded by Jan financing; updated to 2H26 Raised (earlier to later)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2023, Q4 2023)Current Period (Q1 2024)Trend
Autoimmune expansion (ADI-001)Q4: IND cleared for LN; Phase 1 to start 2Q24; plan to expand indications On track to initiate LN Phase 1 in 2Q24; interest in expanding to additional autoimmune indications Strengthening; execution phase
Oncology focus (MCL)Q3: Emphasis on MCL; EXPAND cohort in post‑CAR‑T LBCL Strategic focus on MCL; LBCL de‑prioritized near‑term due to budget; clinical update 2H24 Sharpened focus
ADI-270 (RCC)Q3: prioritization; pre‑IND done; IND 1H24 IND on track 2Q24; ASGCT preclinical oral presentation On schedule
Manufacturing/readinessQ3: expanded CDMO capacity for ADI‑001 Continued clinical execution across programs Stable
Cash runway/capitalQ3: runway into 1H25 Post‑Jan financing extended into 2H26; Q1 maintained Improved

Management Commentary

  • “We are poised for a transformational year in 2024 as we advance our gamma delta T cell platform… and prepare to initiate a Phase 1 study… in lupus nephritis in the second quarter” — Chen Schor, President & CEO .
  • On autoimmune rationale: gamma delta 1 T cells traffic to solid tissues, enabling depletion of tissue‑resident B‑cells; safety profile and off‑the‑shelf availability suit community settings .
  • On MCL strategy: decision to focus near‑term on MCL is budget‑driven; strong CR rate and durability support potential accelerated path .
  • On lymphodepletion for LN: regimen aligned with clinically validated approaches; minor differences from “enhanced” regimen, undisclosed for competitive reasons .

Q&A Highlights

  • Portfolio prioritization: LBCL slowed to concentrate capital on MCL and autoimmune expansion; “purely a budget‑driven decision” with strong MCL efficacy/safety .
  • Lupus nephritis trial design: 3+3 dose escalation (100M up to 1B CAR+ cells), cyclophosphamide/fludarabine lymphodepletion; primary endpoints safety, secondary efficacy with renal function markers and PD biomarkers (ANA, anti‑dsDNA, complement) .
  • Enrollment and competition: lupus enrollment generally slower with competition, yet strong KOL interest given B‑cell depletion and off‑the‑shelf profile .
  • Patient eligibility and prior therapies: LN patients late‑line; prior Rituximab allowed with washouts; protocol details on concomitant meds agreed with FDA .
  • Safety considerations: allogeneic gamma delta platform viewed as favorable on CRS/ICANS and T‑cell malignancy risk vs. autologous constructs; persistence sufficient to “reset” B‑cell compartment .

Estimates Context

  • S&P Global consensus estimates for Q1 2024 were unavailable at the time of this analysis; therefore, comparisons to Wall Street consensus are limited.
  • External source indicates EPS consensus of −$0.58 vs. actual −$0.35, implying a beat of +$0.23; revenue was not reported for the quarter .
  • Given reliance on non‑S&P data, treat estimate-related conclusions as indicative; we recommend confirming with S&P Global before adjusting models.

Financial vs. Estimates

MetricQ1 2024 ActualQ1 2024 ConsensusBeat/Miss
EPS ($)−$0.35 −$0.58 (external source; S&P unavailable) Beat by $0.23
Revenue ($USD Millions)$0.0 N/A (S&P unavailable)N/A

Key Takeaways for Investors

  • Cash runway extended into 2H26 post‑January financing, de‑risking near‑term execution across autoimmune and RCC programs .
  • Near‑term catalysts in 2Q24: ADI‑001 LN Phase 1 initiation and ADI‑270 IND filing; H2’24 MCL clinical update could be a stock catalyst .
  • Strategic focus on MCL (and autoimmune) concentrates resources where early data and safety profile suggest best‑in‑class potential; expect clarity on pivotal path in MCL if H2’24 update is strong .
  • No commercial revenue; operating losses persist, but R&D reductions and interest income are helping narrow net loss; monitor spend trajectory and enrollment pace in LN .
  • Estimate comparisons from S&P Global were unavailable; external data suggest an EPS beat — confirm with S&P before revising models .
  • The autoimmune thesis hinges on tissue homing and robust B‑cell depletion with off‑the‑shelf convenience; watch for site activation and initial PD/biomarker readouts to validate mechanism .
  • Trading lens: Engage ahead of 2Q24 initiation/IND milestones and position into H2’24 MCL update; downside risk tied to enrollment cadence and competitive dynamics in lupus, upside on strong safety/efficacy signals and accelerated pathways .