On February 28, 2024 Inhibrx, Inc. (Nasdaq: INBX) ("Inhibrx" or the "Company"), a biopharmaceutical company with three clinical programs in development and a strong emerging pipeline, reported financial results for the fourth quarter and fiscal year 2023 (Press release, Inhibrx, FEB 28, 2024, View Source [SID1234640621]).
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Key Highlights
Sale of INBRX-101 to Sanofi: In January 2024, the Company announced that it entered into a definitive agreement with Aventis, Inc. ("Aventis"), a subsidiary of Sanofi, whereby Sanofi will indirectly acquire, through Aventis, all of the assets and liabilities associated with INBRX-101 ("the Merger"). Immediately prior to the closing of the Merger, all non-101 assets and liabilities will be spun out into a new publicly traded company, Inhibrx Biosciences, Inc. ("New Inhibrx"). Sanofi will acquire all outstanding shares of the Company and, in turn, each shareholder will receive (i) $30.00 per share in cash, (ii) one contingent value right per share, representing the right to receive a contingent payment of $5.00 in cash upon the achievement of a regulatory milestone, and (iii) one SEC-registered, publicly-traded, share of New Inhibrx per every four shares of Inhibrx common stock held. In addition, in connection with the transaction, Sanofi will assume and retire the Company’s outstanding third-party debt and fund New Inhibrx with $200.0 million in cash. Sanofi will also retain an equity interest in New Inhibrx of 8%. The Company expects the transaction to close in the second quarter of 2024.
INBRX-105: The Company decided to terminate its INBRX-105 program after evaluation of the totality of data from the expansion cohorts, in which it determined the initial signal was not sufficiently validated to support the continuation of the program. The Company is in the process of winding down the clinical trial and expects it to be completed within the first half of 2024.
All Company Employees and Directors are Currently Subject to a Company-wide Blackout Restricting the Trading of Inhibrx Stock: The Company plans to file the proxy statement related to the sale of INBRX-101 in the next few days. Shortly after public filing of the Company’s proxy statement, and in accordance with the Company’s insider trading policy, the Company expects to lift the Company-wide blackout. As of today, employees and board members hold approximately 3.5 million vested and in-the-money options in Inhibrx common stock. The shares issuable upon exercise of these options are generally freely tradable. Any in-the-money options still outstanding at the Merger close will be converted into the Merger Consideration, as defined in the Merger Agreement, and will not convert into New Inhibrx shares.
Financial Results
Cash and Cash Equivalents. As of December 31, 2023, Inhibrx had cash and cash equivalents of $277.9 million, compared to $337.3 million as of September 30, 2023.
R&D Expense. Research and development expenses were $82.1 million during the fourth quarter of 2023 as compared to $30.5 million during the fourth quarter of 2022. Research and development expenses were $191.6 million during the fiscal year 2023 as compared to $110.2 million during the fiscal year 2022. The increase in research and development expenses during both periods was primarily due to the following factors:
an increase in contract manufacturing expenses due to the nature of the development and manufacturing activities performed during the current period at our CDMO and CRO partners supporting our clinical and preclinical therapeutic candidates, primarily due to large scale drug substance manufacturing services, including the utilization of raw materials during the fourth quarter of 2023, performed by one of our CDMO partners for INBRX-101, in addition to other activities performed with our CDMO partners which reflect the stage-specific needs of each of our programs, including early and late stage drug substance clinical manufacturing, drug product manufacturing, and selected BLA-enabling activities;
an increase in clinical trial expenses, primarily related to costs incurred following the initiation of the registration-enabling Phase 2 trial for INBRX-101 for the treatment of emphysema due to AATD, which was initiated during the current year, as well as the progression of the Company’s INBRX-109 registration-enabling Phase 2 trial for the treatment of unresectable or metastatic conventional chondrosarcoma. The Company also incurred increased costs associated with the utilization of Keytruda used in combination with INBRX-105 in our Phase 1/2 clinical trial; and
an increase in personnel-related costs, primarily related to an increase in headcount as a result of a significant expansion of the Company’s clinical team, as well as the issuance of additional stock options and the expansion of the bonus eligibility pool during the current year.
G&A Expense. General and administrative expenses were $7.8 million during the fourth quarter of 2023, compared to $5.3 million during the fourth quarter of 2022. General and administrative expenses were $29.4 million during the fiscal year 2023, compared to $21.1 million during the fiscal year 2022. This increase in general and administrative expenses during both periods was primarily due to the following factors:
an increase in personnel-related costs, primarily related to an increase in headcount as the Company continues to build its commercial strategy and medical affairs team, as well as increased expense related to additional stock option grants to employees and the expansion of the bonus eligibility pool in the current year;
an increase in pre-commercialization expenses, primarily related to increases in consulting services to support the Company’s commercial operations business intelligence strategies and market research expenses related to INBRX-101 and INBRX-109; and
an increase in professional service expenses related to accounting and legal services which support the Company in its general corporate and intellectual property matters, including services performed during the fourth quarter of 2023 as related to the Company’s proposed Merger.
Net Loss. Net loss was $93.6 million during the fourth quarter of 2023, or $1.73 per share, compared to $40.9 million during the fourth quarter of 2022, or $0.95 per share. Net loss was $241.4 million during the fiscal year 2023, or $5.12 per share, compared to $145.2 million during the fiscal year 2022, or $3.62 per share.