ubx-10q_20190930.htm

 

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: 001-38470

 

Unity Biotechnology, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

26-4726035

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

3280 Bayshore Blvd. Suite 100

Brisbane, CA

94005

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650) 416-1192

 

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001

UBX

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 45,941,750 shares of common stock outstanding.

 


UNITY BIOTECHNOLOGY, INC.

QUARTERLY REPORT ON FORM 10-Q

Table of Contents

 

PART I. FINANCIAL INFORMATION

 

Item 1

Condensed Financial Statements

2

 

Condensed Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018

2

 

Condensed Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)

3

 

Condensed Statements of Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)

4

 

Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (unaudited)

6

 

Notes to Condensed Financial Statements (unaudited)

7

Item 2

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

21

Item 3

Quantitative and Qualitative Disclosures About Market Risk

29

Item 4

Controls and Procedures

29

 

 

 

PART II. OTHER INFORMATION

 

 

 

Item 1

Legal Proceedings

30

Item 1A

Risk Factors

30

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

74

Item 3

Default Upon Senior Securities

74

Item 4

Mine Safety Disclosures

74

Item 5

Other Information

74

Item 6

Exhibits

75

Signatures

76

 

 

1


PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

 

Unity Biotechnology, Inc.

Condensed Balance Sheets

(In thousands, except share and per share amounts)

 

 

 

September 30,

2019

 

 

December 31,

2018

 

 

 

(Unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

36,768

 

 

$

15,399

 

Short-term marketable securities

 

 

76,206

 

 

 

155,736

 

Prepaid expenses and other current assets

 

 

2,249

 

 

 

1,830

 

Tenant improvement receivable

 

 

10,650

 

 

 

 

Total current assets

 

 

125,873

 

 

 

172,965

 

Property and equipment, net

 

 

5,359

 

 

 

6,238

 

Long-term marketable securities

 

 

7,353

 

 

 

 

Restricted cash

 

 

1,446

 

 

 

550

 

Other long-term assets

 

 

1,647

 

 

 

1,622

 

Total assets

 

$

141,678

 

 

$

181,375

 

Liabilities, convertible preferred stock, and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,578

 

 

$

4,847

 

Accrued compensation

 

 

3,672

 

 

 

3,791

 

Accrued and other current liabilities

 

 

4,912

 

 

 

4,990

 

Settlement liability

 

 

 

 

 

2,059

 

Contingent consideration liability

 

 

1,156

 

 

 

895

 

Total current liabilities

 

 

14,318

 

 

 

16,582

 

Deferred rent, net of current portion

 

 

12,643

 

 

 

2,467

 

Contingent consideration liability, net of current portion

 

 

 

 

 

1,588

 

Other non-current liabilities

 

 

 

 

 

45

 

Total liabilities

 

 

26,961

 

 

 

20,682

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

 

 

Convertible preferred stock, $0.0001 par value; 10,000,000 shares authorized;

   no shares issued and outstanding

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value; 300,000,000 shares

   authorized as of September 30, 2019 and December 31, 2018; 44,088,338 and

   42,414,294 shares issued and outstanding as of September 30, 2019 and

   December 31, 2018, respectively

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

342,647

 

 

 

324,663

 

Related party promissory notes for purchase of common stock

 

 

(201

)

 

 

(201

)

Employee promissory notes for purchase of common stock

 

 

(400

)

 

 

(400

)

Accumulated other comprehensive loss

 

 

95

 

 

 

(95

)

Accumulated deficit

 

 

(227,428

)

 

 

(163,278

)

Total stockholders’ equity

 

 

114,717

 

 

 

160,693

 

Total liabilities, convertible preferred stock, and stockholders’ equity

 

$

141,678

 

 

$

181,375

 

 

See accompanying notes to the condensed financial statements.

2


Unity Biotechnology, Inc.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

17,777

 

 

$

14,353

 

 

$

52,750

 

 

$

42,577

 

General and administrative

 

 

5,692

 

 

 

4,389

 

 

 

15,139

 

 

 

11,688

 

Change in fair value of contingent consideration

 

 

(1,115

)

 

 

635

 

 

 

(1,327

)

 

 

2,393

 

Total operating expenses

 

 

22,354

 

 

 

19,377

 

 

 

66,562

 

 

 

56,658

 

Loss from operations

 

 

(22,354

)

 

 

(19,377

)

 

 

(66,562

)

 

 

(56,658

)

Interest income, net

 

 

756

 

 

 

1,068

 

 

 

2,663

 

 

 

2,246

 

Other expense, net

 

 

(112

)

 

 

(37

)

 

 

(251

)

 

 

(70

)

Net loss

 

 

(21,710

)

 

 

(18,346

)

 

 

(64,150

)

 

 

(54,482

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable securities,

   net of tax

 

 

(18

)

 

 

(42

)

 

 

190

 

 

 

(15

)

Comprehensive loss

 

$

(21,728

)

 

$

(18,388

)

 

$

(63,960

)

 

$

(54,497

)

Net loss per share, basic and diluted

 

$

(0.51

)

 

$

(0.45

)

 

$

(1.51

)

 

$

(2.29

)

Weighted-average number of shares used in

   computing net loss per share, basic and diluted

 

 

42,965,945

 

 

 

41,057,861

 

 

 

42,584,835

 

 

 

23,762,450

 

 

See accompanying notes to the condensed financial statements.


 

3


Unity Biotechnology, Inc.

Statements of Stockholders’ Equity

(In thousands, except share and per share amounts)

(Unaudited)

 

For the Nine Months Ended September 30, 2019

 

 

 

Convertible

Preferred Stock

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Related Party

Promissory Notes

for Purchase of

 

 

Employee Promissory Notes for Purchase of

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Common Stock

 

 

Common Stock

 

 

(Gain) Loss

 

 

Deficit

 

 

Equity (Deficit)

 

Balances at December 31, 2018

 

 

 

 

$

 

 

 

 

42,414,294

 

 

$

4

 

 

$

324,663

 

 

$

(201

)

 

$

(400

)

 

$

(95

)

 

$

(163,278

)

 

$

160,693

 

Issuance of common stock upon exercise of stock options

 

 

 

 

 

 

 

 

 

340,731

 

 

 

 

 

 

300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

300

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

207

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,997

 

Common stock issued to third parties

 

 

 

 

 

 

 

 

 

133,334

 

 

 

 

 

 

2,059

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,059

 

Change in unrealized gain (loss) on available-for-sale marketable securities, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

114

 

 

 

 

 

 

114

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,767

)

 

 

(18,767

)

Balances at March 31, 2019

 

 

 

 

$

 

 

 

 

42,888,359

 

 

$

4

 

 

$

329,226

 

 

$

(201

)

 

$

(400

)

 

$

19

 

 

$

(182,045

)

 

$

146,603

 

Issuance of common stock upon exercise of stock options

 

 

 

 

 

 

 

 

 

147,832

 

 

 

 

 

 

494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

494

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

218

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

218

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,944

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,944

 

Repurchased shares

 

 

 

 

 

 

 

 

 

(3,793

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under employee stock purchase plan (“ESPP”)

 

 

 

 

 

 

 

 

 

51,201

 

 

 

 

 

 

405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

405

 

Common stock issued to third party for a license

 

 

 

 

 

 

 

 

 

120,000

 

 

 

 

 

 

965

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

965

 

Change in unrealized gain (loss) on available-for-sale marketable securities, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

94

 

 

 

 

 

 

94

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,673

)

 

 

(23,673

)

Balances at June 30, 2019

 

 

 

 

$

 

 

 

 

43,203,599

 

 

$

4

 

 

$

333,252

 

 

$

(201

)

 

$

(400

)

 

$

113

 

 

$

(205,718

)

 

$

127,050

 

Issuance of common stock, net of issuance costs, under at-the-market ("ATM") equity offering program

 

 

 

 

 

 

 

 

 

874,643

 

 

 

 

 

 

5,398

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,398

 

Issuance of common stock upon exercise of stock options

 

 

 

 

 

 

 

 

 

10,584

 

 

 

 

 

 

25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

149

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,823

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,823

 

Repurchased shares

 

 

 

 

 

 

 

 

 

(488

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gain (loss) on available-for-sale marketable securities, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18

)

 

 

 

 

 

(18

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21,710

)

 

 

(21,710

)

Balances at September 30, 2019

 

 

 

 

$

 

 

 

 

44,088,338

 

 

$

4

 

 

$

342,647

 

 

$

(201

)

 

$

(400

)

 

$

95

 

 

$

(227,428

)

 

$

114,717

 

4


 

For the Nine Months Ended September 30, 2018

 

 

 

Convertible

Preferred Stock

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Related Party

Promissory Notes

for Purchase of

 

 

Employee Promissory Notes for Purchase of

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Common Stock

 

 

Common Stock

 

 

(Gain) Loss

 

 

Deficit

 

 

Equity (Deficit)

 

Balances at December 31, 2017

 

 

28,159,724

 

 

$

173,956

 

 

 

 

4,830,389

 

 

$

1

 

 

$

4,072

 

 

$

(202

)

 

$

 

 

$

(104

)

 

$

(86,880

)

 

$

(83,113

)

Issuance of Series C convertible preferred stock at $15.3317 per share for cash, net of issuance costs of $100

 

 

3,590,573

 

 

 

54,950

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon exercise of stock options

 

 

 

 

 

 

 

 

 

400,587

 

 

 

 

 

 

31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

38

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,370

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,370

 

Change in unrealized gain (loss) on available-for-sale marketable securities, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34

)

 

 

 

 

 

(34

)

Receipt of promissory note from related party for purchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(390

)

 

 

 

 

 

 

 

 

 

 

 

(390

)

Receipt of promissory note from employee for purchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(400

)

 

 

 

 

 

 

 

 

(400

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,133

)

 

 

(16,133

)

Balances at March 31, 2018

 

 

31,750,297

 

 

$

228,906

 

 

 

 

5,230,976

 

 

$

1

 

 

$

5,511

 

 

$

(592

)

 

$

(400

)

 

$

(138

)

 

$

(103,013

)

 

$

(98,631

)

Issuance of Series C convertible preferred stock at $5.1972 per share for cash, net of issuance costs of $19

 

 

322,852

 

 

 

4,931

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of preferred stock to common stock

 

 

(32,073,149

)

 

 

(233,837

)

 

 

 

32,073,149

 

 

 

2

 

 

 

233,837

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

233,839

 

Issuance of common stock upon exercise of stock options

 

 

 

 

 

 

 

 

 

10,613

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

213

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,838

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,838

 

Change in unrealized gain (loss) on available-for-sale marketable securities, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

61

 

 

 

 

 

 

61

 

Issuance of common stock at initial public offering, net of offering costs

 

 

 

 

 

 

 

 

 

5,000,000

 

 

 

1

 

 

 

75,851

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

75,852

 

Repayment of promissory note from related party from purchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

504

 

 

 

391