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.
QUARTERLY REPORT ON FORM 10-Q
Table of Contents
|
|
||
|
Item 1 |
2 |
|
|
|
Condensed Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018 |
2 |
|
|
3 |
|
|
|
4 |
|
|
|
Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (unaudited) |
6 |
|
|
7 |
|
|
Item 2 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
21 |
|
Item 3 |
29 |
|
|
Item 4 |
29 |
|
|
|
|
|
|
|
|
|
|
Item 1 |
30 |
|
|
Item 1A |
30 |
|
|
Item 2 |
74 |
|
|
Item 3 |
74 |
|
|
Item 4 |
74 |
|
|
Item 5 |
74 |
|
|
Item 6 |
75 |
|
|
76 |
||
1
Item 1. Condensed Financial Statements
Unity Biotechnology, Inc.
(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
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
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 |
|
|
| ||||||