Name: eFFECTOR Therapeutics, Inc. Q2 2023 Earnings Call
Start: 2023-08-08T00:00:00.000Z

Executive Summary

EFTR reported Q2 2023 with no grant revenue, reduced R&D spend, and net loss per share of $0.17; cash/investments increased to $25.0M following $16.2M of capital raises, extending runway into Q2 2024 .
Clinical momentum: ASCO poster showed 26% partial response rate in the ZFA triplet (zotatifin + fulvestrant + abemaciclib) in heavily pretreated ER+ mBC; mature PFS and additional dose-escalation data are expected in H2 2023 .
KICKSTART Phase 2b (tomivosertib + pembrolizumab in NSCLC, PD-L1 ≥50%) continued enrolling with topline data anticipated in H2 2023 (maintained) .
Street consensus (S&P Global) for Q2 2023 revenue/EPS was unavailable in our data set; we cannot formally assess beats/misses this quarter; we anchor estimate comparisons as unavailable and note sellsiders may update OPEX/ runway assumptions given the lower R&D and new cash runway disclosure .

What Went Well and What Went Wrong

What Went Well
- Positive ZFA triplet efficacy at ASCO: 26% PR in RECIST-evaluable patients (5/19; 4 confirmed, 1 unconfirmed) despite heavy pretreatment, with generally tolerable safety; management highlighted “substantially greater activity” than expected versus FA doublet in this population .
- Operating discipline: R&D decreased to $4.9M (from $6.9M YoY) driven by timing of clinical/manufacturing activities; G&A held at $3.0M YoY .
- Liquidity strengthened: Two registered direct financings raised $16.2M gross proceeds, extending runway into Q2 2024 (from Q1 2024 previously) .
What Went Wrong
- Revenue backdrop: No grant revenue recorded in Q2 2023 versus $2.011M in Q2 2022, highlighting dependence on financing while programs advance .
- Net loss increased YoY to $8.4M (from $6.9M) despite lower R&D, driven by a swing in other income/expense versus prior-year earn-out fair value gains; interest expense on term loans weighed on results .
- Absence of a Q2 earnings call transcript limits visibility into detailed Q&A or incremental datapoints beyond the press release; company indicated it hosted a call during ASCO to discuss zotatifin, but that transcript is not in our document set .

Metric	Q2 2022	Q1 2023	Q2 2023
Revenues ($M)	$2.011	$0.000	$0.000
R&D Expense ($M)	$6.919	$6.609	$4.881
G&A Expense ($M)	$2.973	$2.927	$2.974
Operating Loss ($M)	$(7.881)	$(9.536)	$(7.855)
Other Income (Expense), net ($M)	$0.966	$(0.478)	$(0.509)
Net Income (Loss) ($M)	$(6.915)	$(10.014)	$(8.364)
Diluted EPS ($)	$(0.17)	$(0.24)	$(0.17)
Weighted Avg Shares (basic & diluted)	41.119M	42.001M	47.829M

Liquidity and Capitalization

Metric	Q4 2022	Q1 2023	Q2 2023
Cash & Equivalents ($M)	$8.708	$10.310	$14.714
Short-term Investments ($M)	$17.602	$8.697	$10.305
Total Cash, Equivalents & ST Inv. ($M)	$26.310	$19.007	$25.019
Current Term Loans, net ($M)	$19.061	$19.137	$19.216

KPIs and Clinical Metrics

KPI	Q4 2022	Q1 2023	Q2 2023
ZFA Triplet ORR (ER+ mBC)	29% (2/7) initial signals, cohort expanded	ASCO abstract slated; two confirmed PRs in first 7 reported	26% PR in 19 RECIST-evaluable (4 confirmed, 1 unconfirmed)
ZFA Triplet Safety	Generally well-tolerated	Generally safe, well-tolerated	Majority AEs Grade 1–2; 3 discontinuations due to AEs (any cause)
ZF Doublet Dose Escalation	Resumed at 0.1 mg/kg Q2W, 0.07 mg/kg QW	On track for H2 2023 topline	On track for H2 2023 topline
KICKSTART (NSCLC)	Enrollment ongoing; topline H2 2023	Enrollment ongoing; topline H2 2023	Enrollment ongoing; topline H2 2023

Note: No business segments; gross margin not applicable in a pre-revenue biotech .

Metric	Period	Previous Guidance	Current Guidance	Change
Cash Runway	As of Q1 2023 vs Q2 2023	Into Q1 2024	Into Q2 2024	Raised/extended
KICKSTART Topline Timing	2023	H2 2023	H2 2023	Maintained
ZF Doublet Dose Escalation Topline	2023	H2 2023	H2 2023	Maintained
ZFA Triplet Mature PFS Readout	2023	Not specified in prior quarter	H2 2023	Introduced

Topic	Previous Mentions (Q4 2022, Q1 2023)	Current Period (Q2 2023)	Trend
R&D execution (zotatifin ER+ mBC)	Early PR signals in 2/7; cohort expansion; dose escalation resumed	26% PR in 19 RECIST-evaluable; mature PFS H2 2023; continuing dose escalation	Improving clinical activity visibility
NSCLC program (tomivosertib)	KICKSTART enrolling; topline H2 2023	Enrollment ongoing; topline H2 2023	Steady progress
Financing/liquidity	Runway into Q1 2024	$16.2M raised; runway into Q2 2024	Strengthened
Collaborations/AI	Pfizer collaboration reiterated; no AI detail	Stanford randomized Phase 2 leveraging AI/cancer genomics	Expanding translational/AI footprint
Safety/tolerability	Triplet generally tolerated	Majority AEs Grade 1–2; 3 discontinuations	Consistent tolerability

Note: No Q2 2023 earnings call transcript available in our document set; themes based on press releases .

“The data presented at ASCO was a significant milestone for the zotatifin program, with substantially greater activity observed with the ZFA triplet than we would have expected in such heavily pretreated patients with just fulvestrant and abemaciclib... We are now focusing on defining our registrational path for zotatifin in ER+ mBC...” — Steve Worland, Ph.D., President & CEO .
“The randomized Phase 2b KICKSTART clinical trial of tomivosertib combined with pembrolizumab... continues to progress, with an anticipated data readout in the second half of 2023.” — Steve Worland, Ph.D. .
“We bolstered our balance sheet by raising over $16.0 million during the quarter, which now extends our cash runway into the second quarter of 2024.” — Steve Worland, Ph.D. .

No Q2 2023 earnings call transcript was available in the document set; the company indicated it would host a conference call during ASCO 2023 to discuss zotatifin, but a transcript was not found here .

S&P Global consensus estimates for Q2 2023 revenue and EPS were unavailable in our data set for EFTR; therefore, we cannot assess beats/misses versus Street for this quarter. We anchor to S&P Global for estimates when available and note the unavailability here .
Given reported figures (no grant revenue; R&D down to $4.9M; net loss $8.4M; runway extended into Q2 2024), we expect analysts to revisit OPEX cadence and liquidity runway assumptions; no formal consensus revisions can be inferred without S&P data .

Near-term catalysts: H2 2023 topline from KICKSTART (NSCLC) and mature PFS + dose-escalation readouts for zotatifin in ER+ mBC; these readouts are likely to drive stock moves given binary clinical outcomes .
The 26% PR rate in heavily pretreated ER+ mBC on the ZFA triplet, coupled with manageable safety, supports continued development and potential positioning as a second-line therapy in defined subsegments, per management’s view .
Operating discipline evident: R&D stepped down sequentially and YoY, while G&A remained controlled; net loss per share held at $0.17 YoY despite absence of prior-year earn-out gains in other income .
Liquidity improved: $16.2M raised extends runway into Q2 2024, reducing near-term financing overhang as the company approaches multiple data updates .
Collaboration breadth: Stanford randomized Phase 2 study in genomically defined ER+ subgroups underscores a precision/AI-enabled development approach that may enhance probability of success and eventual positioning .
Risk balance: Lack of revenue and reliance on clinical inflections keep EFTR higher-risk; interest expense on term loans continues to pressure P&L until de-leveraging or new non-dilutive funding emerges .