Aileron Therapeutics, Inc., a clinical-stage biopharmaceutical company focused on developing therapies for orphan pulmonary and fibrosis indications, reported significant financial developments in its recent 10-Q filing for the quarter ending September 30, 2024. The company had 21,665,941 shares of common stock outstanding, reflecting a substantial increase from 4,885,512 shares at the end of 2023, primarily due to the conversion of Series X Preferred Stock and the issuance of shares related to the acquisition of Lung Therapeutics, Inc. on October 31, 2023.

As of September 30, 2024, Aileron reported cash and cash equivalents of $17,652,000, a slight increase from $17,313,000 at the end of 2023. However, the company indicated that this amount is insufficient to fund its operating expenses and capital expenditures for at least the next twelve months, raising substantial doubt about its ability to continue as a going concern. The accumulated deficit grew to $(310,419,000) from $(288,517,000) at the end of 2023.

The company experienced a significant increase in operating expenses, which totaled $6,071,000 for the three months ended September 30, 2024, compared to $1,983,000 for the same period in 2023. This increase was driven by research and development expenses, which surged to $3,722,000 from just $22,000 in the prior year, largely due to costs associated with the clinical programs acquired from Lung. The net loss for the quarter was $(5,847,000), compared to $(1,827,000) in the same quarter of 2023.

For the nine months ended September 30, 2024, Aileron reported a net loss of $(21,902,000), a significant increase from $(8,393,000) in the same period of 2023. The company’s net cash used in operating activities also rose to $(17,479,000) from $(9,417,000) year-over-year.

Strategically, Aileron has focused on advancing its clinical candidates, LTI-03 and LTI-01, with LTI-03 recently completing a Phase 1b trial showing positive topline data. The acquisition of Lung Therapeutics has shifted Aileron’s focus towards first-in-class medicines for orphan pulmonary and fibrosis indications, and the company is planning a Phase 2 clinical trial for LTI-03.

In terms of financing, Aileron raised approximately $17,675,000 through a public offering in May 2024, which contributed to a net increase in cash and cash equivalents. However, the company anticipates needing to raise additional capital through equity or debt financing, collaborations, or licensing arrangements to support its ongoing research and development efforts.