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Business Segment Information
 9 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Business Segment Information

Note 11. Business Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance. The Company's operating segments were identified in fiscal 2024 and did not impact prior periods. The Company's operating segments are as follows:

Research & Development

The research and development (“R&D”) segment consists of the Company's drug development efforts. The Company's current clinical focus is in advancing FXR314 in IBD, including UC and CD. The Company plans to start a Phase 2a clinical trial in UC in the calendar year 2025. The Company released Phase 2 data for FXR314 for the treatment of MASH in April 2024 that are supportive of ongoing development, and believes FXR314 has a commercial opportunity in MASH, most likely in combination therapy. The

Company is exploring the potential for combination therapies using FXR314 and currently approved mechanisms in preclinical animal studies and its IBD disease models.

The Company's second focus is building high fidelity, 3D tissues that recapitulate key aspects of human disease. The Company uses its proprietary technology to build functional 3D human tissues that mimic key aspects of native human tissue composition, architecture, function and disease. The Company believes these attributes can enable critical complex, multicellular disease models that can be used to develop clinically effective drugs across multiple therapeutic areas.

As with the clinical development program, the Company is initially focusing on the intestine and has ongoing 3D tissue development efforts in human tissue models of UC and CD. The Company uses these models to identify new molecular targets responsible for driving the disease and to explore the mechanism of action of known drugs including FXR314 and related molecules. The Company intends to initiate drug discovery programs around these new validated targets to identify drug candidates for partnering and/or internal clinical development.

Mosaic Cell Sciences

The Mosaic Cell Sciences segment, which began operations in February 2024, consists of the Company's Mosaic Cell Sciences division (“Mosaic”), which served as a key source of certain of the primary human cells that the Company utilized in its research and development efforts. Mosaic provided the Company with qualified human cells for use in its clinical research and development programs. In addition to supplying the Company with primary human cells, Mosaic offered human cells for sale to life science customers, both directly and through distribution partners, which the Company expected to offset costs and over time become a profit center that offset overall R&D spending by the Company. However, Mosaic ended its operations in the third quarter of fiscal 2025.

Change to Reportable Segments

The Company determined that it will have a change in reportable segments beginning in the fourth quarter of fiscal 2025, due to Mosaic ending its operations during the third quarter of fiscal 2025. When the change becomes effective, there will be an update to the financial information that is evaluated on a regular basis by the chief operating decision maker for purposes of allocating resources and assessing performance. The change in reportable segments does not affect prior period segment reporting. The Company analyzed whether the closing of the Mosaic business segment qualified for reporting as a discontinued operation under ASC Topic 205. The Company's main operations are its R&D activities. Mosaic was initially formed to generate primary human cells for use by R&D rather than purchasing from third parties, while also selling excess inventory commercially to external customers, as a way to offset costs. However, the Company did not achieve significant revenues from Mosaic as initially expected. Therefore, Mosaic's remaining saleable inventory was internally transferred to R&D and Mosaic ended its commercial operations. The Company concluded that the closing of the Mosaic business segment does not qualify for reporting as a discontinued operation because the closing of the segment does not represent a strategic shift that will have a major effect on the Company's operations and financial results.

Business Segment Information

The Company's R&D segment generated royalty revenue related to its IP. The Company's Mosaic segment generated product revenue as part of its core operations. Segment revenues consisted of the following (in thousands):

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

December 31, 2024

 

 

December 31, 2023

 

 

December 31, 2024

 

 

December 31, 2023

 

 

R&D

 

 

 

 

 

 

 

 

 

 

 

 

Royalty revenue

$

15

 

 

$

5

 

 

$

68

 

 

$

80

 

 

Mosaic

 

 

 

 

 

 

 

 

 

 

 

 

Product revenue

 

9

 

 

 

—

 

 

 

25

 

 

 

—

 

 

Total segment revenue

$

24

 

 

$

5

 

 

$

93

 

 

$

80

 

 

Total Company revenue

$

24

 

 

$

5

 

 

$

93

 

 

$

80

 

 

Operating segment costs and expenses consisted of the following (in thousands):

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

December 31, 2024

 

 

December 31, 2023

 

 

December 31, 2024

 

 

December 31, 2023

 

 

R&D

 

 

 

 

 

 

 

 

 

 

 

 

     Research and development expenses

$

899

 

 

$

1,434

 

 

$

3,010

 

 

$

4,435

 

 

Mosaic

 

 

 

 

 

 

 

 

 

 

 

 

     Cost of revenues

 

2

 

 

 

—

 

 

 

5

 

 

 

—

 

 

     Research and development expenses

 

881

 

 

 

—

 

 

 

1,156

 

 

 

—

 

 

     Selling, general, and administrative expenses

 

43

 

 

 

—

 

 

 

178

 

 

 

—

 

 

Total segment costs and expenses

$

1,825

 

 

$

1,434

 

 

$

4,349

 

 

$

4,435

 

 

Other selling, general, and administrative expenses

 

1,667

 

 

 

2,251

 

 

 

5,206

 

 

 

7,635

 

 

Total Company costs and expenses

$

3,492

 

 

$

3,685

 

 

$

9,555

 

 

$

12,070

 

 

The R&D segment's identifiable assets are its fixed assets. The Mosaic segment ended its operations in the third quarter of fiscal 2025 and therefore did not have any identifiable assets as of December 31, 2024. Mosaic's remaining saleable inventory was written off and internally transferred to R&D, and its identifiable fixed assets were transferred to R&D. Other Company assets are comprised of all other assets that are not distinctly identifiable to a segment. Operating segment assets consisted of the following (in thousands):

 

 

December 31, 2024

 

 

March 31, 2024

 

R&D

 

 

 

 

 

Fixed assets, net

$

448

 

 

$

423

 

Mosaic

 

 

 

 

 

Fixed assets, net

 

—

 

 

 

183

 

Inventory

 

—

 

 

 

297

 

Total segment assets

$

448

 

 

$

903

 

Other Company assets

 

3,396

 

 

 

5,446

 

Total Company assets

$

3,844

 

 

$

6,349