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GRI Bio, Inc. 10-K Analysis & Summary – 3/14/2025

⚠️This is not investment advice.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️

GRI Bio, Inc.

Filing date:

03/14/2025

TLDR:

ELI5:

GRI Bio is a company trying to make new medicines for diseases where the body’s immune system is not working correctly. They don’t have much money and need to find more to keep going, but if their medicines work, they could help a lot of people.

Accession #:

0001824293-25-000050

Published on

Analyst Summary

  • GRI Bio is a clinical-stage biopharmaceutical company focused on therapies for inflammatory, fibrotic, and autoimmune disorders, targeting iNKT and dNKT cells.
  • The company’s lead product candidate, GRI-0621, is in Phase 2a trial for idiopathic pulmonary fibrosis (IPF), with topline results expected in Q3 2025.
  • GRI-0803 is in preclinical development for autoimmune disorders like SLE.
  • The company reported a net loss of $8.2 million in 2024, compared to $13.0 million in 2023, with an accumulated deficit of $39.7 million.
  • Cash and cash equivalents were $5.0 million as of December 31, 2024, expected to fund operations into the second quarter of 2025.
  • The company’s auditor has expressed substantial doubt about its ability to continue as a going concern.
  • Management acknowledges the need for additional capital and the risks associated with securing funding.
  • Return on Assets (ROA): -143.01%
  • Return on Equity (ROE): -203.55%
  • Earnings Per Share (EPS): $(55.21)
  • Current Ratio: 3.43
  • Debt-to-Equity Ratio: 0.42
  • Interest Coverage Ratio: 329.28
  • Price-to-Earnings Ratio (P/E): -383.53
  • Price-to-Book Ratio (P/B): 780.67
  • Enterprise Value to EBITDA (EV/EBITDA): -382.15
  • Net Income Growth: -37.05%
  • EPS Growth: -98.90%

Opportunities and Risks

  • Financial Risk: Limited cash runway and dependence on external funding.
  • Clinical Trial Risk: Uncertainty in clinical trial results for GRI-0621 and GRI-0803.
  • Regulatory Risk: Potential delays or unfavorable decisions in regulatory approvals.
  • Commercialization Risk: Challenges in achieving market acceptance and securing reimbursement.
  • Reliance on Third Parties: Dependence on CROs and contract manufacturers.
  • Cybersecurity Risk: Risks related to cyberattacks, compromises, cybersecurity incidents, or other disruptions.
  • GRI-0621 in IPF: Positive Phase 2a trial results could lead to significant value creation.
  • GRI-0803 in SLE: Successful development could address a large market.
  • NKT Cell Platform: Expertise in NKT cell biology could lead to additional product candidates.
  • Strategic Collaborations: Partnerships could provide funding and expertise.

Potential Implications

Company Performance

  • The company’s ability to continue operations depends on securing additional funding.
  • Positive clinical trial results for GRI-0621 are crucial for future success.
  • Successful development of GRI-0803 could expand the company’s product portfolio.
  • Strategic collaborations could accelerate development and commercialization.

Stock Price

  • Positive results from the Phase 2a trial for GRI-0621 could significantly increase the stock price.
  • Failure to secure additional funding could negatively impact the stock price.
  • Delays in regulatory approvals or unfavorable regulatory decisions could decrease the stock price.

GRI Bio, Inc. (CK:0001824293) 10-K Filing Analysis – Fiscal Year Ended December 31, 2024

Executive Summary

This report analyzes GRI Bio, Inc.’s 10-K filing for the fiscal year ended December 31, 2024. GRI Bio is a clinical-stage biopharmaceutical company focused on developing therapies for inflammatory, fibrotic, and autoimmune disorders, primarily targeting iNKT and dNKT cells. The company is currently focused on GRI-0621 for IPF and GRI-0803 for SLE. The company faces significant financial challenges, as highlighted by the auditor’s going concern warning. While the pipeline shows promise, the company’s future hinges on securing additional funding and achieving clinical milestones. Given the current financial situation and the inherent risks in drug development, the overall assessment is HOLD. Further positive clinical data and successful fundraising are needed to improve the outlook.

Recommendations:

  • Monitor Clinical Trial Progress: Closely track the progress of the Phase 2a trial for GRI-0621 in IPF, with topline results expected in Q3 2025.
  • Assess Fundraising Efforts: Evaluate the company’s ability to secure additional funding in the near term.
  • Review Risk Factors: Pay close attention to the risk factors outlined in the 10-K, particularly those related to financial position and reliance on third parties.

Company Overview

GRI Bio, Inc. is a clinical-stage biopharmaceutical company (SIC Code 2834) focused on discovering, developing, and commercializing innovative therapies that target serious diseases associated with dysregulated immune responses. Their lead product candidate, GRI-0621, is being developed for idiopathic pulmonary fibrosis (IPF). They also have GRI-0803 in preclinical development for autoimmune disorders like SLE. The company has a limited operating history and has incurred significant net losses since inception. Their auditor has expressed substantial doubt about their ability to continue as a going concern.

Financial Statement Analysis

Key Financial Data

  • Net Loss: $8.2 million (2024) vs. $13.0 million (2023)
  • Cash and Cash Equivalents: $5.0 million (December 31, 2024)
  • Accumulated Deficit: $39.7 million (December 31, 2024)

Key Ratios and Trends

The company’s financial statements reveal a concerning trend of net losses and a reliance on external funding. The decrease in net loss from 2023 to 2024 is primarily due to decreased general and administrative expenses, but research and development expenses increased. The company’s cash position is precarious, with existing cash and cash equivalents only expected to fund operations into the second quarter of 2025.

Cash Flow Analysis

  • Operating Activities: Negative cash flow, indicating the company is not generating sufficient cash from its core business.
  • Financing Activities: Positive cash flow, driven by proceeds from equity offerings and warrant exercises. This highlights the company’s dependence on external financing.

Uncommon Metrics

The filing does not explicitly disclose customer acquisition costs or churn rates, as the company is pre-revenue. However, the company does discuss employee turnover and the importance of retaining key personnel as a risk factor.

Management’s Discussion and Analysis (MD&A) Insights

Management acknowledges the company’s need for additional capital and the potential risks associated with securing funding. They highlight the progress of GRI-0621’s Phase 2a trial in IPF and plans to advance GRI-0803 into Phase 1 studies. The MD&A emphasizes the company’s strategy to focus on NKT cell biology and expand its product portfolio. However, the narrative is tempered by the going concern warning and the inherent uncertainties in drug development.

Risk and Opportunity Assessment

Key Risks

  • Financial Risk: The company’s limited cash runway and dependence on external funding pose a significant risk to its ability to continue operations.
  • Clinical Trial Risk: The success of GRI-0621 and GRI-0803 depends on positive clinical trial results, which are inherently uncertain.
  • Regulatory Risk: Delays in regulatory approvals or unfavorable regulatory decisions could significantly impact the company’s prospects.
  • Commercialization Risk: Even if approved, the company faces challenges in achieving market acceptance and securing adequate reimbursement for its product candidates.
  • Reliance on Third Parties: The company’s reliance on CROs and contract manufacturers exposes it to risks related to their performance and compliance.
  • Cybersecurity Risk: The company faces risks related to cyberattacks, compromises, cybersecurity incidents, or other disruptions, which could result in the compromise of sensitive or proprietary information, lead to operational or service interruption, harm our reputation, and subject us to litigation, fines and other significant financial and legal exposure, and other material and adverse consequences.

Potential Opportunities

  • GRI-0621 in IPF: Positive results from the Phase 2a trial could lead to significant value creation, given the unmet need in IPF treatment.
  • GRI-0803 in SLE: Successful development of GRI-0803 for SLE could address a large market with limited treatment options.
  • NKT Cell Platform: The company’s expertise in NKT cell biology could lead to the discovery and development of additional product candidates.
  • Strategic Collaborations: Partnerships with larger pharmaceutical companies could provide funding and expertise to accelerate development and commercialization.

Conclusion and Actionable Insights

GRI Bio is a high-risk, high-reward investment. The company’s innovative approach to targeting NKT cells holds promise, but its financial situation is precarious. Investors should closely monitor the company’s clinical trial progress and fundraising efforts. A positive outcome in the Phase 2a trial for GRI-0621 and successful financing would significantly improve the company’s outlook.

Disclaimer: This analysis is based solely on the provided SEC filing and does not constitute financial advice. Investors should conduct their own due diligence before making any investment decisions.

GRI Bio, Inc. experienced a net loss, although it was reduced compared to the previous year. The company significantly increased its cash position through financing activities. Operating expenses remain high relative to revenue, contributing to ongoing losses.

Financial Ratio and Metric Analysis

Profitability

  • Gross Profit Margin: Not applicable as there is no revenue.
  • Operating Profit Margin:

    • Metric: (Loss from Operations) / Revenue. Since there is no revenue, this is not applicable.
  • Net Profit Margin:

    • Metric: (Net Loss) / Revenue. Since there is no revenue, this is not applicable.
  • Return on Assets (ROA):

    • Metric: Net Loss / Total Assets = (-8,207) / 5,739 = -143.01%
  • Return on Equity (ROE):

    • Metric: Net Loss / Total Stockholders’ Equity = (-8,207) / 4,032 = -203.55%
  • Earnings Per Share (EPS):

    • Metric (Basic and Diluted): $(55.21)

Liquidity

  • Current Ratio:

    • Metric: Current Assets / Current Liabilities = 5,615 / 1,636 = 3.43
  • Quick Ratio (Acid-Test Ratio):

    • Metric: (Current Assets – Inventory) / Current Liabilities. Since there is no inventory, it is the same as the current ratio = 3.43
  • Cash Ratio:

    • Metric: Cash and Cash Equivalents / Current Liabilities = 5,028 / 1,636 = 3.07

Solvency/Leverage

  • Debt-to-Equity Ratio:

    • Metric: Total Liabilities / Total Stockholders’ Equity = 1,707 / 4,032 = 0.42
  • Debt-to-Assets Ratio:

    • Metric: Total Liabilities / Total Assets = 1,707 / 5,739 = 0.30
  • Interest Coverage Ratio (Times Interest Earned):

    • Metric: Earnings Before Interest and Taxes (EBIT) / Interest Expense. EBIT = Net Loss – Interest Expense = -8,207 – 25 = -8,232. Interest Expense = -25. Interest Coverage Ratio = -8,232 / -25 = 329.28

Activity/Efficiency

  • Inventory Turnover: Not applicable as the company does not appear to hold significant inventory.
  • Days Sales Outstanding (DSO): Not applicable as there are no sales.
  • Days Payable Outstanding (DPO): Not applicable due to lack of cost of goods sold data.
  • Asset Turnover:

    • Metric: Revenue / Total Assets. Since there is no revenue, this is 0.

Valuation

  • Price-to-Earnings Ratio (P/E):

    • Metric: Market Cap / Net Income. Market Cap = Stock Price * Shares Outstanding = 5.99 * 525,485 = 3,147,655.15. Net Income = -8,207. P/E Ratio = 3,147,655.15 / -8,207 = -383.53
  • Price-to-Book Ratio (P/B):

    • Metric: Market Cap / Book Value of Equity. Book Value of Equity = Total Stockholders’ Equity = 4,032. P/B Ratio = 3,147,655.15 / 4,032 = 780.67
  • Price-to-Sales Ratio (P/S):

    • Metric: Market Cap / Revenue. Since there is no revenue, this is not applicable.
  • Enterprise Value to EBITDA (EV/EBITDA):

    • Metric: EV / EBITDA. EV = Market Cap + Total Debt – Cash. Market Cap = 3,147,655.15. Total Debt = 1,707. Cash = 5,028. EV = 3,147,655.15 + 1,707 – 5,028 = 3,144,334.15. EBITDA = Net Income – Interest – Taxes + Depreciation and Amortization = -8,207 – 25 + 4 = -8,228. EV/EBITDA = 3,144,334.15 / -8,228 = -382.15

Growth Rates

  • Revenue Growth: Not applicable as there is no revenue.
  • Net Income Growth:

    • Metric: (Net Income Current Year – Net Income Previous Year) / Net Income Previous Year = (-8,207 – (-13,037)) / -13,037 = 4,830 / -13,037 = -37.05%
  • EPS Growth:

    • Metric: (EPS Current Year – EPS Previous Year) / EPS Previous Year = (-55.21 – (-5,018.09)) / -5,018.09 = 4,962.88 / -5,018.09 = -98.90%

Other Relevant Metrics

No company-specific KPIs or non-GAAP metrics were provided in the extracted data.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️