美國
證券交易委員會
華盛頓特區20549
表格
（標記一）
根據1934年證券交易法第13或15(d)節的季度報告 |
截至季度結束日期的財務報告
或者
根據1934年證券交易法第13或15(d)節的轉型報告書 |
在過渡期從到
委託文件編號：001-39866
（依據其憲章指定的註冊名稱）
| ||
（國家或其他管轄區的 | （IRS僱主 |
(
（註冊者的主要執行辦公室的地址，包括郵政編碼和電話號碼，包括區號）
在法案第12(b)條的規定下注冊的證券：
請勾選表示註冊人（1）在過去12個月（或者在註冊人需要提交此類報告的更短時間內）已經提交了證券交易法第13或第15（d）條規定需要提交的所有報告；以及（2）在過去90天內一直受到該等提交要求的約束。 x 否（¨）
請在對應的複選框內表示下文所提及的公司是否已在過去12個月之內（或爲該公司要求提交該類文件的短於12個月的期間）以電子方式提交了必須根據S-T法規第405規則（本章第232.405條）提交的每一個互動數據文件。
請勾選標記以說明註冊人是大型快速申報人、加速申報人、非加速申報人、較小的報告公司還是新興成長型公司。請查看《交易所法》第120億.2條中「大型快速申報人」、「加速申報人」、「較小的報告公司」和「新興成長型公司」的定義。
大型加速文件申報人 | ☐ | 加速文件申報人 | ☐ | |
☒ | 更小的報告公司 | |||
新興成長公司 | ||||
如果是新興成長公司，請打勾表示註冊人已選擇不使用根據交易所法第13(a)節提供的任何新的或修訂後的財務會計準則延長過渡期符合要求。
請勾選以下內容。申報人是否是外殼公司（根據證券交易法規則12b-2定義）。 是
截至11月12日第2024年，註冊企業擁有
milestone pharmaceuticals和Milestone標誌出現在本季度10-Q表格中，爲Milestone Pharmaceuticals Inc.的未註冊商標。本季度10-Q表格中出現的所有其他商標、商號和服務標記均爲其各自所有者的財產。僅供方便起見，在本季度10-Q表格中，這些商標和商號可能沒有註冊商標符號和商標符號，但這些引用不應被解釋爲各自所有者不會主張其權利。
本季度10-Q表格中涉及到美元和加拿大元。除非另有說明，本表中提及的所有金額均以美元表示。「$」表示美元，「C$」表示加拿大元。
有關前瞻性聲明的特別說明
本季度10-Q表格中包含關於我們及我們所在行業的前瞻性聲明，涉及重大風險和不確定性。本季度10-Q表格中除歷史事實陳述外的所有陳述，包括關於我們的策略、未來財務狀況、未來業務運營、預計成本、前景、計劃、管理目標和預期市場增長的陳述，均屬前瞻性聲明。在某些情況下，您可以通過類似「瞄準」、「預期」、「假設」、「相信」、「考慮」、「繼續」、「可能」、「設計」、「由於」、「估計」、「期望」、「目標」、「打算」、「可能」、「目標」、「計劃」、「預測」、「定位」、「潛在」、「尋找」、「應當」、「目標」、「將」、「可能」等術語識別前瞻性聲明，這些術語是對未來事件和未來趨勢的預測，或這些術語的否定或其他類似術語。
我們在很大程度上基於我們對可能影響我們財政狀況、經營業務、業務策略和財務需求的未來事件和財務趨勢的當前預期和預測，制定了這些前瞻性聲明。這些前瞻性聲明受到許多已知和未知風險、不確定性和假設的影響，包括在本季度10-Q表格中「風險因素」部分和其他部分描述的風險。
| ● | 我們當前和未來的Etripamil臨床試驗的啓動、時間安排、進展和結果，包括我們用於治療的Etripamil的第3期臨床試驗 陣發性室上性心動過速我們Etripamil用於治療房顫和快速心室率的第2期臨床試驗，以及我們的研發計劃； |
| ● | 通過與吉興製藥的許可協議，我們有能力在中國、香港、澳門和臺灣開發並在獲得監管機構批准後商業化Etripamil； |
| ● | 我們計劃開發和推出Etripamil和任何未來的產品候選者； |
| ● | 我們對於費用、未來收入、資本要求和需要額外財務支持的估計； |
| ● | 我們建立合作關係或獲得額外資金的能力； |
| ● | 我們目前和將來的產品候選者獲得監管批准的能力; |
| ● | 我們對etripamil和任何未來產品候選品潛在市場規模以及市場接受程度和速度的期望； |
| ● | 我們有能力資助我們的營運資本需求，以及對我們資本資源充足性的期望； |
| ● | 我們業務模式和業務，以及etripamil和任何未來產品候選者的戰略計劃的執行； |
| ● | 我們的知識產權地位和專利權的期限； |
1
| ● | 涉及我們知識產權或其他專有權的發展或爭端； |
| ● | 我們對政府和第三方付款人覆蓋範圍和報銷方面的期望; |
| ● | 我們在所服務市場上的競爭能力； |
| ● | 政府法律和法規的影響； |
| ● | 與我們競爭對手和我們的行業相關的發展 |
| ● | 可能影響我們財務結果的其他因素。 |
上文風險清單並非詳盡無遺。本季度10-Q表格中的其他部分以及名爲「風險因素」部分 在我們的年度10-K報告的第一部分已經披露。 可能會包含其他可能損害我們業務和財務績效的因素。此外，我們經營在一個非常競爭激烈且迅速變化的環境中。新的風險因素不時出現，我們的管理層無法預測所有風險因素，也無法評估所有因素對我們業務的影響以及任何因素，或任何組合因素，可能導致實際結果與任何前瞻性陳述中包含的結果有實質性差異，或含有的暗示。
鑑於這些前瞻性聲明中存在重大不確定性，您不應將前瞻性聲明視爲未來事件的預測。儘管我們相信我們對本季度報告中包含的每一項前瞻性聲明都有合理依據，但我們無法保證前瞻性聲明中反映的未來結果、活動水平、表現或事件和情況將會實現或根本發生。您應參閱標題爲"風險因素"的部分所披露的內容 在我們於SEC提交的10-k表格年度報告中，已經披露了之前在第I部分，第1A項中的內容。 關於可能導致我們的實際結果與我們的前瞻性聲明所表達或暗示的結果存在重大差異的重要因素的討論，請參閱已於2024年3月21日在SEC和 Milestone 的SEDAR+資料檔案中 www.sedarplus.com 披露的年度報告10-k。此外，如果我們的前瞻性聲明被證明不準確，這種不準確性可能是重大的。除非法律要求，否則我們不承諾公開更新任何前瞻性聲明，無論是出於新信息、未來事件或其他原因。
2
第一部分——財務信息
項目1.基本報表。
里程碑製藥公司。
彙編的綜合資產負債表（未經審核）
（以美元千位計，除了股票數據）
| 2024年9月30日 |
| 2023年12月31日 | |||
資產 |
|
|
| |||
流動資產 |
|
| ||||
現金及現金等價物 | $ | |
| $ | | |
短期投資 | | | ||||
研發稅收抵免應收款 | |
| | |||
預付款項 | |
| | |||
其他應收款 | |
| | |||
總流動資產 | |
| | |||
經營租賃權使用資產 | | | ||||
固定資產 | |
| | |||
總資產 | $ | |
| $ | | |
負債及股東權益 |
|
|
| |||
流動負債 |
|
|
| |||
應付賬款及應計費用 | $ | |
| $ | | |
經營租賃負債 | |
| | |||
流動負債合計 | |
| | |||
經營租賃負債，淨值超過流動資產 | |
| | |||
高級擔保可轉換債券 | | | ||||
負債合計 | |
| | |||
股東權益 |
|
| ||||
普通股， | |
| | |||
預先融資認股權證 - | | | ||||
額外實收資本 | |
| | |||
累積赤字 | ( |
| ( | |||
總股東權益 | |
| | |||
負債合計和股東權益總計 | $ | |
| $ | | |
附註是這些中期簡明合併財務報表的 integra l部分。
3
Milestone Pharmaceuticals Inc.
損失的壓縮合並報表（未經審核）
(單位：美元，除每股數據和股數外一律以千美元計)
截至2023年9月30日的三個月 | 截至2023年9月30日的九個月 | ||||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||||
營業收入 | $ | — |
| $ | — | $ | — |
| $ | | |||
營業費用 |
|
|
| ||||||||||
研發支出，減稅抵免後淨額 |
| |
| | |
| | ||||||
一般行政 |
| |
| | |
| | ||||||
商業服務業務 |
| |
| | |
| | ||||||
經營虧損 |
| ( |
| ( | ( |
| ( | ||||||
利息收入 |
| |
| | |
| | ||||||
利息支出 | ( | ( | ( | ( | |||||||||
淨虧損和綜合虧損 |
| $ | ( |
| $ | ( | $ | ( |
| $ | ( | ||
加權平均基本和稀釋後的股份和預先擔保的認股權證的數量 | | | | | |||||||||
基本和稀釋每股淨虧損 |
| $ | ( |
| $ | ( | $ | ( |
| $ | ( | ||
附註是這些中期簡明合併財務報表的 integra l部分。
4
里程碑製藥公司。
股東權益簡明綜合報表（未經審計）
（以美元千位數顯示，股份數據除外）
普通股 | 預融資認股權證 | ||||||||||||||||||
| 數量 |
| 金額 |
| 數量 |
| 金額 |
| 額外的 |
| 累積的 |
| 總計 | ||||||
截至2023年6月30日的餘額 | | $ | | | $ | | $ | | $ | ( | $ | | |||||||
2023年9月30日結束的三個月期間的交易 | |||||||||||||||||||
淨虧損 | — | — | — | — | — | ( | ( | ||||||||||||
期權行權 | | | — | — | ( | — | | ||||||||||||
基於股份的補償 | — | — | — | — | | — | | ||||||||||||
員工股票購買計劃購買 | | | — | — | — | — | | ||||||||||||
截至2023年9月30日的餘額 | | $ | | | $ | | $ | | $ | ( | $ | | |||||||
2024年6月30日的餘額 | | $ | | | $ | | $ | | $ | ( | $ | | |||||||
截至2024年9月30日的三個月期間的交易 | |||||||||||||||||||
淨損失 | — | — | — | — | — | ( | ( | ||||||||||||
股權補償計劃 | — | — | — | — | | — | | ||||||||||||
員工股票購買計劃購買 | | | — | — | — | — | | ||||||||||||
2024年9月30日餘額 | | $ | | | $ | | $ | | $ | ( | $ | | |||||||
截至2022年12月31日的餘額 | | $ | | | $ | | $ | | $ | ( | $ | | |||||||
2023年9月30日結束時的九個月交易 | |||||||||||||||||||
淨虧損 | — | — | — | — | — | ( | ( | ||||||||||||
行使股票期權 | | | — | — | ( | — | | ||||||||||||
預先融資認股權證 - 定向增發，扣除發行成本 | — | — | | | — | — | | ||||||||||||
基於股份的補償 | — | — | — | — | | — | | ||||||||||||
普通股份交易 | ( | ( | — | — | — | — | ( | ||||||||||||
員工股票購買計劃購買 | | | — | — | — | — | | ||||||||||||
2023年9月30日的餘額 | | $ | | | $ | | $ | | $ | ( | $ | | |||||||
截至2023年12月31日的餘額 | | $ | | | $ | | $ | | $ | ( | $ | | |||||||
2024年9月30日結束的九個月期間的交易 | |||||||||||||||||||
淨虧損 | — | — | — | — | — | ( | ( | ||||||||||||
行使股票期權 | | | — | — | ( | — | | ||||||||||||
預先資金支持的認股權證，扣除發行成本 | — | — | | | — | — | | ||||||||||||
基於股份的補償 | — | — | — | — | | — | | ||||||||||||
發行普通股，減去發行成本 | | | — | — | — | — | | ||||||||||||
員工股票購買計劃購買 | | | — | — | — | — | | ||||||||||||
2024年9月30日的餘額 | | $ | | | $ | | $ | | $ | ( | $ | | |||||||
附註是這些中期簡明合併財務報表的 integra l部分。
5
里程碑製藥公司。
簡明的綜合現金流量表（未經審核）
(以美元千爲單位)
截至2023年9月30日的九個月 | ||||||
2024 |
| 2023 | ||||
經營活動中使用的現金流量 | ||||||
淨虧損 | $ | ( | $ | ( | ||
調整爲淨損失到經營活動現金流量淨使用： | ||||||
固定資產折舊 | | | ||||
債務成本攤銷 | | | ||||
投資折價的累計攤銷 | ( | ( | ||||
與債務相關的非現金利息費用 | | | ||||
基於股份的報酬支出 | | | ||||
處置固定資產和設備的損失 | | — | ||||
經營性資產和負債變動: | ||||||
其他應收款 | | ( | ||||
研發稅收抵免應收款 | ( | ( | ||||
預付費用 | | ( | ||||
營運租賃資產和負債 | ( | ( | ||||
應付賬款及應計費用 | ( | | ||||
經營活動使用的淨現金流量 | ( | ( | ||||
投資活動使用的現金 | ||||||
收購資產和設備 | ( | ( | ||||
購買短期投資 | ( | ( | ||||
短期投資贖回 | | | ||||
投資活動產生的淨現金流出 | ( | ( | ||||
融資活動提供的現金流量 | ||||||
期權行使所得 | | | ||||
發行高級擔保可轉換債務所得款項 | — | | ||||
發行普通股收到的款項，減去發行成本 | | — | ||||
發行預付權證的收益，扣除發行成本 | | ( | ||||
員工股票購買計劃收入 | | | ||||
支付債務發行成本 | — | ( | ||||
融資活動提供的現金流量 | | | ||||
現金及現金等價物淨增加額（減少額） | ( | | ||||
現金及現金等價物 - 期初 | | | ||||
現金及現金等價物 - 期末 | $ | | $ | | ||
附註是這些中期簡明合併財務報表的 integra l部分。
6
1 組織與經營性質
Milestone Pharmaceuticals 公司（以下簡稱 Milestone 或 公司）是一家在 《商業公司法》（安大略省） （魁北克）Milestone的總部目前位於加拿大魁北克省的蒙特利爾。我們的普通股於2019年5月9日開始在納斯達克全球精選市場交易。我們的普通股交易代碼爲「MIST」。Milestone專注於心血管藥物的研發和商業化。Milestone的主打產品候選藥物etripamil是一種新穎、有效的快速作用的鈣通道阻滯劑，公司設計並正在開發成爲患者使用的快速作用鼻噴劑。公司正在開發etripamil用於治療陣發性室上性心動過速、心房顫動和其他心血管適應症。
2.主要會計政策摘要
a）合併基礎
簡明綜合財務報表包括公司和Milestone Pharmaceuticals USA，Inc.的帳戶。所有公司間交易和餘額已予以消除。
b）報告基礎和會計估計使用和主要會計政策
這些未經審計的中期簡明綜合財務報表是根據美國一般公認會計原則，即「美國GAAP」編制的，基礎與公司按照並在最近一份年度綜合財務報表的註釋2中披露的會計原則一致。特定信息，尤其是一般應包括在根據美國GAAP編制的年度財務報表中的附註，已經被省略或濃縮。因此，這些未經審計的中期簡明綜合財務報表不包括所有完整年度財務報表所需的信息，因此，應與截至2023年12月31日的年度綜合財務報表及其附註一起閱讀。
在公司管理層的意見中，附表的中期未經審計簡明綜合財務報表包含所有必要的調整，僅包括常規反覆調整，以公平陳述截至2024年9月30日的資產負債表，截至2024年和2023年9月30日的損益及股東權益表，以及截至2024年和2023年9月30日的現金流量表。
2023年12月31日的簡明合併資產負債表是從經審計的年度合併財務報表中得出的，但不包含美國公認會計原則要求的所有註腳披露。
這些未經審計的中期簡明合併財務報表以美元呈現，這是公司的功能貨幣。
根據美國通用會計準則編制未經審計的中期簡明合併財務報表要求公司進行估計和判斷，影響資產和負債的某些報告金額以及在合併財務報表日期和本期間報告的營業收入和費用的披露的適從。公司根據當前事實、歷史經驗和其他各種因素進行估計和假設，認爲這些在情況下是合理的，以判斷資產和負債的賬面價值，這些價值並非可以從其他來源輕而易舉地得出。重要的估計和判斷包括但不限於,
| ● | 根據與臨床研究機構或「CRO」建立的協議，按試驗的終身工作量已完成的百分比估計，在合併財務報表日期對潛在資產和負債的披露以及本期間報告的營業收入和費用的報告金額方面，公司需要根據美國通用會計準則進行未經審計的中期簡明合併財務報表的編制。公司的估計和假設基於當前事實、歷史經驗和其他各種因素，公司認爲這些因素在情況下是合理的，以判斷那些不能從其他來源輕易地得知的資產和負債的賬面價值。 |
7
Milestone Pharmaceuticals Inc.
簡明合併財務報表註釋
截至2024年和2023年九月三十日的三個月和九個月（未經審計）
（以美元計，除非另有說明，並以股票和每股數據爲單位的千美元）
| 機構或「CMOs」，以及影響研發（研發）支出的臨床試驗機構 |
| ● | 對員工、顧問和董事授予的期權的授予日期公允價值估計，以及使用Black-Scholes期權定價模型導致的股份報酬費用。 |
c) 重大風險和不確定性
公司面臨着特定於其業務和執行策略的挑戰和風險，以及藥品行業的常見風險與不確定性，包括但不限於以下內容：獲得其產品候選物的監管批准的風險與不確定性；供應研究藥物的延遲或問題或未能遵守制造規定；確定、收購或在許可中心獲得產品候選物；藥品產品開發以及臨床成功的固有不確定性；以及保護和增強知識產權的挑戰；並遵守適用的監管要求。
此外，公司可能會受到一般經濟、政治和市場條件的影響，包括由於投資者對通貨膨脹、武裝衝突以及美國和國外金融市場總體波動的擔憂而惡化的市場條件。
d) 最近的會計聲明
2023年11月，財務會計準則委員會（FASB）發佈了《會計準則更新》（ASU 2023-07），分部報告（主題280）：報告段信息披露的改進（「 ASU 2023-07」），要求上市公司披露其報告部門的重大支出信息，報告頻率爲中期和年度。 ASU 2023-07適用於2023年12月15日之後開始的財政年度以及2024年12月15日之後開始的財年中的中期時段。允許提前採納。公司正在評估採用這項新ASU對其基本報表披露的影響。
2023年12月，FASB發佈了《ASU 2023-09》，所得稅（主題740）：所得稅披露的改進，或「 ASU 2023-09」。該更新中的修訂要求上市公司年度披露（1）稅率調解中的特定類別和（2）提供額外信息，用於調解達到定量閾值的項目（如果這些調解項目的影響等於或大於按適用法定所得稅率乘以稅前收益（或虧損）計算得到的金額的5％）。修訂還要求企業年度披露所支付的所得稅的分解金額。ASU 2023-09適用於2024年12月15日之後開始的年度時段。可提前適用於尚未發佈或可供發佈的年度財務報表。公司正在評估採用這項新ASU對其基本報表披露的影響，但不打算提前採用。
e）流動性來源和資金需求
公司自成立以來一直出現營運虧損，並經歷負面經營現金流，預計在未來幾年仍將出現虧損。此外，在我們的新藥申請（NDA）提交的修訂時間表方面，我們採取了一些現金保全措施，通過項目延期和團隊重組來減少支出。這些現金保全措施已基本完成，並已部分被
8
Milestone Pharmaceuticals Inc.
Notes to Condensed Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)
(in thousands of US dollars, except where noted and for share and per share data)
3 Revenues
The Company recorded
4 Short-term Investments
Short-term investments are classified as held-to-maturity, are initially recognized at fair value and are subsequently accounted for at amortized cost. They are comprised of guaranteed investment certificates and U.S. treasury bills with a maturity greater than 90 days but less than one year and, as such, are classified as current assets.
As of September 30, 2024, $
5 Debt
On March 29, 2023, we closed the transactions contemplated by a note purchase agreement, or the “Note Purchase Agreement”, with RTW Investments LP and certain of its affiliates, or collectively, “RTW”, and issued and sold $
In accounting for the issuance of the Convertible Notes, the Company determined there were no embedded features, which require bifurcation between debt and equity components. As a result, the Convertible Notes are accounted for as a liability. As of September 30, 2024, the estimated fair value of the Convertible Notes was approximately $
The net carrying amount of the Convertible Note were as follows:
| September 30, 2024 | December 31, 2023 | ||||
Original principal |
| $ | | $ | | |
Paid in kind (PIK) interest | | | ||||
Unamortized debt discount | ( | ( | ||||
Unamortized debt issuance costs |
| ( | ( | |||
Total |
| $ | | $ | | |
The following table presents the total amount of interest cost recognized relating to the 2029 Convertible Notes:
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2024 |
| 2023 |
| 2024 |
| 2023 | ||||||||
Contractual interest expense | $ | |
| $ | | $ | |
| $ | | ||||
Amortization of debt discount | | | | | ||||||||||
Amortization of debt issuance costs | |
| | |
| | ||||||||
Total interest expense | $ | |
| $ | | $ | |
| $ | | ||||
9
Milestone Pharmaceuticals Inc.
簡明合併財務報表註釋
截至2024年和2023年九月三十日三個月和九個月期間（未經審計）
（以美元千位計，除特別說明外，股票和每股數據均以千美元計）
6 應付賬款及應計負債
應付賬款和應計負債包括以下內容:
| 2024年9月30日 | 2023年12月31日 | ||||
|
|
|
| |||
交易應付賬款 |
| $ | | $ | | |
應計的薪酬和待發福利 |
| | | |||
應計的研發負債 |
| | | |||
已計提商業負債 | | | ||||
已計提法律責任負債 | | | ||||
其他應計負債 |
| | | |||
總計 |
| $ | | $ | | |
7 股東權益
授權股本
公司已授權和發行了無面值的普通股份，可投票和參與，其中無限數量的股份已獲授權和
截至2024年9月30日，有
2024年2月28日，我們簽署了一項承銷協議，即「承銷協議」，與一項普通股發行相關，即「發行」，發行價格爲每股
2023年3月 共享22, 2023年，公司與RTW關聯實體簽署了一項交換協議，或「交換協議」，公司與「交換股東」交換了 「交易協議」，向RTW關聯實體或「交換股東」交換了一攬子 共計交換了
10
8 股份基礎補償
股票期權
根據公司的2019年股權激勵計劃，或稱「2019計劃」，以及公司的股票期權計劃，或稱「2011計劃」，除非董事會另有決定，否則期權的歸屬和行權方式如下：
2024年1月1日，公司根據2019計劃自動增加了公司普通股的發行數量
2021年11月10日，公司設立了2021年誘導計劃，即「誘導計劃」，通過授予獎勵來實施。這個2021年誘導計劃旨在幫助公司爲某些個人提供就業引誘，激勵這些人爲公司的成功盡最大努力，併爲員工從普通股股價上漲中受益提供一種手段。截至2024年9月30日，2021年誘導計劃下有
11
Milestone Pharmaceuticals Inc.
Notes to Condensed Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)
(in thousands of US dollars, except where noted and for share and per share data)
The total outstanding and exercisable standard options from the 2011 Plan, 2019 Plan and Inducement Plan as of and for the nine-month period ending September 30 were as follows (excluding performance stock options and performance share units):
2024 | |||||||||||||
Weighted | |||||||||||||
Number | average | ||||||||||||
of shares | exercise | ||||||||||||
| 2019 Plan |
| Inducement Plan | 2011 Plan |
| Total |
| price | |||||
Outstanding at beginning of period - 2011 Plan |
| — | — |
| |
| |
| $ | | |||
Outstanding at beginning of period - 2019 Plan | | — | — | | | ||||||||
Outstanding at beginning of period - Inducement Plan | — | | — | | | ||||||||
Granted - 2019 Plan | | — | — | | | ||||||||
Exercised - 2011 Plan | — | — | ( | ( | | ||||||||
Forfeited - Inducement Plan | — | ( | — | ( | | ||||||||
Forfeited - 2019 Plan | ( | — | — | ( | | ||||||||
Expired - 2019 Plan | ( | — | — | ( | | ||||||||
Expired - 2011 Plan | — | — | ( | ( | | ||||||||
Expired - Inducement Plan | — | ( | — | ( | | ||||||||
Outstanding at end of period |
| | | | | $ | | ||||||
Outstanding at end of period - Weighted average exercise price | $ | | $ | | $ | | |||||||
Exercisable at end of period | | | | | $ | | |||||||
Exercisable at end of period - Weighted average exercise price |
| $ | | $ | | $ | | ||||||
2023 | |||||||||||||
Weighted | |||||||||||||
Number | average | ||||||||||||
of shares | exercise | ||||||||||||
2019 Plan |
| Inducement Plan | 2011 Plan |
| Total |
| price | ||||||
Outstanding at beginning of period - 2011 Plan |
| — | — | | | $ | | ||||||
Outstanding at beginning of period - 2019 Plan |
| | — | — | | | |||||||
Outstanding at beginning of period - Inducement Plan | — | | — | | | ||||||||
Granted - 2019 Plan | | — | — | | | ||||||||
Exercised - 2019 Plan | ( | — | — | ( | | ||||||||
Exercised - 2011 Plan | — | — | ( | ( | | ||||||||
Forfeited - 2019 Plan | ( | — | — | ( | | ||||||||
Expired - 2019 Plan | ( | — | — | ( | | ||||||||
Expired - 2011 Plan | — | — | ( | ( | | ||||||||
Cancelled - 2019 Plan | ( | — | — | ( | | ||||||||
Outstanding at end of period | | | | | $ | | |||||||
Outstanding at end of period - Weighted average exercise price | $ | | $ | | $ | | |||||||
Exercisable at end of period | | | | | $ | | |||||||
Exercisable at end of period - Weighted average exercise price | $ | | $ | | $ | | |||||||
The weighted average remaining contractual life was
There was $
12
授予的期權是根據Black-Scholes期權定價模型進行估值的。該模型還需要做出假設，包括預期的期權壽命、波動率、無風險利率和股利率，這些假設會極大地影響計算得出的價值。按照期權公平價值在歸屬於股東權益的其他資本中攤銷。
截至九月三十日及九個月期間結束時，尚未獲得的期權如下（不包括績效股票期權和績效股份單位）：
2024 | ||||||||||||||
數量 | 已授予和預期於2021年1月2日授予股份 | |||||||||||||
期權的選擇 | 價格 | |||||||||||||
2019計劃 |
| 26.72美元 |
| 2011年計劃 |
| 所有板塊 |
| 公允價值 | ||||||
2019年計劃期初未授予的股票期權 | | — | — | |
| | ||||||||
期權計劃期初未獲授予的股份期權 - 誘導計劃 | — | | — | | | |||||||||
授予-2019計劃 |
| | — | — | | | ||||||||
已股權激勵，未行使的2019年計劃 | ( | — | — | ( | | |||||||||
已獲得，未行使的誘因計劃 | — | ( | — | ( | | |||||||||
被放棄 - 誘因計劃 | — | ( | — | ( | | |||||||||
已放棄 - 2019計劃 | ( | — | — | ( | | |||||||||
期權期末未獲授的份額 |
| | | — | |
| $ | | ||||||
期末未享有的股票期權-加權平均公允價值 | $ | | $ | | $ | — | ||||||||
2023 | ||||||||||||||
數量 | 已授予和預期於2021年1月2日授予股份 | |||||||||||||
期權 | 價格 | |||||||||||||
| 2019計劃 |
| 26.72美元 |
| 2011 Plan |
| 所有板塊 |
| 公允價值 | |||||
2011年計劃期初未發放的股份期權 |
| — | — | | |
| $ | | ||||||
2019年計劃期初未歸屬期權 | | — | — | |
| | ||||||||
期初未歸屬的股票期權-誘因計劃 | — | | — | | | |||||||||
已批准 - 2019計劃 |
| | — | — | | | ||||||||
已生效，尚未實現的2011計劃 | — | — | ( | ( |
| | ||||||||
Vested, outstanding 2019 Plan | ( | — | — | ( | | |||||||||
已授予、未行使的誘因計劃 | — | ( | — | ( | | |||||||||
沒收 - 2019計劃 | ( | — | — | ( | | |||||||||
期權期末未投資 |
| | | — | |
| $ | | ||||||
期權期末未取得的股份-加權平均公允價值 | $ | | $ | | $ | — | ||||||||
2011年計劃、2019年計劃和引誘計劃所授予的標準期權的公允價值是使用Black-Scholes期權定價模型進行估計的，導致以下對授予的期權的加權平均假設（不包括績效股票期權和績效股票單位）：
截至2023年9月30日的三個月 | 截至2023年9月30日的九個月 | ||||||||||||
2024 |
| 2023 |
| 2024 |
| 2023 |
| ||||||
行權價格 | $ | |
| $ | | $ | |
| $ | | |||
股價 | $ | |
| $ | | $ | |
| $ | | |||
波動性 |
| | % | | % |
| | % | | % | |||
無風險利率 |
| | % | | % |
| | % | | % | |||
預計壽命 |
|
|
| |
| | |||||||
分紅 |
| % | % |
| % | % | |||||||
預期波動率是利用可比公司確定的，這些公司的信息是公開可獲取的。無風險利率是根據授予時美國主權利率基準確定的，剩餘
13
Milestone Pharmaceuticals Inc.
Notes to Condensed Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)
(in thousands of US dollars, except where noted and for share and per share data)
term equal to the expected life of the option. Expected option life is determined based on the simplified method as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The simplified method is an average of the contractual term of the options and its ordinary vesting period. Dividend yield is based on the share option’s exercise price and expected annual dividend rate at the time of grant.
Performance Stock Options
On May 6, 2024, the Company, pursuant to the 2019 Plan, awarded
The original grant-date fair value of each option was estimated on the date of grant using the same option valuation model used for the options outlined above. The original grant-date fair value of $
The vesting of the performance-based stock options is conditional upon the U.S. Food and Drug Administration, or “FDA”, approval of etripamil. Subject to the optionholder’s continuous service as of each such date,
Employee Stock Purchase Plan
On July 15, 2022, the Company offered an ESPP, in which participation is available to our employees in the United States and Canada who meet certain service eligibility requirements. Eligible employees may authorize an amount up to
On January 1, 2024, the number of common shares reserved for issuance under the ESPP automatically increased by
Performance Share Units
On May 6, 2024, the Company, pursuant to the 2019 Plan, awarded
14
Milestone Pharmaceuticals Inc.
簡明合併財務報表註釋
截至2024年9月30日和2023年9月30日三個月和九個月結束（未經審計）
（以千美元計，除非另有說明，並且適用於股份和每股數據）
以下是公司截至2023年9月30日九個月的PSU活動摘要：
| 2024 |
| 2023 | |||
期初餘額 |
| $ | — | $ | — | |
已批准 |
|
| |
| — | |
已授予 | — | — | ||||
已取消 | — | — | ||||
期末餘額 |
| $ | | $ | — | |
所授予的PSUs數量代表可能獲得的普通股總數。然而，實際獲得的股票數量將基於履行績效指標。在達到績效標準後，
以股票爲基礎的薪酬支出
公司根據以下計劃確認了全部股份爲基礎的薪酬支出:
截至2023年9月30日的三個月 | 截至2023年9月30日的九個月 | ||||||||||||
| 2024 |
| 2023 | 2024 |
| 2023 |
| ||||||
管理 |
| $ | | $ | | $ | |
| $ | | |||
研發費用 |
| | | |
| | |||||||
商業活動 |
| | | |
| | |||||||
總計 |
| $ | | $ | | $ | |
| $ | | |||
9 每股淨損失
基本和稀釋後每股普通股淨損失是通過將適用於普通股股東的淨損失除以在期間內發行的普通股和預資金認股權的加權平均數量來確定的。除了上述2029年可轉換票據的轉換特性，該公司審查並得出結論，如果轉換，基礎上述事實將具有抗稀釋性，以下潛在稀釋證券也已在2022年9月30日的稀釋加權平均股份計算中被排除在外，因爲它們將具有抗稀釋性：
| 2024 |
| 2023 | |
股票期權和表現股單位 |
| |
| |
上述金額反映了所述工具的普通股等價物。
10 | 版稅購買協議 |
2023年3月27日，我們與RTW簽訂了一份購買和銷售協議，簡稱「版稅購買協議」。
根據版稅購買協議，RTW同意購買，待etripamil獲得FDA批准（需符合一定條件），以購買價格$爲交換條件。
15
Milestone Pharmaceuticals Inc.
簡明合併財務報表註釋
For the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)
(in thousands of US dollars, except where noted and for share and per share data)
to: (i)
根據公司對版稅購買協議條款和條件的評估，在這些臨時財務報表中無需進行會計確認。
11 其他 應收賬款
其他應收賬款包括以下內容：
| 2024年9月30日 |
| 2023年12月31日 | |||
應收利息 |
| $ | | $ | | |
銷售稅應收款 |
|
| |
| | |
Clinical receivable | | | ||||
其他流動應收款 | | | ||||
總計 |
| $ | | $ | | |
截至2023年12月31日止，公司確認了一個$的臨床應收款項
16
I第2節。管理層對財務狀況和業績的討論和分析。
以下信息應與本季度報告表格10-Q中包括的未經審計的中期簡明合併報表及其附註，以及我們已於2024年3月21日向證券交易委員會（「SEC」）提交的年度合併財務報表及附註一起閱讀。 我們的實際結果可能會與這些前瞻性聲明中預期的結果有實質性差異，原因是多種因素，包括本季度10-Q表格中「風險因素」部分和其他部分中討論的因素。
公司概括
我們是一家專注於開發和商業化創新心血管藥物的生物製藥公司。 我們的首席產品候選藥物etripamil是一種新穎而強效的鈣通道阻滯劑，我們設計它作爲快速起效的鼻噴劑，供患者自行使用。 我們正在開發etripamil以用於治療特定心律失常，首要適應症是治療陣發性陣發性心動過速（PSVT），以及治療伴有快速室速的房顫（AFib-RVR）的適應症。
PSVT，也稱爲陣發性心動過速（SVT），是一種以心臟電系統異常爲特徵的情況，導致患者出現意外的，通常症狀嚴重的快速心跳發作。 患有SVT發作的患者常常出現心悸、出汗、胸部壓力或疼痛、氣促、突發疲勞、頭暈或眩暈、暈厥和焦慮等症狀。 鈣通道阻滯劑長期以來已經獲得批准用於治療SVT以及其他心臟狀況。口服的鈣通道阻滯劑有時被用於預防性地嘗試控制未來發作SVT的頻率和持續時間。 用於治療SVT發作的已批准鈣通道拮抗劑在醫療監督下靜脈內給藥，通常是在急診科。 我們相信etripamil便捷的鼻噴劑給藥方式和快速起效能力有望將治療SVT發作的當前範式從繁重和昂貴的急診科環境中轉變。
房顫，也稱爲「 AFib」，是一種常見的心律失常形式，心率不規律且通常較快，往往具有明顯症狀，如果沒有適當治療，可能會增加中風、心力衰竭和其他心血管併發症的風險。房顫的常見併發症是快速心室率，即「 AFib-RVR」，通常被定義爲每分鐘≥110次心跳。在患有房顫的患者中發生RVR會增加明顯症狀出現的可能性，包括心悸、氣促和虛弱。治療房顫有兩種常用的藥物治療方法，節律控制和率控制。無論採取哪種長期治療方案，在面對突發的房顫-RVR發作時，需要進行急性速率控制，大多數治療是口服AV-結節靶向藥物，如β受體阻滯劑或鈣通道阻滯劑。然而，這些口服速率控制藥物在急性使用時不足以提供立即或充分的心室速率控制，因爲需要30到90分鐘的延遲起效時間，結果許多患者需要更快速和更確定的速率降低和症狀緩解，因此通過前往急診室接受使用靜脈速率控制和/或心臟電覆律治療他們的房顫來尋求急性醫療護理。與SVT類似，患者因需要訪問急診室來克服他們的房顫發作和RVR發作的不可預測性而感到失控；醫生對於缺乏患者自我管理這些急性速率攻擊的選擇感到沮喪；付款機構更希望以更具成本效率和時間效率的方式處理房顫-RVR發作。
PSVT臨床開發計劃
2024年5月，我們宣佈美國食品藥品監督管理局（「FDA」）接受了我們的新藥申請（NDA）。此次接受是在2024年3月我們向FDA重新提交NDA後進行的。我們正在尋求批准銷售和推廣etripamil用於PSVT的治療。etripamil的NDA是根據FDA的指導重新提交的，此前我們在2023年10月提交的原始NDA在2023年12月獲得FDA的拒絕受理（RTF）函。FDA在函件中並在初步審查後確定，NDA內容不足以進行實質審查。FDA要求對記錄的時間數據進行澄清
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of adverse events in Phase 3 clinical trials; FDA did not express concerns about the nature or severity of adverse events. In February 2024, Milestone held a Type A Meeting with the FDA to determine the next steps for the resubmission of the NDA. The Agency indicated that the adverse events, or “AEs”, hourly timing data in question had minimal impact on the overall characterization of the etripamil safety profile. As a result, data sets that capture timing of AEs reported in the Phase 3 pivotal studies were revised to align with FDA requests and resubmitted as supplementary information to the original NDA. The resubmission package included restructured data sets that captured timing of reported AEs and certain data files reformatted to facilitate FDA’s analyses. No additional efficacy or safety data were requested as part of the RTF. The FDA has informed the Company of a prescription drug user fee act (PDUFA) date of March 27, 2025. If approved, we believe that etripamil will be the first self-administered therapy for the rapid termination of episodes of SVT wherever and whenever they occur.
In April 2024, the Company announced new clinical data demonstrating real-world application of etripamil, an investigational new drug, for conversion of recurrent PSVT. Conducted in North and South America, an open label, Phase 3 study of etripamil in PSVT (the NODE-303 study) was presented at The American College of Cardiology Scientific Sessions. NODE-303 evaluated self-administered etripamil (70 mg, nasal spray) in an outpatient setting for up to four episodes of PSVT per patient. Other key characteristics of the NODE-303 study that distinguish the study from earlier phase 3 studies, include the removal of the in-office test dose as well as the use of a broader inclusion exclusion study entry criteria. For example, NODE-303 did not exclude patients with a history of co-morbid AFib or atrial flutter. The results demonstrated that symptom-prompted treatment with etripamil restored sinus rhythm with a median time-to-conversion of 17.0 minutes and was generally well tolerated. The conversion of PSVT to sinus rhythm was similar among multiple PSVT episodes and the frequency of treatment-emergent adverse events within 24 hours decreased with successive episodes. Adverse events were predominantly localized to the drug’s nasal administration site, consistent with prior trial findings. The protocol was amended during the trial to allow for a repeat dose of drug if symptoms persisted 10 minutes following the first dose, however the majority of the clinical trial was conducted prior to the amendment and utilized the 70 mg single dose. Efficacy of etripamil for PSVT conversion (restoration of sinus rhythm) in NODE-303 was 60% by 30 minutes after drug self-administration, and 69.9% by 60 minutes after drug self-administration; these rates of conversion are similar to those demonstrated in double-blinded and other open-label etripamil studies. This data supports a potentially significant shift in the management approach for recurrent PSVT.
In October 2022, we announced positive and statistically significant topline efficacy and safety data from our Phase 3 RAPID clinical trial evaluating etripamil in patients with PSVT. These results from the RAPID trial were presented in November 2022, as a Late-Breaking Clinical Trial at the American Heart Association Scientific Sessions (Chicago, IL). These results were also published in The Lancet in July 2023. RAPID, a multi-center, randomized, double-blind, placebo-controlled, event-driven Phase 3 trial, enrolled 706 patients across clinical sites in North America and Europe. Patients were randomized 1:1 using a self-administered regimen consisting of a first dose of study drug, and a repeat dose 10 minutes later if symptoms persisted. Self-administration was prompted by a patient’s symptoms and performed in the at-home setting without medical supervision. The RAPID trial achieved its primary endpoint with etripamil demonstrating a highly statistically significant and clinically meaningful difference in time to SVT conversion as compared to placebo. A Kaplan Meier analysis demonstrated a significantly greater proportion of patients who took etripamil converted to sinus rhythm within thirty minutes compared to patients that took placebo (64.3% vs. 31.2%; hazard ratio, or “HR”, 2.62; 95% CI 1.66, 4.15; p<0.001). By 90 minutes post-study drug administration, 80.6% of patients taking etripamil converted to sinus rhythm compared to 60.7% of patients taking placebo (HR = 1.93; 95% CI 1.349, 2.752; p<0.001). Statistically significant reductions in time to conversion in patients who took etripamil were evident early and persisted throughout the observation window of the trial compared to patients that took placebo. The median time-to-conversion for patients in the RAPID trial who self-administered etripamil was 17.2 minutes compared to 53.3 minutes for patients taking placebo. The safety and tolerability data from the RAPID trial supports the potential self-administration of etripamil, with findings consistent with those observed in prior trials. The most common randomized-treatment emergent adverse events, or RTEAEs, and adverse events, or “AEs”, occurred within 24 hours of etripamil administration and were related to the nasal local administration site. Overall, the majority of RTEAEs were reported as mild (68%) or moderate (31%). No serious adverse effects related to etripamil were reported.
The use of additional medical interventions and emergency department utilization were key secondary endpoints for both the RAPID and NODE-301 trials. In a pre-planned pooled analysis across both trials, patients who self-administered
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etripamil sought additional medical interventions 43% less frequently (15% vs. 25%; p=0.013) and had 39% fewer visits to the emergency department (14% vs. 22%; p=0.035) than patients in the placebo arm.
We believe that PSVT is a large and under-recognized market that we estimate affects approximately two million Americans and results in over 150,000 emergency department visits and hospital admissions and up to 80,000 ablations per year. From this diagnosed population, we define the target addressable market for etripamil as 40 to 60% of patients who experience frequent and longer, moderate to severe episodes each year. After being exposed to the data from the RAPID clinical study in market research, Cardiologists reported a willingness to prescribe etripamil to approximately 50% of the patients with PSVT in their care, which suggests 500,000 to 800,000 patients can potentially be treated with etripamil in the peak year. Additionally, we believe that these target patients will use etripamil to treat a median of five episodes per year based on the projected number of longer or more intense episodes (self-reported) experienced by the patient. This implies potential demand in the US for etripamil of 2.5 million to 4 million episodes treated in the peak year.
AFib-RVR Clinical Development Program
In the first quarter of 2024, we met with the FDA in a Type C meeting. In this meeting, the FDA reiterated its prior guidance from our Pre-IND meeting regarding the availability of an sNDA pathway for the marketing approval for etripamil for the indication of AFib-RVR. The sNDA pathway potentially permits a single pivotal efficacy study to be sufficient for filing for marketing approval if etripamil is already approved for PSVT. FDA further concurred with respect to key proposed study elements including powering, inclusion criteria, patient population, and statistical analyses, and offered clarification with respect to the endpoints to guide the design of the Phase 3 study. In our mid-2023 Pre-IND meeting, the FDA provided guidance that our primary endpoint can be the reduction of ventricular rate, and the primary analysis would be on the intent to treat, or “ITT”, population. In addition, the study would have to show statistical significance (p<0.05) on the key secondary endpoint of symptom relief as a patient benefit, also in the ITT population. The secondary endpoint could use a patient-reported outcomes measure, or “PRO”, and the application of a seven-point anchored scale was discussed with the FDA. We anticipate finalizing the Phase 3 study protocol in 2024 and anticipate enrolling patients in the first half of 2025.
We continue to engage with the FDA in finalizing the Phase 3 clinical study protocol for AFib-RVR. The study is expected to be conducted in the at-home setting consisting of patients with a history of symptomatic episodes and using a self-administered, repeat-dose regimen of 70mg per dose similar to what was studied in the RAPID trial in patients with PSVT. Our target population would be patients with verified AFib-RVR, and the ITT population would be all patients self-administering the study drug for perceived AFib-RVR. The primary endpoint being considered is the mean change from baseline ventricular rate to nadir ventricular rate for patients treated with etripamil vs placebo, as was studied in the ReVeRA trial. Our key secondary endpoint will be based on a PRO acceptable to the FDA, which is the same or similar to ones we have used in our PSVT and AFib-RVR programs. We estimate that the study size would be approximately 150 events from patients with a history of symptomatic episodes.
In November 2023, we presented positive Phase 2 data from the ReVeRA study, as a Featured Science Presentation at the American Heart Association Scientific Meetings (Philadelphia, PA) and as simultaneously published in Circulation: Arrhythmia and Electrophysiology. The randomized, placebo-controlled Phase 2 ReVeRA trial enrolled 87 patients and dosed 56 patients aged 18 years and older with AFib who experienced a ventricular rate of 110 or more beats per minute (bpm) prior to receiving etripamil nasal spray. The trial was designed to assess the reduction in ventricular rate (primary endpoint), the time to achieve maximum reduction in ventricular rate, duration of effect, and patient satisfaction with treatment using the Treatment Satisfaction Questionnaire 9 (TSQM-9) patient reported outcome (PRO) tool (key secondary endpoints).
Data from ReVeRA trial showed that delivery of etripamil nasal spray significantly and rapidly reduced ventricular rate, consistent with the drug’s pharmacologic profile. Etripamil achieved the primary endpoint with high statistical significance with patients experiencing a ventricular rate reduction of 29.91 bpm (95% confidence interval: -40.31, -19.52; p<0.0001) in the etripamil arm compared to placebo. The maximum reduction in rate reported by a patient taking etripamil was 34.97 bpm. The median time to maximum reduction in ventricular rate was 13 minutes in patients taking etripamil. A greater number of patients taking etripamil achieved a ventricular rate of less than 100 bpm (58.3%) than those taking placebo
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(4%). Furthermore, 67% of patients taking etripamil achieved ventricular rate reductions of more than 20% and 96% of patients receiving etripamil achieved more than 10% in ventricular rate reductions in the first 60 minutes compared to 0% and 20% in patients taking placebo, respectively. Using the TSQM-9, compared to placebo, patients treated with etripamil demonstrated significant improvements in two satisfaction ratings: effectiveness (p<0.0001) and relief of symptoms (p=0.0002).
Treatment-emergent serious adverse events, or “TESAEs”, were rare, with two occurring in one patient in the etripamil arm (3.7%) and four occurring in two patients in the placebo arm (6.9%). The TESAEs in the etripamil arm (transient severe bradycardia and syncope, assessed as due to hyper-vagotonia) occurred in a patient with a history of vagal events, and fully resolved by placing the patient supine and was without sequelae. The most common (≥ 5%) adverse events were mild or moderate in intensity and included nasal discomfort, rhinorrhea, increased lacrimation, throat irritation and dizziness.
An estimated five million Americans suffer from AFib. The Centers for Disease Control projects the prevalence of AFib will grow to an estimated 12 million patients by 2030. A subset of AFib patients experience episodes of abnormally high heart rate most often accompanied by palpitations, shortness of breath, dizziness, and weakness. While these episodes, known as AFib-RVR, may be treated by oral calcium channel blockers and/or beta blockers, patients frequently seek acute care in the emergency department to resolve symptoms. In 2016, nearly 800,000 patients were admitted to the emergency department due to AFib symptoms. Treatment for such symptoms typically includes medically supervised intravenous administration of calcium channel blockers or beta blockers, or electrical cardioversion.
Operations Overview
Since the commencement of our operations in 2003, we have devoted substantially all of our resources to performing research and development activities in support of our product development efforts, hiring personnel, raising capital to support and expand such activities, providing general and administrative support for these operations and, more recently, preparing for commercialization. We operate our business using a significant outsourcing model. As such, our team is composed of a relatively smaller core of employees who direct a significantly larger number of team members who are outsourced in the form of vendors and consultants to enable execution of our operational plans. We do not currently have any products approved for sale, and we continue to incur significant research and development and general administrative expenses related to our operations.
Since inception, we have incurred significant operating losses. For the three months ended September 30, 2024 and 2023, we recorded net losses of $9.4 million and $15.1 million, respectively. For the nine months ended September 30, 2024 and 2023, we recorded net losses of $29.2 million and $46.1 million, respectively. As of September 30, 2024, we had an accumulated deficit of $355.2 million. We expect to continue to incur significant losses for the foreseeable future. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the necessary development activities required for obtaining regulatory approval and preparing for potential commercialization of our product candidates. We had $12.8 million of cash and cash equivalents and $63.6 million of short-term investments at September 30, 2024.
We expect to continue to incur significant expenses and to increase operating losses for at least the next several years. Our net losses may fluctuate significantly from period to period, depending on the timing of our planned clinical trials and expenditures on other research and development activities. We expect our expenses will increase over time as we:
● | continue our ongoing and planned development of etripamil, including future Phase 3 clinical trials for the treatment of AFib-RVR and potential Phase 4 clinical trials for treatment of PSVT; | |||||
● | seek marketing approvals for etripamil for the treatment of PSVT, AFib-RVR and other cardiovascular indications; | |||||
● | establish a sales, marketing, manufacturing and distribution capability, either directly or indirectly through third parties, to | |||||
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commercialize etripamil or any future product candidate for which we may obtain marketing approval; | ||||||
● | build a portfolio of product candidates through development, or the acquisition or in-license of drugs, product candidates or technologies; | |||||
● | initiate preclinical studies and clinical trials for etripamil for any additional indications we may pursue, including the clinical trials for the treatment of atrial fibrillation and rapid ventricular rate as well as other areas of unmet medical need, and for any additional product candidates that we may pursue in the future; | |||||
● | maintain, protect and expand our intellectual property portfolio; | |||||
● | hire additional clinical, regulatory and scientific personnel; | |||||
● | add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; and | |||||
● | incur additional legal, accounting, insurance and other expenses associated with operating as a public company. | |||||
Recent Developments
In September 2024, the Company appointed Joseph Papa to its Board as an independent director. Mr. Papa is a renowned pharmaceutical and healthcare leader, with more than 35 years of experience navigating companies through periods of rapid growth, transformation, and strategic M&A transactions, including as former Chairman and CEO of Bausch + Lomb, Bausch Health and Perrigo and as a director of SparingVision and Candel Therapeutics. He brings broad commercial experience and proven capabilities of advancing innovative products aimed at significantly enhancing patients’ lives.
On September 6, 2024, our licensing partner, Corxel (formerly Ji Xing Pharmaceuticals Limited, JIXING), a clinical-stage biopharmaceutical company announced positive topline data from the Phase 3 JX02002 clinical trial of etripamil nasal spray in patients with PSVT in China.
The 500-patient Phase 3 trial (JX02002) met its primary endpoint, with a Kaplan Meier analysis shows a statistically significantly greater proportion of patients who self-administered etripamil converted from PSVT to sinus rhythm within 30 minutes compared to placebo (40.5% vs. 15.9%, respectively; hazard ratio [HR] = 3.00; 95% CI 1.58-5.71; p<0.001). Statistically significant (p<0.05) results were also shown for the secondary efficacy endpoints for percent of patients’ PSVT converted to sinus rhythm by 10, 15, 45 and 60 minutes after self-administration of study drug.
Corxel further reported that, overall, treatment emergent adverse events were comparable between treatment groups, and there were no reported serious adverse events related to etripamil. The safety and tolerability data from the JX02002 trial were consistent with previous clinical studies. This important study further expands the etripamil global development program to more than 2,000 unique patients treated with etripamil.
The Macroeconomic Climate
Inflation rates may also materially adversely affect our business and corresponding financial position and cash flows. Inflationary factors, changes to interest rates and overhead costs may adversely affect our operating results. Interest and inflation rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Additionally, geopolitical events such as the Russia-Ukraine war and unrest and/or further escalation in Israel and Gaza, recent banking instabilities and other U.S. geopolitical
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issues affecting other territories and employee availability and wage increases, and economic markets all of which may result in additional stress on our working capital resources.
Components of Results of Operations
Revenues
We have not generated any revenues from product sales to date. We would only expect to generate revenues from product sales in the near future if the FDA approves the NDA. We recorded no revenue for the three and nine months ended September 30, 2024. We recorded no revenue and $1.0 million in revenue during the three and nine months ended September 30, 2023, respectively. This revenue is due to a milestone reached as a result of the successful initiation of a Phase 1 Clinical Trial of the product by or on behalf of Corxel for the treatment of PSVT in the People’s Republic of China, or “the Territory”, including mainland China, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan.
Research and Development Expenses
Research and development expenses consist primarily of salaries and fees paid to external service providers and also include personnel costs, including share-based compensation expense and other related compensation expenses. We expense research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors, collaborators and third-party service providers.
To date, substantially all of our research and development expenses have been related to the preclinical and clinical development of etripamil. As we advance etripamil or other product candidates for other indications, we expect to allocate our direct external research and development costs across each of the indications or product candidates. Further, we expect our research and development costs to increase for the development of etripamil in atrial fibrillation with rapid ventricular rate, and we expect our research and development expenses related to the development of etripamil for PSVT decrease as a percentage of our total research and development expenses.
The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming and is subject to uncertainties and delays. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates, if at all.
We recognize the benefit of Canadian research and development tax credits as a reduction of research and development costs for fully refundable investment tax credits.
General and Administrative Expenses
General and administrative expenses include personnel and related compensation costs, expenses for outside professional services, lease expense, insurance expense and other general administrative expenses. Personnel costs consist of salaries, bonuses, benefits, related payroll taxes and share-based compensation. Outside professional services consist of legal, accounting and audit services and other consulting fees.
We expect to continue to incur expenses as a public company, including expenses related to compliance with the rules and regulations of the Securities and Exchange Commission, or “SEC”, and those of any national securities exchange on which our securities are traded, additional insurance expenses, investor relations activities, and other administrative and professional services.
Commercial Expenses
Commercial expenses consist primarily of personnel and related compensation costs, market and health economic research, and market development activities for PSVT and, to a lesser extent, AFib-RVR. The focus of these expenses is three-fold:
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first, we want to leverage rigorous primary and secondary research to fully understand our target disease states from the perspective of the patient, healthcare provider, and payer; second, we want to understand and document the burden of disease posed by PSVT and AFib-RVR from an epidemiology, healthcare resource use, and cost perspective; and third, we want to engage our target patient, physician, and payer stakeholders with evidence-based and compliant educational materials that serve to increase the awareness and understanding of the impact of PSVT and AFib-RVR on patients and the overall healthcare system.
If the FDA approves the NDA, we anticipate our commercial expenses will increase as we invest in the infrastructure, personnel, and operational expenses required to launch our first product in the United States.
Interest Income
Interest income primarily consists of interest income from our cash equivalents and short-term investments.
Interest Expense
Interest expense primarily consists of contractual debt interest expense and the amortization of debt costs.
Results of Operations
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023
The following table summarizes our results of operations and changes:
Three months ended September 30, | |||||||||||
(in thousands) |
| 2024 |
| 2023 | $ Change |
| % Change | ||||
Revenue | $ | — | $ | — | — | 0.0% | |||||
Operating expenses | |||||||||||
Research and development, net of tax credits | $ | 3,963 | $ | 6,721 | $ | (2,758) |
| (41.0)% | |||
General and administrative |
| 3,742 |
| 4,227 |
| (485) |
| (11.5)% | |||
Commercial |
| 1,911 |
| 4,412 | (2,501) |
| (56.7)% | ||||
Total operating expenses |
| 9,616 |
| 15,360 |
| (5,744) |
| (37.4)% | |||
Loss from operations |
| (9,616) |
| (15,360) |
| 5,744 |
| (37.4)% | |||
Interest income |
| 1,080 |
| 1,120 |
| (40) |
| (3.6)% | |||
Interest expense | (903) | (841) | (62) | 7.4% | |||||||
Net loss | $ | (9,439) | $ | (15,081) | $ | 5,642 |
| (37.4)% | |||
Nine months ended September 30, | |||||||||||
(in thousands) |
| 2024 |
| 2023 | $ Change |
| % Change | ||||
Revenue | $ | — | $ | 1,000 | $ | (1,000) |
| 100.0% | |||
Operating expenses | |||||||||||
Research and development, net of tax credits | 10,417 | 25,600 | (15,183) |
| (59.3)% | ||||||
General and administrative |
| 12,741 |
| 12,561 |
| 180 |
| 1.4% | |||
Commercial |
| 6,596 |
| 10,137 |
| (3,541) |
| (34.9)% | |||
Total operating expenses |
| 29,754 |
| 48,298 |
| (18,544) |
| (38.4)% | |||
Loss from operations |
| (29,754) |
| (47,298) |
| 17,544 |
| (37.1)% | |||
Interest income |
| 3,260 | 2,921 |
| 339 |
| 11.6% | ||||
Interest expense | (2,662) | (1,697) | (965) | 56.9% | |||||||
Net loss | (29,156) |
| (46,074) | 16,918 |
| (36.7)% | |||||
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Revenue
We recorded no revenue for the three and nine months ended September 30, 2024. We recorded no revenue and $1.0 million in revenue during the three and nine months ended September 30, 2023, respectively. This prior year revenue was the result of having reached a milestone pursuant to our License and Collaboration Agreement, dated May 15, 2021, with Corxel, formerly known as Ji Xing Pharmaceuticals Limited (such party “Ji Xing” and , such agreement, the “Ji Xing License Agreement”), due upon the successful initiation of a Phase 1 Clinical Trial of a pharmaceutical product that uses a device to deliver etripamil by nasal spray by or on behalf of Corxel for the treatment of PSVT in the People’s Republic of China, or “the Territory”, including mainland China, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan.
Research and Development Expenses
The following table shows our research and development expenses by type of activity for the three and nine months ended September 30, 2024 and 2023, respectively.
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
(in thousands) |
| 2024 |
| 2023 | $ Change |
| % Change |
| 2024 |
| 2023 | $ Change |
| % Change | ||||||||
Clinical | $ | 1,586 | $ | 3,157 | $ | (1,571) |
| (49.8)% | $ | 5,044 | $ | 16,526 | $ | (11,482) |
| (69.5)% | ||||||
Drug manufacturing and formulation |
| 1,594 |
| 2,111 |
| (517) |
| (24.5)% |
| 3,033 |
| 5,535 |
| (2,502) |
| (45.2)% | ||||||
Regulatory and other costs |
| 844 |
| 1,539 |
| (695) |
| (45.2)% |
| 2,534 |
| 3,777 |
| (1,243) |
| (32.9)% | ||||||
Less: R&D tax credits |
| (61) |
| (86) |
| 25 |
| (29.1)% |
| (194) |
| (238) |
| 44 |
| (18.5)% | ||||||
Total R&D expenses | $ | 3,963 | $ | 6,721 | $ | (2,758) |
| (41.0)% | $ | 10,417 | $ | 25,600 | $ | (15,183) |
| (59.3)% | ||||||
Research and development expenses decreased by $2.8 million, or 41.0%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was primarily due to lower clinical expenses. This decrease in clinical expenses was driven by lower clinical development costs and clinical personnel-related costs as a result of the completion of phase 3 studies. This decrease was also driven by a decrease in drug manufacturing and regulatory costs.
Research and development expenses decreased by $15.2 million, or 59.3%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was primarily due to lower clinical expenses. This decrease in clinical expenses was driven by lower clinical development costs and clinical personnel-related costs as a result of the completion of phase 3 studies. This decrease was also driven by a decrease in drug manufacturing and regulatory costs.
We recognize the benefit of Canadian research and development tax credits as a reduction of research and development costs for fully refundable investment tax credits.
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General and Administrative
General and administrative expenses decreased $0.5 million, or 11.5%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to a decrease in personnel costs, partially offset by an increase in outside service costs.
General and administrative expenses remained substantially consistent for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
Commercial
Commercial expenses decreased by $2.5 million, or 56.7%, for the three months ended September 30, 2024, compared to the same period in 2023. This decrease is a result of a decrease in personnel costs, professional costs and other operational expenses related to commercialization.
Commercial expenses decreased by $3.5 million, or 34.9%, for the nine months ended September 30, 2024, compared to the same period in 2023. This decrease is a result of a decrease in professional costs and other operational expenses related to commercialization.
We anticipate our commercial expenses will increase as we invest in the infrastructure, personnel and operational expenses required to launch our first product in the United States, if the FDA approves the NDA.
Interest Income
Interest income was $1.1 million and $1.1 million for the three months ended September 30, 2024 and 2023. Interest income was $3.3 million and $2.9 million for the nine months ended September 30, 2024 and 2023, respectively. The increase in interest income was due to a larger amount of assets invested in 2024 when compared to 2023.
Interest Expense
Interest expense was $0.9 million and $0.8 million for the three months ended September 30, 2024 and 2023. Interest expense was $2.7 million and $1.7 million for the nine months ended September 30, 2024 and 2023, respectively. The increase in interest expense was due to the issuance of the 2029 Convertible Notes on March 29, 2023.
Liquidity and Capital Resources
Sources of Liquidity
We have incurred operating losses and experienced negative operating cash flows since our inception, and we anticipate continuing to incur losses for at least the next several years. As of September 30, 2024, we had cash, cash equivalents and short-term investments of $76.4 million and an accumulated deficit of $355.2 million.
On February 28, 2024, we entered into an underwriting agreement, or the “Underwriting Agreement”, related to an underwritten public offering, or the “Offering”, of 16,666,667 of our common shares, without par value, at a public offering price of $1.50 per share and, in lieu of common shares to certain investors, pre-funded warrants to purchase 3,333,333 Shares at a public offering price of $1.499 per pre-funded warrant. Under the terms of the Underwriting Agreement, we granted the Underwriters an option to purchase up to an additional 3,000,000 common shares at the same price per share as the other common shares sold in the Offering, which was exercised by the Underwriters in full on February 29, 2024.
Each pre-funded warrant has an exercise price of $0.001 per share. The pre-funded warrants were exercisable immediately upon issuance, subject to certain beneficial ownership limitations.
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The net proceeds to the Company from the Offering, including the proceeds from the exercise by the Underwriters of their option to purchase the additional 3,000,000 common shares in full, was $31.9 million after deducting underwriting commissions and offering expenses payable by the Company.
On March 27, 2023, we entered into a purchase and sale agreement, or the “Royalty Purchase Agreement”, and a note purchase agreement, or the “Note Purchase Agreement”, with RTW Investments, LP and certain of its affiliates, or collectively, “RTW”.
On March 29, 2023, the Company closed the transaction contemplated by the Note Purchase Agreement and issued and sold the $50 million principal amount of 6.0% Convertible Senior Notes due 2029, or the “2029 Convertible Notes”, to the holders in a private placement transaction.
The 2029 Convertible Notes are senior secured obligations and are guaranteed on a senior secured basis by our wholly owned subsidiary, Milestone Pharmaceuticals USA, Inc. Interest, at the annual rate of 6.0%, is payable quarterly in cash or, at our option, payable in kind for the first three years. The maturity date for the 2029 Convertible Notes will be March 31, 2029. The obligations under the 2029 Convertible Notes are secured by substantially all of our and our subsidiary guarantor’s assets.
Each $1,000 of principal of the 2029 Convertible Notes (including any interest added thereto as payment in kind) is convertible into 191.0548 shares of our common shares, equivalent to an initial conversion price of approximately $5.23 per share, subject to customary anti-dilution and other adjustments. Subject to specified conditions, on or after March 27, 2027, the 2029 Convertible Notes are redeemable by us subject to certain conditions, at a redemption price equal to 100% of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
On July 29, 2020, we entered into an Open Market Sale AgreementSM, or the “Sales Agreement”, with Jefferies LLC with respect to an at-the-market offering program, or the “ATM Program”, under which the Company may issue and sell its common shares having an aggregate offering price of up to $50 million through Jefferies as its sales agent or principal. On May 31, 2023, we filed a prospectus supplement (File No. 333-261049) that amended and restated the information in our prospectus supplement dated July 29, 2020, and, accordingly, the information in this prospectus supplement superseded the information contained in that prospectus supplement, or the prior prospectus supplement. Pursuant to that prior prospectus supplement and accompanying base prospectus contained in our Registration Statement on Form S-3 (File No. 333-239318), or the prior prospectus, we issued 361,236 common shares under the Sales Agreement, resulting in net proceeds of $2.6 million (net of issuance costs of $0.1 million). No shares were sold under the Sales Agreement during the three or nine months ended September 30, 2024.
We expect that our operating plan, existing cash and cash equivalents and short-term investments will be sufficient to fund our operations for at least the next 12 months from the date of issuance of this Form 10-Q for the quarter ended September 30, 2024 and that there are no known events or conditions that may cast substantial doubt on our ability to continue as a going concern for at least the next 12 months from the date of this filing.
Contingent future source of funding
Pursuant to the Royalty Purchase Agreement, RTW agreed to purchase, following the FDA approval of etripamil (subject to certain conditions), in exchange for a purchase price of $75.0 million, the right to receive a tiered quarterly royalty payments, or “royalty interest”, on the annual net product sales of etripamil in the United States. This represents a contingent future source of funding, in order for the Company to receive the $75 million dollars, the closing conditions specified in the Royalty Purchase Agreement, which includes the Company receiving marketing approval from the FDA on or prior to September 30, 2025, must be met.
Funding Requirements
We use our cash primarily to fund research and development expenditures. We expect our research and development expenses to increase as we continue the development of etripamil and prepare to pursue regulatory approval. We expect
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to incur increasing operating losses for the foreseeable future as we continue the clinical development of our product candidate. At this time, due to the inherently unpredictable nature of clinical development, we cannot reasonably estimate the costs we will incur and the timelines that will be required to complete development, obtain marketing approval, and commercialize etripamil or any future product candidates, if at all. For the same reasons, we are also unable to predict when, if ever, we will generate revenue from product sales or whether, or when, if ever, we may achieve profitability. Clinical and preclinical development timelines, the probability of success, and development costs can differ materially from expectations.
In addition, we have exclusive development and commercialization rights for etripamil for all indications that we may pursue and as such have the potential to license development and or commercialization rights for etripamil to a potential partner in regions outside of Greater China. We plan to establish commercialization and marketing capabilities using a direct sales force to commercialize etripamil in the United States. Outside of the United States, we are considering commercialization strategies that may include collaborations with other companies.
For other new product candidates, our efforts are focused on licensing development and/or commercialization rights from potential partners. In the case of either in-licensing or out-licensing, we cannot forecast when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development and commercialization plans and capital requirements.
The timing and amount of our operating expenditures will depend largely on:
| ● | the timing, progress and results of our ongoing and planned clinical trials and other development activities of etripamil in PSVT, AFib-RVR and in other cardiovascular indications; |
| ● | the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials of etripamil for additional indications or any future product candidates that we may pursue; |
| ● | our ability to establish additional collaborations on favorable terms, if at all; |
| ● | the ability of vendors and third-party service providers to accurately forecast expenses and deliver on expectations; |
| ● | the costs, timing and outcome of regulatory review of etripamil and any future product candidates; |
| ● | the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for etripamil and any future product candidates for which we receive marketing approval; |
| ● | the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and |
| ● | the extent to which we acquire or in-license other product candidates and technologies. |
Until such time, if ever, as we can generate substantial revenue from product sales, we expect to fund our operations and capital funding needs through equity and/or debt financing. We may also consider entering into collaboration arrangements or selectively partnering for clinical development and commercialization. The sale of additional equity would result in additional dilution to our shareholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that restrict our operations or our ability to incur additional indebtedness or pay dividends, among other items. If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could materially and adversely affect our business, financial condition and results of operations.
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Cash Flows
The following table summarizes our cash flows for the periods indicated:
Nine months ended September 30, | ||||||||||
(in thousands) | 2024 |
| 2023 | $ Change | % Change | |||||
Net cash (used in) provided by: | ||||||||||
Operating activities | $ | (22,005) | $ | (36,628) | 14,623 |
| (39.9)% | |||
Investing activities | (11,051) | (8,920) | (2,131) |
| 23.9% | |||||
Financing activities | 32,095 | 47,791 | (15,696) |
| (32.8)% | |||||
Net (decrease) increase in cash and cash equivalents during the period | $ | (961) |
| $ | 2,243 | (3,204) |
| |||
Operating Activities
Net cash used in operating activities during the nine months ended September 30, 2024 was $22.0 million, which consisted primarily of a net loss of $29.2 million. The net loss was partially offset by a net cash increase of $0.4 million related to the change in assets and liabilities, non-cash charges of $4.3 million related to share based compensation, and non-cash interest charges of $2.4 million related to the convertible note.
Net cash used in operating activities during the nine months ended September 30, 2023 was $36.6 million, which consisted primarily of a net loss of $46.0 million. The net loss was partially offset by a net cash increase of $0.1 million related to the change in assets and liabilities, non-cash charges of $7.7 million related to share based compensation and non-cash interest charges of $1.5 million related to the convertible note.
Investing Activities
In the nine months ended September 30, 2024, we acquired $99.6 million of short-term investments, and we redeemed $88.5 million in short-term investments. In the nine months ended September 30, 2023, we acquired $95.8 million of short-term investments, and we redeemed $87.0 million in short-term investments.
Financing Activities
In the nine months ended September 30, 2024, our financing activities provided cash proceeds of $32.1 million. These proceeds were primarily a result of the $31.9 million received from the issuance of common shares and pre-funded warrants, net of $2.6 million in issuance costs paid under the Underwriting Agreement.
In the nine months ended September 30, 2023, our financing activities provided cash proceeds of $47.8 million. These proceeds were primarily a result of the $50 million received from the issuance of convertible notes under the Note Purchase Agreement, which was partially offset by $2.8 million in debt costs, and $0.6 million in cash proceeds from the exercise of share options and issuance of common shares under the employee stock purchase plan.
We have not entered into off-balance sheet arrangements.
Contractual Obligations
During the nine months ended September 30, 2024, there were no material changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K, filed with the SEC on March 21, 2024.
Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited interim condensed consolidated financial statements as of September 30, 2024, which have been prepared in accordance
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with United States generally accepted accounting principles, or “U.S. GAAP”, and on a basis consistent with those accounting principles followed by us. The preparation of these consolidated financial statements requires our management to make judgments and estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates and judgments include, but are not limited to:
| ● | Estimates of the percentage of work completed of the total work over the life of the individual trial in accordance with agreements established with CROs, CMOs and clinical trial sites which in turn impact the research and development expenses. |
| ● | Estimate of the grant date fair value share options granted to employees, consultants and directors, and the resulting share-based compensation expense, using the Black-Scholes option-pricing model. |
Accordingly, actual results may differ from these judgments and estimates under different assumptions or conditions and any such differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
a) Research and Development Expenses — Accruals
Research and development costs are charged against income in the period of expenditure. Our research and development costs consist primarily of salaries and fees paid to CROs and to CMOs.
Clinical trial expenses include direct costs associated with CROs, direct CMO costs for the formulation and packaging of clinical trial material, as well as investigator and patient related costs at sites at which our trials are being conducted. Direct costs associated with our CROs and CMOs are generally payable on a time and materials basis, or when milestones are achieved. The invoicing from clinical trial sites can lag several months. We record expenses for our clinical trial activities performed by third parties based upon estimates of the percentage of work completed of the total work over the life of the individual trial in accordance with agreements established with CROs and clinical trial sites. We determine the estimates through discussions with internal clinical personnel, CROs and CMOs as to the progress or stage of completion of trials or services and the agreed upon fee to be paid for such services based on facts and circumstances known to us as of each consolidated balance sheet date. The actual costs and timing of clinical trials are highly uncertain, subject to risks and may change depending upon a number of factors, including our clinical development plan. If the actual timing of the performance of services of the level of effort varies from the estimate, we will adjust the accrual accordingly. Adjustments to prior period estimates have not been material. We recognize the benefit of Canadian research and development tax credits as a reduction of research and development costs for fully refundable investment tax credits and as a reduction of income taxes for investment tax credits that can only be claimed against income taxes payable when there is reasonable assurance that the claim will be recovered.
b) Share Based Compensation
We recognize compensation costs related to share options granted to employees, consultants and directors based on the estimated fair value of the awards on the date of grant. We estimate the grant date fair value, and the resulting share based compensation expense, using the Black-Scholes option pricing model. This Black-Scholes option pricing model uses various inputs to measure fair value, including estimated fair value of our underlying common shares at the grant date, expected term, estimated volatility, risk-free interest rate and expected dividend yields of our common shares. The estimated volatility creates a critical estimate because we have not been a public company long enough to demonstrate our own historical volatility. The grant date fair value of the share based awards is recognized on a straight-line basis over the requisite service periods, which are generally the vesting period of the respective awards. Forfeitures are accounted for as they occur.
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Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board, or “FASB”, issued Accounting Standard Update, or “ASU 2023-07”, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the effect of adopting this new ASU on its financial statement disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, or “ASU 2023-09”. The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). The amendments also require entities on an annual basis to disclose disaggregated amounts of income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is evaluating the effect of adopting this new ASU on its financial statement disclosures, but does not intend to early adopt.
Emerging Growth Company Status
The Jumpstart Our Business Startups Act of 2012 permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have irrevocably elected to “opt out” of this provision and, as a result, we comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our initial public offering in May 2019, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, and (2) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The primary objective of our investment activities is to preserve principal and liquidity while maximizing income without significantly increasing risk. We are exposed to market risks in the ordinary course of our business. These risks primarily relate to interest rate risks. We had cash, cash equivalents and short-term investments of $76.4 million as of September 30, 2024, which consist primarily of bank deposits and guaranteed investment certificates. We do not enter into investments for trading or speculative purposes. Due to the short-term nature of our investment portfolio, we do not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair market value of our portfolio, and accordingly we do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates.
We undertake certain transactions in Canadian dollars and as such are subject to risk due to fluctuations in exchange rates. Canadian dollar denominated payables are paid at the converted rate as due. We do not use derivative instruments or have a formal hedging program to hedge exposure to foreign exchange rate risk due to the low volume of transactions denominated in foreign currencies. On September 30, 2024, our net monetary exposure denominated in Canadian dollars was $1.7 million.
Our operating results and financial position are reported in U.S. dollars in our consolidated financial statements. The fluctuation of the Canadian dollar in relation to the U.S. dollar might, consequently, have an impact upon our loss and may also affect the value of our assets and the amount of shareholders’ equity.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the “Exchange Act”, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have an adverse effect on our business, operating results or financial condition.
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Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in Part I, Item 1A. in our Annual Report on Form 10-K, filed with the SEC and under Milestone’s SEDAR+ profile at www.sedarplus.com on March 21, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not applicable
Item 3. Defaults Upon Senior Securities.
Not applicable
Item 4. Mine Safety Disclosures.
Not applicable
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Item 5. Other Information.
Rule 10b5-1 Trading Arrangements
None of our directors or executive officers
Item 6. Exhibits.
| ||
Exhibit |
| Description |
3.1 | ||
3.2 | ||
10.1 | Non-Employee Director Compensation Policy, as amended July 11, 2024. | |
10.2 | ||
31.1 |
| |
31.2 |
| |
32.1* |
| |
101.INS | Inline XBRL Instance Document | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL. |
* Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the “Exchange Act (whether made before or after the date of the Form 10-Q)”, irrespective of any general incorporation language contained in such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MILESTONE PHARMACEUTICALS INC. | ||
Date: November 12, 2024 | By: | /s/ Joseph Oliveto |
Joseph Oliveto | ||
President and Chief Executive Officer | ||
Date: November 12, 2024 | By: | /s/ Amit Hasija |
Amit Hasija | ||
Chief Financial Officer | ||
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