MUSTANG BIO, INC. (MBIO)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 sharply reduced operating expenses to $5.231M, down 68% year over year, and narrowed net loss to $5.191M ($0.46 EPS) versus $16.693M ($2.06 EPS) in Q1 2023 .
• Cash and cash equivalents fell to $1.337M at quarter-end, with cash used in operations of $5.321M; management disclosed substantial doubt about going concern absent additional financing .
• Operational guidance was lowered: despite a successful End-of-Phase 1 FDA meeting and March RMAT designation for MB-106, Mustang does not expect to initiate the pivotal Phase 2 WM trial in 2024 due to limited resources; MB-109 start also deferred pending funding .
• Post-quarter, the May 2 offering raised ~$3.3M net and warrants were repriced; on May 13, CFIUS required abandonment of the uBriGene manufacturing facility transaction via a National Security Agreement, removing a potential cash source and adding operational uncertainty .
• No Q1 2024 earnings call transcript or Q1 press release was available; Wall Street consensus estimates via S&P Global were unavailable to compare beats/misses.

What Went Well and What Went Wrong

What Went Well

• RMAT designation granted in March 2024 for MB-106 in relapsed/refractory CD20-positive WM and FL, enabling expedited FDA interactions and potential rolling review .
• End-of-Phase 1 FDA meeting completed with agreement on pivotal Phase 2 WM trial design (1×10^7 CAR-T cells/kg), and no additional nonclinical studies expected prior to Phase 2/BLA; Phase 1 indolent lymphoma arm achieved sustained 100% complete response in FL (N=6) with no CRS > grade 1 and no ICANS despite no prophylaxis .
• Significant cost control: total operating expenses fell 68% YoY, primarily from lower R&D, lab supplies, program costs due to license terminations and subcontracting reimbursement .
• “We plan to move ahead with the first ever registrational CAR-T trial focused on relapsed or refractory Waldenstrom macroglobulinemia… We expect to treat the first patient in the second half of 2024, which could enable topline results in the second half of 2026,” CEO Manuel Litchman said in March (historical aspiration, later revised) .

What Went Wrong

• Cash position deteriorated to $1.337M at March 31 and management disclosed substantial doubt regarding going concern; workforce reduced ~81% in April to preserve capital .
• CFIUS mandated abandonment of the uBriGene transaction via a National Security Agreement on May 13, removing a potential contingent payment and complicating manufacturing transition plans .
• Nasdaq deficiency letter received March 13 for failing the $2.5M stockholders’ equity requirement; Mustang submitted a compliance plan on April 29 but outcome is uncertain .
• Clinical/operational guidance lowered: Mustang does not expect to initiate MB-106 WM Phase 2 in 2024; MB-109 Phase 1 initiation deferred pending resources .

Financial Results

KPIs – Program R&D Spend (quarterly):

Notes:

• No revenue was reported; Mustang stated it has not generated any revenue from its development stage products .
• Margins are not applicable due to absence of revenue.

Guidance Changes

Earnings Call Themes & Trends

No Q1 2024 earnings call transcript was available. Themes tracked across recent disclosures:

Management Commentary

• “We plan to move ahead with the first ever registrational CAR-T trial focused on relapsed or refractory Waldenstrom macroglobulinemia… We expect to treat the first patient in the second half of 2024” — Manuel Litchman, M.D., CEO (March 11 press release; later revised due to funding) .
• “The FDA’s safe-to-proceed within 30 days of IND filing [for MB-109] is testimony to the talent and resourcefulness of our team” — CEO (Nov 14 press release) .
• Q1 2024 MD&A highlights: FDA agreed with proposed Phase 2 WM trial design; no additional nonclinical studies expected; indolent lymphoma arm sustained 100% FL CR with minimal CRS/ICANS .
• Liquidity disclosure: “There exists substantial doubt about our ability to continue as a going concern… we reduced workforce by approximately 81%… and terminated certain license agreements… to preserve capital” .

Q&A Highlights

• No Q1 2024 earnings call transcript was available; therefore, no Q&A themes or guidance clarifications could be assessed.

Estimates Context

• Wall Street consensus estimates (EPS, revenue) via S&P Global were unavailable for Q1 2024 in our session, so comparison to consensus and determination of beats/misses could not be made. Mustang is pre-revenue and did not report product revenues for Q1 2024 .

Key Takeaways for Investors

• Expense discipline is material: OpEx down 68% YoY and net loss narrowed, but absolute cash burn remains high relative to cash on hand; financing risk persists .
• Clinical profile for MB-106 continues to look compelling (sustained FL CRs, favorable safety), and RMAT plus End-of-Phase 1 alignment de-risk the regulatory path; however, funding constraints will drive timing .
• Operational setbacks (CFIUS NSA abandoning facility sale; workforce reduction; Nasdaq deficiency) heighten execution and listing risks, potentially increasing dilution in future raises .
• Near-term catalysts are financing and strategic partnership developments rather than clinical initiations; Phase 2 WM start is deferred beyond 2024 absent capital .
• Post-quarter raise (~$3.3M net) extends runway into early 2025 per current plan, but management still flags going concern risk; additional capital or partnerships likely required .
• Program prioritization shows MB-106 and MB-109 as focus; legacy gene therapy programs largely terminated, providing cost credits (e.g., St. Jude payables forgiveness) .
• Trading implications: headline sensitivity to financing, listing compliance, and regulatory updates; positive data/regulatory milestones may be overshadowed by liquidity overhang in the short term .

Source Documents

• Q1 2024 10-Q (filed May 15, 2024): financials, MD&A, liquidity, guidance .
• 8-K Item 2.02 (April 29, 2024): preliminary cash and cash used in operations .
• FY 2023 press release (8-K, March 11, 2024): corporate highlights, CEO commentary .
• Q3 2023 press release (8-K, Nov 14, 2023): quarterly financials, clinical updates .