UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 13 ,2024, Gyre Therapeutics, Inc. issued a press release announcing its financial results for the three and nine months ended September 30, 2024 and other matters described. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
As provided in General Instruction B.2 of Form 8-K, the information in this Item 2.02 and Exhibit 99.1 incorporated herein shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall such information or Exhibit 99.1 be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are being furnished herewith:
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Exhibit Title or Description |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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GYRE THERAPEUTICS, INC. |
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Date: November 13, 2024 |
By: |
/s/ Han Ying, Ph.D. |
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Name: |
Han Ying, Ph.D. |
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Title: |
Chief Executive Officer |
Exhibit 99.1
Gyre Therapeutics Reports Third Quarter 2024 and Year-To-Date Financial Results and Provides Business Update
Last patient completed pivotal Phase 3 trial in CHB-associated liver fibrosis in the PRC with data expected in Q1 2025
On track to initiate U.S. Phase 2 trial of F351 in MASH-associated liver fibrosis in 2025
Commercial launch of avatrombopag maleate tablets expected by the first half of 2025
Commercial launch of nintedanib expected in 2025
Cash and cash equivalents totaled $15.9 million as of September 30, 2024
SAN DIEGO, Nov. 13, 2024 (GLOBE NEWSWIRE) -- Gyre Therapeutics (“Gyre”) (Nasdaq: GYRE), a self-sustainable, commercial-stage biotechnology company with clinical development programs focusing on a variety of chronic organ diseases, today announced financial results for the third quarter and nine months ended September 30, 2024, and provided a business update.
“Our team has made great progress over the last several months and recently achieved a significant milestone with the final patient completing 52 weeks of study in our pivotal Phase 3 trial for F351 in CHB-associated liver fibrosis. We are encouraged by F351’s potential as a novel treatment for this fibrotic disease and are excited to share topline results in the first quarter 2025,” said Han Ying, Ph.D., Chief Executive Officer of Gyre Therapeutics. “With several upcoming milestones in 2025, including the commercial launch of two new products in the PRC as well as the anticipated initiation of U.S. Phase 2 trial of F351 in MASH-associated liver fibrosis, we remain confident in Gyre’s ability to deliver in the clinic and the commercial market for patients in need.”
Third Quarter 2024 Business Highlights and Upcoming Milestones
Commercial-Stage Updates
1
Clinical Development Updates
F351 (Hydronidone):
F573:
Preclinical Development Updates
Corporate Updates
2
Financial Results
Cash Position
As of September 30, 2024, Gyre had cash and cash equivalents of $15.9 million. Based on current plans, Gyre anticipates that its cash resources as of September 30, 2024 will enable it to fund operations through at least 12 months following the issuance of the condensed financial statements.
Financial Results for the Three Months Ended September 30, 2024
3
Financial Results for the Nine Months Ended September 30, 2024
4
Use of Non-GAAP Financial Measures by Gyre Therapeutics, Inc.
Gyre reports financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). This release presents the financial measure “adjusted net income,” which is not calculated in accordance with GAAP. The most directly comparable GAAP measure for this non-GAAP financial measure is “net income.” Adjusted net income presents Gyre’s results of operations after excluding gain from change in fair value of warrants, stock-based compensation, and provision for income taxes. This is meant to supplement, and not substitute, Gyre’s financial information presented in accordance with GAAP. Adjusted net income as defined by Gyre may not be comparable to similar non-GAAP measures presented by other companies. Management believes that presenting adjusted net income provides investors with additional useful information in evaluating the Gyre’s performance and valuation. See the reconciliation of adjusted net income to net income in the section titled “Reconciliation of GAAP to Non-GAAP Financial Measures” below.
About Hydronidone (F351)
F351 is a structural analogue of the approved anti-fibrotic (IPF) drug Pirfenidone and has been shown to inhibit in vitro both p38γ kinase activity and TGF-β1-induced excessive collagen synthesis in hepatic stellate cells (“HSCs”), which are recognized as critical event in the development and progression of fibrosis in the liver. This is further supported by its anti-proliferative effects on the HSCs in the liver. In vitro anti-fibrotic effects of F351 were also confirmed in several established in vivo models of liver fibrosis such as CCI4-induced liver fibrosis mouse model, DMN-induced liver fibrosis rat model, and HSA-induced liver rat model, as well as mouse model of MASH fibrosis (CCI4+Western High Fat Diet).
About Gyre Pharmaceuticals
Gyre Pharmaceuticals is a commercial-stage biopharmaceutical company committed to the research, development, manufacturing and commercialization of innovative drugs for organ fibrosis. Its flagship product, ETUARY® (Pirfenidone capsule), was the first approved treatment for IPF in the PRC in 2011 and has maintained a prominent market share (2023 net sales of $112.1 million). In addition, Gyre Pharmaceuticals is evaluating F351 in a Phase 3 clinical trial in CHB-associated liver fibrosis in the PRC, which is expected to readout topline data by early 2025. F351 received Breakthrough Therapy designation by the NMPA Center for Drug Evaluation in March 2021. Gyre Pharmaceuticals is also developing treatments for COPD, PAH and ALF/ACLF. In October 2023, Gyre Therapeutics acquired an indirect majority interest in Gyre Pharmaceuticals (also known as Beijing Continent Pharmaceuticals Co., Ltd.).
About Gyre Therapeutics
Gyre Therapeutics is a biopharmaceutical company headquartered in San Diego, CA, with a primary focus on the development and commercialization of F351 (Hydronidone) for the treatment of MASH-associated fibrosis in the U.S. Gyre’s development strategy for F351 in MASH is based on the company's experience in MASH rodent model mechanistic studies and CHB-induced liver fibrosis clinical studies. Gyre is also advancing a diverse pipeline in the PRC through its indirect controlling interest in Gyre Pharmaceuticals, including ETUARY therapeutic expansions, F573, F528, and F230.
5
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, which statements are subject to substantial risks and uncertainties and are based on estimates and assumptions. All statements, other than statements of historical facts included in this press release, are forward-looking statements, including statements concerning: the expectations regarding Gyre’s research and development efforts, timing of expected clinical readouts, including timing of topline data from Gyre Pharmaceuticals’ Phase 3 clinical trial evaluating F351 for the treatment of CHB-associated liver fibrosis in the PRC, the U.S. IND submission of F351 in MASH-associated liver fibrosis, initiation of Gyre’s Phase 2 trial and comprehensive Phase 2/3 clinical program in the U.S. for F351, timing of topline results from Phase 2 clinical trial in the PRC of F573 for acute/acute on-chronic liver failure and initiation of Phase 1 trial of F230 for the treatment of PAH, the expectations regarding generic drug nintedanib, the anticipated commercial launch of avatrombopag maleate tablets, interactions with regulators, expectations regarding future product sales, and Gyre’s financial position and cash resources. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms, and similar expressions intended to identify forward-looking statements. These statements reflect our plans, estimates, and expectations, as of the date of this press release. These statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the forward-looking statements expressed or implied in this press release. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation: Gyre’s ability to execute on its clinical development strategies; positive results from a clinical trial may not necessarily be predictive of the results of future or ongoing clinical trials; the timing or likelihood of regulatory filings and approvals; competition from competing products; the impact of general economic, health, industrial or political conditions in the United States or internationally; the sufficiency of Gyre’s capital resources and its ability to raise additional capital. Additional risks and factors are identified under “Risk Factors” in Gyre’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 27, 2024 and in other filings with the Securities and Exchange Commission.
Gyre expressly disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
For Investors:
Stephen Jasper
stephen@gilmartinir.com
6
Gyre Therapeutics, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Revenues |
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$ |
25,488 |
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$ |
32,042 |
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$ |
77,885 |
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$ |
86,302 |
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Operating expenses: |
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Cost of revenues |
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958 |
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1,184 |
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2,707 |
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3,386 |
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Selling and marketing |
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13,699 |
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13,928 |
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40,655 |
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44,695 |
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Research and development |
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2,775 |
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3,009 |
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8,312 |
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9,212 |
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General and administrative |
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3,823 |
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1,157 |
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10,645 |
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4,607 |
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Total operating expenses |
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21,255 |
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19,278 |
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62,319 |
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61,900 |
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Income from operations |
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4,233 |
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12,764 |
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15,566 |
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24,402 |
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Other income (expense), net: |
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Interest income, net |
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523 |
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283 |
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1,201 |
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718 |
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Other expense, net |
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(598 |
) |
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(1,333 |
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(1,226 |
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(1,281 |
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Change in fair value of warrant liability |
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(228 |
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— |
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6,973 |
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— |
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Loss on disposal of assets, net |
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— |
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(526 |
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(68 |
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(526 |
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Income before income taxes |
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3,930 |
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11,188 |
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22,446 |
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23,313 |
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Provision for income taxes |
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(1,074 |
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(3,678 |
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(5,117 |
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(7,816 |
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Net income |
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2,856 |
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7,510 |
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17,329 |
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15,497 |
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Net income attributable to noncontrolling interest |
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1,732 |
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3,534 |
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5,145 |
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7,424 |
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Net income attributable to common stockholders |
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$ |
1,124 |
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$ |
3,976 |
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$ |
12,184 |
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$ |
8,073 |
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Net income per share attributable to common stockholders: |
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Basic |
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$ |
0.01 |
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$ |
0.06 |
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$ |
0.14 |
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$ |
0.13 |
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Diluted |
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$ |
0.01 |
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$ |
0.05 |
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$ |
0.05 |
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$ |
0.10 |
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Weighted average shares used in calculating net income per share attributable to common stockholders: |
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Basic |
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85,643,646 |
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63,588,119 |
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84,807,041 |
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63,588,119 |
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Diluted |
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102,640,373 |
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78,904,324 |
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102,505,585 |
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78,907,695 |
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7
Gyre Therapeutics, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
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September 30, 2024 |
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December 31, 2023 |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
15,866 |
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$ |
33,509 |
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Short-term bank deposits |
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9,226 |
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— |
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Accounts and note receivables, net |
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19,487 |
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15,552 |
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Other receivables from GNI |
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1,287 |
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1,287 |
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Inventories, net |
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6,379 |
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4,281 |
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Prepaid assets |
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1,051 |
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1,547 |
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Other current assets |
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1,513 |
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1,045 |
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Total current assets |
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54,809 |
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57,221 |
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Property and equipment, net |
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24,442 |
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23,288 |
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Long-term receivable from GCBP |
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4,900 |
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4,722 |
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Intangible assets, net |
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184 |
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205 |
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Right-of-use assets |
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1,984 |
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489 |
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Land use rights, net |
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1,479 |
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1,493 |
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Deferred tax assets |
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5,161 |
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4,695 |
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Long-term certificates of deposit |
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29,515 |
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23,431 |
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Other assets, noncurrent |
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2,766 |
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|
995 |
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Total assets |
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$ |
125,240 |
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$ |
116,539 |
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Liabilities, convertible preferred stock, and equity |
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Current liabilities: |
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Accounts payable |
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$ |
303 |
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$ |
355 |
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Deferred revenue |
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36 |
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39 |
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Due to related parties |
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1,288 |
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1,369 |
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CVR excess closing cash payable |
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— |
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1,085 |
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Accrued expenses and other current liabilities |
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9,553 |
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11,935 |
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Income tax payable |
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2,842 |
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5,054 |
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Operating lease liabilities, current |
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694 |
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|
210 |
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Total current liabilities |
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14,716 |
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20,047 |
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Operating lease liabilities, noncurrent |
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1,101 |
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199 |
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Deferred government grants |
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185 |
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213 |
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CVR derivative liability, noncurrent |
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4,900 |
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4,722 |
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Warrant liability, noncurrent |
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5,862 |
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12,835 |
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Other noncurrent liabilities |
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2 |
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49 |
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Total liabilities |
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26,766 |
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38,065 |
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Convertible Preferred Stock, $0.001 par value, 5,000,000 shares authorized; |
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— |
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64,525 |
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Stockholders’ equity: |
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Common stock, $0.001 par value, 400,000,000 shares authorized; 85,769,526 shares and |
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85 |
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77 |
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Additional paid-in capital |
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134,296 |
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68,179 |
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Statutory reserve |
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3,098 |
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3,098 |
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Accumulated deficit |
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(73,354 |
) |
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(85,538 |
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Accumulated other comprehensive loss |
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(946 |
) |
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(1,644 |
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Total Gyre stockholders’ equity (deficit) |
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63,179 |
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(15,828 |
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Noncontrolling interest |
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35,295 |
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29,777 |
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Total equity |
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98,474 |
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|
13,949 |
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Total liabilities, convertible preferred stock, and equity |
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$ |
125,240 |
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$ |
116,539 |
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8
Gyre Therapeutics, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands)
(Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Net income |
$ |
2,856 |
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$ |
7,510 |
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$ |
17,329 |
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$ |
15,497 |
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Loss (gain) from change in fair value of warrants (1) |
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228 |
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— |
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(6,973 |
) |
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— |
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Stock-based compensation |
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237 |
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|
— |
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264 |
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|
|
— |
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Provision for income taxes |
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1,074 |
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|
|
3,678 |
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|
5,117 |
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|
7,816 |
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Non-GAAP adjusted net income |
$ |
4,395 |
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$ |
11,188 |
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$ |
15,737 |
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$ |
23,313 |
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(1) Reflects adjustments for fair value of warrants based on the Black-Scholes option pricing model.
9