Item 2.02. Results of Operations and Financial Condition.
On April 3, 2023, Pardes Biosciences, Inc. (the Company) announced that as of
March 31, 2023, it had preliminary cash, cash equivalents and short-term
investments totaling approximately $172.4 million.
The Company's unaudited financial statements for the three months ended March
31, 2023 are not yet available. Accordingly, the information presented reflects
the Company's preliminary financial data subject to the completion of the
Company's financial closing procedures and any adjustments that may result from
the completion of the quarterly review of the Company's financial statements.
Actual financial results that will be reflected in the Company's Quarterly
Report on Form 10-Q for the three months ended March 31, 2023 when they are
completed and publicly disclosed may differ from the preliminary results
presented here.
The information in this Item 2.02 is being furnished and shall not be deemed
"filed" for the 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 it be deemed incorporated by reference into any filing made
by the Company under the Securities Act of 1933, as amended (the Securities
Act), or the Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.
Item 2.05. Costs Associated with Exit or Disposal Activities.
On March 31, 2023, the Board of Directors (the Board) of the Company approved a
reduction in workforce (the Plan) to align operations with the changes in the
Company's corporate strategy. Under the Plan, due to the Company's decision to
suspend its clinical development of pomotrelvir and winddown its research and
development activities, the Company is reducing headcount by approximately 85%
through a reduction in its workforce.
The Plan will take place in phases, with the first reduction in force occurring
in April 2023, and is anticipated to be completed in the second quarter of 2023.
The total cost related to the Plan is estimated to be approximately $5.7
million, all of which is cash-based expenditures related primarily to personnel
expenses such as salaries, one-time severance payments and other benefits. The
foregoing estimated amount does not include any non-cash charges associated with
stock-based compensation. The Company also expects to incur other costs
associated with the winddown of clinical and CMC operations and other
contractual costs, the amounts of which are not capable of being estimated in
good faith at this time. The Company expects to recognize substantially all of
the charges related to the Plan in the second quarter of 2023.
As the Plan is implemented, the Company's management will re-evaluate the
estimated costs and expenses set forth above and may revise the estimated
restructuring charge as appropriate, consistent with generally accepted
accounting principles. The Company may incur other charges, including contract
termination costs, and will record these expenses in the appropriate period as
they are determined. These estimates are subject to a number of assumptions, and
actual results may differ. The Company may also incur additional costs not
currently contemplated due to events that may occur as a result of, or that are
associated with, the Plan. If the Company subsequently determines that it will
incur additional material costs or charges or there are material differences
from the amount provided above, the Company will file an amendment to this
Current Report on Form 8-K (this Current Report) or, to the extent permissible,
include such information in its Quarterly Report on Form 10-Q for the three
months ended March 31, 2023 to disclose any such material costs, charges or
differences.
Item 7.01. Regulation FD Disclosure.
On April 3, 2023, the Company issued a press release reporting topline results
from its Phase 2 clinical trial of pomotrelvir, the Company's oral antiviral
drug candidate for the treatment of COVID-19. The full text of the press release
is attached as Exhibit 99.1 to this Current Report.
The information in this Item 7.01, including the attached Exhibit 99.1, is being
furnished and shall not be deemed "filed" for the purposes of Section 18 of the
Exchange Act, or otherwise subject to the liabilities of that section, nor shall
it be deemed incorporated by reference into any filing made by the Company under
the Securities Act or the Exchange Act, except as shall be expressly set forth
by specific reference in such a filing.
Item 8.01. Other Events.
On April 3, 2023, the Company announced topline results of its Phase 2 clinical
trial of pomotrelvir for the treatment of patients with mild to moderate
COVID-19. Pomotrelvir did not achieve the primary endpoint as measured by the
proportion of participants below the limit of detection for infectious
SARS-CoV-2 by infectious virus assay (IVA) on day three of treatment with
pomotrelvir versus with placebo. Pomotrelvir did not demonstrate meaningful
improvement over placebo in reduction from baseline of SARS-CoV-2 infectious
virus titer by IVA or in the reduction from baseline or proportion achieving
undetectable viral load by quantitative reverse transcriptase polymerase chain
reaction measured from mid-turbinate swabs.
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The median time to alleviation of the 14 U.S. Food and Drug Administration
guidance-defined and 12 (excluding loss of taste and smell) targeted COVID-19
symptoms were eight days and seven days, respectively, in both pomotrelvir and
placebo treated participants. The median time to alleviation of five key
COVID-19 symptoms (cough, stuffy or runny nose, low energy or tiredness, sore
throat, and feeling hot or feverish) was six days in both pomotrelvir and
placebo treated participants with median times to resolution of each individual
key symptom being two to five days and similar for pomotrelvir and placebo
treated participants.
There were no deaths and no participants experienced progression to severe
COVID-19. There were no drug-related adverse events, serious adverse events, or
adverse events leading to discontinuation in either treatment arm. Pomotrelvir
was well tolerated, with treatment-emergent, drug-related nausea occurring in
3.1% of participants, which represented the only adverse event occurring in
greater than 2% of pomotrelvir-treated participants.
The Phase 2 double-blind, randomized study evaluated the antiviral activity,
safety, and clinical efficacy of pomotrelvir compared with placebo in
non-hospitalized, symptomatic, otherwise healthy adults with mild-to-moderate
COVID-19 and a confirmed positive SARS-CoV-2 test. Participants were dosed
orally twice-daily at 700 mg (2 x 350 mg tablets) with food for five days.
Based upon the topline results from the Phase 2 clinical trial, the Company has
decided to suspend further clinical development of pomotrelvir and the Board has
initiated a review of a range of strategic alternatives that may include, but
are not limited to, an acquisition, merger, business combination or other
transaction. There can be no assurance that this review process will result in
the Company pursuing a transaction or that any transaction, if pursued, will be
completed on attractive terms or at all. The Company does not intend to comment
further unless or until the Board has approved a definitive course of action,
the review process is concluded, or it is determined that other disclosure is
appropriate.
Forward Looking Statement
This Current Report contains statements that relate to future events and
expectations and, as such, constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. When or if used
in this Current Report, the words "believe," "intend," "may," "plan,"
"possible," "predict," "should," "will," and similar expressions and their
variants, as they relate to the Company, may identify forward-looking
statements. All statements that reflect the Company's expectations, assumptions
or projections about the future, other than statements of historical fact, are
forward-looking statements, including, without limitation, statements regarding
the Company's preliminary cash, cash equivalents and short-term investments as
of March 31, 2023, the percentage of positions affected by the Plan, and the
estimated restructuring charges associated with, and the time frame for
completion of and recognition of charges associated with, the Plan, and the
Company's intent to review strategic alternatives. Any forward-looking
statements in this Current Report are based on management's current expectations
and beliefs and are subject to a number of risks, uncertainties and important
factors that may cause actual events or results to differ materially from those
expressed or implied by any forward-looking statements contained in this Current
Report, including, without limitation, risks associated with: the completion of
the quarterly review of the Company's financial statements for the quarter ended
March 31, 2023; volatility and uncertainty in the capital markets for
biopharmaceutical companies; the Company's ability to execute its planned
exploration and evaluation of strategic alternatives; availability of suitable
third parties with which to conduct contemplated strategic transactions; whether
the Company will be able to pursue a strategic transaction, or whether any
transaction, if pursued, will be completed on attractive terms or at all;
whether the Company's plans will provide the intended benefits and cost savings;
and other risks and uncertainties described under the heading "Risk Factors" in
the Company's Annual Report on Form 10-K for the year ended December 31, 2022
and other filings subsequently filed with the U.S. Securities and Exchange
Commission. The statements in this Current Report speak only as of the date of
this Current Report, even if subsequently made available by the Company on its
website or otherwise. The Company disclaims any intention or obligation to
update publicly any forward-looking statements, whether in response to new
information, future events, or otherwise, except as required by applicable law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Press Release by the Company dated April 3, 2023.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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