NKGen Biotech, Inc. (NKGN)·Q3 2023 Earnings Summary

Executive Summary

• Newly Nasdaq-listed company with no revenue reported and a significantly wider loss driven by SPAC-related items; Q3 GAAP net loss was $33.2M and EPS was -$2.48, versus a $6.7M loss and -$1.10 EPS a year ago .
• Cash was $8.8M at quarter-end, total debt liabilities were $20.2M, and stockholders’ equity stood at -$40.6M; liquidity remains constrained pending potential release of $32.9M held in escrow from the business combination .
• Management emphasized near-term clinical catalysts: initiating SNK01 Alzheimer’s Phase I/IIa by year-end 2023, an IND for SNK01 in Parkinson’s, and preliminary SNK02 allogeneic solid tumor data in 1Q24 .
• No Wall Street consensus estimates from S&P Global were available for NKGN; therefore, beat/miss analysis vs estimates is not possible (S&P Global data unavailable for this ticker).

What Went Well and What Went Wrong

What Went Well

• SNK01 Phase I in Alzheimer’s showed encouraging signals: 90% of patients improved or maintained cognitive function (ADCOMS) by 11 weeks; biomarker reductions persisted to Week 22; no treatment-related AEs .
• Regulatory progress: FDA cleared IND for SNK01 to treat moderate Alzheimer’s Disease, enabling the Phase I/IIa start by year-end 2023 .
• Allogeneic platform advancement: first patient dosed in SNK02 Phase I for solid tumors; preliminary solid tumor data anticipated in 1Q24 .

Selected management quote:

• “We had a very exciting quarter as a newly Nasdaq-listed company… Our approach continues to show promise… and the continued progress observed in our autologous SNK01 program…” — Paul Y. Song, M.D., CEO .

What Went Wrong

• Material widening of net loss due to SPAC transaction-related items: a $24.5M loss on issuance of forward purchase contracts and $3.3M of transaction costs expensed; combined with warrant/fair-value effects, driving net loss to $33.2M in Q3 .
• Liquidity pressure: cash $8.8M at 9/30 versus heavy liabilities and negative equity; $32.9M in escrow not received at closing may or may not be released, creating funding uncertainty .
• Increased G&A expense to $3.0M (from $1.9M a year ago) tied to stock option grants earlier in 2023; R&D remained sizable at $3.9M despite decreased recruitment costs .

Financial Results

Income Statement (YoY Comparison)

Drivers and other income/expense detail (Q3 2023):

• Loss on issuance of forward purchase contract: $(24,475)
• Transaction costs expensed: $(3,329)
• Change in fair value of convertible notes: $1,741
• Interest expense: $(211)

Balance Sheet Snapshot

Debt and business combination funding:

• Total debt liabilities: $20.2M (bank debt $4.9M; related party loans $5.3M; senior convertible note $10.0M held by NKMAX Co., Ltd.)
• Gross proceeds from business combination: ~$21.9M ($1.7M from trust; $20.2M from warrants/senior convertible notes)
• Escrowed funds: $32.9M (not received at closing; may be released to the Company and/or investors)
• Transaction costs settled at/near closing: ~$14.3M; unpaid as of 9/30/23: ~$7.3M

Estimates vs Actuals

Note: S&P Global consensus estimate data was unavailable for NKGN at the time of analysis.

KPIs (Clinical/Operational)

Guidance Changes

Earnings Call Themes & Trends

Note: No Q3 2023 earnings call transcript was identified in our document set.

Management Commentary

• “We recognize the volatility in the market, but we believe in our NK cell therapy approach… Our approach continues to show promise… positive data readouts from our Phase I clinical study in Alzheimer’s disease.” — Paul Y. Song, M.D., CEO .
• “We are highly focused on raising additional capital to fund our trials and operations and advance our differentiated NK cell therapy programs.” — Paul Y. Song, M.D., CEO .
• Near-term milestones reiterated: commence SNK01 AD Phase I/IIa by YE23; SNK01 Parkinson’s IND; SNK02 preliminary solid tumor data in 1Q24 .

Q&A Highlights

• No earnings call transcript was identified; Q&A highlights unavailable this quarter.

Estimates Context

• S&P Global consensus estimates for Q3 2023 EPS and revenue were unavailable for NKGN at the time of analysis; therefore, we cannot assess beats/misses vs Wall Street expectations.
• Given the company reported zero revenue and a widened GAAP net loss primarily due to transaction-related items, near-term estimate revisions may focus on operating expense trajectories and funding runway rather than revenue/EPS modeling .

Key Takeaways for Investors

• Funding and liquidity are the central near-term risks: $8.8M cash, negative equity, and $32.9M escrow not received at closing; watch for any escrow releases, financings, or partnerships to extend runway .
• Clinical catalysts could be stock-moving: SNK01 Phase I/IIa AD initiation by YE23 and preliminary SNK02 solid tumor data in 1Q24; regulatory momentum with AD IND clearance provides validation .
• Transaction-related accounting items drove the Q3 loss; absent these, the operating loss was much smaller, but ongoing cash needs and debt obligations ($20.2M) remain significant .
• Expense trends: G&A increased on stock grants; R&D trimmed slightly due to lower recruitment costs—monitor expense discipline as programs scale .
• No revenue yet; investment case hinges on clinical efficacy, regulatory progress, and capital access rather than near-term P&L metrics .
• Public listing completed; investor communications and conference participation indicate active engagement—follow upcoming data disclosures and any guidance or funding updates .
• For trading, near-term headlines around INDs/data readouts and financing developments are the likely catalysts; absence of consensus estimates reduces traditional beat/miss volatility but increases sensitivity to clinical/regulatory news flow .

Sources: Q3 2023 8-K and Exhibit 99.1 press release and financial statements ; related company press releases and investor pages .