Executive Summary / Key Takeaways

• Contineum Therapeutics ($CTNM) is a clinical-stage biotech focused on neuroscience, inflammation, and immunology (NI&I), leveraging a small molecule platform targeting specific biological pathways with the aim of altering disease course.
• The company's lead wholly-owned asset, PIPE-791 (LPA1R inhibitor), is advancing in Phase 1b trials for chronic pain and PET imaging (informing IPF/PrMS Phase 2), with top-line data expected in Q2 2025 (PET) and early 2026 (chronic pain).
• The partnered asset, PIPE-307 (M1R inhibitor) with Janssen (JJ), recently completed enrollment in its Phase 2 RRMS trial (VISTA), with top-line data anticipated in H2 2025; JJ is also conducting a Phase 2 trial for MDD.
• Contineum reported $190.7 million in cash, cash equivalents, and marketable securities as of March 31, 2025, which management believes is sufficient to fund operations for at least 12 months from the May 14, 2025 filing date, despite increasing R&D expenses ($13.7 million in Q1 2025 vs. $7.8 million in Q1 2024).
• Upcoming clinical data readouts for PIPE-791 and PIPE-307 represent critical catalysts for the stock, while the need for future financing and the inherent risks of clinical development remain key considerations for investors.
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Setting the Stage: A Targeted Approach in NI&I

Contineum Therapeutics is carving out a niche in the complex landscape of neuroscience, inflammation, and immunology (NI&I) by focusing on developing differentiated, oral small molecule therapies. The company's core strategy revolves around identifying and modulating specific biological pathways believed to be central to disease progression, aiming not just for symptom management but to potentially alter the course of these conditions. This targeted approach is foundational to its pipeline and competitive positioning.

The company's journey began in 2009, evolving through various funding rounds, including convertible notes and preferred stock financings, to fuel its early research and development efforts. A pivotal moment arrived in February 2023 with the strategic partnership established with Janssen for PIPE-307, providing significant non-dilutive capital through an upfront payment and validating the potential of Contineum's platform. This was followed by the company's transition to the public markets via an IPO in April 2024, which injected substantial capital and restructured its equity base, setting the stage for accelerated clinical development.

Within the competitive NI&I space, Contineum faces established giants like Biogen (BIIB), Novartis (NVS), Sanofi (SNY), and Gilead Sciences (GILD), who possess deep pockets, extensive market presence, and diversified portfolios, including established treatments for conditions like multiple sclerosis and various inflammatory diseases. While these large players hold significant market share (e.g., Biogen with 15-20% in MS, Novartis and Sanofi with 10-15% in immunology/MS), Contineum, as a clinical-stage entity, currently holds negligible market share. However, Contineum's strategic agility and focus on potentially first-in-class or best-in-class small molecules offer a different competitive angle. Its pipeline, particularly the LPA1R and M1R inhibitors, aims to address unmet needs or offer differentiated profiles compared to existing therapies, which often include biologics with different administration routes and potential side effect profiles.

Contineum's technological edge lies in its ability to design selective, brain-penetrant (for PIPE-791) or peripherally-restricted (for CTX-343) small molecules. For PIPE-791, preclinical data suggests advantages over other LPA1R antagonists, including high bioavailability, low plasma protein binding, and a long receptor residence time. While specific quantifiable comparative metrics versus competitors' approved or pipeline assets are not detailed, the strategic intent is clear: these properties are designed to translate into improved efficacy, safety, and potentially more convenient dosing, which could provide a competitive moat against both existing small molecules and biologics. The peripherally-restricted nature of CTX-343, designed to avoid central nervous system exposure, is another example of tailoring molecule properties for specific therapeutic goals, potentially offering a better safety profile for indications where central activity is undesirable. The company's R&D efforts, including the nomination of CTX-343 and ongoing discovery programs, are aimed at expanding this portfolio of targeted therapies, although specific quantifiable targets or timelines for these early-stage programs are not publicly disclosed beyond their preclinical status. The "so what" for investors is that successful translation of these technological advantages in clinical trials could position Contineum's assets favorably in large, competitive markets, potentially leading to significant market penetration and revenue opportunities if approved.

Performance and Financial Health: Fueling the Pipeline

As a clinical-stage biopharmaceutical company, Contineum's financial profile is characterized by significant investment in research and development and a lack of product revenue. The company's financial performance in the first quarter of 2025 reflects this operational focus, with operating expenses seeing a substantial increase. Total operating expenses rose to $18.1 million for the three months ended March 31, 2025, a notable increase from $9.9 million during the same period in 2024.

This surge in expenses was primarily driven by the acceleration of clinical trial activities. Research and development expenses increased by $5.9 million year-over-year, largely due to a $3.8 million increase in costs associated with contract research organizations (CROs) supporting the ongoing PIPE-307 Phase 2 VISTA trial for RRMS, the PIPE-791 Phase 1b chronic pain trial, and the PIPE-791 Phase 1b PET imaging trial. Increased personnel costs ($0.8 million), non-cash stock-based compensation ($0.7 million), facilities costs ($0.3 million), and expenses for supplies and toxicology studies also contributed to the rise in R&D spending.

General and administrative expenses also saw a significant increase of $2.2 million, primarily due to higher non-cash stock-based compensation ($1.1 million), increased personnel-related expenses ($0.7 million), and costs associated with operating as a public company, such as director and officer insurance ($0.2 million).

These increased expenditures resulted in a net loss of $16.0 million for the first quarter of 2025, compared to a net loss of $8.4 million for the first quarter of 2024. The accumulated deficit grew to $133.4 million as of March 31, 2025, underscoring the company's pre-revenue stage and investment phase.

On the income side, interest income increased to $2.3 million in Q1 2025 from $1.6 million in Q1 2024, reflecting a larger pool of invested funds.

Crucially for a biotech company in this stage, liquidity is paramount. As of March 31, 2025, Contineum held $190.7 million in cash, cash equivalents, and marketable securities. This strong cash position is a result of historical funding efforts, including the $50 million upfront payment from the JJ license agreement in 2023 and the approximately $107.9 million in net proceeds from the April 2024 IPO. Management has stated that based on the current operating plan, these existing resources are expected to be sufficient to fund operations for at least 12 months from the filing date of the Q1 2025 report (May 14, 2025).

Cash flow analysis shows net cash used in operating activities was $14.4 million in Q1 2025, an increase from $8.0 million in Q1 2024, consistent with the higher operating expenses. Net cash provided by investing activities was $14.9 million in Q1 2025, driven by sales and maturities of marketable securities ($48.7 million) offsetting purchases ($33.7 million). Financing activities provided a modest $24,000 in Q1 2025, primarily from stock option exercises.

The current financial position provides Contineum with the necessary runway to advance its key clinical programs through important data readouts. However, the company explicitly acknowledges the need for future financing to support continued development, regulatory processes, and potential commercialization. The ability to raise additional funds on favorable terms, or through strategic collaborations that don't require relinquishing valuable rights, will be critical for the company's long-term success.

Strategic Progress and Outlook: Catalysts on the Horizon

Contineum's strategic focus is firmly on advancing its pipeline through key clinical milestones, with several significant catalysts anticipated in the near term. The progress of its lead assets, PIPE-791 and PIPE-307, forms the core of its value proposition.

PIPE-791, the wholly-owned LPA1R inhibitor, is being developed for multiple indications. Following the completion of a Phase 1 healthy volunteer trial, the company initiated a Phase 1b open-label PET imaging trial in December 2024. This trial is designed to assess the relationship between pharmacokinetics and receptor occupancy in the lung and brain, providing crucial data to inform dose selection for planned Phase 2 trials in idiopathic pulmonary fibrosis (IPF) and progressive multiple sclerosis (PrMS). Top-line data from this PET trial is expected in the second quarter of 2025, representing a significant near-term event for investors. Furthermore, in March 2025, Contineum initiated patient dosing in an exploratory Phase 1b chronic pain trial for PIPE-791, targeting pain associated with osteoarthritis and low back pain. This trial is expected to enroll approximately 40 patients across up to five U.S. sites with a 28-day treatment duration, and top-line data is anticipated in early 2026.

The partnered asset, PIPE-307, a selective M1R inhibitor, is being advanced in collaboration with Janssen. Contineum recently completed enrollment of 168 patients in its Phase 2 VISTA trial for relapsing-remitting multiple sclerosis (RRMS) in January 2025. The top-line data from this trial is a major anticipated catalyst, expected in the second half of 2025. The collaboration with JJ is structured such that JJ holds exclusive worldwide rights and is generally responsible for development, manufacturing, and commercialization. Contineum is funding the Phase 2 RRMS trial but retains an opt-in right to co-fund a portion of Phase 3 and subsequent development costs for PIPE-307 in exchange for increased royalties (a one to two percentage point increase). JJ has also initiated its own Phase 2 proof-of-concept trial for PIPE-307 (branded as JNJ-89495120) in major depressive disorder (MDD), beginning recruitment of an estimated 124 adult participants in December 2024. This parallel development by a major pharmaceutical partner underscores the potential perceived value of PIPE-307 across different NI&I indications and provides additional shots on goal for the program. Contineum believes PIPE-307 is the most advanced selective M1R antagonist in clinical development, suggesting a potential first-mover advantage if successful.

Beyond these clinical programs, Contineum is leveraging its discovery capabilities to build out its pipeline. In January 2024, the company nominated CTX-343, a peripherally-restricted LPA1R antagonist, and commenced preclinical studies. This program, along with other ongoing discovery efforts, aims to identify additional drug candidates targeting NI&I pathways.

Looking ahead, Contineum anticipates that its operating expenses will continue to increase significantly as it progresses its clinical trials, pursues regulatory approvals, expands its R&D activities and headcount, and builds the infrastructure necessary for potential commercialization. The successful execution of the planned clinical trials and the outcomes of the upcoming data readouts are paramount to validating the company's platform and advancing its assets towards potential approval and commercial success.

Risks and Challenges

Investing in a clinical-stage biopharmaceutical company like Contineum Therapeutics inherently involves a high degree of risk. The successful development and potential commercialization of its drug candidates are subject to numerous uncertainties.

A primary risk lies in the outcome of clinical trials. While Contineum's preclinical data and Phase 1 results are encouraging, there is no guarantee that the ongoing or future Phase 1b and Phase 2 trials for PIPE-791 and PIPE-307 will demonstrate sufficient safety and efficacy to support further development or regulatory approval. Clinical trials can fail at any stage due to unexpected safety issues or lack of efficacy. Delays in trial enrollment, site activation, or data collection could also push back timelines and increase costs.

Regulatory risk is also significant. Even with positive clinical data, there is no assurance that the U.S. Food and Drug Administration (FDA) or other regulatory bodies will approve Contineum's drug candidates. The regulatory review process is complex and can be unpredictable.

Competition in the NI&I space is intense. As discussed, large pharmaceutical companies with established products and pipelines are actively developing therapies for conditions like MS, IPF, and depression. Contineum's ability to successfully compete will depend on demonstrating a differentiated profile for its drug candidates, achieving favorable clinical outcomes, and securing market access and reimbursement if approved. While Contineum's technology aims for differentiation, competitors are also innovating, including exploring alternative modalities like biologics and potentially gene therapies, which could offer different advantages or cost structures.

Manufacturing challenges, intellectual property protection, and the ability to establish effective sales and marketing capabilities (if approval is obtained) are additional hurdles.

Furthermore, the company's financial runway, while currently projected to last at least 12 months, is dependent on managing its increasing operating expenses and the timing and costs of its development programs. The need for future financing is explicit, and there is no guarantee that additional capital will be available when needed or on terms favorable to the company and its existing stockholders. Raising funds through equity could dilute current shareholders, while debt financing could impose restrictive covenants. Licensing or collaboration deals, while providing capital, may require relinquishing rights to promising assets.

These risks highlight the speculative nature of investing in Contineum and underscore the importance of monitoring clinical trial progress, regulatory interactions, and the company's ability to secure future funding.

Conclusion

Contineum Therapeutics stands at a critical juncture, with a targeted pipeline of small molecule candidates aimed at significant unmet needs in neuroscience, inflammation, and immunology. The company's strategy, rooted in its differentiated technology platform, seeks to develop therapies that can potentially alter the course of disease. The recent financial results reflect the expected increase in investment necessary to advance these programs through the clinic.

With a solid cash position providing runway for the near term, the investment narrative for Contineum is heavily tied to the upcoming clinical data readouts. The top-line results from the PIPE-791 Phase 1b PET trial in Q2 2025 and the PIPE-307 Phase 2 VISTA trial in H2 2025 are particularly important catalysts that will provide crucial insights into the potential efficacy and safety of these lead assets and inform future development decisions. The progress of the PIPE-791 chronic pain trial and JJ's development of PIPE-307 in MDD add further dimensions to the story. While the competitive landscape is challenging and the risks inherent in drug development are substantial, successful clinical outcomes for its lead programs, coupled with a strategic approach to future financing, could position Contineum to capitalize on the large market opportunities it is pursuing. Investors will be closely watching the data and the company's ability to execute on its clinical and financial strategy in the coming quarters.