Clene Inc. (NASDAQ:CLNN) is a late clinical-stage biopharmaceutical company that is pioneering the discovery, development, and commercialization of novel clean-surfaced nanotechnology (CSN) therapeutics. The company's mission is to improve mitochondrial health and protect neuronal function in order to treat debilitating neurodegenerative diseases, including amyotrophic lateral sclerosis (ALS), multiple sclerosis (MS), and Parkinson's disease (PD).
Clene's Origin and Evolution
Clene Inc. was founded in 2014 as Clene Nanomedicine, Inc. with the goal of harnessing the power of nanotechnology to address unmet medical needs in the central nervous system (CNS) disorder space. The company's innovative approach centers around its patented electro-crystal-chemistry manufacturing platform, which enables the production of concentrated, stable, highly active, clean-surfaced nanocrystal suspensions. This breakthrough technology allows Clene to develop novel therapeutic candidates that exhibit catalytic activities many times higher than traditional nanoparticles.
In December 2020, Clene Nanomedicine, Inc. became a public company through a reverse recapitalization with Tottenham Acquisition I Limited, listing its shares on the Nasdaq Capital Market under the ticker symbol CLNN. As part of the transaction, certain Clene Nanomedicine stockholders and Tottenham's former officers, directors, and public stockholders became entitled to receive contingent earn-out shares based on achieving certain stock price milestones. This transformative event provided Clene with the resources and visibility to accelerate the development of its pipeline and advance its mission of revolutionizing the treatment of neurodegenerative diseases.
Over the years, Clene has faced several challenges in advancing its pipeline of drug candidates, including the high costs and complexities associated with clinical development, regulatory approvals, and manufacturing. The company has incurred significant losses and negative cash flows from operations since its inception, as it has dedicated substantial resources to the development of its lead drug candidate, CNM-Au8, for applications primarily in neurology.
In 2023, Clene implemented cost-saving initiatives, including delaying and reducing certain research and development programs and commercialization efforts, as well as eliminating certain staff positions, in an effort to preserve its cash and cash equivalents. As of September 30, 2024, the company had accumulated a deficit of $268.6 million, reflecting the substantial investments made in its research and development efforts.
Financial Overview and Liquidity
As of September 30, 2024, Clene reported cash and cash equivalents of $14.64 million, along with $6.18 million in marketable securities. The company has taken proactive steps to bolster its financial position, including securing a $10 million debt facility in late 2024 to pay off its existing senior loan and finance ongoing operations. This term loan with Avenue Venture Opportunities Fund, L.P. was amended in September 2024 to defer principal payments and extend the maturity to Q2 2025.
Clene's financial performance has been characterized by continued investment in its research and development efforts. For the fiscal year 2023, the company reported total revenue of $654,000, with a net loss of $49.5 million. The annual operating cash flow was -$30.17 million, and the annual free cash flow was -$30.5 million. For the nine months ended September 30, 2024, the company reported total revenue of $251,000, with a net loss of $25.85 million. In the most recent quarter (Q3 2024), revenue was $87,000, representing a 19% year-over-year decrease due to lower sales of the company's dietary supplement products. The net loss for Q3 2024 was $7.99 million.
Despite the challenges of operating in the capital-intensive biotech industry, Clene has demonstrated financial discipline. The company's cash conversion cycle stood at -302.72 days as of September 30, 2024, indicating efficient management of working capital. Clene's current and quick ratios of 0.83 and 0.82, respectively, suggest a solid liquidity position. The debt-to-equity ratio was -5.55 as of December 31, 2023.
Advancing the Clinical Pipeline
Clene's lead drug candidate, CNM-Au8, is a proprietary CSN therapeutic designed to improve central nervous system cell survival and function. The company is currently evaluating CNM-Au8 in various clinical trials for the treatment of ALS, MS, and PD.
In ALS, Clene is making significant progress. The company recently met with the U.S. Food and Drug Administration (FDA) to discuss a potential accelerated approval pathway for CNM-Au8. The FDA recommended that Clene leverage additional neurofilament light (NfL) biomarker data from its ongoing expanded access programs (EAPs) to support the efficacy findings observed in the HEALEY ALS Platform Trial. Clene plans to submit this additional data, alongside commencing the Phase 3 RESTORE-ALS trial, in a New Drug Application (NDA) targeted for mid-2025. The RESTORE-ALS trial is expected to initiate in the second quarter of 2025, contingent on the outcome of the recent Type C meeting with the FDA and securing funding.
In MS, Clene has initiated a second dosing cohort of its REPAIR-MS Phase 2 clinical trial in non-active progressive MS patients. The company expects to conclude enrollment by the end of 2024 and report topline results by mid-2025. Clene intends to work closely with regulatory authorities to determine the optimal path forward for advancing CNM-Au8 into Phase 3 trials and potential approval.
Clene's CNM-ZnAg asset, a dietary supplement with applications in supporting immune health, has also demonstrated promising results in a recent COVID-19 clinical trial. The company is evaluating potential commercialization strategies for this asset through its wholly-owned subsidiary, dOrbital, Inc., and its exclusive license agreement with 4Life Research LLC.
Research and Development Expenses
For the nine months ended September 30, 2024, Clene's research and development expenses were $14.49 million, representing a 27% decrease compared to the same period in 2023. This decrease was primarily due to reimbursements received for the ALS expanded access program (EAP) funded by a National Institutes of Health grant, as well as decreased expenses for completed clinical trials. However, Clene expects R&D expenses to increase in future years as it advances its drug candidates through later-stage trials.
Competitive Landscape and Regulatory Landscape
Despite the significant unmet need in the neurodegenerative disease space, the competitive landscape for ALS and MS treatments remains challenging. In April 2023, the FDA granted accelerated approval to Biogen's tofersen (Qalsody) for the treatment of SOD1-ALS, a rare genetic form of the disease. Additionally, Amylyx Pharmaceuticals' sodium phenylbutyrate and taurursodiol, previously approved in the U.S. and Canada, was voluntarily withdrawn from the market after a negative outcome in a Phase 3 trial.
Clene's innovative approach with CNM-Au8 has the potential to address these challenges. The company's ongoing interactions with the FDA suggest a constructive dialogue and a potential pathway for accelerated approval in ALS, provided Clene can successfully leverage the additional NfL biomarker data. Similarly, in MS, Clene's REPAIR-MS trial aims to demonstrate the efficacy of CNM-Au8 in non-active progressive patients, an area with limited treatment options.
Risks and Uncertainties
As a clinical-stage biopharmaceutical company, Clene faces several risks and uncertainties inherent to the industry. These include the inherent challenges of drug development, potential delays or setbacks in clinical trials, the need for regulatory approvals, and the ability to secure adequate funding to support its operations and pipeline advancement.
Additionally, Clene's reliance on its proprietary technology and intellectual property rights exposes the company to the risk of potential infringement or legal challenges. The competitive landscape, particularly in the ALS and MS treatment markets, also poses a significant risk as Clene seeks to establish its therapies as viable treatment options.
Market Opportunity
The global nanotech market, in which Clene operates, was valued at $3.69 billion in 2022 and is projected to grow at a 33.1% CAGR from 2023 to 2030. This growth is driven by increased use in medical diagnostics and imaging, technological advancements, and substantial R&D funding. Clene's focus on developing innovative nanotechnology-based therapeutics positions the company to potentially capture a significant share of this expanding market.
Product Segments
Clene operates in two main product segments: drug development and dietary supplements.
Drug Development Segment: This is Clene's primary focus, centered on developing CSN drug candidates for CNS disorders. The lead candidate, CNM-Au8, is in development for ALS, MS, and PD.
Dietary Supplement Segment: Through its wholly-owned subsidiary, dOrbital, Inc., Clene generates revenue from the sale of dietary supplements. The company has an exclusive license agreement with 4Life Research, LLC to sell certain Clene-developed dietary supplements under the brand names Zinc Factor and Gold Factor.
For the nine months ended September 30, 2024, Clene reported $173,000 in product revenue from the sale of its dietary supplements, a 51% decrease compared to the same period in 2023. Royalty revenue from the 4Life license agreement was $78,000, a 40% decrease year-over-year. These decreases were due to the timing of purchases by 4Life under the supply and license agreements.
Geographic Markets
Clene primarily sells its dietary supplement products in the United States, which represents its main geographic market at present.
Conclusion
Clene Inc. (NASDAQ:CLNN) is a pioneering biopharmaceutical company at the forefront of neurodegenerative disease treatment using cutting-edge nanotech therapeutics. With a robust pipeline led by the promising CNM-Au8 candidate, Clene is positioned to potentially transform the treatment landscape for ALS, MS, and other debilitating CNS disorders.
The company's recent progress in securing regulatory guidance and strengthening its financial position, combined with its innovative approach and experienced management team, suggest that Clene is well-equipped to navigate the challenges of the biotech industry and deliver on its mission of improving patient outcomes. As Clene continues to advance its clinical programs and navigate the regulatory landscape, investors will closely monitor the company's ability to execute on its strategic objectives and capitalize on the significant opportunities within the neurodegenerative disease market.