Arecor Therapeutics (AREC) H1 2024 earnings summary

Executive summary

• Advanced diabetes and obesity pipeline, with AT278 showing Phase I superiority in both Type 1 and Type 2 diabetics, supporting further development and partnership discussions.

• Initiated oral GLP-1 program with promising early data and expanded technology partnerships, including collaborations with TRX Biosciences and Medtronic.

• Ogluo® focused on growth in UK and Germany, with targeted campaigns and supply chain improvements, though recent packaging issues may impact near-term sales.

• Revenue streams from product sales, licensing, and royalties are growing, with significant upside from proprietary pipeline and technology partnerships.

• Successful £6.4m fundraise post-period, strengthening the balance sheet for R&D and commercial expansion.

Financial highlights

• Revenue for H1 2024 increased to £2.0m from £1.67m in H1 2023, driven by diversified sources including royalties and product sales.

• Total income was £2.03m (H1 2023: £2.33m), with reduced R&D spend of £2.09m (H1 2023: £2.86m).

• Loss after tax was £4.64m (H1 2023: £4.53m); operating loss for H1 2024 was £4.83m.

• Cash and equivalents at 30 June 2024 were £2.53m, with £6.4m raised post-period.

• Net assets of £13.2m at period end.

Outlook and guidance

• Anticipates strong revenue growth in H2 2024 and expects to achieve consensus analyst forecasts with continued year-on-year growth.

• Focused R&D on diabetes, obesity, and oral peptide delivery, with ongoing strategic co-development and non-dilutive funding discussions.

• Planned headcount reduction and close cash management to deliver annualized savings.

• Non-clinical PK proof-of-concept study for oral GLP-1 receptor agonist expected in H1 2025.

• Board notes uncertainty around AT220 royalties, licensing deal timing, and Ogluo® sales growth.