Arecor Therapeutics (AREC) H2 2024 earnings summary

Executive summary

• Focused on developing enhanced therapeutics for diabetes and obesity, leveraging proprietary Arestat technology and strategic partnerships for novel formulations and oral peptide delivery, targeting high-value markets through both proprietary and partnered programs.

• Portfolio includes in-house products and three partner-licensed products, with AT220 on the market and AT278/AT247 showing clinical superiority in diabetes care, especially for type 2 diabetics with high BMI.

• Growing royalty streams from licensed biosimilar AT220 and new licensing agreements for RTU medicines, including AT351.

• Strong IP position with 17 key patents granted, enhancing protection for Arestat, AT247, AT278, and the platform.

• Strategic partnerships and licensing agreements are central to growth, with ongoing discussions for AT278 and expansion of the oral peptide delivery platform.

Financial highlights

• Revenues increased 11% to $5.1 million (£5.1m), driven by Tetris products, AT220 royalty income, and non-Ogluo products.

• R&D expenses fell by $2.4 million to $3 million (£3.0m), reflecting clinical study, payroll savings, and tight cost control.

• SG&A expenses remained flat at $6.2 million (£6.2m), with Tetris-related costs set to halve in 2025 and reach zero in 2026.

• Exceptional non-cash items of £3.3m impacted results.

• Cash position at $3.3 million (£3.3m), augmented by a $5.8 million funding raise, but down from £6.8m in the prior year.

Outlook and guidance

• Well-positioned for 2025 with focus on AT278 insulin and oral peptide delivery platform, with future R&D to focus on these areas.

• Cessation of Tetris activities expected to be cash generative in 2025.

• Runway extends well into H1 2026, with emphasis on strategic partnership for AT278 and advancing oral peptide platform.

• Pre-clinical PK studies for oral GLP-1 to inform next development steps in H2 2025.

• Anticipated growth in partner revenues, especially from AT220 royalties and pharma partnerships.