SEC Filing - Unity Biotechnology

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ubx-10q_20210930.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, 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 November 5, 2021, the registrant had 57,724,179 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 September 30, 2021 (unaudited) and December 31, 2020	2
	Condensed Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)	3
	Condensed Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)	4
	Condensed Statements of Cash Flows for the Nine Months Ended September 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	27
Item 3	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4	Controls and Procedures	37

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	38
Item 1A	Risk Factors	38
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	84
Item 3	Default Upon Senior Securities	84
Item 4	Mine Safety Disclosures	84
Item 5	Other Information	84
Item 6	Exhibits	85
Signatures		86

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

Unity Biotechnology, Inc.

Condensed Balance Sheets

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

	September 30, 2021			December 31, 2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	21,994		$	17,807
Short-term marketable securities		58,973			79,892
Prepaid expenses and other current assets		3,209			3,167
Restricted cash		550			—
Total current assets		84,726			100,866
Property and equipment, net		10,608			12,627
Operating lease right-of-use assets		21,856			23,509
Long-term marketable securities		7,500			17,871
Long-term restricted cash		896			1,446
Other long-term assets		105			—
Total assets	$	125,691		$	156,319
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,773		$	2,558
Accrued compensation		3,398			5,355
Accrued and other current liabilities		6,861			6,550
Current portion of long-term debt		945			—
Total current liabilities		12,977			14,463
Operating lease liability, net of current portion		30,812			34,468
Long-term debt, net		24,142			24,508
Other long-term liabilities		23			—
Total liabilities		67,954			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 September 30, 2021 and December 31, 2020; 57,469,879 and 53,253,213 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		5			5
Additional paid-in capital		447,057			422,379
Related party promissory notes for purchase of common stock		—			(210	)
Accumulated other comprehensive gain		6			5
Accumulated deficit		(389,331	)		(339,299	)
Total stockholders’ equity		57,737			82,880
Total liabilities and stockholders’ equity	$	125,691		$	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 September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Operating expenses:
Research and development	$	9,081		$	18,830		$	28,815		$	54,218
General and administrative		5,747			6,530			17,952			18,803
Change in fair value of contingent consideration		—			(718	)		—			(33	)
Impairment of long-lived assets		—			—			—			2,159
Total operating expenses		14,828			24,642			46,767			75,147
Loss from operations		(14,828	)		(24,642	)		(46,767	)		(75,147	)
Interest income		20			226			82			1,093
Interest expense		(792	)		(499	)		(2,351	)		(499	)
Other income (expense), net		(850	)		(2,637	)		(996	)		296
Net loss		(16,450	)		(27,552	)		(50,032	)		(74,257	)
Other comprehensive gain (loss)
Unrealized loss on marketable debt securities		—			(166	)		—			(24	)
Comprehensive loss	$	(16,450	)	$	(27,718	)	$	(50,032	)	$	(74,281	)
Net loss per share, basic and diluted	$	(0.30	)	$	(0.52	)	$	(0.91	)	$	(1.49	)
Weighted-average number of shares used in computing net loss per share, basic and diluted		55,436,444			52,482,200			54,826,481			49,926,396

See accompanying notes to the condensed financial statements.

Unity Biotechnology, Inc.

Condensed Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

For the Nine Months Ended September 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
Issuance of common stock to Lincoln Park Capital Fund, net of issuance costs		1,272,855			—		3,726		—			—			—			—			3,726
Stock-based compensation		—			—		3,086		—			—			—			—			3,086
Common stock granted to third party		400,052			—		1,457		—			—			—			—			1,457
Vesting of restricted stock units		692,722			—		—		—			—			—			—			—
Unrealized gain on available-for-sale marketable securities		—			—		—		—			—			1			—			1
Net loss		—			—		—		—			—			—			(16,450	)		(16,450	)
Balances at September 30, 2021		57,469,879		$	5	$	447,057	$	—		$	—		$	6		$	(389,331	)	$	57,737

For the Nine Months Ended September 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		—