Connect Biopharma Shares H1 2024 Financial Results and Business Update

Connect Biopharma Holdings Limited, a U.S.-based clinical-stage biopharmaceutical company, announced key developments in its transformation and future strategy. The company, listed on Nasdaq under the ticker CNTB, focuses on creating innovative treatments for inflammatory diseases.

In June 2024, the company appointed Barry Quart, Pharm.D., as the new Chief Executive Officer and a Board member. Quart brings over three decades of experience in biotechnology and pharmaceuticals, including leading early-stage biotech companies to achieve nine FDA-approved drugs. Simultaneously, David Szekeres was named President, contributing his extensive background in life sciences. Additionally, in June, Kleanthis G. Xanthopoulos, Ph.D., became the Chairperson of the Board, and James Zuie-chin Huang, M.B.A., joined the Board in February 2024, bringing his expertise as an entrepreneur and investor in the healthcare sector.

Connect Biopharma is actively evaluating its clinical development strategy for rademikibart, its leading product candidate. The company received positive feedback from the FDA regarding potential Phase 3 programs for rademikibart in treating asthma and atopic dermatitis. Simcere Pharmaceutical Co., Ltd., its partner in Greater China, has commenced Phase 3 trials for rademikibart in China. Additionally, Connect Biopharma presented promising results from a global Phase 2b trial for rademikibart in moderate-to-severe asthma at the American Thoracic Society 2024 International Conference.

To support its transformation into a U.S.-centric company, Connect Biopharma has significantly reduced its presence in China, decreasing its workforce by about 15% as of June 30, 2024, with further reductions anticipated by the end of the year. The company also completed a technology transfer of the rademikibart manufacturing process to a U.S.-based contract manufacturer, helping to cut manufacturing expenses for the remainder of 2024 and 2025.

Financially, Connect Biopharma reported cash and cash equivalents of $110.2 million as of June 30, 2024, down from $118.7 million at the end of 2023. This decrease is attributed to funding clinical programs and operations, partially offset by partnership payments from Simcere. The company's revenue for the first half of 2024 was $24.1 million, thanks to the license and collaboration agreement with Simcere established in November 2023.

Research and development expenses for the six months ended June 30, 2024, were $13.3 million, a significant reduction from $26.6 million in the same period in 2023. This decrease resulted from fewer clinical trials, less drug manufacturing activity, and reduced personnel costs. Administrative expenses rose slightly to $8.3 million from $8.1 million in 2023, primarily due to severance costs related to employee reductions. The company posted a net income of $7.6 million for the first half of 2024, a significant turnaround from a net loss of $30.5 million in the prior year.

Connect Biopharma continues to control its spending effectively, extending its cash runway. The management believes the company has sufficient funds to support its operations at least into the first half of 2027. Overall, these strategic and financial measures position Connect Biopharma to advance its mission of developing innovative therapies for inflammatory diseases while transitioning into a more U.S.-focused company.

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