Clene Inc. (NASDAQ: CLNN) is a clinical-stage biopharmaceutical company pioneering the discovery, development, and commercialization of novel clean-surfaced nanotechnology (CSN) therapeutics. With a focus on addressing the high unmet medical needs in central nervous system (CNS) disorders, Clene’s pipeline aims to transform the treatment landscape for debilitating conditions like amyotrophic lateral sclerosis (ALS), multiple sclerosis (MS), and Parkinson’s disease (PD).
Business Overview and History
Clene Inc. was founded in 2014 as Clene Nanomedicine, Inc., with a focus on developing novel clean-surfaced nanotechnology (CSN) therapeutics. The company was incorporated in Delaware and innovated an electro-crystal-chemistry drug development platform that produced nanocrystals with faceted structures and surfaces free of chemical modifications. This breakthrough overcame a significant hurdle in harnessing transition metal catalytic activity for therapeutic use.
In December 2020, Clene Nanomedicine completed a reverse recapitalization with Tottenham Acquisition I Limited and began trading on the Nasdaq Capital Market under the ticker symbol CLNN. As part of this transaction, certain Clene Nanomedicine stockholders became entitled to receive contingent earn-out shares based on the achievement of specific milestones.
Throughout its history, Clene has faced several financial challenges. In 2019 and 2022, the company entered into term loan agreements with the Maryland Department of Housing and Community Development and Avenue Venture Opportunities Fund, L.P. to secure financing. Additionally, Clene has incurred significant losses and negative cash flows from operations since inception, requiring it to raise additional capital through equity and debt financing to fund its research and development activities.
Despite these challenges, Clene has made significant progress in advancing its pipeline of CSN therapeutic candidates. The company’s proprietary electro-crystal-chemistry platform enables the production of highly active, clean-surfaced nanocrystal suspensions, which has yielded promising results in clinical trials. Clene’s lead drug candidate, CNM-Au8, a nanocrystalline gold suspension, has demonstrated the potential to address the complex pathophysiology of neurodegenerative diseases by supporting and maintaining beneficial metabolic and energetic cellular reactions within diseased, stressed, and damaged cells.
Clene operates in two primary product segments: Drugs and Dietary Supplements. The Drugs segment is focused on developing treatments for central nervous system disorders, with CNM-Au8 as the lead candidate. The Dietary Supplements segment generates revenue through the sale of products like Zinc Factor and Gold Factor, as well as through a licensing agreement with 4Life Research, LLC.
Financial Overview
As of September 30, 2024, Clene reported cash, cash equivalents, and marketable securities totaling $14.6 million, a decrease from $35.0 million as of December 31, 2023. The company’s net cash used in operating activities was $16.5 million for the nine months ended September 30, 2024, compared to $23.0 million for the same period in 2023.
Clene’s revenue for the nine months ended September 30, 2024, was $251.0 thousand, compared to $484.0 thousand in the same period of 2023. The decrease in revenue was primarily due to the timing of purchases of the company’s dietary supplement products by its partner, 4Life Research LLC.
The company’s net loss for the nine months ended September 30, 2024, was $25.9 million, compared to a net loss of $39.3 million in the same period of 2023. Clene’s research and development expenses decreased from $19.98 million in the nine months ended September 30, 2023, to $14.49 million in the same period of 2024, primarily due to reimbursements for expenses incurred during the ongoing ALS expanded access program (EAP) funded by a National Institutes of Health (NIH) grant, as well as decreases in expenses related to the company’s completed clinical trials.
Clene’s general and administrative expenses decreased from $11.03 million in the nine months ended September 30, 2023, to $10.15 million in the same period of 2024, primarily due to a decrease in directors and officers insurance fees, partially offset by an increase in legal fees related to regulatory activities and intellectual property.
For the most recent fiscal year, Clene reported revenue of $654,000, a net loss of $49,504,000, operating cash flow of -$30,171,000, and free cash flow of -$30,501,000. In the most recent quarter, the company reported revenue of $87,000, a net loss of $7,986,000, operating cash flow of -$3,023,000, and free cash flow of -$3,024,000. The year-over-year quarterly revenue growth was -19%, primarily due to the timing of purchases of Zinc Factor and Gold Factor by 4Life under the supply and license agreements.
Liquidity
Clene’s liquidity position is a critical aspect of its financial health. As of September 30, 2024, the company had $14.6 million in cash, cash equivalents, and marketable securities. This represents a significant decrease from the $35.0 million reported at the end of 2023, highlighting the ongoing cash burn associated with the company’s research and development activities.
To address its liquidity needs, Clene has taken several measures. In November 2024, the company closed a $7.3 million registered direct offering and concurrent private placements, providing additional capital to support ongoing operations and clinical development efforts. Furthermore, Clene amended its debt agreement with Avenue Capital, deferring principal payments and extending the maturity of the facility to the second quarter of 2025. These actions demonstrate the company’s proactive approach to managing its liquidity position and ensuring sufficient funding for its critical programs.
The company’s debt-to-equity ratio stands at -4.496, indicating a highly leveraged financial position. Clene has a current ratio of 0.8266 and a quick ratio of 0.821, suggesting potential short-term liquidity challenges. The company has a $30 million term loan facility with Avenue Venture Opportunities Fund, L.P., of which $10 million was outstanding as of September 30, 2024.
Recent Developments and Outlook
In November 2024, Clene met with the U.S. Food and Drug Administration (FDA) in a Type C meeting to discuss the potential for an accelerated approval pathway for CNM-Au8 in ALS. The company is awaiting the meeting minutes, which will provide further clarity on the next steps in the regulatory process.
Subsequent to the third quarter of 2024, Clene closed a $7.3 million registered direct offering and concurrent private placements, providing additional capital to support the company’s ongoing operations and clinical development efforts. Additionally, the company amended its debt agreement with Avenue Capital, deferring principal payments and extending the maturity of the facility to the second quarter of 2025.
Looking ahead, Clene plans to continue its focus on advancing the clinical development of CNM-Au8 for ALS and other neurodegenerative indications. The company is preparing to initiate an international confirmatory Phase 3 trial of CNM-Au8 30 mg, RESTORE-ALS, in the second quarter of 2025, contingent upon the outcome of the recent FDA meeting and securing the necessary funding.
Clene has also initiated a second dosing cohort of the REPAIR-MS trial, an open-label, investigator-blinded Phase 2 clinical study in non-active progressive MS patients. This demonstrates the company’s commitment to expanding its pipeline and addressing multiple neurodegenerative conditions.
Risks and Challenges
Clene faces several risks and challenges common to clinical-stage biopharmaceutical companies. These include the inherent uncertainty of drug development, the potential for delays or failures in clinical trials, the need for regulatory approvals, and the ability to secure sufficient funding to support ongoing operations and future growth.
The company’s reliance on a single lead drug candidate, CNM-Au8, poses a concentration risk, as the success of the company’s business is heavily dependent on the successful development and commercialization of this asset. Additionally, Clene’s limited revenue stream from its dietary supplement business may not be sufficient to offset the substantial investments required for its drug development programs.
Competitive pressures from other companies developing treatments for neurodegenerative diseases, as well as the potential for regulatory, intellectual property, and market access challenges, could also impact Clene’s ability to achieve its long-term objectives.
The biotechnology and pharmaceutical industry focused on neurodegenerative diseases has seen a compound annual growth rate (CAGR) of approximately 7-8% over the past 5 years. However, there have been limited clinical successes and no curative therapies approved to date for diseases like ALS, highlighting both the opportunity and the challenges in this space.
Conclusion
Clene Inc. is at the forefront of harnessing the power of nanotechnology to revolutionize the treatment of neurodegenerative diseases. With its innovative CSN platform and lead drug candidate, CNM-Au8, the company is poised to make a significant impact on the lives of patients suffering from debilitating conditions like ALS, MS, and PD.
Despite the challenges inherent in drug development and its current financial position, Clene’s commitment to scientific excellence and its promising clinical results have positioned the company as a potential leader in this rapidly evolving field. As the company continues to navigate the regulatory landscape and advance its clinical programs, investors will closely follow Clene’s progress and its potential to deliver transformative therapies to patients in dire need.
However, it is important to note that Clene’s success is contingent upon its ability to secure additional financing, successfully complete clinical trials, and obtain regulatory approvals. The company’s tight liquidity position and ongoing operating losses underscore the need for careful financial management and strategic decision-making in the coming months and years.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.