Calithera Biosciences, Inc. (CALA)·Q3 2022 Earnings Summary

Executive Summary

• Q3 2022 was operationally challenged: site activation delays in both sapanisertib and mivavotinib led management to push initial data readouts to mid-2023 from prior Q1 2023 guidance .
• Financials reflected a pre-revenue biotech profile: total revenue was $0.0 in Q3 (vs $6.75M in Q3 2021; license revenue) and net loss was $9.8M; R&D and G&A continued to trend down as programs were prioritized .
• Cash and cash equivalents were $34.1M at quarter-end; management reiterated runway into Q2 2023 and is evaluating strategic alternatives, including collaborations, licensing or sale of programs to extend runway .
• A positive regulatory milestone: FDA Fast Track designation for sapanisertib in October supports more frequent FDA dialogue and potential priority review in NRF2-mutated sqNSCLC .
• Near-term stock narrative hinges on clinical execution and financing visibility; the delay to mid-2023 shifts catalyst timing while Fast Track provides a counterbalancing regulatory positive .

What Went Well and What Went Wrong

What Went Well

• Fast Track designation for sapanisertib in NRF2-mutated sqNSCLC, enabling more frequent FDA engagement and potential for priority review: “we received FDA Fast Track designation for sapanisertib… benefits that could support our efforts… more quickly” .
• Progress on clinical program starts: Phase 2 enrollment began for sapanisertib (July) and mivavotinib (June), with trial-in-progress posters presented at key conferences .
• Opex discipline: R&D fell to $6.5M from $11.6M YoY; G&A fell to $3.0M from $6.3M YoY, reflecting reduced legacy program spend and lower personnel/legal costs .

What Went Wrong

• Site activation delays at multiple clinical sites (post‑pandemic staffing shortages) drove slower enrollment and pushed initial data readouts to mid‑2023 (from Q1 2023) .
• No Q3 revenue (vs $6.75M license revenue in Q3 2021), heightening reliance on balance sheet and external funding/transactions .
• Runway tightness: cash $34.1M with guidance only into Q2 2023, prompting evaluation of program sales and partnerships; analysts pressed on whether pausing trials might be considered to extend runway .

Financial Results

Quarterly Trend (Sequential)

Year-over-Year (Q3)

Balance Sheet KPIs

Notes:

• EPS was disclosed for Q1 2022 at $(0.18) per share; Q2 and Q3 EPS were not provided in the press releases .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We received FDA Fast Track designation for sapanisertib… benefits that could support our efforts to bring sapanisertib to patients… more quickly… we have experienced site activation delays… leading to slower than anticipated enrollment… initial data… not be available until mid‑2023.” — Susan Molineaux, CEO, Q3 press release .
• “We believe we have sufficient cash to fund our operations into the second quarter of 2023… evaluating all options… including strategic collaboration… licensing… and sale of certain programs.” — Susan Molineaux, Q3 call .
• “There were activation delays… including post‑pandemic staffing shortages… several sites that were projected to activate in Q3 are actually activating this quarter… once these sites are up and running, we expect them to put patients on.” — Emil Kuriakose, CMO, Q3 call .
• “Cash and cash equivalents totaled $34.1 million at September 30, 2022… R&D $6.5M… G&A $3.0M… Net loss $9.8M.” — Stephanie Wong, CFO, Q3 call .

Q&A Highlights

• Enrollment delays and confidence: Management attributed delays primarily to staffing shortages and expects steeper enrollment as sites activate; still confident in mid‑2023 initial data given binary response endpoints and prior single‑agent signals .
• Financing and strategic options: Company is considering nondilutive options including collaborations, licensing, and potential asset divestitures; pausing a trial to extend runway is within the realm of consideration but not decided .
• Data package sufficiency for partnering: Open‑label studies aim to confirm previously observed activity; quality of data may matter as much as quantity for partnership discussions .
• VPS4 program: Continues through lead optimization; updates expected by year-end; could be in play for transactions but specifics not disclosed .

Estimates Context

• Wall Street consensus (S&P Global) for CALA’s Q3 2022 revenue and EPS was unavailable due to missing CIQ mapping; as a result, comparison to consensus cannot be provided at this time. Estimates data retrieval via S&P Global was not available.

Key Takeaways for Investors

• Catalyst timing shifts: Initial data for both sapanisertib and mivavotinib now targeted for mid‑2023, extending the timeline and likely pushing trading catalysts out by one to two quarters .
• Regulatory de‑risking: Fast Track status for sapanisertib strengthens the regulatory posture and could accelerate review if clinical activity is confirmed in NRF2‑mutated sqNSCLC .
• Balance sheet watch: $34.1M cash with runway into Q2 2023; strategic transactions are actively considered to extend runway, a key medium‑term thesis variable .
• Execution focus: Elimination of site bottlenecks and enrollment cadence are critical near‑term operating metrics; management highlighted post‑pandemic staffing constraints as the main headwind .
• Opex discipline: Sequential declines in R&D and G&A support runway management, but absence of revenue in Q3 underscores dependence on external capital or transactions .
• Binary data risk: Both programs rely on confirming prior single‑agent activity; small but quality data could be sufficient for go/no‑go and partnering discussions .
• Trading setup: Near‑term, news flow likely centers on financing/strategic updates and site activation progress; medium‑term, mid‑2023 readouts are the principal stock movers .