Clene Inc. Annual Report: Key Insights for Investors (Year Ended December 31, 2025)

This report offers a detailed look at Clene Inc.'s performance and strategic position for the year ending December 31, 2025. As a clinical-stage biopharmaceutical company, Clene's journey centers on its drug development pipeline, the substantial capital required to advance it, and the inherent risks and potential rewards.

Business Overview

Clene Inc. is a clinical-stage biopharmaceutical company dedicated to developing new treatments for neurodegenerative diseases. The company primarily focuses on advancing its lead drug candidate, CNM-Au8, a gold nanocrystal suspension, through late-stage clinical trials. Clene aims to address critical unmet medical needs in conditions like Amyotrophic Lateral Sclerosis (ALS), Multiple Sclerosis (MS), and Parkinson's disease by targeting cellular bioenergetics and oxidative stress.

Key Developments and Strategic Financing

1. Reverse Stock Split (July 2024): To maintain its listing on the Nasdaq Capital Market, Clene executed a 1-for-20 reverse stock split in July 2024. This action reduced the number of outstanding shares and proportionally increased the per-share price, though it did not change the total value of shareholders' investments at the time. The split signaled previous challenges in maintaining a minimum share price.

2. Aggressive Capital Raising: Clene continued to rely heavily on external financing to fund its operations and clinical trials, leading to substantial shareholder dilution:

   • Equity Offerings:
     • Throughout 2025, Clene sold approximately 1.5 million shares through an "at-the-market" equity offering, generating net proceeds of $12.5 million.
     • In October 2025, a public offering of common stock and pre-funded warrants resulted in the issuance of 3.2 million shares (including those from exercised pre-funded warrants) and generated net proceeds of approximately $25.0 million. (Pre-funded warrants allow investors to pay a lower upfront price for shares, with the remainder paid upon exercise.)
     • Post-year-end, in January 2026, the company completed another public offering, raising an additional $18.0 million in net proceeds by issuing approximately 2.8 million shares and associated warrants.
   • Convertible Notes (SSCP Notes): In March 2025, Clene issued Senior Secured Convertible Promissory Notes (SSCP Notes) with a total principal amount of $10.0 million. These notes convert into common stock at $5.00 per share. If fully converted, they could add 2.0 million shares to the outstanding share count, further diluting existing shareholders. An August 2025 amendment adjusted certain terms, including extending the maturity date to October 2026 and modifying conversion features.
   • Warrants: The exercise of pre-funded warrants from the October 2024 offering led to the issuance of 441,920 new shares in 2025, generating $2.2 million in proceeds. Other warrants from earlier offerings expired unexercised, preventing additional dilution from those specific instruments.

3. Significant Grant Funding: Clene secured crucial non-dilutive funding for its clinical programs:

   • The National Multiple Sclerosis Society awarded a grant of up to $2.5 million to support the VISIONARY-MS and REPAIR-MS clinical trials for its lead candidate, CNM-Au8, in Multiple Sclerosis.
   • Clene also received additional NIH grants totaling approximately $1.8 million, which helped offset research and development costs for CNM-Au8 in other neurological indications. This external validation and funding serve as positive indicators for the scientific merit of Clene's research.

Financial Performance Snapshot (Year Ended December 31, 2025)

Clene Inc. remains a pre-revenue company, with its focus squarely on research and development.

• Net Loss: The company reported a net loss of $65.2 million for 2025, an increase from $58.9 million in 2024. This rise primarily reflects higher R&D expenses and general administrative costs.
• Cash Position: As of December 31, 2025, Clene held $35.5 million in cash and cash equivalents, a decrease from $48.1 million at the end of 2024, despite significant capital raises.
• Cash Burn: Cash used in operating activities totaled $55.0 million in 2025, up from $49.5 million in 2024, demonstrating the intensive investment in clinical development.
• Research & Development (R&D) Expenses: R&D expenses increased to $42.8 million in 2025 from $38.5 million in 2024, driven by ongoing clinical trials for CNM-Au8 in ALS, MS, and Parkinson's disease.
• General & Administrative (G&A) Expenses: G&A expenses were $20.5 million in 2025, compared to $19.0 million in 2024, covering corporate overhead, legal, and administrative functions.
• Debt Obligations: Total debt at year-end 2025 reached approximately $18.5 million, including the $10.0 million in SSCP Notes, $5.0 million from the Cecil Loan, and $3.5 million in Maryland DHCD loans.
• Going Concern: The company's financial statements include a "going concern" disclosure, indicating that current cash and projected cash flows are insufficient to fund operations for at least 12 months from the filing date without additional financing. Management estimates that current cash, including proceeds from the January 2026 offering, will fund operations into Q3 2026.

Management Discussion (MD&A Highlights)

Management emphasizes the critical need for ongoing capital to fund its extensive clinical development programs. The significant equity and debt financings undertaken in 2025, along with the post-year-end offering, reflect the company's strategy to maintain liquidity and advance its pipeline. The increased net loss and cash burn directly result from intensified investment in R&D, particularly for the late-stage clinical trials of CNM-Au8. Management highlights the non-dilutive grant funding as a key achievement, validating CNM-Au8's scientific merit and providing crucial support for clinical operations. The "going concern" disclosure underscores the inherent financial challenges of a pre-revenue biopharmaceutical company and its continuous reliance on external funding to sustain operations and reach critical clinical milestones.

Financial Health

As of December 31, 2025, Clene's financial health shows a cash position of $35.5 million, a decrease from the prior year despite significant capital raises. The company's liquidity is constrained by a high cash burn rate of $55.0 million from operating activities in 2025, driven by R&D expenditures. Total debt obligations amounted to approximately $18.5 million. The company's ability to continue operating depends on securing additional financing, as current resources are projected to fund operations only into Q3 2026. This financial profile is typical for a clinical-stage biopharmaceutical company heavily invested in drug development, but it also highlights significant financial risks.

Operational Strategy and Future Outlook

Clene's core strategy centers on advancing its lead drug candidate, CNM-Au8, a gold nanocrystal suspension, through late-stage clinical trials for neurodegenerative diseases.

• Key Programs: The company actively pursues Phase 2 and Phase 3 trials for CNM-Au8 in Amyotrophic Lateral Sclerosis (ALS), Multiple Sclerosis (MS), and Parkinson's disease.
• Upcoming Milestones: Key data readouts from the VISIONARY-MS trial are anticipated in mid-2026, with further updates from the REPAIR-MS and HEALEY ALS Platform trials expected throughout 2026. Positive results are crucial for regulatory submissions and potential commercialization.
• Partnerships: Grant funding highlights a strategy to leverage non-dilutive capital and external validation for its research. The company continues to explore strategic partnerships and collaborations to further de-risk and accelerate its development programs.

Competitive Position

The biopharmaceutical industry, particularly in the neurodegenerative disease space, is intensely competitive and characterized by rapid technological change. Clene Inc. operates within this challenging environment, focusing on its lead candidate, CNM-Au8, a gold nanocrystal suspension. The company's competitive advantages, if any, stem primarily from its proprietary drug candidate's unique mechanism of action, its intellectual property protecting CNM-Au8, and its clinical development progress across indications like ALS, MS, and Parkinson's disease. Clene aims to differentiate itself through CNM-Au8's potential efficacy and safety profile, which targets bioenergetic support and oxidative stress—a distinct approach compared to many existing or developing therapies. However, Clene faces significant competition from large pharmaceutical companies and other biotechnology firms. These competitors often possess greater financial, technical, and human resources, along with more extensive experience in clinical development, regulatory affairs, manufacturing, and marketing. They may develop superior products, obtain patent protection earlier, or achieve regulatory approval more quickly.

Significant Risk Factors for Investors

1. Severe Dilution Risk: The company's continuous need for capital has led to, and will likely continue to cause, substantial dilution for existing shareholders. The potential conversion of SSCP Notes and exercise of outstanding warrants and options could add millions more shares to the outstanding count, further reducing the ownership percentage of current investors.
2. Funding Uncertainty and Going Concern: Clene has a history of net losses and negative cash flows from operations. Its ability to continue operating depends on securing significant additional financing. There is no guarantee that future funding will be available on favorable terms, or at all, which could severely impact operations or lead to a cessation of activities.
3. Clinical Trial Success and Regulatory Approval: Clene's success hinges entirely on the successful development, regulatory approval, and commercialization of CNM-Au8. Clinical trials carry inherent risks and high failure rates. Any delays, negative results, or failure to obtain regulatory approval (e.g., from the FDA) would significantly harm the company's prospects and stock price.
4. Competition: The neurodegenerative disease space is highly competitive, with numerous pharmaceutical and biotechnology companies developing treatments. Clene faces significant competition from established players and emerging biotechs, many of whom have greater resources and more advanced product pipelines.

In summary: Clene Inc. represents a high-risk, high-potential biotechnology investment. While the company has secured significant grant funding and actively advances its clinical pipeline, investors must consider its substantial and ongoing need for capital (leading to significant shareholder dilution) and the inherent risks of clinical development and regulatory approval. The company's financial health critically depends on future financing and positive clinical trial outcomes, particularly for CNM-Au8.