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Cerevel Therapeutics Holdings, Inc. (CERE)·Q3 2023 Earnings Summary

Executive Summary

  • Cerevel extended cash runway into 2026 following an October follow-on offering (~$498.7M net), with cash, cash equivalents and marketable securities of $758.2M at 9/30/23 .
  • Operating expenses increased year over year as the company advanced late-stage programs; R&D was $85.3M and G&A was $26.1M in Q3, driven by program progression and higher personnel costs including equity-based comp .
  • Net loss per share improved sequentially to $(0.61) vs $(0.63) in Q2 and $(0.66) in Q3 2022; revenue remains non-material as Cerevel is pre-commercial .
  • Near-term stock reaction catalysts: Dec 11, 2023 tavapadon investor webcast and multiple 2024 readouts (TEMPO-3 1H24; TEMPO-1/2 2H24; EMPOWER 2H24; REALIZE mid-2024) .

What Went Well and What Went Wrong

What Went Well

  • Strengthened balance sheet post quarter-end with ~$498.7M net proceeds, extending runway into 2026 . Quote: “We are well-capitalized, with runway into 2026...” — Ron Renaud, CEO .
  • Pipeline execution on track: emraclidine EMPOWER data expected 2H24; darigabat REALIZE mid-2024; tavapadon TEMPO-3 1H24, TEMPO-1/2 2H24 .
  • Clear external engagement: scheduled tavapadon investor webcast on Dec 11, 2023 (10:00–11:30 a.m. ET), highlighting Parkinson’s program positioning .

What Went Wrong

  • Elevated operating spend year over year as programs scale: total operating expenses $111.3M in Q3 vs $95.1M in Q3 2022; R&D increase tied to emraclidine and tavapadon advancement and personnel costs .
  • G&A rose to $26.1M vs $23.7M prior year, reflecting higher personnel costs (incl. equity comp), partially offset by lower professional fees .
  • Lack of commercial revenue continues to drive losses: net loss $(96.4)M and net loss per share $(0.61) in Q3; company remains pre-commercial and reliant on financing and cash balances .

Financial Results

MetricQ3 2022Q2 2023Q3 2023
Revenues ($USD Millions)$0.0 $0.0 $0.0
Total Operating Expenses ($USD Millions)$95.1 $96.8 $111.3
Loss from Operations ($USD Millions)$(95.1) $(96.8) $(111.3)
Interest Income, net ($USD Millions)$4.0 $9.8 $9.9
Interest Expense ($USD Millions)$(1.3) $(2.6) $(2.6)
Other Income (Expense), net ($USD Millions)$(7.6) $(9.8) $7.8
Net Loss ($USD Millions)$(99.9) $(99.5) $(96.4)
Net Loss per Share (Basic & Diluted, $)$(0.66) $(0.63) $(0.61)
Weighted Avg Shares (Basic & Diluted)152.3M 157.1M 157.5M

KPIs

KPIQ3 2022Q2 2023Q3 2023
R&D Expense ($USD Millions)$71.4 $74.1 $85.3
G&A Expense ($USD Millions)$23.7 $22.8 $26.1
Cash, Cash Equivalents & Marketable Securities ($USD Millions)N/A$825.1 $758.2
Convertible Senior Notes 2027, Net ($USD Millions, Balance Sheet)N/A$336.4 $336.9
Total Stockholders’ Equity ($USD Millions)$521.2 $350.5 $273.0

Notes:

  • Revenue presented as $0.0 reflects pre-commercial status; loss from operations equals negative total operating expenses, consistent with no reported revenue .
  • Cash at 9/30/23 reflects quarter-end; October follow-on offering added ~$498.7M net proceeds post quarter .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayMulti-yearInto 2025 (as of Q2) Into 2026 (post Oct offering) Raised runway
Emraclidine (EMPOWER-1/2) Schizophrenia Data20242H 2024 (updated at Q2) 2H 2024 reiterated Maintained
Emraclidine (EMPOWER-3) OLEOngoingEnrollment continuing Enrollment continuing Maintained
Emraclidine AD Psychosis (Phase 1 MAD)OngoingInitiated; Fast Track designation Ongoing in elderly volunteers Maintained
Darigabat REALIZE (Focal Epilepsy)Mid-2024Mid-2024 Mid-2024 Maintained
Darigabat ADAPT (Panic Disorder)OngoingInitiated Ongoing Maintained
Tavapadon TEMPO-3 (Adjunct, PD)1H 20241H 2024 1H 2024 Maintained
Tavapadon TEMPO-1/2 (Monotherapy, PD)2H 20242H 2024 2H 2024 Maintained
CVL-871 (Dementia-related Apathy)Phase 2aTimeline under review Timeline under review Maintained
Tavapadon Investor WebcastDec 11, 2023Not previously scheduledScheduled Dec 11, 2023 New event

Earnings Call Themes & Trends

Note: Q3 2023 call transcript could not be retrieved due to a system database inconsistency; themes below reflect prepared remarks from press releases.

TopicPrevious Mentions (Q-2)Previous Mentions (Q-1)Current Period (Q3)Trend
R&D execution and pipeline breadthEmphasis on strong science; EMPOWER timing shifted to 2H24; ADAPT initiated; REALIZE mid-2024 Unavailable via toolsReiterated 2024 readouts and ongoing trials Stable execution toward 2024 catalysts
Capital position/runway$825.1M cash & securities; runway into 2025 Unavailable via tools$758.2M at 9/30; +$498.7M net offering; runway into 2026 Improved runway
Parkinson’s program (tavapadon)TEMPO-1/2/3 ongoing; timelines outlined Unavailable via toolsInvestor webcast scheduled; timelines reiterated Increased investor engagement
Emraclidine in AD psychosisPhase 1 MAD in elderly; Fast Track Unavailable via toolsOngoing; registrational-supportive studies prioritized Continued progress
Organizational leadershipNew CEO/CFO appointments highlighted Unavailable via toolsTeam focus on late-stage pipeline Steady leadership focus

Management Commentary

  • “Cerevel is bringing forward one of the broadest neuroscience pipelines in the industry, with novel approaches to treating challenging diseases, and we remain focused on execution as we head into multiple data readouts in 2024.” — Ron Renaud, President & CEO .
  • “We are well-capitalized, with runway into 2026, and we have a strong team in place to advance our late-stage pipeline of potential new treatments for schizophrenia, epilepsy, and Parkinson’s disease.” — Ron Renaud .
  • R&D increase rationale: advancement of emraclidine and tavapadon programs and higher personnel costs including equity-based compensation .
  • G&A increase rationale: higher personnel costs including equity-based compensation, partially offset by reduced professional fees .

Q&A Highlights

  • The Q3 2023 earnings call transcript could not be retrieved due to a system database inconsistency, so Q&A themes and specific management responses are unavailable via our tools at this time .
  • Prepared remarks emphasize execution into 2024 readouts and capital runway extension post offering .

Estimates Context

  • Wall Street consensus (S&P Global/Capital IQ) for Q3 2023 EPS and revenue was unavailable due to missing CIQ mapping for CERE in our data connector, preventing retrieval of consensus means and estimate counts. As a result, beats/misses versus consensus cannot be assessed at this time [SpgiEstimatesError].
  • Implication: Without consensus, modelers should anchor near-term updates to spend trajectory and pipeline timelines rather than quarterly EPS/revenue comparisons.

Key Takeaways for Investors

  • Balance sheet strength: ~$758.2M at quarter-end plus ~$498.7M net offering materially extends runway into 2026, reducing financing overhang .
  • 2024 is data-rich: TEMPO-3 (1H24), TEMPO-1/2 (2H24), EMPOWER (2H24), REALIZE (mid-2024) — multiple shots on goal across PD, schizophrenia, epilepsy .
  • Operating spend rising with program scale; monitor R&D cadence and equity-based comp as drivers of quarterly cash burn .
  • Parkinson’s D1/D5 mechanism differentiation: tavapadon positioned as potential first-in-class; Dec 11 webcast may refine clinical/commercial narrative .
  • Emraclidine’s M4-selective profile remains central to schizophrenia strategy; regulatory Fast Track in AD psychosis adds optionality .
  • With no commercial revenue, quarterly EPS is less informative; focus on clinical milestones and capital runway to judge risk/reward .
  • Trading lens: upcoming December webcast and early 2024 readouts are likely stock-moving events; position sizing should reflect binary trial outcomes and extended runway.

Appendix: Additional Document References

  • Q3 2023 8-K press release and financials .
  • Preliminary cash update 8-K (Oct 11, 2023) .
  • Q2 2023 8-K press release and financials .