SEC Filing - Unity Biotechnology

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ubx-10q_20210630.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 June 30, 2021

☐	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.)

285 East Grand Ave. South San Francisco, CA	94080
(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 August 6, 2021, the registrant had 55,104,250 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
	Condensed Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020	2
	Condensed Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)	3
	Condensed Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)	4
	Condensed Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (unaudited)	6
	Notes to Condensed Financial Statements (unaudited)	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4	Controls and Procedures	35

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	36
Item 1A	Risk Factors	36
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	81
Item 3	Default Upon Senior Securities	82
Item 4	Mine Safety Disclosures	82
Item 5	Other Information	82
Item 6	Exhibits	83
Signatures		84

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

Unity Biotechnology, Inc.

Condensed Balance Sheets

(In thousands, except for share amounts and par value)

	June 30, 2021			December 31, 2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	13,498		$	17,807
Short-term marketable securities		70,445			79,892
Prepaid expenses and other current assets		3,665			3,167
Total current assets		87,608			100,866
Property and equipment, net		11,251			12,627
Operating lease right-of-use assets		22,416			23,509
Long-term marketable securities		13,542			17,871
Restricted cash		1,446			1,446
Total assets	$	136,263		$	156,319
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,898		$	2,558
Accrued compensation		2,613			5,355
Accrued and other current liabilities		8,884			6,550
Total current liabilities		13,395			14,463
Operating lease liability, net of current portion		32,036			34,468
Long-term debt, net		24,892			24,508
Other long-term liabilities		23			—
Total liabilities		70,346			73,439
Commitments and contingencies (Note 6)
Stockholders’ equity:
Convertible preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.0001 par value; 300,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 55,104,250 and 53,253,213 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively		5			5
Additional paid-in capital		438,788			422,379
Related party promissory notes for purchase of common stock		—			(210	)
Accumulated other comprehensive gain		5			5
Accumulated deficit		(372,881	)		(339,299	)
Total stockholders’ equity		65,917			82,880
Total liabilities and stockholders’ equity	$	136,263		$	156,319

See accompanying notes to the condensed financial statements.

Unity Biotechnology, Inc.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Operating expenses:
Research and development	$	11,016		$	16,123		$	19,733		$	35,388
General and administrative		5,980			6,320			12,206			12,273
Change in fair value of contingent consideration		—			906			—			685
Impairment of long-lived assets		—			—			—			2,159
Total operating expenses		16,996			23,349			31,939			50,505
Loss from operations		(16,996	)		(23,349	)		(31,939	)		(50,505	)
Interest income		26			340			62			867
Interest expense		(784	)		—			(1,559	)		—
Other income (expense), net		(72	)		4,342			(146	)		2,933
Net loss		(17,826	)		(18,667	)		(33,582	)		(46,705	)
Other comprehensive gain (loss)
Unrealized gain (loss) on marketable debt securities		(10	)		(141	)		—			142
Comprehensive loss	$	(17,836	)	$	(18,808	)	$	(33,582	)	$	(46,563	)
Net loss per share, basic and diluted	$	(0.32	)	$	(0.38	)	$	(0.62	)	$	(0.96	)
Weighted-average number of shares used in computing net loss per share, basic and diluted		54,859,727			49,659,153			54,516,445			48,606,768

See accompanying notes to the condensed financial statements.

Unity Biotechnology, Inc.

Condensed Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

For the Six Months Ended June 30, 2021

	Common Stock					Additional Paid-In		Related Party Promissory Notes for Purchase of			Promissory Notes for Purchase of			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares			Amount		Capital		Common Stock			Common Stock			Gain (Loss)			Deficit			Equity
Balances at December 31, 2020		53,253,213		$	5	$	422,379	$	(210	)	$	—		$	5		$	(339,299	)	$	82,880
Issuance of common stock, net of issuance costs, under at-the-market equity ("ATM") offering program		1,220,629			—		8,892		—			—			—			—			8,892
Issuance of common stock upon exercise of stock options		259,019			—		1,183		—			—			—			—			1,183
Repurchase of early exercised shares		(33,370	)		—		—		—			—			—			—			—
Stock-based compensation		—			—		2,744		—			—			—			—			2,744
Vesting of restricted stock units		88,218			—		—		—			—			—			—			—
Reclass of promissory notes for purchase of common stock		—			—		—		210			(210	)		—			—			—
Unrealized gain on available-for-sale marketable securities		—			—		—		—			—			10			—			10
Net loss		—			—		—		—			—			—			(15,756	)		(15,756	)
Balances at March 31, 2021		54,787,709		$	5	$	435,198	$	—		$	(210	)	$	15		$	(355,055	)	$	79,953
Issuance of common stock upon exercise of stock options		238,519			—		612		—			—			—			—			612
Stock-based compensation		—			—		2,782		—			—			—			—			2,782
Issuance of common stock under 2018 ESPP		54,943			—		196		—			—			—			—			196
Vesting of restricted stock units		23,079			—		—		—			—			—			—			—
Repayment of promissory note for purchase of common stock		—			—		—		—			210			—			—			210
Unrealized loss on available-for-sale marketable securities		—			—		—		—			—			(10	)		—			(10	)
Net loss		—			—		—		—			—			—			(17,826	)		(17,826	)
Balances at June 30, 2021		55,104,250		$	5	$	438,788	$	—		$	—		$	5		$	(372,881	)	$	65,917

For the Six Months Ended June 30, 2020

	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		Capital		Common Stock			Common Stock			Gain (Loss)			Deficit			Equity
Balances at December 31, 2019		47,227,065	$	5	$	366,695	$	(210	)	$	(418	)	$	90		$	(245,455	)	$	120,707
Issuance of common stock, net of issuance costs, under ATM offering program		1,513,840		—		8,763		—			—			—			—			8,763
Issuance of common stock upon exercise of stock options		73,049		—		249		—			—			—			—			249
Vesting of early exercised stock options		—		—		40		—			—			—			—			40
Stock-based compensation		—		—		3,225		—			—			—			—			3,225
Common stock issued for services		43,550		—		100		—			—			—			—			100
Unrealized gain on available-for-sale marketable securities		—		—		—		—			—			283			—			283
Net loss		—		—		—		—			—			—			(28,038	)		(28,038	)
Balances at March 31, 2020		48,857,504	$	5	$	379,072	$	(210	)	$	(418	)	$	373		$	(273,493	)	$	105,329
Issuance of common stock, net of issuance costs, under ATM offering program		2,594,030		—		20,731		—			—			—			—			20,731
Issuance of common stock upon exercise of stock options		105,142		—		355		—			—			—			—			355
Issuance of common stock from restricted stock units		103,020		—		—		—			—			—			—			—
Vesting of early exercised stock options		—		—		132		—			—			—			—			132
Stock-based compensation		—		—		4,079		—			—			—			—			4,079
Issuance of common stock under 2018 ESPP		69,815		—		385		—			—			—			—			385
Repayment of promissory note for purchase of common stock		—		—		—		—			56			—			—			56
Unrealized loss on available-for-sale marketable securities		—		—		—		—			—			(141	)		—