Longboard Pharmaceuticals, Inc. (NASDAQ:LBPH) is a clinical-stage biopharmaceutical company focused on developing novel, transformative medicines for neurological diseases. The company was formed in January 2020 by Arena Pharmaceuticals, Inc. (Arena), which was subsequently acquired by Pfizer, Inc. in March 2022. Longboard is currently focused on developing two lead product candidates, bexicaserin (LP352) and LP659, both of which were licensed from Arena.
Business Overview
Longboard's most advanced product candidate, bexicaserin (LP352), is an oral, centrally acting, 5-hydroxytryptamine 2C receptor subtype (5-HT2C) superagonist. In the first quarter of 2024, the company announced positive topline data from a Phase 1b/2a clinical trial, the PACIFIC Study, evaluating bexicaserin in participants ages 12 to 65 years old with a broad range of developmental and epileptic encephalopathies (DEEs), including Dravet syndrome (DS), Lennox-Gastaut syndrome (LGS), and other DEEs. Longboard is currently in the planning stages of a global Phase 3 program for bexicaserin.The company's next most advanced product candidate, LP659, is a centrally acting, sphingosine-1-phosphate (S1P) receptor subtypes 1 and 5 modulator. In November 2023, Longboard initiated a Phase 1 single-ascending dose (SAD) clinical trial for LP659 in healthy volunteers, with topline data expected in the second quarter of 2024. The FDA has placed a partial clinical hold on multiple-ascending dose (MAD) or other repeat dose studies for LP659, pending review of safety data from the SAD study and other related information.
Longboard's other development efforts are in the research stage. The company has devoted substantially all of its resources to research and development activities, organizing and staffing the company, business planning, raising capital, in-licensing intellectual property rights, and establishing its intellectual property portfolio.
Financial Performance
For the fiscal year ended December 31, 2023, Longboard reported a net loss of $54.4 million and had no revenue. The company's annual operating cash flow and free cash flow were both negative $50.9 million. As of December 31, 2023, Longboard had cash, cash equivalents, and short-term investments of $321.0 million, providing the company with sufficient capital to fund its operations for at least the next 12 months.In the first quarter of 2024, Longboard reported a net loss of $15.0 million. Research and development expenses were $13.2 million, an increase of 54% compared to the first quarter of 2023, primarily due to increased clinical trial and preclinical expenses related to bexicaserin and LP659, as well as higher personnel-related costs. General and administrative expenses were $4.9 million, an increase of 44% compared to the first quarter of 2023, mainly driven by higher personnel-related expenses and consulting and professional fees.
Liquidity and Capital Resources
As of December 31, 2023, Longboard had $321.0 million in cash, cash equivalents, and short-term investments, providing the company with sufficient capital to fund its operations for at least the next 12 months. In January 2024, the company completed a public offering of common stock, raising $226.5 million in net proceeds. Additionally, in March 2024, Longboard completed a private placement of non-voting common stock, raising $59.8 million in net proceeds.The company's future capital requirements will depend on many factors, including the type, number, scope, progress, expansions, results, and timing of its research programs, preclinical studies, and clinical trials for its current and any future product candidates, as well as the outcome, timing, and costs of regulatory review of its product candidates. Longboard may seek to raise additional capital through public or private equity offerings, debt financings, collaborations, licenses, and other similar arrangements.
Risks and Challenges
Longboard faces several risks and challenges common to the biopharmaceutical industry, including the inherent uncertainty of clinical development, the need for substantial additional capital to finance its operations, and the potential for competition from other companies developing similar products. The company's ability to successfully develop, obtain regulatory approval for, and commercialize its product candidates will be critical to its future success and profitability.Additionally, Longboard's reliance on third-party manufacturers and contractors for the development and potential commercialization of its product candidates introduces risks related to the company's ability to control the manufacturing process and ensure the timely supply of its product candidates. The company also faces risks related to its intellectual property, including the potential for infringement claims by third parties and the need to protect its own proprietary rights.
Outlook and Guidance
Longboard has not provided specific financial guidance for the upcoming fiscal year. However, the company has stated that it expects its research and development expenses to increase substantially as it continues the development of its product candidates, particularly as they advance to later stages of clinical trials. The company also anticipates that its general and administrative expenses will increase modestly to support its increased research and development activities and the costs of operating as a public company.Despite the challenges, Longboard remains focused on advancing its pipeline of product candidates for the treatment of neurological diseases. The positive topline data from the PACIFIC Study for bexicaserin and the upcoming Phase 1 data for LP659 are important milestones that could help drive the company's future growth and development.