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SPRUCE BIOSCIENCES, INC. (SPRB)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 2024 showed disciplined cost execution with R&D down 51% YoY to $6.55M and total OpEx down 40% YoY to $10.01M, narrowing net loss to $8.67M from $12.35M a year ago .
  • Collaboration revenue fell to $0.60M (vs. $3.07M Q3’23) as the Kaken $15M upfront continues to be recognized over the performance period; cash and cash equivalents were $60.06M with runway through end of 2025 per management .
  • Binary clinical catalysts are imminent: topline data for CAHmelia-204 (adult CAH, GC-sparing endpoint) and CAHptain-205 (adult/pediatric dosing cohorts) expected in December 2024; EOP2 FDA meeting targeted 1H 2025 .
  • Competitive backdrop is active: Neurocrine’s CRF1 NDAs in adult/pediatric CAH have FDA priority reviews with December 2024 action dates, a sector read-through for CRF1 antagonism in CAH .

What Went Well and What Went Wrong

What Went Well

  • Material OpEx reduction: R&D down 51% YoY to $6.55M and total OpEx down 40% YoY to $10.01M, driven by termination of CAHmelia-203, completion of CAHmelia-204 enrollment and PCOS POWER study, partially offset by CAHptain-205 dose-ranging cohorts .
  • Cash discipline with $60.06M on hand and stated runway through end of 2025—beyond December readouts and EOP2 interaction timing .
  • Program momentum and clarity on near-term catalysts: “We remain on track to report primary efficacy and safety data…from CAHmelia-204…[and] topline…from CAHptain-205…in December 2024,” CEO Javier Szwarcberg, M.D., M.P.H. .

What Went Wrong

  • Revenue softness: collaboration revenue fell to $0.60M (vs. $3.07M Q3’23) as Kaken upfront recognition tapered; deferred revenue current balance now $0.70M .
  • Ongoing losses: net loss was $8.67M, albeit improved from $12.35M YoY; EPS $(0.21) vs. $(0.30) a year ago .
  • Scientific/regulatory risk remains central: adult CAH Phase 2b CAHmelia-203 failed its primary endpoint and was terminated; adult CAH CAHmelia-204 and pediatric/adult CAHptain-205 are now pivotal to path forward .

Financial Results

MetricQ3 2023Q1 2024Q2 2024Q3 2024
Collaboration Revenue ($USD Millions)$3.073 $2.002 $1.610 $0.602
Research & Development Expense ($USD Millions)$13.494 $10.317 $8.090 $6.554
General & Administrative Expense ($USD Millions)$3.237 $4.318 $3.556 $3.456
Total Operating Expenses ($USD Millions)$16.731 $14.635 $11.646 $10.010
Net Loss ($USD Millions)$(12.354) $(11.625) $(9.181) $(8.671)
Diluted EPS ($)$(0.30) $(0.28) $(0.22) $(0.21)
Cash & Cash Equivalents (Period-End, $USD Millions)N/A$81.154 $69.683 $60.055
  • YoY drivers: OpEx reductions stemmed from the CAHmelia-203 termination, completion of 204 enrollment and PCOS POWER study; offset by CAHptain-205 dose-ranging work .
  • Revenue accounting: collaboration revenue reflects partial recognition of the $15M Kaken upfront per cost-based input method; $0.7M deferred revenue remaining (current) at 9/30/24 .

No segment revenue breakdown is applicable (single program focus) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CAHmelia-204 topline (adult CAH, 200mg QD)4Q24“Anticipated in 4Q 2024” “Anticipated in December 2024” Refined timing (maintained window)
CAHptain-205 topline (adult/pediatric BID cohorts)4Q24“Anticipated in 4Q 2024” “Anticipated in December 2024” Refined timing (maintained window)
End-of-Phase 2 FDA meeting1H251H 2025 1H 2025 Maintained
Cash runwayThrough 2025Through end of 2025 Through end of 2025 Maintained

Earnings Call Themes & Trends

Note: A Q3 2024 earnings call transcript was not available in the filings/press-release corpus for SPRB this quarter.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2024)Trend
Adult CAH CAHmelia-203 outcomeQ1: CAHmelia-203 failed A4 endpoint; study terminated . Q2: cost reductions followed .Reiterated 203 termination as driver of lower R&D .Stable (de-risking spend)
Adult CAH CAHmelia-204 timing/scopeQ1: topline anticipated 3Q24 . Q2: anticipated 4Q24 .December 2024 topline; primary endpoint: GC dose change (HCe) .Clarity (refined timing)
Pediatric/adult CAH CAHptain-205 dosingQ1: more rapid clearance in children; added higher BID cohorts . Q2: topline 4Q24 .December 2024 topline for 200mg/400mg BID cohorts .Progressing
PCOS POWER dataQ2: final Phase 2 data presented at ENDO; androgen-lowering signals; well-tolerated .Program referenced as completed study; no new Q3 data .Stable
MDD (HMNC collaboration)Q2: collaboration announced; HMNC to fund P2 PoC .MD&A reiterates precision psychiatry rationale; option post-study .Stable
Cost discipline/runwayQ1/Q2: runway through end 2025; OpEx reductions from 203 termination .Runway through end 2025; OpEx down significantly YoY .Positive
Competitive landscapeQ2: active competitors (Neurocrine, Crinetics) .Neurocrine NDAs have FDA priority reviews, Dec 2024 action dates; BridgeBio program discontinued .Heightened competitive milestone timing

Management Commentary

  • “We remain on track to report primary efficacy and safety data plus interim data from the open-label extension of the CAHmelia-204 study…[and] topline…from the CAHptain-205 study…in December 2024.” — Javier Szwarcberg, M.D., M.P.H., CEO .
  • Financial framing: “Cash and cash equivalents as of September 30, 2024 were $60.1 million. Cash…are expected to allow the company to fund its current operating plan through the end of 2025.” .

Q&A Highlights

  • No Q3 2024 earnings call transcript was available in the filings/press-release corpus for SPRB this quarter.

Estimates Context

  • Wall Street consensus estimates from S&P Global could not be retrieved during this session (request limit exceeded); as a result, we cannot classify Q3 revenue/EPS as beat/miss versus consensus at this time. When accessible, S&P Global consensus should be used for estimate comparisons.

Key Takeaways for Investors

  • December 2024 is the pivotal month: dual topline readouts (adult CAH GC-sparing CAHmelia-204 and adult/pediatric dose-ranging CAHptain-205) will likely be the primary stock catalysts; results will shape regulatory path and funding strategy .
  • Expense base has been structurally right-sized; R&D down ~51% YoY and OpEx down ~40% YoY underpin a longer runway into/through key data events .
  • Revenue visibility remains tied to Kaken revenue recognition; with current deferred revenue at ~$0.7M, collaboration revenue will likely be modest absent new business development .
  • Competitive read-through is approaching (Neurocrine FDA decisions in December 2024). Positive outcomes for the class could validate mechanism; conversely, negative outcomes could weigh on sentiment for CRF1 antagonists .
  • Balance sheet: $60.06M cash is expected to fund operations through end-2025, but positive clinical data will be important to accessing non-dilutive/dilutive capital on acceptable terms ahead of registrational work .
  • Watch for EOP2 meeting in 1H 2025 to crystallize registrational design and endpoints in adult and pediatric CAH .

Supporting detail follows.

  • Program detail and timelines: Press release and MD&A reiterate December 2024 toplines and 1H 2025 EOP2 .
  • Financials and drivers: Q3 revenue $0.60M, R&D $6.55M, G&A $3.46M, net loss $8.67M; revenue recognition under Kaken agreement and OpEx drivers disclosed .
  • Liquidity: Cash $60.06M; runway guidance through end-2025 .