Exicure, Inc. Reports Full Year 2023 Financial Results

Rhea-AI Summary

Exicure (Nasdaq: XCUR) reported its full-year 2023 financial results, highlighting a significant reduction in operations and financial strain.

As of December 31, 2023, the company’s cash and cash equivalents stood at $0.8 million, down from $8.6 million in 2022, further dropping to $0.2 million by May 31, 2024. Exicure received a $0.7 million loan from DGP Co., to cover immediate financial needs.

Research and development expenses decreased drastically to $1.4 million from $19.8 million in 2022, following the suspension of clinical, preclinical, and discovery program activities.

General and administrative expenses rose to $12.7 million from $10.9 million. The net loss for the year increased to $16.9 million, significantly higher than the $2.6 million loss in 2022, due to the absence of revenue.

Management disclosed concerns over the company's ability to continue operations without substantial additional financing in the near term.

Positive

• Research and development expenses decreased by $18.3 million, reflecting cost-cutting measures.
• Receipt of a $0.7 million loan from DGP Co., to assist with immediate financial needs.

Negative

• Cash and cash equivalents decreased to $0.2 million by May 31, 2024.
• General and administrative expenses increased by $1.8 million.
• Net loss significantly increased to $16.9 million from $2.6 million in 2022.
• The company has no revenue to offset expenses.
• Management expressed concerns about the inability to continue operations without substantial additional financing.
• The company's cash position is critical, needing immediate additional funding.

Insights

Financial Analyst

The financial state of Exicure, Inc. is quite concerning for retail investors. The company's cash position has drastically declined from $8.6 million at the end of 2022 to $0.2 million by May 31, 2024. This steep drop indicates severe liquidity issues. Moreover, the recent loan of $0.7 million from DGP Co., Ltd., while helpful in the short term, is not a sustainable solution as it is a short-term loan with a 6% interest rate due in ten months.

Research and Development (R&D) expenses fell sharply from $19.8 million in 2022 to $1.4 million in 2023. This decline aligns with the company's cessation of R&D activities, indicating a strategic pivot but also a lack of ongoing projects that could drive future growth.

General and Administrative (G&A) expenses rose to $12.7 million, up from $10.9 million the previous year. This increase in overhead costs despite a shrinking operational scope raises questions about operational efficiency.

The company reported a net loss of $16.9 million for 2023 compared to a $2.6 million net loss in 2022. This significant increase in net loss despite reduced operational activities is alarming and suggests ineffective cost management strategies.

Market Research Analyst

Examining Exicure's strategic pivot away from R&D to exploring strategic alternatives is crucial. The company halted all their preclinical activities and significantly reduced their workforce, suggesting a shift from their core competencies in nucleic acid therapies. This pivot may indicate that the company couldn't sustain its original business model and now it’s exploring various avenues to maximize shareholder value.

The market's reception to this shift is likely going to be cautious. Investors generally prefer companies with clear, sustainable business models. Exicure's current state, requiring substantial additional financing in the near term, coupled with no assurance of such financing being available, makes it a risky investment. The company's future is highly uncertain without a clear, new strategic direction or substantial financial backing.

Moreover, the discontinuation of R&D activities could push existing investors who were interested in its biotechnological innovations to reconsider their positions. The company’s growth potential now hinges on the success of its strategic alternatives, which remain undefined.

CHICAGO--(BUSINESS WIRE)-- Exicure, Inc. (Nasdaq: XCUR) has historically been an early-stage biotechnology company focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets. In September 2022, the Company announced a significant reduction in force, suspension of preclinical activities and halting of all research and development, and that the Company was exploring strategic alternatives to maximize stockholder value.

2023 Financial Results

Cash Position: Cash and cash equivalents were $0.8 million as of December 31, 2023, as compared to $8.6 million as of December 31, 2022. Subsequent to December 31, 2023, our cash and cash equivalents have decreased to approximately $0.2 million as of May 31, 2024. Subsequent to May 31, 2024, the Company received a $0.7 million loan from DGP Co., Ltd., a significant stockholder. The loan has a maturity of ten months from issuance and interest at a rate of 6.0% per annum is payable at maturity. The Company believes that its cash and cash equivalents are insufficient to continue to fund operations and additional funding is needed in the very near term.

Research and Development (R&D) Expense: Research and development expenses were $1.4 million for the year ended December 31, 2023, as compared to $19.8 million for the year ended December 31, 2022. The decrease in R&D expense for the year ended December 31, 2023 of $18.3 million reflects the stoppage of clinical, preclinical, and discovery program activities and a reduction in employee headcount with lower employee-related expenses and fewer discovery, preclinical, and clinical program activities resulting from the restructuring activities that the Company announced in December 2021 and September 2022.

General and Administrative (G&A) Expense: General and administrative expenses were $12.7 million for the year ended December 31, 2023, as compared to $10.9 million for the year ended December 31, 2022. The increase in G&A expense of $1.8 million for the year ended December 31, 2023 was mostly due to certain expenses that previously had been recorded as research and development expenses, such as office facilities, legal, and payroll related costs, that no longer met the criteria to be classified as research and development expenses due to the shift in our historical business operations discontinuing all research and development activities.

Net Loss: The Company had a net loss of $16.9 million for the year ended December 31, 2023, as compared to a net loss of $2.6 million for the year ended December 31, 2022. Although operating expenses were reduced by more than 50%, there were no revenues to offset these expenses resulting in an increase in net loss of $14.3 million.

Going Concern: Management believes that the Company’s existing cash and cash equivalents is not sufficient to continue to fund operations. The Company has already engaged in significant cost reductions, so our ability to further cut costs and extend the Company’s operating runway is limited. As a result, substantial additional financing is needed in very near term to pay expenses, fund the ongoing exploration of strategic alternatives and pursue any alternatives that may be identified. The Company needs to raise capital to fund its operations. There can be no assurance that such additional financing will be available and, if available, can be obtained on acceptable terms.

About Exicure

Exicure, Inc. has historically been an early-stage biotechnology company focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets. Following its recent restructuring and suspension of clinical and development activities, the Company is exploring strategic alternatives to maximize stockholder value, both with respect to its historical biotechnology assets and more broadly. For further information, see www.exicuretx.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release other than statements of historical fact may be deemed forward looking including, but not limited to, statements regarding: the Company’s current business plans and objectives, including the pursuit of strategic alternatives to maximize stockholder value. Words such as “plans,” “expects,” “will,” “anticipates,” “continue,” “advance,” “believes,” “target,” “may,” “intend,” “could,” and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements are based on management’s current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. For a discussion of other risks and uncertainties, and other important factors, any of which could cause the Company’s actual results to differ from those contained in the forward-looking statements, see the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. All information in this press release is as of the date of the release, and the Company undertakes no duty to update this information or to publicly announce the results of any revisions to any of such statements to reflect future events or developments, except as required by law.

EXICURE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
	December 31, 2023				December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	816			$	8,577
Other receivable		15				—
Prepaid expenses and other current assets		1,193				1,474
Total current assets		2,024				10,051
Property and equipment, net		54				2,530
Right-of-use asset		6,517				7,257
Other noncurrent assets		2,985				3,490
Total assets	$	11,580			$	23,328
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		1,631				361
Accrued expenses and other current liabilities		879				1,278
Total current liabilities		2,510				1,639
Lease liability, noncurrent		6,039				6,767
Total liabilities	$	8,549			$	8,406
Stockholders’ equity:
Preferred stock, $0.0001 par value per share; 10,000,000 shares authorized, no shares issued and outstanding, December 31, 2023 and December 31, 2022		—				—
Common stock, $0.0001 par value per share; 200,000,000 shares authorized, 8,650,515 issued and outstanding, December 31, 2023; 4,965,901 issued and outstanding, December 31, 2022		1				—
Additional paid-in capital		192,593				187,571
Accumulated other comprehensive loss		—				—
Accumulated deficit		(189,563	)			(172,649	)
Total stockholders' equity		3,031				14,922
Total liabilities and stockholders’ equity	$	11,580			$	23,328

EXICURE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
		Year Ended December 31,
		2023				2022
Revenue:
Collaboration revenue		$	—			$	28,826
Total revenue			—				28,826
Operating expenses:
Research and development expense			1,423				19,767
General and administrative expense			12,653				10,890
Loss from sale of property and equipment			920				—
Total operating expenses			14,996				30,657
Operating loss			(14,996	)			(1,831	)
Other income (expense), net:
Changes in fair value of investment in convertible notes receivable			(2,000	)			—
Dividend income			52				78
Interest income			32				15
Interest expense			—				(595	)
Other income (expense), net			(2	)			(40	)
Total other income (expense), net			(1,918	)			(542	)
Net loss before provision for income taxes			(16,914	)			(2,373	)
Provision for income taxes			—				209
Net loss		$	(16,914	)		$	(2,582	)
Basic and diluted loss per common share		$	(2.11	)		$	(0.56	)
Weighted-average basic and diluted common shares outstanding			8,013,840				4,619,471

 

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Josh Miller

847-673-1700

media@exicuretx.com

Source: Exicure, Inc.

FAQ

What are Exicure's 2023 financial results?

Exicure reported a net loss of $16.9 million for 2023, with significant reductions in R&D expenses and ongoing financial challenges.

What is Exicure's cash position as of December 31, 2023?

As of December 31, 2023, Exicure's cash and cash equivalents were $0.8 million.

What is Exicure's stock symbol?

Exicure's stock symbol is XCUR.

Why did Exicure's general and administrative expenses increase in 2023?

The increase of $1.8 million in G&A expenses is due to reclassification of certain costs previously recorded as R&D expenses.

How has Exicure managed its R&D expenses in 2023?

Exicure reduced R&D expenses to $1.4 million from $19.8 million, reflecting the halt of clinical and preclinical activities.

What loan did Exicure receive in 2024 to support its operations?

Exicure received a $0.7 million loan from DGP Co., in 2024.

What are the financial concerns for Exicure in 2024?

Exicure's management expressed concerns over the company's ability to continue operations without substantial additional financing.