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Sonnet BioTherapeutics Holdings, Inc. (SONN)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 FY2024: Net loss of $3.51M and diluted EPS of -$0.70 as collaboration revenue was $0; operating expenses declined YoY on cost controls, but cash remained tight with $3.55M on hand and runway “into November 2024” .
  • Clinical progress: SON-1010 showed preliminary clinical benefit (stable disease at 4 months) in 35% of evaluable patients across trials; SON-080 Phase 1b data in CIPN showed tolerability and quality-of-life signal, with a pivot toward a partnered Phase 2 in DPN .
  • IP and development: A U.S. composition-of-matter patent was granted for SON-1210; Sonnet entered a Master Clinical Collaboration Agreement to study SON-1210 in metastatic pancreatic cancer via an investigator-initiated Phase 1/2a (IIOC, Sarcoma Oncology Center) .
  • Corporate actions: Warrant exercises generated $3.4M in gross proceeds; later, a 1-for-8 reverse stock split was approved/effected to maintain Nasdaq listing, reducing shares outstanding from ~5.2M to ~0.65M .
  • No earnings call transcript was available; Street estimates via S&P Global were unavailable for Q3; investors should focus on cash runway, financing cadence, and near-term clinical catalysts .

What Went Well and What Went Wrong

What Went Well

  • SON-1010 clinical signal: “8 of 23 patients (35%)…suggesting clinical benefit…Stable Disease at 4 months,” with extended half-life (~10x vs rhIL-12) and favorable safety across up to 25 cycles in monotherapy and 10 cycles in combo without dose-limiting toxicity .
  • SON-080 Phase 1b (CIPN) met initial safety objectives; data indicated tolerability at 20µg and 60µg/dose and improvements in QLQ-CIPN20 scores vs placebo with durability post-therapy; no pro-inflammatory cytokine signal detected .
  • Strategic/IP momentum: Granted U.S. patent for SON-1210; secured an investigator-led clinical collaboration to initiate Phase 1/2a in pancreatic cancer, aiming to add value while preserving cash resources .

Management quote: “We continue to be encouraged with the data generated by our lead program SON-1010…represents a significant opportunity to help patients with PROC…” – Pankaj Mohan, Ph.D., Founder and CEO .
Management quote: “We intend to seek a partnership to move [SON-080] forward towards commercialization [in DPN].” – Pankaj Mohan, Ph.D. .

What Went Wrong

  • Minimal revenue and persistent losses: Collaboration revenue was $0 vs $36.9K in Q3 2023; net loss was $3.51M (vs $3.95M LY), with EPS -$0.70; profitability remains dependent on financing and non-operating items .
  • Liquidity constraints: Cash was $3.55M with stated runway into November 2024; ongoing cost reductions include suspending antiviral development and tightening focus to select programs .
  • Financing overhang: Need for capital evident (warrant exercises $3.4M, equity facility in Q2, reverse split to satisfy Nasdaq $1 minimum bid), highlighting dilution risk and market sensitivity .

Financial Results

Income Statement and Per-Share Metrics

MetricQ3 2023Q1 2024Q2 2024Q3 2024
Collaboration Revenue ($)$36,850 $18,626 $0 $0
Research & Development ($)$2,409,471 $644,042 $2,167,288 $1,727,033
General & Administrative ($)$1,542,689 $653,455 $1,701,273 $1,801,632
Total Operating Expenses ($)$3,952,160 $1,297,497 $3,868,561 $3,528,665
Net Income (Loss) ($)$(3,946,742) $(1,168,509) $365,425 $(3,505,555)
Diluted EPS ($)$(2.95) $(0.31) $0.07 $(0.70)
Weighted Avg Shares (Diluted)1,335,872 3,797,753 4,885,845 5,037,508

Notes:

  • Q2 2024 benefitted from $4.33M other income (sale of NJ NOLs), producing positive net income/EPS despite zero revenue .
  • Operating expenses trended lower YoY due to cost-saving initiatives and program prioritization .

Balance Sheet Snapshot

MetricSep 30, 2023Dec 31, 2023Mar 31, 2024Jun 30, 2024
Cash and Equivalents ($)$2,274,259 $3,021,392 $3,786,184 $3,554,331
Total Current Assets ($)$4,738,229 $4,623,783 $5,222,982 $5,127,771
Total Current Liabilities ($)$5,524,595 $2,654,311 $2,764,684 $3,109,854
Total Stockholders’ Equity ($)$(225,980) $2,572,459 $3,054,279 $2,618,106

KPIs (Clinical/Operational)

KPIQ1 FY2024Q2 FY2024Q3 FY2024
SON-1010 subjects across SB101/SB221——61 enrolled
SON-1010 preliminary clinical benefit——35% SD at 4 months (8/23)
SON-1010 cycles tolerated——Up to 25 cycles mono; up to 10 cycles combo; no DLT
SON-1210 IPPreclinical publication —U.S. patent granted (No. 12,006,361)
SON-080 Phase 1b CIPNEnrollment completed Early safety cleared DSMB Tolerability and QoL signal (20/60µg)
Financing actions$4.55M gross offering (Oct-23) $4.33M net NOL sale; equity facility $3.4M gross warrant exercises

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash runwayAs of Q1 FY2024 (Feb 2024)Into 3rd calendar quarter 2024 (pending NOL sale) ——
Cash runwayAs of Q2 FY2024 (May 2024)Into July 2024; “potential” cuts into August; equity facility entered ——
Cash runwayAs of Q3 FY2024 (Aug 2024)—“Sufficient to fund operations into November 2024” Raised vs prior month indications
SON-080 developmentFY2024CIPN Phase 1b safety readout Seek partnership; initiate Phase 2 in DPN with partner Strategic pivot
SON-1010 milestones2H24–1H25—2H24 safety; 1H25 topline efficacy (SB101); 2H24 additional safety; 2H25 RP2D & topline (SB221) New timeline specificity
Corporate listingSept 2024—1-for-8 reverse split effective Sept 30 to meet Nasdaq bid requirements Corporate action

No formal revenue/margin guidance was provided in the quarter’s materials .

Earnings Call Themes & Trends

No earnings call transcript was available for Q3 FY2024.

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
R&D execution (SON-1010)Safety/tolerability foundation; desensitizing dose strategy; ongoing SB101/SB221 enrollment 35% preliminary clinical benefit; extended half-life; favorable safety; upcoming data timelines Progressing with emerging efficacy signal
SON-080 programPhase 1b safety met; DSMB cleared; CIPN on hold; pivot to DPN partnership Phase 1b CIPN tolerability and QoL improvements; partnership plan for DPN Strategic focus on DPN via partner
IP/Platform (SON-1210)Extensive preclinical publication U.S. composition-of-matter patent; pancreatic cancer collaboration setup Strengthened IP and clinical pathway
Liquidity/financingUnderwritten offering; NOL sale; equity facility Warrant exercises $3.4M; reverse split to maintain listing Ongoing capital management
Regulatory/legal—Patent grant; investigator-initiated IND activities with IIOC Positive developments

Management Commentary

  • “We continue to be encouraged with the data generated by our lead program SON-1010…represent[s] a significant opportunity to help patients with PROC…” – Pankaj Mohan, Ph.D., Founder & CEO .
  • “We intend to seek a partnership to move the asset forward towards commercialization [in DPN].” – Pankaj Mohan, Ph.D. .
  • “We expect that this development approach will provide us with valuable information in a high-value cancer indication… and enable us to preserve cash resources.” – Pankaj Mohan, Ph.D., on SON-1210 pancreatic cancer collaboration .
  • “We are targeting pancreatic cancer… which has increased expression of the FcRn and GP60 receptors, as well as the SPARC complex.” – John Cini, Ph.D., CSO .

Q&A Highlights

No Q3 FY2024 earnings call transcript was found; therefore, no Q&A highlights are available for this quarter [ListDocuments returned none].

Estimates Context

  • Attempts to retrieve Q3 FY2024 Wall Street consensus EPS and revenue via S&P Global were unsuccessful due to request limit errors. Consensus estimates were therefore unavailable for this analysis at the time of retrieval [GetEstimates errors].
  • Without published consensus, investors should anchor on internal cash runway guidance and clinical milestone timelines for near-term expectations .

Key Takeaways for Investors

  • Cash runway into November 2024 with $3.55M cash as of June 30; financing actions (warrants, reverse split) underscore ongoing capital needs and potential dilution risk .
  • Clinical momentum: SON-1010 shows early efficacy signal (35% SD at 4 months), with key safety/topline readouts slated across 2H24–2H25—these are likely the primary stock catalysts .
  • SON-080 pivot to DPN via partnership could unlock a larger market with disease-modifying rationale; watch for partner announcements and Phase 2 initiation .
  • SON-1210 strengthened via U.S. patent and planned pancreatic cancer study with IIOC; human data initiation could broaden platform validation beyond IL-12 mono .
  • Operating discipline reduced expenses YoY, but the business remains pre-revenue; quarterly P&L is sensitive to non-operating items (e.g., NOL monetization) .
  • Maintain focus on upcoming readouts and regulatory steps; absent Street consensus, price action likely tied to clinical disclosures and capital markets events .

Appendix: Additional Relevant Press Releases (Q3 Calendar 2024)

  • SON-080 Phase 1b CIPN data and DPN partnership intent (July 24, 2024) .
  • SON-1210 pancreatic cancer Master Clinical Collaboration Agreement (Aug 19, 2024) .
  • 1-for-8 reverse stock split announcement (Sept 25, 2024) .