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SPRUCE BIOSCIENCES, INC. (SPRB)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 2024 delivered lower collaboration revenue but materially improved operating efficiency, with operating expenses down 28% year over year and 20% quarter over quarter, and net loss narrowed to $9.2M; cash and equivalents were $69.7M with runway through end of 2025 .
  • Programmatically, management reiterated near-term catalysts: topline data from CAHmelia-204 (adult CAH) and CAHptain-205 (adult/pediatric CAH) now anticipated in Q4 2024, shifting later vs Q1’s timeline; an EOP2 FDA meeting is targeted for 1H 2025 .
  • Strategic expansion into precision psychiatry via HMNC collaboration adds optionality in MDD, with HMNC funding a Phase 2 PoC and Spruce retaining an option to in-license Cortibon on positive results; HMNC expects to initiate the study in Q4 2024 .
  • No quantitative financial guidance was provided beyond cash runway. Wall Street consensus estimates via S&P Global were unavailable for Q2 2024 due to request limits; therefore, beats/misses vs estimates cannot be assessed at this time.

What Went Well and What Went Wrong

What Went Well

  • Operating discipline: Total operating expenses fell to $11.6M in Q2, down from $16.1M in Q2 2023 and $14.6M in Q1 2024; net loss narrowed to $9.2M from $12.8M in Q2 2023 and $11.6M in Q1 2024 .
  • Clear upcoming clinical catalysts: “In the fourth quarter of 2024, we plan to report primary efficacy and safety data through week 24 plus interim data from the open-label extension of the CAHmelia-204 study…” (CEO Javier Szwarcberg) .
  • Portfolio optionality via MDD: HMNC collaboration advances a precision psychiatry path with HMNC funding a Phase 2 PoC and Spruce holding a worldwide in‑license option for Cortibon if results are positive .

What Went Wrong

  • Revenue softness: Collaboration revenue declined to $1.6M vs $2.2M in Q2 2023 and $2.0M in Q1 2024, reflecting pacing of recognition from the Kaken upfront .
  • Program timing slippage: CAHmelia-204 and CAHptain-205 toplines moved to Q4 2024 vs Q1’s prior Q3 2024 expectation, elongating the data catalyst timeline .
  • Prior clinical miss still overhang: CAHmelia-203 in adult CAH with severe hyperandrogenemia did not meet its primary endpoint, necessitating program adjustments and realignment .

Financial Results

MetricQ2 2023Q1 2024Q2 2024
Collaboration Revenue ($USD Millions)$2.17 $2.00 $1.61
R&D Expenses ($USD Millions)$13.13 $10.32 $8.09
G&A Expenses ($USD Millions)$3.01 $4.32 $3.56
Total Operating Expenses ($USD Millions)$16.14 $14.64 $11.65
Net Loss ($USD Millions)$(12.82) $(11.62) $(9.18)
Net Loss per Share ($USD)$(0.32) $(0.28) $(0.22)

KPIs and Balance Sheet Highlights

MetricFY 2023 (12/31/2023)Q1 2024 (3/31/2024)Q2 2024 (6/30/2024)
Cash and Cash Equivalents ($USD Millions)$96.34 $81.15 $69.68
Deferred Revenue – Current ($USD Millions)$4.91 $2.91 $1.30
Accrued Expenses & Other Current Liabilities ($USD Millions)$14.60 $11.97 $10.68
Term Loan – Current Portion ($USD Millions)$1.62 $1.62 $1.62
Total Stockholders’ Equity ($USD Millions)$76.51 $66.62 $59.17

Notes

  • Stock‑based compensation within operating expenses: $1.7M in Q2 2024 vs $1.2M in Q2 2023 .
  • Cash runway reiterated through end of 2025 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayThrough end of 2025Through end of 2025 (FY23 and Q1 updates) Through end of 2025 (Q2 update) Maintained
CAHmelia-204 toplineAdult CAHQ3 2024 Q4 2024 Lowered/Delayed
CAHptain-205 toplineAdult/Pediatric CAHQ3 2024 interim Q4 2024 topline Lowered/Delayed
EOP2 FDA MeetingRegulatoryQ1 2025 1H 2025 Timing broadened
Financial Guidance (Revenue, Margins, OpEx)FY/QtrNot provided Not provided N/A
MDD (HMNC) PoC StartMDDNot previously guidedHMNC to initiate Phase 2 in Q4 2024 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2023 and Q1 2024)Current Period (Q2 2024)Trend
Adult CAH Clinical PathCAHmelia-203 did not meet primary endpoint; pivot to GC reduction in CAHmelia-204 CAHmelia-204 topline now Q4 2024; week 24 efficacy and safety plus open-label interim planned Pivot to registrational endpoint and later timeline
Pediatric CAH Dose-Ranging73% met A4 or GC reduction at 12 weeks; further dose-ranging planned CAHptain-205 adult/pediatric topline targeted Q4 2024; BID dosing at 200mg/400mg Continued advancement; higher BID dosing explored
R&D Execution & Cost ControlWorkforce reduction (~21%); runway through 2025 OpEx down materially; runway reiterated Sustained discipline
PCOS POWER StudyCompletion referenced in Q1 ENDO 2024 presentation showed DHEAS reduction and SHBG increase; well‑tolerated External validation; potential partnering
New Therapeutic Area (MDD)Not presentHMNC collaboration; Phase 2 PoC funded by HMNC; Spruce option to in-license Cortibon Strategic optionality added
Regulatory MilestonesEOP2 meeting plan Q1 2025 EOP2 target broadened to 1H 2025 Slight schedule shift
Macro/Supply Chain/TariffsNo notable commentaryNo notable commentaryStable

Management Commentary

  • “We remain committed to advancing the development of tildacerfont and opening a new chapter in the management of CAH…” (CEO Javier Szwarcberg) .
  • “We believe that tildacerfont has the potential to address severe hyperandrogenemia in CAH at higher doses taken BID. If results from CAHmelia-204 and CAHptain-205 are positive, we intend to meet with the U.S. Food and Drug Administration…” .
  • On MDD: “We believe that Cortibon has the potential to enable tildacerfont to be advanced as a precision therapeutic for personalized medicine in patients with MDD… We are excited to collaborate with HMNC and initiate a Phase 2 proof-of-concept study…” .

Q&A Highlights

  • No Q&A transcript is available for Q2 2024; therefore, no call‑based clarifications can be assessed for this quarter.

Estimates Context

  • Wall Street consensus estimates (S&P Global) for Q2 2024 EPS and revenue were unavailable due to SPGI daily request limits at time of query; as a result, we cannot evaluate beats/misses vs consensus for this quarter.
  • Where future comparisons are needed, we will anchor to S&P Global consensus and update post‑availability.

Key Takeaways for Investors

  • Operating efficiency is improving: material reductions in OpEx and net loss provide downside protection ahead of data catalysts .
  • Clinical inflection now Q4 2024: both CAHmelia-204 and CAHptain-205 toplines are synchronized in Q4; the consolidated window concentrates event risk and potential stock reaction catalysts .
  • Adult CAH strategy focuses on GC reduction (potential registrational endpoint), addressing adherence and dose considerations surfaced in CAHmelia-203 .
  • Precision psychiatry optionality via HMNC collaboration broadens TAM and could introduce a separate catalyst path (MDD Phase 2 PoC initiation in Q4 2024) .
  • Balance sheet supports runway through end of 2025, providing capacity to reach and digest multiple data readouts and conduct EOP2 regulatory interactions without near‑term financing pressure .
  • Near-term trading setup is catalyst‑driven: outcomes from CAHmelia-204 and CAHptain-205 are likely to dictate valuation; investors should monitor dose‑response, GC reduction magnitude, safety, and FDA alignment statements post‑readout .
  • Medium‑term thesis hinges on clinical validation translating into registrational trial design clarity and potential partnering (e.g., PCOS or MDD), with continued operating discipline to bridge to pivotal execution .

Sources: Q2 2024 8‑K and Exhibit 99.1 press release ; Q2 2024 press release (duplicate) ; Q1 2024 8‑K ; FY 2023 8‑K ; HMNC collaboration press release ; POWER study press release .