Arecor cuts costs as it seeks an injection of capital

Arecor has introduced cost control measures but if these don’t do the job then in the worst-case scenario the company may require a cash infusion as early as the third quarter of this year.

The company previously flagged its need for additional funding, “noting that the company is not yet profitable and there are inherent uncertainties in the timing and quantum of revenue growth.”

Arecor said recently it had a reasonable expectation of raising funds in the period to December 31 but added that this was not guaranteed. It said that, if needed, it could apply a number of cost mitigations.

Since announcing its results, Arecor says working capital requirements have accelerated – primarily as a result of the timing of potential pipeline revenue and an increase in costs.

The company expects revenue for 2024 to remain in line with consensus market expectations but adds that this remains dependent on revenue growth across all areas of the business.

This includes new potential licensing deals, increased Tetris Pharma sales and royalties from AT220, “the timing and magnitude of which are not all fully within the company's control.”

Since announcing what it calls highly positive results for its ultra-concentrated ultra-rapid acting insulin, AT278, which demonstrated superiority in a phase I clinical trial in overweight and obese people with type 2 diabetes, the board has concluded that the optimal value inflection for AT278 and value for shareholders is likely to be achieved through conducting an insulin pump study.

It says this should provide sufficient data for potential licensing partners, to further demonstrate the potential of AT278 to disrupt the market by enabling the next generation of truly miniaturised, longer-wear insulin pumps, a key focus for patients, physicians and the industry.

The company has not committed to any costs in connection with this study but believes that these data “would optimally position this product for strategic partnering.”

CEO Sarah Howell, said: “We believe the growth potential for the company remains compelling with a number of revenue and significant partnership opportunities. We are focused on addressing the funding requirements for the business to deliver this growth and to capture the value of our platform and insulin assets.”