Centessa Pharmaceuticals plc (NASDAQ:CNTA) is a clinical-stage pharmaceutical company on a mission to discover, develop, and ultimately deliver medicines that are transformational for patients. With a differentiated asset-centric drug discovery and development approach, Centessa has built a robust pipeline of product candidates targeting various therapeutic areas of high unmet need.
Business Overview
Centessa was founded in October 2020 as a limited liability company under the laws of England and Wales. The company's formation was driven by the goal of using a differentiated asset-centric drug discovery and development approach to build a pipeline of high conviction programs, product candidates, technologies, or intellectual property that the company believes are novel, employ differentiated mechanisms of action, or have a combination of these attributes.
In January 2021, Centessa acquired the ownership interests of its Centessa Subsidiaries, which historically operated as independent entities with generally separate management and operational teams. This acquisition required Centessa to expend significant resources and efforts in integrating the operations of these Centessa Subsidiaries into its larger organization, which proved to be challenging due to the number of subsidiaries acquired and the heterogeneity of their historical operations.
Over the next few years, Centessa made progress in advancing its pipeline, including initiating clinical trials for certain product candidates such as LB101 and ORX750. However, the company also faced setbacks, terminating several of its programs including lixivaptan for ADPKD, the small molecule EGFR Exon20 inhibitor program, the C797S mutation inhibitor program for NSCLC, the ZF874 program for AATD, and the dual-STAT35 degrader program in AML. Additionally, in December 2022, Centessa suspended dosing in the MAD stage of the Phase 1 study of CBS001.
In 2023, Centessa underwent a corporate consolidation of its U.S. and UK businesses to simplify its administrative operations, obtain operational efficiencies, generate administrative cost savings, and improve the overall control environment. This reorganization transferred the business operations and assets of its UK subsidiaries to Centessa Pharmaceuticals UK Limited. Subsequently, Centessa dissolved several of its UK subsidiaries using the voluntary strike off procedure.
As of November 2024, Centessa had 75 full-time equivalent employees located across the U.S., U.K. and the European Union who provide services including operational, administrative, research and development, and other support functions across the organization. The company has relied heavily on third parties such as contract research organizations and contract manufacturing organizations to advance its product candidates through preclinical and clinical development.
Centessa's business is organized into two main product segments: the Orexin Receptor 2 (OX2R) Agonist Program and the LockBody Technology Platform.
The Orexin Receptor 2 (OX2R) Agonist Program is Centessa's most advanced pipeline program, focusing on developing potential best-in-class and/or first-in-class OX2R agonists for the treatment of sleep-wake disorders including narcolepsy type 1 (NT1), narcolepsy type 2 (NT2), and idiopathic hypersomnia (IH), as well as neurological, neurodegenerative, and psychiatric conditions. The lead candidate in this program is ORX750, a novel, orally administered, highly potent and selective OX2R agonist being developed for NT1, NT2, and IH.
In May 2024, Centessa initiated a Phase 1 first-in-human clinical study of ORX750 in healthy volunteers. The ongoing Phase 1 study is evaluating the safety, tolerability, and pharmacokinetics of single-ascending and multiple-ascending doses of ORX750. In September 2024, Centessa reported interim data from the Phase 1 study, which showed that ORX750 significantly increased wakefulness in acutely sleep-deprived healthy volunteers compared to placebo, with a favorable safety and tolerability profile. In November 2024, additional interim data continued to demonstrate increased wakefulness with ORX750 and a linear pharmacokinetic profile supporting once-daily dosing. Centessa expects the Phase 1 study to enable dose selection for planned Phase 2 studies in patients with NT1, NT2, and IH.
Centessa is also advancing ORX142, another novel OX2R agonist, through IND-enabling studies for the treatment of neurological, neurodegenerative, and psychiatric disorders associated with excessive daytime sleepiness (EDS). The company recently nominated ORX489 as its third OX2R agonist development candidate, further strengthening its pipeline of differentiated orexin-based therapies.
The LockBody Technology Platform is designed to selectively drive potent effector function activity, such as CD47 or CD3, into the tumor microenvironment while avoiding systemic toxicity. The lead LockBody candidate is LB101, a conditionally tetravalent PD-L1xCD47 bi-specific monoclonal antibody, which is being evaluated in a Phase 1/2a clinical trial for the treatment of advanced solid tumors. In March 2023, Centessa initiated a Phase 1/2a first-in-human, open-label, dose escalation study of LB101 in patients with advanced solid tumors to evaluate the safety, tolerability, and preliminary activity of the LockBody approach.
Financials and Liquidity
As of September 30, 2024, Centessa reported cash, cash equivalents, and short-term investments of $518.4 million, which the company believes will be sufficient to fund its expected operating expenses and capital expenditure requirements into mid-2027. This strong cash position provides Centessa with the financial flexibility to advance its diverse pipeline of product candidates.
For the most recent quarter, Centessa reported no revenue and a net loss of $42.6 million. The company's research and development expenses for the nine months ended September 30, 2024 were $89.4 million, while its general and administrative expenses were $37.1 million for the same period.
Centessa's balance sheet remains solid, with a current ratio of 21.52 and a quick ratio of 21.52 as of September 30, 2024, indicating strong liquidity. The company's debt-to-equity ratio stood at 0.17, suggesting a prudent capital structure.
As of September 30, 2024, Centessa had $395.03 million in cash and cash equivalents and $123.42 million in short-term investments. In October 2021, the company entered into a Note Purchase Agreement (NPA) with Oberland Capital, under which Centessa issued a secured note in the principal amount of $75 million. The NPA also provides for up to an additional $100 million available to Centessa to fund mergers, acquisitions, in-licensing or other strategic transactions. As of September 30, 2024, Centessa had made cumulative payments under the NPA, including interest payments, totaling $26.30 million.
Centessa's robust financial position enables it to continue investing in its pipeline and pursuing strategic initiatives to drive long-term growth. The company does not currently disclose detailed geographic performance information, likely due to its small-cap status and focus on early-stage development programs.
Recent Developments and Catalysts
In November 2024, Centessa announced the voluntary discontinuation of the global clinical development program for SerpinPC, a novel inhibitor of activated protein C (APC) that was being evaluated for the treatment of hemophilia B. This decision was made to prioritize capital towards the development of the company's growing OX2R agonist franchise, particularly the advancement of ORX750 and ORX142.
Looking ahead, Centessa has several key milestones and catalysts on the horizon. The company plans to present data from the ongoing Phase 1 clinical trial of ORX750 at a medical conference in the second quarter of 2025. Additionally, Centessa expects to generate clinical data for ORX750 in patients with NT1, NT2, and IH from its Phase 2a study in 2025, which could further demonstrate the drug's potential as a best-in-class or first-in-class treatment option.
For ORX142, Centessa aims to initiate clinical development with the goal of sharing data from studies in acutely sleep-deprived healthy volunteers in 2025. The company's third OX2R agonist candidate, ORX489, is also progressing through IND-enabling activities, showcasing Centessa's commitment to expanding its orexin-based pipeline.
In the oncology space, Centessa continues to advance its LB101 program, with the ongoing Phase 1/2a study expected to provide insights into the performance of the company's proprietary LockBody technology platform in a clinical setting.
Risks and Challenges
As a clinical-stage biopharmaceutical company, Centessa faces several risks and challenges common to the industry. These include the inherent uncertainty of drug development, the potential for clinical trial failures or delays, regulatory approval hurdles, and the need for significant capital to fund its operations and pipeline advancement.
Centessa's reliance on its subsidiaries and the potential for conflicts of interest between the parent company and its subsidiaries also pose risks. Additionally, the company's international operations expose it to various business, regulatory, and legal risks associated with doing business across multiple jurisdictions.
The biotechnology and pharmaceutical industries are characterized by rapidly changing technologies, significant competition and a strong emphasis on intellectual property. Centessa operates in these highly competitive and dynamic industries, facing challenges common to many clinical-stage biopharmaceutical companies, such as the need to successfully advance its product candidates through preclinical and clinical development, obtain regulatory approvals, and commercialize any approved products.
On September 28, 2022, the company and certain of its current and former officers were named as defendants in a proposed class-action lawsuit filed in the United States District Court for the Central District of California. The complaint generally alleged that the company violated Sections 10(b) and 20(a) and Sections 11 and 15 of the Securities Act of 1933 by allegedly making materially false and/or misleading statements, as well as allegedly failing to disclose material adverse facts relating to the safety profile and future clinical and commercial prospects of each of its lixivaptan and ZF874 programs, which caused the company's securities to trade at artificially inflated prices.
The lawsuit was subsequently transferred to the United States District Court for the Southern District of New York, and an amended complaint was filed on February 10, 2023. The amended complaint focused solely on alleged violations of Sections 11 and 15 of the Securities Act based on alleged misstatements in the S-1 filed by the company in connection with its Initial Public Offering, specifically concerning lixivaptan.
On August 2, 2024, the court granted the company's motion to dismiss all claims with leave for the plaintiff to amend within twenty-one days certain statements and no leave to amend other statements and no ability to expand the scope of the claims pleaded in the amended complaint. On August 27, 2024, the court dismissed the plaintiff's complaint with prejudice and ordered the case closed.
Outlook and Conclusion
Centessa Pharmaceuticals is a clinical-stage biotech company with a diversified pipeline of innovative product candidates targeting areas of high unmet medical need. The company's differentiated asset-centric approach has allowed it to advance multiple promising programs, with a particular focus on its OX2R agonist franchise led by ORX750 and ORX142.
The positive interim data reported for ORX750 in 2024, along with the anticipated clinical readouts for this program and others in Centessa's pipeline, position the company for potential long-term success. Its strong financial position, with over $500 million in cash and cash equivalents, provides the runway necessary to continue investing in research and development activities.
While Centessa faces the inherent risks associated with drug development, the company's diversified pipeline, experienced management team, and unique operating model suggest it is well-positioned to capitalize on the significant opportunities within the biopharmaceutical industry. As Centessa continues to execute on its strategic priorities, shareholders will be closely watching for updates on the advancement of its transformative medicine candidates.