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QB

Q32 Bio Inc. (FIXX)·Q2 2024 Earnings Summary

Executive Summary

  • Q32 Bio reported Q2 2024 net loss of $16.98M (basic and diluted EPS $(1.42)), driven by stepped-up Phase 2 spending; R&D was $13.4M and G&A $4.5M, versus $8.0M and $2.5M in Q2 2023 . Cash, cash equivalents and short-term investments were $107.6M with runway into mid-2026, positioning the company through four Phase 2 milestones .
  • Clinical execution remained on plan: bempikibart AD Phase 2 enrollment was completed and expanded to 121 patients on demand; AA Phase 2 enrollment was completed earlier; topline data for both remain targeted for Q4’24 . ADX-097 renal basket trial is enrolling, with initial open-label data by year-end 2024 and topline in 2H’25; AAV Phase 2 initiation is planned for H1’25 .
  • No revenue was recognized in Q2 2024 (vs. $3.205M collaboration revenue in Q2 2023), reflecting the 2023 termination of the Horizon agreement and previously reversed revenue under ASC 606 .
  • Potential stock catalysts: Q4’24 toplines for bempikibart (AD and AA) and initial ADX-097 renal basket data by YE’24; inclusion in the Russell 3000 in June could broaden investor awareness .

What Went Well and What Went Wrong

  • What Went Well

    • Completed and upsized AD Phase 2 enrollment to 121 patients due to demand; timelines for AD and AA toplines reaffirmed for Q4’24 (“we look forward to sharing topline results… in the fourth quarter of 2024”) .
    • Continued execution across innate immunity program: ADX-097 renal basket trial enrolling; initial open-label data expected by year-end 2024 and topline in 2H’25; AAV Phase 2 remains planned for H1’25 .
    • Strengthened capital position relative to operating plan: $107.6M in cash and investments with runway into mid-2026 to cover four Phase 2 milestones .

  • What Went Wrong

    • Operating loss widened on higher trial and manufacturing costs for bempikibart; R&D rose to $13.4M (+$5.4M YoY) and G&A to $4.5M (+$2.0M YoY) .
    • No revenue contribution in the quarter versus prior-year collaboration revenue, following the Horizon termination and ASC 606 revenue reversal in late 2023 .
    • Equity method loss from OXB (US) LLC of $1.45M added to quarterly loss (prior to switching to cost method in May) .

Financial Results

MetricQ2 2023Q1 2024Q2 2024
Collaboration arrangement revenue ($USD Millions)$3.205 $0.000 $0.000
Research and development ($USD Millions)$8.017 $9.841 $13.411
General and administrative ($USD Millions)$2.463 $5.002 $4.508
Net income (loss) ($USD Millions)$(5.807) $1.029 $(16.978)
EPS – basic ($)$(16.69) $1.03 $(1.42)
EPS – diluted ($)$(16.69) $(6.33) $(1.42)

Cash and Liquidity

MetricMar 31, 2024Jun 30, 2024
Cash, cash equivalents & short-term investments ($USD Millions)$135.3 $107.6
Liquidity outlookRunway into mid-2026 Runway into mid-2026

R&D KPIs (Program-level, Q2 2024 vs Q2 2023)

KPI ($USD Millions)Q2 2023Q2 2024
ADX-097 – direct R&D$2.230 $1.517
Bempikibart – direct R&D$2.736 $8.059
Personnel-related & consulting (incl. SBC)$2.311 $2.797
Indirect R&D$0.539 $0.772

Notes:

  • Q1 2024 net income reflects a $15.9M non-cash gain from convertible notes fair value change upon conversion at the March merger closing .
  • Q2 2024 other income included a $1.4M favorable change in CVR liability fair value and higher interest income, partially offset by venture debt interest .

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2024)Current Guidance (Q2 2024)Change
Bempikibart AD Phase 2 toplineQ4 2024Q4’24 Q4’24 Maintained
Bempikibart AA Phase 2 toplineQ4 2024Q4’24 Q4’24 Maintained
ADX-097 renal basket – initial open-label dataBy YE 2024By YE’24 By YE’24 Maintained
ADX-097 renal basket – topline2H 20252H’25 2H’25 Maintained
ADX-097 AAV Phase 2 initiationH1 2025H1’25 H1’25 Maintained
AD Phase 2 enrollment/size2024~100 patients; Part B enrolling Enrollment completed; increased to 121 Increased
Cash runwayThroughInto mid-2026 Into mid-2026 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q2 2024)Trend
Clinical execution – bempikibartQ-2: N/A (public listing via March reverse merger); Q-1: AA enrollment complete; AD on-track; toplines Q4’24 AD enrollment completed; trial expanded to 121; toplines Q4’24 On track; execution milestones advanced
Complement program – ADX-097Q-1: Renal basket to initiate H1’24; initial data by YE’24; AAV H1’25; topline 2H’25 Renal basket enrolling; initial data by YE’24; AAV H1’25; topline 2H’25 Timelines reaffirmed
Financing & runwayQ-1: Reverse merger closed; $42M PIPE; runway mid-2026 Runway mid-2026 reiterated Stable
Index inclusionQ-1: —Added to Russell 3000 in June New positive dev’t
Partnering/rights to assetsQ-2/2023: Horizon termination; rights regained to bempikibart No changeStable

Management Commentary

  • “Q32 Bio made strong progress advancing both bempikibart and ADX-097 in Phase 2 clinical trials.” – CEO Jodie Morrison .
  • “We completed enrollment in the Phase 2 clinical trial of bempikibart in AD, exceeding our initial enrollment target due to strong patient demand, and we look forward to sharing topline results… in the fourth quarter of 2024.” .
  • “We are enrolling patients in our Phase 2 basket trial of ADX-097… We expect to share initial data… by the end of this year, with topline results… in the second half of 2025… [and] initiate a second Phase 2… in AAV in the first half of next year.” .

Q&A Highlights

  • We did not locate a Q2 2024 earnings call transcript in the company documents reviewed; this recap relies on the Q2 2024 8-K press release and 10-Q for qualitative insights .

Estimates Context

  • Wall Street consensus estimates (S&P Global) for Q1 and Q2 2024 were unavailable at the time of this analysis; therefore, no vs-consensus comparisons are presented. The company did not provide revenue or EPS guidance in its Q2 2024 materials .

Key Takeaways for Investors

  • Multiple near-term catalysts: bempikibart Phase 2 toplines in AD and AA in Q4’24, plus initial ADX-097 renal basket data by YE’24; success could be a significant valuation driver for an early-stage immunology platform .
  • Clinical execution momentum: AD trial enrollment exceeded plan (121 patients), suggesting robust recruitment; both Phase 2 programs maintained timing .
  • Spending ramp reflects program advancement: R&D rose to $13.4M (manufacturing and clinical costs for bempikibart), widening the quarterly loss; expect continued elevated OpEx into key readouts .
  • Balance sheet supports milestones: $107.6M in cash/investments with runway into mid-2026 should fund through four Phase 2 milestones, reducing near-term financing risk .
  • Strategic flexibility: Full rights to bempikibart following Horizon termination could enable partnering optionality post-proof-of-concept .
  • Index inclusion: Russell 3000 addition may incrementally improve visibility and liquidity ahead of data readouts .

Supporting Documents:

  • Q2 2024 8-K 2.02 press release and exhibits .
  • Q2 2024 Form 10-Q with financials and MD&A .
  • Q1 2024 8-K 2.02 press release with financials .