Exicure Inc.

11/07/2025 | Press release | Distributed by Public on 11/07/2025 15:18

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following information should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q and the audited financial information and the notes thereto included in our Annual Report on Form 10-K (the "Annual Report") for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission, or SEC, on March 18, 2025. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act, that involve significant risks and uncertainties. Our actual results, performance or experience could differ materially from what is indicated by any forward-looking statement due to various important factors, risks, uncertainties, assumptions and other factors including, but not limited to, those identified in this Quarterly Report on Form 10-Q and those set forth under the section titled "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q and in our other SEC filings.
Overview
Historically, we have been an early-stage biotechnology company focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets. In September 2022, we announced a significant reduction in force, suspension of preclinical activities and halting of all research and development, and that we were exploring strategic alternatives to maximize stockholder value. In 2024, we entered into a licensing agreement for patents related to one of our historical drug candidates, and received a small, one-time payment and an entitlement to only modest royalties on future sales of the licensed technology that was not material. We then sold some of its samples related to the licensed product. Also in 2024, we entered into an asset purchase agreement with Flashpoint Therapeutics, Inc. to sell our historical biotechnology intellectual property and other assets to the purchaser. Any value we may generate from the Purchase Agreement will be primarily through royalties and license fees that we may receive in the future under the Purchase Agreement. However, whether we receive any royalties or licenses fees, and the amounts and timing thereof, are uncertain and out of our control.
We continue to engage in a broader exploration of strategic alternatives, including but not limited to private company acquisitions, raising additional capital, strategic partnerships, some combination of these, and other arrangements that are in management's view worth exploring. We obtained significant financing late in 2024 in order to continue operations and our exploration of strategic alternatives and consummate any transactions that we may identify.
On January 19, 2025, we entered into a Share Purchase Agreement with GPCR pursuant to which we acquired from GPCR all of the issued and outstanding equity securities of GPCR USA. In connection with the closing of the Share Purchase Agreement, the Company and GPCR entered into a License and Collaboration Agreement to further develop and commercialize GPCR's technologies related to certain intellectual property and patents. This License and Collaboration Agreement requires us to make milestone payments to GPCR upon the achievement of specific milestone events relating to clinical trials, marketing authorizations, and net sales, as well as for us to pay a recurring royalty payments, as set forth in the agreement.
GPCR USA has an ongoing Phase 2 clinical trial focused on blood cancer patients, particularly those eligible for hematopoietic stem cell transplantation, commonly referred to as bone marrow transplant. Its current clinical trial involves the combined administration of GPC-100 (a small molecule antagonist with a high binding affinity to a chemokine receptor) and propranolol (a beta-blocker drug that affects the heart and circulation) for mobilization of stem cells in Multiple Myeloma patients. GPCR USA completed the administration of GPC-100 to 19 patients in the second quarter of 2025 and aims to announce the clinical trial results during the fourth quarter of 2025.
On March 26, 2025, the Company formed KC Creation, a wholly-owned South Korean subsidiary. It was established based on the future growth strategies, such as a collaboration with GPCR USA and Korean bio-platform companies, response to sustainability trends by development of infrastructure based on eco-friendly renewable energy, and diversification of business and utilization of global growth potential of Korean entertainment content. These business lines are designed to enhance the Company's mid- and long-term value through investment recovery potential and brand synergy.
Operating, financing, and cash flow considerations
Since our inception in 2011, we have primarily funded our operations through sales of our securities, loans and collaborations. Effective as of November 12, 2024, we entered into the Initial Common Stock Purchase Agreement with HiTron, pursuant to which we agreed to issue and sell to HiTron 433,333 shares of our Common Stock, for an aggregate purchase price of $1.3 million, at a purchase price per share of $3.00. On November 13, 2024, we entered into the Subsequent Common Stock Purchase Agreement, pursuant to which we agreed to sell and issue to HiTron 2,900,000 additional shares of Common Stock for an aggregate purchase price of $8.7 million, at a purchase price per share of $3.00. The issuance of such shares under the Subsequent Common Stock Purchase Agreement closed on December 24, 2024.
On December 9, 2024, we entered into a common stock purchase agreement (the "SangSang Purchase Agreement") with SangSang, pursuant to which we agreed to issue and sell to SangSang 433,332 shares of our Common Stock, for an aggregate purchase price of approximately $2.0 million, at a purchase price per share of $4.61. The transactions under the SangSang Purchase Agreement closed on December 24, 2024.
On December 10, 2024, the Company entered into a common stock purchase agreement MIRTO, pursuant to which the Company agreed to issue and sell to MIRTO 87,808 shares of its Common Stock, for an aggregate purchase price of approximately $0.41 million, at a purchase price per share of $4.61, which closed on December 24, 2024.
On February 14, 2025, the Company entered into a Common Stock Purchase Agreement with Shin Chang Partners and RMS0718 Co., Ltd., pursuant to which the Company agreed to issue and sell to each of the Purchasers 145,454 shares at a purchase price of $5.50 per share. The Company received aggregate gross process of approximately $1.6 million.
As of September 30, 2025, our cash and cash equivalents were $4.4 million. Our current liquidity may not be sufficient to continue to fund operations for the next 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. Additional financing will be needed to fund our ongoing operations and exploration of strategic alternatives and pursue any alternatives that we identify. If we are unable to raise capital, the Company may seek bankruptcy protection and/or cease operations in the near term, which may result in the Company's stockholders receiving no or very little value in respect of their shares of the Company's common stock.
We expect to seek financing through equity offerings. However, it may be difficult to obtain financing given the Company's current condition and uncertainty over its future direction. Therefore, we may be unable to raise capital at all or on favorable terms. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to continue operations.
Critical Accounting Estimates
We prepare our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.
We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors. Changes in estimates used in these and other items could have a material impact on our financial statements. This includes estimates where the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and the impact of the estimate on financial condition or operating performance is material.
Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the acquired asset and its eventual disposition are less than its carrying amount.
When conducting the impairment analysis for these long-lived assets, with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires us to make various assumptions, estimates and judgements including projected revenue, gross margins, operating costs, growth rates, and discount rates. We believe our assumptions, estimates, and judgements to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Business Combinations
We follow the acquisition method of accounting to record identifiable assets acquired and liabilities assumed in connection with acquired businesses at their estimated fair value as of the date of acquisition. Identifiable intangible assets from business combinations are recognized at their estimated fair values as of the date of acquisition and consist of in-process research and development ("IPR&D"). Determination of the estimated fair value of identifiable intangible assets requires judgment. The fair value of intangible assets is estimated using the Multi-Period Excess Earnings Method (MPEEM) for the acquired IPR&D. The fair value methods are income-based valuation approaches, which require judgment to estimate appropriate discount rates, probability of success rates related to the drug under development, projected revenue, gross margins, operating costs, and growth rates.
The contingent consideration liability, associated with our business combination, is estimated based on the discounted cash flow method to determine the probability of achieving certain milestones. In order to perform the fair value calculations, the following estimates are considered: probability of achieving certain milestones, discount period, and discount rates.
We believe our assumptions, estimates, and judgements to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed.
Results of Operations
Comparison of the Three Months Ended September 30, 2025 and 2024
The following table summarizes the results of our operations for the three months ended September 30, 2025 and 2024:
Three Months Ended
September 30,
(dollars in thousands) 2025 2024 Change
Revenue:
Revenue $ - $ - - - %
Total Revenue - - - - %
Operating expenses:
Research and development expense 888 - 888 100 %
General and administrative expense 1,499 1,434 65 5 %
Litigation legal expense - 1,138 (1,138) (100) %
Loss from sale or disposal of property and equipment 4 - 4 100 %
Total operating expenses 2,391 2,572 (181) (7) %
Operating loss (2,391) (2,572) 181 (7) %
Other income, net:
Dividend income 27 - 27 100 %
Interest income 29 1 28 2,800 %
Interest expense - (12) 12 (100) %
Gain on settlement of accounts payables 155 - 155 100 %
Change in fair value of contingent liability (246) - (246) (100) %
Other (expense) income (11) 1,500 (1,511) (101) %
Total other (expense) income, net (46) 1,489 (1,535) (103) %
Net loss before provision for income taxes (2,437) (1,083) (1,354) 125 %
Provision for income taxes - (8) 8 - %
Net loss $ (2,437) $ (1,091) $ (1,346) 123 %
Research and development expense
The following table summarizes our research and development expenses incurred during the periods indicated:
Three Months Ended
September 30,
(dollars in thousands) 2025 2024 Change
Employee-related expense $ 320 $ - $ 320 100 %
Clinical development programs expense 568 - 568 100 %
Total research and development expense $ 888 $ - $ 888 100 %
Research and development expense was $0.9 million for the three months ended September 30, 2025, reflecting an increase of $0.9 million, or 100% from research and development expense of $0 for three months ended September 30, 2024. The Company incurred research and development expense in 2025 after the acquisition of GPCR USA. In 2022, the Company suspended its clinical, preclinical, and discovery program activities and reduced headcount as it began exploring strategic alternatives in April 2023 and stopped recording any research and development expenses until the Acquisition in the first quarter of 2025.
General and administrative expense
Three Months Ended
September 30,
(dollars in thousands) 2025 2024 Change
General and administrative expense $ 1,499 $ 1,434 65 5 %
General and administrative expense was $1.5 million for the three months ended September 30, 2025, representing an increase of $0.1 million or 5%, from $1.4 million for the three months ended September 30, 2024. The increase for the three months ended September 30, 2025 was due to the additional expenses incurred from the acquisition of GPCR USA.
Litigation legal expense
The decrease of $1.1 million for the three months ended September 30, 2025 was due to accruals recorded in the third quarter of 2024 for the amount of the unsatisfied self-insured retainer and legal defense costs related to the securities litigation lawsuit.
Loss from sale or disposal of property and equipment
The Company recognized a $4,000 loss from GPCR USA's sale of fixed assets for the three months ended September 30, 2025 .
Other income and expense
The Company recognized a loss of $246,000 related to the change in the fair value of its contingent liability. The Company satisfied its self-insured retainer with the insurer during the third quarter of 2025 resulting in a gain of $155,000. During the third quarter of 2024, the Company sold of certain assets pursuant to a purchase agreement for $1,500,000 to the purchaser for the Company's historical biotechnology intellectual property and other assets and included spherical nucleic acid-related technology, research and development programs, and clinical assets.
Comparison of the Nine Months Ended September 30, 2025 and 2024
The following table summarizes the results of our operations for the nine months ended September 30, 2025 and 2024:
Nine Months Ended
June 30,
(dollars in thousands) 2025 2024 Change
Revenue:
Revenue $ - $ 500 (500) (100) %
Total Revenue - 500 (500) (100) %
Operating expenses:
Research and development expense 2,631 - 2,631 100 %
General and administrative expense 5,230 4,005 1,225 31 %
Litigation legal expense - 1,138 (1,138) (100) %
Loss from sale or disposal of property and equipment 90 - 90 100 %
Gain on early lease termination (5,974) - (5,974) (100) %
Total operating expenses 1,977 5,143 (3,166) (62) %
Operating loss (1,977) (4,643) 2,666 (57) %
Other (expense) income, net:
Dividend income 106 5 101 2,020 %
Interest income 38 7 31 443 %
Interest expense - (18) 18 (100) %
Gain on settlement of accounts payables 346 - 346 100 %
Change in fair value of contingent liability (541) - (541) (100) %
Other expense (20) 2,137 (2,157) (100) %
Total other (expense) income, net (71) 2,131 (2,202) (103) %
Net loss before provision for income taxes (2,048) (2,512) 464 (18) %
Provision for income taxes - (8) 8 - %
Net loss $ (2,048) $ (2,520) $ 472 (19) %
Revenue
On February 5, 2024, the Company entered into a patent license agreement to develop cavrotolimod for potential treatment for hepatitis with a private clinical stage biopharmaceutical company. Under the terms of the agreement, this biopharmaceutical company received an exclusive license in the field of hepatitis to all of the Company's relevant patents. A total of $0.5 million was paid to the Company after the execution of this agreement.
Research and development expense
The following table summarizes our research and development expenses incurred during the periods indicated:
Nine Months Ended
September 30,
(dollars in thousands) 2025 2024 Change
Employee-related expense $ 746 $ - $ 746 100 %
Clinical development programs expense 1,885 - 1,885 100 %
Total research and development expense $ 2,631 $ - $ 2,631 100 %
Research and development expense was $2.6 million for the nine months ended September 30, 2025, reflecting an increase of $2.6 million, or 100% from research and development expense of $0 for nine months ended September 30, 2024. The Company incurred research and development expense in 2025 after the acquisition of GPCR USA. In 2022, the Company suspended its clinical, preclinical, and discovery program activities and reduced headcount as it began exploring strategic alternatives in April 2023 and stopped recording any research and development expenses until the Acquisition in the first quarter of 2025.
General and administrative expense
Nine Months Ended
September 30,
(dollars in thousands) 2025 2024 Change
General and administrative expense $ 5,230 $ 4,005 1,225 31 %
General and administrative expense was $5.2 million for the nine months ended September 30, 2025, representing an increase of $1.2 million or 31%, from $4.0 million for the nine months ended September 30, 2024. The increase for the nine months ended September 30, 2025 was due to the additional expenses incurred from the acquisition of GPCR USA and increased professional services compared to the same prior year quarter.
Loss from sale or disposal of property and equipment
The Company recognized a $90,000 loss from the sale of GPCR USA's fixed assets.
Gain on early lease termination
Due to the early termination of the Chicago Lease as of January 31, 2025, the Company recognized a $6.0 million gain resulting from the reversal of the remaining liability related to this lease.
Other income and expense
The Company recognized a gain of $346,000 from satisfying its self-insured retainer with the insurer and from the reversal of liability related to registration rights delay amounts owed to DGP. The Company recognized a loss of $541,000 related to the change in the fair value of its contingent liability.
The Company sold samples of its clinical products during the second quarter of 2024 to a private clinical stage biopharmaceutical company. During the third quarter of 2024, the Company sold of certain assets pursuant to a purchase agreement for $1,500,000 to the purchaser for the Company's historical biotechnology intellectual property and other assets and included spherical nucleic acid-related technology, research and development programs, and clinical assets.
Liquidity and Capital Resources
Since our inception, we have incurred significant operating losses. We generated limited revenue from our collaboration agreements, which have since been terminated. We have funded our operations to date with proceeds received from equity financings and payments received in connection with collaboration agreements, which have since been terminated. Currently we are exploring strategic alternatives and generating limited revenue. As of September 30, 2025, our cash and cash equivalents were $4.4 million.
We incurred net loss of approximately $2.0 million for the nine months ended September 30, 2025 and net loss of $2.5 million for the nine months ended September 30, 2024. We expect to incur significant expenses and negative cash flows for the foreseeable future.
Our current liquidity is not sufficient to continue to fund existing obligations and operations. As a result, there is substantial doubt about our ability to continue as a going concern. Additional financing will be needed to fund our ongoing operations and exploration of strategic alternatives and pursue any alternatives that we identify. We may need to seek bankruptcy protection and/or cease operations in the near term, which may result in our stockholders receiving no or very little value in respect of their shares of our common stock.
See "Funding Requirements" below for additional information on our future capital needs.
Cash Flows
The following table shows a summary of our cash flows for the nine months ended September 30, 2025 and 2024:
Nine Months Ended
September 30,
(in thousands) 2025 2024
(unaudited)
Net cash used in operating activities $ (7,408) $ (2,065)
Net cash used in investing activities (2,262) -
Net cash provided by financing activities 1,600 1,000
Net (decrease) in cash, cash equivalents, and restricted cash $ (8,070) $ (1,065)
Operating activities
Net cash used in operating activities was $7.4 million and $2.1 million for the nine months ended September 30, 2025 and 2024, respectively. The increase in cash used in operating activities for the nine months ended September 30, 2025 of $5.3 million was due to the increase of operating activities and higher headcount from the GPCR USA acquisition.
Investing activities
Net cash used in investing activities was $2.3 million and $0.0 million for the nine months ended September 30, 2025 and 2024, respectively. The increase in cash used by investing activities of $2.3 million was due to purchase of GPCR USA and capital expenditures by KC Creation.
Financing activities
Net cash provided by financing activities was $1.6 million and $1.0 million for nine months ended September 30, 2025 and 2024, respectively. The increase of $0.6 million is due to the funds received from the common stock purchase agreements in February 2025.
Funding Requirements
Our existing cash and cash equivalents may not be sufficient to enable us to fund our existing obligations and ongoing operating expenses for the near term. Our future capital requirements are difficult to forecast and will depend on many factors, including, but not limited to:
•the results of our exploration of strategic alternatives, including any potential transactions;
•the results of any future or pending litigation against the Company;
•the extent to which we encounter increased costs as a result of global and macroeconomic conditions, including rising inflation and interest rates, supply chain disruptions, fluctuating exchange rates, and increases in commodity, energy and fuel prices, as well as political events such as the current federal government shutdown; and
•unknown legal, administrative, regulatory, accounting, and information technology costs as well as additional costs associated with operating as a public company.
Until such time, if ever, as we can generate substantial revenue, we expect to finance our cash needs primarily through equity offerings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. Further, the global financial markets have experienced significant disruptions over the past couple of years due to the global health, the ongoing conflict between Russia and Ukraine, and in the Middle East, and worsening global macroeconomic conditions, including actions taken by central banks to counter inflation, volatility in the capital markets and related market uncertainty, may impact our ability to obtain additional financing when needed on favorable terms or at all. Any further disruption or slowdown in the global financial markets and economy may negatively affect our ability to raise funding through equity or debt financings on attractive terms or at all, which could in the future negatively affect our operations.
Going Concern
In accordance with Accounting Standards Codification 205-40, Going Concern, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued. In the absence of a significant source of recurring revenue, our continued viability is dependent on our ability to continue to raise additional capital to finance our operations. As discussed above, there are substantial uncertainties about our ability to raise such financing.
Contractual Obligations and Commitments
Redwood City Lease, Chicago Lease and Vehicle Lease
Refer to Note 5 - Leases to the Notes to unaudited condensed consolidated financial statements included herein.
There have been no material changes to our contractual obligations and commitments from those described in our Annual Report, other than the termination of the Chicago Lease as mentioned in Note 5.
Exicure Inc. published this content on November 07, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 07, 2025 at 21:19 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]