QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
Eddeva |
||
(Address of principal executive offices) |
(Zip Code) |
Title of Each Class |
Trading Symbol |
Name of each exchange on which registered | ||
(Nasdaq Capital Market) |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
• | our ongoing and planned preclinical studies and clinical trials; |
• | preclinical study data and clinical trial data and the timing of results of our ongoing clinical studies and/or trials; |
• | our plans to seek and enter into clinical trial collaborations and other broader collaborations; |
• | the direct and indirect impact of the COVID-19 pandemic on our business operations and financial condition, including manufacturing, research and development costs, clinical trials, regulatory processes and employee expenses; and |
• | our estimates regarding prospects, strategies, expenses, operating capital requirements, results of operations and needs for additional financing. |
• | We are very early in our development efforts and our product candidates may not be successful in later stage clinical trials. Results obtained in our preclinical studies and clinical trials to date are not necessarily indicative of results to be obtained in future clinical trials. As a result, our product candidates may never be approved as marketable therapeutics. |
• | We will need additional funding to complete the development of our product candidates and before we can expect to become profitable from the sales of our products, if approved. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts. |
• | We rely, and expect to continue to rely, on third parties to conduct our clinical trials and to manufacture our product candidates for preclinical and clinical testing. These third parties may not perform satisfactorily, which could delay our product development activities. |
• | If we are unable to adequately protect our proprietary technology or obtain and maintain issued patents which are sufficient to protect our product candidates, others could compete against us more directly, which would have a material adverse impact on our business, results of operations, financial condition and prospects. |
• | We may not be able to retain key executives or to attract, retain and motivate key personnel. If we are unable to retain such key personnel, it could have a material adverse impact on our business and prospects. |
• | Business interruptions resulting from the coronavirus disease (“COVID-19”) outbreak or similar public health crises could cause a disruption of the development of our product candidates and adversely impact our business. |
Item 1. |
Financial Statements. |
June 30, |
December 31 |
|||||||
2021 |
2020 |
|||||||
Unaudited |
||||||||
Assets |
||||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Other receivables |
||||||||
Prepaid expenses and other current assets |
||||||||
Tax incentive receivable |
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|
|
|
|||||
Total current assets |
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Property and equipment, net |
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Right of use asset |
||||||||
Goodwill |
||||||||
In-process research and development |
||||||||
Other long-term assets |
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|
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Total assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities and Stockholders’ Equity |
||||||||
Current Liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued expenses and other current liabilities |
||||||||
Contingent value rights |
||||||||
Lease obligations, current |
||||||||
Deferred revenue |
— | |||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Long term Liabilities: |
||||||||
Term debt |
||||||||
Lease obligations |
||||||||
Contingent value rights |
||||||||
Deferred tax liability |
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|
|
|
|
|||||
Total liabilities |
||||||||
Commitments and contingencies |
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Stockholders’ equity: |
||||||||
Preferred stock, $ |
||||||||
Common Stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
|
|
|
|
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
License revenue |
$ | $ | $ | $ | ||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
||||||||||||||||
General and administrative |
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|
|||||||||
Total operating expenses |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other non-operating (expense) income: |
||||||||||||||||
Other income (expense) |
( |
) | ( |
) | ( |
) | ||||||||||
Change in fair value of convertible debt |
( |
) | ( |
) | ||||||||||||
Change in fair value of conti n gent value rights |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Income tax expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to common stockholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted adjusted net loss per common shares |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average number of shares outstanding, basic and diluted |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive loss: |
||||||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Other comprehensive (loss) gain |
||||||||||||||||
Foreign currency translation |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Share based compensation expense |
||||||||
Foreign currency (gain) loss |
( |
) | ||||||
Loss ( gain) on disposal of tangible fixed assets |
( |
) | ||||||
Depreciation |
||||||||
Non-cash interest |
||||||||
Amortization of debt issuance costs |
||||||||
Fair value adjustments |
||||||||
Operating right of use asset |
||||||||
Changes in operating assets and liabilities: |
||||||||
Other receivables |
( |
) | ||||||
Prepaid expenses and other current assets |
||||||||
Tax incentive receivable |
||||||||
Accounts payable |
( |
) | ||||||
Accrued expenses and other current liabilities |
( |
) | ( |
) | ||||
Deferred revenue |
( |
) | ( |
) | ||||
Operating lease liability |
( |
) | ( |
) | ||||
Other long term asset |
( |
) | ||||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
Cash flows from investing activities: |
||||||||
Purchase of property, plant and equipment |
( |
) | ( |
) | ||||
Proceeds from sale of property, plant and equipment |
||||||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of convertible notes |
||||||||
Net proceeds from issuance of common stock |
||||||||
Net proceeds from term debt |
||||||||
Payment of debt issuance costs |
( |
) | ||||||
Net cash provided by financing activities |
||||||||
Net increase (decrease) in cash and cash equivalents |
( |
) | ||||||
Effect of exchange rate changes on cash |
( |
) | ||||||
Cash and cash equivalents at beginning of period |
||||||||
Cash and cash equivalents at end of period |
$ | $ | ||||||
Supplemental disclosure of cash flow information |
||||||||
Cash paid for income taxes |
$ | $ | ||||||
Purchases of property and equipment included in accounts payable and accrued expenses |
$ | $ | ||||||
Cash paid for interest |
$ |
$ |
||||||
Non-cash investing and financing activities: |
||||||||
Additions to ROU assets obtained from new operating lease liabilities |
$ | $ | ||||||
Issuance of warrants |
$ |
$ |
Stockholders’ Equity |
||||||||||||||||||||||||||||||||
For the Three Months Ended June 30, 2021 |
Common Shares |
Capital in Excess of par Value |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||||||||||
Number of Shares |
Value |
Accumulated deficit |
||||||||||||||||||||||||||||||
Balance at March 31, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||||||||||
Issuance of warrants in connection with term loan |
— | — |
— | — | ||||||||||||||||||||||||||||
Issuance of common stock in connection with at-the-market |
— |
— |
— |
|||||||||||||||||||||||||||||
Issuance of common stock in connection with public offering, net of issuance costs |
— | — | ||||||||||||||||||||||||||||||
Equity adjustment from foreign currency translation |
— |
— |
— |
— |
||||||||||||||||||||||||||||
Stock option exercises |
— | — | — | — | — | |||||||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
||||||||||||||||||||||||||||
Net loss |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at June 30, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Stockholders’ Equity |
||||||||||||||||||||||||||||||||
For the Three Months Ended June 30, 2020 |
Seed preferred |
Series A preferred |
Common Shares |
Capital in Excess of par Value |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||||||||
Number of shares |
Number of shares |
Number of Shares |
Value |
Accumulated deficit |
||||||||||||||||||||||||||||
Balance at March 31, 2020 |
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||||||||
Issuance of common stock for services rendered |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
Issuance of common stock in connection with at-the-market |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||
Equity adjustment from foreign currency translation |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at June 30, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2021 |
Common Shares |
Capital in Excess of par Value |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||||||||||
Number of Shares |
Value |
Accumulated deficit |
||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||||||||||
Issuance of warrants in connection with term loan |
— |
— |
— | — | ||||||||||||||||||||||||||||
Issuance of common stock in connection with at-the-market offering, net of issuance costs |
— |
— | — | |||||||||||||||||||||||||||||
Issuance of common stock in connection with public offering, net of issuance costs |
— | — | ||||||||||||||||||||||||||||||
Equity adjustment from foreign currency translation |
— | — |
— | ( |
) | — | ( |
) | ||||||||||||||||||||||||
Stock option exercises |
— |
— | — | — | — | |||||||||||||||||||||||||||
Share-based compensation |
— | — |
— | — | ||||||||||||||||||||||||||||
Net loss |
— | — |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at June 30, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Stockholders’ Equity |
||||||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2020 |
Seed preferred |
Series A preferred |
Common Shares |
Capital in Excess of par Value |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||||||||
Number of shares |
Number of shares |
Number of Shares |
Value |
Accumulated deficit |
||||||||||||||||||||||||||||
Balance at December 31, 2019 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||||||||||
Issuance of common stock for services rendered |
— | — | — | — | — | — | — |
|||||||||||||||||||||||||
Issuance of common stock in connection with at-the-market offering, net of issuance costs |
— | — | — | — | — | — | — | |||||||||||||||||||||||||
Equity adjustment from foreign currency translation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at June 30, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Useful Economic Life | ||
Leasehold property improvements, right of use assets | ||
Laboratory equipment | ||
Furniture and office equipment |
(i) |
the scope of the contract increases because of the addition of promised goods or services that are distinct; and |
(ii) |
the price of the contract increases by an amount of consideration that reflects standalone selling prices of the additional promised goods or services and any appropriate adjustments to that price to reflect the circumstances of the particular contract. |
• | Level 1 — Quoted prices in active markets for identical assets or liabilities. |
• | Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. |
• | Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. |
Purchase Price Allocation |
||||
Number of full common shares |
||||
Multiplied by fair value per share of common stock |
$ | |||
Purchase price |
$ | |||
Cash and cash equivalents |
$ | |||
Marketable securities |
||||
Prepaid expenses and other assets |
||||
Operating lease right of use asset |
||||
Intangible assets |
||||
Goodwill |
||||
Accounts payable, accrued expenses and other liabilities |
( |
) | ||
Contingent value rights |
( |
) | ||
Liability and equity based warrants |
( |
) | ||
Deferred tax liability |
( |
) | ||
Operating lease liability |
( |
) | ||
Fair value of net assets acquired |
$ | |||
Net Loss Per Share |
||||||||||||||||
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Weighted average number shares outstanding, basic and diluted |
||||||||||||||||
Net loss income per common, basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Potential Dilutive Shares |
||||||||
For the Three and Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Convertible debt shares |
— | |||||||
Common stock warrants |
— | |||||||
Stock options and RSUs |
Property, Plant and Equipment, net |
||||||||
June 30, |
December 31 |
|||||||
2021 |
2020 |
|||||||
Leasehold improvements |
$ | $ | ||||||
Laboratory equipment |
||||||||
Furniture and office equipment |
||||||||
Less: Accumulated depreciation |
||||||||
$ | $ | |||||||
Fair Value Measurements as of June 30 2021 Using: |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Liabilities: |
||||||||||||||||
Contingent value rights |
$ | — | $ | — | $ | $ | ||||||||||
Warrants |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | — | $ | — | $ | $ | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair Value Measurements as of December 31, 2020 Using: |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Liabilities: |
||||||||||||||||
Contingent value rights |
$ | — | $ | — | $ | $ | ||||||||||
Warrants |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | — | $ | — | $ | $ | |||||||||||
|
|
|
|
|
|
|
|
Change in Level 3 Liabilities |
||||||||
November 2016 Private Placement Warrants |
Contingent Value Rights |
|||||||
Balance at December 31, 2020 |
$ | $ | ||||||
Warrants exercised |
( |
) | — |
|||||
Change in fair value of CVR |
— | |||||||
|
|
|
|
|||||
Balance at June 30, 2021 |
$ | $ | ||||||
|
|
|
|
June 30, |
December 31 |
|||||||
2021 |
2020 |
|||||||
Clinical Trial Costs |
$ | $ | ||||||
Severance |
||||||||
Compensation and B enefits |
||||||||
Professional F ees |
||||||||
Other |
||||||||
|
|
|
|
|||||
|
$ | $ | ||||||
|
|
|
|
Term Debt |
||||||||
June 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Term Loan A and B due |
$ | $ | ||||||
Term Loan C and D due |
||||||||
Term debt |
||||||||
Less: Unamortized deferred issuance costs |
( |
) | ||||||
Less: Warrant discount and interest |
( |
) | ||||||
Total debt obligations- long term |
$ | $ | ||||||
Warrants Outstanding |
||||
Outstanding at December 31, 2020 |
||||
Exercises |
( |
) | ||
Issued |
||||
Expired |
( |
) | ||
Outstanding at June 30, 2021 |
||||
Black-Scholes Option-Pricing | ||||
June 30, 2021 |
December 31 2020 | |||
Risk-free interest rate |
||||
Expected volatility |
||||
Expected dividend yield |
||||
Expected life (in years) |
Stock Option Activity |
||||||||||||||||
Number of Shares |
Weighted Average Exercise Price |
Weighted Average Contractual Term |
Aggregate Intrinsic Value |
|||||||||||||
(in years) |
(in thousands) |
|||||||||||||||
Outstanding as of December 31, 2020 |
$ | $ | ||||||||||||||
Granted |
||||||||||||||||
Exercised |
( |
) | ||||||||||||||
Forfeited and expired |
( |
) | ||||||||||||||
Outstanding as of June 30, 2021 |
||||||||||||||||
Options exercisable at June 30, 2021 |
||||||||||||||||
RSU Activity |
||||||||
Restricted Stock Units |
Weighted- Average Grant Date Fair Value |
|||||||
Total nonvested units at December 31, 2020 |
$ | |||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Total nonvested units at June 30, 2021 |
$ | |||||||
Share-Based Compensation |
||||||||||||||||
For the Three Months Ended June 30, |
For the Six Months ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Research and development expenses |
$ | $ | $ | $ | ||||||||||||
General and administrative expenses |
||||||||||||||||
$ | $ | $ | $ | |||||||||||||
Revenue by Collaboration Partner |
||||||||||||||||
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Ares |
$ | |||||||||||||||
Denali |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
Deferred revenue balance at January 1, 2021 |
Additions |
Revenue recognized |
Impact of exchange rates |
Deferred revenue balance at June 30, 2021 |
||||||||||||||||
Deferred revenue |
||||||||||||||||||||
Ares collaboration |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
Denali collaboration |
( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deferred revenue |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||
|
|
|
|
|
|
|
|
|
|
Maturities of Operating Lease Liabilities |
||||
Periods |
||||
For the period July 1, 2021 to December 31, 2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total lease payments |
$ | |||
|
|
Future Expected Cash Receipts From Sublease |
||||
Period |
||||
For the period July 1, 2021 to December 31, 2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total sublease receipts |
$ | |||
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | expenses incurred under agreements with contract research organizations (“CROs”) as well as investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development services; |
• | manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial materials; |
• | expenses incurred for outsourced professional scientific development services; |
• | costs for laboratory materials and supplies used to support our research activities; |
• | allocated facilities costs, depreciation, and other expenses, which include rent and utilities; |
• | up-front, milestone and management fees for maintaining licenses under our third-party licensing agreements; and |
• | compensation expense. |
• | research and development support of our product candidates, including conducting future clinical trials of FS118, FS120, FS222 and SB 11285; |
• | progressing the clinical development of FS118, FS120, FS222 and SB 11285; |
• | establishing an appropriate safety profile with investigational new drug-enabling studies to advance our programs into clinical development; |
• | identifying new product candidates to add to our development pipeline; |
• | successful enrollment in, and the initiation and completion of clinical trials; |
• | the timing, receipt and terms of any marketing approvals from applicable regulatory authorities; |
• | commercializing the product candidates, if and when approved, whether alone or in collaboration with others; |
• | establishing commercial manufacturing capabilities or making arrangements with third party manufacturers; |
• | the development and timely delivery of commercial-grade drug formulations that can be used in our clinical trials; |
• | addressing any competing technological and market developments, as well as any changes in governmental regulations; |
• | negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter and performing our obligations under such arrangements; |
• | maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how, as well as obtaining and maintaining regulatory exclusivity for our product candidates; |
• | continued acceptable safety profile of the drugs following approval; and |
• | attracting, hiring, and retaining appropriately qualified personnel. |
• | CROs in connection with performing research services on our behalf and clinical trials; |
• | investigative sites or other providers in connection with clinical trials; |
• | vendors in connection with preclinical and clinical development activities; and |
• | vendors related to product manufacturing, development and distribution of preclinical and clinical supplies. |
Three Months Ended June 30, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
(in thousands) |
||||||||||||
Statements of Comprehensive Income |
||||||||||||
License revenue |
$ | — | $ | 543 | $ | (543 | ) | |||||
Operating expenses: |
||||||||||||
Research and development |
8,437 | 2,093 | 6,344 | |||||||||
General and administrative |
6,501 | 3,236 | 3,265 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
$ | 14,938 | $ | 5,329 | $ | 9,609 | ||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(14,938 |
) |
(4,786 |
) |
(10,152 |
) | ||||||
Other non-operating income (expense): |
||||||||||||
Other income (expense) |
(46 | ) | (143 | ) | 97 | |||||||
Change in fair value of convertible notes |
— | (1,498 | ) | 1,498 | ||||||||
Change in fair value of liability |
(583 | ) | — | (583 | ) | |||||||
|
|
|
|
|
|
|||||||
Loss before income taxes |
(15,567 | ) | (6,427 | ) | (9,140 | ) | ||||||
(Loss) benefit for income taxes |
(82 | ) | (35 | ) | (47 | ) | ||||||
|
|
|
|
|
|
|||||||
Net loss |
$ | (15,649 | ) | $ | (6,462 | ) | $ | (9,187 | ) | |||
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
(in thousands) |
||||||||||||
Statements of Comprehensive Income |
||||||||||||
License revenue |
$ | 2,917 | $ | 1,898 | $ | 1,019 | ||||||
Operating expenses: |
||||||||||||
Research and development |
15,704 | 5,493 | 10,211 | |||||||||
General and administrative |
12,930 | 6,425 | 6,505 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
$ | 28,634 | $ | 11,918 | $ | 16,716 | ||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(25,717 | ) | (10,020 | ) | (15,697 | ) | ||||||
Other non-operating income (expense): |
||||||||||||
Other income (expense) |
972 | (1,670 | ) | 2,642 | ||||||||
Change in fair value of convertible notes |
— | (1,884 | ) | 1,884 | ||||||||
Change in fair value of liability |
(583 | ) | — | (583 | ) | |||||||
|
|
|
|
|
|
|||||||
Loss before income taxes |
(25,328 | ) | (13,574 | ) | (11,754 | ) | ||||||
(Loss) benefit for income taxes |
(190 | ) | (47 | ) | (143 | ) | ||||||
|
|
|
|
|
|
|||||||
Net loss |
$ | (25,518 | ) | $ | (13,621 | ) | $ | (11,897 | ) | |||
|
|
|
|
|
|
Summarized cash flow information |
||||||||||||
Six Months Ended June 30, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
(in thousands) |
||||||||||||
Net cash used in operating activities |
$ | (23,333 | ) | (2,482 | ) | $ | (20,851 | ) | ||||
Net cash used in investing activities |
(643 | ) | (62 | ) | (581 | ) | ||||||
Net cash provided by financing activities |
87,046 | 500 | 86,546 | |||||||||
Effect of exchange rate changes on cash |
52 | (201 | ) | 253 | ||||||||
|
|
|
|
|
|
|||||||
Net increase in cash |
$ |
63,122 |
$ |
(2,245 |
) |
$ |
65,367 |
|||||
|
|
|
|
|
|
• | our ability to raise capital in light of the impacts of the ongoing global COVID-19 pandemic on the global financial markets; |
• | the scope, progress, results, and costs of drug discovery, preclinical development, laboratory testing, drug manufacturing and clinical trials for the product candidates we have developed or may develop; |
• | our ability to enroll clinical trials in a timely manner and to quickly resolve any delays or clinical holds that may be imposed on our development programs, particularly in light of the global COVID-19 pandemic; |
• | the costs associated with our manufacturing process development and evaluation of third-party manufacturers and suppliers; |
• | the costs, timing and outcome of regulatory review of our product candidates; |
• | the costs of preparing and submitting marketing approvals for any of our product candidates that successfully complete clinical trials, and the costs of maintaining marketing authorization and related regulatory compliance for any products for which we obtain marketing approval; |
• | the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights, and defending intellectual property-related claims; |
• | the costs of future activities, including product sales, medical affairs, marketing, manufacturing, and distribution, for any product candidates for which we receive marketing approval; |
• | the terms of our current and any future license agreements and collaborations; and the extent to which we acquire or in-license other product candidates, technologies and intellectual property; |
• | the success of our collaborations with Ares and Denali and other partners; |
• | our ability to establish and maintain additional collaborations on favorable terms, if at all; and |
• | the costs of operating as a public company. |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. |
Controls and Procedures. |
Item 1. |
Legal Proceedings. |
Item 1A. |
Risk Factors. |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds. |
Item 3. |
Defaults Upon Senior Securities |
Item 4. |
Mine Safety Disclosures. |
Item 5. |
Other Information. |
Item 6. |
Exhibits. |
* |
Filed herewith. |
± | Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets (“[***]”) because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed. |
F-star Therapeutics, Inc. | ||||||
Date: August 13, 2021 | By: | /s/ Eliot R. Forster | ||||
Eliot R. Forster, Ph.D. | ||||||
President and Chief Executive Officer |