CASI Pharmaceuticals, Inc. (NASDAQ: CASI), a biopharmaceutical company focused on developing and commercializing innovative therapeutics and pharmaceutical products, has faced significant challenges in recent years. The company's annual net income for the most recent fiscal year stood at a loss of $26,938,000, while annual revenue reached $33,879,000. Additionally, the company's annual operating cash flow and free cash flow were negative, at -$19,967,000 and -$22,208,000, respectively.
Business Overview
The company's financial performance has been impacted by a variety of factors, including the ongoing COVID-19 pandemic, which has disrupted its supply chain and marketing activities, particularly for its flagship product, EVOMELA®. In the second and third quarters of 2022, the lockdowns in Shanghai and other major cities in China led to limited access to local hospitals, adversely impacting EVOMELA® sales. The restrictions also had a negative effect on the enrollment of patients for CNCT19's Phase II registration studies.
Pipeline Development
Despite these headwinds, CASI Pharmaceuticals has continued to make progress in its pipeline development. The company's core hematology/oncology assets include CNCT19, an autologous CD19 CAR-T investigative product, BI-1206, a novel anti-FcγRIIB antibody, CB-5339, a novel VCP/p97 inhibitor, and CID-103, a full human IgG1 anti-CD38 monoclonal antibody.
Partnerships and Licensing Agreements
In October 2020, CASI Pharmaceuticals entered into an exclusive licensing agreement with BioInvent International AB for the development and commercialization of BI-1206 in Mainland China, Taiwan, Hong Kong, and Macau. The company received regulatory approval from the China Center for Drug Evaluation (CDE) in the second quarter of 2022 and initiated a Phase 1 study of BI-1206 in combination with rituximab in the third quarter of the same year.
The company's partnership with Juventas Biotechnology (Tianjin) Co., Ltd. for the development and commercialization of CNCT19 has also been a focus. Juventas has completed the CNCT19 Phase 1 studies in patients with B-cell acute lymphoblastic leukemia (B-ALL) and B-cell non-Hodgkin lymphoma (B-NHL), and has completed the Phase 2 B-ALL pivotal study in China, while the B-NHL registration study is still ongoing.
In March 2021, CASI Pharmaceuticals entered into an exclusive license with Cleave Therapeutics, Inc. for the development and commercialization of CB-5339, an oral novel VCP/p97 inhibitor, in Mainland China, Hong Kong, Macau, and Taiwan. CB-5339 is being evaluated in a Phase 1 clinical trial in patients with acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS).
The company's CID-103, a full human IgG1 anti-CD38 monoclonal antibody, is being developed for the treatment of patients with multiple myeloma. The Phase 1 dose escalation and expansion study of CID-103 in patients with previously treated, relapsed or refractory multiple myeloma is ongoing in France and the UK.
Geographic Breakdown
In terms of geographic breakdown, the majority of CASI Pharmaceuticals' operations and activities are now located in China and are conducted primarily through its two subsidiaries: CASI Pharmaceuticals (China) Co., Ltd. in Beijing and CASI Pharmaceuticals (Wuxi) Co., Ltd. in Wuxi. The company's commercial product, EVOMELA®, is approved for use in China as a conditioning treatment prior to stem cell transplantation and as a palliative treatment for patients with multiple myeloma.
Financials
Regarding revenue breakdowns, CASI Pharmaceuticals' primary source of revenue is the sales of EVOMELA®, which accounted for $27,788,000, or 99.8%, of the company's total revenue of $27,848,000 in the first nine months of 2022. This represents a 33% increase compared to the same period in the previous year, driven by the continued growth in EVOMELA® sales. The company's lease income, which primarily consists of an equipment lease with Juventas, contributed the remaining $60,000, or 0.2%, of total revenue.
The company's gross profit margin has remained relatively stable at around 58% for the past four reporting periods. However, the increase in research and development expenses, which rose from $10,408,000 in the first nine months of 2021 to $11,748,000 in the same period of 2022, has put pressure on the company's overall profitability.
Liquidity
CASI Pharmaceuticals' liquidity position has also been a concern, as the company has incurred significant losses from operations since its inception in 1991 and had an accumulated deficit of $624,900,000 as of September 30, 2022. The company believes it has sufficient resources to fund its operations for at least one year beyond the date of the latest financial statements, but it will need to continue to pursue additional financing options, such as strategic alliances, licensing agreements, or equity and debt offerings, to support its ongoing operations and pipeline development.
Risks and Challenges
The company's risk profile includes the potential inability to continue as a going concern due to insufficient capital, the possibility of delisting from the Nasdaq Capital Market, the volatility in the market price of its shares, the risk of substantial dilution of existing shareholders in future share issuances, and the challenges of executing its business strategy on a global scale, particularly in China.
Outlook
Despite these challenges, CASI Pharmaceuticals' promising pipeline of hematology/oncology assets, including CNCT19, BI-1206, CB-5339, and CID-103, offers hope for the company's future. The successful development and commercialization of these product candidates could significantly improve the company's financial performance and long-term prospects. Investors will be closely watching the progress of CASI Pharmaceuticals' pipeline and its ability to navigate the ongoing operational and financial hurdles it faces.