Cue Biopharma, Inc. (CUE) is a clinical-stage biopharmaceutical company pioneering a novel class of therapeutic biologics to selectively modulate disease-specific T cells. The company's Immuno-STAT™ platform has generated a diverse pipeline of drug candidates targeting oncology and autoimmune indications, demonstrating its versatility and potential to address significant unmet medical needs.
Business Overview and History
Cue Biopharma was founded in 2015 with the vision of translating nature's immune system "cues" into precision protein therapeutics. The company's core technology platform, Immuno-STAT, was developed to emulate the body's natural T cell activation and regulation mechanisms, enabling selective modulation of disease-specific T cells.
In the same year of its founding, Cue Biopharma entered into a crucial license agreement with Albert Einstein College of Medicine. This agreement granted the company access to patent rights related to its core technology platform for engineering biologics to control T cell activity, precision immune-modulatory drug product candidates, and two supporting technologies. These technologies enable the discovery of costimulatory signaling molecules and T-cell targeting peptides. The license agreement was subsequently amended in 2017 and 2018.
A significant milestone in Cue Biopharma's history came in December 2017 when the company went public, raising $80 million in its initial public offering. This influx of capital provided essential resources for the company's research and development efforts.
In 2018, Cue Biopharma formed a strategic collaboration with LG Chem Ltd., focusing on the development of Immuno-STAT product candidates in the field of oncology. This partnership brought immediate financial benefits, with LG Chem providing a $5 million upfront payment and purchasing $5 million of Cue Biopharma's common stock.
As the company progressed, it faced financial challenges common to many clinical-stage biopharmaceutical companies. To address these needs, Cue Biopharma secured a $10 million loan agreement with Silicon Valley Bank in 2022. Following the closure of Silicon Valley Bank in 2023, this loan was assumed by First Citizens Bank, ensuring continued financial support for the company's operations.
Recent Developments and Financial Performance
In July 2024, Cue Biopharma announced a strategic prioritization of its autoimmune programs, including CUE-401 and CUE-501, accompanied by an organizational restructuring to streamline operations and reduce capital requirements. This decision was driven by the company's belief that its autoimmune programs represent significant near-term and intermediate value creation opportunities, while enabling the continued maturation of its oncology data. The restructuring included a 25% workforce reduction to strengthen operational efficiencies.
Financials
For the third quarter of 2024, Cue Biopharma reported a net loss of $8.66 million, or $0.17 per share, compared to a net loss of $11.01 million, or $0.24 per share, in the same period of the prior year. The company's revenues for the quarter increased to $3.34 million, up from $2.10 million in the third quarter of 2023, largely driven by the Ono collaboration. This represents a significant year-over-year revenue increase of 59.05%.
For the nine months ended September 30, 2024, Cue Biopharma reported collaboration revenue of $7.71 million, compared to $3.67 million in the same period of the prior year. This increase was primarily driven by revenue recognized from the company's collaboration agreement with Ono Pharmaceutical Co., Ltd. Research and development expenses for the nine-month period were $29.11 million, compared to $29.91 million in the prior year period.
In the most recent fiscal year (2023), Cue Biopharma reported annual revenue of $5.49 million, an annual net loss of $50.73 million, and an annual operating cash flow and free cash flow of -$39.96 million.
Liquidity
As of September 30, 2024, Cue Biopharma had cash and cash equivalents of $32.40 million, providing a runway into the fourth quarter of 2025, based on the company's current operating plan and the anticipated cost savings from the recent restructuring.
The company's debt-to-equity ratio stood at 0.37 as of September 30, 2024. Cue Biopharma maintains a $10 million term loan facility with First Citizens Bank, which was amended in October 2024 to remove the requirement to maintain $20 million in cash. The company is now required to maintain unrestricted and unencumbered cash equal to the lesser of 100% of consolidated cash or $20 million.
The company's current ratio and quick ratio both stood at 2.22 as of September 30, 2024, indicating a strong short-term liquidity position.
Pipeline and Key Programs
Oncology Programs
CUE-101: The company's most advanced clinical-stage asset, CUE-101 is being investigated for the treatment of human papillomavirus (HPV) positive recurrent/metastatic head and neck squamous cell carcinoma (HNSCC). Recent data from the Phase 1 trials have demonstrated enhanced overall response rates and survival outcomes when CUE-101 is combined with the standard-of-care checkpoint inhibitor, KEYTRUDA®. In the ongoing Phase 1b trial of CUE-101 in combination with KEYTRUDA, the company has observed one confirmed complete response, ten confirmed partial responses, and seven patients with durable stable disease greater than 12 weeks, resulting in an objective response rate of 46% and a disease control rate of 75% as of the September 11, 2024 data cut-off date. Notably, these responses include multiple patients with low PD-L1 expression, a patient population known to be less likely to respond to KEYTRUDA alone. The median overall survival observed in these patients was 21.8 months, compared to the historical median overall survival of 12.3 months with KEYTRUDA alone.
CUE-102: Targeting the Wilms' Tumor 1 (WT1) antigen, CUE-102 is currently in a Phase 1 monotherapy trial for the treatment of WT1-positive solid tumors and hematological malignancies. Preliminary data have shown selective expansion of WT1-specific T cells and encouraging signs of antitumor activity. The Phase 1 monotherapy clinical trial is specifically focused on late-line recurrent/metastatic WT1-positive colorectal, gastric, ovarian, and pancreatic cancer. The company has observed selective expansion of WT1-specific CD8 T cells and reductions in tumor burden in some patients treated with CUE-102.
Autoimmune Programs
CUE-401: A bispecific molecule designed to selectively induce and expand regulatory T cells (Tregs) for the treatment of autoimmune diseases. Preclinical studies have demonstrated the ability of CUE-401 to generate stable and functional Tregs, with the potential to suppress autoimmune pathology. Preclinical data has shown that CUE-401 can effectively generate a robust population of FOXP3+ Tregs by delivering both IL-2 and TGF-beta signals.
CUE-501: Leveraging the Immuno-STAT platform, CUE-501 is engineered to selectively redirect virus-specific memory T cells to deplete autoreactive B cells, addressing the important B cell axis in autoimmune disorders. This bispecific approach aims to selectively redirect memory T cells to deplete autoreactive B cells, a key mechanism for treating autoimmune and inflammatory diseases.
Collaborations and Partnerships
Cue Biopharma has established several strategic collaborations to advance its pipeline and leverage its Immuno-STAT platform: - LG Chem: An exclusive license agreement for the development and commercialization of CUE-101 and two additional Immuno-STAT candidates in select Asian markets. - Ono Pharmaceutical: A collaboration focused on the development of CUE-401 for autoimmune diseases, with Ono providing research funding and potential milestone and royalty payments.
Risks and Challenges
As a clinical-stage biopharmaceutical company, Cue Biopharma faces several risks and challenges common to the industry, including: - Successful clinical development and regulatory approval of its drug candidates - Ability to secure additional financing to support ongoing operations and pipeline advancement - Competition from other companies developing similar or competing technologies - Potential intellectual property disputes or infringement claims - Reliance on third-party collaborations and partnerships for certain program developments
Industry Trends
Cue Biopharma operates in the biopharmaceutical industry, which has a projected compound annual growth rate (CAGR) of 11.5% from 2023 to 2030. This growth trajectory underscores the potential opportunities for innovative companies like Cue Biopharma in the coming years.
Outlook and Conclusion
Cue Biopharma's strategic prioritization of its autoimmune programs, accompanied by organizational restructuring, aims to optimize the company's near-term and intermediate value creation potential. The continued maturation of the oncology data, particularly from the CUE-101 and CUE-102 programs, also holds promise for long-term growth.
By leveraging its versatile Immuno-STAT platform, Cue Biopharma is well-positioned to address significant unmet medical needs in both oncology and autoimmune diseases. The company's collaborations with industry leaders further bolster its capabilities and provide additional avenues for value creation.
As Cue Biopharma navigates the dynamic biopharmaceutical landscape, its focus on selective immune modulation and strategic execution could position the company for sustained growth and the potential to deliver meaningful therapeutic solutions to patients. The company's strong liquidity position, coupled with its innovative pipeline and strategic collaborations, provides a solid foundation for future development and potential market success.