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arvn-10q_20210930.htm

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 September 30, 2021

☐	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 November 1, 2021, the registrant had 52,871,645 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 Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	28
PART II.	OTHER INFORMATION	29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 6.	Exhibits	32
Signatures		33

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 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 our Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021, and this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” sections, 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.

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)

	September 30, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	255,662,835		$	588,373,232
Restricted cash		4,500,000			—
Marketable securities		1,288,814,399			100,157,618
Accounts receivable		1,880,180			1,000,000
Other receivables		6,755,720			7,443,654
Prepaid expenses and other current assets		18,537,587			6,113,122
Total current assets		1,576,150,721			703,087,626
Property, equipment and leasehold improvements, net		11,628,051			12,259,515
Operating lease right of use assets		4,250,463			1,992,669
Collaboration contract asset and other assets		12,835,975			28,777
Total assets	$	1,604,865,210		$	717,368,587
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	4,671,605		$	7,121,879
Accrued expenses		13,769,220			18,859,840
Deferred revenue		162,943,830			22,150,861
Current portion of operating lease liability		1,123,101			952,840
Total current liabilities		182,507,756			49,085,420
Deferred revenue		600,429,165			22,938,233
Long term debt		1,000,000			2,000,000
Operating lease liability		3,191,132			1,087,422
Total liabilities		787,128,053			75,111,075
Commitments and Contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 52,766,020 and 48,455,741 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		52,766			48,455
Accumulated deficit		(629,893,515	)		(491,888,910	)
Additional paid-in capital		1,448,254,555			1,133,537,171
Accumulated other comprehensive (loss) income		(676,649	)		560,796
Total stockholders’ equity		817,737,157			642,257,512
Total liabilities and stockholders’ equity	$	1,604,865,210		$	717,368,587

See accompanying notes

Arvinas, INC. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)

Condensed Consolidated Statements of Operations	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020
Revenue	$	9,284,785		$	7,596,776		$	20,368,568		$	19,584,085
Operating expenses:
Research and development		40,603,631			30,012,918			118,481,320			75,155,694
General and administrative		16,012,384			9,331,925			42,741,962			26,072,404
Total operating expenses		56,616,015			39,344,843			161,223,282			101,228,098
Loss from operations		(47,331,230	)		(31,748,067	)		(140,854,714	)		(81,644,013	)
Other income (expenses)
Other income, net		219,058			144,215			1,703,521			841,967
Interest income		368,545			800,236			1,179,088			3,065,220
Interest expense		(8,125	)		(16,250	)		(32,500	)		(48,750	)
Total other income		579,478			928,201			2,850,109			3,858,437
Net loss	$	(46,751,752	)	$	(30,819,866	)	$	(138,004,605	)	$	(77,785,576	)
Net loss per common share, basic and diluted	$	(0.94	)	$	(0.79	)	$	(2.81	)	$	(2.01	)
Weighted average common shares outstanding, basic and diluted		49,807,508			39,058,294			49,101,927			38,784,569

Condensed Consolidated Statements of Comprehensive Loss	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020
Net loss	$	(46,751,752	)	$	(30,819,866	)	$	(138,004,605	)	$	(77,785,576	)
Other comprehensive loss:
Unrealized (loss) gain on available-for-sale securities		(190,105	)		(584,317	)		(1,237,445	)		972,231
Comprehensive loss	$	(46,941,857	)	$	(31,404,183	)	$	(139,242,050	)	$	(76,813,345	)

See accompanying notes

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 September 30, 2020 and 2021	Shares		Amount		Deficit			Capital			Income (Loss)			Equity
Balance at June 30, 2020		38,825,190	$	38,825	$	(419,522,556	)	$	615,601,031		$	1,664,124		$	197,781,424
Stock-based compensation		—		—		—			8,246,921			—			8,246,921
Net loss		—		—		(30,819,866	)		—			—			(30,819,866	)
Restricted stock vesting		82,156		82		—			(82	)		—			—
Exercise of stock options		25,581		26		—			577,277			—			577,303
Common stock issued in at-the-market offering, net of issuance costs of $0.9 million		1,163,074		1,163					29,917,339						29,918,502
Unrealized loss on available-for -sale securities		—		—		—			—			(584,317	)		(584,317	)
Balance at September 30, 2020		40,096,001	$	40,096	$	(450,342,422	)	$	654,342,486		$	1,079,807		$	205,119,967
Balance at June 30, 2021		48,994,869	$	48,995	$	(583,141,763	)	$	1,166,526,486		$	(486,544	)	$	582,947,174
Stock-based compensation		—		—		—			15,224,632			—			15,224,632
Net loss		—		—		(46,751,752	)		—			—			(46,751,752	)
Restricted stock vesting		54,804		55		—			(55	)		—			—
Exercise of stock options		258,532		258		—			6,570,446			—			6,570,704
Common stock issued, net of issuance costs of $4.6 million		3,457,815		3,458		—			259,933,046			—			259,936,504
Unrealized loss on available-for -sale securities		—		—		—			—			(190,105	)		(190,105	)
Balance at September 30, 2021		52,766,020	$	52,766	$	(629,893,515	)	$	1,448,254,555		$	(676,649	)	$	817,737,157


											Accumulated
								Additional			Other			Total
	Common				Accumulated			Paid-in			Comprehensive			Stockholders'
For the Nine Months Ended September 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		—		—		—			22,121,591			—			22,121,591
Net loss		—		—		(77,785,576	)		—			—			(77,785,576	)
Restricted stock vesting		295,065		295		—			(295	)		—			—
Exercise of stock options		176,509		177		—			3,206,761			—			3,206,938
Common stock issued in at-the-market offering, net of issuance costs of $0.9 million		1,163,074		1,163					29,917,339						29,918,502
Unrealized gain on available-for -sale securities		—		—		—			—			972,231			972,231
Balance at September 30, 2020		40,096,001	$	40,096	$	(450,342,422	)	$	654,342,486		$	1,079,807		$	205,119,967
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		—		—		—			40,120,506			—			40,120,506
Net loss		—		—		(138,004,605	)		—			—			(138,004,605	)
Restricted stock vesting		179,832		180		—			(180	)		—			—
Exercise of stock options		672,632		673		—			14,664,012			—			14,664,685
Common stock issued, net of issuance costs of $4.6 million		3,457,815		3,458		—			259,933,046			—			259,936,504
Unrealized loss on available-for -sale securities		—		—		—			—			(1,237,445	)		(1,237,445	)
Balance at September 30, 2021		52,766,020	$	52,766	$	(629,893,515	)	$	1,448,254,555		$	(676,649	)	$	817,737,157

See accompanying notes

Arvinas, INC. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

	For the Nine Months Ended September 30,
	2021			2020
Cash flows from operating activities:
Net loss	$	(138,004,605	)	$	(77,785,576	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		3,511,998			2,113,865
Net accretion of bond discounts/premiums		5,241,206			1,404,626
Forgiveness of debt income		(1,000,000	)		—
Loss (gain) on sale of marketable securities		26,055			(327,025	)
Amortization of right-of-use assets		931,261			624,614
Amortization of collaboration contract asset		62,890			—
Stock-based compensation		40,120,506			22,121,591
Changes in operating assets and liabilities:
Accounts receivable		(880,180	)		(2,444,450	)
Other receivables		687,934			2,769,195
Prepaid expenses and other current assets		(12,424,465	)		265,412
Collaboration contract asset		(12,870,088	)		—
Accounts payable		(2,525,807	)		(246,733	)
Accrued expenses		(5,090,620	)		4,540,830
Deferred revenue		718,283,901			(13,102,948	)
Operating lease liability		(915,084	)		(669,183	)
Net cash provided by (used in) operating activities		595,154,902			(60,735,782	)
Cash flows from investing activities:
Purchase of marketable securities		(1,402,866,256	)		(41,196,165	)
Maturities of marketable securities		200,482,309			115,402,053
Sales of marketable securities		7,222,460			37,775,235
Purchase of property, equipment and leasehold improvements		(2,805,001	)		(4,592,917	)
Net cash (used in) provided by investing activities		(1,197,966,488	)		107,388,206
Cash flows from financing activities: