SEC Filing - Unity Biotechnology

View:

Download DOC

Download PDF

Download XLS

Download XBRL

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 June 30, 2023

☐ 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, a 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 4, 2023, the registrant had 14,601,258 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 June 30, 2023 (unaudited) and December 31, 2022	2
	Condensed Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)	3
	Condensed Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)	4
	Condensed Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022 (unaudited)	6
	Notes to Condensed Financial Statements (unaudited)	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4	Controls and Procedures	33

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	34
Item 1A	Risk Factors	34
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	79
Item 3	Default Upon Senior Securities	79
Item 4	Mine Safety Disclosures	79
Item 5	Other Information	79
Item 6	Exhibits	80
Signatures		81

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, 2023			December 31, 2022(1)
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	19,118		$	12,736
Short-term marketable securities		49,974			82,059
Prepaid expenses and other current assets		3,874			1,740
Total current assets		72,966			96,535
Property and equipment, net		7,181			7,825
Operating lease right-of-use assets		18,061			19,042
Long-term marketable securities		1,899			—
Long-term restricted cash		896			896
Other long-term assets		5			52
Total assets	$	101,008		$	124,350
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,449		$	1,790
Accrued compensation		1,652			3,020
Accrued and other current liabilities		5,417			5,334
Current portion of long-term debt		13,704			9,476
Total current liabilities		22,222			19,620
Operating lease liability, net of current portion		25,297			26,991
Long-term debt, net of current portion		4,082			10,891
Total liabilities		51,601			57,502
Commitments and contingencies (Note 8)
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, 2023 and December 31, 2022; 14,595,477 and 14,215,302 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively(2)		1			1
Additional paid-in capital		532,563			527,049
Accumulated other comprehensive loss		(136	)		(251	)
Accumulated deficit		(483,021	)		(459,951	)
Total stockholders’ equity		49,407			66,848
Total liabilities and stockholders’ equity	$	101,008		$	124,350

(1) The balance sheet as of December 31, 2022 is derived from the audited financial statements as of that date.

(2) The Company effected a reverse stock split of its outstanding shares of common stock on October 19, 2022 where every ten shares of its common stock issued and outstanding was converted into one share of common stock. Any fractional post-split shares as a result of the reverse split were rounded down to the nearest whole post-split share. Shareholders of the Company previously authorized the Board of Directors to approve a reverse stock split at the annual meeting on October 18, 2022. All share amounts and per share amounts disclosed in this Quarterly Report on Form 10-Q have been restated to reflect the reverse stock split on a retroactive basis in all periods presented.

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,
	2023			2022			2023			2022
Licensing revenue - related party	$	—		$	236		$	—		$	236

Operating expenses:
Research and development		6,529			7,553			12,364			20,014
General and administrative		5,433			4,941			10,252			10,747
Total operating expenses		11,962			12,494			22,616			30,761
Loss from operations		(11,962	)		(12,258	)		(22,616	)		(30,525	)
Interest income		805			58			1,660			87
Interest expense		(979	)		(894	)		(1,981	)		(1,702	)
Other income (expense), net		(69	)		(43	)		(133	)		88
Net loss		(12,205	)		(13,137	)		(23,070	)		(32,052	)
Other comprehensive (loss) gain
Unrealized gain (loss) on marketable debt securities		14			(11	)		115			(143	)
Comprehensive loss	$	(12,191	)	$	(13,148	)	$	(22,955	)	$	(32,195	)
Net loss per share, basic and diluted	$	(0.85	)	$	(1.90	)	$	(1.61	)	$	(4.69	)
Weighted-average number of shares used in computing net loss per share, basic and diluted(1)		14,425,775			6,924,782			14,369,643			6,839,293

(1) The Company effected a reverse stock split of its outstanding shares of common stock on October 19, 2022 where every ten shares of its common stock issued and outstanding was converted into one share of common stock. Any fractional post-split shares as a result of the reverse split were rounded down to the nearest whole post-split share. Shareholders of the Company previously authorized the Board of Directors to approve a reverse stock split at the annual meeting on October 18, 2022. All share amounts and per share amounts disclosed in this Quarterly Report on Form 10-Q have been restated to reflect the reverse stock split on a retroactive basis in all periods presented.

See accompanying notes to the condensed financial statements.

Unity Biotechnology, Inc.

Condensed Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)


	Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Gain (Loss)			Deficit			Equity
Balances at December 31, 2022		14,215,302	$	1	$	527,049	$	(251	)	$	(459,951	)	$	66,848
Issuance of common stock, net of issuance costs, under at-the-market (“ATM”) offering program		106,781		—		274		—			—			274
Vesting of restricted stock units		37,131		—		—		—			—			—
Stock-based compensation		—		—		2,270		—			—			2,270
Unrealized gain on available-for-sale marketable securities		—		—		—		101			—			101
Net loss		—		—		—		—			(10,865	)		(10,865	)
Balances at March 31, 2023		14,359,214	$	1	$	529,593	$	(150	)	$	(470,816	)	$	58,628
Issuance of common stock, net of issuance costs, under at-the-market (“ATM”) offering program		168,000		—		518		—			—			518
Issuance of common stock under 2018 ESPP		41,497		—		91		—			—			91
Vesting of restricted stock units		26,766		—		—		—			—			—
Stock-based compensation		—		—		2,361		—			—			2,361
Unrealized gain on available-for-sale marketable securities		—		—		—		14			—			14
Net loss		—		—		—		—			(12,205	)		(12,205	)
Balances at June 30, 2023		14,595,477	$	1	$	532,563	$	(136	)	$	(483,021	)	$	49,407


	Common Stock(1)				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		(Loss)			Deficit			Equity
Balances at December 31, 2021		6,299,158	$	1	$	459,636	$	(44	)	$	(400,024	)	$	59,569
Issuance of common stock, net of issuance costs, under at-the-market (“ATM”) offering program		232,500		—		3,420		—			—			3,420
Issuance of common stock to Lincoln Park Capital Fund		90,000		—		910		—			—			910
Issuance of common stock to Hercules Capital		262,761		—		3,179		—			—			3,179
Vesting of restricted stock units		30,358		—		—		—			—			—
Stock-based compensation		—		—		2,660		—			—			2,660
Unrealized loss on available-for-sale marketable securities		—		—		—		(132	)		—			(132	)
Net loss		—		—		—		—			(18,915	)		(18,915	)
Balances at March 31, 2022		6,914,777	$	1	$	469,805	$	(176	)	$	(418,939	)	$	50,691
Issuance of common stock, net of issuance costs, under ATM offering program		—		—		13		—			—			13
Issuance of common stock under 2018 ESPP		18,202		—		125		—			—			125
Vesting of restricted stock units		25,481		—		—		—			—			—
Stock-based compensation		—		—		2,250		—			—			2,250
Unrealized loss on available-for-sale marketable securities		—		—		—		(11	)		—			(11	)
Net loss		—		—		—		—			(13,137	)		(13,137	)
Balances at June 30, 2022		6,958,460	$	1	$	472,193	$	(187	)	$	(432,076	)	$	39,931

See accompanying notes to the condensed financial statements.

Unity Biotechnology, Inc.

Condensed Statements of Cash Flows

(In thousands)

(Unaudited)


	Six Months Ended June 30,
	2023			2022
Operating activities
Net loss	$	(23,070	)	$	(32,052	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		643			1,236
Amortization of debt issuance costs		653			708
Debt extinguishment gain upon conversion to equity		—			(199	)
Net accretion and amortization of premium and discounts on marketable securities		(831	)		231
Gain on disposal of property and equipment		—			(151	)
Stock-based compensation		4,631			4,910
Non-cash rent expense		(540	)		(1,263	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(2,134	)		(886	)
Other long-term assets		47			29
Accounts payable		(341	)		(541	)
Accrued compensation		(1,368	)		(737	)
Accrued liabilities and other current liabilities		(89	)		(1,069	)
Other long-term liabilities		—			(23	)
Net cash used in operating activities		(22,399	)		(29,807	)
Investing activities
Purchase of marketable securities		(21,868	)		(21,526	)
Maturities of marketable securities		53,000			33,250
Purchase of property and equipment		—			(11	)