UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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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:
(Exact name of registrant as specified in its Charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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The |
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.
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).
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.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
As of August 2, 2021, the registrant had
Table of Contents
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Page |
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PART I. |
2 |
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Item 1. |
2 |
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2 |
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Condensed Consolidated Statements of Operations and Comprehensive Loss |
3 |
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Condensed Consolidated Statements of Changes in Stockholders’ Equity |
4 |
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5 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
6 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
14 |
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Item 3. |
25 |
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Item 4. |
25 |
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PART II. |
27 |
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Item 1. |
27 |
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Item 1A. |
27 |
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Item 2. |
29 |
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Item 6. |
30 |
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31 |
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i
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “target,” “potential,” “goals,” “will,” “would,” “could,” “should,” “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:
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the initiation, timing, progress and results of our current and future clinical trials of ARV-110, ARV-471 and ARV-766, including statements regarding the period during which the results of the clinical trials will become available; |
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the timing of, and our ability to obtain, marketing approval of ARV-110, ARV-471, and ARV-766 and the ability of ARV-110, ARV-471, and ARV-476 and our other product candidates to meet existing or future regulatory standards; |
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the potential achievement of milestones and receipt of payments under our collaborations, including our collaboration with Pfizer Inc., or Pfizer, entered into in July 2021, or the ARV-471 Collaboration; |
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our agreement to sell and issue shares of our common stock to Pfizer, subject to certain conditions, pursuant to the terms of stock purchase agreement we entered into with Pfizer in connection with the ARV-471 Collaboration; |
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our plans to pursue research and development of other product candidates; |
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the potential advantages of our platform technology and our product candidates; |
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the extent to which our scientific approach and platform technology may potentially address a broad range of diseases and disease targets; |
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the potential receipt of revenue from future sales of our product candidates; |
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the rate and degree of market acceptance and clinical utility of our product candidates; |
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our estimates regarding the potential market opportunity for our product candidates; |
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our sales, marketing and distribution capabilities and strategy; |
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our ability to establish and maintain arrangements for manufacture of our product candidates; |
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our ability to enter into additional collaborations with third parties; |
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our intellectual property position; |
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our estimates regarding expenses, future revenues, capital requirements and needs for additional financing; |
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the impact of COVID-19 on our business and operations; |
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the impact of government laws and regulations; and |
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our competitive position. |
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements except as required by applicable law.
ii
In this Quarterly Report on Form 10-Q, unless otherwise stated or the context otherwise requires, references to the “Company,” “Arvinas,” “we,” “us,” and “our,” except where the context requires otherwise, refer to Arvinas, Inc. and its consolidated subsidiaries, or any one or more of them as the context may require, and “our board of directors” refers to the board of directors of Arvinas, Inc.
We use Arvinas, the Arvinas logo, and other marks as trademarks in the United States and other countries. This Quarterly Report on Form 10-Q contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report on Form 10-Q, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity.
iii
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Arvinas, INC. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
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June 30, 2021 |
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December 31, 2020 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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— |
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Marketable securities |
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Account receivable |
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— |
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Other receivables |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, equipment and leasehold improvements, net |
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Operating lease right of use assets |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders' equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Deferred revenue |
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Current portion of operating lease liability |
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Total current liabilities |
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Deferred revenue |
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Long term debt |
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Operating lease liability |
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Total liabilities |
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Commitments and Contingencies |
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Stockholders’ equity: |
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Common stock, $ issued and outstanding as of June 30, 2021 and December 31, 2020, respectively |
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Accumulated deficit |
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( |
) |
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( |
) |
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Additional paid-in capital |
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Accumulated other comprehensive income (loss) |
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( |
) |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes
2
Arvinas, INC. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)
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Condensed Consolidated Statements of Operations |
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For the Three Months Ended June 30, |
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For the Six Months Ended June 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Operating expenses: |
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Research and development |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
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Other income (expenses) |
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Other income, net |
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Interest income |
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Interest expense |
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( |
) |
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( |
) |
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( |
) |
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( |
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Total other income |
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Net loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
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Net loss per common share, basic and diluted |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Weighted average common shares outstanding, basic and diluted |
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Condensed Consolidated Statements of Comprehensive Loss |
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For the Three Months Ended June 30, |
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For the Six Months Ended June 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Net loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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Other comprehensive income (loss): |
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Unrealized gain (loss) on available-for-sale securities |
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( |
) |
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( |
) |
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Comprehensive loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
See accompanying notes
3
Arvinas, INC. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)
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Accumulated |
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Additional |
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Other |
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Total |
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Common |
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Accumulated |
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Paid-in |
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Comprehensive |
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Stockholders' |
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For the Three Months Ended June 30, 2020 and 2021 |
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Shares |
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Amount |
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Deficit |
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Capital |
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Income (Loss) |
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Equity |
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Balance at March 31, 2020 |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Issuance of common stock |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
|
Restricted stock vesting |
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— |
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( |
) |
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— |
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— |
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Exercise of stock options |
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— |
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— |
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Unrealized gain on available-for -sale securities |
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— |
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— |
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— |
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— |
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Balance at June 30, 2020 |
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|
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$ |
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$ |
( |
) |
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$ |
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$ |
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|
$ |
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Balance at March 31, 2021 |
|
|
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|
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$ |
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|
|
$ |
( |
) |
|
$ |
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$ |
( |
) |
|
$ |
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|
Stock-based compensation |
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|
— |
|
|
|
— |
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|
|
— |
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|
|
|
|
|
|
— |
|
|
|
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|
Net loss |
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|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Restricted stock vesting |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
Exercise of stock options |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Unrealized loss on available-for -sale securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Balance at June 30, 2021 |
|
|
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
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|
Accumulated |
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|
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|
|
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|
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|
Additional |
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Other |
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Total |
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|||
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|
Common |
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Accumulated |
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Paid-in |
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Comprehensive |
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Stockholders' |
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|||||||||
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For the Six Months Ended June 30, 2020 and 2021 |
|
Shares |
|
|
Amount |
|
|
Deficit |
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|
Capital |
|
|
Income (Loss) |
|
|
Equity |
|
||||||
|
Balance at December 31, 2019 |
|
|
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Restricted stock vesting |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
Exercise of stock options |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Unrealized gain on available-for -sale securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2020 |
|
|
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Balance at December 31, 2020 |
|
|
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Restricted stock vesting |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
Exercise of stock options |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Unrealized loss on available-for -sale securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Balance at June 30, 2021 |
|
|
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
See accompanying notes
4
Arvinas, INC. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
|
|
|
For the Six Months Ended June 30, |
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|||||
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|
2021 |
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|
2020 |
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||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
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|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
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|
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|
|
Net accretion of bond discounts/premiums |
|
|
|
|
|
|
|
|
|
Forgiveness of debt income |
|
|
( |
) |
|
|
|
|
|
Amortization of right to use assets |
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities: |
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|
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|
|
|
|
|
|
Account receivable |
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|
|
|
|
|
|
|
Other receivables |
|
|
|
|
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
|
|
|
Accounts payable |
|
|
( |
) |
|
|
( |
) |
|
Accrued expenses |
|
|
( |
) |
|
|
( |
) |
|
Deferred revenue |
|
|
( |
) |
|
|
( |
) |
|
Operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
|
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
Purchase of marketable securities |
|
|
( |
) |
|
|
( |
) |
|
Maturities of marketable securities |
|
|
|
|
|
|
|
|
|
Sales of marketable securities |
|
|
|
|
|
|
|
|
|
Purchase of property, equipment and leasehold improvements |
|
|
( |
) |
|
|
( |
) |
|
Net cash (used in) provided by investing activities |
|
|
( |
) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Proceeds from exercise of stock options |
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
( |
) |
|
|
|
|
|
Cash, cash equivalents and restricted cash, beginning of the period |
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash, end of the period |
|
$ |
|
|
|
$ |
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
Purchases of property, equipment and leasehold improvements unpaid at period end |
|
$ |
|
|
|
$ |
|
|
|
Cash paid for interest |
|
$ |
|
|
|
$ |
|
|
See accompanying notes
5
Arvinas, INC. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
1. Nature of Business and Basis of Presentation
Arvinas, Inc. and subsidiaries (“Arvinas” or “the Company”) is a clinical-stage biopharmaceutical company dedicated to improving the lives of patients suffering from debilitating and life-threatening diseases through the discovery, development and commercialization of therapies that degrade disease-causing proteins. The Company expects to incur additional operating losses and negative operating cash flows for the foreseeable future.
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended (“Exchange Act”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to Securities and Exchange Commission (“SEC”) rules. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included. The condensed consolidated balance sheet at December 31, 2020 has been derived from Arvinas’ audited consolidated financial statements at that date. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021. The financial statements should be