CASI PHARMACEUTICALS ANNOUNCES FOURTH QUARTER AND FULL-YEAR 2023 BUSINESS AND FINANCIAL RESULTS

Rhea-AI Summary

CASI Pharmaceuticals, Inc. reported fourth quarter 2023 revenue of $6.9 million, 33% lower than 2022, with full-year revenue of $34 million, an 11% decrease. Key highlights include the approval of Inaticabtagene Autoleucel and advancements in pipeline development. Despite positive developments, revenue decline and ongoing arbitration proceedings with Juventas pose challenges for CASI.

Positive

• Approval of Inaticabtagene Autoleucel by NMPA in China for B-cell acute lymphoblastic leukemia treatment.
• Advancements in pipeline development with BI-1206 and CB-5339 receiving approvals and progressing in trials.
• Increase in stem cell transplants with EVOMELA® in China market, addressing high unmet needs.
• Revenue decline in 2023 compared to 2022 due to market challenges and competition.
• Ongoing arbitration proceedings with Juventas regarding CNCT-19 Agreements pose risks for CASI.
• Positive outlook for pipeline development and commercialization efforts in 2024.

Negative

• Revenue decline of 11% in 2023 compared to 2022.
• Ongoing arbitration proceedings with Juventas may impact business relationships and outcomes.
• Net loss of $26.3 million for the year ended December 31, 2023.
• Decrease in research and development expenses raises questions about future innovation and growth.
• Cash, cash equivalents, and short-term investments decreased from $48.6 million in 2022 to $29.1 million in 2023.

Insights

Financial Analyst

The reported financial results of CASI Pharmaceuticals indicate a decline in revenue, with a 33% drop in Q4 2023 sales of EVOMELA® and an 11% decrease in full-year revenue. This trend suggests a challenging market and operational environment for the company. The launch of a generic competitor has likely contributed to the revenue decline, as generics typically offer a more cost-effective alternative to branded drugs, leading to a shift in market share. The reduction in R&D expenses, while improving the net loss figures, raises questions about the company's future pipeline development and its ability to innovate and bring new products to market.

From a financial perspective, the decrease in cash reserves from $48.6 million to $29.1 million is a concern, as it indicates a significant burn rate that could impact the company's ability to fund ongoing operations and development projects without additional capital infusion. Investors will need to consider the company's strategy for managing expenses and generating revenue, as well as the potential outcomes of the arbitration proceedings with Juventas, which could have financial implications.

Medical Research Analyst

The approval of Inaticabtagene Autoleucel (CNCT-19) for r/r B-ALL and the progression of other pipeline candidates like BI-1206 and CID-103 are positive scientific developments, indicating CASI's commitment to addressing unmet medical needs in oncology. The commercialization strategy for FOLOTYN® in China, targeting PTCL, shows the company's focus on expanding its oncology portfolio in a market with a growing demand for innovative cancer therapies.

However, the arbitration proceedings with Juventas over CNCT-19 commercialization rights introduce uncertainty regarding the future revenue potential and market access for this therapy. The clinical and regulatory milestones achieved for their pipeline candidates must be weighed against the potential risks associated with the ongoing legal disputes and the impact they may have on the company's ability to capitalize on its R&D investments.

Market Research Analyst

The expansion of EVOMELA®'s market penetration in China, from 800 to nearly 10,000 treated patients since its launch, demonstrates effective marketing and physician engagement strategies. However, the introduction of a generic melphalan formulation has evidently disrupted sales, highlighting the importance of differentiating products in a competitive market.

The strategic focus on the Chinese market, with the introduction of FOLOTYN® and the development of CID-103 for multiple myeloma, suggests CASI is capitalizing on China's growing pharmaceutical market. Nevertheless, the company must navigate the complexities of the Chinese regulatory environment and healthcare system to ensure successful commercialization of its products.

BEIJING, March 28, 2024 /PRNewswire/ -- CASI Pharmaceuticals, Inc. (Nasdaq: CASI), a Cayman incorporated biopharmaceutical company focused on developing and commercializing innovative therapeutics and pharmaceutical products, today reported business and financial results for the year ended December 31, 2023, and provided an update on key highlights for 2023. 

CASI reported fourth quarter 2023 revenue of $6.9 million for EVOMELA^®, 33% lower than the same period in 2022. The 2023 full-year revenue of $34 million reflects an 11% of decrease compared to 2022. Wei-Wu He, Ph.D., CASI's Chairman and Chief Executive Officer, said "CASI's team has navigated our business through a challenging external environment. We have successfully brought the second commercial product FOLOTYN^® to China market as a treatment for patients with relapsed or refractory peripheral T-cell lymphoma (PTCL). We will continue to strengthen the commercial franchise throughout 2024 and beyond. At the same time, our regulatory and development team made significant pipeline advancements."

Dr. He continued, "Advancement, development, and commercialization of the pipelines remain our strategic focus.  2023 marks a major milestone for CASI and our partner Juventas; Inaticabtagene Autoleucel (CNCT-19 CAR-T cell therapy) was approved by National Medical Products Administration (NMPA) in November 2023. We continue the development for BI-1206 in China, with the early clinical data from the ongoing phase I trial in China demonstrating promising preliminary clinical results for patients with relapsed/refractory non-Hodgkin lymphoma. CB-5339 received Clinical Trial Application approval from the NMPA in January 2023. We are currently preparing for CID-103 clinical study application in relapsed or refractory multiple myeloma in China. We will continue to drive our portfolio forward by executing on several milestones in the quarters ahead." 

Key Highlights for 2023

EVOMELA^® (melphalan for injection)

Prior to EVOMELA's entry into the Chinese market, an average of 800 stem cell transplants per year were conducted in the multiple myeloma (MM) treatment setting. Following EVOMELA's launch in August of 2019, CASI worked closely with therapeutic area experts to improve market awareness and expedite adoption in the Chinese market. In 2023, nearly 10,000 patients were treated with EVOMELA. CASI continues to pursue a similar strategy with respect to marketing efforts and physician visits to further the adoption of stem cell transplantation as a standard of care in the MM treatment setting and will continue working to address the persistent high unmet need in this patient population.

FOLOTYN^® (Pralatrexate)

On July 31, 2023, CASI entered into a tripartite assignment agreement with Mundipharma International Corporation Limited ("MICL"), Mundipharma Medical Company (MMCo), and Acrotech Biopharma Inc. (Acrotech) for the commercialization of FOLOTYN^® (Pralatrexate) in the People's Republic of China. FOLOTYN^® (Pralatrexate) is a dihydrofolate reductase inhibitor indicated for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (PTCL). This product was approved by both the FDA and China's NMPA for PTCL. CASI announced the first patient was dosed with FOLOTYN^® in China on February 15, 2024. CASI will continue to spend time, resources, and efforts on the commercialization of FOLOTYN^® in China.

BI-1206 (Anti-FcyRIIB antibody)

Along with CASI's partner, BioInvent, CASI continues to progress the development and regulatory framework for BI-1206 in China. The NMPA granted BI-1206 Clinical Trial Application (CTA) approval in December 2021. EC approval from a leading investigational site was granted in January 2022. BI-1206 is currently being investigated in two Phase 1/2 trials as combination agent with rituximab for the treatment of non-Hodgkin lymphoma, which includes patients with FL, MCL and marginal zone lymphoma (MZL) who have relapsed or are refractory to rituximab. A second Phase 1/2 trial is investigating BI-1206 in combination with anti-PD1 therapy Keytruda^® (pembrolizumab) in solid tumors. In 2022, the U.S. FDA granted orphan drug designation, for BI-1206, for the treatment of follicular lymphoma (FL), the most common form of slow-growing non-Hodgkin lymphoma (NHL).

Inaticabtagene Autoleucel (CNCT-19)

On November 8, 2023, The China National Medical Products Administration (NMPA) has granted market approval for Juventas' Inaticabtagene Autoleucel (CNCT-19) for the treatment of relapsed and refractory B-cell acute lymphoblastic leukemia (r/r B-ALL) in China.

Inaticabtagene Autoleucel is a CD19 CAR-T cell therapy product comprised of a unique CD19 scFv（HI19a）structure and utilizes leading CMC manufacturing techniques. Inaticabtagene Autoleucel has demonstrated a high level of efficacy, with durable remissions, and substantially improved safety profile with reduced CAR-T related toxicities in the pivotal clinical study for the treatment of adults with r/r B-ALL.

CASI is currently involved in arbitration proceedings against Juventas in relation to Juventas's purported termination of the CNCT-19 Agreements, between the Company and Juventas with respect to the commercialization of Juventas' cell therapy, Inaticabtagene Autoleucel (CNCT-19). On March 2, 2024, CASI received a notice from Juventas, which purported to terminate the CNCT-19 Agreements. CASI responded to Juventas's purported termination notice, noting that Juventas was not entitled to unilaterally terminate the CNCT-19 Agreements and further demanding that Juventas cease any conduct that may constitute further breach of the CNCT-19 Agreements and execute a written undertaking regarding compliance with the CNCT-19 Agreements by March 13, 2024. Juventas did not comply with CASI's demands. On March 20, 2024, CASI submitted a Notice of Arbitration at the Hong Kong International Arbitration Centre ("HKIAC") against Juventas pursuant to the CNCT-19 Agreements' dispute resolution clauses, claiming that Juventas's purported termination was invalid and that Juventas breached the CNCT-19 Agreements and seeking, among other things, damages and injunctive reliefs. Together with the Notice of Arbitration, CASI also submitted an application for the appointment of an emergency arbitrator, seeking emergency injunctive reliefs. On the same day, Juventas also submitted a Notice of Arbitration at the HKIAC against CASI, alleging, among other things, that the CNCT-19 Agreements were validly terminated and that CASI breached the CNCT-19 Agreements. The HKIAC has appointed an emergency arbitrator in accordance with CASI's application. The arbitration proceedings are ongoing.

CB-5339 (VCP/p97 inhibitor)

In March 2021, the Company entered into an exclusive license with Cleave Therapeutics, Inc. ("Cleave") for the development and commercialization of CB-5339, an oral novel VCP/p97 inhibitor, in both hematological malignancies and solid tumors, in Mainland China, Hong Kong, Macau and Taiwan. CB-5339 has been evaluated by Cleave in a Phase 1 clinical trial in patients with acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). Because CB-5339 has not yet reached technological feasibility and has no alternative future uses, the Company expensed the $5.5 million upfront payment as acquired in-process research and development in 2021.

On July 18, 2023, the Company entered into an assignment agreement (the "Assignment Agreement") with Cleave, pursuant to which the Company obtained the global intellectual property rights related to CB-5339. Pursuant to the Assignment Agreement and partially in exchange for the transfer of the global intellectual property rights for CB-5339 as well as all remaining CB-5339 drug substance and drug product to CASI.

CID-103 (Anti-CD38 Mab)

CID-103 is a fully human IgG1 anti-CD38 monoclonal antibody recognizing a unique epitope that has demonstrated encouraging preclinical efficacy and safety profile compared to other anti-CD38 monoclonal antibodies. CASI maintains exclusive global rights and is developing CID-103 for the treatment of patients with multiple myeloma. The Phase 1 dose escalation and expansion study of CID-103 in patients with previously treated relapsed or refractory multiple myeloma is closed to further accrual in France and the UK. Future multiple myeloma development activities will be focused on China.  CASI entered into a sublicense agreement with Precision Autoimmune Therapeutics, who will carry out the development activities for the autoimmune indications for CID-103.

Full-Year 2023 Financial Results 

• Revenues consist of product sales of EVOMELA^®. Revenue was $34.0 million for the year ended December 31, 2023 compared to $38 million for the year ended December 31, 2022. The decrease was mainly attributable to the launch of an undifferentiated generic formulation of melphalan for injection product by a Chinese domestic manufacture.
  
  
• Costs of revenues were $13.8 million for the year ended December 31, 2023 compared to $15.8 million for the year ended December 31, 2022. Costs of revenues as a percentage of EVOMELA^® sales for 2023 and 2022 were 41% and 42%, respectively.
  
  
• General and administrative expenses for the year ended December 31, 2023 were $25.4 million, compared with $23.4 million for the year ended December 31, 2022. The increase in general and administrative expenses was primarily attributable to incremental share-based compensation expense recognized due to the option modification in May 2023 amounted to US$2.2 million, and increased depreciation expense of US$1.2 million due to the full year depreciation expenses of CASI Wuxi's leasehold improvement that started to depreciate in August 2022, offset by decrease of land vacancy fee of US$1.3 million in relation to the return of the Wuxi land use right.
  
  
• Selling and marketing expenses for the year ended December 31, 2023, were $16.4 million, compared with $14.3 million for the year ended December 31, 2022. The increase was primarily due to increased travel and conference expenses incurred for our commercial activities after the Chinese health authority cancelled the stringent COVID-19 controlled measure in December 2022.
  
  
• Research and development expenses for the year ended December 31, 2023 were $9.9 million, compared with $16.0 million for the year ended December 31, 2022. The decrease in R&D expenses is primarily due to CID-103 as we incurred less laboratory tests and decrease in the research and development expenses of generic pharmaceuticals in Wuxi manufacturing facility.
  
  
• Net loss for the year ended December 31, 2023 was $26.3 million compared to $40.3 million for the year ended December 31, 2022.
  
  
• As of December 31, 2023, CASI had cash, cash equivalents and short term investment of $29.1 million compared to $48.6 million as of December 31, 2022.

Further information regarding the Company, including its Annual Report on Form 20-F for the year ended December 31, 2023, can be found at www.casipharmaceuticals.com.

About CASI Pharmaceuticals

CASI Pharmaceuticals, Inc. is a biopharmaceutical company focused on developing and commercializing innovative therapeutics and pharmaceutical products in China, the United States, and throughout the world. The Company is focused on acquiring, developing, and commercializing products that augment its hematology oncology therapeutic focus as well as other areas of unmet medical need. The Company intends to execute its plan to become a leader by launching medicines in the Greater China market, leveraging the Company's China-based regulatory and commercial competencies and its global drug development expertise. The Company's operations in China are conducted through its wholly owned subsidiary, CASI Pharmaceuticals (China) Co., Ltd., located in Beijing, China. More information on CASI is available at www.casipharmaceuticals.com.

CASI Forward-Looking Statements:

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as the Company's strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the risk that we may be unable to continue as a going concern as a result of our inability to raise sufficient capital for our operational needs; the possibility that we may be delisted from trading on The Nasdaq Capital Market if we fail to satisfy applicable continued listing standards; the volatility in the market price of our ordinary shares; the risk of substantial dilution of existing shareholders in future share issuances; the difficulty of executing our business strategy on a global basis including China; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates or future candidates; legal or regulatory developments in China that adversely affect our ability to operate in China, our lack of experience in manufacturing products and uncertainty about our resources and capabilities to do so on a clinical or commercial scale; risks relating to the commercialization, if any, of our products and proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other risks); our inability to predict when or if our product candidates will be approved for marketing by the U.S. Food and Drug Administration, European Medicines Agency, PRC National Medical Products Administration, or other regulatory authorities; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates or future candidates; the risks relating to the need for additional capital and the uncertainty of securing additional funding on favorable terms; the risks associated with our product candidates, and the risks associated with our other early-stage products under development; the risk that result in preclinical and clinical models are not necessarily indicative of clinical results; uncertainties relating to preclinical and clinical trials, including delays to the commencement of such trials; our ability to protect our intellectual property rights; the lack of success in the clinical development of any of our products; and our dependence on third parties; the risks related to our dependence on Juventas to conduct the clinical development of CNCT19 and to partner with us to co-market CNCT19; risks related to our dependence on Juventas to ensure the patent protection and prosecution for CNCT19; risks relating to the commercialization, if any, of our proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other risks); risks relating to interests of our largest shareholder and our Chairman and CEO that differ from our other shareholders; and risks related to the development of a new manufacturing facility by CASI Pharmaceuticals (Wuxi) Co., Ltd. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided herein is as of the date of this announcement, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

EVOMELA^® is proprietary to Acrotech Biopharma Inc. and its affiliates. FOLOTYN^® is proprietary to Acrotech Biopharma Inc and its affiliates.

COMPANY CONTACT:
Rui Zhang
CASI Pharmaceuticals, Inc.
240.864.2643
ir@casipharmaceuticals.com

(Financial Table Follows)

 

CASI Pharmaceuticals, Inc. Consolidated Balance Sheets (In USD thousands, except share and per share data)
		December 31, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents		$	17,083		$	47,112
Investment in equity securities, at fair value			1,675			2,763
Short term investments			12,011			1,462
Accounts receivable			9,551			12,973
Receivable from a related party			587			—
Inventories			15,877			6,138
Prepaid expenses and other			2,560			2,975
Total current assets			59,344			73,423
Term deposit, non current			—			3,065
Property, plant and equipment, net			9,241			11,831
Intangible assets, net			1,839			1,063
Long-term investments			1,686			4,398
Right of use assets			2,392			1,398
Other assets			766			1,056
Total assets		$	75,268		$	96,234
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	4,438		$	3,289
Accrued and other current liabilities			12,288			11,816
Income tax payable			—			1,900
Total current liabilities			16,726			17,005
Long term borrowing			18,895			—
Other liabilities			15,482			12,297
Total liabilities			51,103			29,302
Commitments and contingencies
Redeemable noncontrolling interest, at redemption value			—			22,358
Shareholders' equity:
Ordinary shares, $0.0001 par value:
500,000,000 shares authorized
13,790,127 shares and 13,733,459 shares issued at December 31, 2023 and December 31, 2022, respectively;
13,378,175 shares and 13,457,625 shares outstanding at December 31, 2023 and December 31, 2022, respectively			1			1
Additional paid-in capital			695,785			691,766
Treasury shares, at cost: 411,952 shares and 275,834 shares held at December 31, 2023 and December 31, 2022, respectively			(9,604)			(9,330)
Accumulated other comprehensive loss			(1,200)			(703)
Accumulated deficit			(660,817)			(637,160)
Total shareholders' equity			24,165			44,574
Total liabilities, redeemable noncontrolling interest and shareholders' equity		$	75,268		$	96,234

 

CASI Pharmaceuticals, Inc. Consolidated Statements of Operations and Comprehensive Loss (In USD thousands, except share and per share data)
		Year Ended December 31,
		2023			2022			2021
Revenues:
Product sales		$	33,879		$	38,047		$	30,020
Sublicensing revenue from a related party			—			5,000			—
Lease income from a related party			—			60			148
Total revenues			33,879			43,107			30,168
Total costs of revenues			13,827			15,827			12,557
Gross Profit			20,052			27,280			17,611
Operating expenses:
Research and development			9,861			15,996			14,422
General and administrative			25,387			23,449			23,701
Selling and marketing			16,450			14,326			14,705
Other operating income			(6,366)			—			—
Acquired in-process research and development			—			—			6,555
Loss on disposal of long-lived assets			—			2,058			65
Foreign exchange gain			(200)			(3,241)			(321)
Impairment of intangible assets			—			8,724			—
Total operating expenses			45,132			61,312			59,127
Loss from operations			(25,080)			(34,032)			(41,516)
Non-operating income (expense):
Interest income, net			614			127			321
Other income			764			44			558
Change in fair value of investments			(581)			(8,895)			5,660
Gain from sale of an equity investment			—			5,325			—
Impairment loss of long-term investments			(2,009)			—			(865)
Loss before income tax benefit (expense) and share of net loss in an equity investee			(26,292)			(37,431)			(35,842)
Income tax benefit (expense)			81			(1,980)			—
Net loss before share of net loss in an equity investee			(26,211)			(39,411)			(35,842)
Share of net loss in an equity investee			(48)			(846)			—
Net loss			(26,259)			(40,257)			(35,842)
Less:Loss attributable to redeemable noncontrolling interest			(2,602)			(8,740)			(700)
Accretion to redeemable noncontrolling interest redemption value			3,281			9,497			1,512
Deemed dividends to Wuxi LP			22			—			—
Net loss attributable to CASI Pharmaceuticals, Inc.		$	(26,960)		$	(41,014)		$	(36,654)
Net loss per share (basic and diluted)		$	(2.02)		$	(3.01)		$	(2.69)
Weighted average number of ordinary shares outstanding (basic and diluted)			13,360,185			13,647,455			13,610,441
Comprehensive loss:
Net loss		$	(26,259)		$	(40,257)		$	(35,842)
Foreign currency translation adjustment			(1,118)			(4,513)			1,977
Total comprehensive loss		$	(27,377)		$	(44,770)		$	(33,865)
Less: Comprehensive loss attributable to redeemable noncontrolling interest			(3,223)			(10,596)			(88)
Comprehensive loss attributable to ordinary shareholders		$	(24,154)		$	(34,174)		$	(33,777)

 

 

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SOURCE CASI Pharmaceuticals

FAQ

What was CASI Pharmaceuticals' revenue in the fourth quarter of 2023?

CASI reported revenue of $6.9 million in the fourth quarter of 2023, 33% lower than the same period in 2022.

What is the full-year revenue for CASI Pharmaceuticals in 2023?

CASI reported a full-year revenue of $34 million for 2023, reflecting an 11% decrease compared to 2022.

What key highlight was mentioned regarding Inaticabtagene Autoleucel?

Inaticabtagene Autoleucel (CNCT-19) was approved by the National Medical Products Administration (NMPA) in November 2023 for the treatment of relapsed and refractory B-cell acute lymphoblastic leukemia in China.

What are the ongoing arbitration proceedings involving CASI and Juventas?

CASI is currently involved in arbitration proceedings against Juventas regarding the purported termination of the CNCT-19 Agreements, seeking damages and injunctive reliefs.

How did CASI address the revenue decline in 2023 compared to 2022?

CASI attributed the revenue decline in 2023 to market challenges and competition, impacting the financial results for the year.

What was the net loss for CASI Pharmaceuticals for the year ended December 31, 2023?

CASI reported a net loss of $26.3 million for the year ended December 31, 2023, compared to $40.3 million for the same period in 2022.