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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

Form 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

 

Commission File Number: 001-35420

ChemoCentryx, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

94-3254365

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

 

 

850 Maude Avenue

Mountain View, California

94043

(Address of Principal Executive Offices)

(Zip Code)

 

(650) 210-2900

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

CCXI

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒  No   

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  Yes      No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of July 31, 2020 was 68,892,493.

 

 

 


 

CHEMOCENTRYX, INC.

 

QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended June 30, 2020

Table of Contents

 

 

 

 

PART I. FINANCIAL INFORMATION

Page

 

 

 

Item 1.

Financial Statements (Unaudited)

3

 

 

 

 

Condensed Consolidated Balance Sheets – June 30, 2020 and December 31, 2019

3

 

 

 

 

Condensed Consolidated Statements of Operations – Three and Six Months Ended June 30, 2020 and 2019

4

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) – Three and Six Months Ended June 30, 2020 and 2019

5

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity – Three and Six Months Ended June 30, 2020 and 2019

6

 

 

 

 

Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2020 and 2019

8

 

 

 

 

Notes to Condensed Consolidated Financial Statements

9

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

 

 

 

Item 4.

Controls and Procedures

29

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

30

 

 

 

Item 1A.

Risk Factors

30

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

31

 

 

 

Item 3.

Defaults Upon Senior Securities

31

 

 

 

Item 4.

Mine Safety Disclosures

31

 

 

 

Item 5.

Other Information

31

 

 

 

Item 6.

Exhibits

31

 

 

EXHIBIT INDEX

32

 

 

SIGNATURES

33

 

2


 

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and par value data)

(unaudited)

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

333,205

 

 

$

39,179

 

Short-term investments

 

 

171,415

 

 

 

133,607

 

Accounts receivable, other

 

 

156

 

 

 

176

 

Accounts receivable from related party

 

 

72

 

 

 

 

Prepaid expenses and other current assets

 

 

2,385

 

 

 

1,400

 

Total current assets

 

 

507,233

 

 

 

174,362

 

Property and equipment, net

 

 

5,569

 

 

 

2,154

 

Long-term investments

 

 

 

 

 

29,454

 

Operating lease right-of-use assets

 

 

28,087

 

 

 

1,704

 

Other assets

 

 

1,155

 

 

 

1,409

 

Total assets

 

$

542,044

 

 

$

209,083

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,409

 

 

$

1,532

 

Accrued and other current liabilities

 

 

19,279

 

 

 

19,806

 

Other current liabilities to related party

 

 

6,173

 

 

 

 

Deferred revenue from related party

 

 

27,504

 

 

 

37,742

 

Total current liabilities

 

 

56,365

 

 

 

59,080

 

Long-term debt, net

 

 

24,252

 

 

 

19,786

 

Non-current deferred revenue from related party

 

 

12,094

 

 

 

63,095

 

Non-current lease liabilities

 

 

27,446

 

 

 

566

 

Other non-current liabilities

 

 

746

 

 

 

556

 

Total liabilities

 

 

120,903

 

 

 

143,083

 

Commitments (Note 7)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value, 10,000,000 shares authorized;

   no shares issued and outstanding

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized;

  68,803,400 and 60,234,784 shares issued and outstanding at

  June 30, 2020 and December 31, 2019, respectively

 

 

69

 

 

 

60

 

Additional paid-in capital

 

 

852,006

 

 

 

495,624

 

Note receivable

 

 

(16

)

 

 

(16

)

Accumulated other comprehensive income

 

 

488

 

 

 

318

 

Accumulated deficit

 

 

(431,406

)

 

 

(429,986

)

Total stockholders’ equity

 

 

421,141

 

 

 

66,000

 

Total liabilities and stockholders’ equity

 

$

542,044

 

 

$

209,083

 

 

See accompanying notes.

3


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenue from related party

 

$

49,283

 

 

$

7,173

 

 

$

55,138

 

 

$

15,500

 

Grant revenue

 

 

157

 

 

 

 

 

 

310

 

 

 

 

Total revenue

 

 

49,440

 

 

 

7,173

 

 

 

55,448

 

 

 

15,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

18,762

 

 

 

17,624

 

 

 

38,073

 

 

 

32,978

 

General and administrative

 

 

10,292

 

 

 

5,570

 

 

 

19,112

 

 

 

11,071

 

Total operating expenses

 

 

29,054

 

 

 

23,194

 

 

 

57,185

 

 

 

44,049

 

Income (loss) from operations

 

 

20,386

 

 

 

(16,021

)

 

 

(1,737

)

 

 

(28,549

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

576

 

 

 

1,418

 

 

 

1,560

 

 

 

2,539

 

Interest expense

 

 

(695

)

 

 

(547

)

 

 

(1,243

)

 

 

(1,089

)

Total other income (expense), net

 

 

(119

)

 

 

871

 

 

 

317

 

 

 

1,450

 

Net income (loss)

 

$

20,267

 

 

$

(15,150

)

 

$

(1,420

)

 

$

(27,099

)

Net income (loss) per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.32

 

 

$

(0.26

)

 

$

(0.02

)

 

$

(0.49

)

Diluted

 

$

0.29

 

 

$

(0.26

)

 

$

(0.02

)

 

$

(0.49

)

Shares used to compute net income (loss) per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

63,282

 

 

 

58,056

 

 

 

62,289

 

 

 

55,226

 

Diluted

 

 

69,416

 

 

 

58,056

 

 

 

62,289

 

 

 

55,226

 

 

See accompanying notes.

4


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 

(in thousands)

(unaudited)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net income (loss)

 

$

20,267

 

 

$

(15,150

)

 

$

(1,420

)

 

$

(27,099

)

Unrealized gain on available-for-sale securities

 

 

271

 

 

 

357

 

 

 

170

 

 

 

551

 

Comprehensive income (loss)

 

$

20,538

 

 

$

(14,793

)

 

$

(1,250

)

 

$

(26,548

)

 

See accompanying notes.

5


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

 

(in thousands, except share data)

(unaudited)

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Note

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Receivable

 

 

Income

 

 

Deficit

 

 

Equity

 

Balance as of March 31, 2020

 

 

61,792,661

 

 

$

62

 

 

$

511,571

 

 

$

(16

)

 

$

217

 

 

$

(451,673

)

 

$

60,161

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

20,267

 

 

 

20,267

 

Unrealized gain on investments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

271

 

 

 

-

 

 

 

271

 

Issuance of common stock upon

    follow-on offering, net of

    issuance costs (Note 10)

 

 

5,980,000

 

 

 

6

 

 

 

325,648

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

325,654

 

Issuance of common stock under

    equity incentive plans

 

 

1,035,206

 

 

 

1

 

 

 

9,693

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9,694

 

Repurchased shares upon vesting of

    restricted stock units for tax

    withholdings

 

 

(4,467

)

 

 

-

 

 

 

(229

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(229

)

Employee stock-based compensation

 

 

-

 

 

 

-

 

 

 

5,076

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,076

 

Compensation expense related to

    options granted to consultants

 

 

-

 

 

 

-

 

 

 

247

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

247

 

Balance as of June 30, 2020

 

 

68,803,400

 

 

$

69

 

 

$

852,006

 

 

$

(16

)

 

$

488

 

 

$

(431,406

)

 

$

421,141

 

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Note

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Receivable

 

 

Income

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2019

 

 

60,234,784

 

 

$

60

 

 

$

495,624

 

 

$

(16

)

 

$

318

 

 

$

(429,986

)

 

$

66,000

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,420

)

 

 

(1,420

)

Unrealized gain on investments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

170

 

 

 

-

 

 

 

170

 

Issuance of common stock upon

    follow-on offering, net of

    issuance costs

 

 

5,980,000

 

 

 

6

 

 

 

325,648

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

325,654

 

Issuance of common stock under

    equity incentive plans

 

 

2,681,075

 

 

 

3

 

 

 

24,490

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

24,493

 

Repurchased shares upon vesting of

    restricted stock units for tax

    withholdings

 

 

(92,459

)

 

 

-

 

 

 

(3,709

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,709

)

Employee stock-based compensation

 

 

-

 

 

 

-

 

 

 

9,450

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9,450

 

Compensation expense related to

    options granted to consultants

 

 

-

 

 

 

-

 

 

 

503

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

503

 

Balance as of June 30, 2020

 

 

68,803,400

 

 

$

69

 

 

$

852,006

 

 

$

(16

)

 

$

488

 

 

$

(431,406

)

 

$

421,141

 

 

See accompanying notes.

 


6


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

 

(in thousands, except share data)

(unaudited)

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Note

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Receivable

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance as of March 31, 2019

 

 

57,725,915

 

 

$

58

 

 

$

467,047

 

 

$

(16

)

 

$

(4

)

 

$

(386,446

)

 

$

80,639

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(15,150

)

 

 

(15,150

)

Unrealized gain on investments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

357

 

 

 

-

 

 

 

357

 

Issuance of common stock under

    equity incentive and employee

    stock purchase plans

 

 

483,830

 

 

 

-

 

 

 

2,716

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,716

 

Employee stock-based compensation

 

 

-

 

 

 

-

 

 

 

2,841

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,841

 

Compensation expense related to

    options granted to consultants

 

 

-

 

 

 

-

 

 

 

57

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

57

 

Balance as of June 30, 2019

 

 

58,209,745

 

 

$

58

 

 

$

472,661

 

 

$

(16

)

 

$

353

 

 

$

(401,596

)

 

$

71,460

 

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Note

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Receivable

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2018

 

 

50,652,238

 

 

$

51

 

 

$

389,398

 

 

$

(16

)

 

$

(198

)

 

$

(374,497

)

 

$

14,738

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(27,099

)

 

 

(27,099

)

Unrealized gain on investments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

551

 

 

 

-

 

 

 

551

 

Issuance of common stock

    through Equity Distribution

    Agreement, net of issuance costs

 

 

6,491,196

 

 

 

6

 

 

 

73,270

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

73,276

 

Issuance of common stock under

    equity incentive and employee

    stock purchase plans

 

 

1,173,930

 

 

 

1

 

 

 

5,567

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,568

 

Repurchased shares upon vesting of

    restricted stock units for tax

    withholdings

 

 

(107,619

)

 

 

-

 

 

 

(1,174

)

 

 

-

 

 

 

-