Executive Summary

Transitional quarter marked by restructuring and pivot to partnerships; minimal collaboration revenue ($0.11M) and a materially wider net loss ($63.94M; -$1.33 EPS) driven by non‑cash impairments of IPR&D ($32.9M) and long‑lived assets ($13.1M), plus $3.2M in restructuring charges .
Operating model reset: R&D down meaningfully YoY ($8.59M vs $15.53M) following the January decision to discontinue CP101 PRISM4; G&A stable; cash of $41.68M with runway “into 2025,” aided by repayment of Hercules debt in January ($16.2M) .
Strategic progress: UC investigator‑sponsored trial agreement (Brigham and Women’s) for CP101 with topline data targeted in 2025; UMN license amendment aligns milestones with sublicensing strategy; leadership transition announced (new CEO/CFO effective mid‑May) .
Key forward catalysts: patent litigation jury trial targeted for May 2024 (Ferring/Rebiotix), UC trial readout in 2025; PRISM4 discontinued but safety analysis showed no CP101‑related SAEs among 19 patients (12 on CP101) .

What Went Well and What Went Wrong

What Went Well
- Executing partnership strategy: “advance its novel microbiome technology through partnerships and collaborations,” including UC trial with Brigham and Women’s and amended UMN license enabling milestone satisfaction via sublicenses .
- Safety profile update: PRISM4 safety analysis (post‑discontinuation) reported no drug‑related SAEs among 19 patients (12 CP101) .
- Liquidity visibility: Cash of $41.68M and runway into 2025; debt fully repaid in January ($16.2M), reducing financial overhang .
What Went Wrong
- Material non‑cash impairments drove a significantly wider loss: $32.9M IPR&D impairment, $13.1M long‑lived asset impairment; restructuring charges of $3.2M .
- De minimis collaboration revenue ($0.11M), limiting operating leverage and rendering margins not meaningful despite OpEx reductions .
- Continued operational reset after program discontinuation; forward‑looking risks include ability to monetize IP/other assets and capital access, as disclosed in forward‑looking statements risk factors .

Financial Results

Quarterly P&L and cash (oldest → newest)

Metric	Q3 2022	Q4 2022	Q1 2023
Revenue ($USD Millions)	$0.14	$0.01	$0.11
Net Loss ($USD Millions)	$(40.37)	$(27.01)	$(63.94)
Diluted EPS ($)	$(0.85)	$(0.56)	$(1.33)
R&D Expense ($USD Millions)	$11.86	$16.58	$8.59
G&A Expense ($USD Millions)	$9.58	$10.94	$9.62
Total Operating Expenses ($USD Millions)	$40.77	$27.76	$67.48
Net Income Margin (%)	-29,254% (calc. from )	-338,600% (calc. from )	-59,706% (calc. from )
Cash & Cash Equivalents ($USD Millions)	$85.29 (9/30/22)	$71.04 (12/31/22)	$41.68 (3/31/23)

YoY comparison (Q1 2023 vs Q1 2022)

Metric	Q1 2022	Q1 2023
Revenue ($USD Millions)	$0.35	$0.11
Net Loss ($USD Millions)	$(24.57)	$(63.94)
Diluted EPS ($)	$(0.52)	$(1.33)
R&D Expense ($USD Millions)	$15.53	$8.59
G&A Expense ($USD Millions)	$9.40	$9.62
IPR&D Impairment ($USD Millions)	$0.00	$32.90
Long‑Lived Asset Impairment ($USD Millions)	$0.00	$13.14
Restructuring Expense ($USD Millions)	$0.00	$3.24

Notes: Q1 net loss increase primarily reflects non‑cash IPR&D and asset impairments and restructuring associated with program discontinuation and restructuring . R&D declined $6.9M YoY with the wind‑down of CP101 development activities .

KPIs and operating items (Q3 2022 → Q1 2023)

KPI	Q3 2022	Q4 2022	Q1 2023
Restructuring Expense ($M)	$1.27	$0.24	$3.24
Goodwill Impairment ($M)	$18.06	$0.00	$0.00
IPR&D Impairment ($M)	$0.00	$0.00	$32.90
Long‑Lived Asset Impairment ($M)	$0.00	$0.00	$13.14
Debt Repayment ($M)	—	—	$16.20 (Jan 2023)

Segment breakdown: Not applicable; revenue predominantly collaboration and the company does not report segments in these releases .

Guidance Changes

Metric/Item	Period	Previous Guidance	Current Update	Change
Cash Runway	Multi‑year	Into 2025 (as of 12/31/22)	Into 2025 (as of 3/31/23)	Maintained
PRISM4 (CP101 in rCDI) topline	H1 2024 (prior)	H1 2024 anticipated (Q3’22)	Program discontinued Jan 2023; safety analysis disclosed	Withdrawn
UC investigator‑sponsored trial topline (CP101)	2025	—	2025 anticipated	New
Litigation (Ferring/Rebiotix)	2024	Jury trial scheduled May 2024	No change in Q1 release	Maintained

No quantitative guidance was provided for revenue, EPS, margins, OpEx, OI&E, tax rate, or dividends in Q1 2023 materials .

Earnings Call Themes & Trends

No Q1 2023 earnings call transcript was found; themes are drawn from company press releases.

Topic	Q3 2022 (Nov 10)	Q4 2022 (Mar 23)	Q1 2023 (May 10)	Trend
R&D execution/portfolio	PRISM4 dosing underway; aiming to accelerate topline; platform reprioritization	Decision to discontinue PRISM4 announced in Jan 2023; workforce reduction (~95%); subleases initiated	Safety analysis post‑discontinuation: no drug‑related SAEs	Pivot from internal development to disciplined wind‑down and safety disclosure
Partnerships/collaboration	Evaluating strategic partnerships for preclinical IBD/ASD	Partnerships pursued; strain bank launched	UC investigator‑sponsored trial; UMN license amendment to support sublicensing	Increasing reliance on external collaborations
Regulatory/legal	—	Claim construction favorable on 7/8 terms; May 2024 jury trial targeted	No new legal update in Q1 PR	Court developments supportive; trial timeline unchanged
Cost & liquidity	Runway into Q2’24	Runway extended into 2025; debt repaid in Jan 2023	Runway into 2025 reiterated; $41.68M cash at 3/31/23	Runway improved via cost actions and debt payoff
Product safety	—	—	PRISM4 safety analysis: no drug‑related SAEs	Positive safety datapoint post‑discontinuation

Management Commentary

“Finch has continued to execute on its strategy to advance its novel microbiome technology through partnerships and collaborations, highlighted by the…investigator‑sponsored clinical trial agreement with Brigham and Women’s Hospital… and an amended license agreement with the University of Minnesota.” — Mark Smith, CEO .
“Today’s announcements reflect our continued progress executing against our strategy to build value and advance our microbiome technology through external partnerships.” — Mark Smith, CEO (UC trial and UMN update press release) .
On restructuring and value path: “significantly decreased costs… extending our expected cash runway into 2025… We expect this will support company operations well beyond our anticipated jury trial with Ferring and Rebiotix… scheduled for May 2024.” — Mark Smith, CEO (Q4/FY release) .

Q&A Highlights

No Q1 2023 earnings call transcript was available in our document set; no Q&A themes to report for the period.

Estimates Context

S&P Global consensus estimates for Q1 2023 revenue and EPS were not available to us at the time of analysis due to data access limitations. As a result, we cannot provide a vs‑consensus comparison for the quarter.

Key Takeaways for Investors

The quarter was dominated by non‑cash impairment charges tied to the strategic reset; core OpEx is trending lower as CP101 development activities are wound down, improving runway visibility into 2025 .
Strategy is pivoting toward monetizing IP and assets and advancing programs via external collaborators (UC trial, UMN amendment), reducing capital intensity while preserving optionality .
Safety update from PRISM4 (no CP101‑related SAEs) supports CP101’s profile as it is explored in UC; however, CDI program discontinuation removes a nearer‑term commercialization path .
Litigation with Ferring/Rebiotix remains a potentially catalytic event (May 2024 jury trial) with favorable claim construction; outcomes could influence IP value realization .
Liquidity improved by debt repayment and cost actions; with $41.68M cash at quarter‑end, Finch reiterated runway into 2025, but risk disclosures highlight going‑concern and capital‑access uncertainties typical for pre‑revenue biotechs executing strategic alternatives .
Near‑term narrative drivers: partnership announcements, licensing deals (including strain bank), and legal milestones; medium‑term: UC investigator‑sponsored trial readout in 2025 .

Sources: Q1 2023 8‑K and press release (including financial tables) ; Q4 2022 8‑K (for prior‑quarter comps, runway, litigation timeline) ; Q3 2022 8‑K (for trend and prior guidance) ; April 18, 2023 UC/UMN 8‑K press release .

Finch Therapeutics Group, Inc. (FNCH)·Q1 2023 Earnings Summary