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Aileron Therapeutics, Inc. (ALRN)·Q1 2024 Earnings Summary

Executive Summary

  • Aileron reported no revenue, a net loss of $7.1M, and EPS of $(0.86) for Q1 2024, with operating expenses up 44% YoY as Lung Therapeutics programs ramped post-merger .
  • Cash was $12.0M at March 31; after a May equity/warrant offering, management guided cash runway into 2H 2025, up from prior guidance of funding into Q4 2024, improving capital visibility despite higher R&D and G&A .
  • Clinical progress: positive Cohort 1 Phase 1b IPF data for LTI-03 showed statistically significant reductions in 3 fibrosis/inflammation biomarkers; Cohort 2 topline (high-dose) expected in Q3 2024 .
  • No earnings call transcript was filed for Q1; an expert event discussed Cohort 1 results. Street EPS/revenue consensus (S&P Global) was unavailable, so beats/misses vs estimates cannot be assessed .
  • Near-term stock catalysts: Cohort 2 readout and warrant call mechanics tied to positive topline disclosure may influence trading dynamics and liquidity .

What Went Well and What Went Wrong

What Went Well

  • LTI-03 Phase 1b Cohort 1 delivered biomarker signals: statistically significant decreases in GAL‑7 (p=0.0014), TSLP (p=0.0223), and Col‑1α1 (p=0.0489); solRAGE increased without inflammation, and LTI‑03 was well tolerated (no SAEs) .
  • Management quote underscoring progress: “We are encouraged that low dose LTI‑03 achieved statistical significance in three out of eight biomarkers... We expect to report topline results from Cohort 2... in the third quarter of this year.” — Brian Windsor, Ph.D., CEO .
  • Strengthened runway via May offering (~$20M gross; ~$17.9M net), extending funding into 2H 2025, reducing near-term financing overhang .

What Went Wrong

  • Higher OpEx: R&D rose to $3.5M (+$1.7M YoY) and G&A to $3.7M (+$1.5M YoY), reflecting Lung acquisition integration and manufacturing ramp, widening operating loss .
  • Material weaknesses in internal controls remained as of Q1, with remediation in progress (staffing, system integration, third‑party advisors), posing execution/reporting risk .
  • Cash burn intensified: net cash used in operating activities was $5.3M vs $4.7M in Q1 2023, highlighting higher spend before efficacy readouts .

Financial Results

Metric (USD)Q1 2023Q4 2023Q1 2024
Revenue$0 $0 $0
R&D Expense$1.810M $1.972M $3.463M
G&A Expense$2.179M $5.330M $3.742M
Total Operating Expenses$5.011M $7.290M $7.205M
Loss from Operations$(5.011)M $(7.290)M $(7.205)M
Other Income (Expense), net$0.232M $(0.049)M $0.092M
Net Loss$(4.779)M $(7.339)M $(7.113)M
EPS (Basic & Diluted)$(1.05) $(1.54) $(0.86)
Weighted Avg. Shares4,541,167 4,769,483 8,301,798
Balance SheetQ1 2023Q4 2023Q1 2024
Cash & Equivalents$7.783M $17.313M $12.042M
Working Capital—$13.881M $8.232M
Total Assets—$106.008M $99.192M
Stockholders’ Equity—$6.887M $44.750M
Cash Flow (USD)Q1 2023Q1 2024
Net Cash Used in Operating Activities$(4.661)M $(5.271)M

KPIs (Clinical/Operational)

KPIQ1 2023Q4 2023Q1 2024
LTI-03 Phase 1b patients (Cohort 1)——12 enrolled (9 active / 3 placebo)
Biomarkers showing positive trend——7/8; 3 significant (GAL‑7, TSLP, Col‑1α1)
Safety——No SAEs; no inflammation via pAKT
Cohort 2 topline timing——Expected Q3 2024
Cash runway guide—Into Q4 2024 Into 2H 2025 post offering

Notes:

  • No segments; no product revenue .
  • Prior two quarters benchmarking uses Q4 2023 press release and Q1 2023 YoY comparisons .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayCorporateFund operations into Q4 2024 Fund operations into 2H 2025 (after ~$17.9M net offering) Raised runway
Clinical Milestone (LTI‑03 Cohort 2 topline)Q3 2024Expected Q3 2024 Reaffirmed Q3 2024 Maintained
Capital Markets (May 2024 offering)ImmediateNot applicableClosed offering; 4,273,505 shares + warrants; potential up to ~$20M on warrant exercise New financing

Earnings Call Themes & Trends

(No Q1 earnings call transcript found; themes derived from Q4 FY 2023 and Q1 2024 press releases and 10‑Q.)

TopicPrevious Mentions (Q4 2023)Current Period (Q1 2024)Trend
R&D Execution (LTI‑03)Emphasis on Phase 1b progress and anticipated Q3 2024 topline Positive Cohort 1 biomarker signals; Cohort 2 timing reiterated Strengthening data narrative
Capital & Runway~$18.4M financing; runway into Q4 2024 May offering extends runway into 2H 2025 Improved liquidity
Manufacturing/CommitmentsNot detailedPurchase commitments with manufacturer $2.339M (2025+) Future cash obligations
Internal ControlsNot highlightedMaterial weaknesses; remediation plan detailed Risk acknowledged; remediation ongoing
Regulatory/LegalClean disclosuresNo material legal proceedings Stable
Corporate ChangesLung acquisition consolidation CEO appointment; governance updates Integration advancing

Management Commentary

  • “In the first quarter, we made steady progress against our key priorities of advancing LTI‑03... We expect to report topline results from Cohort 2 in the ongoing Phase 1b study in the third quarter of this year.” — Brian Windsor, Ph.D., President & CEO .
  • Financial highlights emphasized cash of $12.0M at March 31 and extended runway post‑offering .

Q&A Highlights

  • No Q1 2024 earnings call transcript was filed; the company hosted a pulmonary care expert event discussing Cohort 1 results, with replay available on the investor website .
  • No formal Q&A guidance clarifications are available from a transcript.

Estimates Context

  • Wall Street consensus EPS and revenue estimates from S&P Global for Q1 2024 were unavailable; as a pre‑revenue clinical‑stage company, no revenue was reported and EPS was a GAAP loss of $(0.86) .
  • Without available consensus, estimate comparisons and beat/miss assessments cannot be determined at this time.

Key Takeaways for Investors

  • Clinical validation signals: Cohort 1 biomarker reductions and safety profile support mechanistic plausibility ahead of Cohort 2 topline in Q3 2024 — a key binary catalyst .
  • Runway extended into 2H 2025 post‑offering, mitigating near‑term financing risk despite higher OpEx as programs scale .
  • Execution focus: manufacturing commitments and increased spend reflect scaling; monitor cash burn and timing of efficacy‑oriented readouts .
  • Governance/control remediation: material weaknesses present near‑term reporting risk; track remediation milestones and disclosures .
  • Trading dynamics: warrant terms include a call feature tied to positive Phase 1b topline disclosure; could influence post‑data liquidity and stock behavior .
  • No revenue/segments; thesis hinges on clinical progression (IPF LTI‑03) and optionality from LTI‑01 in LPE .
  • Near‑term strategy: position sizing around Q3 2024 Cohort 2 readout; reassess funding scenarios based on data and potential follow‑on steps .