On February 26, 2025 Theratechnologies Inc. ("Theratechnologies" or the "Company") (TSX: TH) (NASDAQ: THTX), a specialty biopharmaceutical company focused on the commercialization of innovative therapies that have the potential to redefine standards of care, reported business highlights and financial results for the fourth quarter and full year of fiscal year 2024, ended November 30, 2024 (Press release, Theratechnologies, FEB 26, 2025, View Source [SID1234650642]). All figures are in U.S. dollars unless otherwise stated.

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Fourth-Quarter and Fiscal 2024 Revenue Highlights

(in 000s of US$)

Three-month
periods ended

November 30,

%
change Years ended
November 30, %
change

2024 2023 2024 2023

EGRIFTA SV net sales

17,674 16,958 4.2 % 60,147 53,705 12.0 %
Trogarzo net sales

7,328 6,494 12.8 % 25,719 28,059 (8.3 %)

Revenue

$ 25,002 $ 23,452 6.6 % $ 85,866 $ 81,764 5.0 %

*This is a non-IFRS measure. See "non-IFRS and non-U.S. GAAP measure" below.

"Fourth quarter of 2024 marked a standout finish to the year, generating $25 million in revenue and leading to annual revenue of $85.9 million," said Paul Lévesque, President and Chief Executive Officer. "Our bottom line was even stronger, delivering a positive Adjusted EBITDA for the quarter of $7.8 million, up 56% over fourth quarter of 2023 and a full year result surpassing $20 million in Adjusted EBITDA, as compared to negative $3 million in 2023. Our financial success was rewarded by $75 million in new credit facilities with TD Bank and Investissement Québec, highlighting confidence in our longer-term growth strategy, which is to strengthen and scale our commercial business underpinned by our HIV portfolio. We witnessed unprecedented demand for EGRIFTA SV this past year resulting in full-year sales of $60.1 million dollars, which represents 12% growth year-over-year. We will continue to manufacture additional batches of EGRIFTA SV until the anticipated transition to the F8 formulation.

Lévesque added, "The addition of olezarsen and donidalorsen in Canada are expected to drive long-term growth over and above our foundational HIV business. I am equally confident that our team’s demonstrated experience and expertise in commercializing treatments in the US and Canada will enable us to deliver on additional assets with new and existing partners. In parallel, we are actively searching for a partner for our oncology program to continue the important evaluation of our novel PDCs. With an FDA protocol amendment in hand to pursue the Phase 1 trial at higher doses and a comprehensive preclinical and clinical data set, we believe we can find the right partner to continue this important science."

Recent Company Highlights

Remediation to Temporary Supply Disruption for EGRIFTA SV

On January 9, 2025, the Company announced a temporary supply disruption for EGRIFTA SV caused by an unexpected voluntary shutdown of the Company’s contract manufacturer’s facility in 2024, following an inspection by the United States Food and Drug Administration ("FDA"). The manufacturer has resumed manufacturing of EGRIFTA SV in November 2024. In order to resume distribution of EGRIFTA SV, the Company was required to file a Prior Approval Supplement ("PAS") with the FDA describing the changes made by its manufacturer. The Company filed the PAS, which is subject to a four month review period, on December 18, 2024.

On February 13, 2025, the FDA, via its Drug Shortage Staff, indicated that it would allow the Company to sell and distribute newly manufactured batches of EGRIFTA SV while the review of the PAS is ongoing, thereby allowing the Company to sell two manufactured batches of EGRIFTA SV, representing up to six months of supply. Distribution of the product resumed on February 13, 2025.

In its communication of February 13, 2025, the FDA indicated that if the Company plans to submit a new or updated proposal to continue mitigating this shortage beyond these two batches, the Company should submit the shortage mitigation proposal to the Drug Shortage Staff so that the FDA can evaluate the proposal. The Company’s contract manufacturer has already manufactured one additional batch of EGRIFTA SV, and two additional batches are planned before the end of the third quarter of 2025.

Theratechnologies Receives March 2025 PDUFA Action Date for Updated Tesamorelin F8 Formulation sBLA

On December 10, 2024, the Company announced that the FDA has assigned a Prescription Drug User Fee Act (PDUFA) action date of March 25, 2025 to the Company’s supplemental Biologics License Application for the F8 formulation of tesamorelin ("F8 Formulation"), submitted on November 26, 2024. If approved by the FDA, the F8 Formulation is intended to replace the F4 formulation, which is sold in the U.S. under the trade name EGRIFTA SV. The F8 Formulation is patent protected in the U.S. until 2033.

Company Secures up to $75 Million in New Credit Facilities with TD Bank and Investissement Québec

On December 2, 2024, the Company announced that it had closed on a $40 million three-year non-dilutive, senior secured syndicated financing with TD Bank, as agent (TD Bank Financing). This new credit facility includes a $15 million revolving credit facility, and a term loan totaling $25 million. The credit facility also includes a $20 million accordion feature, which could expand total commitments up to $60 million. Investissement Québec (IQ), the Company’s largest shareholder, has also agreed to provide a $15 million second ranking secured subordinated term loan (IQ Subordinated Loan). Net proceeds from the new loans together with cash on hand were used to repay all obligations, including prepayment penalties, under the Company’s existing facility with affiliates of Marathon Asset Management, L.P. ("Marathon") pursuant to the credit agreement entered into with Marathon in July 2022 (the "Marathon Credit Agreement"), and to fund the $10 million upfront consideration associated to the Ionis product licenses.

Exclusive Licensing Agreement with Ionis to Commercialize Olezarsen and Donidalorsen in Canada

On December 4, 2024, the Company announced it entered into an agreement with Ionis Pharmaceuticals, Inc. ("Ionis") to in-license two investigational RNA-targeted medicines developed by Ionis. Under the agreement, Theratechnologies receives exclusive rights in Canada for olezarsen, which is being evaluated for familial chylomicronemia syndrome (FCS) and severe hypertriglyceridemia (sHTG), and for donidalorsen, which is being evaluated for the treatment of hereditary angioedema (HAE).

Sudocetaxel Zendusortide (TH1902) and SORT1+ Technology

On December 9, 2024, the Company announced preliminary efficacy and safety data from Part 3 (dose escalation, weekly dosing schedule) of its Phase 1b trial of sudocetaxel zendusortide (TH1902), the Company’s lead investigational peptide drug conjugate (PDC) in patients with advanced ovarian cancer. Based on results demonstrating favorable tolerability and signals of efficacy, the Medical Review Committee, which includes study investigators and external experts, has unanimously recommended continued evaluation and exploration of higher doses. On January 31, 2025, the Company received FDA approval to proceed with an amendment to its Phase 1 study protocol to increase the dose of sudocetaxel zendusortide on the same weekly infusion cycle to 3.33 followed by 3.90 mg/kg/wk.

The Company is currently reaching out to pharmaceuticals companies to out-license the rights to sudocetaxel zendusortide and to its SORT1+ TechnologyTM platform.

Summary of Financial Results

The financial results presented in this press release are taken from the Company’s Management’s Discussion and Analysis ("MD&A"), and audited consolidated financial statements ("Audited Financial Statements") for the twelve-month period ended November 30, 2024, or Fiscal 2024, which have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). The MD&A and the Audited Financial Statements can be found SEDAR+ at www.sedarplus.ca, on EDGAR at www.sec.gov and at www.theratech.com. Unless specified otherwise, all capitalized terms have the meaning ascribed thereto in our MD&A.

Fourth-Quarter Fiscal 2024 Financial Results

Revenue

Consolidated revenue for the three months ended November 30, 2024, amounted to $25,002,000 compared to $23,452,000 for the same period last year, representing an increase of 6.6%.

For the fourth quarter of Fiscal 2024, sales of EGRIFTA SV reached $17,674,000 compared to $16,958,000 in the fourth quarter of the prior year, representing an increase of 4.2%. Revenue growth for EGRIFTA SV is mostly related to increased unit sales (+4.2%) and a higher selling price (+5%), and was hampered by higher government chargeback and rebates (-1.5%).

In the fourth quarter of Fiscal 2024, Trogarzo sales amounted to $7,328,000 compared to $6,494,000 for the same quarter of Fiscal 2023, representing an increase of 12.8%. The increase was mainly due to higher unit sales (+11.2%) in the quarter as compared to last year, as well as a higher selling price (+3.4%) and was hampered by higher government chargeback and rebates (-1.8%).

Cost of Sales

In the fourth quarter of Fiscal 2024, cost of sales was $6,096,000 compared to $5,066,000 for the same period in Fiscal 2023.

Cost of Sales

Three months

ended November 30

2024 2023
($000s) % of
Revenue ($000s) % of
Revenue
EGRIFTA SV

2,289 13.0 % 1,713 10.1 %
Trogarzo

3,807 52.0 % 3,353 51.6 %
Total

6,096 24.4 % 5,066 21.6 %
For the three-month period ended November 30, 2024, EGRIFTA SV cost of sales was negatively affected by a $661,000 inventory provision ($50,000 in the comparable period of 2023) related to the manufacturing of a batch of F8 Formulation, as the F8 Formulation has not yet been approved by the FDA for commercialization. No such provision was taken in the three-month period ended November 30, 2023. Trogarzo cost of sales is contractually established at 52% of net sales, subject to periodic adjustment for returns or other factors.

R&D Expenses

R&D expenses in the fourth quarter of Fiscal 2024 amounted to $5,884,000 compared to $5,229,000 in the comparable period of Fiscal 2023. R&D expenses were higher because of the impairment loss on intangible assets related to our oncology program ($3,488,000). This increase was offset by the reduction in other R&D expenses in the three-month period ended November 30, 2024, and were further reduced by the recognition of Canadian federal non-refundable tax credits ($838,000).

R&D expenses in the fourth quarter of Fiscal 2024 were negatively impacted by an impairment loss of the intangible asset of $3,488,000 related to the acquisition of our oncology program. We recorded no such impairment in the three-month period ended November 30, 2023.

Selling Expenses

Selling expenses in the three-month period ended November 30, 2024, amounted to $7,044,000 compared to $6,748,000 in the comparable period of Fiscal 2023, an increase of 4.4%.

The increase in selling expenses is largely associated with the overall growth of the commercial operations, in-line with the strategic goal of ensuring continued top-line revenue growth.

The amortization of the intangible asset value for the EGRIFTA SV and Trogarzo commercialization rights is also included in selling expenses. As such, we recorded amortization expense of $360,000 for the three-month period ended November 30, 2024 unchanged as compared to the same period of Fiscal 2023.

General and Administrative Expenses

General and administrative expenses in the fourth quarter of Fiscal 2024 amounted to $5,059,000, compared to $3,739,000 reported in the same period of Fiscal 2023. The increase in General and administrative expenses is mainly due to higher stock based compensation expense.

Adjusted EBITDA

Adjusted EBITDA was $7,756,000 for the fourth quarter of Fiscal 2024, compared to $4,958,000 for the same period of Fiscal 2023. See "Non-IFRS and Non-US-GAAP Measure" below and see "Reconciliation of Adjusted EBITDA" below for a reconciliation to Net Loss for the relevant periods.

Net Finance Costs

Net finance costs for the three-month period ended November 30, 2024, were $7,801,000 compared to $5,352,000 in the same period of last year. The increase in net finance costs is due to the higher interest expense on the Marathon Loan Facility, as well as the higher loss on long-term debt modifications and repayment related to the repayment of the Marathon Loan Facility.

Income Tax Expense

Income tax expense amounted to $1,021,000, versus $73,000 in the same period last year. The increase in the fourth quarter of 2024 over the same period of 2023 is attributable to the higher net fiscal income generated by our operations. The Company recorded Canadian federal non-refundable tax credits in the three-month period ended November 30, 2024 ($838,000) against research and development expenses, which largely offsets the Canadian federal income tax payable. Refer to Note 20 of the Audited Financial Statements.

Net Loss

Taking into account the revenue and expense variations described above, the Company recorded a net loss of $7,903,000, or $0.16 per share, in the fourth quarter of Fiscal 2024 compared to a net loss of $2,755,000, or $0.08 per share, in the fourth quarter of Fiscal 2023.

Fiscal Year 2024 Financial Results compared to Fiscal Year 2023 Financial Results

Revenue

Consolidated revenue for Fiscal 2024 was $85,866,000 compared to $81,764,000 for the same period last year, representing an increase of 5.0%.

For Fiscal 2024, sales of EGRIFTA SV reached $60,147,000 compared to $53,705,000 for the same period last year representing growth of 12%. The increase in net sales of EGRIFTA SV was mostly the result of a higher number of units sold compared to the previous year (+9.0%), as well as a higher selling price (+5.6%) and were hampered by higher government chargebacks and rebates (-2.6%). Overall growth of EGRIFTA SV unit sales was hampered in Q1 2024 by draw downs in inventory at specialty pharmacies, a situation which has now been normalized.

In Fiscal 2024, Trogarzo net sales were $25,719,000 compared to $28,059,000 in the prior year, a decrease of 8.3%. Lower sales of Trogarzo were mostly the result of lower unit sales due to competitive pressures in the multidrug-resistant segment of the HIV-1 market, where Trogarzo remains an important part of the treatment arsenal but has lost market share to market leaders in the segment. We foresee less of an impact from new entrants in the future. The decrease is explained by a lower number of units sold compared to the previous year (-11.4%) and was mitigated by a higher selling price (+3.7%). The remaining difference is explained by lower sales in Europe, which were minimal since we decided to cease selling efforts in Europe in 2022.

Cost of Sales

For Fiscal 2024, cost of sales was $20,448,000 compared to $19,635,000 in Fiscal 2023.

Cost of Sales

Fiscal Year

ended November 30

2024 2023
($000s) % of
Revenue ($000s) % of
Revenue
EGRIFTA SV

7,190 12.0 % 4,998 9.3 %
Trogarzo

13,258 51.5 % 14,637 52.2 %
Total

20,448 23.8 19,635 24.0 %
For Fiscal 2024, EGRIFTA SV cost of sales was negatively affected by a $1,749,000 inventory provision ($220,000 in Fiscal 2023) related to the manufacturing of a batch of F8 Formulation, as the F8 Formulation has not yet been approved by the FDA for commercialization. Trogarzo cost of sales is contractually established at 52% of net sales, subject to periodic adjustment for returns or other factors.

R&D Expenses

R&D expenses were $16,973,000 for Fiscal 2024 compared to $30,370,000 for Fiscal 2023, a decrease of 44.1%, mostly due to lower spending on our various programs. R&D expenses in Fiscal 2024 were also reduced by the recognition of Canadian federal non-refundable tax credits ($1,488,000).

R&D expenses in the fourth quarter of Fiscal 2024 were negatively impacted by an impairment loss of the intangible asset of $3,488,000 related to the acquisition of our oncology program. The Company recorded no such provision in the three-month period ended November 30, 2024.

R&D expenses in Fiscal 2023 were negatively impacted by a provision of $3,042,000 related to sudocetaxel zendusortide material which could expire before Theratechnologies is able to use it in our clinical program. We recorded no such provision in Fiscal 2024.

Selling Expenses

Selling expenses for Fiscal 2024 were $25,419,000 compared to $26,769,000 for Fiscal 2023. The decrease in selling expenses in Fiscal 2024 is due in large part to tighter expense control in commercialization activities. Spending in the third quarter and fourth quarters of Fiscal 2024 has stabilized following the completion of cost-cutting measures implemented in Fiscal 2023.

The amortization of the intangible asset value for the EGRIFTA SV and Trogarzo commercialization rights is also included in selling expenses. As such, the Company recorded amortization expense of $1,440,000 for Fiscal 2024 compared to $2,513,000 in Fiscal 2023.

General and Administrative Expenses

General and administrative expenses for Fiscal 2024 were $14,852,000 compared to $15,617,000 for Fiscal 2023. The decrease in general and administrative expenses is largely due to the implementation of cost-cutting measures announced in Fiscal 2023. General and administrative spending should stabilize in the future as the cost-cutting measures implemented by the Company have been completed.

Net Finance Costs

Net finance costs for Fiscal 2024 were $14,475,000 compared to $12,909,000 in Fiscal 2023. The increase in net finance costs in Fiscal 2024 versus Fiscal 2023 was mostly due to the higher interest expense on the Company’s long-term debt ($687,000), as well as higher loss on long-term debt modifications and repayment related to the amendments to and repayment of the Marathon Credit Agreement ($2,358,000). These higher costs were offset by lower accretion and amortization of deferred financing costs ($1,599,000).

Adjusted EBITDA

Adjusted EBITDA was $20,207,000 for Fiscal 2024 compared to $(2,914,000) for Fiscal 2023. See "Non-IFRS and Non-US-GAAP Measure" below and see "Reconciliation of Adjusted EBITDA" below for a reconciliation to Net Loss for the relevant periods.

Income Tax Expense

Income tax expense for Fiscal 2024 amounted to $2,005,000, versus $421,000 in the same period last year. The increase in Fiscal 2024 is attributable to the higher net fiscal income generated by our operations. The Company recorded Canadian federal non-refundable tax credits ($1,488,000) against research and development expenses, which largely offsets the Canadian federal income tax payable. Refer to Note 20 of the Audited Financial Statements.

Net Loss

Taking into account the revenue and expense variations described above, we recorded a net loss of $8,306,000, or $0.17 per share, in Fiscal 2024 compared to $23,957,000, or $0.91 per share, in Fiscal 2023.

Financial Position, Liquidity and Capital Resources

Going Concern Uncertainty

As part of the preparation of the Financial Statements, management is responsible for identifying events or conditions that indicate a material uncertainty exists that casts substantial doubt on the Company’s ability to continue as a going concern. Substantial doubt regarding the Company’s ability to continue as a going concern exists if events or conditions, considered collectively, indicate that the Company may be unable to honor its obligations as they fall due during a period of at least, but not limited to, 12 months from November 30, 2024. If the Company concludes that events or conditions indicate material uncertainty exists on its ability to continue as a going concern, it must assess whether management’s plans developed to mitigate these events or conditions address the material uncertainty.

For the year ended November 30, 2024, the Company incurred a net loss of $8,306,000 (2023-$23,957,000; 2022-$47,237,000) and had positive cash flows from operating activities of $2,379,000 (2023- negative $5,678,000; 2022 negative $14,692,000). As at November 30, 2024, cash amounted to $5,899,000 and bonds and money market funds amounted to $3,937,000 and the accumulated deficit is $416,887,000. The Company’s ability to continue as a going concern requires the Company to continue to achieve positive cash flows through revenues generation and managing expenses, and meet the covenants of the TD Credit Agreement and the IQ Credit Agreement at all times, which require testing on a quarterly basis.

On January 9, 2025, the Company announced a temporary supply disruption for EGRIFTA SV caused by an unexpected voluntary shutdown of the Company’s contract manufacturer’s facility in the third quarter of 2024 following an inspection by the FDA. The manufacturer resumed manufacturing of EGRIFTA SV, in November 2024. In order to resume distribution of EGRIFTA SV, the Company was required to file a PAS with the FDA describing the changes made by its manufacturer. The Company filed the PAS on December 18, 2024. A PAS is usually reviewed by the FDA within four months of receipt.

On February 13, 2025, the FDA, via its Drug Shortage Staff, indicated that it would allow the Company to sell and distribute newly manufactured batches of EGRIFTA SV even though the product was manufactured without an approved PAS, thereby allowing the Company to sell two manufactured batches of EGRIFTA SV, representing up to six months of supply. Distribution of the product resumed on February 13, 2025.

In its communication of February 13, 2025, the FDA indicated that if the Company plans to submit a new or updated proposal to continue mitigating this shortage beyond these two batches, the Company should submit the shortage mitigation proposal to the Drug Shortage Staff so that the FDA can evaluate the proposal. The Company’s contract manufacturer has already manufactured one additional batch of EGRIFTA SV, and two additional batches are planned before the end of the third quarter of 2025.

The Company’s ability to continue generating revenues through the sale of EGRIFTA SV and to be able to meet the Adjusted EBITDA covenants at all times, to be tested on a quarterly basis, contained in the TD Credit Agreement and the IQ Credit Agreement for a period of at least, but not limited to, 12 months from November 30, 2024, involves significant judgement and is dependent on the full resumption of the distribution of EGRIFTA SV, which is dependant on FDA approval.

Should management’s plans not materialize, the Company may be in default under the TD Credit Agreement and the IQ Credit Agreement, be forced to reduce or delay expenditures and capital additions or sell or liquidate its assets. Portions of management’s plans are outside of their control such as the timing of full resumption of product distribution which requires FDA approval. Therefore, there are scenarios wherein events or conditions combine to create material uncertainty and cast substantial doubt about the Company’s ability to continue as a going concern.

The Audited Financial Statements have been prepared assuming the Company will continue as a going concern, which assumes the Company will continue its operations in the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Audited Financial Statements do not include any adjustments to the carrying values and classification of assets and liabilities and reported expenses that might result from the outcome of this uncertainty and that may be necessary if the going concern basis was not appropriate for the Audited Financial Statements. If the Company was unable to continue as a going concern, material impairment of the carrying values of the Company’s assets, including intangible assets, could be required.

Analysis of cash flows

As at November 30, 2024, cash, cash equivalent in escrow, bonds and money market funds amounted to $19,836,000 compared to $40,387,000 at November 30, 2023. Available cash is invested in highly liquid fixed income instruments including governmental, municipal and paragovernmental organizations, high-grade corporate bonds and money market funds. On November 30, 2024, $10,000,000 was held in escrow pending completion of the Ionis Transaction and is therefore presented as cash equivalent in escrow. See "Subsequent Event".

The Company voluntarily changed its accounting policy in Fiscal 2023 to classify interest paid and received as part of its operating activities, which were previously classified as cash flow from financing activities and interest received as cash flows from investing activities.

During Fiscal 2024, cash flows provided by operating activities were $2,379,000, compared to negative $5,678,000 in Fiscal 2023.

In Fiscal 2024, changes in operating assets and liabilities had a negative impact on cash flow from operations of $5,017,000 (2023-positive impact of $8,133,000). These changes included negative impacts from higher trade and other receivables ($2,195,000), lower provisions ($1,760,000), lower accounts payable and accrued liabilities ($1,830,000), and higher prepaid expenses and deposits ($298,000) while lower tax credits and grants receivable ($281,000) and lower inventories ($785,000) had a positive impact on cash flows from operating activities.

During Fiscal 2024, the Company received net proceeds of $44,576,000 from the issuance of long-term debt and used $64,908,000 (including prepayment penalties and fees) to fully reimburse the Marathon Credit Facility.

During Fiscal 2024, investing activities included the payment of the second tranche of the milestone to TaiMed Biologics related to the approval of the IV push method of administration of Trogarzo ($1,500,000), and was offset by net proceeds from the sale of bonds and money market funds ($2,383,000).

Outstanding Securities Data

As at February 25, 2025, the number of issued and outstanding Common Shares amounted to 45,980,019. The following securities were also issued and outstanding: 5,000,000 Marathon Warrants exercisable into 1,250,000 Common Shares, 5,688,186 share options and 3,381,816 Exchangeable Subscription Receipts.

Subsequent Events

Licensing agreement

On December 3, 2024, the Company has entered into an agreement with Ionis Ionis to license two investigational RNA-targeted medicines developed by Ionis. Under the agreement, the Company receives exclusive rights in Canada to commercialize olezarsen, which is being evaluated for familial chylomicronemia syndrome (FCS) and severe hypertriglyceridemia (sHTG), and donidalorsen, which is being evaluated for the treatment of hereditary angioedema (HAE).

The Company paid $10,000,000 on December 5, 2024, upon execution of the agreement, which cash equivalent was held in escrow at November 30, 2024 from IQ. The Company also agreed to cash milestone payments based on the achievement of receipt of regulatory approval milestone and receipt of public reimbursement approval milestone (up to $5,750,000), annual sales targets at three different tiers (up to $7,000,000) for donidalorsen only. In addition, Ionis will also be entitled to receive tiered double-digit royalties on annual net sales of each medicine. Royalties on annual net sales of both medicines will be owed for a period of up to 12 years.

The Company will be responsible for filing, obtaining and maintaining regulatory approval for olezarsen and donidalorsen in Canada. Ionis will be manufacturing and supplying both products to Theratechnologies and has granted the Company a right to manufacture both products in certain limited circumstances.

The term of the licensing agreement with Ionis will continue until the Company permanently ceases commercializing all licensed products in Canada, or unless earlier terminated in accordance with customary termination provisions for transactions of this like-nature.

Tariffs

On February 1, 2025, the President of the United States signed an executive order which provided that, effective February 4, 2025, most goods imported into the United States would be subject to a 25% tariff. The application of the order was subsequently suspended; however there are discussions about the re-introduction of those tariffs on goods exported from Canada to the United States.

EGRIFTA SV is exported to the United States. It is too early to determine whether these tariffs will apply to pharmaceutical products and how they would directly impact the Company. The Company expects that such tariffs, if effective, will likely have an adverse effect on its financial results.

11

Reconciliation of Adjusted EBITDA

(In thousands of U.S. dollars)

Three-month periods
ended November 30
Years ended

November 30

2024    2023    2024    2023    2022   

Net loss

(7,903) (2,755) (8,306) (23,957) (47,237)

Add :

Depreciation and

amortization1

493 576 2,761 3,315 12,471

Net Finance costs2

7,801 5,352 14,475 12,909 6,886

Income taxes

1,021 73 2,005 421 443

Share-based

compensation

2,195 418 3,549 2,215 3,872

Inventory provision3

661 50 1,749 220 1,477

Restructuring costs4

-  1,244 486 1,963 - 

Impairment loss on

intangible assets

3,488 -  3,488 -  - 

Adjusted EBITDA

7,756 4,958 20,207 (2,914) (22,088)

             

1 Includes depreciation of property and equipment, amortization of intangible, other assets and right-of-use assets.

2 Includes all finance income and finance costs consisting of: Foreign exchange, interest income, accretion expense and amortization of deferred financing costs, interest expense, write-offs, gain or loss on financial instruments carried at fair value and loss on debt modification and repayment and gain on lease termination.

3 Inventory provision pending marketing approval of the F8 Formulation.

4 Restructuring costs include severance and other expenses associated with termination of employment related to the reorganization announced in July 2023 and completed in October 2023, as well as the decision to cease early stage R&D activities in 2024.

12

Conference Call Details

The conference call will be held at 8:30 a.m. (ET) on February 26, 2025, to discuss the results and recent business updates.

The call will be hosted by Paul Lévesque, President and Chief Executive Officer, who will be joined by other members of the management team, including Philippe Dubuc, Senior Vice President and Chief Financial Officer, Christian Marsolais, Ph.D., Senior Vice President and Chief Medical Officer and John Leasure, Global Commercial Officer. They will be available to answer questions from participants following prepared remarks.

Participants are encouraged to join the call at least ten minutes in advance to secure access. Conference call dial-in and replay information can be found below.

CONFERENCE CALL INFORMATION

Conference Call Date

February 26, 2025

Conference Call Time

8:30 a.m. ET

Webcast link

View Source

Dial in

1-877-513-4119 (toll free) or 1-412-902-6615 (international)

Access Code

4430181
CONFERENCE CALL REPLAY

Toll Free

1-877-344-7529 (US) / 1-855-669-9658 (Canada)

International Toll

1-412-317-0088
Replay Access Code

3856571
Replay End Date

March 5, 2025

To access the replay using an international dial-in number, please select this link:

View Source

An archived webcast will also be available on the Company’s Investor Relations website under ‘Past Events’.

On February 26, 2025 Sonnet BioTherapeutics Holdings, Inc. (the "Company" or "Sonnet") (NASDAQ: SONN), a clinical-stage company developing targeted immunotherapeutic drugs, reported the presentation of a compilation of data at the 2025 American Association for Cancer Research (AACR) (Free AACR Whitepaper) IO Conference (Press release, Sonnet BioTherapeutics, FEB 26, 2025, View Source [SID1234650641]).

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As part of the conference, Dr. Sant Chawla, Principal Investigator at the Sarcoma Oncology Center in Santa Monica, California, presented a poster entitled, "Combination immunotherapy with an albumin-binding interleukin-12 fusion protein that extends cytokine half-life, targets the tumor microenvironment, and enhances therapeutic efficacy." This is the first time the overall strategy of Sonnet’s Fully Human Albumin Binding (FHAB) platform has been compiled with existing data and presented in a poster. The presented poster is now available on the Publications page of the Company’s website.

SON-1010 is the Company’s proprietary version of recombinant human interleukin-12 (rhIL-12), configured using genetic fusion to the FHAB platform, which extends the half-life and bioactivity of the IL-12 component due to binding native albumin in the serum. Albumin binding to FcRn, GP60, and SPARC results in an improved PK profile, decreased toxicity risk, and a broader therapeutic index preclinically, with significant targeting of the tumor microenvironment and increases in activated NK, NKT, Th1, and cytotoxic CD8 T cells, as well as marked repolarization of pro-tumor M2 MDSCs to inflammatory M1 APCs.

"Recombinant interleukins have generally had limited clinical success due to inefficient tumor targeting, short half-lives, and off-target toxicity. As previously disclosed, our novel FHAB platform has demonstrated the potential for us to design product candidates that safely extend the half-life of cytokines and deliver them to the tumor, where they can convert the immunological response from ‘cold’ to ‘hot’ and potentially realize the promise of immunotherapy. We are pleased to share the compilation of data in this poster presentation and look forward to announcing additional data from our ongoing studies evaluating our SON-1010 platform in 2025," commented Pankaj Mohan, Ph.D., Founder and Chief Executive Officer of Sonnet.

Key Highlights:

● A platform strategy was developed that links cytokines to the FHAB as mono- or bifunctional fusions to bind native albumin at both physiologic and acidic pH, taking advantage of albumin’s long serum half-life and concentration in tumors, allowing delivery to and accumulation of the drug in the TME. IL-12 is a potent cytokine that stimulates the innate and adaptive immune responses, functioning in combination with other cytokines, like IL-15 and IL-18. Several approaches are currently being studied in humans, such as:

○ SON-1010 monotherapy at the highest dose is continuing in patients with advanced solid tumors. In December 2024, the Company disclosed clinical benefit in 48% of patients, including a partial response at the highest dose in a patient with clear cell sarcoma. The poster reflects the current status of this trial.

○ Co-administration with a checkpoint inhibitor (atezolizumab) to activate local immune cells and upregulate PD-L1 in the TME. Safety has been monitored at each dose escalation step and the most common adverse events at each dose level have been updated for the results currently available.

○ SON-1010 is being administered alternating with an immunoreactive chemotherapy drug (trabectedin) to enhance its ability to activate a pro-inflammatory phenotype in the TME.

○ Alternating administration with a potent chemotherapeutic regimen (NALIRIFOX) will be done in front-line patients with pancreatic ductal adenocarcinoma (PDAC) to enhance their response.

● Each setting has the potential to augment the effects of the licensed therapy in populations that continue to have high unmet needs for an improved outcome. Immunotherapy allows greater flexibility in selecting potentially synergistic combinations for rational implementation.

● SON-1010 and SON-1210 address paramount safety and tolerability factors, which have traditionally hindered the use of therapeutic cytokines in the treatment of solid tumors, by extending the cytokine half-life and improving the therapeutic index that may result in better patient outcomes.

SON-1010 is being evaluated in a Phase 1b/2a dose-escalation and proof-of-concept study (SB221) in combination with SON-1010 and atezolizumab (Tecentriq) (in collaboration with Genentech, a member of the Roche Group), which is focused on platinum-resistant ovarian cancer (PROC) (NCT05756907). The extended PK of SON-1010, along with its ability to induce IFNγ in the TME causing upregulation of PD-L1, creates an opportunity for synergistic activity. Enrollment remains ongoing and an update on safety at the MTD in that trial is expected in Q1 calendar year 2025. Another trial evaluating dose escalation of SON-1210 (IL12-FHAB-IL15), followed by its combination with NALIRIFOX in patients with metastatic pancreatic cancer, is expected to begin later this calendar year.

About SON-1010

SON-1010 is a candidate immunotherapeutic recombinant drug that links unmodified single-chain human IL-12 with the albumin-binding domain of the single-chain antibody fragment A10m3. This single-chain antibody fragment was selected to bind albumin both at normal pH, as well as at the acidic pH typically found in the TME. The FHAB technology targets tumor and lymphatic tissue, providing a mechanism for dose sparing and an opportunity to improve the safety and efficacy profile of not only IL-12, but a variety of potent immunomodulators that can be linked using the platform. Interleukin-12 can orchestrate a robust immune response to many cancers and pathogens. Given the types of proteins induced in the TME, such as the Secreted Protein and Rich in Cysteine (SPARC) and glycoprotein 60 (GP60), several types of cancer, such as non-small cell lung cancer, melanoma, head and neck cancer, sarcoma, and some gynecological cancers are particularly relevant to this approach. SON-1010 is designed to deliver IL-12 to local tumor tissue, turning ‘cold’ tumors ‘hot’ by stimulating IFNγ, which activates innate and adaptive immune cell responses and increases the production of Programed Death Ligand 1 (PD-L1) on tumor cells.

On February 26, 2025 Schrödinger, Inc. (Nasdaq: SDGR) reported financial results for the fourth quarter and full-year ended December 31, 2024, and provided its financial outlook for 2025 (Press release, Schrodinger, FEB 26, 2025, View Source [SID1234650640]).

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"We are delighted with Schrödinger’s excellent financial performance in 2024. Software revenue growth exceeded our expectations, showing the resilience of our business through changing industry cycles and the impact of large contract renewals. Our drug discovery collaboration portfolio is expanding, driven by our new agreement with Novartis and expanded collaborations with Otsuka and Lilly, and we expect to report initial clinical data from our three lead proprietary programs this year," said Ramy Farid, Ph.D., chief executive officer of Schrödinger. "We continue to see increasing momentum and conviction around our validated computational methods and are committed to remaining scientific leaders in this area. With our platform, our collaborations, our programs, and our strong financial position, we believe we are well positioned to deliver across all facets of our business in 2025 and beyond."

Today Schrödinger also announced that it has expanded its research collaboration with Eli Lilly and Company. This expansion builds on the companies’ previously announced collaboration, with the addition of an undisclosed target. The terms of the expanded collaboration are consistent with the previously announced agreement.

Fourth Quarter 2024 Financial Results
•Total revenue for the fourth quarter increased 19.1% to $88.3 million, compared to $74.1 million in the fourth quarter of 2023.
•Software revenue for the fourth quarter increased 16.0% to $79.7 million, compared to $68.7 million in the fourth quarter of 2023. The increase was primarily due to increased hosted revenue from large customers with additional contribution from new multi-year customer agreements.
•Drug discovery revenue was $8.7 million for the fourth quarter, compared to $5.5 million in the fourth quarter of 2023. The increase was primarily due to the recognition of milestones during the quarter.
•Software gross margin decreased to 83% for the fourth quarter, compared to 87% in the fourth quarter of 2023, primarily reflecting higher cost of revenue associated with the predictive toxicology initiative.
•Operating expenses were $84.8 million for the fourth quarter, compared to $87.2 million for the fourth quarter of 2023.
•Other expense, which includes changes in fair value of equity investments and interest income/expense, was $18.5 million for the fourth quarter, compared to $1.9 million for the fourth quarter of 2023.
•Net loss for the fourth quarter was $40.2 million, compared to $30.7 million in the fourth quarter of 2023.

Three Months Ended
December 31,
2024 2023 % Change
(in millions)
Total revenue $ 88.3 $ 74.1 19%
Software revenue 79.7 68.7 16%
Drug discovery revenue 8.7 5.5 58%
Software gross margin 83 % 87 %
Operating expenses $ 84.8 $ 87.2 (2.7)%
Other expense $ (18.5) $ (1.9) —
Net loss $ (40.2) $ (30.7) —

Full Year 2024 Financial Results
•Total revenue for the full year decreased 4.2% to $207.5 million, compared to $216.7 million for 2023.
•Software revenue for the full year increased 13.3% to $180.4 million, compared to $159.1 million for 2023. Revenue growth was primarily driven by increases in hosted contracts and contribution revenue.
•Drug discovery revenue for the full year was $27.2 million compared to $57.5 million for 2023. The first quarter of 2023 included the recognition of a $25 million milestone from BMS.
•Software gross margin was 80% for the full year, compared to 81% for 2023.
•Operating expenses were $341.4 million for the full year, compared to $318.1 million for 2023, primarily due to higher research and development expenses.
•Other income, which includes gains/loss on equity investments, changes in fair value of such investments and interest income/expense, was $23.6 million for the full year, compared to $220.4 million for 2023.
•Net loss for the full year was $187.1 million, compared to income of $40.7 million for 2023.
•At December 31, 2024, Schrödinger had cash, cash equivalents, restricted cash and marketable securities of approximately $367.5 million, compared to approximately $398.4 million at September 30, 2024 and approximately $468.8 million at December 31, 2023. In January 2025, Schrodinger received the $150 million upfront payment from Novartis for the recently announced drug discovery collaboration.

Twelve Months Ended
December 31,
2024 2023 % Change
(in millions)
Total revenue $ 207.5 $ 216.7 (4.2)%
Software revenue 180.4 159.1 13%
Drug discovery revenue 27.2 57.5 (53)%
Software gross margin 80 % 81 %
Operating expenses $ 341.4 $ 318.1 7.3%
Other income $ 23.6 $ 220.4 —
Net (loss) income $ (187.1) $ 40.7 —

For the three months and year ended December 31, 2024, Schrödinger reported net losses of $40.2 million and $187.1 million, respectively, compared to a net loss of $30.7 million and net income of $40.7 million for the three months and year ended December 31, 2023, respectively.
For the three months and year ended December 31, 2024, Schrödinger reported non-GAAP net losses of $17.2 million and $191.4 million, respectively, compared to non-GAAP net losses of $23.0 million and $157.8 million

for the three months and year ended December 31, 2023, respectively. See "Non-GAAP Information" below and the table at the end of this press release for a reconciliation of non-GAAP net income (loss) to GAAP net income (loss).

Full Year 2024 Key Performance Indicators (KPIs)
Schrödinger today reported 2024 key performance indicators for both the software and drug discovery components of its business.

Software. Total annual contract value (ACV) increased 23.7% to $190.8 million, and the ACV of Top 10 customers increased 43% to $73.1 million. The number of customers with an ACV of at least $5 million increased from four to eight, and the number of customers with an ACV of at least $1 million increased from 27 to 31. Schrödinger’s customer retention rate among customers with an ACV of at least $500,000 was 100% and the number of such customers increased from 54 to 61.

Drug discovery. Schrödinger ended 2024 with 13 ongoing programs eligible for royalties, compared to 12 the previous year. For the year ended December 31, 2024, the number of collaborators since 2018 increased to 19.

Software KPI 2024 2023
Total annual contract value (ACV) $190.8 million $154.2 million
ACV of Top 10 customers $73.1 million $51.0 million
Number of customers with at least $5M in ACV 8 4
Number of customers with at least $1M in ACV 31 27
Number of customers with at least $500,000 in ACV 61 54
Number of customers with at least $100,000 in ACV 235 222
Customer retention rate with at least $500,000 in ACV 100% 98%
Customer retention with at least $100,000 in ACV 95% 92%
Number of active customers with ACV of at least $1,000 1,752 1,785

Drug Discovery KPI 2024 2023
Ongoing programs eligible for royalties 13 12
Number of collaborators since 2018 19 17

For additional information about the company’s KPIs, see "Operating Metrics" below.

2025 Financial Outlook
As of February 26, 2025, Schrödinger provided the following expectations for the fiscal year ending December 31, 2025:
•Software revenue growth is expected to range from 10% to 15%.
•Drug discovery revenue is expected to range from $45 million to $50 million.
•Software gross margin is expected to range from 74% to 75%.
•Operating expense growth in 2025 is expected to be less than 5%.
•Cash used for operating activities in 2025 is expected to be significantly lower than cash used for operating activities in 2024.

For the first quarter of 2025, software revenue is expected to range from $44 million to $48 million.

Key Highlights
Collaborative Pipeline & Co-Founded Companies
•Earlier today, the company announced an expanded research collaboration with Lilly. The expansion adds an undisclosed target to the companies’ previously announced collaboration under terms consistent with the existing agreement.

•In January, Schrödinger announced that its research collaboration with Novartis received antitrust regulatory clearance, and Schrödinger received the upfront payment of $150 million from Novartis in January 2025.

•Also in January, the company announced an expanded research collaboration agreement with Otsuka Pharmaceutical Co., Ltd. The expansion adds another undisclosed target to the collaboration under terms consistent with the existing agreement.
•In December, Ajax Therapeutics, a company co-founded by Schrödinger, presented an overview poster of its ongoing Phase 1 trial evaluating AJ1-11095 for the treatment of myelofibrosis at the 66th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition.

•Also in December, Structure Therapeutics, a company co-founded by Schrödinger, announced the selection of ACCG-2671, as its lead oral small molecule amylin receptor agonist for the treatment of obesity. Schrödinger collaborated with Structure on the discovery of ACCG-2671 and is entitled to milestones and low single-digit royalties on sales.

Proprietary Pipeline
•In January, the U.S. Food and Drug administration granted SGR-2921, the company’s CDC7 inhibitor, Orphan Drug Designation for the treatment of acute myeloid leukemia (AML). Schrödinger expects to present initial clinical data from the ongoing Phase 1 study of SGR-2921 in patients with AML and myelodysplastic syndrome (MDS) in the second half of 2025.

•Schrödinger continues to progress the Phase 1 clinical study of SGR-1505, the company’s MALT1 inhibitor, in patients with relapsed/refractory B-cell malignancies and expects to report initial clinical data from the trial in the second quarter of 2025.

•The Phase 1 study of SGR-3515, Schrödinger’s Wee1/Myt1 inhibitor, continues to enroll patients with advanced solid tumors at sites in the U.S. and Canada. Initial clinical data from this study is expected in the second half of 2025.

Platform
•The company is continuing to advance the science underpinning its platform, including advancing its predictive toxicology initiative, further integrating physics and AI/ML into platform workflows, and expanding the applicability of the platform to new high-value areas, including biologics and drug formulations.

•In January, Schrödinger scientists published a paper assessing the accuracy of free-energy perturbation (FEP) in predicting relative binding energies of ligands to DNA and RNA targets. The assessment suggests FEP+ has sufficient accuracy to guide lead optimization in drug discovery programs targeting nucleic acids.

Webcast and Conference Call Information
Schrödinger will host a conference call to discuss its fourth quarter and full year 2024 financial results on Wednesday, February 26, 2025, at 4:30 p.m. ET. The live webcast can be accessed under "News & Events" in the investors section of Schrödinger’s website, View Source To participate in the live call, please register for the call here. It is recommended that participants register at least 15 minutes in advance of the call. Once registered, participants will receive the dial-in information. The archived webcast will be available on Schrödinger’s website for approximately 90 days following the event.

On February 26, 2025 Revolution Medicines, Inc. (Nasdaq: RVMD), a late-stage clinical oncology company developing targeted therapies for patients with RAS-addicted cancers, reported its financial results for the quarter and full year ended December 31, 2024, and provided an update on corporate progress (Press release, Revolution Medicines, FEB 26, 2025, View Source [SID1234650639]).

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The company’s mission is to revolutionize treatment for patients with RAS-addicted cancers through the discovery, development and delivery of innovative, targeted medicines across lines of therapy and tumor types. Its deep pipeline of clinical-stage RAS(ON) inhibitors includes daraxonrasib (RMC-6236), a RAS(ON) multi-selective inhibitor; elironrasib (RMC-6291), a RAS(ON) G12C-selective inhibitor; and zoldonrasib (RMC-9805), a RAS(ON) G12D-selective inhibitor.

"In 2024 we built on our record of execution by advancing our highly differentiated portfolio of RAS-focused investigational drugs, making significant progress in building the organizational capabilities needed to drive the next stage of our strategy, and ending the year in an exceptionally strong financial position," said Mark A. Goldsmith, M.D., Ph.D., chief executive officer and chairman of Revolution Medicines. "In 2025 we aim to increase impact for patients with RAS-addicted tumors, including pancreatic cancer and lung cancer, by enrolling the ongoing registrational trials and opening additional pivotal trials in earlier lines of therapy."

Recent Clinical Highlights

Pancreatic Ductal Adenocarcinoma (PDAC)

The company currently has two RAS(ON) inhibitors being developed for patients with PDAC, daraxonrasib and zoldonrasib. The company is evaluating these compounds as monotherapy and in combination regimens.

Daraxonrasib in PDAC

On December 2, 2024, the company reported a new analysis of safety and activity data from its ongoing monotherapy trial of daraxonrasib in patients with previously treated PDAC harboring a RAS mutation. As of the July 23, 2024 data cutoff date, at the 300 mg once daily (QD) dose, the same dose used in the ongoing RASolute 302 Phase 3 PDAC trial, patients with PDAC harboring a KRAS G12X mutation achieved a median progression-free survival (PFS) of 8.8 months (95% confidence interval (CI), 8.5 – not estimable (NE)), while the median overall survival (OS) was not estimable (95% CI, NE – NE), and patients with PDAC harboring any RAS mutation achieved a median PFS of 8.5 months (95% CI, 5.9 – NE), while the median OS was not estimable (95% CI, 8.5 – NE).

These data are consistent with the initial dataset from the same July 23, 2024 data cutoff date presented at the EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper) (Triple) meeting in October 2024, which demonstrated that, at a dose range of 160 to 300 mg QD, patients with PDAC harboring a KRAS G12X mutation achieved a median PFS of 8.5 months (95% CI, 5.3 – 11.7) and a median OS of 14.5 months (95% CI, 8.8 – NE), while patients with PDAC harboring any RAS mutation achieved a median PFS of 7.6 months (95% CI, 5.9 – 11.1) and a median OS of 14.5 months (95% CI, 8.8 – NE).

Daraxonrasib exhibited a manageable safety and tolerability profile in both datasets and no new safety signals were observed. The most common treatment-related adverse events (TRAEs) were rash and gastrointestinal-related toxicities that were primarily Grade 1 or 2 in severity. No Grade 3 or higher TRAEs were observed in greater than 10% of patients and there were no treatment discontinuations due to TRAEs.

On January 24, 2025, at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Gastrointestinal Cancers Symposium (ASCO GI), the company presented data showing that treatment with daraxonrasib induced early and deep reduction of RAS mutant circulating tumor DNA (ctDNA) in patients with previously treated PDAC, indicating inhibition of all major forms of oncogenic RAS. These results further support the ongoing RASolute 302 trial.

Zoldonrasib in PDAC

On October 25, 2024, the company reported first-in-human clinical results for zoldonrasib at the Triple meeting. Zoldonrasib demonstrated encouraging safety and antitumor activity in patients with RAS G12D PDAC.

Non-Small Cell Lung Cancer (NSCLC)

The company is also developing its RAS(ON) inhibitors for patients with advanced NSCLC.

Daraxonrasib in NSCLC

On December 2, 2024, the company reported updated results in patients with previously treated RAS mutant NSCLC who received daraxonrasib. Daraxonrasib was generally well tolerated and demonstrated favorable dose intensity and compelling PFS and OS.

Supported by these data, and having finalized the study design disclosed on December 2, 2024, the company has initiated a global, randomized Phase 3 trial (RASolve 301) of daraxonrasib versus docetaxel in patients with previously treated, locally advanced or metastatic NSCLC.

RAS(ON) Inhibitor Combination Trials

The company has ongoing efforts to identify and advance rational combination strategies with its RAS(ON) inhibitors, using a data-driven approach to prioritize among multiple options for advancing into early lines of therapy.

Daraxonrasib with Pembrolizumab

On December 2, 2024, the company reported data showing that the combination of daraxonrasib with pembrolizumab in NSCLC was generally well tolerated, and the safety profile was consistent with previously reported results for the individual agents.

Elironrasib with Daraxonrasib

On December 2, 2024, the company reported initial clinical safety, tolerability and activity for the first-of-its-kind RAS inhibitor doublet with the combination of elironrasib with daraxonrasib, which showed the combination was generally well tolerated and provided initial proof-of-mechanism in patients with colorectal cancer who were previously treated with a KRAS(OFF) G12C inhibitor. The company believes these preliminary observations support continued development of this RAS(ON) inhibitor doublet in a broad range of G12C-mutant tumor types and earlier lines of therapy.

Elironrasib with Pembrolizumab

On December 2, 2024, the company reported initial safety and tolerability data on the combination of elironrasib with pembrolizumab in patients with RAS G12C-mutant NSCLC, which support combinability with a safety profile consistent with previously reported results for the individual agents.

The company believes the three pairwise combinations of elironrasib with daraxonrasib, daraxonrasib with pembrolizumab, and elironrasib with pembrolizumab justify investigation of the triplet combination of elironrasib and daraxonrasib with pembrolizumab as a potential chemotherapy-sparing, first-line option for patients with NSCLC.

Zoldonrasib with Daraxonrasib

The company has completed dose escalation for a second RAS(ON) inhibitor doublet – zoldonrasib combined with daraxonrasib – and is currently in an expansion phase across a range of solid tumors at the anticipated single agent recommended Phase 2 doses for both agents.

Strategic Priorities and Markers of Progress

The company has five strategic priorities for this year to maximize the potential impact for patients with RAS-addicted cancers:

Execute pivotal trials with daraxonrasib monotherapy in patients with previously treated metastatic PDAC and NSCLC.

The company anticipates substantially completing enrollment in RASolute 302, the company’s randomized Phase 3 trial comparing daraxonrasib to standard of care chemotherapy in 2L patients with metastatic PDAC, in 2025 to enable an expected data readout in 2026.

Having finalized the study design disclosed on December 2, 2024, the company is now activating investigational sites for RASolve 301, its global randomized Phase 3 trial comparing daraxonrasib to docetaxel in patients with previously treated, locally advanced or metastatic RAS mutant NSCLC.

Advance daraxonrasib into earlier-line randomized pivotal trials in patients with PDAC.

The company anticipates initiating two pivotal trials in earlier lines of treatment for PDAC in the second half of 2025:

• A global, randomized Phase 3 trial in first-line patients with metastatic PDAC. The trial is expected to compare a reference arm of patients treated with chemotherapy to two investigational arms, one with patients treated with daraxonrasib monotherapy and one with patients treated with daraxonrasib plus chemotherapy.

• A global, randomized Phase 3 trial of daraxonrasib as adjuvant treatment for patients with resectable PDAC.

Generate sufficient data to inform development priorities for the mutant-selective inhibitors elironrasib and zoldonrasib and prepare to initiate one or more pivotal trials either as monotherapy or in a drug combination.

The company expects to share additional clinical safety and antitumor activity on zoldonrasib in the second quarter of 2025.

The company currently expects to initiate one or more pivotal combination trials in 2026 that incorporate either elironrasib or zoldonrasib and expects to share clinical data supporting these plans in the second or third quarter of 2025.

Progress earlier-stage pipeline, including advancing next-generation innovations from the company’s highly productive discovery organization.

The company expects to advance RMC-5127, a RAS(ON) G12V-selective inhibitor, to a clinic-ready stage in 2025 to enable the expected initiation of a first-in-human dose escalation Phase 1 clinical trial in 2026.

Grow commercial and operational capabilities and increase pre-commercial activities in support of a potential launch.

The company continues to expand key aspects of its organization to support a potential launch by continuing to add top talent, including U.S. field teams. The company plans to retain control of U.S. commercial rights as a core element of the current strategy and is also exploring strategies for serving patients outside the U.S., potentially including partnership opportunities.
Corporate and Financial Highlights

Financing

In December 2024, the company completed an upsized public equity offering, raising $823 million in net proceeds. This included the exercise in full by the underwriters of their option to purchase additional shares of common stock. These funds will be used to strengthen the company’s balance sheet and overall financial position to support the continued development and expansion of its product pipeline and preparation for the potential commercial launch of daraxonrasib, subject to FDA approval.

Fourth Quarter Results

Cash Position: Cash, cash equivalents and marketable securities were $2.3 billion as of December 31, 2024, compared to $1.9 billion as of December 31, 2023. The increase was primarily attributable to the company’s public equity offering in December 2024.

R&D Expenses: Research and development expenses were $188.1 million for the quarter ended December 31, 2024, compared to $148.5 million for the quarter ended December 31, 2023. The increase was primarily due to an increase in clinical trial expenses for daraxonrasib, elironrasib, and zoldonrasib, and an increase in personnel-related expenses related to additional headcount. Research and development expenses for the quarter ended December 31, 2023, included $13.1 million of expenses related to the wind-down of EQRx, Inc. (EQRx), which primarily consisted of non-recurring employee-related termination expenses and stock-based compensation expense related to the acceleration of EQRx equity awards in conjunction with the closing of the transaction.

G&A Expenses: General and administrative expenses were $28.2 million for the quarter ended December 31, 2024, compared to $32.2 million for the quarter ended December 31, 2023. The decrease was primarily due to $13.8 million of expenses related to the wind-down of EQRx, which primarily consisted of non-recurring employee-related termination expenses and stock-based compensation expense related to the acceleration of EQRx equity awards in conjunction with the closing of the EQRx transaction that were included in the quarter ended December 31, 2023, offset by an increase in commercial preparation activities and an increase in personnel-related expenses related to additional headcount.

Net Loss: Net loss was $194.6 million for the quarter ended December 31, 2024, compared to net loss of $161.5 million for the quarter ended December 31, 2023. Net loss for the quarter ended December 31, 2023, included $26.9 million of operating expenses related to the wind-down of EQRx.

Full Year 2024 Financial Highlights

Revenue: Total revenue was zero for the year ended December 31, 2024, compared to $11.6 million for the year ended December 31, 2023. The decrease in revenue was due to the termination of the company’s collaboration agreement with Sanofi in 2023.

R&D Expenses: Research and development expenses were $592.2 million for the year ended December 31, 2024, compared to $423.1 million for the year ended December 31, 2023. The increase was primarily due to an increase in clinical trial expenses for daraxonrasib, elironrasib and zoldonrasib, an increase in personnel-related expenses related to additional headcount, and an increase in stock-based compensation. Research and development expenses for the year ended December 31, 2023, included $13.1 million of expenses related to the wind-down of EQRx.

G&A Expenses: General and administrative expenses were $97.3 million for the year ended December 31, 2024, compared to $75.6 million for the year ended December 31, 2023. The increase was primarily due to an increase in commercial preparation activities and an increase in personnel-related expenses related to additional headcount. General and administrative expenses for the year ended December 31, 2023, included $13.8 million of expenses related to the wind-down of EQRx.

Net Loss: Net loss was $600.1 million for the year ended December 31, 2024, compared to net loss of $436.4 million for the year ended December 31, 2023.

2025 Financial Guidance
Revolution Medicines expects full year 2025 GAAP net loss to be between $840 million and $900 million, which includes estimated non-cash stock-based compensation expense of between $115 million and $130 million. Based on the company’s current operating plan, the company projects that current cash, cash equivalents and marketable securities can fund planned operations into the second half of 2027.

Webcast
Revolution Medicines will host a webcast this afternoon, February 26, 2025, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). To listen to the live webcast, or access the archived webcast, please visit: View Source Following the live webcast, a replay will be available on the company’s website for at least 14 days.

On February 26, 2025 Relay Therapeutics, Inc. (Nasdaq: RLAY), a clinical-stage precision medicine company transforming the drug discovery process by combining leading-edge computational and experimental technologies, reported fourth quarter and full year 2024 financial results and corporate highlights (Press release, Relay Therapeutics, FEB 26, 2025, View Source [SID1234650638]).

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"Our RLY-2608 breast cancer program continued to advance and develop rapidly in 2024, driven by positive maturation of the RLY-2608 + fulvestrant doublet dataset, now with over 100 patients dosed and median PFS of 11.4 months in second-line patients. We also continue to make progress with our investigational triplet combinations, which we believe could potentially allow RLY-2608 to address patients in earlier settings," said Sanjiv Patel, M.D., President and Chief Executive Officer of Relay Therapeutics. "Looking forward into 2025, it is our top priority to continue advancing our clinical programs, including the initiation of the RLY-2608 + fulvestrant Phase 3 trial in breast cancer patients. With a strong capital position that supports the execution of that pivotal trial, and a team with proven development experience, I am confident in our abilities to meaningfully advance these programs towards patients in oncology and genetic disease areas."

Initiation of ReDiscover-2 Phase 3 trial of RLY-2608 + Fulvestrant in the Middle of 2025

•
Relay Tx has conducted an end of Phase 2 meeting with the Food and Drug Administration (FDA) and announces the Phase 3 trial design, dose, and plans to initiate the trial in mid-2025
•
Design
o
Planned Phase 3 registrational study (ReDiscover-2) is a randomized, open-label, multicenter clinical trial that will evaluate the safety and efficacy of RLY-2608 + fulvestrant in PI3Kα-mutated, HR+/HER2- advanced breast cancer patients previously treated with a CDK4/6 inhibitor
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Comparator arm will be capivasertib + fulvestrant
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Key inclusion criteria include:
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Patients must be CDK4/6-experienced (either in the adjuvant or metastatic setting)
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Patients must have been on frontline endocrine therapy containing regimen for >6 months
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Patients may have seen up to 1 prior chemotherapy and no ADC in the metastatic setting

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Metabolic inclusion criteria: HbA1c <7% and fasting plasma glucose <140 mg/dL at baseline
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Target enrollment is 540 patients
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The primary endpoint is progression free survival (PFS), per RECIST 1.1 criteria, tested hierarchically in patients with PI3Kα mutations in the kinase domain only and in patients with any PI3Kα mutation (kinase + non-kinase mutations)
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Overall survival is a key secondary endpoint with overall response rate (ORR), duration of response and quality of life as additional secondary endpoints
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Dose
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Phase 3 dose of RLY-2608 is 400mg twice daily (BID) in the fed state (fed)
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A positive food effect has been observed when RLY-2608 was administered to patients in the fed state, which increased the exposure level of RLY-2608 compared to the fasted state (fasted)
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The RLY-2608 400mg BID fed dose has been shown to achieve exposures equivalent to 600mg BID fasted in cancer patients.
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600mg BID fasted was the dose used in our expansion cohorts

Additional Corporate Highlights

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RLY-2608:
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RLY-2608 doublet: Presented interim clinical data from the open-label Phase 1b study for RLY-2608 + fulvestrant at the San Antonio Breast Cancer Symposium (SABCS) 2024, showing:
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11.4-month median PFS in second line (2L) patients with PI3Kα-mutated, HR+/HER2- advanced breast cancer
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39% confirmed ORR across patients with measurable disease (n= 31)
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67% Clinical Benefit Rate (CBR) across all evaluable patients (32 of 48 CBR-evaluable patients; CBR defined as the proportion of patients with complete response, partial response or stable disease for at least 24 weeks)
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Safety profile (n= 118) remained differentiated with mostly low-grade treatment- related adverse events
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RLY-2608 triplet: Continued to advance two potential front-line triplet regimens in patients with PI3Kα- mutated, HR+, HER2- advanced breast cancer who had previously received at least one prior CDK4/6 inhibitor, including:
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Initiation of triplet cohort for RLY-2608 + fulvestrant + atirmociclib (Pfizer’s selective CDK4 inhibitor) combination
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Continued advancement of the ongoing RLY-2608 + fulvestrant + ribociclib combination cohort
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Planning underway for development of next-generation endocrine therapy combinations with RLY-2608
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Lirafugratinib:
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Entered exclusive global licensing agreement, granting Elevar Therapeutics worldwide rights to develop and commercialize lirafugratinib
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NRAS program:
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Nominated development candidate, RLY-8161
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Research:
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Continued to consolidate and focus the research platform and portfolio on a small number of high-value targets

Anticipated 2025 Milestones

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RLY-2608 in Breast Cancer:
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Initiation of Phase 3 trial in the middle of 2025
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Additional Phase 1b doublet data in 2025

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Vascular malformations: RLY-2608 clinical trial initiation in the first quarter of 2025
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NRAS and Fabry programs continue to advance towards IND and timing of clinical start for each program will be phased to optimize resources to ensure the execution of the ReDiscover-2 Phase 3 trial

Fourth Quarter and Full Year 2024 Financial Results

Cash, Cash Equivalents and Investments: As of December 31, 2024, cash, cash equivalents, and investments totaled $781.3 million compared to approximately $750.1 million as of December 31, 2023. The company expects its current cash, cash equivalents and investments will be sufficient to fund its current operating plan into the second half of 2027.

Revenue: There was no revenue for the fourth quarters of 2024 and 2023. Revenue was $10.0 million for the full year 2024, as compared to $25.5 million for the full year 2023. The decrease was primarily due to the timing of milestones achieved, as well as revenue recognized thereon, under the company’s Collaboration and License Agreement with Genentech, Inc.

R&D Expenses: Research and development expenses were $68.1 million for the fourth quarter of 2024, as compared to $77.5 million for the fourth quarter of 2023. Research and development expenses were $319.1 million for the full year 2024, as compared to $330.0 million for the full year 2023. The decreases were primarily due to the impact of prioritization of certain programs in the company’s pipeline, as previously disclosed.

G&A Expenses: General and administrative expenses were $16.9 million for the fourth quarter of 2024, as compared to $16.8 million for the fourth quarter of 2023. General and administrative expenses were $76.6 million for the full year 2024, as compared to $75.0 million for the full year 2023.

Net Loss: Net loss was $76.0 million for the fourth quarter of 2024, or a net loss per share of $0.45, as compared to a net loss of $83.5 million for the fourth quarter of 2023, or a net loss per share of $0.67. Net loss was $337.7 million for the full year 2024, or a net loss per share of $2.36, as compared to a net loss of $342.0 million for the full year 2023, or a net loss per share of $2.79.