Financial Performance Overview

Cartesian Therapeutics, Inc. is a biopharmaceutical company focused on developing innovative therapies for various medical conditions. In this financial report, the company provides an overview of its financial performance for the years ended December 31, 2024 and 2023.

The key highlights from the report are:

• Collaboration and license revenue increased by 47% in 2024 compared to 2023, primarily due to milestone payments and the recognition of deferred revenue.
• Research and development expenses decreased by 37% in 2024, driven by a wind-down of legacy programs and lower stock-based compensation.
• General and administrative expenses decreased by 26% in 2024, mainly due to reductions in stock compensation and professional fees.
• The company reported a net loss of $77.4 million in 2024, a significant improvement from the $219.7 million net loss in 2023.
• Cartesian ended 2024 with $214.3 million in cash, cash equivalents, and restricted cash, which it believes will fund operations into mid-2027.

Revenue Trends

Cartesian’s revenue is primarily generated through collaboration and licensing agreements with other biopharmaceutical companies. In 2024, the company reported $38.3 million in collaboration and license revenue, a 47% increase from the $26.0 million reported in 2023.

The increase was mainly due to a $30 million milestone payment received from Sobi for the initiation of a rolling biologics license application for the company’s lead product candidate, SEL-212, as well as the recognition of the remaining deferred revenue from the terminated Astellas agreement.

In addition, Cartesian recognized $0.6 million in grant revenue in 2024, which it received from the National Institutes of Health to support specific research and development activities. There was no grant revenue in 2023.

The company does not expect to generate revenue from product sales for at least the next several years, as its product candidates are still in development and have not yet received regulatory approval. Future revenue will depend on the successful development and commercialization of Cartesian’s pipeline.

Expense Management

Cartesian’s total operating expenses decreased by 26% in 2024 compared to 2023, driven by reductions in both research and development (R&D) and general and administrative (G&A) costs.

R&D expenses decreased by 37% to $45.1 million in 2024. This was primarily due to a $25.7 million reduction in expenses associated with the company’s legacy Selecta programs, as it focused its efforts on the development of its lead candidate, Descartes-08 for myasthenia gravis. The company also saw decreases in R&D employee expenses and stock-based compensation.

G&A expenses decreased by 26% to $30.1 million in 2024. This was mainly the result of lower stock compensation and professional fees compared to the prior year, which had elevated costs related to the merger transaction.

The company also recorded a $7.6 million impairment charge in 2024 related to the decision to cease use of its office and laboratory space in Watertown, Massachusetts.

Financial Position and Liquidity

As of December 31, 2024, Cartesian had $214.3 million in cash, cash equivalents, and restricted cash, of which $1.7 million was restricted. The company believes this cash position will enable it to fund its operating expenses and capital expenditure requirements into mid-2027.

In addition to its existing cash, Cartesian may receive future research and development funding from its collaboration agreements. The company also has the ability to raise additional capital through equity offerings, debt financing, and potential royalty/milestone monetization transactions.

Cartesian’s cash requirements are primarily driven by its continued investment in research and development, including clinical trials, as well as general and administrative expenses to support its operations. The company may need to seek additional financing in the future to support its long-term growth and development plans.

Strengths and Weaknesses

Strengths:

• Diversified revenue streams from collaboration and licensing agreements
• Reduced R&D and G&A expenses, improving financial efficiency
• Significant cash runway to fund operations into mid-2027
• Promising lead candidate, Descartes-08, advancing in clinical development

Weaknesses:

• Reliance on collaboration partners for future revenue and development
• No approved products or revenue from product sales
• Continued net losses and need for additional financing

Cartesian’s primary strength is its ability to generate revenue from collaboration and licensing agreements, which have provided a steady stream of funding to support its research and development activities. The company’s strategic focus on its lead candidate, Descartes-08, and the reduction in expenses related to legacy programs have also improved its financial efficiency.

However, Cartesian remains dependent on its collaboration partners for future revenue and development progress. Without any approved products or revenue from product sales, the company will continue to rely on external funding sources to sustain its operations. The need for additional financing in the future represents a potential weakness, as the terms of such financing could be dilutive to existing shareholders.

Outlook and Future Considerations

Cartesian’s outlook remains cautiously optimistic as it continues to advance its pipeline and explore new strategic partnerships. The successful development and potential commercialization of Descartes-08 for myasthenia gravis will be a key driver of the company’s future success.

To achieve its goals, Cartesian will need to:

• Continue to develop its preclinical and clinical-stage product candidates
• Seek regulatory approvals for any product candidates that complete clinical trials
• Maintain and expand its intellectual property portfolio
• Hire additional staff to support its growing operations
• Incur costs associated with operating as a public company

The company’s ability to secure additional financing, whether through equity offerings, debt, or potential royalty/milestone transactions, will be crucial in funding its future growth and development plans. Cartesian’s management will need to carefully manage its cash resources and explore various financing options to ensure it has the necessary capital to execute its strategy.

Overall, Cartesian’s financial performance in 2024 showed signs of improvement, with reduced expenses and a smaller net loss compared to the previous year. However, the company still faces the challenge of transitioning from a development-stage to a commercial-stage organization, which will require significant investment and careful execution. Investors will be closely watching Cartesian’s progress in advancing its pipeline and securing the necessary funding to support its long-term growth.