MEI Pharma Reports Fiscal Year End 2024 Cash Position

Rhea-AI Summary

MEI Pharma (Nasdaq: MEIP) reported its fiscal year end 2024 results, confirming the continuation of its strategic alternatives evaluation. The company announced on July 22, 2024, that it had begun this process to maximize stockholder value. Oppenheimer & Co., Inc. was engaged as the exclusive financial adviser for this review. Options under consideration include out-licensing existing programs and potential mergers or acquisitions.

To preserve cash, MEI initiated a reduction-in-force on August 1, 2024, which will progress in stages. While clinical development of voruciclib has been discontinued, some non-clinical activities for other drug candidates continue. As of June 30, 2024, MEI had $38.3 million in cash, cash equivalents, and short-term investments with no outstanding debt.

Positive

• Cash position of $38.3 million with no outstanding debt
• Engagement of Oppenheimer & Co., Inc. as exclusive financial adviser for strategic review
• Ongoing evaluation of strategic alternatives to maximize stockholder value

Negative

• Reduction-in-force initiated to preserve cash
• Discontinuation of clinical development for voruciclib
• Uncertainty regarding the outcome of the strategic alternatives evaluation

Insights

Financial Analyst

MEI Pharma's fiscal year-end report reveals a cash position of $38.3 million with no outstanding debt, which is important for a biotech company in transition. This cash runway provides a buffer as they explore strategic alternatives. However, the ongoing reduction-in-force raises concerns about operational capacity. The discontinuation of voruciclib's clinical development suggests a shift in R&D focus, potentially impacting future revenue streams. The engagement of Oppenheimer & Co. as a financial advisor indicates a serious commitment to exploring options like out-licensing and M&A, which could unlock value for shareholders. Overall, while the company's financial position is stable, the strategic review process introduces significant uncertainty about MEI's future direction and value proposition.

Biotech Industry Expert

MEI Pharma's strategic pivot is a critical juncture for the company. The discontinuation of voruciclib's clinical development is a significant setback, potentially narrowing their pipeline. However, maintaining "certain non-clinical activities" suggests they're keeping options open. The strategic review, including out-licensing and M&A considerations, is a prudent move in the current biotech landscape where consolidation and partnerships are increasingly common. The reduction-in-force, while preserving cash, may impact the company's ability to advance remaining programs. This situation is not uncommon for small biotech firms facing pipeline challenges, but it does put pressure on management to find a value-creating path forward quickly.

Corporate Strategy Consultant

MEI Pharma's strategic review is a critical inflection point. The $38.3 million cash position provides a runway for this process, but time is of the essence. The reduction-in-force, while necessary for cash preservation, signals a dramatic shift in operations. This could be viewed positively as a lean approach to maximize shareholder value or negatively as a sign of internal growth prospects. The engagement of Oppenheimer & Co. adds credibility to the strategic alternatives process. However, the lack of concrete timelines or specific strategic targets leaves shareholders in a state of uncertainty. The success of this process will heavily depend on the quality of assets for out-licensing and the company's attractiveness for potential M&A, both of which are unclear from the current disclosure.

Confirms Continuation of Evaluation of Strategic Alternatives

SAN DIEGO--(BUSINESS WIRE)-- MEI Pharma, Inc. (Nasdaq: MEIP) (the “Company”) today reported results for its fiscal year ended June 30, 2024.

Previously on July 22, 2024, the Company announced the commencement of an evaluation of strategic alternatives with the goal of maximizing the value of its assets for its stockholders. Subsequent to that date, the Company announced the engagement of Oppenheimer & Co., Inc. to serve as the Company’s exclusive financial adviser to assist in the review and evaluation of that process. As part of the review of strategic alternatives, the Company will consider options such as out-licensing opportunities for existing programs and merger and acquisition opportunities.

To best preserve the Company’s existing cash, the Company commenced a reduction-in-force on August 1, 2024, which will continue in stages as the Company’s operational and strategic direction evolves. Additionally, while the Company has discontinued the clinical development of voruciclib, certain non-clinical activities related to the Company’s drug candidates continue to be conducted.

There can be no assurance the exploration of strategic alternatives will result in any agreements or transactions, or, if completed, any agreements or transactions will be successful or on attractive terms. The Company does not expect to disclose developments with respect to this process unless or until the evaluation of strategic alternatives has been completed or the Board of Directors has concluded disclosure is appropriate or legally required.

As of June 30, 2024, MEI had $38.3 million in cash, cash equivalents, and short-term investments with no outstanding debt.

About MEI Pharma

MEI Pharma, Inc. (Nasdaq: MEIP) is a clinical-stage pharmaceutical company with a portfolio of several drug candidates that may offer novel and differentiated cancer therapies. The drug candidate pipeline includes voruciclib, an oral cyclin-dependent kinase 9 (“CDK9”) inhibitor, and ME-344, an intravenous small molecule mitochondrial inhibitor targeting the oxidative phosphorylation pathway. For more information, please visit www.meipharma.com. Follow us on X (formerly Twitter) @MEI_Pharma and on LinkedIn.

Forward-Looking Statements

Certain information contained in this press release that are not historical in nature are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding the Company’s ability to identify, assess and execute a strategic transaction or realize value from its existing assets, the Company’s ability to preserve cash in order to adequately fund an orderly wind down of its operations if no transaction is consummated, the ability of stockholders and other stakeholders to realize any value or recovery as part of a transaction or a wind down process, the Company’s workforce reduction and future charges expected to be incurred in connection therewith, the adequacy or sufficiency of the Company’s existing cash resources and other statements. You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on management’s current expectations and are subject to a number of risks and uncertainties, including, but not limited to the Company’s ability to identify attractive strategic alternatives; the Company’s ability to retain key personnel; the adequacy of the Company’s capital resources in light of changing circumstances; the actions of various stakeholders of the Company; uncertainty regarding the impact of rising inflation and the increase in interest rates as a result; potential economic downturn; activist investors; government regulation; and one-time events. We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements.

MEI PHARMA, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
	June 30,
		2024				2023
ASSETS
Current assets:
Cash and cash equivalents	$	3,705			$	16,906
Short-term investments		34,640				83,787
Unbilled receivables		-				85
Prepaid expenses and other current assets		2,424				6,750
Total current assets		40,769				107,528
Operating lease right-of-use asset		214				11,972
Property and equipment, net		392				1,309
Total assets	$	41,375			$	120,809
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	3,168			$	6,134
Accrued liabilities		5,187				12,461
Deferred revenue		-				317
Operating lease liability		-				1,428
Total current liabilities		8,355				20,340
Deferred revenue, long-term		-				64,545
Operating lease liability, long-term		-				11,300
Total liabilities		8,355				96,185
Stockholders' equity:
Preferred stock, $0.01 par value; 100 shares authorized;
none outstanding		-				-
Common stock, $0.00000002 par value; 226,000 shares
authorized; 6,663 shares issued and outstanding
at June 30, 2024 and 2023		-				-
Additional paid-in-capital		421,239				430,621
Accumulated deficit		(388,219	)			(405,997	)
Total stockholders' equity		33,020				24,624
Total liabilities and stockholders' equity	$	41,375			$	120,809

MEI PHARMA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
		Years Ended June 30,
			2024				2023
Revenues		$	65,297			$	48,816
Operating expenses:
Research and development			16,561				52,450
General and administrative			23,295				33,130
Impairment of long-lived assets			10,899				-
Total operating expenses			50,755				85,580
Income (loss) from operations			14,542				(36,764	)
Other income (expense):
Change in fair value of warrant liability			-				1,603
Interest and dividend income			3,277				3,345
Other expense, net			(41	)			(22	)
Net income (loss)		$	17,778			$	(31,838	)
Net income (loss) per share - basic and diluted		$	2.67			$	(4.78	)
Weighted-average shares used in computing
net income (loss) per share - basic and diluted			6,663				6,663

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240919436864/en/

Justin J. File

858-898-0976

investor@meipharma.com

Source: MEI Pharma, Inc.

FAQ

What was MEI Pharma's (MEIP) cash position as of June 30, 2024?

As of June 30, 2024, MEI Pharma (MEIP) reported $38.3 million in cash, cash equivalents, and short-term investments with no outstanding debt.

When did MEI Pharma (MEIP) begin its evaluation of strategic alternatives?

MEI Pharma (MEIP) announced the commencement of its evaluation of strategic alternatives on July 22, 2024.

Who is MEI Pharma's (MEIP) financial adviser for the strategic review process?

MEI Pharma (MEIP) engaged Oppenheimer & Co., Inc. as its exclusive financial adviser to assist in the review and evaluation of strategic alternatives.

What actions has MEI Pharma (MEIP) taken to preserve cash?

MEI Pharma (MEIP) initiated a reduction-in-force on August 1, 2024, which will continue in stages as the company's operational and strategic direction evolves.

Has MEI Pharma (MEIP) discontinued any clinical programs?

Yes, MEI Pharma (MEIP) has discontinued the clinical development of voruciclib, although certain non-clinical activities related to other drug candidates continue.