BioAtla Slides as Cash Concerns Overshadow Clinical Progress
Shares fall over 4% after the biotech firm's wider net loss and low cash reserves eclipse positive trial updates and plans for a strategic deal.
BioAtla Inc. (NASDAQ: BCAB) shares fell more than 4% in after-hours trading Thursday after the company revealed a wider net loss and a dwindling cash position that heightened investor concerns about its financial runway, despite meeting earnings per share estimates and reporting significant progress in its cancer drug pipeline.
The San Diego-based clinical-stage biopharmaceutical company posted a third-quarter net loss of $15.8 million, or $0.27 per share, which was in line with analyst expectations. However, the loss marked a significant increase from the $10.6 million deficit reported in the same period last year. According to its latest financial report, the company's cash and cash equivalents stood at just $8.3 million as of September 30.
That figure has placed a sharp focus on the company's cash burn rate, even as management pointed to a crucial lifeline on the horizon. BioAtla announced it is in "advanced stages to finalize a strategic transaction" intended to secure a partner and is on track to complete the deal by the end of the year. Chief Financial Officer Richard Waldron confirmed the $8.3 million cash balance on the earnings call, noting it did not include a $2 million milestone payment received in October.
Despite the precarious financials, BioAtla celebrated a key regulatory milestone, having reached an alignment with the U.S. Food and Drug Administration (FDA) on the trial design for a pivotal Phase 3 study of its lead drug candidate, ozuriftamab vedotin (Oz-V). The drug is being developed to treat a type of head and neck cancer, and the company projects its peak global sales could reach approximately $800 million for this indication alone.
"We are poised to begin enrolling our registrational Phase 3 trial early next year," said Jay Short, CEO of BioAtla, during the company's quarterly conference call. He emphasized that the company remains on track to finalize the partnership by year-end, a deal seen by analysts as critical to funding the expensive late-stage trial.
Further data from its clinical pipeline provided additional positive notes. The company presented promising interim results from a Phase 1 trial of another candidate, BA3182, for treating advanced solid tumors, and noted encouraging survival data from a Phase 2 trial of mecbotamab vedotin in soft tissue sarcomas. BioAtla has managed to rein in spending, with research and development expenses decreasing to $9.5 million from $16.4 million year-over-year, largely due to a workforce reduction in March and the prioritization of key clinical programs.
The market, however, remained fixated on the balance sheet. Shares of BioAtla dropped 4.09% in after-market trading to close at $0.67. The company, which has a market capitalization of just over $40 million, has seen its stock trade between a 52-week high of $1.90 and a low of $0.24. The current analyst consensus on the stock is a "Reduce," with an average price target of $10.00, suggesting a view that the company's clinical assets hold significant value but are counterweighed by substantial financial risk.
For BioAtla, the coming weeks are pivotal. The successful execution of a strategic partnership could provide the necessary capital to advance its promising oncology pipeline toward commercialization. Failure to do so would leave the company in a vulnerable position, forcing it to seek other, potentially more dilutive, financing options to continue its operations.