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Eliem Therapeutics, Inc. (ELYM)·Q1 2023 Earnings Summary

Executive Summary

  • Q1 2023 net loss was $22.3M, or $(0.84) EPS; results were driven by $15.8M one-time termination benefits from the restructuring (including $9.0M stock-based comp), which materially increased G&A in the quarter .
  • Cash, cash equivalents and marketable securities were $109.4M as of March 31, 2023; management reiterated funding runway into 2027 .
  • Pipeline pivot progressed: initial preclinical data for ETX-123 (Kv7.2/3 opener) showed high potency and differentiated selectivity; synthesis scale-up initiated with Phase 1 planned 1H 2024 .
  • The February strategic update paused ETX-155 and implemented ~55% workforce reduction with leadership transitions (Executive Chairman Andrew Levin assuming day-to-day oversight), a key narrative catalyst for re-focusing on Kv7 .

What Went Well and What Went Wrong

What Went Well

  • Presented initial ETX-123 preclinical data confirming Kv7.2/3 modulation with high potency/selectivity and encouraging in vivo anticonvulsant activity; Andrew Levin: “With a strong balance sheet funding operations into 2027, we expect to have the financial strength to fund multiple catalysts and advance this exciting program into the clinic” .
  • Initiated synthesis scale-up to enable IND-enabling safety studies for ETX-123; Phase 1 clinical studies planned for 1H 2024, maintaining near-term development timeline .
  • Reaffirmed robust liquidity with $109.4M and runway into 2027, supporting the Kv7 program through multiple data milestones .

What Went Wrong

  • One-time restructuring costs of $15.8M (including $14.0M in G&A and $1.8M in R&D) materially pressured Q1 results; EPS deteriorated to $(0.84) vs $(0.50) prior year, obscuring underlying opex trend .
  • ETX-155 development paused amid challenging capital environment; workforce reduced ~55% and senior leadership departures announced (CEO, CFO/COO, General Counsel), raising near-term execution risk in transition .
  • No earnings call transcript was published for Q1 2023, limiting qualitative visibility on near-term priorities beyond press release and strategic 8-K .

Financial Results

MetricQ2 2022Q3 2022Q4 2022Q1 2023
R&D Expense ($USD Thousands)8,740 4,258 4,927 5,720
G&A Expense ($USD Thousands)4,932 4,490 4,627 17,718
Total Operating Expenses ($USD Thousands)13,701 8,748 9,554 23,438
Net Loss ($USD Thousands)(14,596) (9,682) (7,762) (22,290)
Diluted EPS ($USD)(0.56) (0.37) (0.29) (0.84)
Cash, Cash Equivalents & Marketable Securities ($USD Thousands)134,700 129,600 123,566 109,372

Notes: Company states it has not generated product revenue to date .

KPIs (Restructuring and Operating)

KPIQ1 2023
One-time termination benefits ($USD Thousands)15,800
Portion included in R&D ($USD Thousands)1,800
Portion included in G&A ($USD Thousands)14,000
Stock-based comp included in termination benefits ($USD Thousands)9,000
Workforce reduction (%)~55% (first half 2023)

Estimates vs Actuals (S&P Global consensus unavailable)

MetricQ4 2022 ActualQ4 2022 ConsensusQ1 2023 ActualQ1 2023 Consensus
Diluted EPS ($USD)(0.29) N/A (S&P Global consensus unavailable)*(0.84) N/A (S&P Global consensus unavailable)*
Revenue ($USD Millions)No reported product revenue N/A (S&P Global consensus unavailable)*No reported product revenue N/A (S&P Global consensus unavailable)*

*Consensus values were unavailable via S&P Global for ELYM; comparisons to Street were not possible.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayCorporateFund operations into 2027 Fund operations into 2027 Maintained
ETX-123 Phase 1 Start1H 2024Planned 1H 2024 Planned 1H 2024 Maintained
ETX-123 Preclinical Data2023Initial data at March 2023 ion channel symposium Additional data at Epilepsy Therapies May 31–Jun 2 and Kv7 Symposium Sep 13–15, 2023 Updated/timing details added
Corporate Focus2023Reprioritize to Kv7; pause ETX-155 Continued Kv7 focus; ETX-155 paused Maintained

Earnings Call Themes & Trends

(Company did not publish a Q1 2023 earnings call transcript; themes reflect 8-Ks and filings.)

TopicPrevious Mentions (Q3 2022 and Q4 2022)Current Period (Q1 2023)Trend
R&D execution (Kv7/ETX-123)Kv7 program advancing; IND-enabling planned Q1 2023; strong preclinical profile Presented initial ETX-123 data; synthesis scale-up; Phase 1 planned 1H 2024 Focus intensifies on Kv7; execution milestones achieved
ETX-155 statusPK variability analyzed; plan to initiate MDD Phase 2a in Q1 2023; not reinitiating PSE PoC Program paused per Feb strategic update Strategic deprioritization; capital discipline
Cash runwayInto 2025 (Q3 2022 10-Q) Into 2027 (Feb update, reiterated Q1 press release) Runway extended via restructuring
Leadership & orgNo major changes noted in Q3 2022 filing CEO/CFO/GC departures; Executive Chairman assumes interim day-to-day Transition period; governance adjustments
Scientific selectivity & safety profilePreclinical Kv7 potency/selectivity data building No GABAA/hERG/off-target at anticonvulsant doses; translational MES efficacy; bladder assay advantage vs retigabine Strengthening translational package

Management Commentary

  • “We were excited to share our initial preclinical data from ETX-123… With a strong balance sheet funding operations into 2027, we expect to have the financial strength to fund multiple catalysts and advance this exciting program into the clinic.” — Andrew Levin, Executive Chairman .
  • “We are excited about this next chapter… our encouraging Kv7 Program… our current balance sheet provides us significant runway to see the program through compelling data catalysts.” — Andrew Levin (Strategic update press release) .

Q&A Highlights

  • No earnings call transcript was published for Q1 2023; therefore, Q&A themes and clarifications are unavailable from call materials .

Estimates Context

  • S&P Global consensus EPS and revenue estimates were unavailable for ELYM; as a pre-revenue biotech with recent strategic reprioritization, Street coverage/mapping was not present, so comparisons to consensus could not be made (attempted; unavailable)*.
  • The absence of revenue (per filings) and one-time restructuring costs in Q1 likely complicate traditional EPS beat/miss framing for this period .

*Consensus values were unavailable via S&P Global for ELYM; comparisons to Street were not possible.

Key Takeaways for Investors

  • Q1’s $(0.84) EPS and elevated G&A were largely driven by non-recurring termination benefits; underlying opex trend ex-restructuring is more favorable than reported headline figures .
  • Liquidity remains robust with $109.4M and runway into 2027, enabling continuity through ETX-123 Phase 1 and additional preclinical milestones without near-term capital raises implied by management’s runway guidance .
  • Strategic focus on Kv7/ETX-123 has tangible momentum (initial preclinical data presented; IND-enabling activities underway); Phase 1 in 1H 2024 provides a clear next catalyst path .
  • Leadership transitions and a ~55% workforce reduction suggest leaner operations tailored to Kv7 priorities; monitor execution risk in transition and timing of IND-enabling completions .
  • With no product revenue and S&P consensus unavailable, stock narrative will hinge on R&D milestones and balance sheet runway rather than quarterly P&L beats/misses .
  • Upcoming scientific presentations (May/September) and continued preclinical readouts can serve as near-term sentiment drivers ahead of 1H 2024 clinical start .
  • Watch for additional disclosures on ETX-123 safety, selectivity, and human target engagement plans (e.g., TMS in healthy subjects) to de-risk clinical translation .