Third Harmonic Bio, Inc. (NASDAQ:THRD) is a clinical-stage biopharmaceutical company focused on advancing the next wave of medicine for dermal, respiratory, and gastrointestinal inflammatory diseases. The company is developing next-generation, highly selective, oral small-molecule inhibitors of KIT, a cell surface receptor that serves as the master regulator of mast cell function and survival.
Business Overview
Third Harmonic Bio was incorporated in 2019 and has two offices located in San Francisco, California and Cambridge, Massachusetts. The company's initial focus is on developing an oral KIT inhibitor to treat chronic spontaneous urticaria (CSU), with planned expansion into other mast cell-mediated inflammatory disorders, including severe asthma.
The company plans to announce U.S. Food and Drug Administration (FDA) clearance of its Investigational New Drug (IND) application to initiate a first-in-human clinical trial of THB335, a potent, highly selective, oral, small molecule KIT inhibitor that is in development for the treatment of mast cell-mediated diseases. The company intends to initiate a Phase 1 single and multiple ascending doses (SAD/MAD) clinical trial of THB335 to evaluate safety, pharmacokinetics and pharmacodynamics in healthy volunteers. The company expects to report clinical results during the first half of 2025.
The company is leveraging its nonclinical and clinical experience with its first generation THB001 product candidate to prioritize speed to Phase 2 with THB335 and is initiating reproductive and chronic toxicology studies to support rapid advancement toward late-stage clinical development. THB335 maintains the nonclinical pharmacology and selectivity profile of THB001, with structural modifications designed to mitigate hepatotoxicity risk and provide a differentiated metabolic, distribution and physiochemical profile.
Recent Developments
In July 2023, the company disclosed topline results of the Phase 1b clinical trial of its first-generation oral KIT inhibitor product candidate THB001 for the treatment of chronic inducible urticaria, which it discontinued in December 2022 due to observed liver transaminitis in two of five patients enrolled. The results provided evidence of pharmacodynamic and clinical activity, with four of the five patients achieving partial or complete responses. The company also shared preliminary results from extensive studies of THB001 that were conducted to identify the mechanism for the observed liver toxicity, which was not predicted by nonclinical toxicology studies.
Financials
For the year ended December 31, 2023, Third Harmonic Bio reported a net loss of $30.8 million and no revenue. The company's net cash used in operating activities was $20.4 million, and its free cash flow was negative $20.6 million.
For the three months ended December 31, 2023, the company reported a net loss of $7.9 million and no revenue. The company's net cash used in operating activities was $6.3 million during the quarter.
Liquidity
As of December 31, 2023, Third Harmonic Bio had $262.8 million in cash and cash equivalents, which the company believes will be sufficient to fund its operations and capital expenses through at least 2026.
Risks and Challenges
Third Harmonic Bio faces several risks and challenges, including:
1. Limited operating history and no approved products: The company has a limited operating history, and neither THB335 nor any of its other product candidates have been approved for commercial sale.
2. Significant net losses and need for additional capital: The company has incurred significant net losses since its inception and expects to continue to incur losses for the foreseeable future. The company will need substantial additional funding to support its ongoing operations and pursue its growth strategy.
3. Regulatory approval risks: The regulatory approval process for THB335 and any future product candidates is highly uncertain, and the company may be unable to obtain, or may be delayed in obtaining, U.S. or foreign regulatory approval.
4. Clinical development risks: Drug development is a lengthy and expensive process, and the outcome of clinical trials is inherently uncertain. The company may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of THB335 or any future product candidates.
5. Competition from larger and more established companies: The company faces competition from entities that have made substantial investments into the rapid development of novel treatments for allergic and inflammatory diseases, including large and specialty pharmaceutical and biotechnology companies.
6. Reliance on third parties: The company relies, and intends to continue to rely, on third parties to conduct its clinical trials and perform all of its research and nonclinical studies. If these third parties do not satisfactorily carry out their contractual duties, the company's development programs may be delayed or subject to increased costs.
7. Intellectual property risks: The company's ability to obtain, maintain and enforce patent protection for its technologies or product candidates is critical to its success. The company may face challenges in protecting its intellectual property rights.
Outlook
Despite the challenges, Third Harmonic Bio's focus on developing innovative oral KIT inhibitors for the treatment of mast cell-mediated inflammatory diseases presents a promising opportunity. The company's lead product candidate, THB335, has demonstrated favorable nonclinical and early clinical results, and the planned initiation of the Phase 1 clinical trial is an important milestone.
Conclusion
With a strong cash position and a clear development strategy, Third Harmonic Bio is well-positioned to advance THB335 and potentially expand its pipeline of oral KIT inhibitor product candidates. As the company continues to navigate the regulatory and clinical development landscape, investors will closely monitor the progress of THB335 and the company's ability to execute on its strategic objectives.