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 September 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: 001-40656

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, Suite 500 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 November 2, 2023, the registrant had 68,111,019 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 September 30, 2023 and December 31, 2022	5
	Condensed Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022	6
	Condensed Statements of Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022	7
	Condensed Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	9
	Notes to Unaudited Condensed Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73
Item 3.	Defaults Upon Senior Securities	73
Item 4.	Mine Safety Disclosures	73
Item 5.	Other Information	73
Item 6.	Exhibits	74
SIGNATURES		76

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:

•

our vision to change the treatment paradigm for heart disease;

•

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

•

the timing, dosing, patient enrollment and populations, progress, and results of preclinical studies and ongoing or 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), U.S. 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 trials;

•

the size of the market opportunity for our product candidates, including our estimates of the number of patients who suffer from the diseases we are targeting;

•

our manufacturing, commercialization, and marketing capabilities and strategy;

•

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 (U.S), Europe and other jurisdictions;

•

our intellectual property position, including the scope and length 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 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, cash outlays, capital requirements and needs for additional financing, including expenses arising as a result of being a public company;

•

our financial performance;

•

our facilities;

•

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;

•

the impact of critical accounting policies on investor’s ability to understand our financial performance; and

•

our expectations regarding the period during which we will remain an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (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)

(Unaudited)


	September 30,			December 31,
	2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	82,153		$	95,272
Short-term investments in marketable securities		39,600			91,255
Prepaid expenses and other current assets		5,075			7,227
Total current assets		126,828			193,754
Property and equipment, net		45,131			51,032
Operating lease right-of-use assets		9,337			11,663
Long-term investments in marketable securities		6,367			17,703
Other noncurrent assets		5,734			4,793
Total assets	$	193,397		$	278,945
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,902		$	9,578
Accrued and other current liabilities		10,321			10,664
Operating lease liabilities, current		3,154			4,006
Total current liabilities		19,377			24,248
Operating lease liabilities, noncurrent		8,890			11,093
Other noncurrent liabilities		246			228
Total liabilities		28,513			35,569
Commitments and contingencies (Note 6)
Stockholders’ equity:
Common stock		7			7
Additional paid-in capital		538,485			522,945
Accumulated other comprehensive loss		(261	)		(378	)
Accumulated deficit		(373,347	)		(279,198	)
Total stockholders’ equity		164,884			243,376
Total liabilities and stockholders’ equity	$	193,397		$	278,945

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,
	2023			2022			2023			2022
Operating expenses:
Research and development	$	23,091		$	23,758		$	75,173		$	68,789
General and administrative		7,829			7,540			24,574			22,282
Total operating expenses		30,920			31,298			99,747			91,071
Loss from operations		(30,920	)		(31,298	)		(99,747	)		(91,071	)
Other income, net:
Interest income		1,776			596			5,586			917
Other income, net		1			6			12			5
Total other income, net		1,777			602			5,598			922
Net loss before income tax expense		(29,143	)		(30,696	)		(94,149	)		(90,149	)
Income tax expense		—			—			—			—
Net loss		(29,143	)		(30,696	)		(94,149	)		(90,149	)
Other comprehensive income (loss):
Net unrealized gain (loss) on marketable securities		72			(28	)		117			(626	)
Comprehensive loss	$	(29,071	)	$	(30,724	)	$	(94,032	)	$	(90,775	)
Net loss per share, basic and diluted	$	(0.39	)	$	(0.74	)	$	(1.28	)	$	(2.18	)
Weighted-average shares used in computing net loss per share, basic and diluted		73,924,937			41,358,296			73,579,200			41,309,812

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

TENAYA THERAPEUTICS, INC.

Condensed Statements of Stockholders’ Equity

(In thousands, except share data)

(Unaudited)


	Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance as of January 1, 2023		66,857,113	$	7	$	522,945	$	(378	)	$	(279,198	)	$	243,376
Issuance of common stock upon exercise of stock options and vesting of restricted stock units		8,311		—		—		—			—			—
Vesting of early exercised stock options		—		—		1		—			—			1
Stock-based compensation		—		—		3,514		—			—			3,514
Other comprehensive income		—		—		—		258			—			258
Net loss		—		—		—		—			(31,737	)		(31,737	)
Balance as of March 31, 2023		66,865,424	$	7	$	526,460	$	(120	)	$	(310,935	)	$	215,412
Issuance of common stock in connection with at-the-market sales, net of issuance costs of $120		535,767		—		3,868		—			—			3,868
Issuance of common stock upon exercise of pre-funded warrants		302,517		—		—		—			—			—
Issuance of common stock pursuant to employee stock purchase plan		150,575		—		282		—			—			282
Issuance of common stock upon exercise of stock options		10,875		—		29		—			—			29
Stock-based compensation		—		—		3,831		—			—			3,831
Other comprehensive loss		—		—		—		(213	)		—			(213	)
Net loss		—		—		—		—			(33,269	)		(33,269	)
Balance as of June 30, 2023		67,865,158	$	7	$	534,470	$	(333	)	$	(344,204	)	$	189,940
Issuance of common stock upon vesting of restricted stock units		245,861		—		—		—			—			—
Stock-based compensation		—		—		4,015		—			—			4,015
Other comprehensive income		—		—		—		72			—			72
Net loss		—		—		—		—			(29,143	)		(29,143	)
Balance as of September 30, 2023		68,111,019	$	7	$	538,485	$	(261	)	$	(373,347	)	$	164,884


	Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
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
Issuance of common stock upon exercise of stock options and vesting of restricted stock units		10,869		—		6		—			—			6
Vesting of early exercised stock options		—		—		5		—			—			5
Stock-based compensation		—		—		3,174		—			—			3,174
Other comprehensive loss		—		—		—		(28	)		—			(28	)
Net loss		—		—		—		—			(30,696	)		(30,696	)
Balance as of September 30, 2022		41,374,689	$	4	$	442,773	$	(767	)	$	(245,682	)	$	196,328

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

TENAYA THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(94,149	)	$	(90,149	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		6,506			4,350
Amortization (accretion) of premium (discount) on marketable securities		(1,371	)		76
Stock-based compensation		11,360			8,280
Non-cash operating lease expense		2,326			1,510
Other		157			27
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		2,013			(3,278	)
Other noncurrent assets		(658	)		(672	)
Accounts payable		(2,977	)		(1,803	)
Accrued and other current liabilities		(300	)		2,051
Operating lease liabilities		(3,055	)		(2,147	)
Other noncurrent liabilities		—			13
Net cash used in operating activities		(80,148	)		(81,742	)
Cash flows from investing activities:
Purchases of property and equipment		(845	)		(19,835	)
Purchases of marketable securities		(40,998	)		(108,737	)
Proceeds from maturities of marketable securities		105,484			206,250
Other		(7	)		—
Net cash provided by investing activities		63,634			77,678
Cash flows from financing activities:
Proceeds from at-the-market sales, net of issuance costs		3,868			—
Payment of accrued offering costs		(501	)		—
Proceeds from exercise of stock options and employee stock purchase plan		311			281
Net cash provided by financing activities		3,678			281
Net change in cash, cash equivalents and restricted cash		(12,836	)		(3,783	)
Cash and cash equivalents and restricted cash at beginning of period		95,671			38,676
Cash and cash equivalents and restricted cash at end of period	$	82,835		$	34,893
Components of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	82,153		$	34,494
Restricted cash included in other noncurrent assets		682