SEC Filing | Tenaya Therapeutics, Inc.

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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, 2022


☐	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.

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.

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)


	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.

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.

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.

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	)