Humacyte Inc.
08/11/2025 | Press release | Distributed by Public on 08/11/2025 15:01
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q ("Quarterly Report") and with our audited financial statements and the notes thereto included in our Annual Report. In addition, you should read the "Risk Factors" and "Information Regarding Forward-Looking Statements" sections of this Quarterly Report and our Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Unless the context indicates otherwise, references in this Quarterly Report to the "Company," "Humacyte," "we," "us," "our" and similar terms refer to Humacyte, Inc. (formerly known as Alpha Healthcare Acquisition Corp.) and its consolidated subsidiaries (Humacyte Global, Inc. and Humacyte Europe Limited) following the Merger (defined below).
Overview
We are a commercial-stage biotechnology platform company developing universally implantable, bioengineered human tissues at commercial scale, and in the first quarter of 2025 commenced the United States commercial launch of our first FDA-approved product. We are pioneering the development and manufacture of off-the-shelf, universally implantable, bioengineered human tissues, advanced tissue constructs and organ systems with the goal of improving the lives of patients and transforming the practice of medicine. We believe our regenerative medicine technology has the potential to overcome limitations in existing standards of care and address the lack of significant innovation in products that support tissue repair, reconstruction and replacement. We are leveraging our novel, scalable technology platform to develop proprietary bioengineered, acellular human tissues for use in the treatment of diseases and conditions across a range of anatomic locations in multiple therapeutic areas.
We are initially using our proprietary, scientific technology platform to engineer and manufacture ATEVs. On December 19, 2024, the FDA granted full approval for the ATEV under the brand name SymvessTMfor use in adults as a vascular conduit for extremity arterial injury when urgent revascularization is needed to avoid imminent limb loss, and autologous vein graft is not feasible. Our ATEVs are designed to be easily implanted into any patient without inducing a foreign body response or leading to immune rejection. We are developing a portfolio, or "cabinet", of ATEVs with varying diameters and lengths. The ATEV cabinet would initially target the vascular repair, reconstruction and replacement market, including use in vascular trauma, AV access for hemodialysis and PAD. We are also developing the ATEV for CABG and pediatric heart surgery. Over the longer term, we are developing our ATEV for the delivery of cellular therapies, including pancreatic islet cell transplantation to treat Type 1 diabetes (our BioVascular Pancreas or BVP). We will continue to explore the application of our technology across a broad range of markets and indications, including the development of urinary conduit, trachea, esophagus and other novel cell delivery systems.
For the ATEV, we believe there is substantial clinical demand for safe and effective vascular conduits to replace and repair blood vessels throughout the body. Vascular injuries resulting from trauma are common in civilian and military populations, frequently resulting in the loss of either life or limb. Existing treatment options in the vascular repair, reconstruction and replacement market include the use of autologous vessels and synthetic grafts, which we believe suffer from significant limitations. For example, the use of autologous veins to repair traumatic vascular injuries can lead to significant morbidity associated with the surgical wounds created for vein harvest and prolonged times to restore blood flow to injured limbs, leading to an increased risk of complications such as amputation and reperfusion injury. In addition, in many instances of vascular trauma the patient may not have adequate vein available, or the time between injury and treatment is too long to make autologous graft repair feasible. Synthetic grafts are often contraindicated in the setting of vascular trauma due to wound contamination that contributes to higher infection risk and can lead to prolonged hospitalization and limb loss. Given the competitive advantages our ATEVs are designed to have over existing vascular substitutes, we believe that ATEVs have the potential to become the standard of care and lead to improved patient outcomes and lower healthcare costs.
In addition to extremity vascular trauma, we and our collaborators are currently conducting Phase 3 and Phase 2 trials of our 6 millimeter ATEV in AV access for hemodialysis and PAD. We were granted Fast Track designation by the FDA for our 6 millimeter ATEV for use in AV access for hemodialysis in 2014. We also received the first Regenerative Medicine Advanced Therapy ("RMAT") designation from the FDA, for the creation of vascular access for performing hemodialysis, in March 2017. In May 2023, we were granted the RMAT designation for the ATEV for urgent arterial repair following extremity vascular trauma, and in June 2024, we were granted the RMAT designation for the ATEV for patients with advanced PAD. In addition, in 2018 our ATEV product candidate was assigned a priority designation by the Secretary of Defense under Public Law 115-92, enacted to expedite the FDA's review of products that are intended to diagnose, treat or prevent serious or life-threatening conditions facing American military personnel.
In September 2023, we announced positive topline results from our V005 Phase 2/3 trial in vascular trauma, and in December 2023, we filed a BLA for urgent arterial repair following extremity vascular trauma when synthetic graft is not indicated, and autologous vein use is not feasible. In February 2024, the FDA accepted the BLA filing, granted priority review and set a Prescription Drug User Fee Act date of August 10, 2024. On August 9, 2024, the FDA informed us that it required additional time to complete its review of the BLA for the vascular trauma indication. On December 19, 2024, the FDA granted full approval for Symvess (acellular tissue engineered vessel-tyod) for use in adults as a vascular conduit for extremity arterial injury when urgent revascularization is needed to avoid imminent limb loss, and autologous vein graft is not feasible. In February 2025, the FDA completed its required review of commercial batch information for Symvess and authorized us to commence commercial shipments and we shipped our first commercial products in March 2025.
In April 2023, we announced completion of enrollment of our V007 Phase 3 trial of the ATEV for use in AV access for hemodialysis. In July 2024, we announced positive topline results from our V007 Phase 3 trial, where the ATEV met the primary endpoints in the study. Dependent upon interim results from our ongoing V012 Phase 3 trial in women, we plan to submit a supplemental BLA for the ATEV to the FDA for an indication in AV access for hemodialysis in the second half of 2026.
We have incurred operating losses and negative cash flows from operations in each year since our inception in 2004. As of June 30, 2025 and December 31, 2024, we had an accumulated deficit of $684.5 million and $686.0 million, respectively, and working capital of $30.6 million and $27.9 million, respectively. Our operating losses were approximately $29.7 million and $52.9 million for the three and six months ended June 30, 2025, respectively, and $29.5 million and $56.1 million for the three and six months ended June 30, 2024, respectively.
Net cash flows used in operating activities were $55.0 million and $48.6 million during the six months ended June 30, 2025 and 2024, respectively. Substantially all of our operating losses resulted from costs incurred in connection with our research and development programs and from selling, general and administrative costs associated with our operations. We expect to incur substantial operating losses and negative cash flows from operations for the foreseeable future as we begin to commercialize Symvess and advance our product candidates.
As of June 30, 2025, we had cash and cash equivalents of $38.0 million and restricted cash of $50.4 million. We believe our cash and cash equivalents on hand and existing capacity under our Common Stock Purchase Agreement will be sufficient to fund operations for at least 12 months from the date of this Quarterly Report. See Note 1 - Organization and Description of Business in the notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information regarding this assessment.
Our need for additional capital will depend in part on the scope and costs of our development and commercial manufacturing activities, and the results of our commercial sales efforts. We recently received FDA approval to commercialize Symvess and have only recently generated revenue from the sale of commercialized products. Our ability to generate product revenue will depend on the successful development and commercialization of Symvess and our product candidates. Until such time, if ever, we expect to finance our operations through the use of existing cash and cash equivalents, the sale of equity, debt, financings, debt refinancings or restructurings or through potential collaborations with other companies, other strategic transactions or government and other grants. Adequate capital may not be available to us when needed or on acceptable terms. If we are unable to raise capital, we could be forced to delay, reduce, suspend or cease our research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition. See "Risk Factors" for additional information.
We expect to continue to incur significant expenses and to increase operating losses for at least the next several years. We anticipate that our expenses will increase substantially as we seek to:
•commercialize Symvess via U.S. market launch for indications in vascular trauma and, if approved, in AV access for hemodialysis;
•obtain marketing approval for our 6 millimeter ATEV in additional indications involving vascular repair, reconstruction and replacement, including in AV access for hemodialysis;
•scale out our manufacturing facility to the extent required to satisfy potential market demand for Symvess in the U.S. and our product candidates, following receipt of any regulatory approval;
•continue our preclinical and clinical development efforts;
•maintain, expand and protect our intellectual property portfolio;
•add operational, financial and management information systems and personnel to support, among other things, our product development and commercialization efforts and operations; and
•continue operating as a public company, which includes higher costs associated with hiring additional personnel, director and officer insurance premiums, audit and legal fees and expenses for compliance with public company reporting requirements under the Exchange Act and rules implemented by the SEC and Nasdaq.
Recent Developments
On April 28, 2025, we implemented a cost reduction action to reduce our workforce by 30 employees, cease recruitment of additional planned new hires, and reduce other operating expenses. Substantially all of the employees impacted by this plan were notified beginning May 7, 2025. We undertook these cost reductions to improve cash runway and to better align the Company's organizational structure with its top business objectives. We incurred aggregate charges representing one-time cash expenditure for severance and other employee termination benefits of approximately $0.7 million during the second quarter of 2025, of which $0.6 million was recognized in research and development expenses and $0.1 million was recognized in selling, general and administrative expenses on our condensed consolidated statements of operations and comprehensive income (loss). Humacyte estimates that it will incur savings due to the workforce and other operating cost reductions, and reduced capital expenditures, net of termination severance and benefits, totaling approximately $13.8 million in 2025 and up to approximately $38.0 million in 2026.
In October 2024, we submitted a New Technology Add-On Payment ("NTAP") application for Symvess to the Centers for Medicare and Medicaid Services ("CMS"). In July 2025, CMS declined to approve our NTAP application. We may engage in discussions with CMS regarding the application, but there is no guarantee that CMS will reverse its decision within a given timeframe, or at all. We believe that the potential impact of the NTAP on commercial success is limited as only approximately 4.3% of vascular trauma patients are covered under Medicare reimbursement.
Components of Results of Operations
Revenue
We generate product revenue from commercial sales of Symvess in the United States. Contract revenue consists of revenue related to a single contract with a customer to recover contract expenses. Contract revenue associated with each performance obligation in the contract is recognized as the research and development services are provided according to the actual costs incurred compared to the total costs expected to be incurred to satisfy the performance obligation.
Prior to the recent commercialization of the ATEVs in the vascular trauma indication, all of our revenue was derived from government and other grants. From inception through June 30, 2025, we have been awarded grants, including grants from the California Institute of Regenerative Medicine ("CIRM"), the National Institutes of Health ("NIH"), and the Department of Defense, to support our development, production scaling and clinical trials of our product candidates.
We may generate revenue in the future from government and other grants, payments from future license or collaboration agreements and from product sales of our ATEVs in the vascular trauma indication and any of our product candidates that receive marketing approval. We expect that any revenue we generate will fluctuate from quarter to quarter. If we fail to complete the development of, or obtain marketing approval for, our product candidates in a timely manner, our ability to generate future revenue, and our results of operations and financial position, would be materially adversely affected.
Cost of goods sold
We have inventory for which the production costs were recorded as an expense in 2024 prior to FDA approval. We expect cost of goods sold to normalize after utilization of this inventory. If market acceptance of Symvess does not occur at all or on a timely basis prior to the inventory shelf-life expiration, we may be required to write-off some or all inventory, which could affect our financial requirements and financial results. Cost of goods sold includes overhead related to unused production capacity, which was recorded as an expense during the three and six months ended June 30, 2025, as well as royalties expense based on our product revenue.
Research and Development Expenses
Since our inception, we have focused our resources on our research and development activities, including conducting preclinical studies and clinical trials, developing and refining our manufacturing process and activities related to regulatory filings for our product candidates. We recognize research and development expenses as they are incurred. Our research and development expenses consist primarily of:
•salaries and related overhead expenses for personnel in research and development functions, including stock-based compensation and benefits;
•fees paid to CROs and consultants, including in connection with our clinical trials, and other related clinical trial fees, such as for clinical site fees and investigator grants related to patient screening and treatment, conduct of clinical trials, laboratory work and statistical compilation and analysis;
•allocation of facility lease and maintenance costs;
•depreciation of leasehold improvements, laboratory equipment and computers;
•costs related to purchasing raw materials and producing our product candidates for clinical trials;
•costs related to compliance with regulatory requirements;
•costs related to our manufacturing development and expanded-capabilities initiatives; and
•license fees related to in-licensed technologies.
The majority of our research and development resources are currently focused on our Phase 2 and 3 clinical trials for our 6 millimeter ATEV and other work needed to obtain marketing approval for our 6 millimeter ATEV for use in AV access in hemodialysis and PAD in the United States. We have incurred and expect to continue to incur significant expenses in connection with these and our other clinical development efforts, including expenses related to regulatory filings, trial enrollment and conduct, data analysis, patient follow up and study report generation for our Phase 2 and Phase 3 clinical trials.
Direct expenses for our vascular trauma, AV access for hemodialysis and PAD indications include costs related to our clinical trials, including fees paid to CROs, consultants, clinical sites and investigators. Costs related to development activities which broadly support multiple programs using our technology platform, including personnel, materials and supplies, external services costs, and other internal expenses, such as facilities and overhead costs, are not allocated to individual research and development programs. Other research and development expenses include direct costs not identifiable with a specific product candidate, including costs associated with our research and development platform used across programs, process development, manufacturing analytics and preclinical research and development for prospective product candidates and new technologies.
The successful development of our preclinical and clinical product candidates is highly uncertain. At this time, we cannot estimate with any reasonable certainty the nature, timing or costs of the efforts that will be necessary to complete the remainder of the development of any of our preclinical or clinical product candidates or the period, if any, in which material net cash inflows from these product candidates may commence. This is due to the numerous risks and uncertainties associated with the development of our product candidates, including:
•the scope, rate of progress, expense and results of our preclinical development activities, our ongoing clinical trials and any additional clinical trials that we may conduct, and other research and development activities;
•successful patient enrollment in and the initiation and completion of clinical trials;
•the timing, receipt and terms of any marketing approvals from applicable regulatory authorities including the FDA and non-U.S. regulators;
•the extent of any required post-marketing approval commitments to applicable regulatory authorities;
•development and refinement of clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that it or its third-party manufacturers are able to successfully manufacture our product;
•obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;
•significant and changing government regulations;
•launching commercial sales of Symvess and our product candidates, if approved, whether alone or in collaboration with others;
•the degree of market acceptance of Symvess and any product candidates that obtain marketing approval; and
•maintaining a continued acceptable safety profile following approval of Symvess in the vascular trauma indication and in any other indications for which approval may be granted, or for any of our product candidates, if approved.
A change in the outcome of any of these variables could lead to significant changes in the costs and timing associated with the development of our product candidates. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate being required to conduct in order to complete the clinical development of any of our product candidates, or if we experience significant delays in the enrollment or the conduct of any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries and related costs for employees in executive, finance, human resources, commercialization, and administrative support functions, which also include stock-based compensation expenses and benefits for such employees. Other significant general and administrative expenses include facilities costs, professional fees for accounting and legal services and expenses associated with obtaining and maintaining patents.
We expect our general and administrative expenses will continue to increase for the foreseeable future to support our expanded infrastructure and increased costs of operating as a public company and as we commercialize Symvess in the United States and seek marketing approval for Symvess outside of the United States. These increases are expected to include increased employee-related expenses, increased sales and marketing expenses, and increased director and officer insurance premiums, audit and legal fees, and expenses for compliance with public company reporting requirements under the Exchange Act and rules implemented by the SEC, as well as Nasdaq rules.
Other Income (Expense), Net
Total other income (expense), net consists of (i) the change in fair value of the Contingent Earnout Liability that was accounted for as a liability as of the date of the Merger, and is remeasured to fair value at each reporting period, resulting in a non-cash gain or loss, (ii) interest income earned on our cash and cash equivalents, (iii) interest expense incurred on the Purchase Agreement (defined above) and finance leases, and (iv) the change in fair value of our derivative liabilities and asset including the private placement Common Stock warrant liabilities related to the Private Placement Warrants, which we assumed in connection with the Merger; Common Stock warrant liabilities related to our Registered Direct Offerings; the contingent derivative liability related to the Purchase Agreement; a liability related to a freestanding option agreement related to the Purchase Agreement; a derivative liability related to our agreement with JDRF; and a derivative asset related to our Common Stock Purchase Agreement, all of which are subject to remeasurement to fair value at each balance sheet date resulting in a non-cash gain or loss.
Results of Operations
Comparison of the Three Months Ended June 30, 2025 and 2024
| Three Months Ended June 30, | Change | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Product revenue, net | $ | 100 | $ | - | $ | 100 | 100 | % | |||||||||||||||
|
Contract revenue
|
201 | - | 201 | 100 | % | ||||||||||||||||||
| Total revenue | 301 | - | 301 | 100 | % | ||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of goods sold | 213 | - | 213 | 100 | % | ||||||||||||||||||
| Research and development | 22,006 | 23,753 | (1,747) | (7) | % | ||||||||||||||||||
| Selling, general and administrative | 7,809 | 5,746 | 2,063 | 36 | % | ||||||||||||||||||
| Total operating expenses | 30,028 | 29,499 | 529 | 2 | % | ||||||||||||||||||
| Loss from operations | (29,727) | (29,499) | (228) | 1 | % | ||||||||||||||||||
| Other income (expense), net | |||||||||||||||||||||||
| Interest income | 832 | 1,310 | (478) | (36) | % | ||||||||||||||||||
| Change in fair value of Contingent Earnout Liability | (5,470) | (25,571) | 20,101 | (79) | % | ||||||||||||||||||
| Change in fair value of derivatives | (748) | (388) | (360) | 93 | % | ||||||||||||||||||
| Interest expense | (2,545) | (2,515) | (30) | 1 | % | ||||||||||||||||||
| Total other expense, net | (7,931) | (27,164) | 19,233 | (71) | % | ||||||||||||||||||
| Net loss | $ | (37,658) | $ | (56,663) | $ | 19,005 | (34) | % | |||||||||||||||
Revenue
Total revenue was $0.3 million for the three months ended June 30, 2025, compared to no revenue for the three months ended June 30, 2024. Revenue for the three months ended June 30, 2025 consisted of $0.1 million of product revenue from sales of Symvess in the United States and $0.2 million of revenue earned related to research and development services pursuant to a research contract with a large medical technology company.
Cost of goods sold
Cost of goods sold was $0.2 million for the three months ended June 30, 2025 and includes overhead related to unused production capacity which was recorded as an expense during the period. There was no cost of goods sold for the three months ended June 30, 2024.
Research and Development Expenses
The following table discloses the breakdown of research and development expenses for the periods indicated:
| Three Months Ended June 30, | Change | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Direct Expenses | |||||||||||||||||||||||
| Vascular Trauma | $ | 185 | $ | 502 | $ | (317) | (63) | % | |||||||||||||||
| AV Access | 1,541 | 2,033 | (492) | (24) | % | ||||||||||||||||||
| PAD | - | 9 | (9) | (100) | % | ||||||||||||||||||
| Total | 1,726 | 2,544 | (818) | (32) | % | ||||||||||||||||||
| Unallocated Expenses | |||||||||||||||||||||||
| External services | 1,232 | 2,112 | (880) | (42) | % | ||||||||||||||||||
| Materials and supplies | 8,386 | 6,566 | 1,820 | 28 | % | ||||||||||||||||||
| Payroll and personnel expenses | 9,087 | 8,981 | 106 | 1 | % | ||||||||||||||||||
| Other research and development expenses | 1,575 | 3,550 | (1,975) | (56) | % | ||||||||||||||||||
| Total | 20,280 | 21,209 | (929) | (4) | % | ||||||||||||||||||
| Total research and development expenses | $ | 22,006 | $ | 23,753 | $ | (1,747) | (7) | % | |||||||||||||||
Research and development expenses were $22.0 million for the three months ended June 30, 2025, representing a decrease of $1.7 million, or 7%, from $23.8 million for the three months ended June 30, 2024. The decrease was driven by a $2.0 million decrease in other research and development expense related to the capitalization of overhead costs associated with the commercial manufacturing of Symvess, a $0.9 million decrease in external services and an $0.8 million decrease in clinical trials expense, partially offset by a $1.8 million increase in materials and supplies expense driven by an increase in manufacturing production runs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $7.8 million and $5.7 million for the three months ended June 30, 2025 and 2024, respectively. The increase in selling, general and administrative expenses compared to the prior period of $2.1 million, or 36%, was primarily driven by the commercial launch of Symvess and included a $1.9 million increase in payroll and personnel expenses.
Total Other Expense, net
Total other expense, net was $7.9 million for the three months ended June 30, 2025 compared to net expense of $27.2 million for the three months ended June 30, 2024. The decrease in net expense of $19.2 million during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily resulted from a $20.1 million decrease in the non-cash loss resulting from the remeasurement of the Contingent Earnout Liability during each period.
Comparison of the Six Months Ended June 30, 2025 and 2024
| Six Months Ended June 30, | Change | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Product revenue, net | $ | 247 | $ | - | 247 | 100 | % | ||||||||||||||||
|
Contract revenue
|
571 | - | 571 | 100 | % | ||||||||||||||||||
| Total revenue | 818 | - | 818 | 100 | % | ||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of goods sold | 360 | - | 360 | 100 | % | ||||||||||||||||||
| Research and development | 37,424 | 45,017 | (7,593) | (17) | % | ||||||||||||||||||
| Selling, general and administrative | 15,945 | 11,060 | 4,885 | 44 | % | ||||||||||||||||||
| Total operating expenses | 53,729 | 56,077 | (2,348) | (4) | % | ||||||||||||||||||
| Loss from operations | (52,911) | (56,077) | 3,166 | (6) | % | ||||||||||||||||||
| Other income (expense), net: | |||||||||||||||||||||||
| Interest income | 1,494 | 2,341 | (847) | (36) | % | ||||||||||||||||||
| Change in fair value of Contingent Earnout Liability | 44,261 | (30,164) | 74,425 | (247) | % | ||||||||||||||||||
| Change in fair value of derivatives | 14,182 | (328) | 14,510 | * | |||||||||||||||||||
| Interest expense | (5,545) | (4,331) | (1,214) | 28 | % | ||||||||||||||||||
| Total other income (expense), net | 54,392 | (32,482) | 86,874 | (267) | % | ||||||||||||||||||
| Net income (loss) | $ | 1,481 | $ | (88,559) | $ | 90,040 | (102) | % | |||||||||||||||
* Not meaningful
Revenue
Total revenue was $0.8 million for the six months ended June 30, 2025, compared to no revenue for the six months ended June 30, 2024. Revenue for the six months ended June 30, 2025 consisted of $0.2 million of product revenue from sales of Symvess in the United States and $0.6 million of revenue earned related to research and development services pursuant to a research contract with a large medical technology company.
Cost of goods sold
Cost of goods sold was $0.4 million for the six months ended June 30, 2025 and includes overhead related to unused production capacity which was recorded as an expense during the period. There was no cost of goods sold for the six months ended June 30, 2024.
Research and Development Expenses
The following table discloses the breakdown of research and development expenses for the periods indicated:
| Six Months Ended June 30, | Change | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Direct Expenses | |||||||||||||||||||||||
| Vascular Trauma | $ | 412 | $ | 1,465 | $ | (1,053) | (72) | % | |||||||||||||||
| AV Access | 2,744 | 3,025 | (281) | (9) | % | ||||||||||||||||||
| PAD | - | 139 | (139) | (100) | % | ||||||||||||||||||
| Total | 3,156 | 4,629 | (1,473) | (32) | % | ||||||||||||||||||
| Unallocated Expenses | |||||||||||||||||||||||
| External services | 2,897 | 3,425 | (528) | (15) | % | ||||||||||||||||||
| Materials and supplies | 8,386 | 12,019 | (3,633) | (30) | % | ||||||||||||||||||
| Payroll and personnel expenses | 18,632 | 18,142 | 490 | 3 | % | ||||||||||||||||||
| Other research and development expenses | 4,353 | 6,802 | (2,449) | (36) | % | ||||||||||||||||||
| Total | $ | 34,268 | $ | 40,388 | $ | (6,120) | (15) | % | |||||||||||||||
| Total research and development expenses | $ | 37,424 | $ | 45,017 | $ | (7,593) | (17) | % | |||||||||||||||
Research and development expenses were $37.4 million for the six months ended June 30, 2025, representing a decrease of $7.6 million, or 17%, from $45.0 million for the six months ended June 30, 2024. The decrease was primarily driven by a $3.6 million decrease in materials and supplies expense, primarily related to the capitalization of expenditures for inventory during the six months ended June 30, 2025 due to the commencement of commercial manufacturing to support the market launch of Symvess, a $2.4 million decrease in other research and development expenses related to the capitalization of overhead costs associated with the commercial manufacturing of Symvess and a $1.5 million decrease in clinical trials expense.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $15.9 million and $11.1 million for the six months ended June 30, 2025 and 2024, respectively. The increase in general and administrative expenses compared to the prior period of $4.9 million, or 44%, was primarily driven by the commercial launch of Symvess. Significant increases in expenses included a $4.1 million increase in payroll and personnel expenses and a $0.5 million increase in professional fees.
Total Other Income (Expense), net
Total other income, net was $54.4 million for the six months ended June 30, 2025, compared to net expense of $32.5 million for the six months ended June 30, 2024. The increase in net income of $86.9 million during the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily resulted from a $74.4 million increase in the non-cash gain resulting from the remeasurement of the Contingent Earnout Liability during each period.
Liquidity and Capital Resources
Sources of Liquidity
We have historically financed our operations primarily through the sale of equity securities and convertible debt, including pursuant to the 2024 Public Offering, 2025 Public Offering, October 2024 Registered Direct Offering, November Registered Direct Offering, proceeds from the PIPE Financing that occurred in connection with the Merger, borrowings under loan facilities, the Purchase Agreement, and, to a lesser extent, through grants from governmental and other agencies. Since our inception, we have incurred significant operating losses and negative cash flows. As of June 30, 2025 and December 31, 2024, we had an accumulated deficit of $684.5 million and $686.0 million, respectively.
As of June 30, 2025 and December 31, 2024, we had working capital of $30.6 million and $27.9 million, respectively. As of June 30, 2025 and December 31, 2024, we had cash and cash equivalents of $38.0 million and $44.9 million, respectively, and restricted cash of $50.4 million. We funded the restricted cash account on August 14, 2024, in accordance with our amended Purchase Agreement, of which $50.0 million is not subject to our unilateral control.
As of June 30, 2025, we had $47.5 million in remaining availability for sales of Common Stock under our Common Stock Purchase Agreement with Lincoln Park and $69.3 million in remaining availability for sales of Common Stock under our ATM Facility. Subsequent to June 30, 2025, we completed sales of shares under the ATM Facility that provided net proceeds of approximately $6.4 million.
As discussed above, on April 28, 2025, we implemented a cost reduction action to reduce our workforce by 30 employees, cease recruitment of additional planned new hires, and reduce other operating expenses. We undertook these cost reductions to improve cash runway and to better align the Company's organizational structure with its top business objectives. We believe our cash and cash equivalents on hand and existing capacity under our Common Stock Purchase Agreement will be sufficient to fund operations for at least twelve months from the issuance date of these interim financial statements. The future viability of the Company beyond that point is dependent on our ability to generate cash flows from the sale of Symvess and raise additional capital to finance our operations. See Note 1 - Organization and Description of Business to our accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information regarding our assessment. We believe that our longer-term working capital, planned research and development, capital expenditures and other general corporate funding requirements may be satisfied through the sale of equity, debt, financings, debt refinancings or restructurings or through potential collaborations with other companies, other strategic transactions or government or other grants. Our liquidity plans are subject to a number of risks and uncertainties, including those described in the sections entitled "Forward-Looking Statements" and "Risk Factors" in this Quarterly Report and our Annual Report. If we are unable to raise sufficient capital, we may be forced to delay, reduce, suspend or cease certain of our planned research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition.
On May 12, 2023, we entered into the Purchase Agreement with the Purchasers and another affiliate of Oberland Capital Management LLC, as agent for the Purchasers, to obtain financing in respect to the further development and commercialization of our ATEV, to repay our then outstanding credit facility with SVB, and for other general corporate purposes. Pursuant to the Purchase Agreement and subject to customary closing conditions, the Purchasers have purchased certain revenue interests from us in exchange for an aggregate investment amount of up to $150.0 million. Under the terms of the Purchase Agreement, $40.0 million of the Investment Amount, less certain transaction expenses, was funded on May 12, 2023, which was used to repay in full and retire our indebtedness under the our loan agreement with SVB, with the remaining proceeds funded to the Company. On March 11, 2024, $20.0 million of the Investment Amount was funded to the Company. On December 19, 2024, the FDA granted full approval for our BLA for the vascular trauma indication, and we elected not to draw the additional $40.0 million that became available under the Purchase Agreement. As of and subsequent to December 31, 2024, we are not entitled to draw on any further installments under the Purchase Agreement. See Note 7 - Revenue Interest Purchase Agreementto the condensed consolidated financial statements for additional details about this financing transaction.
On February 18, 2024, we agreed with the Purchasers and the Agent, to waive certain breaches related to, and extend the deadline for certain post-closing obligations under, the Purchase Agreement, including the requirement for us to deliver a leasehold mortgage in favor of the Agent over our headquarters. On May 8, 2024, we reached an agreement with the Purchasers to amend the Purchase Agreement to remove requirements related to the leasehold mortgage. In exchange for the removal of this requirement, on August 14, 2024 we funded an account in the amount of $54.0 million, over which the Agent has certain consent and other rights to $50.0 million of the funds. See Note 7 for further information.
On February 29, 2024, we entered into an underwriting agreement in connection with the 2024 Public Offering. The net proceeds to us from the 2024 Public Offering were approximately $43.0 million, after deducting underwriting discounts and commissions and offering expenses. The 2024 Public Offering closed on March 5, 2024.
On September 24, 2024, we entered into the Common Stock Purchase Agreement with Lincoln Park for an equity line financing, which provides that, subject to the terms and conditions set forth in the Common Stock Purchase Agreement, we have the sole right, but not the obligation, to sell to Lincoln Park shares of Common Stock having an aggregate value of up to $50.0 million over a 24-month period. We control the timing and amount of any sales to Lincoln Park. As of June 30, 2025, we had completed sales of shares under the Common Stock Purchase Agreement that provided $2.5 million in gross proceeds, and as of June 30, 2025 we had $47.5 million in remaining availability for sales of our Common Stock under our Common Stock Purchase Agreement with Lincoln Park.
On October 4, 2024, we entered into a securities purchase agreement with an institutional investor pursuant to which the investor purchased approximately $30.0 million of Common Stock and warrants in the October 2024 Registered Direct Offering. The net proceeds to us from the October 2024 Registered Direct Offering were approximately $28.0 million, after deducting placement agent's fees and offering expenses of approximately $2.0 million. The October 2024 Registered Direct Offering closed on October 7, 2024.
On November 13, 2024, we entered into a securities purchase agreement with an institutional investor pursuant to which the investor purchased approximately $15.0 million of Common Stock and warrants in the November 2024 Registered Direct Offering. The net proceeds to us from the November 2024 Registered Direct Offering were approximately $14.9 million after deducting offering expenses of approximately $0.1 million. The November 2024 Registered Direct Offering closed on November 15, 2024.
On March 25, 2025, we entered into an underwriting agreement in connection with the 2025 Public Offering. The net proceeds to us from the 2025 Public Offering were approximately $46.7 million, after deducting underwriting discounts and commissions and offering expenses. The 2025 Public Offering closed on March 27, 2025.
ATM Facility
On September 1, 2022, we entered into the ATM Facility for the sale from time to time of up to $80.0 million of shares of Common Stock. As of June 30, 2025, we have sold an aggregate of 2,633,466 shares of Common Stock under the ATM Facility at an average price of $4.08 per share for net proceeds of approximately $10.4 million after deducting sales commissions of approximately $0.3 million. As of June 30, 2025, we had $69.3 million in remaining availability for sales of Common Stock under the ATM Facility. From June 30, 2025 through August 8, 2025, the Company sold an aggregate of 2,492,410 shares of Common Stock under the ATM Facility at an average price of $2.64 for net proceeds of approximately $6.4 million, after deducting sales commissions of approximately $0.2 million.
Material Cash Requirements
Our known material cash requirements include: (1) the purchase of supplies and services that are primarily for research and development; (2) repayments pursuant to the Purchase Agreement; (3) employee wages, benefits, and incentives; (4) financing and operating lease payments (for additional information see below), and (5) payments under our JDRF Agreement (see Note 11 - Commitments and Contingenciesto our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report). We have also entered into contracts with CROs primarily for clinical trials. These contracts generally provide for termination upon limited notice, and therefore we believe that our non-cancellable obligations under these agreements are not material. Moreover, we may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, for example, legal contingencies, uncertain tax positions, and other matters.
As of June 30, 2025, we had non-cancellable purchase commitments of $24.3 million for supplies and services that are primarily for research and development. We have existing license agreements with Duke University and Yale University, a distribution agreement with Fresenius Medical Care and our JDRF Agreement. The amount and timing of any potential milestone payments, license fee payments, royalties and other payments that we may be required to make under these agreements are unknown or uncertain at June 30, 2025. For additional information regarding our agreement with Fresenius Medical Care, see Note 12 - Related Party Transactions to our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report. For additional information regarding our agreements with Duke University, Yale University and JDRF, see Note 11 - Commitments and Contingencies to our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report.
Revenue Interest Purchase Agreement
On May 12, 2023, we entered into the Purchase Agreement and repaid in full all of the then-existing obligations under our loan agreement with SVB. Under the Purchase Agreement, as of June 30, 2025, we had $68.5 millionrecorded as a revenue interest liability on our condensed consolidated financial statements. For additional information regarding repayment, see Note 7 - Revenue Interest Purchase Agreement to our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report.
Leases
Our finance leases relate to our headquarters facility containing our manufacturing, research and development and general and administrative functions, which was substantially completed in June 2018 and is being leased through May 2033, and our operating lease relates to the land lease associated with our headquarters. Our future contractual obligations under our lease agreements as of June 30, 2025 are as follows:
| ($ in thousands) | Total |
Less than 1 year |
1 - 3 years
|
3 - 5 years
|
More than 5 years |
||||||||||||||||||||||||
|
Finance leases
|
$ | 19,339 | $ | 4,260 | $ | 5,945 | $ | 4,516 | $ | 4,618 | |||||||||||||||||||
|
Operating lease
|
731 | 105 | 210 | 211 | 205 | ||||||||||||||||||||||||
Future Funding Requirements
We expect to incur significant expenses in connection with our ongoing activities as we seek to (i) commercialize Symvess and seek marketing approval for Symvess in additional indications and for our product candidates in the United States and to obtain marketing approval for our 6 millimeter ATEV outside of the United States, (ii) continue clinical development of our 6 millimeter ATEV for use in hemodialysis AV access and submit a BLA for FDA approval of an indication in AV access for hemodialysis, (iii) advance our pipeline in major markets, including PAD Phase 3 trials and continue preclinical development and advance to planned clinical studies in CABG and BVP for diabetes, and (iv) expand our manufacturing facility as required to satisfy market demand. We will need additional funding in connection with these activities.
Our future funding requirements, both short-term and long-term, will depend on many factors, including:
•the cost and timing of our future commercialization activities, including product manufacturing, marketing and distribution for Symvess in the United States, and any other product candidate for which we receive marketing approval in the future;
•the amount and timing of revenues that we receive from commercial sales of Symvess and any product candidates for which we receive marketing approval;
•the progress and results of our clinical trials and interpretation of those results by the FDA and other regulatory authorities;
•the cost, timing and outcome of regulatory review of our product candidates, particularly for marketing approval of Symvess outside of the United States and of our product candidates in the United States;
•the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our additional product candidates;
•the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and
•the costs of operating as a public company, including hiring additional personnel as well as increased director and officer insurance premiums, audit and legal fees, and expenses for compliance with public company reporting requirements under the Exchange Act and rules implemented by the SEC and Nasdaq.
Until such time, if ever, as we are able to successfully commercialize Symvess and to develop and commercialize our product candidates, we expect to continue financing our operations through the sale of equity, debt, financings, debt refinancings or restructurings or through potential collaborations with other companies, other strategic transactions or government or other grants. Adequate capital may not be available to us when needed or on acceptable terms. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures. Debt financing would also result in fixed payment obligations. If we are unable to raise capital, we plan to implement a program that delays, reduces, suspends or ceases our planned capital expenditures, research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition.
Our principal use of cash in recent periods has been primarily to fund our operations, including the clinical and preclinical development of our product candidates. Our future capital requirements, both short-term and long-term, will depend on many factors, including the progress and results of our clinical trials and preclinical development, timing and extent of spending to support development efforts, cost and timing of future commercialization activities, and the amount and timing of revenues that we receive from commercial sales.
See the section of our Annual Report entitled "Risk Factors" for additional risks associated with our substantial capital requirements.
Cash Flows
The following table shows a summary of our cash flows for each of the periods shown below:
| Six Months Ended June 30, | |||||||||||
| ($ in thousands) | 2025 | 2024 | |||||||||
| Net income (loss) | $ | 1,481 | $ | (88,559) | |||||||
|
Non-cash adjustments to reconcile net income (loss) to net cash used in operating activities(1):
|
(45,533) | 40,523 | |||||||||
| Changes in operating assets and liabilities: | (10,962) | (602) | |||||||||
|
Net cash used in operating activities
|
(55,014) | (48,638) | |||||||||
|
Net cash used in investing activities
|
(796) | (575) | |||||||||
|
Net cash provided by financing activities
|
48,905 | 62,328 | |||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (6,905) | $ | 13,115 | |||||||
| Cash, cash equivalents and restricted cash at the beginning of the period | $ | 95,290 | $ | 80,801 | |||||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | 88,385 | $ | 93,916 | |||||||
___________________________
(1)Primarily includes depreciation, amortization related to our leases, stock-based compensation expense, non-cash interest expense related to our revenue interest liability and our JDRF Award liability, and the changes in fair value of our Contingent Earnout Liability and our derivative liabilities and asset.
Cash Flow from Operating Activities
The increase in net cash used in operating activities from the six months ended June 30, 2024to the six months ended June 30, 2025 was primarily due to increased spending on preclinical, clinical and commercial activities as well as payroll and personnel expenses, expansion of clinical development of the ATEV for use in AV access, and our commercial launch of Symvess.
Cash Flow from Investing Activities
Net cash used in investing activities for the six months ended June 30, 2025 and June 30, 2024 consisted of purchases of property and equipment.
Cash Flow from Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2025 consisted primarily of $46.7 million of net proceeds from our 2025 Public Offering. Net cash provided by financing activities for the six months ended June 30, 2024 consisted primarily of $43.0 million of net proceeds from our 2024 Public Offering and $19.5 million of proceeds from the Purchase Agreement.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in SEC rules and regulations.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our unaudited condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and disclosure of contingent liabilities. We base our estimates and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates based on different assumptions, judgments, or conditions.
An accounting estimate or assumption is considered critical if both (a) the nature of the estimate or assumption involves a significant level of estimation uncertainty, and (b) the impact within a reasonable range of outcomes of the estimate and assumption is material to our financial condition. There have been no material changes to our critical accounting policies and estimates as compared to those disclosed in our audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023, included in our Annual Report.
Emerging Growth Company and Smaller Reporting Company Status
We are an "emerging growth company" as defined in the Jumpstart our Business Startups Act of 2012 (the "JOBS Act"), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies until it is no longer an emerging growth company. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. We expect to use the extended transition period and, therefore, while we are an emerging growth company we will not be subject to new or revised accounting standards at the same time that they become applicable to other public companies that are not emerging growth companies, unless we choose to early adopt a new or revised accounting standard. This may make it difficult or impossible to compare our financial results with the financial results of another public company because of the potential differences in accounting standards used.
Additionally, we are a "smaller reporting company" as defined in Item 10(f)(1) of Regulation S-K under the Exchange Act ("Regulation S-K"), and may continue to qualify as such even after we no longer qualify as an emerging growth company. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company if (1) the market value of Common Stock held by non-affiliates is less than $250 million as of the last business day of the second fiscal quarter, or (2) our annual revenues in our most recent fiscal year completed before the last business day of its second fiscal quarter are less than $100 million and the market value of Common Stock held by non-affiliates is less than $700 million as of the last business day of the second fiscal quarter.
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