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Equity Research Profiles |
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Exicure, Inc. XCUR / NasdaqCM / $1.03 March 23, 2020 |
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Business Overview |
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Exicure, Inc. (the Company) is
developing nucleic acid therapeutics based on its proprietary Spherical
Nucleic Acid (SNA) technology platform. SNAs are dense, radial
arrangements of synthetic nucleic acids on a nanoparticle. They enter cells
via ubiquitous scavenger receptors, allowing high cell uptake, extra-hepatic
delivery (shown in both humans and mice), and enhanced stability inside cells.
SNAs can be delivered locally or topically to target tissues, thereby
expanding the potential application of nucleic acid therapeutics. |
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The Company has an extensive
development pipeline. It includes immune-oncology (AST-008 for Merkel cell
carcinoma and cutaneous squamous cell carcinoma), neurology (XCUR-FXN for Friedreichs ataxia), and dermatology (XCUR17 for
inflammatory disorders, netherton syndrome, and
hair loss disorders). |
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The SNA technology platform
has already demonstrated significant success with its partnership initiatives: |
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Exicure and Dublin-based Allergan Pharmaceuticals
International Limited initiated a partnership in late 2019 to discover and
develop two SNA-based treatments for hair loss disorders. Exicure
will incur all costs for discovery prior to an Allergan option exercise,
following which Allergan will be responsible for all follow-on costs. In
addition to up to $725 million in upfront and milestone payments, tiered
royalties were set at percentages in the range of mid-single digits to
mid-teens. |
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In early 2019, the Company
and Dermelix Biotherapeutics initiated a
partnership targeting Netherton syndrome and up to five other rare skin
indications. In addition to up to $166 million in milestone payments per
indication, royalties on annual net sales were set at percentages in the low
double digits. |
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Encouraging preclinical studies
provide a basis for exploration of therapies for many ophthalmological
genetic disorders. There are approximately 250 rare disorders of the eye with
known genetic targets, and SNAs may have advantages over gene therapies. |
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The intellectual property portfolio is extensive,
including an exclusive worldwide license to make, use, and sell SNAs for
therapeutic applications. The Company holds more than 85 issued or allowed
patents and 125+ pending applications across multiple nucleic acid
modalities. |
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2020 Focus |
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Planned Q2 launches of an AST-008
Phase 2 trial for Merkel cell carcinoma and an AST-009 Phase 2 trial for
cutaneous squamous cell carcinoma. |
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Launch IND enabling studies
late in the year for XCUR-FXN in Friedreichs
ataxia. |
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Advance the Allergan
collaboration in hair loss disorders and the Dermelix
collaboration in Netherton syndrome. |
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Expand preclinical activities in neurology and
ophthalmology. |
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Management and Directors |
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The backgrounds of the management
and directors are outlined on the Exicure website
and SEC filings. The BoD consists of eight
non-employee members and David A. Gilhohann, CEO.
The Company also maintains a prestigious Advisory Board, whose backgrounds
are detailed on the Exicure website. |
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David A. Giljohann, CEO
and a director, was the Exicure founding scientist
in 2011 and the founding scientist of AuraSense,
LLC in 2009. AuraSense is the largest Exicure shareholder. |
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Financials |
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Income Statement (12 months through 12/31/19 vs. 12/31/18) |
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Collaboration revenue:
1,296,000 vs. 118,000 R&D expense:
19,340,000 vs. 14,119,000 Other operating expense: 8,573,000
vs. 7.818.000 Operating income (loss): (26,617,000)
vs (21,819,000) Other income (expense): 314,000
vs. (594,000) Net income (loss)
attributable to Exicure, Inc.: (26,303,000) vs. (22,413,000) Earnings (loss) per basic and diluted common share: (0.46)
vs. (0.54) |
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Balance Sheet (12/31/19) |
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Cash & equivalents: 48,460,000 Short-term investments: 62,326,000 Total current assets: 112,776,000 Current portion of long-term debt: 4,956,000 Total current liabilities: 31,087,000 Common stock warrant liability: 414,000 Total liabilities: 34,516,000 Stockholders
equity: 80,747,000 Number of
common shares outstanding (03/05/20): 87,150,447 |
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On December 23, 2019, the company closed an
underwritten public offering of 10,000,000 of its common shares at a price
per share of $2.75. Net proceeds were $25.3 million. The shares were offered
pursuant to an effective shelf registration. On January 6, 2020, the Company
sold an additional 1,081,184 shares at $2.75 per share pursuant to exercise
of the option by the underwriters to purchase additional shares ($2.8 million
net proceeds). |
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Valuation Considerations |
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The Company maintains a robust R&D effort that has a proven record
of advancing the development pipeline. |
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The year-end 2019 working capital position was strong, and partnerships
and licensing could cushion future R&D spending. Management expects that
its working capital will be sufficient to fund Company operations into early
2022. |
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With the late December 2019 offering of new shares by the Company and
the more-recent crash in the overall market, Exicure
shares are presently more than 70% below their mid-December 2019 level. |
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The
impact of COVID-19 remains an uncertainty. In addition, the Company website
and regulatory filings detail a number of risk factors, and these are hereby
incorporated by reference. |
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Executive offices: 8045
Lamon Avenue, Suite 410, Skokie, IL 60077. Phone: 847.673.1700. |
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Investor contact: David
Snyder, Chief Financial Officer. |
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company has not paid TickerBuzz any compensation
for publication of this Profile. Analyst: William J. Ritger. |
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