Tricida Announces Third Quarter 2022 Financial Results
Tricida, Inc. (NASDAQ:TCDA) announced today financial results for the three and nine months ended September 30, 2022 and provided an update on key initiatives.
Business Update
- Tricida announced in October the top-line results from its VALOR-CKD renal outcomes clinical trial, designed to evaluate veverimer's ability to slow CKD progression in patients with metabolic acidosis and chronic kidney disease (CKD). The VALOR-CKD trial did not meet its primary endpoint, which was defined as the time to the first occurrence of any event in the composite endpoint of renal death, end-stage renal disease (ESRD), or a confirmed greater than or equal to 40% reduction in estimated glomerular filtration rate (eGFR), also known as DD40. The overall safety profile of veverimer observed in the trial was consistent with that expected for the general population of patients with Stage 3 to 5 CKD. Data from the trial were also presented at the High Impact Clinical Studies session at the ASN Kidney Week 2022 conference.
- Tricida announced in November that the Board of Directors has authorized Tricida to conduct a thorough review of strategic options in order to maximize value to its stakeholders. Tricida has engaged Stifel and its wholly owned affiliate, Miller Buckfire, to serve as investment banking advisors and SierraConstellation Partners LLC to serve as a financial advisor.
- Tricida has put into place a reduction in force plan which includes an approximate 57% reduction in workforce. The Company estimates aggregate costs of approximately $2.0 million, recorded primarily in November of 2022, related to one-time termination severance payments and other employee-related costs that will be paid during the fourth quarter of 2022 and the first quarter of 2023.
Financial Results for the Three and Nine Months Ended September 30, 2022
Research and development expense was $19.9 million and $26.6 million for the three months ended September 30, 2022 and 2021, respectively. The decrease in research and development expense for the three months ended September 30, 2022 compared to the prior year was primarily due to a decrease in clinical development costs related to the VALOR-CKD trial following the administrative stop announced in May 2022, a decrease in personnel and related costs related to lower bonus expense and a decrease in stock-based compensation expense. Research and development expense was $55.3 million and $78.6 million for the nine months ended September 30, 2022 and 2021, respectively. The decrease in research and development expense for the nine months ended September 30, 2022 compared to the prior year was primarily due to a decrease in clinical development costs related to the VALOR-CKD trial following the administrative stop announced in May 2022, a decrease in personnel and related costs related to lower bonus expense and a decrease in stock-based compensation expense.
General and administrative expense was $4.1 million and $9.1 million for the three months ended September 30, 2022 and 2021, respectively. The decrease in general and administrative expense for the three months ended September 30, 2022 compared to the prior year was primarily due to a decrease in personnel and related costs related to lower bonus expense and a decrease in stock-based compensation expense. General and administrative expense was $23.1 million and $28.5 million for the nine months ended September 30, 2022 and 2021, respectively. The decrease in general and administrative expense for the nine months ended September 30, 2022 compared to the prior year was primarily due to a decrease in personnel and related costs related to lower bonus expense and a decrease in stock-based compensation expense.
Net loss was $25.8 million (non-GAAP net loss of $24.8 million) and $39.7 million (non-GAAP net loss of $30.7 million) for the three months ended September 30, 2022 and 2021, respectively, and $83.9 million (non-GAAP net loss of $69.0 million) and $126.6 million (non-GAAP net loss of $93.6 million) for the nine months ended September 30, 2022 and 2021, respectively. Net loss per basic and diluted share was $0.44 and $0.79 for the three months ended September 30, 2022 and 2021, respectively, and $1.45 and $2.52 for the nine months ended September 30, 2022 and 2021, respectively.
As of September 30, 2022, cash, cash equivalents and investments were $80.2 million.
About Tricida
Tricida, Inc. is a pharmaceutical company focused on its investigational drug candidate, veverimer, a non-absorbed, orally-administered polymer designed to slow CKD progression in patients with metabolic acidosis and CKD. Metabolic acidosis is a condition commonly caused by CKD that is believed to accelerate the progression of kidney deterioration. It is estimated to pose a health risk to approximately 4.3 million patients with CKD in the United States. There are currently no therapies approved by the FDA to slow progression of kidney disease by correcting chronic metabolic acidosis in patients with CKD.
For more information about Tricida, please visit Tricida.com.
Cautionary Note on Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements relate to expectations concerning matters that are not historical facts. Words such as "projects," "believes," "anticipates," "plans," "expects," "intends," "may," "will," "could," "should," "would," and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, all of the statements under the headings "Business Update" and other statements, including the Company's plans to conduct a thorough review of strategic options. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements. Such risks and uncertainties include, without limitation, the Company's contractual and financial obligations to key suppliers and vendors; the Company's financial projections and cost estimates; the Company's ability to raise additional funds; and risks associated with the Company's business prospects, financial results and business operations.
These and other factors that may affect the Company's future business prospects, results and operations are identified and described in more detail in the Company's filings with the Securities and Exchange Commission (the "SEC"), including the Company's most recent Annual Report filed on Form 10-K and the subsequently filed Quarterly Report(s) on Form 10-Q. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by applicable law, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of unanticipated events.
Tricida, Inc. Condensed Balance Sheets (Unaudited) (In thousands) |
|||||||
|
September 30,
|
|
December 31,
|
||||
Assets |
|||||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
17,744 |
|
|
$ |
21,113 |
|
Short-term investments |
|
62,475 |
|
|
|
119,419 |
|
Prepaid expenses and other current assets |
|
2,265 |
|
|
|
5,004 |
|
Total current assets |
|
82,484 |
|
|
|
145,536 |
|
Long-term investments |
__— |
|
|
10,043 |
|
||
Property and equipment, net |
|
541 |
|
|
|
769 |
|
Operating lease right-of-use assets |
|
10,854 |
|
|
|
12,158 |
|
Total assets |
$ |
93,879 |
|
|
$ |
168,506 |
|
|
|
|
|
||||
Liabilities and stockholders' equity (deficit) |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
4,395 |
|
|
$ |
10,023 |
|
Current operating lease liabilities |
|
2,797 |
|
|
|
2,736 |
|
Accrued expenses and other current liabilities |
|
9,735 |
|
|
|
16,721 |
|
Total current liabilities |
|
16,927 |
|
|
|
29,480 |
|
|
|
|
|
||||
Convertible Senior Notes, net |
|
195,347 |
|
|
|
127,512 |
|
Non-current operating lease liabilities |
|
9,851 |
|
|
|
11,296 |
|
Other long-term liabilities |
|
7,852 |
|
|
|
— |
|
Total liabilities |
|
229,977 |
|
|
|
168,288 |
|
|
|
|
|
||||
Stockholders' equity (deficit): |
|
|
|
||||
Preferred stock |
|
— |
|
|
|
— |
|
Common stock |
|
56 |
|
|
|
55 |
|
Additional paid-in capital |
|
746,234 |
|
|
|
810,618 |
|
Accumulated other comprehensive income (loss) |
|
(428 |
) |
|
|
(91 |
) |
Accumulated deficit |
|
(881,960 |
) |
|
|
(810,364 |
) |
Total stockholders' equity (deficit) |
|
(136,098 |
) |
|
|
218 |
|
Total liabilities and stockholders' equity (deficit) |
$ |
93,879 |
|
|
$ |
168,506 |
|
Tricida, Inc. Condensed Statements of Operations and Comprehensive Loss (Unaudited) (In thousands, except share and per share amounts) |
||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|||||||||
Research and development |
$ |
19,935 |
|
|
$ |
26,635 |
|
|
$ |
55,298 |
|
|
$ |
78,591 |
|
|
General and administrative |
|
4,125 |
|
|
|
9,052 |
|
|
|
23,119 |
|
|
|
28,497 |
|
|
Total operating expenses |
|
24,060 |
|
|
|
35,687 |
|
|
|
78,417 |
|
|
|
107,088 |
|
|
Loss from operations |
|
(24,060 |
) |
|
|
(35,687 |
) |
|
|
(78,417 |
) |
|
|
(107,088 |
) |
|
Other income (expense), net |
|
277 |
|
|
|
6 |
|
|
|
408 |
|
|
|
155 |
|
|
Interest expense |
|
(1,978 |
) |
|
|
(3,994 |
) |
|
|
(5,927 |
) |
|
|
(13,533 |
) |
|
Loss on early extinguishment of 2018 Term Loan |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,124 |
) |
|
Net loss |
|
(25,761 |
) |
|
|
(39,675 |
) |
|
|
(83,936 |
) |
|
|
(126,590 |
) |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|||||||||
Net unrealized gain (loss) on available-for-sale investments, net of tax |
|
47 |
|
|
|
(15 |
) |
|
|
(337 |
) |
|
|
(141 |
) |
|
Total comprehensive loss |
$ |
(25,714 |
) |
|
$ |
(39,690 |
) |
|
$ |
(84,273 |
) |
|
$ |
(126,731 |
) |
|
Net loss per share, basic and diluted |
$ |
(0.44 |
) |
|
$ |
(0.79 |
) |
|
$ |
(1.45 |
) |
|
$ |
(2.52 |
) |
|
Weighted-average number of shares outstanding, basic and diluted |
|
58,015,939 |
|
|
|
50,434,879 |
|
|
|
57,854,606 |
|
|
|
50,326,474 |
|
|
Tricida, Inc. GAAP to non-GAAP reconciliations (Unaudited) (In thousands) |
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A reconciliation between net loss on a GAAP basis and on a non-GAAP basis is as follows: |
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
GAAP net loss, as reported |
$ |
(25,761 |
) |
|
$ |
(39,675 |
) |
|
$ |
(83,936 |
) |
|
$ |
(126,590 |
) |
Adjustments: |
|
|
|
|
|
|
|
||||||||
Non-cash operating lease costs |
|
(31 |
) |
|
|
78 |
|
|
|
(80 |
) |
|
|
574 |
|
Accretion of Convertible Senior Notes and 2018 Term Loan |
|
228 |
|
|
|
2,243 |
|
|
|
677 |
|
|
|
7,047 |
|
Loss on early extinguishment of 2018 Term Loan |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,124 |
|
Stock-based compensation |
|
787 |
|
|
|
6,649 |
|
|
|
14,382 |
|
|
|
19,300 |
|
Changes in compound derivative liability |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(202 |
) |
Restructuring costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
107 |
|
Total adjustments |
|
984 |
|
|
|
8,970 |
|
|
|
14,979 |
|
|
|
32,950 |
|
Non-GAAP net loss |
$ |
(24,777 |
) |
|
$ |
(30,705 |
) |
|
$ |
(68,957 |
) |
|
$ |
(93,640 |
) |
Use of Non-GAAP Financial Measures
Tricida supplements its financial statements presented on a GAAP basis by providing additional measures which may be considered "non-GAAP" financial measures under applicable Securities and Exchange Commission rules. The Company believes that the disclosure of these non-GAAP financial measures provides investors with additional information that reflects the amounts and financial basis upon which management assesses and operates the Company's business. These non-GAAP financial measures are not in accordance with generally accepted accounting principles and should not be viewed in isolation or as a substitute for reported, or GAAP, net loss and diluted earnings per share, and are not a substitute for, or superior to, measures of financial performance performed in conformity with GAAP.
"Non-GAAP net loss" is not based on any standardized methodology prescribed by GAAP and represents GAAP net loss adjusted to exclude (1) non-cash operating lease costs, (2) accretion of Convertible Senior Notes and 2018 Term Loan, (3) loss on early extinguishment of 2018 Term Loan, (4) stock-based compensation, (5) changes in compound derivative liability and (6) restructuring costs, in reconciling of GAAP to Non-GAAP net loss. Non-GAAP financial measures used by Tricida may be calculated differently from, and therefore may not be comparable to, non-GAAP measures used by other companies.
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