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9M

9 METERS BIOPHARMA, INC. (NMTRQ)·Q2 2022 Earnings Summary

Executive Summary

  • Q2 2022 focused on vurolenatide in Short Bowel Syndrome (SBS): Phase 2 VIBRANT topline identified a dose/interval with mean >25% TSO reduction; 7/11 patients met responder definition; no early withdrawals; two unrelated catheter infections . Management believes this supports moving to Phase 3 pending an End-of-Phase 2 FDA meeting in Q3 2022 .
  • Larazotide for celiac disease was discontinued following an interim Phase 3 analysis that indicated the additional enrollment required to detect a significant effect was too large to justify continuation .
  • Cash and equivalents were $29.46M at quarter-end; the company also closed a senior secured convertible notes facility up to $70M, drew $20M in July, and guided cash runway into Q4 2023 .
  • Net loss was $11.13M (EPS -$0.04), roughly flat vs Q1 2022 and wider vs Q2 2021; the narrative catalyst is Phase 3 initiation “as early as Q4 2022” subject to FDA feedback .

What Went Well and What Went Wrong

What Went Well

  • Positive Phase 2 VIBRANT results: “identified a dose and dosing interval…mean reduction in TSO of >25%” and 7/11 TSO responders over six weeks; safety generally well tolerated; no early withdrawals .
  • Clear regulatory path: “End-of-Phase 2 meeting with the FDA scheduled for mid-third quarter” with Phase 3 planning/logistics underway .
  • Extended runway: Pro forma cash of $49.5M including $20M draw on the note (closed in July) and guidance for runway into Q4 2023 .

What Went Wrong

  • Celiac program setback: Phase 3 CedLara interim analysis did “not support continuation of the trial” and the company is “discontinuing further development of larazotide in celiac disease” .
  • Nasdaq compliance risk remains: Company received an extension to February 6, 2023 to meet the $1.00 bid-price rule, otherwise faces potential delisting risk .
  • Cash burn: Operating expenses increased year over year; net loss of $11.13M in Q2 2022 vs $8.25M in Q2 2021 .

Financial Results

MetricQ2 2021Q1 2022Q2 2022
Net Loss ($USD Millions)$8.253 $11.4 $11.130
Diluted EPS ($USD)-$0.03 -$0.04 -$0.04
Cash and Equivalents ($USD Millions)$47.0 (FY 2021 YE) $37.2 $29.456

Notes:

  • Company is pre-revenue; no revenue line was reported in the Q2 2022 10-Q income statement .
  • Operating expenses in Q2 2022: R&D $7.546M; G&A $3.649M; total operating expenses $11.195M .

KPIs (Clinical)

  • VIBRANT TSO Responder Rate: 7/11 responders over six-week period .
  • Mean TSO Reduction (go-forward arm): >25% .
  • Parenteral Support: 3/5 patients on active drug had ≥20% reduction in PS volume over treatment period .
  • Safety: No adverse events leading to early withdrawal; two unrelated central catheter infections .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
End-of-Phase 2 (vurolenatide)Q3 2022“EOP2 meeting soon after Phase 2 data” “On track for Q3 2022” Maintained/clarified
Phase 3 start (vurolenatide)Q4 2022“Expected 2H 2022; as early as Q3 2022” “As early as Q4 2022, pending EOP2” Slipped (later-in-2H)
Larazotide (celiac disease)2022Interim analysis early June; continued trial pending results Discontinuing further development in celiac disease Lowered (program halted)
Cash RunwayThrough 2023Into Q2 2023 Into Q4 2023 with $20M drawdown and facility access up to $70M Raised (extended)
Nasdaq Bid-PriceBy Feb 6, 2023Original compliance deadline Aug 8, 2022Extension through Feb 6, 2023 Extended timeline

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2021, Q1 2022)Current Period (Q2 2022)Trend
R&D execution (vurolenatide)Topline Phase 2 in Q2; EOP2 then Phase 3 prep Positive Phase 2 VIBRANT topline; EOP2 Mid-Q3; Phase 3 prep underway Accelerating toward Phase 3
Program reprioritizationN/ALarazotide celiac discontinued post-interim analysis Focus shifted to vurolenatide
MIS-C (larazotide)Phase 2a ongoing with EBRIS Phase 2a ongoing; additional data anticipated Continuing
Financing/capitalEquity raise in 2021; ATM on shelf $70M secured notes facility; $20M initial draw (July) Enhanced liquidity
Regulatory/listingCOVID headwinds, site disruptions Nasdaq bid-price extension to Feb 2023 Risk managed, timeline extended

Management Commentary

  • “We believe these preliminary results are supportive of the safety and efficacy of vurolenatide and look forward to our End-of-Phase 2 meeting with the FDA this quarter…vurolenatide has the potential to play a critical role in the first-line treatment of patients with SBS” — John Temperato, President & CEO .
  • “Vurolenatide may offer a novel and alternative approach…decrease total stool output and reduce parenteral support needs…findings are supportive of the efficacy and safety of vurolenatide and will serve as the basis for our end-of-Phase 2 meeting.” — Patrick H. Griffin, M.D., CMO .
  • “Following thorough analysis of the CedLara Phase 3 study interim data, we are discontinuing further development of larazotide in celiac disease…allow us to shift our financial resources and focus our full support behind the vurolenatide SBS Phase 3 program.” — John Temperato .

Q&A Highlights

  • No Q2 2022 earnings call transcript was available in the document set; therefore, no Q&A themes could be extracted [ListDocuments returned none for earnings-call-transcript; see tool result].

Estimates Context

  • Wall Street consensus EPS/revenue estimates via S&P Global were unavailable due to a Capital IQ mapping gap for NMTRQ (tool error on retrieval). As a result, comparisons to consensus cannot be provided at this time.

Key Takeaways for Investors

  • The SBS program progressed with favorable Phase 2 signals (TSO reduction and PS decreases), a clean tolerability profile, and clear FDA interaction timing; Phase 3 initiation “as early as Q4 2022” is the near-term catalyst .
  • Strategic focus tightened: discontinuation of larazotide in celiac disease removes a binary overhang and reallocates resources to vurolenatide’s Phase 3 .
  • Liquidity improved via a $70M convertible notes facility (initial $20M draw), extending runway into Q4 2023; investors should monitor covenants, conversion terms, and dilution mechanics .
  • Listing risk is managed in the near term with a bid-price extension through Feb 6, 2023, but remains a watch item alongside Phase 3 execution .
  • Near-term trading likely sensitive to: timing/outcome of the End-of-Phase 2 FDA meeting, Phase 3 start, and any additional VIBRANT data disclosures .