ProKidney Reports Business Updates and Second Quarter 2024 Financial Results

Rhea-AI Summary

ProKidney Corp. (PROK) reported Q2 2024 financial results and business updates. Key highlights include:

1. Presented interim REGEN-007 data showing kidney function stabilization in diabetes and advanced CKD patients.

2. Restarted manufacturing and resumed PROACT 1 and PROACT 2 Phase 3 trials.

3. Closed a $140 million upsized public offering, extending cash runway into mid-2026.

4. Ended Q2 with $431.5 million in cash and equivalents.

5. R&D expenses increased to $29.4 million, up from $26.4 million in Q2 2023.

6. G&A expenses slightly increased to $13.7 million from $13.5 million in Q2 2023.

7. Net loss before noncontrolling interest was $38.5 million, compared to $34.8 million in Q2 2023.

8. Appointed Carla Poulson as Chief People Officer.

Positive

• Presented positive interim REGEN-007 data showing kidney function stabilization in patients
• Restarted manufacturing and resumed PROACT 1 and PROACT 2 Phase 3 trials
• Closed $140 million upsized public offering, extending cash runway into mid-2026
• Cash position increased to $431.5 million from $363.0 million at end of 2023
• Received QP Declaration of Equivalence to EU GMPs, allowing shipment of rilparencel to European clinical sites

Negative

• Net loss before noncontrolling interest increased to $38.5 million from $34.8 million in Q2 2023
• R&D expenses increased to $29.4 million from $26.4 million in Q2 2023
• G&A expenses slightly increased to $13.7 million from $13.5 million in Q2 2023

Medical Research Analyst

The interim results from REGEN-007 are encouraging for rilparencel's potential in preserving kidney function in advanced CKD patients with diabetes. The 18-month kidney function stabilization is a significant finding, given the progressive nature of CKD. However, it's important to note that these are interim data and the full Phase 2 results will be necessary to draw more definitive conclusions.

The resumption of PROACT 1 and PROACT 2 Phase 3 trials is a positive development, particularly with the amended protocol for PROACT 1 focusing on more advanced CKD patients. This enrichment strategy could potentially lead to more robust efficacy signals if rilparencel proves effective. The safety profile, described as consistent with prior studies and comparable to kidney biopsy, is reassuring but warrants continued vigilance in larger Phase 3 populations.

Financial Analyst

ProKidney's financial position has strengthened significantly with the $140 million equity offering, extending their cash runway into mid-2026. This funding is important as it covers the expected full enrollment of Phase 3 studies, reducing near-term financing risks. The company's cash position of $431.5 million as of June 30, 2024, represents a 18.9% increase from year-end 2023.

R&D expenses increased by 11.4% year-over-year, reflecting investments in clinical development and manufacturing improvements. The increase in personnel costs suggests a scaling up of operations to support ongoing trials. While G&A expenses remained relatively stable, the net loss widened by 10.6%, indicating continued investment in growth. Investors should monitor the burn rate closely as Phase 3 trials progress, but the current financial position appears solid for near-term objectives.

Biotech Industry Expert

The restart of manufacturing and resumption of Phase 3 trials are critical milestones for ProKidney. The QP Declaration of Equivalence to EU GMPs is particularly significant, enabling the company to expand its clinical footprint in Europe. This international reach could be valuable for future commercialization efforts if rilparencel proves successful.

The appointment of Carla Poulson as Chief People Officer with her extensive experience in biotech HR is a strategic move. As ProKidney scales up operations, strong talent management will be crucial. The company's focus on addressing unmet needs in late-stage CKD patients positions it well in a growing market, given the increasing prevalence of diabetes and CKD globally. However, investors should remain cautious as success in Phase 3 trials is not guaranteed and the path to potential commercialization is still long.

• Reported interim REGEN-007 data that demonstrate rilparencel’s potential to preserve kidney function in patients with diabetes and advanced CKD
  
• Restarted manufacturing and resumed PROACT 1 and PROACT 2 Phase 3 trials
• Closed $140 million upsized underwritten public offering and concurrent registered direct offering
• Ended the second quarter with $431.5 million in cash and cash equivalents and marketable securities, supporting operations through projected Phase 3 enrollment completion in mid-2026

WINSTON-SALEM, N.C., Aug. 09, 2024 (GLOBE NEWSWIRE) --  ProKidney Corp. (Nasdaq: PROK) (“ProKidney” or the “Company"), a leading late clinical-stage cellular therapeutics company focused on chronic kidney disease (CKD), today reported business updates and financial results for the second quarter ended June 30, 2024.

“The interim results of REGEN-007 as presented in June support rilparencel’s potential to preserve kidney function in patients with diabetes and advanced CKD,” said Bruce Culleton, M.D., Chief Executive Officer. “In addition to positive clinical data, the second quarter marked several critical milestones. Manufacturing has restarted, both Phase 3 studies have resumed, and we completed a $140 million equity offering to extend our runway into mid-2026. We are resolutely focused on executing our Phase 3 program as we seek to address the unmet need in late-stage CKD patients who have limited therapeutic options before dialysis or kidney transplant.”

Clinical, Corporate, and Operational Updates

• In June, we presented interim Phase 2 REGEN-007 data that showed kidney function stabilization for 18 months in patients with diabetes and advanced CKD who received rilparencel and a safety profile consistent with prior studies and comparable to kidney biopsy
• Manufacturing restarted in June and the QP Declaration of Equivalence to EU GMPs was received in July, allowing ProKidney to ship rilparencel to clinical study sites in Europe
• PROACT 1 and PROACT 2 Phase 3 trials resumed; patients have begun enrolling in PROACT 1 under the amended protocol that enriches for more advanced CKD patients
• Announced closing of an upsized $140 million underwritten public offering and concurrent registered direct offering in June, extending cash runway into mid-2026 and through the expected full enrollment of the Phase 3 studies
• Appointed Carla Poulson as Chief People Officer in May. Ms. Poulson brings approximately 25 years of experience in human resources, talent acquisition, and management development. Prior to ProKidney, Ms. Poulson served as Chief People Officer at UniQure Therapeutics, Mersana Therapeutics, Akcea Therapeutics and 10 years in senior HR leadership positions at Vertex Pharmaceuticals
  

Second Quarter 2024 Financial Highlights

Liquidity: Cash, cash equivalents and marketable securities as of June 30, 2024, totaled $431.5 million, compared to $363.0 million on December 31, 2023. We expect that our existing cash, cash equivalents and marketable securities held on June 30, 2024, will enable us to fund our operating expenses and capital expenditure requirements into mid-2026.

R&D Expenses: Research and development expenses were $29.4 million for the three months ended June 30, 2024, compared to $26.4 million for the same period in 2023. The increase of $3.0 million was driven primarily by increases in cash compensation costs of approximately $3.2 million as we continue to hire additional personnel in the areas of clinical development, quality, manufacturing, and biostatistics to support our ongoing clinical trials. Further, we have seen increases in professional fees of approximately $1.6 million related to the remediation of quality and manufacturing compliance deficiencies. Lastly, we have experienced increased costs for clinical operations, materials and facilities totaling approximately $2.2 million related to preparations for the restart of activities for our PROACT studies. These increases have been offset by decreased spending on manufacturing improvements and equity-based compensation costs of approximately $2.9 million and $1.3 million, respectively.

G&A Expenses: General and administrative expenses were $13.7 million for the three months ended June 30, 2024 compared to $13.5 million for the same period in 2023. The increase of $0.2 million has been primarily driven by increases in cash compensation of approximately $2.2 million. This increase has been offset by decreases in equity-based compensation of approximately $2.1 million.

Net Loss Before Noncontrolling Interest: Net loss before noncontrolling interest was $38.5 million and $34.8 million for the three months ended June 30, 2024 and 2023, respectively.

Shares outstanding: Class A and Class B ordinary shares outstanding as of June 30, 2024, totaled 289,674,830.

About ProKidney Corp.
ProKidney, a pioneer in the treatment of chronic kidney disease through innovations in cellular therapy, was founded in 2015 after a decade of research. ProKidney’s lead product candidate, rilparencel (also known as REACT^®), is a first-of-its-kind, patented, proprietary autologous cellular therapy being evaluated to potentially preserve kidney function in patients with diabetes and advanced CKD. Rilparencel has received Regenerative Medicine Advanced Therapy (RMAT) designation, as well as FDA and EMA guidance, supporting its ongoing Phase 3 clinical program.

Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. ProKidney’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to financial results and expected cash runway, future performance, development and commercialization of products, if approved, the potential benefits and impact of the Company’s products, if approved, potential regulatory approvals, the size and potential growth of current or future markets for the Company’s products, if approved, the advancement of the Company’s development programs into and through the clinic and the expected timing for reporting data, the making of regulatory filings or achieving other milestones related to related to the Company’s product candidates, and the advancement and funding of the Company’s developmental programs generally. Most of these factors are outside of the Company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: the inability to maintain the listing of the Company’s Class A ordinary shares on the Nasdaq; the inability to implement business plans, forecasts, and other expectations or identify and realize additional opportunities, which may be affected by, among other things, competition and the ability of the Company to grow and manage growth profitably and retain its key employees; the risk of downturns and a changing regulatory landscape in the highly competitive biotechnology industry; the inability of the Company to raise financing in the future; the inability of the Company to obtain and maintain regulatory clearance or approval for its products, and any related restrictions and limitations of any cleared or approved product; the inability of the Company to identify, in-license or acquire additional technology; the inability of Company to compete with other companies currently marketing or engaged in the biologics market and in the area of treatment of kidney diseases; the size and growth potential of the markets for the Company’s products, if approved, and its ability to serve those markets, either alone or in partnership with others; the Company’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing; the Company’s financial performance; the Company’s intellectual property rights; uncertainties inherent in cell therapy research and development, including the actual time it takes to initiate and complete clinical studies and the timing and content of decisions made by regulatory authorities; the fact that interim results from our clinical programs may not be indicative of future results; the impact of geo-political conflict on the Company’s business; and other risks and uncertainties included under the heading “Risk Factors” in the Company’s most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. The Company cautions readers that the foregoing list of factors is not exclusive and cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.

Investor Contacts:

ProKidney
Ethan Holdaway
Ethan.Holdaway@prokidney.com

LifeSci Advisors, LLC
Daniel Ferry
Daniel@lifesciadvisors.com

ProKidney Corp. and Subsidiaries Consolidated Balance Sheets (in thousands, except for share data)
	June 30, 2024				December 31, 2023
	(Unaudited)
Assets
Cash and cash equivalents	$	214,508			$	60,649
Marketable securities		217,023				302,301
Interest receivable		2,748				1,375
Prepaid assets		3,532				3,399
Prepaid clinical		12,451				6,413
Other current assets		—				9
Total current assets		450,262				374,146
Fixed assets, net		42,567				42,143
Right of use assets, net		6,334				4,263
Total assets	$	499,163			$	420,552
Liabilities and Shareholders' Deficit
Accounts payable	$	2,933			$	5,098
Lease liabilities		1,032				803
Accrued expenses and other		15,109				17,665
Income taxes payable		1,515				1,472
Total current liabilities		20,589				25,038
Income tax payable, net of current portion		568				568
Lease liabilities, net of current portion		5,640				3,610
Total liabilities		26,797				29,216
Commitments and contingencies
Redeemable noncontrolling interest		1,444,737				1,494,732
Shareholders’ deficit
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 125,856,877 and 59,880,347 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		13				6
Class B ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 163,817,953 and 168,297,916 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		16				17
Additional paid-in capital		189,267				36,114
Accumulated other comprehensive (loss) gain		(6	)			130
Accumulated deficit		(1,161,661	)			(1,139,663	)
Total shareholders' deficit		(972,371	)			(1,103,396	)
Total liabilities and shareholders' deficit	$	499,163			$	420,552

ProKidney Corp. and Subsidiaries Consolidated Statements of Operations and Comprehensive Loss (in thousands, except for share and per share data)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Operating expenses
Research and development		$	29,404			$	26,364			$	56,637			$	51,981
General and administrative			13,652				13,455				26,495				28,714
Total operating expenses			43,056				39,819				83,132				80,695
Operating loss			(43,056	)			(39,819	)			(83,132	)			(80,695	)
Other income (expense):
Interest income			4,537				5,965				9,380				11,262
Interest expense			(3	)			(4	)			(5	)			(7	)
Net loss before income taxes			(38,522	)			(33,858	)			(73,757	)			(69,440	)
Income tax (benefit) expense			(56	)			965				42				2,292
Net loss before noncontrolling interest			(38,466	)			(34,823	)			(73,799	)			(71,732	)
Net loss attributable to noncontrolling interest			(25,960	)			(25,705	)			(51,801	)			(52,949	)
Net loss available to Class A ordinary shareholders		$	(12,506	)		$	(9,118	)		$	(21,998	)		$	(18,783	)
Weighted average Class A ordinary shares outstanding:
Basic and diluted			75,908,017				64,562,209				68,429,869				64,551,281
Net loss per share attributable to Class A ordinary shares:
Basic and diluted		$	(0.16	)		$	(0.14	)		$	(0.32	)		$	(0.29	)

ProKidney Corp. and Subsidiaries Consolidated Statements of Cash Flows (in thousands)
			Six Months Ended June 30,
				2024				2023
Cash flows from operating activities
Net loss before noncontrolling interest				$	(73,799	)		$	(71,732		)
Adjustments to reconcile net loss before noncontrolling interest to net cash flows used in operating activities:
Depreciation and amortization					2,372				1,702
Equity-based compensation					15,489				24,222
Gain on marketable securities, net					(3,802	)			(1,981		)
Loss on disposal of equipment					131				3
Changes in operating assets and liabilities
Interest receivable					(1,373	)			(8,090		)
Prepaid and other assets					(6,162	)			2,256
Accounts payable and accrued expenses					(5,838	)			12,430
Income taxes payable					43				282
Net cash flows used in operating activities					(72,939	)			(40,908		)
Cash flows from investing activities
Purchases of marketable securities					(82,880	)			(261,847		)
Sales and maturities of marketable securities					171,445				60,768
Purchase of equipment and facility expansion					(1,596	)			(4,686		)
Net cash flows provided by (used in) investing activities					86,969				(205,765		)
Cash flows from financing activities
Proceeds from sales of Class A ordinary shares, net of offering costs					139,855				–
Payments on finance leases					(26	)			(26		)
Net cash flows provided by (used in) financing activities					139,829				(26		)
Net change in cash and cash equivalents					153,859				(246,699		)
Cash, beginning of period					60,649				490,252
Cash, end of period				$	214,508			$	243,553
Supplemental disclosure of non-cash investing and financing activities:
Right of use assets obtained in exchange for lease obligations				$	2,621			$	714
Exchange of Class B ordinary shares				$	14,902			$	–
Impact of equity transactions and compensation on redeemable noncontrolling interest				$	16,708			$	380
Change in redemption value of noncontrolling interest				$	–			$	230,209
Equipment and facility expansion included in accounts payable and accrued expenses				$	780			$	689

FAQ

What were ProKidney's (PROK) key financial results for Q2 2024?

ProKidney reported a net loss of $38.5 million, R&D expenses of $29.4 million, and G&A expenses of $13.7 million. The company ended Q2 with $431.5 million in cash and equivalents.

What clinical updates did ProKidney (PROK) report in Q2 2024?

ProKidney presented interim REGEN-007 data showing kidney function stabilization in diabetes and advanced CKD patients. The company also restarted manufacturing and resumed PROACT 1 and PROACT 2 Phase 3 trials.

How much did ProKidney (PROK) raise in its public offering in Q2 2024?

ProKidney closed a $140 million upsized underwritten public offering and concurrent registered direct offering in June 2024.

What is ProKidney's (PROK) cash runway following the Q2 2024 results?

ProKidney expects its cash position of $431.5 million as of June 30, 2024, to fund operations into mid-2026, through the expected full enrollment of the Phase 3 studies.

Who did ProKidney (PROK) appoint as Chief People Officer in Q2 2024?

ProKidney appointed Carla Poulson as Chief People Officer in May 2024. She brings about 25 years of experience in human resources, talent acquisition, and management development.