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 |
-0206 | ||
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
2 | ||||||
4 | ||||||
ITEM 1. |
Financial Statements (unaudited) | 4 | ||||
4 | ||||||
5 | ||||||
6 | ||||||
8 | ||||||
9 | ||||||
ITEM 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 | ||||
ITEM 3. |
Quantitative and Qualitative Disclosures About Market Risk | 40 | ||||
ITEM 4. |
Controls and Procedures | 40 | ||||
ITEM 1. |
Legal Proceedings | 41 | ||||
ITEM 1A. |
Risk Factors | 41 | ||||
ITEM 2. |
Unregistered Sales of Equity Securities and Use of Proceeds | 41 | ||||
ITEM 3. |
Defaults Upon Senior Securities | 41 | ||||
ITEM 4. |
Mine Safety Disclosures | 41 | ||||
ITEM 5. |
Other Information | 41 | ||||
ITEM 6. |
Exhibits | 42 | ||||
43 |
• | the success of our plans to develop and potentially commercialize our product candidates; |
• | the timing of the initiation and completion of preclinical studies and clinical trials; |
• | the timing and sufficiency of patient enrollment and dosing in any future clinical trials; |
• | the timing of the availability of data from clinical trials; |
• | the timing and outcome of regulatory filings and approvals; |
• | unanticipated delays; |
• | sales, marketing, manufacturing and distribution requirements; |
• | market competition and the acceptance of our products in the marketplace; |
• | regulatory developments in the United States of America; |
• | the development of novel AAV vectors; |
• | the plans of licensees of our technology; |
• | the clinical utility and potential attributes and benefits of ddRNAi and our product candidates, including the potential duration of treatment effects and the potential for a “one shot” cure; |
• | our dependence on our relationships with collaborators and other third parties; |
• | expenses, ongoing losses, future revenue, capital needs and needs for additional financing, and our ability to access additional financing given market conditions and other factors, including our capital structure; |
• | the length of time over which we expect our cash and cash equivalents to be sufficient to execute on our business plan; |
• | our intellectual property position and the duration of our patent portfolio; |
• | the impact of local, regional, and national and international economic conditions and events; and |
• | the impact of the current COVID-19 pandemic, the disease caused by the SARS-CoV-2 virus, |
ITEM 1. |
Financial Statements |
September 30, |
June 30, |
|||||||
2021 |
2021 |
|||||||
(Unaudited) |
||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Trade and other receivables |
||||||||
Prepaid and other assets |
||||||||
Total current assets |
||||||||
Property and equipment, net |
||||||||
Deposits |
||||||||
Other assets |
||||||||
Right-of-use |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Trade and other payables |
$ | $ | ||||||
Accrued employee benefits |
||||||||
Lease liabilities, current portion |
||||||||
Total current liabilities |
||||||||
Lease liabilities, less current portion |
||||||||
Total liabilities |
||||||||
Commitments and contingencies (Note 12) |
||||||||
Stockholders’ equity: |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Total stockholders’ equity |
||||||||
Total liabilities and stockholders’ equit y |
$ | $ | ||||||
Three Months Ended September 30, |
||||||||
2021 |
2020 |
|||||||
Revenue: |
||||||||
Revenues from customers |
$ | $ | ||||||
|
|
|
|
|||||
Total revenues |
||||||||
Operating expenses |
||||||||
Royalties and license fees |
||||||||
Research and development |
||||||||
General and administrative |
||||||||
|
|
|
|
|||||
Total operating expenses |
||||||||
|
|
|
|
|||||
Loss from operations |
( |
) | ( |
) | ||||
Other income (loss): |
||||||||
Foreign currency transaction loss |
( |
) | ( |
) | ||||
Interest expense, net |
( |
) | ( |
) | ||||
Other income, net |
— | |||||||
Unrealized gain on investment |
— | |||||||
|
|
|
|
|||||
Total other loss, net |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|||||
Other comprehensive income: |
||||||||
Unrealized foreign currency translation gain |
||||||||
|
|
|
|
|||||
Total other comprehensive income |
||||||||
|
|
|
|
|||||
Total comprehensive loss |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|||||
Net loss per share: |
||||||||
Basic and diluted |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|||||
Weighted-average shares outstanding: |
||||||||
Basic and diluted |
||||||||
|
|
|
|
Common Stock |
Additional Paid-in |
Accumulated |
Accumulated Other Comprehensive |
Total Stockholders’ |
||||||||||||||||||||
Shares |
Amount |
Capital |
Deficit |
Loss |
Equity |
|||||||||||||||||||
Balance at June 30, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Share-based compensation |
— | — | — | — | ||||||||||||||||||||
Forfeiture of share-based payments |
— | — | ( |
) | — | — | ||||||||||||||||||
Foreign currency translation gain |
— | — | — | — | ||||||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at September 30, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
Additional Paid-in |
Accumulated |
Accumulated Other Comprehensive |
Total Stockholders’ |
||||||||||||||||||||
Shares |
Amount |
Capital |
Deficit |
Loss |
Equity |
|||||||||||||||||||
Balance at June 30, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Share-based compensation |
— | — | — | — | ||||||||||||||||||||
Foreign currency translation gain |
— | — | — | — | ||||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at September 30, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
||||||||
September 30, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
||||||||
Amortization of right-of-use |
||||||||
Unrealized loss on investment |
( |
) | ||||||
Share-based compensation expense |
||||||||
Changes in operating assets and liabilities: |
||||||||
Trade and other receivables |
||||||||
Other assets |
||||||||
Trade and other payables |
( |
) | ||||||
Accrued employee benefits |
( |
) | ( |
) | ||||
Lease liabilities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
( |
) | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) | ||||||
|
|
|
|
|||||
Effects of exchange rate changes on cash and cash equivalents |
||||||||
|
|
|
|
|||||
Net decrease in cash and cash equivalents |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash and cash equivalents, beginning of period |
||||||||
|
|
|
|
|||||
Cash and cash equivalents, end of period |
$ | $ | ||||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information: |
||||||||
Re-measurement of operating lease right-of-use assets |
$ | $ | ||||||
|
|
|
|
Principal place of business/country of incorporation | ||
Benitec Biopharma Proprietary Limited (“BBL”) |
||
Benitec Australia Proprietary Limited |
||
Benitec Limited |
||
Benitec, Inc. |
||
Benitec LLC |
||
RNAi Therapeutics, Inc. |
||
Tacere Therapeutics, Inc. |
||
Benitec IP Holdings, Inc. |
Level 1: | Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. | |
Level 2: | Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. | |
Level 3: | Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. |
Software |
||
Lab equipment |
||
Computer hardware |
||
Leasehold improvements |
Revenues from customers (US$’000) |
Three Months ended September 30, 2021 |
Three Months ended September 30, 2020 |
||||||
Licensing revenue from services transferred overtime |
$ | — | $ | |||||
(US$’000) |
September 30, 2021 |
June 30, 2021 |
||||||
Cash at Bank |
$ | $ | ||||||
Total |
$ | $ | ||||||
(US$’000) |
September 30, 2021 |
June 30, 2021 |
||||||
Prepaid expenses |
$ | $ | ||||||
Security deposit |
||||||||
Market value of listed shares |
||||||||
Total other assets |
||||||||
Less: non-current portion |
( |
) | ( |
) | ||||
Current portion |
$ | $ | ||||||
(US$’000) |
September 30, 2021 |
June 30, 2021 |
||||||
Software |
$ | $ | ||||||
Lab equipment |
||||||||
Computer hardware |
||||||||
Leasehold improvements |
||||||||
Total property and equipment, gross |
||||||||
Accumulated depreciation and amortization |
( |
) | ( |
) | ||||
Total property and equipment, net |
$ | $ | ||||||
(US$’000) |
September 30, 2021 |
June 30, 2021 |
||||||
Trade payable |
$ | $ | ||||||
Accrued license fees |
||||||||
Accrued professional fees |
||||||||
Accrued OPMD project costs |
||||||||
Accrued bonuses |
— |
|||||||
Other payables |
||||||||
Total |
$ | $ | ||||||
(US$’000) |
Operating lease right-of- use assets |
|||
Balance at July 1, 2021 |
$ | |||
Re-measurement during the period |
||||
Amortization of right of use asset |
( |
) | ||
Operating lease right-of-use |
$ | |||
(US$’000) |
Operating lease liabilities |
|||
Balance at July 1, 2021 |
$ | |||
Re-measurement during the period |
||||
Principal payments on operating lease liabilities |
( |
) | ||
|
|
|||
Operating lease liabilities at September 30, 2021 |
||||
Less: non-current portion |
( |
) | ||
|
|
|||
Current portion at September 30, 2021 |
$ | |||
|
|
(US$’000) |
September 30, 2021 |
|||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
|
|
|||
Total operating lease payment s |
||||
Less imputed interest |
( |
) | ||
|
|
|||
Present value of operating lease liabilities |
$ | |||
|
|
Common Stock from Warrants |
Weighted- average Exercise Price (per share) |
|||||||
Outstanding at July 1, 2021 |
$ | |||||||
|
|
|
|
|||||
Outstanding and exercisable at September 30, 2021 |
$ |
Stock Options |
Weighted- average Exercise Price |
Weighted- average Remaining Contractual Term |
Aggregate Intrinsic Value |
|||||||||||||
Outstanding at June 30, 2021 |
$ | $ | — | |||||||||||||
Outstanding at September 30, 2021 |
$ |
— | ||||||||||||||
Exercisable at September 30, 2021 |
$ | $ | — | |||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
||||||||
(US$’000) |
2021 |
2020 |
||||||
Research and development |
$ | $ | ||||||
General and administrative |
||||||||
|
|
|
|
|||||
Total share-based compensation expense |
$ | $ | ||||||
|
|
|
|
• | Biologically significant and dose-dependent levels of BB-301 tissue transduction (i.e., delivery of the multi-functional BB-301 genetic construct into the target pharyngeal muscle cells); |
• | Broad-based and dose-dependent expression of the three distinct genes comprising the BB-301 gene construct within the pharyngeal muscle cells; and |
• | Durable and biologically significant levels of target gene knock-down (i.e., inhibition of the expression of the gene of interest) within the pharyngeal muscle cells. |
• | BB-301 encodes two distinct siRNA species (i.e., siRNA13 and siRNA17) which are each, independently, capable of inhibiting (i.e., “silencing”) the expression of the mutant form of the PABPN1 protein and the wildtype (i.e., endogenous) form of the PABPN1 protein (importantly, the mutant form of the PABPN1 protein underlies the development and progression of OPMD). |
• | BB-301 also codes for a wildtype version of the PABPN1 protein whose intracellular expression is unaffected by the inhibitory activities of siRNA13 and siRNA17, and this codon optimized PABPN1 protein (i.e., coPABPN1) serves to replenish the endogenous form of the PABPN1 protein and to replace the mutant form of PABPN1 that underlies the development and progression of OPMD in diseased tissues. |
• | For comparative purposes, is should be noted that the average range of expression for wild type PABPN1 within the pharyngeal muscle cells of Beagle dogs is 4.5 copies per cell-to-7.8 |
• | As noted above, BB-301 encodes two distinct siRNA species (i.e. siRNA13 and siRNA17) which are each, independently, capable of inhibiting (i.e., “silencing”) the expression of all forms of the PABPN1 protein (siRNA13 and siRNA17 silence the expression of both wildtype PABPN1 [wtPABPN1] and mutant PABPN1). |
• | While the Beagle dog subjects treated in the current BB-301 Pilot Dosing Study do not express mutant PABPN1, the level of BB-301-driven gene silencing for the PABPN1 target can be indirectly assessed due to the equivalent inhibitory effects of siRNA13 and siRNA17 on both wtPABPN1 and mutant PABPN1. |
• | Thus, the wtPABPN1 silencing activity observed in the current BB-301 Pilot Dosing Study serves as a surrogate for the activity that would be anticipated in the presence of mutant PABPN1. |
• | BB-301 has been evaluated in prior non-clinical studies in animals that express mutant PABPN1 and, as a consequence, manifest the key signs and symptoms of OPMD; in these animal models of OPMD, the achievement of PABPN1 silencing levels of 31% inhibition or higher led to complete resolution of OPMD disease symptoms and correction of the histological hallmarks of OPMD. |
• | The non-clinical data derived from the evaluation of BB-301 in both the murine proof-of concept studies and the Pilot Dosing study in Beagle dogs |
• | The experimental, analytical, and statistical methods comprising the 12-week BB-301 GLP Toxicology and Biodistribution study in Beagle dogs |
• | The large-scale manufacturing plan for clinical grade BB-301 drug product for use in the Phase 1b/2a clinical study in OPMD patients |
• | The design of the Phase 1b/2a clinical study slated for initiation in 2022 |
Three Months Ended September 30, |
||||||||
2021 |
2020 |
|||||||
(US$’000) |
||||||||
Revenues: |
||||||||
Revenues from customers |
$ | — | $ | 55 | ||||
|
|
|
|
|||||
Total revenues |
$ | — | $ | 55 | ||||
|
|
|
|
Three Months Ended September 30, |
||||||||
2021 |
2020 |
|||||||
(US$’000) |
||||||||
Operating Expenses: |
||||||||
Royalties and license fees |
$ | — | $ | 134 | ||||
Research and development |
2,780 | 774 | ||||||
General and administrative |
2,042 | 1,837 | ||||||
|
|
|
|
|||||
Total operating expenses |
$ | 4,822 | $ | 2,745 | ||||
|
|
|
|
Three Months Ended September 30, |
||||||||
2021 |
2020 |
|||||||
Other Income (Loss): |
||||||||
(US$’000) |
||||||||
Foreign currency transaction loss |
$ | (240 | ) | $ | (54 | ) | ||
Interest expense, net |
(1 | ) | (1 | ) | ||||
Other income, net |
— | 27 | ||||||
Unrealized gain on investment |
18 | — | ||||||
|
|
|
|
|||||
Total other loss, net |
$ | (223 | ) | $ | (28 | ) | ||
|
|
|
|
Three Months Ended September 30, |
||||||||
2021 |
2020 |
|||||||
(US$’000) |
||||||||
Net cash provided by (used in): |
||||||||
Operating activities |
$ | (4,278 | ) | $ | (2,360 | ) | ||
Investing activities |
— | (173 | ) | |||||
Effects of exchange rate changes on cash and cash equivalents |
236 | 182 | ||||||
|
|
|
|
|||||
Net decrease in cash |
$ | (4,042 | ) | $ | (2,351 | ) | ||
|
|
|
|
• | the timing and costs of our planned clinical trials for our ddRNAi and silence and replace product candidates; |
• | the timing and costs of our planned preclinical studies for our ddRNAi and silence and replace product candidates; |
• | the number and characteristics of product candidates that we pursue; |
• | the outcome, timing and costs of seeking regulatory approvals; |
• | revenue received from commercial sales of any of our product candidates that may receive regulatory approval; |
• | the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may establish; |
• | the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights; |
• | the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against intellectual property related claims; and |
• | the extent to which we need to in-license or acquire other products and technologies. |
Number | Description of Document | |
31.1 | Statement of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
31.2 | Statement of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
32.1 | Statement of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
32.2 | Statement of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
101.INS | Inline XBRL Instance Document* | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document* | |
101.CAL | Inline XBRL Calculation Linkbase Document* | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | |
101.LAB | Inline XBRL Label Linkbase Document* | |
101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document* | |
104 | Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
* | Filed herewith. |
** | Furnished, not filed. |
Benitec Biopharma Inc. | ||||
Dated: November 15, 2021 | /s/ Megan Boston | |||
Megan Boston | ||||
Executive Director (principal financial and accounting officer) | ||||
/s/ Jerel Banks | ||||
Jerel Banks | ||||
Executive Chairman and Chief Executive Officer (principal executive officer) |