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 entered into an Agreement and Plan of Merger (“Merger Agreement”) with Regeneron Pharmaceuticals, Inc. (“Parent”), and Scandinavian Acquisition Sub, Inc., a wholly owned subsidiary of Parent (“Purchaser”), pursuant to which and upon terms and conditions set forth in the Merger Agreement, Purchaser will merge with and into the Company, with the Company as the surviving corporation and as a direct wholly owned subsidiary of Parent (the “Merger”), after which the Company will cease to be a stand-alone entity. The completion of the Merger is subject to conditions, some or all of which may not be satisfied or completed on a timely basis, if at all. Failure to complete the Merger could have material adverse effects on us. |
• | We are a clinical-stage biopharmaceutical company with a 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, has, and may in the future, 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 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 all or a significant portion of our research and product development efforts, including one or more of our clinical trials. |
• | There are substantial doubts about our ability to continue as a going concern. Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations. |
• | 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 has caused delays to our ongoing clinical trials of vidutolimod and could further delay ongoing trials or prevent or delay other clinical trials for vidotolimud or future product candidates. We have had difficulty enrolling patients due primarily to the COVID-19 pandemic, and may continue to find it difficult to enroll patients in our ongoing 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 ability to consummate the Merger and the timing of the closing of the Merger, including the satisfaction to conditions to closing of the Merger within the expected timeframe or at all; |
• | the outcome of any legal proceedings that may be instituted against the parties and others related to the Merger Agreement; |
• | the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Merger Agreement; |
• | unanticipated difficulties or expenditures relating to the Merger, |
• | the response of our collaborators or other parties to the announcement of the Merger; |
• | the response of Company stockholders to the Merger Agreement; |
• | our current expectations and anticipated results of operations; |
• | our ability and need to raise additional funding and our ability to continue as a going concern; |
• | the timing and the success of preclinical studies and clinical trials of vidutolimod and any future product candidates, including our current Phase 2 trial for anti-PD-1 |
• | the ongoing impact of the COVID-19 pandemic on our business and the timing and enrollment of our clinical trials; |
• | our ability to enroll and conduct successful clinical trials or the timing or likelihood of obtaining 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 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, including any potential difficulties in employee retention as a result of the announcement and pendency of the Merger; |
• | 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 (“IPO”) and any other fundraising 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.” |
March 31, 2022 |
December 31, 2021 |
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Assets |
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Current Assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
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Short-term investments |
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Prepaid expenses and other current assets |
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Total current assets |
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Equipment, net |
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Other assets |
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Total assets |
$ | $ | ||||||
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Liabilities and Stockholders’ Equity |
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Current Liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued expenses |
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Total current liabilities |
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Total liabilities |
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Commitments and Contingencies (Note 9) |
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Stockholders’ Equity: |
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Preferred stock, $ |
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Common stock, $ 1 ; |
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Additional paid-in capital |
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Accumulated other comprehensive gain (loss) |
( |
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Accumulated deficit |
( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ | $ | ||||||
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Three Months Ended March 31, |
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2022 |
2021 |
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Operating expenses: |
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Research and development |
$ | $ | ||||||
General and administrative |
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Total operating expenses |
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Loss from operations |
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Other income: |
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Interest income |
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Total other income |
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Net loss |
$ | ( |
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Weighted-average common shares outstanding—basic and diluted |
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Net loss per share—basic and diluted |
$ | ( |
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Comprehensive loss: |
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Net loss |
$ | ( |
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Unrealized loss on available-for-sale |
( |
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Comprehensive loss |
$ | ( |
) | $ | ( |
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Common Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Gain/(Loss) |
Total Stockholders’ Equity (Deficit) |
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Shares |
Amount |
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Balances at December 31, 2021 |
$ |
$ |
$ |
( |
) |
$ | ( |
) | $ |
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Exercise of stock options |
— | — | — | — | — | |||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Unrealized loss on available-for-sale |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
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Balance at March 31, 2022 |
$ |
$ |
$ |
( |
) | $ |
( |
) |
$ |
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Common Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Gain/(Loss) |
Total Stockholders’ Equity (Deficit) |
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Shares |
Amount |
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Balances at December 31, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) | $ |
( |
) | |||||||||||||
Exercise of stock options |
— | — | — | |||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Unrealized loss on available-for-sale |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance at March 31, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
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$ |
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Three Months ended March 31, |
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2022 |
2021 |
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Cash flows from operating activities |
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Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock based compensation |
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Depreciation |
— | |||||||
Amortization/accretion of investments |
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Change in operating assets and liabilities: |
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Prepaid expenses and other current assets |
( |
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Accounts payable |
( |
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Accrued expenses |
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Net cash used in operating activities |
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Cash flows from investing activities |
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Purchases of investments |
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Maturities of investments |
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Net cash provided by (used in) investing activities |
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Cash flows from financing activities |
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Proceeds from stock option exercises |
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Net cash provided by financing activities |
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Net decrease in cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period |
$ | $ | ||||||
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Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
Short-term Investments |
Investments, non-current |
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(in thousands ) |
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Corporate debt securities |
$ | $ | |
$ | ( |
) | $ | $ | $ | |
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Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
Short-term Investments |
Investments, non-current |
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(in thousands ) |
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Corporate debt securities |
$ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||
March 31, 2022 |
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Level 1 |
Level 2 |
Level 3 |
Total |
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(in thousands) |
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Assets: |
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Money markets funds (included in cash equivalents) |
$ | $ | — | $ | — | $ | ||||||||||
Corporate debt securities |
— | — | ||||||||||||||
Total assets |
$ | $ | $ | — | $ | |||||||||||
December 31, 2021 |
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Level 1 |
Level 2 |
Level 3 |
Total |
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(in thousands) |
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Assets: |
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Money markets funds (included in cash equivalents) |
$ | $ | — | $ | — | $ | ||||||||||
Corporate debt securities |
— | — | ||||||||||||||
Total assets |
$ | $ | $ | — | $ | |||||||||||
March 31, |
December 31, |
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2022 |
2021 |
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(in thousands) |
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Payroll and employee related expenses |
$ | |
$ | |
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External research and development |
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Other accrued expenses |
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Total accrued expenses |
$ | $ | ||||||
Three Months Ended March 31, |
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2022 |
2021 |
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(in thousands) |
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Research and development |
$ | $ | ||||||
General and administrative |
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Total stock-based compensation expense |
$ | $ | |
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• | conduct our current and any additional clinical trials 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; |
• | conduct research and preclinical development of any future product candidates; |
• | 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; |
• | 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; |
• | 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; |
• | 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 and otherwise; and |
• | expand our infrastructure and facilities to accommodate the planned growth of our employee base; |
• | 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 in 2015 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 in a timely manner; |
• | 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. |
Quarters ended March 31, |
Increase (Decrease) |
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2022 |
2021 |
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(in thousands) |
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Operating expenses: |
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Research and development |
$ | 11,648 | $ | 10,378 | $ | 1,270 | ||||||
General and administrative |
4,238 | 3,803 | 435 | |||||||||
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|
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|
|
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Total operating expenses |
15,886 | 14,181 | 1,705 | |||||||||
Loss from operations |
(15,886 | ) | (14,181 | ) | 1,705 | |||||||
Interest income |
19 | 53 | (34 | ) | ||||||||
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Total other income |
19 | 53 | (34 | ) | ||||||||
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Net loss |
$ | (15,867) | $ | (14,128) | $ | 1,739 | ||||||
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Quarter Ended March 31 |
Increase (Decrease) |
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2022 |
2021 |
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( in thousands) |
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Net cash used in operating activities |
$ | (10,670) | $ | (14,307) | $ | (3,637) | ||||||
Net cash provided by (used in) investing activities |
(527) | 10,261 | (10,788) | |||||||||
Net cash provided by financing activities |
— | 118 | (118) | |||||||||
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Net decrease in cash, cash equivalents and restricted cash |
$ | (11,197) | $ | (3,928) | $ | 7,269 | ||||||
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• | our ability to complete the Merger and the timing thereof; |
• | 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 or otherwise; |
• | 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 and timing to seek and obtain regulatory approvals for any product candidates that successfully complete clinical trials; |
• | 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 completing enrollment in and obtaining results from 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, timing 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”) or otherwise;; |
• | 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, including the BMS CTCSA and the Regeneron SNLA; |
• | 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 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 we may experience additional enrollment delays that could prevent us from completing our 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. |
• | further 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. |
• | Other legislative changes have been proposed and adopted in the United States since the ACA was enacted that may impact our business if we are able to commercialize any product candidates. In August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers up to 2% per fiscal year, and, due to subsequent legislative amendments, including the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) will remain in effect through 2030 unless additional Congressional action is taken. Pursuant to the CARES Act, which was signed into law on March 27, 2020 to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, and subsequent legislation, these reductions were suspended from May 1, 2020 through March 31, 2022. Then, a 1% payment reduction will occur beginning April 1, 2022 through June 30, 2022, and the 2% payment reduction will resume on July 1, 2022. |
• | In addition, the American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. |
• | On April 13, 2017, CMS published a final rule that gives states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces. |
• | Additionally, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part B drugs beginning January 1, 2020. This final rule codified CMS’s policy change that was effective January 1, 2019. However, it is unclear whether the Biden administration will challenge, reverse, revoke or otherwise modify these executive and administrative actions. |
• | On December 20, 2019, former President Trump signed into law the Further Consolidated Appropriations Act (H.R. 1865), which repealed the Cadillac tax, the health insurance provider tax, and the medical device excise tax. It is impossible to determine whether similar taxes could be instated in the future. |
• | 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. Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act or federal civil money penalties; |
• | 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. Manufacturers can be held liable under the federal False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. The federal False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the federal False Claims Act and to share in any monetary recovery; |
• | 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 (physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, and certified-nurse midwives); |
• | HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (the “HITECH Act”) and its implementing regulations, including the Final Omnibus Rule published in January 2013, 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 creation, maintenance, receipt, 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. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions. In addition, there may be additional federal, state and non-U.S. laws which govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; |
• | 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. In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America’s Code on Interactions with Healthcare Professionals. Several states also impose other marketing restrictions or require pharmaceutical companies to make marketing or price disclosures to the state and require the registration of pharmaceutical sales representatives. State and foreign laws, including for example the European Union General Data Protection Regulation, which became effective May 2018 also govern the privacy and security of personal data, including health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. There are ambiguities as to what is required to comply with these state requirements and if we fail to comply with an applicable state law requirement, we could be subject to penalties; 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 time it takes and 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. |
* | 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 Bash | |
Alan Bash | ||
President, Chief Executive Officer and Director | ||
(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 Bash, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2022 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 registrants 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: May 12, 2022
/s/ Alan Bash |
Alan Bash |
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 March 31, 2022 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 registrants 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: May 12, 2022
/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 March 31, 2022, 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: May 12, 2022 | /s/ Alan Bash | |||
Alan Bash 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 |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
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 | 21,630,627 | 21,630,572 |
Common stock number of shares outstanding | 21,630,627 | 21,630,572 |
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 Operations And Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2022 |
Mar. 31, 2021 |
|
Operating expenses: | ||
Research and development | $ 11,648 | $ 10,378 |
General and administrative | 4,238 | 3,803 |
Total operating expenses | 15,886 | 14,181 |
Loss from operations | (15,886) | (14,181) |
Other income: | ||
Interest income | 19 | 53 |
Total other income | 19 | 53 |
Net loss | $ (15,867) | $ (14,128) |
Weighted-average common shares outstanding—basic and diluted | 21,630,600 | 21,582,143 |
Net loss per share—basic and diluted | $ (0.73) | $ (0.65) |
Comprehensive loss: | ||
Net loss | $ (15,867) | $ (14,128) |
Unrealized loss on available-for-sale investments | (43) | (9) |
Comprehensive loss | $ (15,910) | $ (14,137) |
Nature of Business |
3 Months Ended |
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Mar. 31, 2022 | |
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 issuance of common and redeemable convertible preferred stock. Proposed Merger with Regeneron Pharmaceuticals, Inc. On April 18, 2022, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) with Regeneron Pharmaceuticals, Inc., a New York corporation (“Parent”), and Scandinavian Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Purchaser”). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions therein, Purchaser filed a tender offer on May 2, 2022, (the “Offer”) to acquire all of the issued and outstanding shares of the common stock of the Company at a price per share of $10.50, to be paid to the seller in cash, without interest and subject to reduction for any applicable withholding of taxes required by applicable law. The Offer will initially remain open for 20 business days, subject to extension under certain circumstances. If successful, upon terms and conditions set forth in the Merger Agreement, Purchaser will merge with and into the Company, with the Company as the surviving corporation and as a direct wholly owned subsidiary of Parent (the “Merger”), after which the Company will cease being a standalone entity. The Merger and related transactions are currently expected to close in mid-2022, subject to the satisfaction or waiver of customary closing conditions. The Merger Agreement provides that the Company will be required to pay Parent a termination fee in the amount of $8.8 millionif, among other reasons: (i) the Company elects to terminate the Merger Agreement in accordance therewith; (ii) the Company fails to include a favorable recommendation of the Board in the Schedule 14D-9 or in the preliminary proxy statement filed with the SEC related to the stockholder meeting approving and adopting the Merger Agreement; or (iii) the Merger Agreement is terminated by either the Company or Parent resulting from the failure of the parties to consummate the closing of the Merger in the timetable specified in the Merger Agreement. Assuming successful completion of the Merger, the Company will incur approximately $10.0 million of closing costs to third-party advisors in accordance with contractual obligations tied to the successful closing of the transaction. 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. We are also subject to risks related to the Merger, including our ability consummate the Merger and the timing of the closing of the Merger, the risks that a condition to closing would not be satisfied within the expected timeframe or at all or that the closing of the Merger will not occur; the outcome of any legal proceedings that may be instituted against the parties and others related to the Merger Agreement; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Merger Agreement; unanticipated difficulties or expenditures relating to the Merger, the response of our collaborators or other third parties to the announcement of the Merger, and/or potential difficulties in employee retention as a result of the announcement and pendency of the Merger; and the response of our stockholders to the Merger Agreement, If the Merger does not occur, there can be no assurance that we will be able to successfully raise sufficient additional capital or complete in a timely manner 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. Going Concern Since inception, the Company has incurred recurring losses and negative cash flows from operations. The Company expects to continue to generate operating losses for the foreseeable future. The Company has funded its operations primarily with proceeds from the sale of its common stock, convertible debt and redeemable convertible preferred stock. The Company’s cash, cash equivalents and available-for-sale investments were $ 60.1 million as of March 31, 2022. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as Going Concern (Subtopic 205-40) As a result, management has concluded that substantial doubt exists with respect to the Company’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. If the Merger does not occur, the Company expects its existing cash, cash equivalents and available-for-sale |
Summary of Significant Accounting Policies |
3 Months Ended |
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Mar. 31, 2022 | |
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 3, Summary of Significant Accounting Policies 10-K. There have been no material changes to the significant accounting policies during the three-month period ended March 31, 2022. 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 consolidated financial statements and should be read in conjunction with the Company’s consolidated financial statements and related footnotes as of and for the year ended December 31, 2021, included in the Company’s 2021 Annual Report on Form 10-K. The Company’s financial information as of March 31, 2022, and for the three months ended March 31, 2022 and 2021 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, 2021 was derived from audited consolidated 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. 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. 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 condensed 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 March 31, 2022
As of December 31, 2021
At March 31, 2022 all 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 corporate debt securities. The Company estimates the fair values of these marketable securities by taking into consideration valuations obtained from third-party pricing sources. |
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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Stock-Based Compensation |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | 5 – 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 three months ended March 31, 2022, the Company granted options with service-based vesting conditions for the purchase of 1,589,475 shares of common stock with a weighted average exercise price of $ 2.41 per share and a weighted average grant-date fair value of $ 1.70 per share. |
Net Loss Per Share |
3 Months Ended |
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Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 6 – N ET LOSS PER SHARE Because the Company reports a net loss, basic and diluted net loss per share are the same for both years presented. All stock options have been excluded from the computation of diluted weighted-average shares outstanding because such securities would have an antidilutive impact. At March 31, 2022 and 2021, options to purchase common stock of 4,724,613 and 3,178,556, respectively, have been excluded from the calculation of diluted net loss per share because their inclusion would have been antidilutive. |
Commitments And Contingencies |
3 Months Ended |
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Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | 7 – C OMMITMENTS AND CONTINGENCIES Operating Lease The Company has a month-to-month 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 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. 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 Kuros’ 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. Through March 31, 202 2 , the Company has incurred license fees and milestone payments totaling $ 8.3million, including $ 6.0 million in 2021. Cost incurred in 2021 relate 2.0d to: (i) a $ 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 condensed consolidated statement of operations for the three months ended March 31, 2021 and (ii) a $ 4.0 million milestone payment in connection with the patient dosing in a Phase 2 trial of vidutolimod in combination with nivolumab for the treatment of patients with anti-PD-1 refractory melanoma and to potentially support a Biologics License Application (“BLA”) and marketing approval of vidutolimod, which was entirely recognized in the condensed consolidated statements of operations for the three months ended June 30, 2021. Future milestone payments will be due upon filing for regulatory approval in each of the United States, Europe and the Far East and for ultimate approval in each of those regions. The licensed know-how. The Kuros License Agreement expires upon the expiration of the last-to-expire royalty 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. |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
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).
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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 consolidated financial statements and should be read in conjunction with the Company’s consolidated financial statements and related footnotes as of and for the year ended December 31, 2021, included in the Company’s 2021 Annual Report on Form 10-K. The Company’s financial information as of March 31, 2022, and for the three months ended March 31, 2022 and 2021 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, 2021 was derived from audited consolidated 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. 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.
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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 condensed 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 March 31, 2022
As of December 31, 2021
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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) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued expenses consist of the following:
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Stock-Based Compensation - (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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Nature of Business - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions |
Apr. 18, 2022 |
Mar. 31, 2022 |
---|---|---|
Subsidiary, Sale of Stock [Line Items] | ||
Available-for-sale investment | $ 60.1 | |
Regeneron Pharmaceuticals, Inc [Member] | Subsequent Event [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Sale of stock, price per share | $ 10.50 | |
Termination fees | $ 8.8 | |
Assuming of successful merger completion closing costs to third party advisors | $ 10.0 |
Going Concern - Additional Information (Detail) $ in Millions |
Mar. 31, 2022
USD ($)
|
---|---|
Going Concern [Abstract] | |
Cash, Cash Equivalents, and Short-term Investments | $ 60.1 |
Cash | $ 60.1 |
Investments And Fair Value Measurement - Summary Of Amortized Cost And Estimated Fair Value Of Investment (Detail) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Debt Securities, Available-for-sale [Line Items] | |||
Debt Securities, Available-for-sale, Fair Value | $ 60,100 | ||
Corporate Debt Securities [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Debt Securities, Available-for-sale, Amortized Cost | 20,612 | $ 20,206 | |
Debt Securities, Available-for-sale, Unrealized Gain | 0 | $ 0 | |
Debt Securities, Available-for-sale, Unrealized Loss | (57) | $ (14) | |
Debt Securities, Available-for-sale, Fair Value | 20,555 | 20,192 | |
Debt Securities, Available-for-sale, Short-term Investments | 20,555 | 20,192 | |
Debt Securities, Available-for-sale, Investments, non-current | $ 0 | $ 0 |
Investments And Fair Value Measurement - Schedule of Fair Value Assets And Liabilities Measured On Recurring Basis (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Assets: | ||
Assets, Fair Value Disclosure | $ 58,792 | $ 69,674 |
Money Markets Funds [Member] | ||
Assets: | ||
Assets, Fair Value Disclosure | 38,237 | 49,482 |
Corporate Debt Securities [Member] | ||
Assets: | ||
Assets, Fair Value Disclosure | 20,555 | 20,192 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Assets, Fair Value Disclosure | 38,237 | 49,482 |
Fair Value, Inputs, Level 1 [Member] | Money Markets Funds [Member] | ||
Assets: | ||
Assets, Fair Value Disclosure | 38,237 | 49,482 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Assets, Fair Value Disclosure | 20,555 | 20,192 |
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | ||
Assets: | ||
Assets, Fair Value Disclosure | $ 20,555 | $ 20,192 |
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Payables and Accruals [Abstract] | ||
Payroll and employee related expenses | $ 1,849 | $ 2,499 |
External research and development | 5,938 | 3,291 |
Other accrued expenses | 547 | 204 |
Total accrued expenses | $ 8,334 | $ 5,994 |
Stock-Based Compensation - Summary of Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 1,453 | $ 1,216 |
Research and Development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 731 | 486 |
General and Administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 722 | $ 730 |
Stock-Based Compensation - Additional Information (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options granted | shares | 1,589,475 |
Weighted average exercise price, granted | $ 2.41 |
Weighted average grant date fair value of stock options granted, Per share | $ 1.70 |
Net Loss Per Share - Additional Information (Detail) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Earnings Per Share [Abstract] | ||
Purchase common stock | $ 4,724,613 | $ 3,178,556 |
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