Clene Inc. (NASDAQ:CLNN) is a clinical-stage pharmaceutical company at the forefront of developing innovative clean-surfaced nanotechnology ("CSN®") therapeutics. The company's proprietary electro-crystal-chemistry platform enables the production of highly active, clean-surfaced nanocrystal suspensions, positioning Clene to address significant unmet medical needs in central nervous system (CNS) disorders.

Business Overview

Clene's core focus is on advancing its lead drug candidate, CNM-Au8, through clinical trials for applications primarily in neurology. CNM-Au8 is a novel CSN therapeutic designed to catalyze key cellular reactions that support and maintain neuronal function. The company is currently evaluating CNM-Au8 in clinical trials for the treatment of amyotrophic lateral sclerosis (ALS), multiple sclerosis (MS), and Parkinson's disease (PD).

In ALS, Clene is supporting two ongoing expanded access programs (EAPs) that have enrolled more than 250 participants since 2019. The company is also planning the design of an international Phase 3 trial, RESTORE-ALS, with expert ALS clinical advisors and expects to initiate the trial in the second half of 2024, contingent upon funding. Clene plans to work closely with regulatory authorities from the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA) to determine the proper path to potential approval for CNM-Au8 in ALS.

In MS, Clene recently announced positive long-term data from the open-label extension of its Phase 2 VISIONARY-MS clinical trial. The results demonstrated sustained clinical benefits across multiple paraclinical endpoints, including improvements in vision, cognition, and physiologic and structural evidence of repair and remyelination. The company has initiated a second dosing cohort of its Phase 2 REPAIR-MS trial in non-active progressive MS patients, with topline results expected by the end of 2024. Clene plans to engage with the FDA and EMA to advance CNM-Au8 into Phase 3 trials for MS.

In addition to its clinical-stage drug candidates, Clene leverages its electro-crystal-chemistry platform to develop dietary supplements through its wholly owned subsidiary, dOrbital, Inc., and an exclusive license with 4Life Research LLC, an international supplier of health supplements.

Financial Overview

Clene reported annual revenue of $654,000 in 2023, primarily from the sale of dietary supplements. The company incurred a net loss of $49.5 million and generated negative operating and free cash flows of $30.2 million and $30.5 million, respectively, during the same period. As of March 31, 2024, Clene had $27.9 million in cash, cash equivalents, and marketable securities, and $40.8 million in total liabilities, including $10.3 million in convertible notes payable.

For the first quarter of 2024, Clene reported revenue of $73,000, a 32% decrease compared to the prior-year period, primarily due to the timing of purchases of dietary supplements by its partner, 4Life. The company's net loss for the quarter was $11.1 million, a 6% decrease from the first quarter of 2023, driven by a 21% decrease in research and development expenses and a 1% decrease in general and administrative expenses.

Clene's cash used in operating activities for the first quarter of 2024 was $7.1 million, a 23% decrease from the prior-year period, reflecting the company's ongoing efforts to manage its cash resources. The company's cash, cash equivalents, and marketable securities totaled $27.9 million as of March 31, 2024, a decrease of 20% from the end of 2023.

Liquidity and Capital Resources

Clene has incurred significant losses and negative cash flows from operations since its inception, and the company expects to continue incurring additional losses as it advances the development of its clinical-stage drug candidates. As of March 31, 2024, the company had $27.9 million in cash, cash equivalents, and marketable securities, which it expects will not be sufficient to sustain its current operations or meet its obligations as they become due within the next twelve months.

To mitigate its funding needs, Clene plans to raise additional capital through equity financing, debt financing, licensing or collaboration arrangements, and the utilization of its existing at-the-market facility and equity purchase agreement. The company has also implemented cost-saving initiatives, including delaying and reducing certain research and development programs and commercialization efforts, as well as eliminating certain staff positions.

However, Clene has concluded that its plans do not alleviate the substantial doubt about its ability to continue as a going concern beyond one year from the date the condensed consolidated financial statements are issued. The company's ability to continue as a going concern is dependent on its ability to successfully implement its funding plans, which are subject to market conditions and reliance on third parties.

Competitive Landscape

Despite the significant unmet need for effective disease-modifying treatments for ALS, the pharmaceutical industry has faced limited clinical successes in this area. In 2023, the FDA granted accelerated approval to Biogen Inc.'s tofersen (Qalsody) for the treatment of SOD1-ALS, a rare genetic form of the disease. Additionally, Amylyx Pharmaceuticals, Inc.'s sodium phenylbutyrate and taurursodiol (previously approved in the U.S. and Canada) was recently withdrawn from the market after failing to demonstrate a statistically significant treatment benefit in a Phase 3 trial.

Clene's CNM-Au8 is currently being evaluated in clinical trials for the treatment of ALS, MS, and PD, positioning the company to potentially address significant unmet medical needs in these areas. The company's novel CSN therapeutic approach, which aims to catalyze key cellular reactions to support and maintain neuronal function, differentiates it from traditional drug development approaches.

Risks and Challenges

Clene faces several risks and challenges in its pursuit of developing and commercializing its drug candidates. These include the ability to obtain regulatory approvals, the success of its clinical trials, the potential for competition from other therapies, and the company's ability to secure sufficient funding to continue its operations and research and development activities.

The company's reliance on third-party contract research organizations (CROs) and manufacturers also introduces risks related to the timely and successful completion of its clinical trials and the production of its drug candidates. Additionally, Clene's intellectual property position and its ability to protect its proprietary technology are critical to its long-term success.

Outlook and Conclusion

Clene's innovative approach to developing CSN therapeutics, exemplified by its lead candidate CNM-Au8, positions the company to potentially address significant unmet medical needs in CNS disorders. The positive long-term data from the VISIONARY-MS trial and the company's plans to advance CNM-Au8 into Phase 3 trials for ALS and MS demonstrate its progress in clinical development.

However, Clene's ability to execute on its strategic plans is contingent on its success in securing additional funding, which remains a key challenge for the company. The management team's ability to navigate the regulatory landscape and effectively manage its research and development activities will also be crucial to Clene's long-term success.

Overall, Clene's unique technology platform, promising clinical pipeline, and the significant unmet medical needs in its target indications make the company an intriguing player in the pharmaceutical industry. Investors should closely monitor the company's progress in advancing its drug candidates through clinical trials and its efforts to secure the necessary funding to support its operations and growth.