Prometheus Biosciences has released its Q1 2023 earnings, reporting a net loss per share of USD 0.86, beating analyst expectations by 11.6% YoY. Net losses for the quarter increased 27.5% YoY to USD 40.8 million amid higher operating expenses. 

The company is a clinical-stage biotechnology company that is yet to generate any revenue from drug sales. However, it reported collaboration and license revenue of USD 1.1 million, compared with USD 3.9 million in Q1 2022, primarily due to the timing of Falk Collaboration development efforts, subject to 25% reimbursement. 

Total operating expenses rose 38.3%YoY to USD 40.9 million for Q1 2023 due to higher R&D expenses (up 30.5% YoY) related to the preparation for the global Phase III clinical trials for PRA023, as well as the ongoing Phase II clinical trial for the SSc-ILD indication and the Phase I clinical trial of PRA052. General and administrative expenses for the quarter was USD 13.4 million (up 65.4% YoY), primarily due to increased headcount and increased stock compensation expense.

During the quarter Merck and Prometheus Biosciences entered a definitive agreement under which Merck, through a subsidiary, plans to acquire Prometheus for USD 200 per share in an all-cash transaction for a total equity value of approximately USD 10.8 billion. The transaction is expected to close in Q3 2023.

As of March 31, 2023, the company’s cash, cash equivalents, and investments stood at USD 713.7 million, compared with USD 695.8 million at the end of December 2022. The company did not provide guidance for 2023.