SEC Filing | Tenaya Therapeutics, Inc.

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tnya-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: 001-40656

TENAYA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware	81-3789973
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
171 Oyster Point Boulevard, 5^th Floor South San Francisco, CA	94080
(Address of principal executive offices)	(Zip Code)

(650) 825-6900

(Registrant’s telephone number, including area code)

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 per share

TNYA

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.

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, 2021, the registrant had 41,281,210 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
	PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	5
	Condensed Balance Sheets	5
	Condensed Statements of Operations and Comprehensive Loss	6
	Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)	7
	Condensed Statements of Cash Flows	9
	Notes to Unaudited Condensed Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	91
Item 3.	Defaults Upon Senior Securities	92
Item 4.	Mine Safety Disclosures	92
Item 5.	Other Information	92
Item 6.	Exhibits	93
SIGNATURES		95

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, development plans, planned preclinical studies and clinical trials, future results of clinical trials, expected research and development costs, regulatory strategy, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. In some cases, investors can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. These forward-looking statements include, but are not limited to, statements about:

•

the ability of our preclinical studies and planned clinical trials to demonstrate safety and efficacy of our product candidates, and other positive results;

•

the timing, progress and results of preclinical studies and planned clinical trials for our current product candidates and other product candidates we may develop;

•

the timing, scope and likelihood of regulatory filings and approvals, including timing of investigational new drugs (“INDs”), clinical trial applications (“CTAs”), Food and Drug Administration (“FDA”) approvals, and final regulatory approval of our current product candidates and any other future product candidates;

•

our ability to develop and advance our current product candidates and programs into, and successfully complete, clinical studies;

•

our manufacturing, commercialization, and marketing capabilities and strategy and the timing of our facilities becoming operational;

•

our plans relating to commercializing our product candidates, if approved;

•

the need to hire additional personnel and our ability to attract and retain such personnel;

•

our competitive position and the success of competing therapies that are or may become available;

•

our plans relating to the further development of our product candidates, including additional indications and targets we may pursue;

•

the impact of existing laws and regulations and regulatory developments in the United States, Europe and other jurisdictions;

•

our expectations regarding the effects of the COVID-19 pandemic on our business, including our preclinical studies and clinical trials;

•

our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering our current product candidates and other product candidates we may develop, including the extensions of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;

•

our continued reliance on third parties to conduct additional preclinical studies and planned clinical trials of our product candidates, and for the development and manufacture of our product candidates for preclinical studies and clinical trials; our ability to obtain, and negotiate favorable terms of, any collaboration, partnership, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates;

•

the pricing and reimbursement of our current product candidates and other product candidates we may develop, if approved, including any increase in demand as a result of the availability of reimbursement from the government and third-party payors;

•

the rate and degree of market acceptance and clinical utility of our current product candidates and other product candidates we may develop;

•

our estimates regarding expenses, operating losses, future revenue, capital requirements and needs for additional financing;

•

our financial performance;

•

the period over which we estimate our existing cash, cash equivalents and investments in marketable securities will be sufficient to fund our future operating expenses and capital expenditure requirements; and

•

our expectations regarding the period during which we will remain an emerging growth company under the JOBS Act.

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, investors should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

TENAYA THERAPEUTICS, INC.

Condensed Balance Sheets

(In thousands)

	September 30,			December 31,
	2021			2020
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	117,077		$	128,535
Investments in marketable securities		163,388			—
Prepaid expenses and other current assets		4,357			1,429
Total current assets		284,822			129,964
Property and equipment, net		30,891			17,185
Operating lease right-of-use assets		12,006			—
Restricted cash, non-current		547			547
Other non-current assets		3,528			465
Total assets	$	331,794		$	148,161
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	6,171		$	1,017
Accrued expenses and other current liabilities		5,607			3,161
Deferred rent and other lease liabilities, current		—			863
Operating lease liabilities, current		1,914			—
Total current liabilities		13,692			5,041
Deferred rent and other lease liabilities, non-current		—			3,662
Operating lease liabilities, non-current		14,307			—
Other non-current liabilities		96			19
Total liabilities		28,095			8,722
Commitments and contingencies (Note 6)
Convertible preferred stock		—			220,754
Stockholders’ equity (deficit):
Common stock		4			—
Additional paid-in capital		433,112			1,584
Notes receivable from stockholders		(12	)		(87	)
Accumulated other comprehensive loss		(23	)		—
Accumulated deficit		(129,382	)		(82,812	)
Total stockholders’ equity (deficit)		303,699			(81,315	)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	331,794		$	148,161

The accompanying notes are an integral part of these unaudited condensed financial statements.

TENAYA THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Operating expenses:
Research and development	$	12,944		$	8,480		$	33,440		$	22,735
General and administrative		5,356			1,972			13,202			5,855
Total operating expenses		18,300			10,452			46,642			28,590
Loss from operations		(18,300	)		(10,452	)		(46,642	)		(28,590	)
Other income (expense), net:
Interest income		23			7			41			82
Change in fair value of convertible preferred stock tranche liability		—			151			—			75
Other income (expense), net		15			(1	)		31			356
Total other income (expense), net		38			157			72			513
Net loss before income tax expense		(18,262	)		(10,295	)		(46,570	)		(28,077	)
Income tax expense		—			—			—			—
Net loss		(18,262	)		(10,295	)		(46,570	)		(28,077	)
Other comprehensive loss:
Unrealized loss on marketable securities		(23	)		—			(23	)		—
Comprehensive loss	$	(18,285	)	$	(10,295	)	$	(46,593	)	$	(28,077	)
Net loss per share, basic and diluted	$	(0.68	)	$	(10.29	)	$	(4.75	)	$	(29.65	)
Weighted-average shares used in computing net loss per share, basic and diluted		26,895,716			1,000,052			9,808,162			947,009

The accompanying notes are an integral part of these unaudited condensed financial statements.

TENAYA THERAPEUTICS, INC.

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands, except share data)

(Unaudited)

	Convertible Preferred Stock						Common Stock					Additional Paid-In		Notes Receivable from			Accumulated Other Comprehensive			Accumulated			Total Stockholders’ Equity
	Shares			Amount			Shares			Amount		Capital		Stockholders			Loss			Deficit			(Deficit)
Balance as of January 1, 2021		24,493,528		$	220,754			1,210,306		$	—	$	1,584	$	(87	)	$	—		$	(82,812	)	$	(81,315	)
Issuance of Series C convertible preferred stock, net of issuance costs of $20		1,608,750			19,981			—			—		—		—			—			—			—
Issuance of common stock upon exercise of stock options		—			—			12,508			—		29		—			—			—			29
Repurchase of common stock related to early exercise of options		—			—			(365	)		—		—		—			—			—			—
Vesting of early exercised stock options		—			—			—			—		9		—			—			—			9
Stock-based compensation		—			—			—			—		432		—			—			—			432
Net loss		—			—			—			—		—		—			—			(13,098	)		(13,098	)
Balance as of March 31, 2021		26,102,278		$	240,735			1,222,449		$	—	$	2,054	$	(87	)	$	—		$	(95,910	)	$	(93,943	)
Issuance of common stock upon exercise of stock options		—			—			12,173			—		31		—			—			—			31
Repurchase of common stock related to early exercise of options		—			—			(11,980	)		—		—		—			—			—			—
Vesting of early exercised stock options		—			—			—			—		9		—			—			—			9
Notes receivable from stockholders		—			—			—			—		—		75			—			—			75
Stock-based compensation		—			—			—			—		502		—			—			—			502
Net loss		—			—			—			—		—		—			—			(15,210	)		(15,210	)
Balance as of June 30, 2021		26,102,278		$	240,735			1,222,642		$	—	$	2,596	$	(12	)	$	—		$	(111,120	)	$	(108,536	)
Conversion of convertible preferred stock to common stock upon completion of initial public offering		(26,102,278	)		(240,735	)		26,102,278			3		240,732		—			—			—			240,735
Issuance of common stock upon initial public offering, net of issuance costs of $18,459		—			—			13,800,000			1		188,540		—			—			—			188,541
Issuance of common stock upon exercise of stock options		—			—			160,096			—		268		—			—			—			268
Repurchase of common stock related to early exercise of options		—			—			(4,614	)		—		—		—			—			—			—
Vesting of early exercised stock options		—			—			—			—		8		—			—			—			8
Stock-based compensation		—			—			—			—		968		—			—			—			968
Other comprehensive loss		—			—			—			—		—		—			(23	)		—			(23	)
Net loss		—			—			—			—		—		—			—			(18,262	)		(18,262	)
Balance as of September 30, 2021		—		$	—			41,280,402		$	4	$	433,112	$	(12	)	$	(23	)	$	(129,382	)	$	303,699

The accompanying notes are an integral part of these unaudited condensed financial statements.

TENAYA THERAPEUTICS, INC.

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands, except share data)

(Unaudited)

	Convertible Preferred Stock				Common Stock					Additional Paid-In		Notes Receivable from			Accumulated Other Comprehensive		Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares			Amount		Capital		Stockholders			Loss		Deficit			(Deficit)
Balance as of January 1, 2020		11,403,077	$	73,042		1,193,488		$	—	$	764	$	(86	)	$	—	$	(44,417	)	$	(43,739	)
Issuance of Series B convertible preferred stock, net of issuance costs of $23 and partial settlement of convertible preferred stock tranche liability of $27		3,086,415		30,671		—			—		—		—			—		—			—
Issuance of common stock upon exercise of stock options		—		—		3,333			—		3		—			—		—			3
Repurchase of common stock related to early exercise of options		—		—		(612	)		—		—		—			—		—			—
Vesting of early exercised stock options		—		—		—			—		11		—			—		—			11
Notes receivable from stockholders