What changed in this filing

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Item 1. Financial Statements

2021-11-12 compared with 2021-08-11 · 71 added, 64 removed, 344 unchanged (28% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

September 30,

Current assets:

17 unchanged sentences

5,000,000 undesignated authorized shares;

Class X Convertible Preferred Stock issued and outstanding shares – 0 as of June 30, 2021 (unaudited) and December 31, 2020, respectively

Class X Convertible Preferred Stock issued and outstanding shares – 0 as of September 30, 2021 (unaudited) and December 31, 2020, respectively

Common stock, $ 0.001 par value per share;

42,500,000 and 21,425,000 authorized shares as of June 30, 2021 and December 31, 2020, respectively;

issued and outstanding shares – 16,307,370 (unaudited) and 11,018,954 as of June 30, 2021 and December 31, 2020, respectively

42,500,000 and 21,425,000 authorized shares as of September 30, 2021 and December 31, 2020, respectively;

issued and outstanding shares – 27,790,677 (unaudited) and 11,018,954 as of September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

9 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

License and collaboration agreement revenues

10 unchanged sentences

Net loss per share, basic and diluted

Shares used in computing basic net loss per share, basic and diluted

Shares used in computing net loss per share, basic and diluted

See accompanying notes.

2 unchanged sentences

(in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Consolidated net loss

9 unchanged sentences

(in thousands, except share data)

Six Months Ended June 30, 2021 (unaudited)

Nine Months Ended September 30, 2021 (unaudited)

Preferred Stock

15 unchanged sentences

Balance as of June 30, 2021

Six Months Ended June 30, 2020 (unaudited)

Issuance of common stock upon exercise of stock options

Issuance of common stock from at-the-market offerings, net of offering costs

Issuance of common stock from underwritten follow-on offering, net of offering costs

Stock-based compensation

Net unrealized loss on investments, net of tax

Balance as of September 30, 2021

Nine Months Ended September 30, 2020 (unaudited)

Preferred Stock

16 unchanged sentences

Balance as of June 30, 2020

Issuance of common stock from at-the-market offerings, net of offering costs

Stock-based compensation

Net unrealized gain on investments, net of tax

Balance as of September 30, 2020

See accompanying notes.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

51 unchanged sentences

The impact of the COVID-19 pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.

Impacts to our business have included delayed enrollment of our Phase 1b/2a clinical trial in patients with pulmonary sarcoidosis and the discontinuation of some patients in that trial, temporary closures of portions of our facilities and those of our licensees and collaborators, disruptions or restrictions on our employee's ability to travel and delays in certain research and development activities.

Other potential impacts to our business include, but are not limited to disruptions to or delays in other clinical trials, third-party manufacturing supply and other operations, inflation, the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, interruptions or delays in the operations of the FDA or other regulatory authorities, and our ability to raise capital and conduct business development activities.

Impacts to our business have included delayed enrollment of our now completed Phase 1b/2a clinical trial in patients with pulmonary sarcoidosis and the discontinuation of some patients in that trial, temporary closures of portions of our facilities and those of our licensees and collaborators, disruptions or restrictions on our employee's ability to travel and delays in certain research and development activities.

Other potential impacts to our business include, but are not limited to disruptions to or delays in planned clinical trials, third-party manufacturing supply and other operations, inflation, the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, interruptions or delays in the operations of the Food and Drug Administration or other regulatory authorities, and our ability to raise capital and conduct business development activities.

Liquidity and Financial Condition

We have incurred net losses in each year since our inception in 2005, including a condensed consolidated net loss of $ 17.5 million for the six months ended June 30, 2021.

As of June 30, 2021, we had an accumulated deficit of $ 356.1 million.

We believe that our existing cash, cash equivalents and available-for-sale investments of $ 44.1 million as of June 30, 2021 will be sufficient to meet our anticipated cash requirements for a period of at least one year from the filing date of this Quarterly Report on Form 10-Q.

We have incurred net losses in each year since our inception in 2005, including a condensed consolidated net loss of $ 25.2 million for the nine months ended September 30, 2021.

As of September 30, 2021, we had an accumulated deficit of $ 363.7 million.

We believe that our existing cash, cash equivalents and available-for-sale investments of $ 116.4 million as of September 30, 2021 will be sufficient to meet our anticipated cash requirements for a period of at least one year from the filing date of this Quarterly Report on Form 10-Q.

We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years at a minimum.

7 unchanged sentences

Our condensed consolidated financial statements are prepared in accordance with GAAP.

The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that impact the reported amounts of assets, liabilities

and expenses and the disclosure for these items in our condensed consolidated financial statements and accompanying notes.

The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure for these items in our condensed consolidated financial statements and accompanying notes.

The most significant estimates in our condensed consolidated financial statements relate to clinical trial and research and development expenses.

Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ materially from these estimates and assumptions.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

The reclassifications were not material to the condensed consolidated financial statements.

We follow Accounting Standards Codification (ASC) Topic 842, Leases in recording our operating and financing leases.

30 unchanged sentences

Potentially dilutive securities not considered for the calculation of diluted net loss per share are as follows (in common stock equivalents):

Six Months Ended June 30,

Nine Months Ended September 30,

Common stock warrants

34 unchanged sentences

for Identical

As of June 30, 2021

As of September 30, 2021

Cash equivalents

Available-for-sale investments:

Asset-backed securities

Commercial paper

15 unchanged sentences

Total assets measured at fair value

As of June 30, 2021 and December 31, 2020, available-for-sale investments are detailed as follows (in thousands):

June 30, 2021

As of September 30, 2021 and December 31, 2020, available-for-sale investments are detailed as follows (in thousands):

September 30, 2021

Contractual Maturity

Available-for-sale investments:

Asset-backed securities

Within 1 year

Commercial paper

15 unchanged sentences

We intend, and have the ability, to hold our investments in unrealized loss positions, if any, until their amortized cost basis has been recovered.

As of June 30, 2021, all of our available-for-sale investments have a variety of effective maturity dates of less than two years .

As of June 30, 2021, 17 out of 25 available-for-sale investments were in gross unrealized loss positions.

As of September 30, 2021, all of our available-for-sale investments had a variety of effective maturity dates of less than two years .

As of September 30, 2021, 19 out of 30 available-for-sale investments were in gross unrealized loss positions.

License and Other Agreements

5 unchanged sentences

In September 2020, Kyorin began dosing patients in a Phase 1 clinical trial of ATYR1923 (known as KRP-R120 in Japan) and completed the last subject visit in December 2020.

The Phase 1 clinical trial, which was conducted and funded by Kyorin, is a placebo-controlled study to evaluate the safety, pharmacokinetics and immunogenicity of ATYR1923.

The Phase 1 clinical trial, which was conducted and funded by Kyorin, was a placebo-controlled study to evaluate the safety, pharmacokinetics and immunogenicity of ATYR1923.

ATYR1923 was observed to be generally safe and well-tolerated with no drug-related serious adverse events and pharmacokinetics findings were consistent with previous studies of ATYR1923.

1 unchanged sentence

Following the first anniversary of the effective date of the Kyorin Agreement, Kyorin had the right to terminate the agreement for any reason upon 90 days advance written notice.

Either party may terminate the Kyorin Agreement in the event that the other party breaches the agreement and fails to cure the breach, becomes insolvent or challenges certain of the intellectual property rights licensed under the agreement .

In addition, either party may terminate the Kyorin Agreement in the event that the other party breaches the agreement and fails to cure the breach, becomes insolvent or challenges certain of the intellectual property rights licensed under the agreement .

We assessed our license and collaboration with Kyorin in accordance with Topic 606 and concluded that Kyorin is a customer.

8 unchanged sentences

We received the $ 2.0 million from Kyorin in January 2021.

For the six months ended June 30, 2021, there were no activities that triggered additional license and collaboration agreement revenue.

For the six months ended June 30, 2020, we recognized $ 8.0 million as license and collaboration agreement revenue for the upfront payment received.

For the nine months ended September 30, 2021, there were no activities that triggered additional license and collaboration agreement revenue.

For the nine months ended September 30, 2020, we recognized $ 8.0 million as license and collaboration agreement revenue for the upfront payment received.

Both the remaining milestones and royalty payments under the Kyorin Agreement are variable consideration.

10 unchanged sentences

All the contributions provided by the ITC are paid to HKUST and we record expenses under this grant award when incurred.

Expenses for the three months ended June 30, 2021 and 2020 were $ 0.1 million and $ 47,000 , respectively .

Expenses for the six months ended June 30, 2021 and 2020 were approximately $ 0.3 million and $ 47,000 , respectively .

Expenses for each of the three months ended September 30, 2021 and 2020 were $ 0.1 million .

Expenses for the nine months ended September 30, 2021 and 2020 were approximately $ 0.3 million and $ 0.1 million , respectively .

Commitments and Contingencies

Facility Leases

Future minimum payments under the non-cancelable facility lease and reconciliation to the operating lease liability as of June 30, 2021 were as follows (in thousands):

Future minimum payments under the non-cancelable facility lease and reconciliation to the operating lease liability as of September 30, 2021 were as follows (in thousands):

Operating Lease

3 unchanged sentences

Long-term operating lease liability, net of current portion

For each of the three months ended June 30, 2021 and 2020, we recorded an operating lease cost of $ 0.2 million.

For each of the six months ended June 30, 2021 and 2020, we recorded an operating lease cost of $ 0.5 million.

As of June 30, 2021, the weighted-average remaining lease term was 1 .9 years and the weighted-average discount rate was 9.6 %.

For each of the three months ended September 30, 2021 and 2020, we recorded an operating lease cost of $ 0.2 million.

For each of the nine months ended September 30, 2021 and 2020, we recorded an operating lease cost of $ 0.7 million.

As of September 30, 2021, the weighted-average remaining lease term was 1 .7 years and the weighted-average discount rate was 9.6 %.

Stockholders’ Equity

At the Market Offering Program

Underwritten Follow-On Public Offerings

In September 2021, we completed an underwritten follow-on public offering of 10,781,250 shares of our common stock, including the full exercise of the underwriters’ option to purchase additional shares, at a price to the public of $ 8.00 per share.

The total net proceeds from the offering were approximately $ 80.6 million, after deducting underwriting discounts, commissions and offering expenses payable by us.

In February 2020, we completed an underwritten follow-on public offering of 4,235,294 shares of our common stock at a price to the public of $ 4.25 per share.

In March 2020, the underwriters fully exercised their option to purchase additional shares resulting in the issuance of an additional 635,294 shares of common stock.

The total net proceeds from the offering were approximately $ 18.8 million, after deducting underwriting discounts, commissions and offering expenses payable by us.

At the Market Offering Programs

In March 2021, we entered into a Capital on Demand TM Sales Agreement with JonesTrading Institutional Services LLC (JonesTrading) for an at-the-market offering (ATM Offering Program), pursuant to which we can sell from time to time, at our option, up to an aggregate of $ 25.0 million of shares of our common stock through JonesTrading, as sales agent or principal.

JonesTrading is entitled to a commission at a fixed rate equal of up to 3 % of the gross proceeds.

For the nine months ended September 30, 2021, we sold an aggregate of 986,267 shares of common stock at an average price of $ 4.75 per share for net proceeds of $ 4.4 million under the JonesTrading ATM Offering Program.

In May 2019, we entered into a sales agreement with H.C.

Wainwright & Co., LLC (Wainwright) with respect to an at-the-market offering (ATM Offering Program) under which we may offer and sell shares of our common stock having an aggregate offering price of up to $ 10.0 million.

Wainwright & Co., LLC (Wainwright) with respect to an ATM Offering Program under which we could offer and sell shares of our common stock having an aggregate offering price of up to $ 10.0 million.

Wainwright was entitled to a commission at a fixed rate equal to 3 % of the gross proceeds.

In November 2020, we amended our sales agreement with Wainwright to increase the amount of the ATM Offering Program to $ 20.0 million.

Wainwright was entitled to a commission at a fixed commission rate equal to 3 % of the gross proceeds.

In March 2021, the ATM Offering Program with Wainwright automatically terminated upon the issuance and sale of all of the shares of common stock having an aggregate offering price of $ 20.0 million.

Prior to the termination of the sales agreement with Wainwright, in 2021, we sold an aggregate of 1,988,254 shares of common stock at an average price of $ 4.99 per share for net proceeds of $ 9.6 million under the ATM Offering Program.

In March 2021, we entered into a Capital on Demand TM Sales Agreement with JonesTrading Institutional Services LLC (JonesTrading) for a new ATM Offering Program, pursuant to which we can sell from time to time, at our option, up to an aggregate of $ 25.0 million of shares of our common stock through JonesTrading, as sales agent or principal.

JonesTrading is entitled to a commission at a fixed rate equal of up to 3 % of the gross proceeds.

For the six months ended June 30, 2021, we sold an aggregate of 293,830 shares of common stock at an average price of $ 4.72 per share for net proceeds of $ 1.3 million under the ATM Offering Program .

Underwritten Follow-On Public Offering

In February 2020, we completed an underwritten follow-on public offering of 4,235,294 shares of our common stock at a price to the public of $ 4.25 per share.

In March 2020, the underwriters fully exercised their option to purchase additional shares resulting in the issuance of an additional 635,294 shares of common stock.

The total gross proceeds from the underwritten follow-on public offering, including the underwriters’ option to purchase additional shares, was approximately $ 18.8 million, after deducting underwriting discounts, commissions and offering expenses payable by us.

Under the ATM Offering Program with Wainwright, during 2020, we sold an aggregate of 1,657,075 shares of common stock at an average price of $ 4.07 per share for net proceeds of $ 6.4 million.

Purchase Agreement

In September 2020 , we entered into a common stock purchase agreement (Purchase Agreement) with Aspire Capital Fund, LLC (Aspire Capital), which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $ 20.0 million of shares of our common stock at our request from time to time during the 30 month term of the Purchase Agreement.

In September 2020 , we entered into a common stock purchase agreement (Purchase Agreement) with Aspire Capital Fund, LLC (Aspire Capital), which provides that,

upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $ 20.0 million of shares of our common stock at our request from time to time during the 30 month term of the Purchase Agreement.

Concurrently with entering into the Purchase Agreement, we also entered into a registration rights agreement with Aspire Capital, in which we agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, as amended, for the resale of the shares of our common stock that have been and may be issued to Aspire Capital under the Purchase Agreement.

For the six months ended June 30, 2021, we sold an aggregate of 3,000,000 shares of common stock at an average price of $ 5.09 per share for net proceeds of $ 15.2 million under this Purchase Agreement.

For the nine months ended September 30, 2021, we sold an aggregate of 3,000,000 shares of common stock at an average price of $ 5.09 per share for net proceeds of $ 15.2 million under this Purchase Agreement.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance was as follows:

June 30, 2021

September 30, 2021

Common stock warrants

2 unchanged sentences

Shares available under the employee stock purchase plan

The following table summarizes our stock option activity under all equity incentive plans for the six months ended June 30, 2021:

The following table summarizes our stock option activity under all equity incentive plans for the nine months ended September 30, 2021:

Stock Options

2 unchanged sentences

Canceled/forfeited/expired

Outstanding as of June 30, 2021

Outstanding as of September 30, 2021

The assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Expected term (in years)

4 unchanged sentences

102.2% – 109.7

Expected dividend yield

The following table summarizes our restricted stock unit activity under all equity incentive plans for the six months ended June 30, 2021:

The following table summarizes our restricted stock unit activity under all equity incentive plans for the nine months ended September 30, 2021:

Number of Outstanding

2 unchanged sentences

Balance as of December 31, 2020

Balance as of June 30, 2021

Balance as of September 30, 2021

Stock-based Compensation

The allocation of stock-based compensation for all options, including performance options with a market condition, employee stock purchase plan and restricted stock units is as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development

1 unchanged sentence

Total stock-based compensation expense

Subsequent Events

From July 1, 2021 through August 9, 2021, we sold an aggregate of 610,442 shares of common stock at a weighted-average price of $ 4.76 per share through the ATM Offering Program for net proceeds of $ 2.8 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements