Arcellx Provides First Quarter 2024 Financial Results

Rhea-AI Summary

Arcellx, Inc. (NASDAQ: ACLX) reported financial highlights for Q1 2024, with $691.0 million in cash, collaboration revenue of $39.3 million, R&D expenses down by $0.6 million, G&A expenses up by $7.3 million, and a net loss of $7.2 million.

Positive

• Strong cash position of $691.0 million to fund operations until 2027.

• Collaboration revenue increased by $21.4 million due to changes in transaction price with Kite Pharma, Inc.

Negative

• Net loss of $7.2 million in Q1 2024, although an improvement from $27.3 million in Q1 2023.

• General and administrative expenses increased by $7.3 million, driven by higher personnel costs.

Insights

Financial Analyst

When assessing Arcellx's first quarter financials, a key takeaway is the company's robust cash position. With $691.0 million in cash, cash equivalents and marketable securities, the company projects an operational runway extending into 2027. This indicates a strong liquidity status which minimizes immediate financial risk and may reassure investors regarding the company's short-term stability.

Another noteworthy aspect is the substantial increase in collaboration revenue, soaring from $17.9 million to $39.3 million year-over-year. This jump signifies a more than 100% rise, attributed mainly to the amended agreement with Kite Pharma. Such growth in collaboration revenue could be interpreted as a sign of Arcellx's potential to forge and expand lucrative partnerships, a positive indicator for future revenue streams.

However, the increase in General and Administrative (G&A) expenses by $7.3 million might raise concerns about the company's cost management and scalability of operations. Though an uptick in personnel costs, including non-cash stock-based compensation, is common for growing biotech firms, investors should monitor this trend to ensure it aligns with business expansion and revenue growth.

The reported net loss of $7.2 million, which is considerably lower than the previous year's $27.3 million, reflects an improved bottom line. This reduction in net loss may signal effective cost optimization strategies and potentially forecast narrowing losses or future profitability.

Biotech Market Analyst

The biotechnology sector is keenly focused on research and development (R&D) as a measure of future potential. Arcellx's slight decrease in R&D expenses, down $0.6 million from last year, could be seen as a double-edged sword. On one hand, reduced spending on the anito-cel clinical program might suggest efficiencies gained or completion of costly phases. On the other hand, investors tend to favor aggressive R&D investment in biotech companies as an indicator of a robust pipeline and long-term growth prospects.

Understanding the implications of Arcellx's financial results requires contextualizing the data within the biotech industry. The company's financial stability, marked by substantial cash reserves, combined with its ability to attract and grow major collaborations, like the one with Kite Pharma, is indicative of a promising competitive stance within the industry.

However, it is imperative for stakeholders to consider the broader industry climate, including regulatory hurdles and market reception to new therapies, as these factors can dramatically influence the trajectory of companies like Arcellx. Investors should seek a balance between financial health, R&D progress and the inherent risks associated with the biotech sector.

REDWOOD CITY, Calif.--(BUSINESS WIRE)-- Arcellx, Inc. (NASDAQ: ACLX), a biotechnology company reimagining cell therapy through the development of innovative immunotherapies for patients with cancer and other incurable diseases, today reported business highlights and financial results for the first quarter ended March 31, 2024.

First Quarter 2024 Financial Highlights

Cash, cash equivalents, and marketable securities:

As of March 31, 2024, Arcellx had cash, cash equivalents, and marketable securities of $691.0 million. Arcellx anticipates that its cash, cash equivalents, and marketable securities will fund its operations into 2027.

Collaboration revenue:

Collaboration revenue were $39.3 million and $17.9 million for the quarters ended March 31, 2024 and 2023, respectively, an increase of $21.4 million. This increase was primarily driven by changes in estimated transaction price used in calculating collaboration revenue under the license and collaboration agreement and amendment with Kite Pharma, Inc. (Kite).

R&D expenses:

Research and development expenses were $32.3 million and $32.9 million for the quarters ended March 31, 2024 and 2023, respectively, a decrease of $0.6 million. This decrease was primarily driven by a decrease in costs associated with our anito-cel clinical program, with such costs primarily relating to expenses associated with our Lonza manufacturing services agreement. The decrease was partially offset by increased personnel costs, which includes non-cash stock-based compensation expense.

G&A expenses:

General and administrative expenses were $22.7 million and $15.4 million for the quarters ended March 31, 2024 and 2023, respectively, an increase of $7.3 million. This increase was primarily driven by increased personnel costs, which includes non-cash stock-based compensation expense.

Net income or loss:

Net loss was $7.2 million and $27.3 million for the quarters ended March 31, 2024 and 2023, respectively.

About Arcellx, Inc.

Arcellx, Inc. is a clinical-stage biotechnology company reimagining cell therapy by engineering innovative immunotherapies for patients with cancer and other incurable diseases. Arcellx believes that cell therapies are one of the forward pillars of medicine and Arcellx's mission is to advance humanity by developing cell therapies that are safer, more effective, and more broadly accessible. Arcellx's lead product candidate, anito-cel, is being developed for the treatment of relapsed or refractory multiple myeloma (rrMM) in a Phase 2 pivotal trial. Anito-cel has been granted Fast Track, Orphan Drug, and Regenerative Medicine Advanced Therapy designations by the U.S. Food and Drug Administration.

Arcellx is also developing its dosable and controllable CAR T therapy, ARC-SparX, through two Phase 1 programs, ACLX-001 for rrMM and ACLX-002 in relapsed or refractory acute myeloid leukemia and high-risk myelodysplastic syndrome. For more information on Arcellx, please visit www.arcellx.com. Follow Arcellx on X (Twitter) at @arcellx and LinkedIn.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements in this press release that are not purely historical are forward-looking statements, including, without limitation, Arcellx's plans for the research, pre-clinical and clinical development of its product candidates; Arcellx's expectations regarding the potential impact of its product candidates and platforms on patients and cell therapy; and the sufficiency of cash, cash equivalents and marketable securities and Arcellx's ability to fund operations through certain regulatory milestones and timelines. The forward-looking statements contained herein are based upon Arcellx's current expectations and involve assumptions that may never materialize or may prove to be incorrect. These forward-looking statements are neither promises nor guarantees and are subject to a variety of risks and uncertainties, including risks that may be found in the section entitled Part II, Item 1A (Risk Factors) in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed with the Securities and Exchange Commission (SEC) on or about the date hereof, and the other documents that Arcellx may file from time to time with the SEC. These forward-looking statements are made as of the date of this press release, and Arcellx assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

ARCELLX, INC.
SELECTED CONSOLIDATED BALANCE SHEET DATA
(in thousands)
	March 31,			December 31,
	2024			2023
Cash, cash equivalents, and marketable securities	$	691,021		$	729,185
Total assets		779,695			825,132
Total liabilities		283,122			339,752
Total stockholders' equity		496,573			485,380

ARCELLX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share amounts)
	Three Months Ended March 31,
	2024				2023
Revenue	$	39,256			$	17,912
Operating expenses:
Research and development		32,318				32,932
General and administrative		22,748				15,437
Total operating expenses		55,066				48,369
Loss from operations		(15,810	)			(30,457	)
Other income, net		8,612				3,442
Loss before income taxes		(7,198	)			(27,015	)
Income tax expense		—				329
Net loss		(7,198	)			(27,344	)
Other comprehensive loss:
Unrealized gain (loss) on marketable securities		(1,059	)			307
Comprehensive loss	$	(8,257	)		$	(27,037	)
Net loss per share attributable to common stockholders—basic and diluted	$	(0.14	)			(0.58	)
Weighted-average common shares outstanding—basic and diluted		52,757,973				46,769,380

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240507588076/en/

Investors:

Myesha Lacy

ir@arcellx.com

510-418-2412



Media:

Andrea Cohen

Sam Brown Inc.

andreacohen@sambrown.com

917-209-7163

Source: Arcellx, Inc.

FAQ

What were Arcellx's cash, cash equivalents, and marketable securities as of March 31, 2024?

Arcellx had $691.0 million in cash, cash equivalents, and marketable securities.

What was the collaboration revenue for Arcellx in Q1 2024?

Arcellx reported collaboration revenue of $39.3 million in Q1 2024.

How did R&D expenses change in Q1 2024 compared to Q1 2023?

Research and development expenses decreased by $0.6 million in Q1 2024.

What was the net loss for Arcellx in Q1 2024?

Arcellx reported a net loss of $7.2 million in Q1 2024.

Why did general and administrative expenses increase in Q1 2024?

General and administrative expenses increased by $7.3 million primarily due to higher personnel costs.