MEI Pharma Inc

Previous wording

On July 22, 2024, we announced that our Board of Directors (Board) had determined unanimously to begin the evaluation of our strategic alternatives, including potential transactions as well as an orderly wind down of operations, if appropriate, to maximize the value of our assets for our stockholders. We commenced a reduction-in-force (the 2024 RIF) beginning August 1, 2024, which will continue in stages as our operational and strategic direction evolves. We have discontinued the clinical development of voruciclib, while certain nonclinical activities related to MEI’s drug candidate assets will continue to be conducted by us. As part of the review of strategic alternatives, we may consider options such as out-licensing opportunities for existing programs and merger and acquisition opportunities.

Current wording

On July 22, 2024, we announced that our Board of Directors (Board) had determined unanimously to begin the evaluation of our strategic alternatives, including potential transactions as well as an orderly wind down of operations, if appropriate, to maximize the value of our assets for our stockholders. We commenced a reduction-in-force (the Strategic Alternatives RIF) beginning August 1, 2024, which will continue in stages as our operational and strategic direction evolves. We have discontinued the clinical development of voruciclib, while certain nonclinical activities related to MEI’s drug candidate assets will continue to be conducted by us. As part of the review of strategic alternatives, we may consider options such as out-licensing opportunities for existing programs and merger and acquisition opportunities.

Previous wording

Consistent with our intention to preserve cash, David M. Urso, our President and Chief Executive Officer, and Richard Ghalie, M.D., our Chief Medical Officer, stepped down effective August 1, 2024. Mr. Urso also left the Board at that date. We have entered into consulting agreements with both Mr. Urso and Dr. Ghalie under which they will remain available to assist us in our strategic efforts. Charles V. Baltic III, the Chairperson of the Board, also stepped down from the Board contemporaneously with the announcement on July 22, 2024. Our Board appointed Justin J. File, our current Chief Financial Officer, to assume the position of Acting Chief Executive Officer and has appointed Frederick W. Driscoll as Chairperson of the Board.

Current wording

Consistent with our intention to preserve cash, David M. Urso, our former President and Chief Executive Officer, and Richard Ghalie, M.D., our former Chief Medical Officer, stepped down effective August 1, 2024. Mr. Urso also left the Board at that date. We have entered into consulting agreements with both Mr. Urso and Dr. Ghalie under which they will remain available to assist us in our strategic efforts. Charles V. Baltic III, the former Chairperson of the Board, also stepped down from the Board contemporaneously with the announcement on July 22, 2024. Our Board appointed Justin J. File, our Chief Financial Officer, to assume the position of Acting Chief Executive Officer and appointed Frederick W. Driscoll as our Chairperson of the Board.

Previous wording

On October 22, 2024 (the Closing Date), MEI and Aardvark Therapeutics, Inc. (the Purchaser), entered into an Asset Purchase Agreement (the Asset Purchase Agreement), pursuant to which we sold to Purchaser our rights, title and interest in and to certain assets related to ME-344, including relevant intellectual property rights, technology and contracts. Pursuant to the Asset Purchase Agreement, the Purchaser paid us an initial payment of $0.5 million in cash plus a reimbursement amount of $55,000 at the closing of the transaction. The Purchaser may also make future milestone payments up to $62.0 million after the Closing Date, payable upon the achievement of certain regulatory and revenue milestones. The Purchaser also assumed certain of our liabilities after the Closing Date, including liabilities arising under the contracts transferred under the Asset Purchase Agreement.

Current wording

On October 22, 2024 (the Closing Date), MEI and Aardvark Therapeutics, Inc. (the Purchaser), entered into an Asset Purchase Agreement (the Asset Purchase Agreement), whereby we sold to the Purchaser our rights, title and interest in and to certain assets related to ME-344, including relevant intellectual property rights, technology and contracts (the ME-344 Sale). Pursuant to the Asset Purchase Agreement, the Purchaser paid us an initial payment of $0.5 million in cash plus a reimbursement amount of $55,000 at the closing of the transaction. The Purchaser may also make future milestone payments up to $62.0 million after the Closing Date, payable upon the achievement of certain regulatory and revenue milestones. The Purchaser also assumed certain of our liabilities after the Closing Date, including liabilities arising under the contracts transferred under the Asset Purchase Agreement.

Previous wording

Revenue: During the three months ended September 30, 2024, we recognized no revenue due to all deferred revenue associated with the KKC Commercialization Agreement having been recognized in fiscal year 2024, upon entry into the Termination Agreement. During the three months ended September 30, 2023, we recognized revenue of $65.3 million from the KKC Commercialization Agreement.

Current wording

Revenue: During the six months ended December 31, 2024, we recognized no revenue due to all deferred revenue associated with the KKC Commercialization Agreement having been recognized in fiscal year 2024, upon entry into the Termination Agreement. During the six months ended December 31, 2023, we recognized revenue of $65.3 million from the KKC Commercialization Agreement.

Previous wording

Research and development costs decreased by $0.3 million to $3.2 million for three months ended September 30, 2024 compared to $3.5 million for the three months ended September 30, 2023. Costs related to ME-344 decreased $0.9 million due to decreased manufacturing and clinical costs related to the Phase 1b study. Costs related to zandelisib decreased $0.4 million, primarily as a result of the discontinuation of the program during fiscal year 2023 and the completion of wind-down related activities. Costs related to voruciclib increased $1.1 million mainly due to greater recognized manufacturing and clinical costs in the Phase 1 study and costs associated with nonclinical studies. Other research and development costs decreased a net $0.1 million primarily due to reduced payroll related costs partially offset by increased expenses associated with our plan to explore strategic alternatives that was announced in July 2024.

Current wording

Research and development costs decreased by $3.9 million to $3.5 million for the six months ended December 31, 2024 compared to $7.4 million for the six months ended December 31, 2023. Research and development costs primarily decreased compared to the same period in 2023 as a result of our announcement in July 2024 to explore strategic alternatives, at which time all clinical studies were ceased and we initiated reductions in our workforce. These decreases were partially offset by increased costs associated with voruciclib mainly due to greater recognized manufacturing and clinical costs in the Phase 1 study prior to the July 2024 announcement to explore strategic alternatives and increased costs associated with nonclinical studies costs.

Previous wording

To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. There can be no assurance that we will be able to continue to raise additional capital in the future. We have accumulated losses of $396.2 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of September 30, 2024, we had $26.9 million in cash and cash equivalents, and short-term investments. On July 22, 2024, we announced that our Board had determined unanimously to begin the evaluation of our strategic alternatives, including potential transactions as well as an orderly wind down of operations, if appropriate, to maximize the value of our assets for our stockholders. In connection with the exploration of strategic alternatives, we initiated the 2024 RIF to reduce headcount on August 1, 2024 and discontinued the clinical development of voruciclib. As a result of this announcement, we expect our research and development expenses to decrease significantly as we discontinued our clinical research and development activities along with decreased general and administrative costs as we reduce headcount and other operational expenses that supported research and development activities. We will continue to incur research and development expenses in connection with clinical trial closing costs and the completion of certain ongoing nonclinical activities. We believe our cash balance, including our short-term investments, is sufficient to fund operations for at least the next 12 months.

Current wording

To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. There can be no assurance that we will be able to continue to raise additional capital in the future. We have accumulated losses of $398.9 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of December 31, 2024, we had $23.7 million in cash and cash equivalents. On July 22, 2024, we announced that our Board had determined unanimously to begin the evaluation of our strategic alternatives, including potential transactions as well as an orderly wind down of operations, if appropriate, to maximize the value of our assets for our stockholders. In connection with the exploration of strategic alternatives, we initiated the Strategic Alternatives RIF to reduce headcount on August 1, 2024 and discontinued the clinical development of voruciclib. As a result of this announcement, we expect our research and development expenses to decrease significantly as we discontinued our clinical research and development activities along with decreased general and administrative costs as we reduce headcount and other operational expenses that supported research and development activities. We will continue to incur research and development expenses in connection with clinical trial closing costs and the completion of certain ongoing nonclinical activities. We believe our cash balance is sufficient to fund operations for at least the next 12 months.

Previous wording

Net cash used in operating activities for the three months ended September 30, 2024 of $11.5 million consisted of our net loss of $8.0 million and $3.9 million in changes in our operating assets partially offset by $0.5 million for noncash items. Net cash used in operating activities for the three months ended September 30, 2023 of $18.5 million consisted of our net income of $56.4 million and $0.8 million in noncash items offset by changes in our operating assets and liabilities of $75.7 million primarily due to recognition of $64.9 million in deferred revenue.

Current wording

Net cash used in operating activities for the six months ended December 31, 2024 of $15.1 million consisted of our net loss of $10.7 million, $4.3 million in changes in our operating assets and $0.1 million for noncash items. Net cash used in operating activities for the six months ended December 31, 2023 of $29.5 million consisted of our net income of $45.3 million and $2.1 million in noncash items offset by changes in our operating assets and liabilities of $77.0 million primarily due to recognition of $64.9 million in deferred revenue.

Previous wording

Net cash provided by investing activities for the three months ended September 30, 2024 was $14.7 million as compared to $5.0 million cash provided by investing activities for the three months ended September 30, 2023. The change in cash provided by investing activities was primarily due to more net short-term investment activity during the three months ended September 30, 2024.

Current wording

Net cash provided by investing activities for the six months ended December 31, 2024 was $35.2 million as compared to $29.5 million net cash provided by investing activities for the six months ended December 31, 2023. The change in net cash provided by investing activities was primarily due to more net short-term investment activity during the six months ended December 31, 2024 and the proceeds recognized on the disposition of a non-financial asset with no similar transaction in the prior period.