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CONTRAFECT Corp (CFRX)·Q3 2022 Earnings Summary

Executive Summary

  • Q3 2022 delivered significant pipeline updates (ANSM CTA acceptance for intra‑articular exebacase; CF‑370 GLP tox completed with IND targeted by end of Q1 2023), while financials reflected restructuring costs and declining liquidity (cash, cash equivalents and marketable securities $17.6M) .
  • Net loss was $(17.1)M and EPS $(0.43), improving sequentially from Q2 $(18.1)M and $(0.46) but deteriorating vs prior year ($(5.3)M, $(0.13)), driven by a $7.7M restructuring charge covering severance/benefits and write‑off of prepaid manufacturing costs .
  • Management declined a proposed equity financing under offered terms and is evaluating other financing and strategic options, a key near‑term stock narrative given the reduced cash level and ongoing development needs .
  • Key 2023 catalysts: begin dosing intra‑articular exebacase in Q1; CF‑370 IND submission by end of Q1; DISRUPT database lock in December with full study results in 1H 2023, all of which can reframe the clinical thesis and funding path .

What Went Well and What Went Wrong

What Went Well

  • ANSM accepted for review the CTA to begin a Phase 1b/2 study of intra‑articular exebacase in chronic prosthetic knee infections; dosing expected Q1 2023, advancing the program into a potentially differentiated setting .
  • CF‑370 completed GLP toxicology; company expects to submit an IND by the end of Q1 2023, with prior data showing strong in vivo activity and low resistance propensity, reinforcing Gram‑negative opportunity .
  • Management tone remained execution‑focused despite adversity: “We are excited about 2023 and the prospect of having two different programs in the clinic…” and expects to communicate DISRUPT results in 1H 2023 .

What Went Wrong

  • DISRUPT Phase 3 (IV exebacase) remained in post‑futility analysis mode; database lock timing shifted to December with results in 1H 2023, delaying clarity vs prior expectations to complete analysis by end of Q3 2022 .
  • Restructuring costs were materially higher than initial guidance (~$1.5M expected in Q3) as actual Q3 restructuring expense totaled $7.7M (severance/benefits and prepaid manufacturing write‑off) .
  • Liquidity tightened: cash, cash equivalents and marketable securities fell to $17.6M as of 9/30/22 from $42.3M (Q1) and $27.3M (Q2), increasing urgency for financing after management declined offered terms .

Financial Results

P&L Summary (GAAP)

MetricQ3 2021Q1 2022Q2 2022Q3 2022
R&D Expense ($USD Millions)$8.664 $12.725 $16.760 $10.814
G&A Expense ($USD Millions)$3.022 $3.254 $3.266 $3.366
Restructuring Expense ($USD Millions)$0.000 $0.000 $0.000 $7.719
Total Operating Expenses ($USD Millions)$11.686 $15.979 $20.026 $21.899
Net Loss ($USD Millions)$(5.292) $(20.157) $(18.089) $(17.067)
EPS (Basic & Diluted) ($)$(0.13) $(0.51) $(0.46) $(0.43)

Notes:

  • No revenue line presented in GAAP statements in Q1/Q2/Q3 2022 press materials (pre‑commercial stage), making margin comparisons not applicable .
  • Q3 EPS includes non‑cash $4.8M gain from change in fair value of warrant liabilities; prior year Q3 included $6.4M non‑cash gain, affecting comparability .

Cash & Liquidity

MetricQ1 2022Q2 2022Q3 2022
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$42.3 $27.3 $17.6
Cash & Cash Equivalents ($USD Millions)$9.637 $9.549 $4.664
Marketable Securities ($USD Millions)$32.644 $17.753 $12.984
Total Current Assets ($USD Millions)$52.272 $37.712 $20.049
Total Liabilities ($USD Millions)$26.042 $27.913 $26.137
Stockholders’ Equity ($USD Millions)$29.998 $12.885 $(3.013)

KPIs (Operating)

KPIQ3 2021Q1 2022Q2 2022Q3 2022
Shares Used in Computing EPS (Millions)39.333 39.333 39.333 39.333
Change in Fair Value of Warrant Liabilities ($USD Millions)$6.358 $(4.212) $1.916 $4.823

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Intra‑articular exebacase Phase 1b/2 (PJI knee)Q1 2023 start“Expect to file with regulatory authorities later this year to initiate a study” “CTA to ANSM accepted for review; expect to begin dosing patients in Q1 2023” Clarified/Timed (progressed)
CF‑370 IND submissionEnd of Q1 2023“Completing GLP tox; expect to advance CF‑370 into clinical development” “Completed GLP tox; expect to submit IND by end of Q1 2023” Clarified/Timed (progressed)
DISRUPT Phase 3 analysis/result communicationDB lock Dec 2022; results 1H 2023“Expect to complete analysis toward end of Q3 2022” “Database lock in December; communicate full study results in 1H 2023; company’s own analysis shortly after lock” Delayed
Restructuring chargeQ3 2022“~$1.5M expected in Q3” $7.7M actual Raised materially
Annual operating cost savingsOngoing“Lower annual operating costs by over $4.0M” No update provided in Q3 materials Maintained (no Q3 update)
FinancingNear‑termNot disclosed priorEngaged discussions; declined investors’ proposal; evaluating opportunities New disclosure (financing approach)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2022)Trend
Clinical pipeline: exebacase (intra‑articular PJI)“Expect to file later this year to initiate study” ; Q1 prioritized DISRUPT enrollment CTA accepted for review; dosing targeted Q1 2023 Progressing to clinical start
CF‑370 (Gram‑negative lysin)ECCMID in vivo efficacy; low resistance; plan for multiple‑day regimen ; Q1 ECCMID updates GLP tox completed; IND submission by end of Q1 2023 Advancing toward IND
DISRUPT (IV exebacase)DSMB recommended halt for futility; analysis expected end Q3 ; Q1 achieved MRSA enrollment threshold for interim analysis Database lock expected December; full results 1H 2023 Timeline extended; awaiting clarity
Restructuring/OpExPlanned 37% headcount reduction; ~$1.5M Q3 charge; >$4M annual savings Actual Q3 restructuring expense $7.7M Heavier cost restructuring than guided
Financing/liquidityNot highlighted; Q1 cash $42.3M Cash+securities $17.6M; declined proposed equity financing; evaluating options Liquidity tightening; financing decision pending
Scientific validationECCMID/ASM Microbe preclinical data IDWeek and EBJIS clinical/exploratory data; multiple publications Continued external data flow

Note: No Q3 2022 earnings call transcript was available in the document catalog; themes above are synthesized from press releases and 8‑K disclosures .

Management Commentary

  • “We submitted a CTA…to begin a Phase 1b/2 clinical study of intra‑articular exebacase…We…completed the GLP toxicology studies of CF‑370…expect to submit an IND for CF‑370 by the end of the first quarter of 2023…We expect to communicate the results from the full study population in the first half of 2023…” — Roger J. Pomerantz, M.D., President & CEO .
  • “Despite the recent setback from the interim futility analysis…we continue to advance our lead programs toward new clinical studies…We expect to file…to initiate a study of intra‑articular exebacase…We are also completing the GLP toxicology studies required for the IND application of CF‑370…” — CEO statement in Q2 update .
  • Corporate actions included workforce reduction (~37%) and suspension of IV exebacase CMC pre‑commercial activities to refocus resources on development milestones .

Q&A Highlights

  • No Q3 2022 earnings call transcript was found; therefore, no Q&A highlights or on‑call guidance clarifications were available in the document set .

Estimates Context

  • Wall Street consensus via S&P Global was unavailable for CFRX for Q3 2022 due to missing CIQ mapping; as a result, beat/miss vs estimates cannot be assessed from S&P Global in this period [GetEstimates error].

Key Takeaways for Investors

  • Liquidity risk is front‑and‑center: cash, cash equivalents and marketable securities declined to $17.6M, and management disclosed declining a proposed equity financing; near‑term funding decisions are a major stock catalyst .
  • Operational focus has pivoted to intra‑articular exebacase and CF‑370, with concrete timelines (Q1 2023 dosing and IND submission) — successful execution could reset the clinical narrative after DISRUPT futility .
  • Restructuring produced a larger‑than‑guided charge ($7.7M vs ~$1.5M expected), but sequential EPS improved as warrant liability fair‑value shifts partially offset operating losses; investors should normalize for non‑cash warrant effects .
  • DISRUPT full data (1H 2023) remains a binary narrative element; while halted for futility, post‑hoc analyses and database lock may still inform future development strategy for systemic exebacase .
  • Continued scientific dissemination (IDWeek, EBJIS) supports external validation and clinical exploration in PJI and Gram‑negative infections, potentially aiding partner and funding dialogues .
  • Watch for updates on operating cost savings (> $4M annually guided) and financing plans; absent revenue generation, runway length and terms will drive sentiment .