arvn-10q_20210630.htm
false 2021 Q2 0001655759 --12-31 true true P120M 2021 P10Y 2018-09-30 P6M P1Y P1Y 2021 2022 2022 2023 0.759 0.703 P5Y6M P5Y6M 0.005 0.003 66.82 31.95 0.780 0.747 P7Y P7Y 0.012 0.016 82.21 50.00 P8Y4M24D P7Y8M8D 0001655759 2021-01-01 2021-06-30 xbrli:shares 0001655759 2021-08-02 iso4217:USD 0001655759 2021-06-30 0001655759 2020-12-31 iso4217:USD xbrli:shares 0001655759 2021-04-01 2021-06-30 0001655759 2020-04-01 2020-06-30 0001655759 2020-01-01 2020-06-30 0001655759 us-gaap:CommonStockMember 2020-03-31 0001655759 us-gaap:RetainedEarningsMember 2020-03-31 0001655759 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001655759 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001655759 2020-03-31 0001655759 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001655759 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001655759 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001655759 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001655759 us-gaap:CommonStockMember 2020-06-30 0001655759 us-gaap:RetainedEarningsMember 2020-06-30 0001655759 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001655759 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001655759 2020-06-30 0001655759 us-gaap:CommonStockMember 2021-03-31 0001655759 us-gaap:RetainedEarningsMember 2021-03-31 0001655759 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001655759 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-03-31 0001655759 2021-03-31 0001655759 us-gaap:AdditionalPaidInCapitalMember 2021-04-01 2021-06-30 0001655759 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0001655759 us-gaap:CommonStockMember 2021-04-01 2021-06-30 0001655759 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-04-01 2021-06-30 0001655759 us-gaap:CommonStockMember 2021-06-30 0001655759 us-gaap:RetainedEarningsMember 2021-06-30 0001655759 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001655759 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-06-30 0001655759 us-gaap:CommonStockMember 2019-12-31 0001655759 us-gaap:RetainedEarningsMember 2019-12-31 0001655759 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001655759 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001655759 2019-12-31 0001655759 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-06-30 0001655759 us-gaap:RetainedEarningsMember 2020-01-01 2020-06-30 0001655759 us-gaap:CommonStockMember 2020-01-01 2020-06-30 0001655759 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-06-30 0001655759 us-gaap:CommonStockMember 2020-12-31 0001655759 us-gaap:RetainedEarningsMember 2020-12-31 0001655759 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001655759 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-12-31 0001655759 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-06-30 0001655759 us-gaap:RetainedEarningsMember 2021-01-01 2021-06-30 0001655759 us-gaap:CommonStockMember 2021-01-01 2021-06-30 0001655759 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-01 2021-06-30 0001655759 us-gaap:RestrictedStockUnitsRSUMember 2021-01-01 2021-06-30 0001655759 arvn:BayerAGMember 2019-07-31 0001655759 arvn:BayerAGMember arvn:ResearchFundingPaymentsMember srt:ScenarioForecastMember 2022-12-31 0001655759 arvn:BayerAGMember arvn:ResearchFundingPaymentsMember 2019-07-31 0001655759 arvn:BayerAGMember arvn:ResearchFundingPaymentsMember 2020-06-30 0001655759 arvn:BayerAGMember arvn:ResearchFundingPaymentsMember 2021-06-30 0001655759 arvn:StockPurchaseAgreementMember arvn:BayerAGMember 2021-01-01 2021-06-30 0001655759 arvn:PfizerIncorporationMember 2018-01-01 2018-12-31 0001655759 arvn:PfizerIncorporationMember arvn:OptionExercisedToLicenseAgreementsMember 2021-06-30 0001655759 arvn:PfizerIncorporationMember arvn:SubstitutionTargetPaymentsMember 2019-12-31 0001655759 arvn:PfizerIncorporationMember arvn:SubstitutionTargetPaymentsMember 2020-12-31 0001655759 arvn:GenentechIncorporationAndFHoffmanLaRocheLimitedMember 2017-11-01 2017-11-30 arvn:Target 0001655759 2020-01-01 2020-12-31 0001655759 arvn:BayerAGMember 2021-01-01 2021-06-30 0001655759 2021-07-01 2021-06-30 0001655759 2022-01-01 2021-06-30 0001655759 2023-01-01 2021-06-30 0001655759 arvn:GovernmentSecuritiesMaturingTwoThousandTwentyTwoMember 2021-01-01 2021-06-30 0001655759 arvn:CorporateBondsMaturingTwoThousandTwentyOneAndTwoThousandTwentyTwoMember srt:MinimumMember 2021-01-01 2021-06-30 0001655759 arvn:CorporateBondsMaturingTwoThousandTwentyTwoAndTwoThousandTwentyThreeMember srt:MinimumMember 2021-01-01 2021-06-30 0001655759 arvn:CorporateBondsMaturingTwoThousandTwentyOneAndTwoThousandTwentyTwoMember srt:MaximumMember 2021-01-01 2021-06-30 0001655759 arvn:CorporateBondsMaturingTwoThousandTwentyTwoAndTwoThousandTwentyThreeMember srt:MaximumMember 2021-01-01 2021-06-30 0001655759 arvn:CorporateBondsMaturingTwoThousandTwentyOneAndTwoThousandTwentyTwoMember 2021-06-30 0001655759 arvn:CorporateBondsMaturingTwoThousandTwentyTwoAndTwoThousandTwentyThreeMember 2021-06-30 0001655759 arvn:GovernmentSecuritiesMaturingTwoThousandTwentyTwoMember 2021-06-30 0001655759 arvn:CorporateBondsMaturingTwoThousandTwentyOneMember 2020-01-01 2020-12-31 0001655759 arvn:CorporateBondsMaturingTwoThousandTwentyOneMember 2020-12-31 0001655759 arvn:CorporateBondsAndGovernmentSecuritiesMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001655759 arvn:CorporateBondsAndGovernmentSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001655759 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateBondSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001655759 us-gaap:CorporateBondSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001655759 arvn:LaboratoryEquipmentMember 2021-06-30 0001655759 arvn:LaboratoryEquipmentMember 2020-12-31 0001655759 us-gaap:OfficeEquipmentMember 2021-06-30 0001655759 us-gaap:OfficeEquipmentMember 2020-12-31 0001655759 us-gaap:LeaseholdImprovementsMember 2021-06-30 0001655759 us-gaap:LeaseholdImprovementsMember 2020-12-31 xbrli:pure 0001655759 srt:MinimumMember 2021-06-30 0001655759 srt:MaximumMember 2021-06-30 utr:sqft 0001655759 2021-05-31 0001655759 srt:MinimumMember 2021-05-01 2021-05-31 0001655759 srt:MaximumMember 2021-05-01 2021-05-31 0001655759 2021-05-01 2021-05-31 0001655759 arvn:TwoThousandAndFourteenAssistanceAgreementMember stpr:CT 2014-01-01 2014-12-31 0001655759 arvn:TwoThousandAndFourteenAssistanceAgreementMember stpr:CT 2014-12-31 0001655759 srt:MaximumMember arvn:TwoThousandAndEighteenAssistanceAgreementMember stpr:CT 2018-06-30 0001655759 arvn:TwoThousandAndEighteenAssistanceAgreementMember stpr:CT 2018-06-01 2018-06-30 0001655759 arvn:TwoThousandAndEighteenAssistanceAgreementMember stpr:CT 2018-09-30 0001655759 arvn:TwoThousandAndEighteenAssistanceAgreementMember stpr:CT 2018-09-01 2018-09-30 0001655759 srt:MaximumMember arvn:TwoThousandAndEighteenAssistanceAgreementMember stpr:CT 2018-09-01 2018-09-30 0001655759 arvn:TwoThousandAndEighteenAssistanceAgreementMember stpr:CT 2021-04-30 2021-04-30 0001655759 us-gaap:CommonStockMember us-gaap:IPOMember 2020-12-01 2020-12-31 0001655759 us-gaap:CommonStockMember us-gaap:IPOMember 2020-12-31 0001655759 us-gaap:CommonStockMember 2020-12-01 2020-12-31 0001655759 arvn:AtTheMarketOfferingMember arvn:PiperSandlerMember 2019-10-31 0001655759 arvn:AtTheMarketOfferingMember arvn:PiperSandlerMember 2020-01-01 2020-12-31 0001655759 us-gaap:EmployeeStockMember 2018-09-30 0001655759 us-gaap:EmployeeStockMember 2021-01-01 0001655759 us-gaap:EmployeeStockMember 2020-01-01 0001655759 us-gaap:EmployeeStockMember 2021-01-01 2021-01-01 0001655759 us-gaap:EmployeeStockMember 2020-01-01 2020-01-01 0001655759 us-gaap:EmployeeStockMember 2021-01-01 2021-06-30 0001655759 us-gaap:EmployeeStockMember 2021-06-30 0001655759 us-gaap:EmployeeStockMember srt:MinimumMember 2021-01-01 2021-06-30 0001655759 arvn:StockIncentivePlanMember 2018-03-31 0001655759 arvn:StockIncentivePlanMember srt:MinimumMember 2018-03-01 2018-03-31 0001655759 arvn:StockIncentivePlanMember srt:MaximumMember 2018-03-01 2018-03-31 0001655759 arvn:StockIncentivePlanMember 2018-03-01 2018-03-31 0001655759 arvn:TwoThousandEighteenStockIncentivePlanMember 2018-09-30 0001655759 arvn:StockIncentivePlanMember srt:MaximumMember 2018-09-30 0001655759 arvn:TwoThousandEighteenStockIncentivePlanMember srt:MinimumMember 2019-01-01 2019-12-31 0001655759 arvn:TwoThousandEighteenStockIncentivePlanMember 2019-01-01 2019-12-31 0001655759 arvn:StockIncentivePlanMember 2020-01-01 2020-12-31 0001655759 arvn:StockIncentivePlanMember srt:ScenarioForecastMember 2021-01-01 2021-12-31 0001655759 arvn:EmployeesMember arvn:StockIncentivePlanMember 2021-01-01 2021-06-30 0001655759 arvn:EmployeesMember arvn:StockIncentivePlanMember 2021-06-30 0001655759 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-06-30 0001655759 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0001655759 us-gaap:EmployeeStockOptionMember srt:MinimumMember 2021-01-01 2021-06-30 0001655759 us-gaap:EmployeeStockOptionMember srt:MinimumMember 2020-01-01 2020-06-30 0001655759 us-gaap:EmployeeStockOptionMember srt:MaximumMember 2021-01-01 2021-06-30 0001655759 us-gaap:EmployeeStockOptionMember srt:MaximumMember 2020-01-01 2020-06-30 0001655759 us-gaap:EmployeeStockOptionMember srt:MinimumMember 2021-06-30 0001655759 us-gaap:EmployeeStockOptionMember srt:MinimumMember 2020-06-30 0001655759 us-gaap:EmployeeStockOptionMember srt:MaximumMember 2021-06-30 0001655759 us-gaap:EmployeeStockOptionMember srt:MaximumMember 2020-06-30 0001655759 arvn:TwoThousandEighteenStockIncentivePlanMember 2020-12-31 0001655759 arvn:TwoThousandEighteenStockIncentivePlanMember 2021-01-01 2021-06-30 0001655759 arvn:TwoThousandEighteenStockIncentivePlanMember 2021-06-30 0001655759 arvn:StockIncentivePlanMember us-gaap:RestrictedStockMember arvn:EmployeesDirectorsAndConsultantsMember 2020-12-31 0001655759 arvn:StockIncentivePlanMember us-gaap:RestrictedStockMember arvn:EmployeesDirectorsAndConsultantsMember 2021-01-01 2021-06-30 0001655759 arvn:StockIncentivePlanMember us-gaap:RestrictedStockMember arvn:EmployeesDirectorsAndConsultantsMember 2021-06-30 0001655759 arvn:TwoThousandEighteenStockIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember arvn:EmployeesMember 2020-12-31 0001655759 arvn:TwoThousandEighteenStockIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember arvn:EmployeesMember 2021-01-01 2021-06-30 0001655759 arvn:TwoThousandEighteenStockIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember arvn:EmployeesMember 2021-06-30 0001655759 arvn:StockIncentivePlanMember us-gaap:RestrictedStockMember 2021-06-30 0001655759 us-gaap:StateAndLocalJurisdictionMember 2021-04-01 2021-06-30 0001655759 us-gaap:StateAndLocalJurisdictionMember 2020-04-01 2020-06-30 0001655759 us-gaap:StateAndLocalJurisdictionMember 2021-01-01 2021-06-30 0001655759 us-gaap:StateAndLocalJurisdictionMember 2020-01-01 2020-06-30 0001655759 us-gaap:EmployeeStockOptionMember 2021-04-01 2021-06-30 0001655759 us-gaap:RestrictedStockUnitsRSUMember 2020-04-01 2020-06-30 0001655759 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-06-30 0001655759 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-06-30 0001655759 arvn:BayerCropScienceLPMember arvn:OerthBioLimitedLiabilityCorporationMember 2021-06-30 0001655759 arvn:OerthBioLimitedLiabilityCorporationMember us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOrGroupOfInvesteesMember 2021-04-01 2021-06-30 0001655759 arvn:OerthBioLimitedLiabilityCorporationMember us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOrGroupOfInvesteesMember 2021-01-01 2021-06-30 0001655759 arvn:OerthBioLimitedLiabilityCorporationMember 2021-06-30 0001655759 arvn:OerthBioLimitedLiabilityCorporationMember 2020-06-30 0001655759 arvn:OerthBioLimitedLiabilityCorporationMember 2021-04-01 2021-06-30 0001655759 arvn:OerthBioLimitedLiabilityCorporationMember 2020-04-01 2020-06-30 0001655759 arvn:OerthBioLimitedLiabilityCorporationMember 2021-01-01 2021-06-30 0001655759 arvn:OerthBioLimitedLiabilityCorporationMember 2020-01-01 2020-06-30 0001655759 arvn:PfizerIncorporationMember arvn:CollaborationAgreementMember us-gaap:SubsequentEventMember 2021-07-31 0001655759 arvn:PfizerIncorporationMember arvn:RegulatoryAndSalesBasedMilestonesMember us-gaap:SubsequentEventMember srt:MaximumMember 2021-07-31 0001655759 arvn:PfizerIncorporationMember arvn:RegulatoryMilestonePaymentsMember us-gaap:SubsequentEventMember 2021-07-31 0001655759 arvn:PfizerIncorporationMember arvn:StockPurchaseAgreementMember us-gaap:SubsequentEventMember 2021-07-01 2021-07-31 0001655759 arvn:PfizerIncorporationMember arvn:StockPurchaseAgreementMember us-gaap:SubsequentEventMember 2021-07-31

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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, 2021

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: 001-38672

 

ARVINAS, INC.

(Exact name of registrant as specified in its Charter)

 

 

Delaware

47-2566120

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

5 Science Park

395 Winchester Ave.

New Haven, Connecticut

06511

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (203) 535-1456

 

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 $0.001 per share

 

ARVN

 

The Nasdaq Stock Market LLC

 

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, 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.

 

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 2, 2021, the registrant had 49,195,898 shares of common stock, $0.001 par value per share, outstanding.

 

 

 

 

 

 


 

 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

2

Item 1.

Financial Statements (Unaudited)

2

 

Condensed Consolidated Balance Sheets

2

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

3

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity

4

 

Condensed Consolidated Statements of Cash Flows

5

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

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

14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25

Item 4.

Controls and Procedures

25

PART II.

OTHER INFORMATION

27

Item 1.

Legal Proceedings

27

Item 1A.

Risk Factors

27

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

29

Item 6.

Exhibits

30

Signatures

31

 

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:

 

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;

 

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;

 

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;

 

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;

 

our plans to pursue research and development of other product candidates;

 

the potential advantages of our platform technology and our product candidates;

 

the extent to which our scientific approach and platform technology may potentially address a broad range of diseases and disease targets;

 

the potential receipt of revenue from future sales of our product candidates;

 

the rate and degree of market acceptance and clinical utility of our product candidates;

 

our estimates regarding the potential market opportunity for our product candidates;

 

our sales, marketing and distribution capabilities and strategy;

 

our ability to establish and maintain arrangements for manufacture of our product candidates;

 

our ability to enter into additional collaborations with third parties;

 

our intellectual property position;

 

our estimates regarding expenses, future revenues, capital requirements and needs for additional financing;

 

the impact of COVID-19 on our business and operations;

 

the impact of government laws and regulations; and

 

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)

 

 

 

June 30,

2021

 

 

December 31,

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

48,726,443

 

 

$

588,373,232

 

Restricted cash

 

 

4,500,000

 

 

 

 

Marketable securities

 

 

551,849,110

 

 

 

100,157,618

 

Account receivable

 

 

 

 

 

1,000,000

 

Other receivables

 

 

7,415,611

 

 

 

7,443,654

 

Prepaid expenses and other current assets

 

 

15,242,798

 

 

 

6,113,122

 

Total current assets

 

 

627,733,962

 

 

 

703,087,626

 

Property, equipment and leasehold improvements, net

 

 

11,699,480

 

 

 

12,259,515

 

Operating lease right of use assets

 

 

4,564,666

 

 

 

1,992,669

 

Other assets

 

 

28,777

 

 

 

28,777

 

Total assets

 

$

644,026,885

 

 

$

717,368,587

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,975,367

 

 

$

7,121,879

 

Accrued expenses

 

 

13,472,966

 

 

 

18,859,840

 

Deferred revenue

 

 

22,150,861

 

 

 

22,150,861

 

Current portion of operating lease liability

 

 

1,221,152

 

 

 

952,840

 

Total current liabilities

 

 

41,820,346

 

 

 

49,085,420

 

Deferred revenue

 

 

14,862,802

 

 

 

22,938,233

 

Long term debt

 

 

1,000,000

 

 

 

2,000,000

 

Operating lease liability

 

 

3,396,563

 

 

 

1,087,422

 

Total liabilities

 

 

61,079,711

 

 

 

75,111,075

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value; 48,994,869 and 48,455,741 shares

   issued and outstanding as of June 30, 2021 and December 31,

   2020, respectively

 

 

48,995

 

 

 

48,455

 

Accumulated deficit

 

 

(583,141,763

)

 

 

(491,888,910

)

Additional paid-in capital

 

 

1,166,526,486

 

 

 

1,133,537,171

 

Accumulated other comprehensive income (loss)

 

 

(486,544

)

 

 

560,796

 

Total stockholders’ equity

 

 

582,947,174

 

 

 

642,257,512

 

Total liabilities and stockholders’ equity

 

$

644,026,885

 

 

$

717,368,587

 

 

See accompanying notes

2


 

Arvinas, INC. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)

 

Condensed Consolidated Statements of Operations

 

For the Three Months

Ended June 30,

 

 

For the Six Months

Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

$

5,544,418

 

 

$

5,747,681

 

 

$

11,083,783

 

 

$

11,987,309

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

43,010,807

 

 

 

23,416,090

 

 

 

77,877,689

 

 

 

45,142,776

 

General and administrative

 

 

14,410,865

 

 

 

8,815,474

 

 

 

26,729,578

 

 

 

16,740,479

 

Total operating expenses

 

 

57,421,672

 

 

 

32,231,564

 

 

 

104,607,267

 

 

 

61,883,255

 

Loss from operations

 

 

(51,877,254

)

 

 

(26,483,883

)

 

 

(93,523,484

)

 

 

(49,895,946

)

Other income (expenses)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

1,236,657

 

 

 

307,743

 

 

 

1,484,462

 

 

 

697,752

 

Interest income

 

 

360,160

 

 

 

965,851

 

 

 

810,544

 

 

 

2,264,984

 

Interest expense

 

 

(8,125

)

 

 

(16,250

)

 

 

(24,375

)

 

 

(32,500

)

Total other income

 

 

1,588,692

 

 

 

1,257,344

 

 

 

2,270,631

 

 

 

2,930,236

 

Net loss

 

$

(50,288,562

)

 

$

(25,226,539

)

 

$

(91,252,853

)

 

$

(46,965,710

)

Net loss per common share, basic and diluted

 

$

(1.03

)

 

$

(0.65

)

 

$

(1.87

)

 

$

(1.22

)

Weighted average common shares outstanding, basic

   and diluted

 

 

48,860,930

 

 

 

38,739,922

 

 

 

48,741,296

 

 

 

38,644,209

 

 

Condensed Consolidated Statements of Comprehensive Loss

 

For the Three Months

Ended June 30,

 

 

For the Six Months

Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

 

$

(50,288,562

)

 

$

(25,226,539

)

 

$

(91,252,853

)

 

$

(46,965,710

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale securities

 

 

(243,789

)

 

 

2,266,738

 

 

 

(1,047,340

)

 

 

1,556,548

 

Comprehensive loss

 

$

(50,532,351

)

 

$

(22,959,801

)

 

$

(92,300,193

)

 

$

(45,409,162

)

 

See accompanying notes

 

 

 

3


 

 

Arvinas, INC. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

Total

 

 

 

Common

 

 

Accumulated

 

 

Paid-in

 

 

Comprehensive

 

 

Stockholders'

 

For the Three Months Ended June 30, 2020 and 2021

 

Shares

 

 

Amount

 

 

Deficit

 

 

Capital

 

 

Income (Loss)

 

 

Equity

 

Balance at March 31, 2020

 

 

38,672,433

 

 

$

38,672

 

 

$

(394,296,017

)

 

$

606,567,072

 

 

$

(602,614

)

 

$

211,707,113

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

7,754,959

 

 

 

 

 

 

7,754,959

 

Issuance of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

(25,226,539

)

 

 

 

 

 

 

 

 

(25,226,539

)

Restricted stock vesting

 

 

84,177

 

 

 

84

 

 

 

 

 

 

(84

)

 

 

 

 

 

 

Exercise of stock options

 

 

68,580

 

 

 

69

 

 

 

 

 

 

1,279,084

 

 

 

 

 

 

1,279,153

 

Unrealized gain on available-for

   -sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,266,738

 

 

 

2,266,738

 

Balance at June 30, 2020

 

 

38,825,190

 

 

$

38,825

 

 

$

(419,522,556

)

 

$

615,601,031

 

 

$

1,664,124

 

 

$

197,781,424

 

Balance at March 31, 2021

 

 

48,785,692

 

 

$

48,786

 

 

$

(532,853,201

)

 

$

1,148,345,190

 

 

$

(242,755

)

 

$

615,298,020

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

14,568,216

 

 

 

 

 

 

14,568,216

 

Net loss

 

 

 

 

 

 

 

 

(50,288,562

)

 

 

 

 

 

 

 

 

(50,288,562

)

Restricted stock vesting

 

 

58,407

 

 

 

58

 

 

 

 

 

 

(58

)

 

 

 

 

 

 

Exercise of stock options

 

 

150,770

 

 

 

151

 

 

 

 

 

 

3,613,138

 

 

 

 

 

 

3,613,289

 

Unrealized loss on available-for

   -sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(243,789

)

 

 

(243,789

)

Balance at June 30, 2021

 

 

48,994,869

 

 

$

48,995

 

 

$

(583,141,763

)

 

$

1,166,526,486

 

 

$

(486,544

)

 

$

582,947,174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

Total

 

 

 

Common

 

 

Accumulated

 

 

Paid-in

 

 

Comprehensive

 

 

Stockholders'

 

For the Six Months Ended June 30, 2020 and 2021

 

Shares

 

 

Amount

 

 

Deficit

 

 

Capital

 

 

Income (Loss)

 

 

Equity

 

Balance at December 31, 2019

 

 

38,461,353

 

 

$

38,461

 

 

$

(372,556,846

)

 

$

599,097,090

 

 

$

107,576

 

 

$

226,686,281

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

13,874,670

 

 

 

 

 

 

13,874,670

 

Net loss

 

 

 

 

 

 

 

 

(46,965,710

)

 

 

 

 

 

 

 

 

(46,965,710

)

Restricted stock vesting

 

 

212,909

 

 

 

213

 

 

 

 

 

 

(213

)

 

 

 

 

 

 

Exercise of stock options

 

 

150,928

 

 

 

151

 

 

 

 

 

 

2,629,484

 

 

 

 

 

 

2,629,635

 

Unrealized gain on available-for

   -sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,556,548

 

 

 

1,556,548

 

Balance at June 30, 2020

 

 

38,825,190

 

 

$

38,825

 

 

$

(419,522,556

)

 

$

615,601,031

 

 

$

1,664,124

 

 

$

197,781,424

 

Balance at December 31, 2020

 

 

48,455,741

 

 

$

48,455

 

 

$

(491,888,910

)

 

$

1,133,537,171

 

 

$

560,796

 

 

$

642,257,512

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

24,895,874

 

 

 

 

 

 

24,895,874

 

Net loss

 

 

 

 

 

 

 

 

(91,252,853

)

 

 

 

 

 

 

 

 

(91,252,853

)

Restricted stock vesting

 

 

125,028

 

 

 

125

 

 

 

 

 

 

(125

)

 

 

 

 

 

 

Exercise of stock options

 

 

414,100

 

 

 

415

 

 

 

 

 

 

8,093,566

 

 

 

 

 

 

8,093,981

 

Unrealized loss on available-for

   -sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,047,340

)

 

 

(1,047,340

)

Balance at June 30, 2021

 

 

48,994,869

 

 

$

48,995

 

 

$

(583,141,763

)

 

$

1,166,526,486

 

 

$

(486,544

)

 

$

582,947,174

 

 

See accompanying notes

4


 

Arvinas, INC. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

 

 

 

For the Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(91,252,853

)

 

$

(46,965,710

)

Adjustments to reconcile net loss to net cash

   used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2,313,395

 

 

 

1,252,573

 

Net accretion of bond discounts/premiums

 

 

2,673,364

 

 

 

823,694

 

Forgiveness of debt income

 

 

(1,000,000

)

 

 

 

Amortization of right to use assets

 

 

617,058

 

 

 

395,735

 

Stock-based compensation

 

 

24,895,874

 

 

 

13,874,670

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Account receivable

 

 

1,000,000

 

 

 

 

Other receivables

 

 

28,043

 

 

 

2,716,511

 

Prepaid expenses and other current assets

 

 

(9,129,676

)

 

 

404,665

 

Accounts payable

 

 

(2,442,944

)

 

 

(2,279,547

)

Accrued expenses

 

 

(5,386,874

)

 

 

(198,444

)

Deferred revenue

 

 

(8,075,431

)

 

 

(7,952,998

)

Operating lease liabilities

 

 

(611,602

)

 

 

(423,096

)

Net cash used in operating activities

 

 

(86,371,646

)

 

 

(38,351,947

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of marketable securities

 

 

(537,970,196

)

 

 

(41,196,165

)

Maturities of marketable securities

 

 

82,558,000

 

 

 

88,253,053

 

Sales of marketable securities

 

 

 

 

 

4,234,116

 

Purchase of property, equipment and leasehold

   improvements

 

 

(1,456,928

)

 

 

(3,186,093

)

Net cash (used in) provided by investing activities

 

 

(456,869,124

)

 

 

48,104,911

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

8,093,981

 

 

 

2,629,635

 

Net cash provided by financing activities

 

 

8,093,981

 

 

 

2,629,635

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

(535,146,789

)

 

 

12,382,599

 

Cash, cash equivalents and restricted cash, beginning of the period

 

 

588,373,232

 

 

 

9,211,057

 

Cash, cash equivalents and restricted cash, end of the period

 

$

53,226,443

 

 

$

21,593,656

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Purchases of property, equipment and leasehold improvements

   unpaid at period end

 

$

296,432

 

 

$

152,477

 

Cash paid for interest

 

$

10,833

 

 

$

32,500

 

 

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 read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2020, forming part of Arvinas’ 2020 Annual Report on Form 10-K filed with the SEC on March 1, 2021.

 

Impact of the coronavirus (“COVID-19”) pandemic

 

As a result of the COVID-19 pandemic, many companies have experienced disruptions in their operations and in markets served. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company’s results of operations and financial position as of June 30, 2021. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of Company to complete certain clinical trials and other efforts required to advance its preclinical pipeline.

2. Accounting Pronouncements and Significant Accounting Policies

The Company reviews new accounting standards as issued. As of June 30, 2021 the Company has not identified any new standards that it believes will have a significant impact on the Company’s financial statements.

There were no changes to the Company’s significant accounting policies during the three months ended June 30, 2021.

3. Research Collaboration and License Agreements

 

In June 2019, the Company and Bayer AG entered into a Collaboration and License Agreement (Bayer Collaboration Agreement) setting forth the Company’s collaboration with Bayer AG to identify or optimize proteolysis targeting chimeras, or PROTAC® targeted protein degraders, that mediate for degradation of target proteins. Under the terms of the Bayer Collaboration Agreement, the Company received an upfront non-refundable payment of $17.5 million in exchange for the use of the Company’s technology license and a $1.5 million payment to fund research activities. Bayer is committed to fund an additional $10.5 million through 2022, of which $3.0 million was received in each of the six months ending June 30, 2020 and 2021. These payments are being recognized over the total estimated period of performance.

 

The Company determined that the Bayer Collaboration Agreement and a Stock Purchase Agreement entered into with Bayer AG at the same time should be evaluated as a combined contract in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. The Company determined the fair value of the shares sold under the Stock Purchase Agreement to be $2.9 million less than the contractual purchase price stipulated in the agreement. In accordance with the applicable accounting guidance in ASC 815-40, Contracts in Entity’s Own Equity, the Company determined that the sale of stock should be recorded at fair value. Therefore, the Company allocated the additional $2.9 million of consideration received under the Stock Purchase Agreement to the Bayer Collaboration Agreement and added such amount to the total transaction price.

6


 

In December 2017, the Company entered into a Research Collaboration and License Agreement with Pfizer, Inc. (Pfizer) (the Pfizer Collaboration Agreement). Under the terms of the Pfizer Collaboration Agreement, the Company received an upfront non-refundable payment and certain additional payments totaling $28.0 million in 2018 in exchange for use of the Company’s technology license and to fund Pfizer-related research as defined within the agreement. These payments are being recognized as revenue over the total estimated period of performance. Pfizer has exercised options on certain targets for $4.9 million as of June 30, 2021. Pfizer also paid the Company $1.2 million in 2019 and $3.0 million in 2020 relating to adding additional targets into the collaboration. The option and target payments are being recognized over the estimated period of performance.

In November 2017, the Company entered into an Amended and Restated Option, License, and Collaboration Agreement with Genentech, Inc. and F. Hoffman-La Roche Ltd. (the Genentech Modification), amending a previous Genentech agreement. Under the Genentech Modification, the Company received additional upfront non-refundable payments of $34.5 million (in addition to $11.0 million received under the previous agreement) to fund Genentech-related research and Genentech has the right to designate up to ten targets.

Information about contract liabilities included as deferred revenue in the condensed consolidated balance sheets, is as follows:

 

 

 

June 30,