Adhera Therapeutics, Inc. (ATRX)·Q2 2015 Earnings Summary

Executive Summary

• Q2 2015 revenue was $0.40M versus $0.00M in Q2 2014, driven by a $0.4M Mirna Therapeutics milestone prepayment; operating loss narrowed sequentially while GAAP net income was $0.90M, largely due to non-cash warrant revaluation gains rather than core operations .
• Cash declined to $0.73M at June 30, 2015 (from $1.16M at March 31) but the company raised $1.1M via Series D preferred and warrants on August 5, extending runway to pursue licensing transactions and limited preclinical work .
• Management emphasized 2H15 as “transformative,” highlighting FDA Fast Track designation for CEQ508 (FAP) and ongoing partnering/licensing efforts; no formal quantitative guidance was issued .
• Street consensus (S&P Global) for Q2 2015 EPS and revenue was unavailable, preventing beat/miss assessment; investors should focus on cash runway, partnering milestones, and regulatory progress as near-term stock catalysts .

What Went Well and What Went Wrong

What Went Well

• Revenue inflected positively to $0.40M vs. $0.00M YoY, reflecting Mirna’s prepayment under the SMARTICLES license, which also improved liquidity during the quarter .
• CEO tone constructive: “Marina Biotech continues to build momentum in 2015… I believe we have enough runway to close those licensing and partnering transactions… the second half of 2015 will be transformative for the company” .
• Regulatory momentum: FDA granted Fast Track designation for CEQ508 (FAP), potentially accelerating development timelines and enhancing partnering optionality .

What Went Wrong

• Operating expenses increased YoY: G&A rose to $1.19M (from $0.62M) on legal/accounting fees tied to SEC reporting compliance and higher personnel costs; R&D also increased to $0.23M (from $0.05M) .
• Profitability remains non-operational: Q2 net income of $0.90M was primarily driven by $1.93M in non-cash gains from changes in fair value of price-adjustable warrants; core operations posted a $1.02M loss .
• Liquidity pressure persisted intra-quarter with cash down to $0.73M at June 30 before the August 5 financing; continued reliance on external capital raises and licensing cash flows remains a risk .

Financial Results

Income Statement Snapshot (YoY and QoQ)

Notes: Q2 2015 YoY change in net income primarily reflects smaller non-cash gains from warrant revaluation and higher operating expenses; the company explicitly attributes the variance in other income to changes in fair value of price-adjustable warrants .

Balance Sheet and Liquidity

Subsequent event: On Aug 5, 2015, the company raised $1.1M via 220 shares of Series D Convertible Preferred and warrants (exercise price $0.40), bolstering liquidity post-quarter .

Estimates vs Actuals (Q2 2015)

S&P Global consensus was unavailable for ATRX for Q2 2015; therefore, beat/miss analysis versus estimates cannot be provided.

Segment Breakdown and KPIs

• Segment reporting: Not applicable; development-stage company with no segment disclosures in the period .
• Key operating KPIs disclosed: None beyond financial line items; notable corporate milestones include FDA Fast Track for CEQ508 and IP/partner updates .

Guidance Changes

Management did not issue formal quantitative guidance; commentary focused on partnering/licensing milestones and regulatory progress .

Earnings Call Themes & Trends

Note: No Q2 2015 earnings call transcript found; themes derived from company press releases/8-Ks. For “Q-2,” Q4 2014 materials were not available in the catalog; Q3 2014 is used as the earlier reference point.

Management Commentary

• “Our near term focus is on closing licensing and partnering transactions in order to bring in additional capital to move our pipeline forward… the recent FDA Fast Track designation for CEQ508 has significantly increased the potential value of this program… the second half of 2015 will be transformative for the company.” — J. Michael French, President & CEO .
• “With the milestone payment we recently received from Mirna, we have improved our cash position allowing us to continue to move our corporate initiatives forward.” — J. Michael French, President & CEO (Q1 2015) .

Q&A Highlights

• No Q2 2015 earnings call transcript was found in the document catalog; as such, there are no Q&A disclosures to summarize for the period.

Estimates Context

• We attempted to retrieve S&P Global (Capital IQ) consensus for Q2 2015 revenue and EPS; coverage/mapping was not available for ATRX at the time of retrieval, so beat/miss analysis versus Street is unavailable.
• Implication: Given the absence of consensus, investor focus should remain on disclosed cash runway, licensing milestones, and regulatory catalysts rather than quarterly “beats/misses” .

Key Takeaways for Investors

• Operating performance remains loss-making (operating loss of $1.02M), with GAAP profitability driven by non-cash warrant revaluation; core funding hinges on licensing cash flows and external financings .
• Cash was $0.73M at quarter-end, subsequently augmented by a $1.1M preferred/warrant raise (Aug 5), providing runway to pursue deals and limited R&D; monitoring additional financings remains critical .
• FDA Fast Track for CEQ508 (FAP) elevates the program’s attractiveness and potential partner interest; near-term regulatory or partnering updates could be stock catalysts .
• IP and delivery platform validation continue (SMARTICLES, tkRNAi, DILA2), with external licensee progression (Mirna) supporting platform credibility .
• With Street estimates unavailable, trading is likely to pivot on binary corporate milestones (licensing closures, regulatory updates) and liquidity signals rather than EPS prints .
• YoY expense growth (notably G&A tied to compliance) and limited cash emphasize the importance of near-term deal execution to sustain operations .

References:

• Q2 2015 press release and financials (8-K, Item 2.02 with Exhibit 99.1) .
• Q1 2015 press release and financials (8-K) .
• Q3 2014 press release (context for “Q-2” themes) .