On August 4, 2022 Yumanity Therapeutics, Inc. ("Yumanity" or the "Company") (Nasdaq: YMTX), a clinical-stage biopharmaceutical company focused on the discovery and development of innovative, disease-modifying therapies for neurodegenerative diseases, reported financial results for the second quarter ended June 30, 2022, and provided an overview of the Company’s recent corporate developments (Press release, Yumanity Therapeutics, AUG 4, 2022, View Source [SID1234617567]).
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Recent Corporate Developments
In June 2022, the Company announced definitive agreements for two strategic transactions. The first definitive agreement is an asset purchase agreement for the sale of Yumanity’s lead clinical-stage product candidate, YTX-7739, as well as Yumanity’s unpartnered discovery-stage neuroscience product candidates and targets to Janssen Pharmaceutica NV ("Janssen"), part of the Janssen Pharmaceutical Companies of Johnson & Johnson, for $26 million in cash. Under the second definitive agreement, Kineta, Inc., ("Kineta") will become a wholly-owned subsidiary of Yumanity in an all-stock transaction, resulting in a combined publicly traded company re-named Kineta, Inc., that will focus on immuno-oncology and continue Yumanity’s ongoing research collaboration with Merck & Co. in amyotrophic lateral sclerosis and frontotemporal lobar dementia. The two transactions are expected to close in the second half of 2022, subject to customary closing conditions, including approval of both transactions by the stockholders of Yumanity.
Second Quarter 2022 Financial Highlights
Cash position: As of June 30, 2022, cash, cash equivalents and investments were $11.8 million, compared to $36.5 million as of December 31, 2021. The decrease was primarily due to a $12.8 million payment to extinguish the Company’s remaining debt during the first quarter of 2022, spending on the clinical development of YTX-7739 primarily in the first quarter of 2022, and costs related to being a public company. As of the issuance date of the condensed consolidated financial statements for the period ended June 30, 2022, the Company expects that, absent either strategic transaction, its cash, cash equivalents and marketable securities will be sufficient to fund its operating expenses early into the first quarter of 2023.
Research and development (R&D) expense: Research and development expense was $1.1 million compared to $7.3 million for the second quarter of 2021. The decrease in R&D expense was primarily due to the elimination of a significant portion of the Company’s R&D personnel in connection with the restructuring announced in February 2022 as well as pausing of clinical development efforts for YTX-7739 while the FDA partial clinical hold is in effect.
General and administrative expense: General and administrative expense was $5.6 million compared to $4.7 million for the second quarter of 2021. The increase was primarily attributable to higher legal fees and investment banking fees incurred in connection with the transactions contemplated by the merger agreement with Kineta and the asset purchase agreement with Janssen.
Net loss: The Company reported a net loss of $4.8 million, or $0.45 per basic and diluted share, compared to a net loss of $10.5 million, or $1.03 per basic and diluted share for the second quarter of 2021. The decrease in net loss was due primarily to the decrease in R&D expense as described above. The Company expects to continue to generate operating losses for the foreseeable future, although at reduced expected levels as a result of restructuring actions taken in the six months ended June 30, 2022.