Quarterly Report (10-q)

Date : 10/31/2019 @ 8:38PM
Source : Edgar (US Regulatory)
Stock : Eidos Therapeutics Inc (EIDX)
Quote : 42.02  -6.32 (-13.07%) @ 10:20PM
Eidos Therapeutics share price Chart

Quarterly Report (10-q)

 

 

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

 

Commission File Number: 001-38533

 

EIDOS THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

46-3733671

( State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

101 Montgomery Street, Suite 2000

San Francisco, CA

 

94104

101 Montgomery Street, Suite 2500

San Francisco, CA

 

94104

(Former address, if changed since last report)

 

(Former Zip Code)

Registrant’s telephone number, including area code: (415) 887-1471

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

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

EIDX

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 October 29, 2019, the registrant had 37,496,571 shares of common stock, $0.001 par value per share, outstanding.

 

 

 

 


Table of Contents

 

 

 

 

 

Page

PART I.

 

FINANCIAL INFORMATION

 

 

Item 1.

 

Financial Statements (Unaudited)

 

1

 

 

Condensed Balance Sheets

 

1

 

 

Condensed Statements of Operations and Comprehensive Loss

 

2

 

 

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

 

3

 

 

Condensed Statements of Cash Flows

 

5

 

 

Notes to Unaudited Condensed Financial Statements

 

6

Item 2.

 

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

 

23

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

30

Item 4.

 

Controls and Procedures

 

30

PART II.

 

OTHER INFORMATION

 

 

Item 1.

 

Legal Proceedings

 

31

Item 1A.

 

Risk Factors

 

31

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

69

Item 3.

 

Defaults Upon Senior Securities

 

69

Item 4.

 

Mine Safety Disclosures

 

69

Item 5.

 

Other Information

 

69

Item 6.

 

Exhibits

 

70

Signatures

 

71

 

 

 

i


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

EIDOS THERAPEUTICS, INC.

Condensed Balance Sheets

(Unaudited)

(In thousands, except share and per share data)

 

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

165,822

 

 

$

157,147

 

Related party receivable

 

 

83

 

 

 

34

 

Prepaid expenses and other current assets

 

 

5,402

 

 

 

1,789

 

Total current assets

 

 

171,307

 

 

 

158,970

 

Property and equipment, net

 

 

1,199

 

 

 

209

 

Operating lease, right of use asset

 

 

4,121

 

 

 

 

Other assets

 

 

2,267

 

 

 

933

 

Total assets

 

$

178,894

 

 

$

160,112

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,567

 

 

$

1,956

 

Related party payable

 

 

372

 

 

 

256

 

Lease liabilities

 

 

471

 

 

 

 

Accrued expenses and other current liabilities

 

 

5,665

 

 

 

2,577

 

Total current liabilities

 

 

10,075

 

 

 

4,789

 

Other liabilities

 

 

129

 

 

 

316

 

Lease liabilities, non-current

 

 

4,736

 

 

 

 

Total liabilities

 

 

14,940

 

 

 

5,105

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value, 5,000,000 shares authorized; no shares

   issued and outstanding

 

 

 

 

 

 

Common stock, $0.001 par value; 150,000,000 shares

   authorized as of September 30, 2019 and December 31, 2018,

   respectively; 37,496,571 and 36,760,536 shares issued and

   outstanding as of September 30, 2019 and December 31, 2018,

   respectively

 

 

38

 

 

 

37

 

Additional paid-in-capital

 

 

248,041

 

 

 

220,240

 

Accumulated deficit

 

 

(84,125

)

 

 

(65,270

)

Total stockholders’ equity

 

 

163,954

 

 

 

155,007

 

Total liabilities and stockholders'  equity

 

$

178,894

 

 

$

160,112

 

 

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

1


 

EIDOS THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

License revenue

 

$

26,691

 

 

$

 

 

$

26,691

 

 

$

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of license revenue

 

 

2,500

 

 

 

 

 

 

2,500

 

 

 

 

Research and development (includes related party

   expense (benefit) of ($76) and ($26) for the three

   months ended September 30, 2019 and 2018, and ($11)

   and $1 for the nine months ended September 30, 2019

   and 2018, respectively)

 

 

11,987

 

 

 

8,369

 

 

 

33,033

 

 

 

20,216

 

General and administrative (includes related party

   expense of $297 and $202 for the three months ended

   September 30, 2019 and 2018, and $450 and $946 for

   the nine months ended September 30, 2019 and 2018,

   respectively)

 

 

5,953

 

 

 

2,619

 

 

 

12,285

 

 

 

6,858

 

Total operating expenses

 

 

20,440

 

 

 

10,988

 

 

 

47,818

 

 

 

27,074

 

Income (loss) from operations

 

 

6,251

 

 

 

(10,988

)

 

 

(21,127

)

 

 

(27,074

)

Other income (expense), net

 

 

680

 

 

 

374

 

 

 

2,272

 

 

 

(3,797

)

Net and comprehensive income (loss)

 

 

6,931

 

 

 

(10,614

)

 

 

(18,855

)

 

 

(30,871

)

Deemed dividend related to redemption feature

   embedded in Convertible Promissory Notes

   payable to stockholders

 

 

 

 

 

 

 

 

 

 

 

(6,523

)

Gain on extinguishment of Convertible Promissory

   Notes payable to stockholders

 

 

 

 

 

 

 

 

 

 

 

7,436

 

Net income (loss) attributable to common stock for basic

   and diluted net income (loss) per share

 

$

6,931

 

 

$

(10,614

)

 

$

(18,855

)

 

$

(29,958

)

Net income (loss) per share attributable to common

   stockholders, basic

 

$

0.19

 

 

$

(0.30

)

 

$

(0.52

)

 

$

(1.83

)

Net income (loss) per share attributable to common

   stockholders, diluted

 

$

0.18

 

 

$

(0.30

)

 

$

(0.52

)

 

$

(1.83

)

Weighted-average shares used in computing net income

   (loss) per share attributable to common stockholders,

   basic

 

 

36,581,786

 

 

 

35,965,790

 

 

 

36,356,675

 

 

 

16,361,349

 

Weighted-average shares used in computing net income

   (loss) per share attributable to common stockholders,

   diluted

 

 

37,710,734

 

 

 

35,965,790

 

 

 

36,356,675

 

 

 

16,361,349

 

 

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

 

 

 

2


 

EIDOS THERAPEUTICS, INC.

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

For the Nine months ended September 30, 2019 (Unaudited)

(in thousands, except for share amounts)

 

 

 

Redeemable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

convertible

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Total

 

 

 

preferred stock

 

 

 

Common stock

 

 

paid-in-

 

 

Accumulated

 

 

stockholders'

 

 

 

Share

 

 

Amount

 

 

 

Share

 

 

Amount

 

 

capital

 

 

deficit

 

 

equity

 

Balance—December 31, 2018

 

 

 

 

$

 

 

 

 

36,760,536

 

 

$

37

 

 

$

220,240

 

 

$

(65,270

)

 

$

155,007

 

Issuance of common stock upon exercise of stock options and restricted

   stock

 

 

 

 

 

 

 

 

 

50,533

 

 

 

 

 

 

25

 

 

 

 

 

 

25

 

Vesting of restricted stock and early exercised options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

38

 

 

 

 

 

 

38

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

964

 

 

 

 

 

 

964

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,733

)

 

 

(11,733

)

Balance—March 31, 2019

 

 

 

 

 

 

 

 

 

36,811,069

 

 

 

37

 

 

 

221,267

 

 

 

(77,003

)

 

 

144,301

 

Issuance of common stock upon exercise of stock options and restricted

   stock

 

 

 

 

 

 

 

 

 

34,480

 

 

 

 

 

 

87

 

 

 

 

 

 

87

 

Issuance of common stock under employee stock plans

 

 

 

 

 

 

 

 

 

25,626

 

 

 

 

 

 

308

 

 

 

 

 

 

308

 

Vesting of restricted stock and early exercised options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37

 

 

 

 

 

 

37

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,166

 

 

 

 

 

 

1,166

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,053

)

 

 

(14,053

)

Balance—June 30, 2019

 

 

 

 

 

 

 

 

 

36,871,175

 

 

 

37

 

 

 

222,865

 

 

 

(91,056

)

 

 

131,846

 

Issuance of common stock upon exercise of stock options and restricted

   stock

 

 

 

 

 

 

 

 

 

69,223

 

 

 

 

 

 

236

 

 

 

 

 

 

236

 

Issuance of common stock under Alexion stock purchase agreement

 

 

 

 

 

 

 

 

 

 

 

556,173

 

 

 

1

 

 

 

23,308

 

 

 

 

 

 

 

23,309

 

Vesting of restricted stock and early exercised options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37

 

 

 

 

 

 

37

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,595

 

 

 

 

 

 

1,595

 

Net income and comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,931

 

 

 

6,931

 

Balance—September 30, 2019

 

 

 

 

$

 

 

 

 

37,496,571

 

 

$

38

 

 

$

248,041

 

 

$

(84,125

)

 

$

163,954

 

 

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

 

 

 

3


 

EIDOS THERAPEUTICS, INC.

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

For the Nine months ended September 30, 2018 (Unaudited)

(in thousands, except for share amounts)

 

 

 

Redeemable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

convertible

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Total

 

 

 

preferred stock

 

 

 

Common stock

 

 

paid-in-

 

 

Accumulated

 

 

stockholders'

 

 

 

Share

 

 

Amount

 

 

 

Share

 

 

Amount

 

 

capital

 

 

deficit

 

 

equity (deficit)

 

Balance—December 31, 2017

 

 

12,856,325

 

 

$

17,028

 

 

 

 

5,137,771

 

 

$

4

 

 

$

1,332

 

 

$

(14,532

)

 

$

(13,196

)

Issuance of Series B redeemable convertible preferred stock upon conversion

   of redeemable convertible promissory notes payable to stockholders

 

 

1,324,823

 

 

 

14,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recognition of beneficial conversion feature related to convertible promissory

   notes payable to stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,122

 

 

 

 

 

 

 

9,122

 

Deemed dividend related to embedded derivative liability on Convertible

   Promissory Notes payable to stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,523

)

 

 

 

 

 

(6,523

)

Issuance of common stock to Stanford University

 

 

 

 

 

 

 

 

 

45,889

 

 

 

 

 

 

7

 

 

 

 

 

 

7

 

Issuance of common stock upon exercise of stock options and restricted

   stock

 

 

 

 

 

 

 

 

 

149,350

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series B redeemable convertible preferred stock, net of issuance

   costs of $125 and fair value of redeemable convertible preferred stock

   tranche liability of $64

 

 

1,476,715

 

 

 

15,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reacquisition of beneficial conversion feature related to Convertible

   Promissory Notes payable to stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,341

)

 

 

(10,013

)

 

 

(14,354

)

Gain on extinguishment of Convertible Promissory Notes payable to

   stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,436

 

 

 

 

 

 

7,436

 

Vesting of restricted stock and early exercised options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

 

 

 

 

 

 

18

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

385

 

 

 

 

 

 

385

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,876

)

 

 

(8,876

)

Balance—March 31, 2018

 

 

15,657,863

 

 

 

47,193

 

 

 

 

5,333,010

 

 

 

4

 

 

 

7,436

 

 

 

(33,421

)

 

 

(25,981

)

Issuance of Series B redeemable convertible preferred stock, net of issuance

   costs of $0

 

 

4,430,162

 

 

 

48,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Settlement of fair value of redeemable convertible preferred stock tranche liability

   upon exercise of put option to stockholders into Series B redeemable convertible

   preferred stock

 

 

 

 

 

694

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net exercise of redeemable convertible preferred stock warrant liability

 

 

 

 

 

 

 

 

 

206,247

 

 

 

 

 

 

3,506

 

 

 

 

 

 

3,506

 

Conversion of redeemable convertible preferred stock to common stock at closing

   of initial public offering

 

 

(20,088,025

)

 

 

(95,887

)

 

 

 

24,025,270

 

 

 

25

 

 

 

95,862

 

 

 

 

 

 

95,887

 

Issuance of common stock upon initial public offering, net of issuance costs

 

 

 

 

 

 

 

 

 

7,187,500

 

 

 

8

 

 

 

110,962

 

 

 

 

 

 

110,970

 

Vesting of restricted stock and early exercised options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

 

 

 

22

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

621

 

 

 

 

 

 

621

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,381

)

 

 

(11,381

)

Balance—June 30, 2018

 

 

 

 

 

 

 

 

 

36,752,027

 

 

 

37

 

 

 

218,409

 

 

 

(44,802

)

 

 

173,644

 

Repurchase of early exercised stock options

 

 

 

 

 

 

 

 

 

(40,366

)

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock and early exercised options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

94

 

 

 

 

 

 

94

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

692

 

 

 

 

 

 

692

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,612

)

 

 

(10,612

)

Balance—September 30, 2018

 

 

 

 

$

 

 

 

 

36,711,661

 

 

$

37

 

 

$

219,195

 

 

$

(55,414

)

 

$

163,818

 

 

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

 

 

 

 

 

4


 

EIDOS THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2019

 

 

2018

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(18,855

)

 

$

(30,871

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

53

 

 

 

40

 

Stock-based compensation expense

 

 

3,725

 

 

 

1,701

 

Accrued interest on Convertible Promissory Notes payable

 

 

 

 

 

48

 

Change in fair value of derivative liability

 

 

 

 

 

(100

)

Change in fair value of redeemable convertible preferred stock tranche liabilities

 

 

 

 

 

630

 

Change in fair value of redeemable convertible preferred stock warrant liability

 

 

 

 

 

2,628

 

Amortization of debt discount on Convertible Promissory Notes payable

 

 

 

 

 

963

 

Loss on disposal of property and equipment

 

 

63

 

 

 

 

Gain on extinguishment of leasehold liability

 

 

(69

)

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Related party receivable

 

 

(49

)

 

 

38

 

Prepaid expenses and other current assets

 

 

(3,614

)

 

 

(2,764

)

Other assets

 

 

(5,454

)

 

 

18

 

Accounts payable

 

 

1,611

 

 

 

1,852

 

Accrued expenses and other liabilities

 

 

7,330

 

 

 

2,278

 

Related party payable

 

 

116

 

 

 

(166

)

Net cash used in operating activities

 

 

(15,143

)

 

 

(23,705

)

 

 

 

 

 

 

 

 

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(147

)

 

 

(144

)

Net cash used in investing activities

 

 

(147

)

 

 

(144

)

 

 

 

 

 

 

 

 

 

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs

 

 

 

 

 

63,875

 

Proceeds from issuance of Convertible Promissory Notes payable

 

 

 

 

 

10,000

 

Proceeds from issuance of common stock under employee stock plan

 

 

308

 

 

 

 

Proceeds from issuance of common stock upon exercise of stock options and restricted stock

 

 

348

 

 

 

75

 

Proceeds from issuance of common stock to Alexion

 

 

23,309

 

 

 

 

Proceeds from issuance of common stock in initial public offering, net of issuance costs

 

 

 

 

 

110,970

 

Net cash provided by financing activities

 

 

23,965

 

 

 

184,920

 

Net increase in cash and cash equivalents

 

 

8,675

 

 

 

161,071