UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2019

OR

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

For the transition period from to

Commission File Number: 001-38360

Solid Biosciences Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	90-0943402
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
141 Portland Street, Fifth Floor Cambridge, MA	02139
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 337-4680

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

Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock $0.001 par value per share	SLDB	The Nasdaq Global Select Market

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒     No  ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒

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

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

As of November 1, 2019, the registrant had 45,987,571 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents

		Page
PART  I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets at September 30, 2019and December 31, 2018	2
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018	3
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2019 and 2018	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2019 and 2018	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30
PART II.	OTHER INFORMATION	32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 6.	Exhibits	73
	Signatures	74

1

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except share and per share data)

	September 30,			December 31,
	2019			2018
Assets
Current assets:
Cash and cash equivalents	$	94,720		$	86,366
Available-for-sale-securities		10,943			36,098
Prepaid expenses and other current assets		7,829			6,175
Total current assets		113,492			128,639
Property and equipment, net		11,369			10,422
Operating lease, right-of-use assets		5,529			—
Other non-current assets		209			209
Restricted cash		327			327
Total assets	$	130,926		$	139,597
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,210		$	3,691
Accrued expenses		11,466			8,235
Operating lease liabilities		1,672			—
Finance lease liabilities		181			173
Other current liabilities		221			382
Total current liabilities		16,750			12,481
Operating lease liabilities, excluding current portion		4,869			—
Finance lease liabilities, excluding current portion		782			859
Other non-current liabilities		—			1,074
Total liabilities		22,401			14,414
Commitments and contingencies (Note 12)
Preferred stock, $0.001 par value; 10,000,000 shares authorized    at September 30, 2019 and December 31, 2018; no shares issued and    outstanding at September 30, 2019 and December 31, 2018		—			—
Common stock, $0.001 par value; 300,000,000 shares authorized at    September 30, 2019 and December 31, 2018; 45,998,944 shares issued and    outstanding at September 30, 2019 and 35,432,460 shares issued and outstanding    at December 31, 2018; 2,295,699 pre-funded warrants outstanding at    September 30, 2019 and no pre-funded warrants outstanding at December 31, 2018		48			35
Additional paid-in capital		392,897			324,209
Accumulated other comprehensive loss		(2	)		(5	)
Accumulated deficit		(284,418	)		(199,056	)
Total stockholders’ equity		108,525			125,183
Total liabilities and stockholders’ equity	$	130,926		$	139,597

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except share and per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenue	$	—		$	—		$	—		$	—
Operating expenses:
Research and development		22,792			14,680			67,671			40,203
General and administrative		6,925			4,470			19,317			13,098
Total operating expenses		29,717			19,150			86,988			53,301
Loss from operations		(29,717	)		(19,150	)		(86,988	)		(53,301	)
Other income (expense):
Interest income		406			92			1,281			237
Other income		56			38			345			187
Total other income (expense), net		462			130			1,626			424
Net loss	$	(29,255	)	$	(19,020	)	$	(85,362	)	$	(52,877	)
Net loss per share attributable to common stockholders,    basic and diluted	$	(0.67	)	$	(0.55	)	$	(2.26	)	$	(1.61	)
Weighted average shares of common stock outstanding,    basic and diluted		43,467,618			34,539,001			37,727,640			32,800,126

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited, in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net loss	$	(29,255	)	$	(19,020	)	$	(85,362	)	$	(52,877	)
Other comprehensive loss:
Unrealized gain (loss) on available-for-sale securities		(5	)		4			3		7
Comprehensive loss	$	(29,260	)	$	(19,016	)	$	(85,359	)	$	(52,870	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited, in thousands, except share / unit data)

	For the Three Months Ended September 30, 2019
	Series 2 Senior Preferred Units		Amount		Series 1 Senior Preferred Units		Amount		Junior Preferred Units		Amount		Series A, B, C and D Common Units		Amount		Common Stock			Amount		Additional paid in capital		Accumulated other comprehensive income (loss)			Accumulated Deficit			Total Stockholders' Equity
Balance at June 30, 2019		—	$	—		—	$	—		—	$	—		—	$	—		35,398,894		$	35	$	331,620	$	3		$	(255,163	)	$	76,495
Equity-based    compensation		—		—		—		—		—		—		—		—		—					3,392		—			—			3,392
Sale of common stock,    net of issuance costs    of $2,079																		10,607,525		11			47,235								47,246
Sale of pre-funded    warrants																		2,295,699		2			10,650								10,652
Net loss		—		—		—		—		—		—		—		—									—			(29,255	)		(29,255	)
Repurchase of shares of    common stock		—		—		—		—		—		—		—		—		(7,475	)		—		—		—			—			—
Unrealized loss on    available for sale    securities		—		—		—		—		—		—		—		—		—			—		—		(5	)		—			(5	)
Balance at September 30,    2019		—	$	—		—	$	—		—	$	—		—	$	—		48,294,643		$	48	$	392,897	$	(2	)	$	(284,418	)	$	108,525
	For the Nine Months Ended September 30, 2019
	Series 2 Senior Preferred Units		Amount		Series 1 Senior Preferred Units		Amount		Junior Preferred Units		Amount		Series A, B, C and D Common Units		Amount		Common Stock			Amount		Additional paid in capital		Accumulated other comprehensive income (loss)			Accumulated Deficit			Total Stockholders' Equity
Balance at December 31,    2018		—	$	—		—	$	—		—	$	—		—	$	—		35,432,460		$	35	$	324,209	$	(5	)	$	(199,056	)	$	125,183
Equity-based    compensation		—		—		—		—		—		—		—		—		—					10,803		—			—			10,803
Sale of common stock,    net of issuance costs    of $2,079																		10,607,525		11			47,235								47,246
Sale of pre-funded    warrants																		2,295,699		2			10,650								10,652
Net loss		—		—		—		—		—		—		—		—									—			(85,362	)		(85,362	)
Repurchase of shares of    common stock		—		—		—		—		—		—		—		—		(41,041	)		—		—		—			—			—
Unrealized gain on    available for sale    securities		—		—		—		—		—		—		—		—		—			—		—		3			—			3
Balance at September 30,    2019		—	$	—		—	$	—		—	$	—		—	$	—		48,294,643		$	48	$	392,897	$	(2	)	$	(284,418	)	$	108,525

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited, in thousands, except share / unit data)

	For the Three Months Ended September 30, 2018
	Series 2 Senior Preferred Units			Amount			Series 1 Senior Preferred Units			Amount			Junior Preferred Units			Amount			Series A, B, C and D Common Units			Amount			Common Stock			Amount		Additional paid in capital		Accumulated other comprehensive income (loss)			Accumulated Deficit			Total Stockholders' Equity
Balance at June 30, 2018		—		$	—			—		$	—			—		$	—			—		$	—			35,444,792		$	35	$	320,382	$	(10	)	$	(158,115	)	$	162,292
Equity-based    compensation		—			—			—			—			—			—			—			—			—					1,797		—			—			1,797
Net loss		—			—			—			—			—			—			—			—										—			(19,020	)		(19,020	)
Repurchase of shares of    common stock		—			—			—			—			—			—			—			—			(12,332	)		—		—		—			—			—
Unrealized gain on    available for sale    securities		—			—			—			—			—			—			—			—			—			—		—		4			—			4
Balance at September 30,    2018		—		$	—			—		$	—			—		$	—			—		$	—			35,432,460		$	35	$	322,179	$	(6	)	$	(177,135	)	$	145,073
	For the Nine Months Ended September 30, 2018
	Series 2 Senior Preferred Units			Amount			Series 1 Senior Preferred Units			Amount			Junior Preferred Units			Amount			Series A, B, C and D Common Units			Amount			Common Stock			Amount		Additional paid in capital		Accumulated other comprehensive income (loss)			Accumulated Deficit			Total Stockholders' Equity (Deficit)
Balance at December 31,    2017		4,886,000		$	55,002			2,500,000		$	25,000			4,414,356		$	44,177			19,438,552		$	65,014			—		$	—	$	—	$	(13	)	$	(124,258	)	$	(59,257	)
Conversion of units into    shares of common    stock		(4,886,000	)		(55,002	)		(2,500,000	)		(25,000	)		(4,414,356	)		(44,177	)		(19,429,620	)		(65,180	)		26,498,559			26		189,333		—			—			124,179
Issuance of common    stock upon initial    public offering, net    of issuance costs of    $4,592		—			—			—			—			—			—			—			—			8,984,375		$	9		129,087		—			—			129,096
Equity-based    compensation		—			—			—			—			—			—			—			166								3,759		—			—			3,925
Net loss		—			—			—			—			—			—			—			—