On November 14, 2023 NKGen Biotech Inc. (Nasdaq: NKGN) (NKGen or the Company), a clinical-stage biotechnology company focused on the development and commercialization of innovative autologous, allogeneic, and CAR-NK natural killer (NK) cell therapeutics, reported its financial results for the third quarter ended September 30, 2023, and provided business highlights (Press release, NKMax America, NOV 14, 2023, View Source [SID1234637633]).
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"We had a very exciting quarter as a newly Nasdaq-listed company," said Paul Y. Song, M.D., CEO of NKGen. "We recognize the volatility in the market, but we believe in our NK cell therapy approach to address some of society’s biggest healthcare challenges. Our approach continues to show promise, including by our recent IND approval and the continued progress observed in our autologous SNK01 program with the completion of, and positive data readouts from, our Phase I clinical study in Alzheimer’s disease."
"We are highly focused on raising additional capital to fund our trials and operations and advance our differentiated NK cell therapy programs," continued Dr. Song. "We remain on track with our near-term milestones, including commencing our Phase I/IIa clinical trial for Alzheimer’s Disease by year end, an IND filing for our SNK01 program for Parkinson’s Disease, and a preliminary data readout of our SNK02 allogeneic Phase I study in solid tumors, the first and only product candidate that does not require lymphodepletion, the latter two which are anticipated in the first quarter of 2024."
Third Quarter 2023 Key Business Highlights
The Company closed its previously announced business combination with Graf Acquisition Corp. IV (Graf), pursuant to which NKGen became a wholly-owned subsidiary of Graf, and changed its name to NKGen Operating Biotech, Inc.
Presented Phase I clinical trial data at the 16th Annual Clinical Trials on Alzheimer’s Disease (CTAD) Conference.
90% of patients demonstrated improvement or maintained stable cognitive function as per Alzheimer’s disease composite score (ADCOMS) following 11 weeks.
SNK01 given intravenously (IV) appears to cross the blood-brain barrier to reduce Cerebrospinal Fluid (CSF) Aβ42/40 and pTau181 levels and neuroinflammation, as measured by Glial Fibrillary Acidic Protein (GFAP); this effect appears to be persistent at Week 22.
No treatment related adverse events were observed.
Poster can be viewed here: PowerPoint Presentation (www.nkgenbiotech.com).
FDA clearance of IND for SNK01 NK cell therapy to treat moderate Alzheimer’s Disease.
First patient dosed in Phase I clinical trial of SNK02, allogeneic NK cell therapy product candidate, for the treatment of solid tumors.
Presentations at the NKGen Investor Event on July 20, 2023 and the Cantor Fitzerald Healthcare Conference on September 27, 2023 presented topics on NKGen’s differentiated intellectual property and approach to NK cell therapy for Alzheimer’s and Parkinson’s diseases, NKGen’s Phase I clinical trial data of SNK01 to treat patients with Alzheimer’s disease, and preclinical compassionate use case studies.
Third Quarter 2023 Financial Results
Cash position: As of September 30, 2023, the Company had total cash of $8.8 million, after partial payment of transaction expenses.
Research and development (R&D) expenses: R&D expenses for the third quarter of 2023 were $3.9 million compared to $4.1 million in the same period in 2022. The decrease was primarily due to decreased clinical trial subject recruitment costs.
General and administrative (G&A) expenses: G&A expenses for the third quarter of 2023 were $3.0 million compared to $1.9 million in the same period in 2022. The increase was primarily due to stock option grants made during the first quarter of 2023.
Net loss: For the third quarter of 2023, the Company reported a net loss of $33.2 million, compared to a net loss of $6.7 million in the same period in 2022. The increase was primarily due to loss from issuance of the forward purchase agreements entered into in connection with the closing of the business combination as well as the recognition of transaction costs related to the business combination that were allocated to liability-classified instruments issued.
Debt: As of September 30, 2023, the Company had total debt liabilities of $20.2 million, comprised of $4.9 million in bank debt, $5.3 million in related party loans, and $10.0 million in form of a senior convertible note held by NKMAX Co., Ltd.
Business Combination: In connection with the business combination with Graf, the Company received approximately $21.9 million in gross proceeds, comprising approximately $1.7 million from the Graf trust account and approximately $20.2 million from the transactions in relation to the issuance of warrants and senior convertible notes. In addition, in accordance with the forward purchase agreements, $32.9 million in funds were deposited into escrow accounts, which were not received by the Company in connection with the closing of the business combination. The escrowed funds may be released to the Company, the investors, or a combination of both. In addition, the Company’s legacy convertible notes converted into shares of common stock of the Company. Furthermore, in connection with the business combination, approximately $14.3 million in transaction costs and deferred underwriting fees were settled at or prior to the closing of the business combination, and approximately $7.3 million remained unpaid as of September 30, 2023.