Name: Aerovate Therapeutics, Inc. Q4 2023 Earnings Call
Start: 2024-03-25T00:00:00.000Z

Executive Summary

Aerovate reported Q4 2023 net loss of $20.4M and EPS of -$0.74, with no product revenue as the company remains pre-revenue; sequentially, OpEx rose to $22.1M driven by R&D, and cash declined to $122.4M .
EPS modestly missed a third-party consensus of -$0.71 by $0.03; revenue was not reported and had no consensus, consistent with pre-revenue status .
Clinical execution advanced: Phase 2b enrollment completed at 202 patients, first Phase 3 patient enrolled, and Phase 2b topline data expected in June 2024; >120 sites actively recruiting for Phase 3 .
Cash runway guidance maintained into 2026 based on current operating plan, supported by Q4 cash and investments of $122.4M .
Near-term stock catalyst: Phase 2b topline in June 2024 and ATS baseline characteristics in May 2024; these will shape Phase 3 dose selection and timeline expectations .

What Went Well and What Went Wrong

Completed Phase 2b enrollment (202 patients) and seamlessly enrolled the first Phase 3 patient; >120 global sites are active, supporting momentum into Phase 3 .
Strengthened IP with two additional US patents in 2023, bringing total issued to six, enhancing long-term protection to 2040+ .
Management reiterated confidence in AV-101’s lung-targeted formulation: “We remain confident… AV-101 has the potential to be an important part of the future standard of care for PAH patients.” — CEO Tim Noyes .

EPS missed third-party consensus (-$0.74 vs -$0.71), reflecting rising R&D intensity and stock-based comp; net loss widened vs Q3 (+$20.4M vs $19.6M) .
Cash decreased to $122.4M from $135.2M in Q3 (and $150.1M in Q2), driven by operational costs in Q4, underscoring burn ahead of Phase 2b topline and Phase 3 ramp .
As a pre-revenue biotech, margin metrics remain not meaningful; OpEx rose sequentially to $22.1M on higher R&D and G&A, highlighting ongoing investment needs into pivotal data readouts .

Metric	Q2 2023	Q3 2023	Q4 2023
Revenue ($USD Millions)	$0.0	$0.0	$0.0
Net Loss ($USD Millions)	$(19.0)	$(19.6)	$(20.4)
EPS (Net loss per share, basic & diluted) ($USD)	$(0.76)	$(0.71)	$(0.74)
Total Operating Expenses ($USD Millions)	$20.3	$21.4	$22.1
R&D Expenses ($USD Millions)	$16.0	$16.9	$17.8
G&A Expenses ($USD Millions)	$4.3	$4.5	$4.3
Total Other Income ($USD Millions)	$1.3	$1.8	$1.7
Cash, cash equivalents & investments ($USD Millions)	$150.1	$135.2	$122.4

Metric	Q4 2022	Q4 2023
Net Loss ($USD Millions)	$(15.0)	$(20.4)
EPS ($USD)	$(0.61)	$(0.74)
R&D ($USD Millions)	$12.2	$17.8
G&A ($USD Millions)	$3.6	$4.3
Total Operating Expenses ($USD Millions)	$15.9	$22.1

Metric	Actual	Consensus	Beat/Miss
EPS ($USD)	$(0.74)	$(0.71)	Miss by $0.03
Revenue ($USD Millions)	$0.0 (pre-revenue)	N/A	N/A

Not applicable; AVTE reports as a single clinical-stage entity with no product revenue .

KPI	Q2 2023	Q3 2023	Q4 2023
Phase 2b enrollment (patients)	In progress; >110 sites activated	In progress; >125 sites activated	Completed at 202 patients
Phase 3 status	Ongoing site activation	Ongoing; on track	First patient enrolled; >120 sites active
Patents issued (incremental in year)	Expanded BoD; focus on IP	+1 patent to total 5	+2 patents (total six)
Cash runway guide	Into 2026	Into 2026	Into 2026

Metric	Period	Previous Guidance	Current Guidance	Change
Phase 2b topline timing	Q2 2024	“Topline data in the second quarter of 2024”	“Topline data expected in June 2024”	Maintained; narrowed to June
Phase 3 enrollment	Ongoing	“On track; trial progressing”	First Phase 3 patient enrolled; >120 sites recruiting	Progressed
Cash runway	Multi-year	Into 2026	Into 2026	Maintained

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2023)	Trend
R&D execution	Q2: >110 sites activated; Phase 2b/3 ongoing . Q3: >125 sites; topline targeted for Q2 2024 .	Phase 2b completed (202 patients); first Phase 3 patient enrolled; >120 sites active; topline June 2024 .	Improving execution cadence
Regulatory/clinical path	Strategic design of seamless Ph2b/Ph3; orphan status noted in filings .	Phase 3 primary endpoint 6MWD; dose to be selected from Ph2b PVR results .	Clear, consistent framework
Intellectual property	Q3: +1 patent to 5 total .	2023: +2 patents; total six issued; global prosecution continues .	Strengthening IP
Cash runway/financing	Q2: ATM proceeds extended runway into 2026 . Q3: runway into 2026 confirmed .	Runway into 2026 reiterated .	Stable liquidity guide
Trial operations footprint	Q2: >110 sites; >20 countries . Q3: >125 sites .	>120 sites active for Phase 3 .	Broad global footprint maintained

“In 2024, we look forward to… announcing Phase 2b topline data in June… We remain confident that delivering our proprietary formulation of imatinib directly to the pulmonary vasculature via inhalation has the potential to achieve robust efficacy with a low side effect burden… AV-101 has the potential to be an important part of the future standard of care for PAH patients.” — Tim Noyes, CEO .
“The completion of enrollment in the Phase 2b portion of the trial marks an exciting milestone… we were also able to rapidly enroll our first patient in the Phase 3 portion…” — Tim Noyes, CEO .

An earnings call transcript was not located; analysis reflects press releases and SEC filings for Q4 2023 .

EPS missed third-party consensus (-$0.74 actual vs -$0.71 consensus); revenue not reported with no consensus, consistent with pre-revenue status .
Implication: modest estimate revisions may be needed for near-term quarterly EPS given higher R&D cadence into topline/Phase 3; medium-term revisions hinge on Phase 2b data informing dose and Phase 3 sizing .

Phase 2b topline in June 2024 is the pivotal near-term catalyst; positive PVR/secondary endpoints could accelerate Phase 3 dose selection and timelines .
Liquidity is adequate with cash/investments of $122.4M and runway guided into 2026; burn likely remains elevated around Phase 2b readout and Phase 3 enrollment .
AV-101’s inhaled imatinib aims to replicate IMPRES efficacy with improved tolerability; Phase 2b PVR signal will be scrutinized against historical benchmarks .
IP strengthening (six issued patents) and Board additions (including Chair appointment) support execution and eventual commercialization readiness .
Pre-revenue profile means “beat/miss” optics hinge on OpEx trajectory; Q4 EPS miss was small and driven by increased R&D investment .
Trading setup: data readouts (ATS baseline in May; Phase 2b topline in June) likely drive volatility; position sizing should consider binary trial risk and potential re-rating on strong PVR/6MWD signals .
Medium-term thesis: if Phase 3 confirms functional benefit (6MWD) with tolerability and the company secures favorable regulatory alignment, AV-101 could be positioned as an add-on therapy ahead of prostacyclins and alongside sotatercept in appropriate patients .