F-star Therapeutics, Inc. (NASDAQ:FSTX) is a clinical-stage biopharmaceutical company at the forefront of developing innovative bispecific antibodies for cancer treatment. The company's proprietary tetravalent (2+2) bispecific antibody platform, known as mAb², aims to create a paradigm shift in cancer treatments by offering patients better and more durable benefits than currently available immune-oncology treatments.

F-star's robust pipeline includes four second-generation immune-oncology therapeutics currently in clinical trials, each targeting some of the most promising immune-oncology targets in drug development, such as LAG-3 and CD137. The company's lead product candidate, FS118, is being evaluated in proof-of-concept Phase 2 trials for PD-1/PD-L1 acquired resistance head and neck cancer patients and checkpoint inhibitor (CPI) naïve non-small cell lung cancer (NSCLC) and diffuse large B-cell lymphoma (DLBCL) patients.

Financials

In the third quarter of 2022, F-star reported revenue of $1.1 million, compared to $0.8 million in the same period of 2021, an increase of approximately $0.3 million. For the nine months ended September 30, 2022, the company reported revenue of $3.7 million, consistent with the same period in 2021. This revenue was primarily generated from the company's collaboration agreements with partners such as Ares, Takeda, and AstraZeneca.

The company's research and development expenses for the third quarter of 2022 were $9.7 million, compared to $5.1 million in the same period of 2021, an increase of $4.6 million. This increase was primarily due to an increase in clinical CRO costs of $3.0 million resulting from an increased number of patients on clinical trials in F-star's four clinical-stage programs, as well as increases in R&D consultancy, R&D staff-related costs, and other costs. For the nine months ended September 30, 2022, research and development expenses were $26.4 million, compared to $20.5 million in the same period of 2021, an increase of $5.9 million.

General and administrative expenses for the third quarter of 2022 were $5.2 million, consistent with the same period in 2021. For the nine months ended September 30, 2022, general and administrative expenses were $18.3 million, compared to $18.2 million in the same period of 2021, an increase of $0.1 million.

F-star reported a net loss of $18.4 million for the third quarter of 2022, compared to a net loss of $10.8 million in the same period of 2021. For the nine months ended September 30, 2022, the company reported a net loss of $49.5 million, compared to a net loss of $36.0 million in the same period of 2021.

Liquidity

As of September 30, 2022, F-star had cash and cash equivalents of $35.6 million, compared to $78.5 million as of December 31, 2021. The company's working capital (current assets less current liabilities) as of September 30, 2022, was $34.9 million.

F-star's cash position and working capital reflect the company's ongoing investment in its clinical-stage programs and research and development activities. The company's net cash used in operating activities for the nine months ended September 30, 2022, was $44.7 million, compared to $34.0 million in the same period of 2021. This increase in cash used was primarily due to the net loss of $49.5 million, partially offset by non-cash charges and changes in working capital.

In terms of liquidity, F-star's management believes that the company's existing cash and cash equivalents as of September 30, 2022, will fund its current operating plan into the second quarter of 2023. The company may continue to seek additional working capital through the sale and issuance of equity securities, debt financing, collaboration arrangements, or other sources.

Business Overview

The company is a clinical-stage biopharmaceutical company pioneering bispecifics in immunotherapy to offer more people with cancer the opportunity to live longer and improved lives. F-star is committed to working towards a future free from cancer and other serious diseases, through the use of tetravalent (2+2) bispecific antibodies to create a paradigm shift in cancer treatments. The company has four second-generation immune-oncology therapeutics in the clinic, each directed against some of the most promising immune-oncology targets in drug development, including LAG-3 and CD137.

F-star's proprietary antibody discovery platform is protected by an extensive intellectual property estate, with over 500 granted patents and pending patent applications relating to its platform technology and product pipeline. The company has attracted multiple partnerships with biotechnology and pharmaceutical companies targeting significant unmet needs across several disease areas, including oncology, immunology, and indications affecting the central nervous system, with over 20 programs being developed by its partners using F-star's technology.

In terms of financial ratios, as of September 30, 2022, F-star had a current ratio of 6.98, a quick ratio of 6.66, and a cash ratio of 6.47, indicating a strong liquidity position. The company's debt ratio was 0.11, and its debt-to-equity ratio was 0.14, suggesting a conservative capital structure.

Outlook

Looking ahead, F-star's management has not provided specific financial guidance for the full year 2022. However, the company remains focused on advancing its clinical-stage programs and exploring strategic partnerships to further develop and commercialize its innovative bispecific antibody platform. Investors will be closely watching for updates on the progress of F-star's clinical trials and any potential collaborations or licensing agreements that could drive future growth and value creation.

Conclusion

Overall, F-star Therapeutics is a promising biopharmaceutical company with a differentiated approach to cancer treatment through its proprietary bispecific antibody platform. The company's robust pipeline, strong intellectual property position, and strategic partnerships position it well to capitalize on the growing demand for innovative immunotherapy solutions. As F-star continues to execute on its clinical development and business development initiatives, investors will be closely monitoring the company's progress and financial performance.