Yumanity Therapeutics Reports Third Quarter 2022 Financial Results and Recent Corporate Developments
Yumanity Therapeutics (YMTX) reported its Q3 2022 financial results, reflecting a net loss of $3.4 million ($0.31 per share), significantly reduced from a $10 million loss in Q3 2021. Cash reserves dropped to $8.4 million from $36.5 million at year-end 2021, mainly due to a $12.8 million debt repayment and clinical expenses. R&D spending plummeted to $0.7 million from $6.6 million YoY, owing to staff reductions and paused development on YTX-7739 amid a partial clinical hold. A merger and asset sale to Janssen for $26 million are in process, with stockholder voting scheduled for December 13, 2022.
- Net loss decreased from $10 million in Q3 2021 to $3.4 million in Q3 2022.
- R&D expenses dropped significantly to $0.7 million from $6.6 million YoY.
- Cash reserves decreased from $36.5 million at year-end 2021 to $8.4 million by September 30, 2022.
- Operational funding expected to last only into early Q1 2023 without strategic transactions.
BOSTON, Nov. 14, 2022 (GLOBE NEWSWIRE) -- Yumanity Therapeutics, Inc. (“Yumanity” or the “Company”) (Nasdaq: YMTX), a clinical-stage biopharmaceutical company, today announced financial results for the third quarter ended September 30, 2022 and provided an overview of the Company’s recent corporate developments.
Recent Corporate Developments
- On November 10, 2022, Yumanity announced the effectiveness of a registration statement on Form S-4 (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) in connection with Yumanity’s previously announced proposed sale of Yumanity’s lead clinical-stage product candidate, YTX-7739, as well as Yumanity’s unpartnered discovery-stage neuroscience product candidates and targets to Janssen Pharmaceutica NV (“Janssen”) for
$26 million in cash as well as Yumanity’s proposed merger with Kineta, Inc. (“Kineta”) under which Kineta will become a wholly-owned subsidiary of Yumanity in an all-stock transaction, resulting in a combined publicly traded company re-named Kineta, Inc. Yumanity subsequently filed a definitive proxy statement and prospectus (the “Proxy Statement”) which provides important information about Yumanity and the proposed transactions, both of which were announced on June 6, 2022. Yumanity is mailing the Proxy Statement to stockholders of record as of the close of business on November 4, 2022. The Proxy Statement will be accompanied by a voting instruction form or a proxy card relating to the special meeting of Yumanity's stockholders to approve the asset sale and merger (the “Special Meeting”) which will be held in a virtual-only format via live audio webcast at 10:00 a.m., Eastern Time, on December 13, 2022, at www.virtualshareholdermeeting.com/YMTX2022SM, unless postponed or adjourned to a later date.
Third Quarter 2022 Financial Highlights
- Cash position: As of September 30, 2022, cash, cash equivalents and investments were
$8.4 million , compared to$36.5 million as of December 31, 2021. The decrease was primarily due to a$12.8 million payment to extinguish the Company’s remaining debt during the first quarter of 2022, spending on the clinical development of YTX-7739 primarily in the first quarter of 2022, and costs related to being a public company. As of the issuance date of the condensed consolidated financial statements for the period ended September 30, 2022, the Company expects that, absent either strategic transaction, its cash, cash equivalents and marketable securities will be sufficient to fund its operating expenses early into the first quarter of 2023. - Research and development (R&D) expense: Research and development expense was
$0.7 million compared to$6.6 million for the third quarter of 2021. The decrease in R&D expense was primarily due to the elimination of a significant portion of the Company’s R&D personnel in connection with the restructuring announced in February 2022 as well as pausing of clinical development efforts for YTX-7739 while the U.S. Food and Drug Administration partial clinical hold is in effect. - General and administrative expense: General and administrative expense was
$4.2 million compared to$4.5 million for the third quarter of 2021. The decrease was primarily attributable to lower personnel costs resulting from the restructuring announced in February 2022, offset by higher legal fees and investment banking fees incurred in connection with the transactions contemplated by the merger agreement with Kineta and the asset purchase agreement with Janssen. - Net loss: The Company reported a net loss of
$3.4 million , or$0.31 per basic and diluted share, compared to a net loss of$10.0 million , or$0.97 per basic and diluted share for the third quarter of 2021. The decrease in net loss was due primarily to the decrease in R&D expense as described above. The Company expects to continue to generate operating losses for the foreseeable future, although at reduced expected levels as a result of restructuring actions taken in the nine months ended September 30, 2022.
| YUMANITY THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) (in thousands, except share/unit amounts) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Collaboration revenue | $ | 1,402 | $ | 1,635 | $ | 4,081 | $ | 7,282 | |||||||
| Operating expenses: | |||||||||||||||
| Research and development | 726 | 6,624 | 6,764 | 20,729 | |||||||||||
| General and administrative | 4,180 | 4,513 | 14,562 | 15,277 | |||||||||||
| Total operating expenses | - | - | 3,903 | - | |||||||||||
| 4,906 | 11,137 | 25,229 | 36,006 | ||||||||||||
| Loss from operations | (3,504 | ) | (9,502 | ) | (21,148 | ) | (28,724 | ) | |||||||
| Other income (expense), net | 141 | (454 | ) | (441 | ) | (368 | ) | ||||||||
| Net loss | $ | (3,363 | ) | $ | (9,956 | ) | (21,589 | ) | (29,092 | ) | |||||
| Net loss per share/unit, basic and diluted | $ | (0.31 | ) | $ | (0.97 | ) | $ | (2.00 | ) | $ | (2.84 | ) | |||
| Weighted average common shares/units outstanding, basic and diluted | 10,855,751 | 10,304,775 | 10,817,830 | 10,239,502 | |||||||||||
| SELECTED CONSOLIDATED BALANCE SHEET DATA (unaudited) (in thousands) | |||||
| September 30, | December 31, | ||||
| 2022 | 2021 | ||||
| Cash, cash equivalents and investments | $ | 8,416 | $ | 36,501 | |
| Total current assets | 9,080 | 42,708 | |||
| Working capital | 4,977 | 20,045 | |||
| Total assets | 9,579 | 62,932 | |||
| Total debt | - | 13,162 | |||
| Total stockholders' equity | 5,476 | 23,497 | |||
About Yumanity
Yumanity is a clinical-stage biopharmaceutical company dedicated to accelerating the revolution in the treatment of neurodegenerative diseases through its scientific foundation and drug discovery platform. Yumanity’s drug discovery platform enables the Company to rapidly screen for potential disease-modifying therapies by overcoming the toxicity of misfolded proteins associated with neurogenerative diseases. Yumanity’s pipeline consists of programs focused on Parkinson’s disease, Lewy body dementia, multi-system atrophy, amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease) and frontotemporal lobar dementia (FTLD). For more information, please visit www.yumanity.com.
Additional Information and Where to Find It
This press release may be deemed to be solicitation material with respect to the proposed transactions between Yumanity and Kineta and between Yumanity and Janssen. In connection with the proposed transactions, on August 29, 2022, Yumanity filed with the SEC a registration statement on Form S-4 (the “Initial Registration Statement”), as amended by Amendment No. 1 to the Initial Registration Statement filed with the SEC on October 3, 2022, Amendment No. 2 to the Initial Registration Statement filed with the SEC on October 24, 2022 and Amendment No. 3 to the Initial Registration Statement filed with the SEC on November 4, 2022 (together with the Initial Registration Statement, the “Registration Statement”), which contains a preliminary proxy statement and prospectus. The Registration Statement has been declared effective by the SEC on November 10, 2022. Yumanity subsequently filed the Proxy Statement on November 10, 2022, which is being mailed to stockholders of record as of the close of business on November 4, 2022. Investors and securityholders of Yumanity and Kineta are urged to read these materials when they become available because they contain important information about Yumanity, Kineta and the proposed transactions. This press release is not a substitute for the Registration Statement, the Proxy Statement or any other documents that Yumanity may file with the SEC or send to securityholders in connection with the proposed transactions. Investors and securityholders may obtain free copies of the documents filed with the SEC, once available, on Yumanity’s website at www.yumanity.com, on the SEC’s website at www.sec.gov or by directing a request to Yumanity’s Investor Relations at (212) 213-0006 ext. 331.
This press release shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Participants in the Solicitation
Each of Yumanity, Kineta and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Yumanity in connection with the proposed transactions. Information about the executive officers and directors of Yumanity is set forth in Yumanity’s Definitive Proxy Statement on Schedule 14A relating to the 2022 Annual Meeting of Stockholders, filed with the SEC on April 25, 2022. Other information regarding the interests of such individuals, who may be deemed to be participants in the solicitation of proxies for the stockholders of Yumanity, is set forth in the Proxy Statement and will be set forth in any other relevant documents to be filed with the SEC. You may obtain free copies of these documents as described above.
Cautionary Statements Regarding Forward-Looking Statements
This press release contains forward-looking statements, including statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may be identified by words and phrases such as “aims,” “anticipates,” “believes,” “could,” “designed to,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “plans,” “possible,” “potential,” “seeks,” “will,” and variations of these words and phrases or similar expressions that are intended to identify forward-looking statements. These forward-looking statements include, without limitation, statements regarding the proposed merger between Yumanity and Kineta and the proposed asset sale to Janssen, including whether and when the transactions will be consummated; Yumanity’s cash runway; statements about the structure, timing and completion of the proposed transactions; the listing of the combined company on Nasdaq after the closing of the proposed merger; expectations regarding the ownership structure of the combined company after the closing of the proposed merger; the expected executive officers and directors of the combined company; the expected cash position of each of Yumanity and Kineta and the combined company at the closing of the proposed merger; the future operations of the combined company; the nature, strategy and focus of the combined company; the development and commercial potential and potential benefits of any product candidates of the combined company; the executive and board structure of the combined company; the location of the combined company’s corporate headquarters; anticipated preclinical and clinical drug development activities and related timelines, including the expected timing for data and other clinical and preclinical results; Kineta having sufficient resources to advance its pipeline; and other statements that are not historical fact. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation: (i) the risk that the conditions to the closing of the proposed transactions are not satisfied, including the failure to timely obtain stockholder approval for the transactions, if at all; (ii) uncertainties as to the timing of the consummation of the proposed transactions and the ability of each of Yumanity, Kineta and Janssen to consummate the proposed merger or asset sale, as applicable; (iii) risks related to Yumanity’s ability to manage its operating expenses and its expenses associated with the proposed transactions pending closing; (iv) risks related to the failure or delay in obtaining required approvals from any governmental or quasi-governmental entity necessary to consummate the proposed transactions; (v) the risk that as a result of adjustments to the exchange ratio, Yumanity stockholders and Kineta shareholders could own more or less of the combined company than is currently anticipated; (vi) risks related to the market price of Yumanity’s common stock relative to the exchange ratio; (vii) unexpected costs, charges or expenses resulting from either or both of the proposed transactions; (viii) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transactions; (ix) the risk that the amount of the dividend distributed to Yumanity stockholders in connection with the asset sale, if any, may be lower than currently anticipated; (x) risks related to the inability of the combined company to obtain sufficient additional capital to continue to advance these product candidates and its preclinical programs; (xi) uncertainties in obtaining successful clinical results for product candidates and unexpected costs that may result therefrom; (xii) risks related to the failure to realize any value from product candidates and preclinical programs being developed and anticipated to be developed in light of inherent risks and difficulties involved in successfully bringing product candidates to market; and (xiii) risks associated with the possible failure to realize certain anticipated benefits of the proposed transactions, including with respect to future financial and operating results. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. These and other risks and uncertainties are more fully described in periodic filings with the SEC, including the factors described in the section titled “Risk Factors” in Yumanity’s most recent Annual or Quarterly Report filed with the SEC, and in other filings that Yumanity makes and will make with the SEC in connection with the proposed transactions, including the Proxy Statement. You should not place undue reliance on these forward-looking statements, which are made only as of the date hereof or as of the dates indicated in the forward-looking statements. Except as required by law, Yumanity expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
Investors:
Burns McClellan, Inc.
Lee Roth
(212) 213-0006 ext. 331
Media:
Burns McClellan, Inc.
Robert Flamm, Ph.D.
rflamm@burnsmc.com
Source: Yumanity Therapeutics, Inc.
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