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.) |
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
| ☒ | Smaller reporting company | |||||
| Emerging growth company | ||||||
| • | We are a clinical-stage biopharmaceutical company with a very limited operating history. We have incurred net losses since our inception and anticipate that we will continue to incur substantial and increasing net losses in the foreseeable future. We may never achieve or sustain profitability. |
| • | A pandemic, epidemic, or outbreak of an infectious disease, such as the global novel coronavirus disease 2019 (“COVID-19”) pandemic, may materially and adversely affect our business, including our preclinical studies, clinical trials, third-parties on whom we rely, our supply chain, our ability to raise capital, and our financial results. |
| • | We have never generated any revenue from product sales, and our ability to generate revenue from product sales and become profitable will depend significantly on our success in achieving a number of goals and on other factors. |
| • | We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our research, product development or commercialization efforts. |
| • | We are heavily dependent on the success of vidutolimod (formerly CMP-001), our only current product candidate. |
| • | We will not be able to commercialize vidutolimod and future product candidates if our preclinical studies do not produce successful results and our clinical trials do not demonstrate the safety and efficacy of vidutolimod and future product candidates. |
| • | Vidutolimod is based on a novel approach to the treatment of cancer, which makes it difficult to predict the time and cost of product candidate development. |
| • | Difficulty in enrolling patients could delay or prevent clinical trials of vidutolimod and future product candidates. We may find it difficult to enroll patients in our clinical trials or any subsequent trials that we may conduct. |
| • | Vidutolimod is being, and future product candidates may be, evaluated in combination with third-party drugs, and we do not have control over the supply, regulatory status, or regulatory approval of such drugs. |
| • | We currently rely on third-party contract manufacturing organizations (“CMOs”) for the production of clinical supply of vidutolimod and may rely on CMOs for the production of commercial supply of vidutolimod, if approved. This reliance on CMOs increases the risk that we will not have sufficient quantities of such materials, product candidates, or any therapies that we may develop and commercialize, or that such supply will not be available to us at an acceptable cost, which could delay, prevent, or impair our development or commercialization efforts. |
| • | We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials. If those third parties do not perform satisfactorily, we may be unable to obtain regulatory approval for vidutolimod or any future product candidates or any approvals that may be obtained may be delayed. |
| • | Our collaboration agreements with any future third-parties may not be successful, which could adversely affect our ability to develop and commercialize vidutolimod or any future product candidates. |
| • | The regulatory approval processes of the U.S. Food and Drug Administration (the “FDA”) and comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable. If we are not able to obtain, or experience delays in obtaining, required regulatory approvals, we will not be able to commercialize vidutolimod and future product candidates as expected, and our ability to generate revenue may be materially impaired or eliminated. |
| • | Our relationships with patients and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, exclusion from government healthcare programs, contractual damages, reputational harm and diminished profits and future earnings. |
| • | We face significant competition, which may result in others discovering, developing or commercializing products more quickly or marketing them more successfully than us. If competitive product candidates are shown to be safer or more effective than ours, our commercial opportunity may be reduced or eliminated. |
| • | If we are unable to obtain, maintain and protect our intellectual property rights for our technology and our product candidates, or if our intellectual property rights are inadequate, our competitive position could be harmed. |
| • | Our success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel. |
| • | our current expectations and anticipated results of operations; |
| • | the timing and the success of preclinical studies and clinical trials of vidutolimod and future product candidates, including our current Phase 2 trial for anti-PD-1 |
| • | the initiation and completion of any clinical trials of vidutolimod and future product candidates; |
| • | the ongoing impact of the COVID-19 pandemic on our business; |
| • | our need to raise additional funding before we can expect to generate any revenues from product sales and our ability to raise capital, including in light of the impact of the ongoing COVID-19 global pandemic and the related potential impact on the US and global economies; |
| • | our ability to conduct successful clinical trials or obtain regulatory approval for vidutolimod or any future product candidates that we may identify or develop; |
| • | our ability to ensure adequate supply of vidutolimod and any future candidates; |
| • | our ability to maintain third-party relationships necessary to conduct our business; |
| • | our dependence upon the success of our research to generate and advance additional product candidates; |
| • | our ability to establish an adequate safety and efficacy profile for vidutolimod or any future product candidates that we may pursue; |
| • | the implementation of our strategic plans for our business, vidutolimod and any other product candidates we may develop and our technology; |
| • | our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology; |
| • | the rate and degree of market acceptance and clinical utility for vidutolimod and any other product candidates we may develop; |
| • | our estimates about the size of our market opportunity; |
| • | our ability to maintain and establish collaborations and strategic relationships, including our clinical trial collaborations with an affiliate of Merck KGaA (“Merck”), Pfizer Inc. (“Pfizer”), Bristol-Myers Squibb Company (“BMS”), and Regeneron Pharmaceuticals, Inc. (“Regeneron”); |
| • | the potential benefits of the continued research, development, testing and manufacturing services provided by contract manufacturing organizations; |
| • | our financial performance and liquidity; |
| • | our ability to effectively manage our anticipated growth; |
| • | developments relating to our competitors and our industry, including the impact of government regulation; |
| • | our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals; |
| • | our ability to maintain adequate internal controls over financial reporting; |
| • | our expectations regarding the period during which we qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act (the “JOBS Act”); |
| • | our expectations regarding the period during which we qualify as a “smaller reporting company”; |
| • | our use of proceeds from our initial public offering and our expectations regarding our estimated expenses, the sufficiency of our cash resources, our expected cash runway and our need for additional financing, and |
| • | other risks and uncertainties, including those listed under the section titled “Risk Factors.” |
Item 1. |
Condensed Consolidated Financial Statements |
September 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
| Assets |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | $ | ||||||
| Restricted cash |
||||||||
| Short-term investments |
||||||||
| Prepaid expenses and other current assets |
||||||||
| |
|
|
|
|
||||
| Total current assets |
||||||||
| |
|
|
|
|||||
| Investments, non-current |
— | |||||||
| Machinery and equipment, net |
— | |||||||
| |
|
|
|
|||||
| Total assets |
$ | $ | ||||||
| |
|
|
|
|||||
| Liabilities and Stockholders’ Equity |
||||||||
| Current Liabilities: |
||||||||
| Accounts payable |
$ | $ | ||||||
| Accrued expenses |
||||||||
| |
|
|
|
|
||||
| Total current liabilities |
||||||||
| |
|
|
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|
||||
| Total liabilities |
||||||||
| |
|
|
|
|||||
| Commitments and Contingencies (Note 9) |
||||||||
| Stockholders’ Equity: |
||||||||
| Preferred stock, $ |
||||||||
| Common stock, $ |
||||||||
| Additional paid-in capital |
||||||||
| Accumulated other comprehensive gain (loss) |
( |
) | ( |
) | ||||
| Accumulated deficit |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Total stockholders’ equity |
||||||||
| |
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | $ | ||||||
| |
|
|
|
|||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development |
$ | $ | $ | $ | ||||||||||||
| General and administrative |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Other income (expense), net: |
||||||||||||||||
| Interest income |
||||||||||||||||
| Loss on sale of available-for-sale |
— | — | ( |
) | — | |||||||||||
| Change in fair value of convertible loan notes |
— | — | — | ( |
) | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total other income (expense), net |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| |
|
|
|
|
|
|
|
|||||||||
| Reconciliation of net loss attributable to common stockholders: |
||||||||||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Accretion of issuance costs on redeemable convertible preferred stock |
— | ( |
) | — | ( |
) | ||||||||||
| Accrued dividends on redeemable convertible preferred stock |
— | ( |
) | — | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net loss attributable to common stockholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| |
|
|
|
|
|
|
|
|||||||||
| Weighted-average common shares outstanding—basic and diluted |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net loss per share attributable to common stockholders—basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| |
|
|
|
|
|
|
|
|||||||||
| Comprehensive loss: |
||||||||||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Unrealized gain on available-for-sale |
— | — | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| |
|
|
|
|
|
|
|
|||||||||
Series A Redeemable Convertible Preferred Stock |
Series B Redeemable Convertible Preferred Stock |
Series C Redeemable Convertible Preferred Stock |
Common Stock |
Additional Paid-In |
Accumulated |
Accumulated Other Comprehensive |
Total Stockholders’ |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Gain/(Loss) |
Equity (Deficit) |
|||||||||||||||||||||||||||||||||||||
Balances at December 31, 2020 |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||||||||||||||
Exercise of stock options |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Unrealized losses on available-for-sale |
— | — | — | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||
Balances |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||||||
Exercise of stock options |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Unrealized gains on available-for-sale |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||
Balances at June 30, 2021 |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||||||
Exercise of stock options |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Unrealized gains on available-for-sale |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||
Balances at September 30, 2021 |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||||||||||||||
Series A Redeemable Convertible Preferred Stock |
Series B Redeemable Convertible Preferred Stock |
Series C Redeemable Convertible Preferred Stock |
Common Stock |
Additional Paid-In |
Accumulated |
Accumulated Other Comprehensive |
Total Stockholders’ |
|||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Gain/(Loss) |
Equity (Deficit) |
|||||||||||||||||||||||||||||||||||||
Balances at December 31, 2019 |
$ |
$ |
— |
$ |
— |
$ |
$ |
— |
$ |
( |
) |
$ |
— |
$ |
( |
) | ||||||||||||||||||||||||||||||||
Issuance of series B redeemable convertible preferred stock at $ issuance |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Exercise of series B preferred stock tranche right |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Accretion of issuance costs related to redeemable convertible preferred stock |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Accrued dividends on redeemable convertible preferred stock |
— | — | — | — | — | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||
Balances March 31, 2020 |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||
Issuance of series C redeemable convertible preferred stock at $ |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Conversion of convertible notes into series C convertible redeemable preferred stock |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Accretion of issuance costs related to redeemable convertible preferred stock |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||||||
Exercise of stock options |
— | — |
— | |||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock awards |
— | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Accrued dividends on redeemable convertible preferred stock |
— | — | — | — | — | ( |
) | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||
Balances |
— |
( |
) |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||||
Stock issuance costs related series C preferred stock |
— | — | — | — | — | ( |
) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Accretion of issuance costs related to redeemable convertible preferred stock |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||||||
Exercise of stock options |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Accrued dividends on redeemable convertible preferred stock |
— | — | — | — | — | ( |
) | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||||
Conversion of redeemable convertible preferred stock |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common shares upon initial public offering net of underwriting discounts, commissions and offering costs |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||||||
Balances at September 30, 2020 |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
$ |
$ |
$ |
( |
) |
$ |
— |
$ |
|||||||||||||||||||||||||||||||
| Nine 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: |
||||||||
| Stock based compensation |
||||||||
| Depreciation |
— | |||||||
| Change in fair value of notes payable |
— | |||||||
| Amortization/accretion of investments |
— | |||||||
| Change in operating assets and liabilities: |
||||||||
| Prepaid expenses and other current assets |
( |
) | ( |
) | ||||
| Accounts payable |
||||||||
| Accrued expenses |
( |
) | ||||||
| |
|
|
|
|||||
| Net cash used in operating activities |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Cash flows from investing activities |
||||||||
| Purchases of investments |
( |
) | — | |||||
| Maturities of investments |
— | |||||||
| Sale of investments |
— | |||||||
| Purchase of machinery and equipment |
( |
) | — | |||||
| |
|
|
|
|||||
| Net cash provided by investing activities |
— | |||||||
| Cash flows from financing activities |
||||||||
| Proceeds from stock option exercises |
||||||||
| Cash paid for deferred offering costs |
|
|
( |
) |
|
|
— |
|
| Proceeds from initial public offering of common stock, net of underwriting discounts, commissions and issuance costs |
— | |||||||
| Proceeds from issuance of convertible preferred stock, net of issuance costs |
— | |||||||
| Proceeds from issuance of convertible loan notes |
— | |||||||
| |
|
|
|
|||||
| Net cash provided by ( financing activitiesused in ) |
( |
) | ||||||
| |
|
|
|
|||||
| Net increase in cash, cash equivalents and restricted cash |
||||||||
| Cash, cash equivalents and restricted cash at beginning of period |
||||||||
| |
|
|
|
|||||
| Cash, cash equivalents and restricted cash at end of period |
$ | |||||||
| |
|
|
|
|||||
| Supplemental disclosure of non-cash inv financing activities:e sting and |
||||||||
| Accretion of issuance costs to redeemable convertible preferred stock |
$ | — | $ | |||||
| Exercise of Series B preferred stock tranche right |
$ | — | $ | |||||
| Accrued dividends on redeemable convertible preferred stock |
$ | — | $ | |||||
| Conversion of loan notes into series C preferred stock |
$ | — | $ | |||||
| Issuance of common stock upon conversion of redeemable convertible preferred stock |
$ | — | $ | |||||
| Initial public offering issuance costs included in accrued expenses |
$ | — | $ | |||||
| Purchase of machinery and equipment included in accounts payable |
$ | $ | — | |||||
| Deferred offering costs included in prepaid expenses and other current assets |
|
$ |
|
|
|
$ |
— |
|
Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
Short-term Investments |
Investments, non-current |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
| Commercial paper |
$ | $ | |
$ | — | $ | $ | $ | — | |||||||||||||||
| Corporate debt securities |
( |
) | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ | |
$ | $ | ( |
) | $ | |
$ | |
$ | |||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
Short-term Investments |
Investments, non-current |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
| Commercial paper |
$ | $ | $ | ( |
) | $ | |
$ | |
$ | — | |||||||||||||
| Corporate debt securities |
— | ( |
) | |||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ | |
$ | $ | ( |
) | $ | $ | $ | |
||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
September 30, 2021 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
(in thousands) |
||||||||||||||||
| Assets: |
||||||||||||||||
| Money markets funds (included in cash equivalents) |
$ | |
$ | — | $ | — | $ | |
||||||||
| Commercial paper |
— | — | ||||||||||||||
| Corporate debt securities |
— | — | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total assets |
$ | $ | |
$ | — | $ | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
December 31, 2020 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
(in thousands) |
||||||||||||||||
| Assets: |
||||||||||||||||
| Money markets funds (included in cash equivalents) |
$ | $ | — | $ | — | $ | ||||||||||
| Commercial paper |
— | — | ||||||||||||||
| Corporate debt securities |
— | — | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total assets |
$ | $ | |
$ | — | $ | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
September 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
| Payroll and employee related expenses |
$ | |
$ | |
||||
| External research and development |
||||||||
| Other accrued expenses |
||||||||
| |
|
|
|
|||||
| Total accrued expenses |
$ | $ | ||||||
| |
|
|
|
|||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
(in thousands) |
(in thousands) |
|||||||||||||||
| Research and development |
$ | |
$ | |
$ | |
$ | |||||||||
| General and administrative |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total stock-based compensation expense |
$ | $ | $ | $ | |
|||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Item 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
| • | prepare for, initiate and conduct additional clinical trials and preclinical studies of vidutolimod, including, among others, our current Phase 2 trial in anti-PD-1 anti-PD-1 anti-PD-1 |
| • | conduct the necessary scale-up activities to support the potential commercialization of vidutolimod, if approved; |
| • | hire additional clinical and scientific personnel to support our ongoing preclinical activities and clinical trials of vidutolimod and any other product candidates we choose to develop; |
| • | develop any future product candidates; |
| • | seek marketing approval for vidutolimod and any other product candidates that successfully complete clinical development; |
| • | acquire or in-license additional product candidates; |
| • | maintain compliance with applicable regulatory requirements; |
| • | maintain, expand, protect and enforce our intellectual property portfolio; |
| • | develop and expand our sales, marketing and distribution capabilities for vidutolimod and any other product candidates for which we obtain marketing approval; |
| • | take precautionary measures to help minimize the risk of the coronavirus or any other future pandemic to our employees and encounter continued delays or interruptions related to current development activities, our supply chain, or the third-parties on whom we rely due to the ongoing COVID-19 pandemic; |
| • | expand our infrastructure and facilities to accommodate the planned growth of our employee base; and |
| • | expand our operational, financial and management systems and increase administrative personnel, including to support our clinical development and commercialization efforts and our operations as a public company. |
| • | expenses incurred in connection with the preclinical and clinical development of our technology and vidutolimod, including clinical trials under agreements with contract research organizations (“CROs”), clinical investigators and consultants; |
| • | employee-related expenses, including salaries, benefits and travel and stock-based compensation expense, for employees engaged in research and development functions; |
| • | the cost of contract manufacturing organizations (“CMOs”), that manufacture drug product for use in our preclinical studies and clinical trials and perform analytical testing, scale-up and other services in connection with our development activities; |
| • | costs related to compliance with regulatory requirements; |
| • | payments made under third-party licensing agreements, such as the exclusive license agreement we entered into with Cytos Biotechnology LTD (now Kuros Biosciences AG, or “Kuros”) (the “Kuros License Agreement”); |
| • | facilities and other expenses, which include direct and allocated expenses for facilities, insurance and supplies; and |
| • | costs related to compliance with regulatory requirements. |
| • | the scope, progress, outcome and costs of our preclinical studies and clinical trials for vidutolimod or any other product candidates we may acquire or develop; |
| • | making arrangements with third-party manufacturers for both clinical and commercial supplies of vidutolimod or any other product candidates; |
| • | successful patient enrollment in, and the initiation and completion of clinical trials; |
| • | raising additional funds necessary to complete clinical development and the potential commercialization, of vidutolimod or any other product candidates; |
| • | receipt, timing and related terms of marketing approvals from applicable regulatory authorities; |
| • | the extent of any required post-marketing approval commitments to applicable regulatory authorities; |
| • | developing and implementing marketing and reimbursement strategies; |
| • | establishing sales, marketing and distribution capabilities and launching commercial sales of vidutolimod or any other products, if approved, whether alone or in collaboration with others; |
| • | acceptance of vidutolimod or any other products, if approved, by patients, the medical community and third-party payors; |
| • | effectively competing with other therapies and/or changes in standard of care; |
| • | obtaining and maintaining third-party coverage and adequate reimbursement; |
| • | obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates; |
| • | protecting and enforcing our rights in our intellectual property portfolio; |
| • | significant and changing government regulations; and |
| • | maintaining an acceptable tolerability profile of the products following approval, if any. |
Three months ended |
Nine months ended |
|||||||||||||||||||||||
September 30, |
Increase |
September 30, |
Increase |
|||||||||||||||||||||
2021 |
2020 |
(Decrease) |
2021 |
2020 |
(Decrease) |
|||||||||||||||||||
(unaudited, in thousands) |
||||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||
| Research and development |
$ | 11,375 | $ | 6,673 | $ | 4,702 | $ | 36,618 | $ | 19,462 | $ | 17,156 | ||||||||||||
| General and administrative |
3,605 | 3,160 | 445 | 11,498 | 6,465 | 5,033 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total operating expenses |
14,980 | 9,833 | 5,147 | 48,116 | 25,927 | 22,189 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Loss from operations |
(14,980 | ) | (9,833 | ) | 5,147 | (48,116 | ) | (25,927 | ) | 22,189 | ||||||||||||||
| Total other income (expense), net |
14 | 4 | 10 | 52 | (51 | ) | 103 | |||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net loss |
$ |
(14,966 |
) |
$ |
(9,829 |
) |
$ |
5,137 |
$ |
(48,064 |
) |
$ |
(25,978 |
) |
$ |
22,086 |
||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Nine months ended September 30, |
Increase |
|||||||||||
2021 |
2020 |
(Decrease) |
||||||||||
( in thousands) |
||||||||||||
| Net cash used in operating activities |
$ | (43,718 | ) | $ | (27,418 | ) | $ | 16,300 | ||||
| Net cash provided by investing activities |
54,337 | — | 54,337 | |||||||||
| Net cash provided by (used in) financing activities |
(180 | ) | 160,573 | (160,753 | ) | |||||||
| |
|
|
|
|
|
|||||||
| Net increase in cash, cash equivalents and restricted cash |
10,439 | $ | 133,155 | $ | (122,716 | ) | ||||||
| |
|
|
|
|
|
|||||||
| • | the initiation, progress, timing, costs and results of current and future preclinical studies and clinical trials for vidutolimod and any other product candidates we may develop or acquire in the future; |
| • | the cost and timing of the manufacture of additional clinical trial materials and the completion of commercial-scale outsourced manufacturing activities; |
| • | the costs to seek regulatory approvals for any product candidates that successfully complete clinical trials; |
| • | the extent to which we experience delays or interruptions to preclinical studies and clinical trials, to our third-party service providers on whom we rely, or to our supply chain due to the ongoing COVID-19 pandemic; |
| • | the need to hire additional clinical, quality assurance, quality control and other scientific personnel |
| • | the number and characteristics of product candidates that we develop or may in-license; |
| • | the outcome, timing and cost of meeting and maintaining compliance with regulatory requirements established by the U.S. Food and Drug Administration (the “FDA”), the European Medical Agency (the “EMA”) and other comparable foreign regulatory authorities; |
| • | the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; |
| • | the terms of any collaboration agreements we may choose to enter into; |
| • | the cost associated with the expansion of our operational, financial and management systems and increased personnel, including personnel to support our operations as a public company; and |
| • | the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products, if approved, on our own. |
| • | initiating and completing preclinical and clinical development of vidutolimod and future product candidates, including our current Phase 2 trial for anti-PD-1 |
| • | obtaining regulatory and marketing approvals for vidutolimod and future product candidates for which we complete clinical trials; |
| • | achieving and maintaining compliance with all regulatory requirements applicable to vidutolimod or any other product candidates; |
| • | establishing and maintaining commercially viable supply and manufacturing relationships with third parties for vidutolimod and future product candidates; |
| • | launching and commercializing vidutolimod, if approved, and future product candidates for which we obtain marketing approvals, either directly or with a collaborator or distributor; |
| • | obtaining market acceptance of vidutolimod, if approved, and future product candidates as viable treatment options by patients, the medical community and third-party payors; |
| • | addressing any competing technological and market developments; |
| • | identifying, assessing, acquiring and developing new product candidates; |
| • | negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter; |
| • | obtaining, maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and |
| • | attracting, hiring, and retaining qualified personnel. |
| • | the scope, progress, results and costs of researching and developing vidutolimod and our VLP technology and future product candidates, and conducting preclinical studies and clinical trials, including our current Phase 2 trial for anti-PD-1 COVID-19 (the “COVID-19 pandemic”), discussed below; |
| • | the timing of, and the costs involved in, obtaining regulatory and marketing approvals for vidutolimod and future product candidates if clinical trials are successful; |
| • | the success of existing or any future collaborations; |
| • | the cost of commercialization activities for any approved product, including marketing, sales and distribution costs; |
| • | the cost of manufacturing vidutolimod and future product candidates for clinical trials; |
| • | our ability to establish and maintain strategic licensing or other arrangements and the financial terms of such agreements, including the Kuros License Agreement, the BMS CTCSA and the Regeneron SNLA; |
| • | the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; |
| • | the timing, receipt, and amount of sales of, or royalties on, our future products, if any; and |
| • | the emergence, and regulatory approval, of competing cancer therapies and other adverse market developments. |
| • | we may fail to reach an agreement with regulators or IRBs regarding the scope, design, or implementation of our clinical trials; |
| • | the FDA, comparable foreign regulators or IRBs may not authorize us or our investigators to commence a clinical trial, to conduct a clinical trial at a prospective trial site or to amend trial protocols, or such regulators or IRBs may require that we modify or amend our clinical trial protocols in ways that make further clinical trials impractical or not financially prudent; |
| • | we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites or contract research organizations (“CROs”); |
| • | we may be unable to initiate or complete preclinical studies or clinical trials on time or at all due to the evolving impacts of the ongoing COVID-19 pandemic, and the spread of COVID-19 may affect the operations of research sites, CROs, IRBs, or key governmental agencies, such as the FDA, which may delay the development of vidutolimod or any future product candidates; |
| • | the supply or quality of raw materials or manufactured product candidates (whether provided by us or third parties) or other materials necessary to conduct clinical trials of our product candidates may be insufficient, inadequate or not available at an acceptable cost, or in a timely manner, or we may experience interruptions in supply; |
| • | the number of patients required for clinical trials of vidutolimod and future product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials or be lost to follow-up at a higher rate than we anticipate; |
| • | patients that enroll in our studies may misrepresent their eligibility or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the study or clinical trial, increase the needed enrollment size for the clinical trial or extend its duration; |
| • | clinical trial participants may elect to participate in alternative clinical trials sponsored by our competitors with product candidates that treat the same indications as vidutolimod and future product candidates; |
| • | our third-party contractors may fail to comply with regulatory requirements or the clinical trial protocol, or meet their contractual obligations to us in a timely manner, or at all, and we may be required to engage in additional clinical trial site monitoring to review our contractors’ performance; |
| • | we, regulators, or IRBs may require that we or our investigators suspend or terminate clinical trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks, undesirable side effects, or other unexpected characteristics of the product candidate, or if such undesirable effects are found to be caused by a chemically or mechanistically similar therapeutic or therapeutic candidate; |
| • | clinical trials of vidutolimod and future product candidates may produce negative or inconclusive results, or our studies may fail to reach the necessary level of statistical significance, and we may decide, or regulators may require us, to conduct additional clinical trials, analyses, reports, data, or preclinical trials or abandon product development programs; |
| • | regulators may revise the requirements for approving our product candidates, or such requirements may not be as we expect or statutes, regulations clinical trial or site policies could be amended or new ones could be adopted; |
| • | the cost of clinical trials of vidutolimod and future product candidates may be greater than we anticipate or we may have insufficient funds or resources to pursue or complete certain aspects of our clinical trial program or to do so within the timeframes we planned; |
| • | we may have insufficient funds to pay the substantial user fees required by the FDA upon the submission of a BLA or equivalent authorizations from comparable foreign regulatory authorities; |
| • | we may have delays in adding new investigators or clinical trial sites, or we may experience a withdrawal of clinical trial sites; |
| • | there may be regulatory questions or disagreements regarding interpretations of data and results, or new information may emerge regarding vidutolimod and future product candidates; |
| • | the FDA or comparable foreign regulatory authorities may not accept data from studies with clinical trial sites in foreign countries; |
| • | the FDA or comparable foreign regulatory authorities may disagree with our proposed indications, fail to approve or subsequently find fault with the manufacturing processes or our manufacturing facilities for clinical and future commercial supplies, and may take longer than we anticipate to review any regulatory submissions we may make for vidutolimod or any future product candidates; |
| • | the data collected from clinical trials of vidutolimod and future product candidates may not be sufficient for or to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a BLA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; |
| • | we may not be able to demonstrate that a product candidate provides an advantage over current standards of care or current or future competitive therapies in development; and |
| • | regarding trials managed by our existing or any future collaborators, our collaborators may face any of the above issues, and may conduct clinical trials in ways they view as advantageous to them but potentially suboptimal for us. |
| • | the design of the clinical trial; |
| • | our ability to recruit clinical trial investigators with the appropriate competencies and experience; |
| • | our ability to administer vidutolimod according to the protocol dose, schedule and route of administration; |
| • | our ability to obtain and maintain patient consents; |
| • | reporting of the preliminary results of any of our clinical trials; |
| • | the ability to monitor patients adequately during and after treatment; and |
| • | the risk that patients enrolled in clinical trials will drop out of the clinical trials before clinical trial completion. |
| • | launching commercial sales of vidutolimod and future product candidates, whether alone or in collaboration with others; |
| • | receiving an approved label with claims that are necessary or desirable for successful marketing, and that does not contain safety or other limitations that would impede our ability to market vidutolimod or any future product candidates; |
| • | creating market demand for our product candidates through marketing, sales and promotion activities; |
| • | hiring, training, and deploying a sales force or contracting with third parties to commercialize vidutolimod or any future product candidates in the United States; |
| • | manufacturing, either on our own or through third parties, product candidates in sufficient quantities and at acceptable quality and cost to meet commercial demand at launch and thereafter; |
| • | establishing and maintaining agreements with wholesalers, distributors, and group purchasing organizations on commercially reasonable terms; |
| • | creating partnerships with, or offering licenses to, third parties to promote and sell product candidates in foreign markets where we receive marketing approval; |
| • | maintaining patent and trade secret protection and regulatory exclusivity for vidutolimod or any future product candidates; |
| • | achieving market acceptance of vidutolimod or any future product candidates by patients, the medical community, and third-party payors; |
| • | achieving appropriate reimbursement for vidutolimod or any future product candidates; |
| • | effectively competing with other therapies; and |
| • | maintaining an acceptable tolerability profile of vidutolimod or any future product candidates following launch. |
| • | the inability to recruit, train, manage, and retain adequate numbers of effective sales and marketing personnel; |
| • | the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe vidutolimod or any future product candidates; |
| • | our inability to effectively oversee a geographically dispersed sales and marketing team; |
| • | the costs associated with training sales and marketing personnel on legal and regulatory compliance matters and monitoring their actions; |
| • | an inability to secure adequate coverage and reimbursement by government and private health plans; |
| • | the clinical indications for which the products are approved and the claims that we may make for the products; |
| • | limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling; |
| • | any distribution and use restrictions imposed by the FDA or comparable foreign regulatory authorities or to which we agree as part of a mandatory REMS or voluntary risk management plan; |
| • | liability for sales or marketing personnel who fail to comply with the applicable legal and regulatory requirements; |
| • | the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and |
| • | unforeseen costs and expenses associated with creating an independent sales and marketing organization or engaging a contract sales organization. |
| • | the efficacy of our vidutolimod and our VLP modality, and future product candidates alone or in combination with checkpoint inhibitor immunotherapies or other therapies; |
| • | the commercial success of the checkpoint blockade drugs with which vidutolimod or future products are or may be co-administered; |
| • | the prevalence and severity of adverse events associated with vidutolimod and future product candidates or those products with which they are co-administered; |
| • | the clinical indications for which the products are approved and the approved claims that we may make for the products; |
| • | limitations or warnings contained in the product’s FDA-approved labeling or those of comparable foreign regulatory authorities, including potential limitations or warnings for vidutolimod and future product candidates that may be more restrictive than other competitive products; |
| • | changes in the standard of care for the targeted indications for vidutolimod and future product candidates, which could reduce the marketing impact of any claims that we could make following FDA approval or approval by comparable foreign regulatory authorities, if obtained; |
| • | the relative convenience and ease of administration of vidutolimod and future product candidates and any products with which they are co-administered; |
| • | the cost of treatment compared with the economic and clinical benefit of alternative treatments or therapies; |
| • | the availability of adequate coverage or reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid; |
| • | the price concessions required by third-party payors to obtain coverage; |
| • | the extent and strength of our marketing and distribution of vidutolimod and future product candidates; |
| • | the safety, efficacy, and other potential advantages over, and availability of, alternative treatments already used or that may later be approved; |
| • | distribution and use restrictions imposed by the FDA or comparable foreign regulatory authorities with respect to vidutolimod and future product candidates or to which we agree as part of a REMS or voluntary risk management plan; |
| • | the timing of market introduction of vidutolimod and future product candidates, as well as competitive products; |
| • | our ability to offer vidutolimod and future product candidates for sale at competitive prices; |
| • | the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; |
| • | the extent and strength of our third-party manufacturer and supplier support; |
| • | the actions of companies that market any products with which vidutolimod and future product candidates are co-administered; |
| • | the approval of other new products; |
| • | adverse publicity about vidutolimod and future product candidates or any products with which they are co-administered, or favorable publicity about competitive products; and |
| • | potential product liability claims. |
| • | decreased demand for any of vidutolimod and future product candidates that we may develop; |
| • | injury to our reputation and significant negative media attention; |
| • | regulatory investigations that could require costly recalls or product modifications; |
| • | withdrawal of clinical trial participants; |
| • | significant costs to defend the related litigation; |
| • | substantial monetary awards to trial participants or patients; |
| • | loss of revenue; |
| • | the diversion of management’s attention away from managing our business; and |
| • | the inability to commercialize vidutolimod and future product candidates that we may develop. |
| • | a covered benefit under its health plan; |
| • | safe, effective and medically necessary; |
| • | appropriate for the specific patient; |
| • | cost-effective; and |
| • | neither experimental nor investigational. |
| • | delays or difficulties in enrolling patients in our clinical trials; |
| • | delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; |
| • | diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials or absenteeism due to the ongoing COVID-19 pandemic that reduces site resources; |
| • | interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the integrity of clinical trial data; |
| • | risk that participants enrolled in our clinical trials will contract COVID-19 or variants thereof while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events or patient withdrawals from our trials; |
| • | limitations in employee resources that would otherwise be focused on conducting our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; |
| • | delays in receiving authorizations from local regulatory authorities to initiate our planned clinical trials; |
| • | delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials; |
| • | interruption in global shipping that may affect the transport of clinical trial materials, such as investigational drug product used in our clinical trials; |
| • | changes in local regulations as part of a response to the ongoing COVID-19 pandemic, which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether; |
| • | interruptions or delays in preclinical studies due to restricted or limited operations at research and development laboratory facilities; |
| • | delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and |
| • | refusal of the FDA to accept data from clinical trials in affected geographies outside the United States. |
| • | be subject to limitations on the indicated uses or patient populations for which they may be marketed, distribution restrictions, or other conditions of approval; |
| • | contain significant safety warnings, including boxed warnings, contraindications, and precautions; |
| • | not be approved with label statements necessary or desirable for successful commercialization; or |
| • | contain requirements for costly post-market testing and surveillance, or other requirements, including the submission of a REMS to monitor the safety or efficacy of the products. |
| • | restrictions on manufacturing, distribution, or marketing of such products; |
| • | restrictions on the labeling, including required additional warnings, such as boxed warnings, contraindications, precautions, and restrictions on the approved indication or use; |
| • | modifications to promotional pieces; |
| • | issuance of corrective information; |
| • | requirements to conduct post-marketing studies or other clinical trials; |
| • | clinical holds or termination of clinical trials; |
| • | requirements to establish or modify a REMS or similar strategy; |
| • | changes to the way the product is administered to patients; |
| • | liability for harm caused to patients or subjects; |
| • | reputational harm; |
| • | the product becoming less competitive; |
| • | warning or untitled letters; |
| • | suspension of marketing or withdrawal of the products from the market; |
| • | regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product; |
| • | refusal to approve pending applications or supplements to approved applications that we submit; |
| • | recalls of products; |
| • | fines, restitution or disgorgement of profits or revenues; |
| • | suspension or withdrawal of marketing approvals; |
| • | refusal to permit the import or export of our products; |
| • | product seizure or detention; |
| • | FDA debarment, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements; or |
| • | injunctions or the imposition of civil or criminal penalties, including imprisonment. |
| • | the demand for vidutolimod and future product candidates, if we obtain regulatory approval; |
| • | our ability to set a price that we believe is fair for our products; |
| • | our ability to obtain coverage and reimbursement approval for a product; |
| • | our ability to generate revenue and achieve or maintain profitability; |
| • | the level of taxes that we are required to pay; and |
| • | the availability of capital. |
| • | the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; |
| • | the federal civil and criminal false claims laws and civil monetary penalty laws, such as the federal False Claims Act, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false of fraudulent claim for purposes of the False Claims Act; |
| • | the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; |
| • | the federal physician payment transparency requirements, sometimes referred to as the “Sunshine Act” under the ACA require manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report to HHS information related to physician (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) payments and other transfers of value and the ownership and investment interests of such physicians and their immediate family members. Effective January 1, 2022, these reporting obligations will extend to include transfers of value made in the previous year to certain nonphysician providers such as physician assistants and nurse practitioners; |
| • | HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (the “HITECH Act”) and its implementing regulations, which also imposes obligations on certain covered entity healthcare providers, health plans, and healthcare clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; |
| • | analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and may be broader in scope than their federal equivalents; some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures; and |
| • | state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts, and analogous foreign laws and regulations. |
| • | our customers’ ability to obtain reimbursement for vidutolimod and future product candidates in foreign markets; |
| • | our inability to directly control commercial activities because we are relying on third parties; |
| • | the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements; |
| • | different medical practices and customs in foreign countries affecting acceptance in the marketplace; |
| • | import or export licensing requirements; |
| • | longer accounts receivable collection times; |
| • | longer lead times for shipping; |
| • | language barriers for technical training; |
| • | reduced protection of intellectual property rights in some foreign countries; |
| • | potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations; |
| • | the existence of additional potentially relevant third-party intellectual property rights; |
| • | foreign currency exchange rate fluctuations; and |
| • | the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute. |
| • | the scope of rights granted under the license agreement and other interpretation-related issues; |
| • | the extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; |
| • | the sublicensing of patent and other rights under our collaborative development relationships; |
| • | our diligence obligations under the license agreement and what activities satisfy those diligence obligations; |
| • | the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our third-party vendors; and |
| • | the priority of invention of patented technology. |
| • | we, or our current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions; |
| • | others may independently develop similar or alternative technologies or duplicate our technology without infringing our owned or in-licensed intellectual property rights; |
| • | it is possible that our pending patent applications or those we may own or in-license in the future will not lead to issued patents; |
| • | issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors; |
| • | our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; |
| • | we cannot ensure that any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates; |
| • | we cannot ensure that any patents issued to us or our licensors will provide a basis for an exclusive market for our commercially viable product candidates or will provide us with any competitive advantages; |
| • | we cannot ensure that our commercial activities or product candidates will not infringe upon the patents of others; |
| • | we cannot ensure that we will be able to successfully commercialize our product candidates on a substantial scale, if approved, before the relevant patents that we own or license expire; |
| • | we may not develop additional proprietary technologies that are patentable; |
| • | the patents of others may harm our business; and |
| • | we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property. |
| • | failure of third-party manufacturers to comply with regulatory requirements and maintain quality assurance; |
| • | breach of the manufacturing agreement by the third party; |
| • | failure to manufacture our product according to our specifications; |
| • | failure to manufacture our product according to our schedule or at all; |
| • | production difficulties caused by unforeseen events that may delay the availability of one or more of the necessary raw materials or delay the manufacture of vidutolimod or any future product candidates for use in clinical trials or for commercial supply, including as a result of the COVID-19 pandemic; |
| • | misappropriation of our proprietary information, including our trade secrets and know-how; and |
| • | termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. |
| • | collaborators may not perform their obligations as expected; |
| • | collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; |
| • | collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; |
| • | collaborators could fail to make timely regulatory submissions for a product candidate; |
| • | collaborators may control the public release of information regarding the developments, and we may not be able to make announcements or data presentations on a schedule favorable to us; |
| • | collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements, which could subject them or us to regulatory enforcement actions; |
| • | collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; |
| • | product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of vidutolimod and future product candidates; |
| • | a collaborator with marketing and distribution rights to vidutolimod or any future product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product candidate or product; |
| • | disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates or might result in litigation or arbitration, any of which would be time consuming and expensive; |
| • | collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; and |
| • | collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability. |
| • | increased operating expenses and cash requirements; |
| • | the assumption of additional indebtedness or contingent liabilities; |
| • | the issuance of our equity securities; |
| • | assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; |
| • | the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition; |
| • | retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships; |
| • | risks and uncertainties associated with the other party to such a transaction, including the prospects of that party, their regulatory compliance status, and their existing products or product candidates and marketing approvals; and |
| • | our inability to generate revenue from acquired technology or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs. |
| • | the success of competitive drugs or technologies; |
| • | results of clinical trials of vidutolimod and future product candidates or those of our competitors, including interim or topline results; |
| • | regulatory or legal developments in the United States and other countries; |
| • | the regulatory status of our product candidates; |
| • | failure of any of our product candidates, if approved, to achieve commercial success; |
| • | developments or disputes concerning patent applications, issued patents or other proprietary rights; |
| • | the recruitment or departure of key personnel; |
| • | the level of expenses related to any of vidutolimod and future product candidates or clinical development programs; |
| • | the results of our efforts to discover, develop, acquire or in-license future product candidates or drugs; |
| • | actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; |
| • | variations in our financial results or those of companies that are perceived to be similar to us; |
| • | changes in the structure of healthcare payment systems; |
| • | market conditions in the pharmaceutical and biotechnology sectors; |
| • | the impact of the ongoing COVID-19 pandemic on us or on the U.S. and global economies and global equity markets; |
| • | general economic, industry and market conditions; and |
| • | the other factors described in this “Risk Factors” section. |
| • | a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; |
| • | a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; |
| • | a requirement that special meetings of stockholders be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; |
| • | advance notice requirements for stockholder proposals and nominations for election to our board of directors; |
| • | a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; |
| • | a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation; and |
| • | the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock. |
| Exhibit Number |
Description | |
| 31.1* | Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934. | |
| 31.2* | Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934. | |
| 32.1*(1) | Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS* | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) | |
| * | Filed herewith |
| (1) | The certifications on Exhibit 32 hereto are deemed to be furnished with this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act. |
| CHECKMATE PHARMACEUTICALS, INC. | ||
| By: | /s/ Alan Fuhrman | |
| Alan Fuhrman | ||
| Interim President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
| By: | /s/ Robert Dolski | |
| Robert Dolski | ||
| Chief Financial Officer | ||
(Principal Financial Officer) | ||
Exhibit 31.1
Certification of Periodic Report under Section 302 of the Sarbanes-Oxley Act of 2002
I, Alan Fuhrman, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2021 of Checkmate Pharmaceuticals, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 12, 2021
| /s/ Alan Fuhrman |
| Alan Fuhrman |
| Interim President and Chief Executive Officer |
| (Principal Executive Officer) |
Exhibit 31.2
Certification of Periodic Report under Section 302 of the Sarbanes-Oxley Act of 2002
I, Robert Dolski, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2021 of Checkmate Pharmaceuticals, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 12, 2021
| /s/ Robert Dolski |
| Robert Dolski |
| Chief Financial Officer |
| (Principal Financial Officer) |
Exhibit 32.1
Certification Of
Principal Executive Officer
Pursuant To 18 U.S.C. Section 1350,
As Adopted Pursuant To
Section 906 of The Sarbanes-Oxley Act Of 2002
In connection with the Quarterly Report on Form 10-Q of Checkmate Pharmaceuticals, Inc. (the “Company”) for the period ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:
| 1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2) | The information contained in the Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Report and results of operations of the Company for the period covered by the Report. |
| Date: November 12, 2021 | /s/ Alan Fuhrman | |||||
| Alan Fuhrman | ||||||
| Interim President and Chief Executive Officer | ||||||
| (Principal Executive Officer) | ||||||
| /s/ Robert Dolski | ||||||
| Robert Dolski | ||||||
| Chief Financial Officer | ||||||
| (Principal Financial Officer) | ||||||
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Common stock par value per share | $ 0.0001 | $ 0.0001 |
| Common stock number of shares authorised | 300,000,000 | 300,000,000 |
| Common stock number of shares issued | 21,626,891 | 21,560,398 |
| Common stock number of shares outstanding | 21,626,891 | 21,560,398 |
| Preferred stock par value per share | $ 0.0001 | $ 0.0001 |
| Preferred stock number of shares authorised | 10,000,000 | 10,000,000 |
| Preferred stock number of shares outstanding | 0 | 0 |
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock And Stockholders' Equity (Deficit) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
|
| Series B Redeemable Convertible Preferred Stock [Member] | ||
| Shares Issued, Price Per Share | $ 2.1687 | |
| Cash paid for redeemable convertible preferred stock issuance | $ 27 | |
| Series C Redeemable Convertible Preferred Stock [Member] | ||
| Shares Issued, Price Per Share | $ 1.6016 | |
| Cash paid for redeemable convertible preferred stock issuance | $ 429 | |
Nature of Business |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Nature of Business | 1 – N ATURE OF BUSINESS Nature of Business Checkmate Pharmaceuticals, Inc. (“Checkmate” or the “Company”), headquartered in Cambridge, Massachusetts, is a clinical stage biotechnology company incorporated under the laws of the State of Delaware in July 2015 that is focused on developing and commercializing its proprietary technology to harness the power of the immune system to combat cancer. Since its inception, the Company has devoted substantially all of its efforts to the research and development activities, including recruiting management and technical staff, raising capital, producing materials for non-clinical and clinical studies and building infrastructure to support such activities, and has not yet generated any revenue. Expenses have primarily been for research and development and related administrative costs. The Company has financed its operations through the sale of common stock, convertible debt and redeemable convertible preferred stock. Initial Public Offering On August 11, 2020, the Company closed its initial public offering (“IPO”), at which time the Company issued and sold 5,000,000 shares of its common stock, at a price to the public of $15.00 per share. On September 3, 2020, the underwriters of the IPO exercised a portion of their overallotment option by purchasing an additional 109,861 shares from the Company at the IPO price. The Company received approximately $67.7 million in net proceeds, inclusive of the over-allotment exercise and after deducting underwriting discounts and commissions and other offering expenses payable by the Company . In connection with the closing of the IPO, all outstanding shares of the Company’s preferred stock were converted into 14,948,241 shares of the Company’s common stock. On July 31, 2020, the Company effected a one-for-7.4771 Risks and Uncertainties The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, the outcome of clinical trials, development by competitors of new therapeutics and technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, ability to secure additional capital to fund operations, and risks associated with the ongoing COVID-19 global pandemic or future pandemics, including known and potential delays associated with its ongoing and anticipated trials and the Company’s ability to raise additional capital to finance its operations. There can be no assurance that the Company will be able to successfully complete the development of, or receive regulatory approval for, any products developed, and if approved, that any products will be commercially viable. Any products resulting from the Company’s current research and development efforts will require significant additional research and development, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts will require significant amounts of additional capital, adequate personnel, infrastructure and extensive compliance reporting capabilities. The Company has not generated any revenues from the sale of any products to date. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.The Company may seek additional funding through private or public equity financings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing agreements. If the Company is unable to obtain additional funding, the Company may be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all. The Company expects that its cash, cash equivalents and available-for-sale |
Summary of Significant Accounting Policies |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Accounting Policies [Abstract] | |
| Summary of Significant Accounting Policies | 2 – S UMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies are described in Note 2, Summary of Significant Accounting Policies 10-K. There have been no material changes to the significant accounting policies during the nine month period ended September 30, 2021, except as noted below. Basis of Presentation The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company and its wholly owned subsidiary Checkmate Pharmaceuticals Security Corporation. Any reference in these notes to applicable guidance is meant to refer to the authoritative accounting principles generally accepted in the United States as found in the Accounting Standard Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB). Unaudited interim financial information The accompanying interim condensed consolidated financial statements and related disclosures are unaudited and have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the Exchange Act. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s financial statements and related footnotes as of and for the year ended December 31, 2020, included in the Company’s 2020 Annual Report on Form 10-K. The Company’s financial information as of September 30, 2021, and for the three and nine months ended September 30, 2021 and 2020 is unaudited, but in the opinion of management, includes all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented. The balance sheet data as of December 31, 2020 was derived from audited financial statements. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year. Use of estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual of research and development expenses and the valuation of stock-based awards before the Company’s IPO. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions. Machinery and equipment Machinery and equipment is recorded at cost less accumulated depreciation. Depreciation is recognized using the straight-line method over the estimated useful life of five years for each asset. Accumulated depreciation at September 30, 2021 was $28,486. Deferred offering costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in the condensed consolidated statements of stockholders’ equity as a reduction of additional paid-in capital. Recently issued accounting pronouncements In June 2016, the FASB issued ASU 2016-13, “Credit Losses (Topic 326).” ASU 2016-13 requires that financial assets measured at amortized cost, such as trade receivables and investments, be represented net of expected credit losses, which may be estimated based on relevant information such as historical experience, current conditions, and future expectation for each pool of similar financial asset. The new guidance requires enhanced disclosures related to trade receivables and associated credit losses. In May 2019, the FASB issued ASU No. 2019-05, “Financial Instruments—Credit Losses (Topic 326) Targeted Transition Relief,” which allows for a transition election on certain instruments. The guidance is effective for Smaller Reporting Companies for fiscal years beginning after December 15, 2022 and interim periods in those fiscal years. In November 2019, the FASB issued ASU No. 2019-11 which amends certain aspects of ASU No. 2016-13, including transition relief for trouble debt restructuring, among other topics. The Company is currently evaluating the impact of this pronouncement on its consolidated financial statements. |
Investments And Fair Value Measurement |
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| Investments, Fair Value Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments And Fair Value Measurement | 3 – I NVESTMENTS AND FAIR VALUE MEASUREMENT The following tables summarizes the amortized cost and estimated fair value of the Company’s investments, which are considered to be available-for-sale As of September 30, 2021
As of December 31, 202 0
At September 30, 2021, all investments mature within one year or less. At September 30, 2021, there were no available-for-sale available-for-sale The following tables set forth the fair value of the Company’s financial assets and liabilities by level within the fair value hierarchy that are measured at fair value on a recurring basis:
Investments classified as Level 2 within the valuation hierarchy consist of commercial paper and corporate debt securities. The Company estimates the fair values of these marketable securities by taking into consideration valuations obtained from third-party pricing sources. |
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Accrued Expenses |
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| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued Expenses | 4 – A CCRUED EXPENSES Accrued expenses consist of the following:
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Redeemable Convertible Preferred Stock |
9 Months Ended |
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Sep. 30, 2021 | |
| Temporary Equity Disclosure [Abstract] | |
| Redeemable Convertible Preferred Stock | 5 – R EDEEMABLE CONVERTIBLE PREFERRED STOCK On August 11, 2020, in connection with the closing of the IPO, all outstanding shares of the Company’s preferred stock were converted into 14,948,241 shares of common stock. As a result of the conversion, the Company reclassified the carrying value of its preferred stock, which included all cumulative but unpaid dividends, to common stock and additional
paid-in-capital |
Equity |
9 Months Ended |
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Sep. 30, 2021 | |
| Stockholders' Equity Note [Abstract] | |
| Equity | 6 – E QUITY The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders. Common stockholders are entitled to receive dividends declared out of funds legally available, subject to the payment in full of all preferential dividends to which the holders of preferred stock are entitled. On August 11, 2020, the Company filed a restated certificate of incorporation in the State of Delaware, which, among other things, restated the number of shares of all classes of stock that the Company has authority to issue up to 310,000,000 shares, consisting of (i) 300,000,000 shares of common stock, $0.0001 par value per share, and (ii) 10,000,000 shares of preferred stock, $0.0001 par value per share. The shares of preferred stock are currently undesignated and no shares are outstanding. Also on August 11, 2020, the Company completed its IPO, pursuant to which it issued and sold 5,109,861 shares of common stock, inclusive of 109,861 shares sold by the Company pursuant to the full exercise of the underwriters’ option to purchase additional shares. The aggregate net proceeds received by the Company from the IPO were $67.7 million, after deducting underwriting discounts and commissions and other offering costs. On September 7, 2021, the Company filed a shelf registration statement on Form S-3 (File No. 333-259353) with the U.S. Securities and Exchange Commission (“SEC”), which was declared effective by the SEC on September 15, 2021 (the “Shelf Registration Statement”). Under the Shelf Registration Statement, the Company may offer and sell, from time to time, various securities in an aggregate amount of up to$ 150million. In connection with filing the Shelf Registration Statement, the Company entered into an Open Market Sale Agreement SM (the “2021 Sales Agreement”), with Jefferies LLC (“Jefferies”), pursuant to which the Company may offer and sell, from time to time, shares of its common stock having an aggregate offering of up to $ 50.0million through Jefferies as its sales agent. The Company will pay the sales agent a commission of % of the gross proceeds of any sales made pursuant to the 2021 Sales Agreement. As of September 30, 2021, no shares of common stock have been sold and no net proceeds have been received by the Company pursuant to the 2021 Sales Agreement . |
Stock-Based Compensation |
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| Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation | 7 – S TOCK -BASED COMPENSATION Total stock-based compensation expense was classified in the accompanying condensed consolidated statements of operations and comprehensive loss as follows:
During the nine months ended September 30, 2021, the Company granted options with service-based vesting conditions for the purchase of 1,210,701 shares of common stock with a weighted average exercise price of $10.51 per share and a weighted average grant-date fair value of $7.33 per share . |
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Net Loss Per Share |
9 Months Ended |
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Sep. 30, 2021 | |
| Earnings Per Share [Abstract] | |
| Net Loss Per Share | 8 – N ET LOSS PER SHARE Net Loss Per Share Attributable To Common Stockholders Because the Company reports a net loss attributable to common stockholders, basic and diluted net loss per share attributable to common stockholders are the same for both years presented. All preferred stock and stock options have been excluded from the computation of diluted weighted-average shares outstanding because such securities would have an antidilutive impact. At September 30, 2021 and 2020, options to purchase common stock of 3,550,129 and 2,491,336, respectively, have been excluded from the calculation of diluted net loss per share because their inclusion would have been antidilutive. |
Commitments And Contingencies |
9 Months Ended |
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Sep. 30, 2021 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments And Contingencies | 9 – C OMMITMENTS AND CONTINGENCIES Operating Lease The Company has a month-to-month i vely. Clinical Trial Collaboration and Supply Agreements On May 10, 2021, the Company entered into a Supply and Non-Exclusive License Agreement (“SNLA”) with Regeneron Pharmaceuticals, Inc. (“Regeneron”). The SNLA dictates the general terms that govern specific collaborative studies between the Company and Regeneron, including a Phase 2 proof of concept trial, with patient cohorts in anti-PD-1 anti-PD-1 and anti-PD-1 non-exclusive licenses to use background intellectual property and regulatory documentation to seek regulatory approval of the other party’s compound solely for use as a combination therapy. The Company does not expect any future consideration to be payable to Regeneron pursuant to the SNLA. On December 7, 2020, the Company entered into the Master Clinical Trial Collaboration Agreement (“MCTCA”) with Bristol-Myers Squibb Company (“BMS”). The MCTCA dictates the general terms that govern specific collaborative studies between the companies, including the Company’s Phase 2 refractory melanoma study and Phase 2 front-line melanoma study (collectively, the “collaborative studies”). Pursuant to the MCTCA, BMS agreed to provide nivolumab, a drug to be used in combination with vidutolimod in the collaborative studies, at its own expense. As part of the MCTCA, the parties granted each other non-exclusive licenses to use background intellectual property and regulatory documentation to seek regulatory approval of the other party’s compound solely for use as a combination therapy. The Company does not expect any further consideration to be payable to BMS pursuant to the MCTCA. On August 22, 2018, the Company entered into the Clinical Trial Collaboration and Supply Agreement (“CTCSA”) with an affiliate of Merck KGaA (“Merck”) and Pfizer Inc. (“Pfizer”) (Merck and Pfizer together are referred to herein as the “Alliance”). Pursuant to the CTCSA, the Company, and the Alliance will each provide compound drug product that will be dosed concurrently or in combination in a clinical trial sponsored by Pfizer. This agreement was amended on March 4, 2019. In addition to providing a compound drug product to be used in the clinical trial, the Company will reimburse Pfizer for each patient dosed in the study using the Company’s compound at a specified rate outlined in the CTCSA. In no event will the amount of costs due by the Company to Pfizer exceed $4.0 million over the term of the CTCSA. The costs of services performed, and material used in connection with the research and development activities of the CTCSA, including reimbursements due to Pfizer, are included in research and development costs and expensed as incurred. The Company incurred $1.0 million and $0.5 million of expense during the years ended December 31, 2020 and 2019, respectively. By mutual agreement of the Company and the Alliance, the clinical trial was discontinued in 2020, and the Company does not expect to incur any further costs in connection with the CTCSA. License Agreement In June 2015, the Company entered into an exclusive license agreement with Cytos Biotechnology LTD (now Kuros Biosciences AG, or “Kuros”) as amended in August 2017 and as further amended in January 2018 (the “Kuros License Agreement”). Pursuant to the Kuros License Agreement, in return for payments made, the Company was granted an exclusive, royalty-bearing, sublicensable, worldwide license, under all of Kuro’s intellectual property rights, including any intellectual property rights arising during the term of the agreement, to commercially develop, manufacture, use, distribute, and sell certain therapeutic products, including vidutolimod, (the “Licensed Products”) for the diagnosis, treatment and prevention of all indications in humans and animals. Under the terms of the Kuros License Agreement, the Company is required to use commercially reasonable efforts to develop at least one Licensed Product. Under the Kuros License Agreement, the Company agreed to make payments to Kuros for each product that achieves certain development and regulatory milestones, including payments of up to $ 56.0 million for the Company’s current oncology programs. As of September 30, 2021, the Company has incurred license fees and milestone payments totaling $ 8.3 million pursuant to the Kuros License Agreement. These payments are comprised of: (i) a license fee of $ 1.0 million which was recognized in research and development expense in 2015, (ii) a $ 1.0 million milestone payment in connection with the dosing of the first patient in our first Phase 1 clinical trial, which was recognized in research and development expense in 2016, (iii) a $ 0.3 million license amendment fee in connection with the signing of the second amendment to the Kuros License Agreement, which was recognized in research and development expense in 2018, (iv) a $ 2.0 million milestone payment in connection with the dosing of the first patient in the Phase 2/3 first-line melanoma trial for vidutolimod, which was recognized in the statement of operations for the three months ended March 31, 2021 and (v) a $ 4.0million milestone payment in connection with the dosing in a Phase 2 trial intended to assess the efficacy and safety of vidutolimod in combination with nivolumab for the treatment of patients with anti-PD-1 The Company is also required to pay tiered royalties of high single-digit to low teens percentages on annual net sales of Licensed Products that are covered by a licensed patent, as well as royalties at % of the foregoing amounts with respect to sales of Licensed Products that are not covered by a licensed patent, but are covered by licensed know-how. The Kuros License Agreement expires upon the expiration of the last-to-expire royalty days’ notice to the other party. The Company has the right to terminate the agreement for any reason upon 90 days’ written notice to Kuros. Other Contingencies During the ordinary course of its operations, the Company may become a party to contractual disputes, litigation, and potential claims. The Company does not believe that the resolution of any of these matters, if any, will have a material adverse effect on its financial position or results of operations. |
Subsequent Event |
9 Months Ended |
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Sep. 30, 2021 | |
| Subsequent Events [Abstract] | |
| Subsequent Event | 10 – SUBSEQUENT EVENT On October 27, 2021, the Company announced that Alan Fuhrman, a member of the board of directors, was appointed interim President and Chief Executive Officer. Mr. Fuhrman succeeds Barry Labinger, who has transitioned from his roles as President, Chief Executive Officer and member of the Company’s board of directors. |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2021 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company and its wholly owned subsidiary Checkmate Pharmaceuticals Security Corporation. Any reference in these notes to applicable guidance is meant to refer to the authoritative accounting principles generally accepted in the United States as found in the Accounting Standard Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB). |
| Unaudited interim financial information | Unaudited interim financial information The accompanying interim condensed consolidated financial statements and related disclosures are unaudited and have been prepared in accordance with GAAP for interim financial information and the instructions to Form
10-Q and Article 10 of Regulation S-X of the Exchange Act. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s financial statements and related footnotes as of and for the year ended December 31, 2020, included in the Company’s 2020 Annual Report on Form 10-K. The Company’s financial information as of September 30, 2021, and for the three and nine months ended September 30, 2021 and 2020 is unaudited, but in the opinion of management, includes all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented. The balance sheet data as of December 31, 2020 was derived from audited financial statements. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year. |
| Use of Estimates | Use of estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual of research and development expenses and the valuation of stock-based awards before the Company’s IPO. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions. |
| Machinery and equipment | Machinery and equipment Machinery and equipment is recorded at cost less accumulated depreciation. Depreciation is recognized using the straight-line method over the estimated useful life of five years for each asset. Accumulated depreciation at September 30, 2021 was $28,486. |
| Deferred offering costs | Deferred offering costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in the condensed consolidated statements of stockholders’ equity as a reduction of additional paid-in capital. |
| Recently issued accounting pronouncements | Recently issued accounting pronouncements In June 2016, the FASB issued ASU 2016-13, “Credit Losses (Topic 326).” ASU 2016-13 requires that financial assets measured at amortized cost, such as trade receivables and investments, be represented net of expected credit losses, which may be estimated based on relevant information such as historical experience, current conditions, and future expectation for each pool of similar financial asset. The new guidance requires enhanced disclosures related to trade receivables and associated credit losses. In May 2019, the FASB issued ASU No. 2019-05, “Financial Instruments—Credit Losses (Topic 326) Targeted Transition Relief,” which allows for a transition election on certain instruments. The guidance is effective for Smaller Reporting Companies for fiscal years beginning after December 15, 2022 and interim periods in those fiscal years. In November 2019, the FASB issued ASU No. 2019-11 which amends certain aspects of ASU No. 2016-13, including transition relief for trouble debt restructuring, among other topics. The Company is currently evaluating the impact of this pronouncement on its consolidated financial statements. |
Investments And Fair Value Measurement (Tables) |
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| Investments, Fair Value Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Amortized cost and estimated fair value of investments | The following tables summarizes the amortized cost and estimated fair value of the Company’s investments, which are considered to be available-for-sale As of September 30, 2021
As of December 31, 202 0
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| Schedule of Fair Value Assets And Liabilities Measured On Recurring Basis | The following tables set forth the fair value of the Company’s financial assets and liabilities by level within the fair value hierarchy that are measured at fair value on a recurring basis:
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Accrued Expenses (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued Expenses | Accrued expenses consist of the following:
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Stock-Based Compensation - (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Total Stock-Based Compensation Expense | Total stock-based compensation expense was classified in the accompanying condensed consolidated statements of operations and comprehensive loss as follows:
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Summary of Significant Accounting Policies -Additional Information (Detail) - Machinery and Equipment [Member] $ in Thousands |
9 Months Ended |
|---|---|
|
Sep. 30, 2021
USD ($)
| |
| Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 28,486 |
| Property, Plant and Equipment, Depreciation Methods | straight-line method |
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Payroll and employee related expenses | $ 1,601 | $ 1,555 |
| External research and development | 3,153 | 3,633 |
| Other accrued expenses | 537 | 390 |
| Total accrued expenses | $ 5,291 | $ 5,578 |
Redeemable Convertible Preferred Stock - Additional Information (Detail) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
Aug. 11, 2020 |
|---|---|---|---|
| Temporary Equity [Line Items] | |||
| Convertible Preferred Stock | $ 0 | $ 0 | |
| Common Stock [Member] | |||
| Temporary Equity [Line Items] | |||
| Convertible Preferred Stock, Shares Issued upon Conversion | 14,948,241 |
Stock-Based Compensation - Summary of Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
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| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
| Stock-based compensation expense | $ 1,480 | $ 852 | $ 4,183 | $ 1,053 |
| Research and Development [Member] | ||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
| Stock-based compensation expense | 617 | 509 | 1,710 | 588 |
| General and Administrative [Member] | ||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
| Stock-based compensation expense | $ 863 | $ 343 | $ 2,473 | $ 465 |
Stock-Based Compensation - Additional Information (Detail) |
9 Months Ended |
|---|---|
|
Sep. 30, 2021
$ / shares
shares
| |
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Stock options granted | shares | 1,210,701 |
| Weighted average exercise price, granted | $ 10.51 |
| Weighted average grant date fair value of stock options granted, Per share | $ 7.33 |
Net Loss Per Share - Additional Information (Detail) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
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| Earnings Per Share [Abstract] | ||
| Purchase common stock | $ 3,550,129 | $ 2,491,336 |