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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, 2022

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: 001-40656

 

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, 5th Floor

South San Francisco, CA

94080

(Address of principal executive offices)

(Zip Code)

 

(650) 825-6990

(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.

 

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 3, 2022, the registrant had 41,364,653 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 as of June 30, 2022 and December 31, 2021

5

 

 

Condensed Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2022 and 2021

6

 

 

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2022 and 2021

7

 

 

Condensed Statements of Cash Flows for the six months ended June 30, 2022 and 2021

8

 

 

Notes to Unaudited Condensed Financial Statements

9

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

23

Item 4.

 

Controls and Procedures

23

 

 

 

 

 

 

PART II—OTHER INFORMATION

 

Item 1.

 

Legal Proceedings

24

Item 1A.

 

Risk Factors

24

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

82

Item 3.

 

Defaults Upon Senior Securities

83

Item 4.

 

Mine Safety Disclosures

83

Item 5.

 

Other Information

83

Item 6.

 

Exhibits

84

SIGNATURES

85

 

 

 


SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. 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;
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 ongoing 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.

3


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.

4


 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

TENAYA THERAPEUTICS, INC.

Condensed Balance Sheets

(In thousands)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

(Unaudited)

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

31,010

 

 

$

38,129

 

Investments in marketable securities

 

 

149,906

 

 

 

213,171

 

Prepaid expenses and other current assets

 

 

4,777

 

 

 

4,058

 

Total current assets

 

 

185,693

 

 

 

255,358

 

Property and equipment, net

 

 

53,013

 

 

 

43,020

 

Operating lease right-of-use assets

 

 

13,114

 

 

 

11,685

 

Restricted cash, noncurrent

 

 

399

 

 

 

547

 

Other noncurrent assets

 

 

3,710

 

 

 

3,579

 

Total assets

 

$

255,929

 

 

$

314,189

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

5,347

 

 

$

10,721

 

Accrued and other current liabilities

 

 

9,498

 

 

 

9,059

 

Operating lease liabilities, current

 

 

3,896

 

 

 

1,994

 

Total current liabilities

 

 

18,741

 

 

 

21,774

 

Operating lease liabilities, noncurrent

 

 

13,104

 

 

 

13,707

 

Other noncurrent liabilities

 

 

217

 

 

 

182

 

Total liabilities

 

 

32,062

 

 

 

35,663

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

439,588

 

 

 

434,196

 

Accumulated other comprehensive loss

 

 

(739

)

 

 

(141

)

Accumulated deficit

 

 

(214,986

)

 

 

(155,533

)

Total stockholders’ equity

 

 

223,867

 

 

 

278,526

 

Total liabilities and stockholders’ equity

 

$

255,929

 

 

$

314,189

 

 

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

5


TENAYA THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

20,876

 

 

$

10,906

 

 

$

45,031

 

 

$

20,496

 

General and administrative

 

 

7,743

 

 

 

4,331

 

 

 

14,742

 

 

 

7,846

 

Total operating expenses

 

 

28,619

 

 

 

15,237

 

 

 

59,773

 

 

 

28,342

 

Loss from operations

 

 

(28,619

)

 

 

(15,237

)

 

 

(59,773

)

 

 

(28,342

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

222

 

 

 

9

 

 

 

321

 

 

 

18

 

Other income (expense), net

 

 

 

 

 

18

 

 

 

(1

)

 

 

16

 

Total other income (expense), net

 

 

222

 

 

 

27

 

 

 

320

 

 

 

34

 

Net loss before income tax expense

 

 

(28,397

)

 

 

(15,210

)

 

 

(59,453

)

 

 

(28,308

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(28,397

)

 

 

(15,210

)

 

 

(59,453

)

 

 

(28,308

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable securities

 

 

(108

)

 

 

 

 

 

(598

)

 

 

 

Comprehensive loss

 

$

(28,505

)

 

$

(15,210

)

 

$

(60,051

)

 

$

(28,308

)

Net loss per share, basic and diluted

 

$

(0.69

)

 

$

(13.26

)

 

$

(1.44

)

 

$

(25.21

)

Weighted-average shares used in computing net loss per share, basic and diluted

 

 

41,302,157

 

 

 

1,147,471

 

 

 

41,285,168

 

 

 

1,122,775

 

 

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

6


 

TENAYA THERAPEUTICS, INC.

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

(In thousands, except share data)

(Unaudited)

 

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated Other Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’ Equity

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

(Deficit)

 

Balance as of January 1, 2022

 

 

 

41,291,374

 

 

$

4

 

 

$

434,196

 

 

$

(141

)

 

$

(155,533

)

 

$

278,526

 

Issuance of common stock upon exercise
   of stock options

 

 

 

7,652

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

17

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

6

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

2,094

 

 

 

 

 

 

 

 

 

2,094

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

(490

)

 

 

 

 

 

(490

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,056

)

 

 

(31,056

)

Balance as of March 31, 2022

 

 

 

41,299,026

 

 

$

4

 

 

$

436,313

 

 

$

(631

)

 

$

(186,589

)

 

$

249,097

 

Issuance of common stock upon exercise
   of stock options

 

 

 

13,186

 

 

 

 

 

 

28

 

 

 

 

 

 

 

 

 

28

 

Issuance of common stock pursuant to
   employee stock purchase plan

 

 

 

51,608

 

 

 

 

 

 

230

 

 

 

 

 

 

 

 

 

230

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

5

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

3,012

 

 

 

 

 

 

 

 

 

3,012

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

(108

)

 

 

 

 

 

(108

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,397

)

 

 

(28,397

)

Balance as of June 30, 2022

 

 

 

41,363,820

 

 

$

4

 

 

$

439,588

 

 

$

(739

)

 

$

(214,986

)

 

$

223,867

 

 

 

 

 

Convertible Preferred Stock

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Notes
Receivable
from

 

 

Accumulated

 

 

Total
Stockholders’ Equity

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stockholders

 

 

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

)

 

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

7


 

TENAYA THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(59,453

)

 

$

(28,308

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

2,263

 

 

 

1,424

 

Amortization of premium on marketable securities

 

 

253

 

 

 

 

Stock-based compensation

 

 

5,106

 

 

 

934

 

Loss on write-offs of property and equipment

 

 

28

 

 

 

 

Non-cash operating lease expense

 

 

795

 

 

 

434

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(438

)

 

 

93

 

Other noncurrent assets

 

 

(132

)

 

 

(2,954

)

Accounts payable

 

 

(2,120

)

 

 

1,363

 

Accrued and other current liabilities

 

 

711

 

 

 

(33

)

Operating lease liabilities

 

 

(1,206

)

 

 

(745

)

Other noncurrent liabilities

 

 

7

 

 

 

(16

)

Net cash used in operating activities

 

 

(54,186

)

 

 

(27,808

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(15,771

)

 

 

(7,559

)

Purchases of marketable securities

 

 

(65,135

)

 

 

 

Proceeds from maturities of marketable securities

 

 

127,550

 

 

 

 

Net cash provided by (used in) investing activities

 

 

46,644

 

 

 

(7,559

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of Series C convertible preferred stock, net of issuance costs

 

 

 

 

 

19,981

 

Proceeds from exercise of stock options and employee stock purchase plan

 

 

275

 

 

 

60

 

Repurchase of common stock

 

 

 

 

 

(10

)

Proceeds from repayments on notes receivable from stockholders

 

 

 

 

 

75

 

Payment of deferred offering costs

 

 

 

 

 

(1,389

)

Net cash provided by financing activities

 

 

275

 

 

 

18,717

 

Net change in cash, cash equivalents and restricted cash

 

 

(7,267

)

 

 

(16,650

)

Cash and cash equivalents and restricted cash at beginning of period

 

 

38,676

 

 

 

129,083

 

Cash and cash equivalents and restricted cash at end of period

 

$

31,409

 

 

$

112,433

 

Components of cash, cash equivalents and restricted cash:

 

 

 

 

 

 

Cash and cash equivalents

 

$

31,010