What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-05 compared with 2020-08-06 · 99 added, 91 removed, 313 unchanged (38% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

June 30, 2020

September 30, 2020

December 31, 2019

20 unchanged sentences

150,000,000 shares authorized;

48,309,457 shares and 39,466,254 shares issued and 48,241,212 shares and 39,260,532 shares outstanding as of June 30, 2020 and December 31, 2019, respectively

48,325,192 shares and 39,466,254 shares issued and 48,293,469 shares and 39,260,532 shares outstanding as of September 30, 2020 and December 31, 2019, respectively

Additional paid-in

7 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,

Operating expenses:

18 unchanged sentences

Income (Loss)

Three Months Ended June 30, 2020

Balances at March 31, 2020

Issuance of common stock upon public offering net of underwriting discounts, commissions and offering costs

Three Months Ended September 30, 2020

Balances at June 30, 2020

Vesting of restricted stock

Issuance of common stock upon exercise of stock options

Issuance of common stock under Employee Stock Purchase Plan

Stock-based compensation expense

Unrealized losses on marketable securities

Balances at September 30, 2020

Three Months Ended September 30, 2019

Balances at June 30, 2019

Three Months Ended June 30, 2019

Balances at March 31, 2019

Issuance of common stock upon public offering net of underwriting discounts, commissions and offering costs

Vesting of restricted stock

1 unchanged sentence

Stock-based compensation expense

Unrealized gains on marketable securities

Balances at June 30, 2019

on marketable securities

Balances at September 30, 2019

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

5 unchanged sentences

Income (Loss)

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Balances at December 31, 2019

2 unchanged sentences

Issuance of common stock upon exercise of stock options

Issuance of common stock under Employee Stock Purchase Plan

Issuance of common stock under Employee

Stock Purchase

Stock-based compensation expense

Unrealized gains on marketable securities

Balances at June 30, 2020

Six Months Ended June 30, 2019

Balances at September 30, 2020

Nine Months Ended September 30, 2019

Balances at December 31, 2018

4 unchanged sentences

Unrealized gains on marketable securities

Balances at June 30, 2019

Balances at September 30, 2019

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

2 unchanged sentences

(In thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities:

1 unchanged sentence

Stock-based compensation expense

Loss on disposal of property and equipment

Depreciation and amortization expense

10 unchanged sentences

Maturities of marketable securities

Net cash provided by (used in) investing activities

Net cash provided by investing activities

Cash flows from financing activities:

4 unchanged sentences

Net cash provided by financing activities

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

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

2 unchanged sentences

investing and financing activities:

Purchase of property and equipment included in accounts payable and accrued expenses

Offering costs included in accounts payable and accrued expenses

8 unchanged sentences

and in June 2018 the Company completed its initial public offering.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations , the continuing impact of the COVID-19 coronavirus

and the ability to secure additional capital to fund operations.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, the continuing impact of the novel coronavirus (“COVID-19”)

pandemic and the ability to secure additional capital to fund operations.

Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization.

2 unchanged sentences

In June 2020, the Company issued and sold 8,625,000 shares of its common stock, including the underwriters’ exercise in full of their option to purchase additional shares of common stock, in a follow-on

public offering at a public offering price of $ 8.00 per share, resulting in net proceeds of $ 64.6 million after underwriting discounts and commission s

and other offering expenses.

public offering at a public offering price of $ 8.00 per share, resulting in net proceeds of $ 64.6 million after underwriting discounts and commissions and other offering expenses.

In May 2019, the Company issued and sold 4,887,500 shares of its common stock, including the underwriters’ exercise in full of their option to purchase additional shares of common stock, in a follow-on

public offering at a public offering price of $ 13.25 per share, resulting in net proceeds of $ 60.3 million after underwriting discounts and commission s

and other offering expenses.

public offering at a public offering price of $ 13.25 per share, resulting in net proceeds of $ 60.3 million after underwriting discounts and commissions and other offering expenses.

The Company has a shelf registration statement on Form S-3

(the “Shelf”) on file with the Securities and Exchange

Commission (the “SEC”), which covers the offering, issuance and sale of up to an aggregate of $

350.0 million of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof.

The Company simultaneously entered into a sales agreement with Cowen and Company, LLC, as sales agent, to provide for the issuance and sale by the Company of up to $

100.0 million of common stock from time to time in

“at-the-market”

(the “Shelf”) on file with the Securities and Exchange Commission (the “SEC”), which covers the offering, issuance and sale of up to an aggregate of $ 350.0 million of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof.

The Company simultaneously entered into a sales agreement with Cowen and Company, LLC, as sales agent, to provide for the issuance and sale by the Company of up to $ 100.0 million of common stock from time to time in “at-the-market”

offerings under the Shelf (the “ATM Program”).

The Shelf was declared effective by the SEC on August 19, 2019.

2020 , no sales have been made pursuant to the ATM Program.

The Company has incurred recurring losses since inception, including net losses of $ 39.1 million and $ 76.8 million for the six months ended June 30, 2020 and the year ended December 31, 2019, respectively.

As of June 30, 2020, the Company had an accumulated deficit of $ 218.6 million.

As of September 30, 2020, no sales have been made pursuant to the ATM Program.

The Company has incurred recurring losses since inception, including net losses of $ 56.8 million and $ 76.8 million for the nine months ended September 30, 2020 and the year ended December 31, 2019, respectively.

As of September 30, 2020, the Company had an accumulated deficit of $ 236.3 million.

The Company expects to continue to generate operating losses for the foreseeable future.

19 unchanged sentences

The consolidated balance sheet at December 31, 2019 was derived from audited financial statements but does not include all disclosures required by GAAP.

The accompanying unaudited consolidated financial statements as of June 30, 2020 and for the three and six months ended June 30, 2020 and 2019 have been prepared by the Company pursuant to the rules and regulations of the SEC for interim financial statements.

The accompanying unaudited consolidated financial statements as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 have been prepared by the Company pursuant to the rules and regulations of the SEC for interim financial statements.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

2 unchanged sentences

on file with SEC.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position as of June 30, 2020 and consolidated results of operations for the three and six months ended June 30, 2020 and 2019 and consolidated cash flows for the six months ended June 30, 2020 and 2019 have been made.

The results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2020 or any other interim period.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position as of September 30, 2020 and consolidated results of operations for the three and nine months ended September 30, 2020 and 2019 and consolidated cash flows for the nine months ended September 30, 2020 and 2019 have been made.

The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2020 or any other interim period.

Fair Value Measurements

11 unchanged sentences

Changes in deferred tax assets and liabilities are recorded in the provision for income taxes.

The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.

Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available

Magenta Therapeutics, Inc.

Notes to Consolidated Financial Statements

evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.

Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company accounts for uncertainty in income taxes recognized in its consolidated financial statements by applying a two-step

7 unchanged sentences

Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders.

For the three and six months ended June 30, 2020 and 2019, the Company’s only element of other comprehensive income

was unrealized gains

on marketable securities.

For the three and nine months ended September 30, 2020 and 2019, the Company’s only element of other comprehensive income (loss) was unrealized gains (losses) on marketable securities.

Net Loss per Share

2 unchanged sentences

For periods in which the Company has reported net losses, diluted net loss per common share is the same as basic net loss per common share, since dilutive common shares are not assumed to have been issued if their affect is anti-dilutive.

The Company reported a net loss for the three and six months ended June 30, 2020 and 2019.

The Company reported a net loss for the three and nine months ended September 30, 2020 and 2019.

The following potential dilutive securities, presented based on amounts outstanding at each period end, have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive impact:

September 30,

Stock options to purchase common stock

Unvested restricted common stock

Unvested restricted common stock and units

Shares of common stock issuable under Employee Stock Purchase Plan

4 unchanged sentences

(“ASU 2019-12”).

includes several

provisions to simplify the accounting for income taxes and removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods.

includes several provisions to simplify the accounting for income taxes and removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods.

For public entities, the guidance is effective for annual reporting periods beginning after December 15, 2020 and for interim periods within those fiscal years.

8 unchanged sentences

asset and a lease liability.

Leases will be classified as either operating or finance, and classification will be based on criteria similar to current lease accounting, but without explicit bright lines.

For public entities, the

Leases will be classified as either operating or finance,

Magenta Therapeutics, Inc.

Notes to Consolidated Financial Statements

guidance was effective for annual reporting periods beginning after December 15, 2018 and for interim periods within those fiscal years.

and classification will be based on criteria similar to current lease accounting, but without explicit bright lines.

For public entities, the guidance was effective for annual reporting periods beginning after December 15, 2018 and for interim periods within those fiscal years.

For nonpublic entities and emerging growth companies that choose to take advantage of the extended transition period, the guidance was effective for annual reporting periods beginning after December 15, 2019.

10 unchanged sentences

In June 2016, the FASB issued ASU No.

Instruments – Credit Losses (Topic 326)

Financial Instruments – Credit Losses (Topic 326)

The new standard adjusts the accounting for assets held at amortized costs basis, including marketable securities accounted for as available for sale.

8 unchanged sentences

Fair Value of Financial Assets

As of June 30, 2020, marketable securities by security type consisted of (in thousands):

United States Treasury Notes (due within one year)

As of September 30, 2020, marketable securities by security type consisted of (in thousands):

United States treasury notes

(due within one year)

As of December 31, 2019, marketable securities by security type consisted of (in thousands):

United States Treasury Notes (due within one year)

Agency Bonds (due within one year)

United States treasury notes

(due within one year)

Magenta Therapeutics, Inc.

1 unchanged sentence

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

Fair Value Measurements at June 30, 2020 Using:

Fair Value Measurements at September 30, 2020 Using:

Cash equivalents:

7 unchanged sentences

United States treasury notes

During the three and six months ended June 30, 2020 and 2019, there were no transfers between Level 1, Level 2 and Level 3.

During the three and nine months ended September 30, 2020 and 2019, there were no transfers between Level 1, Level 2 and Level 3.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

June 30, 2020

September 30, 2020

December 31, 2019

9 unchanged sentences

The Company also has outstanding stock options under the Magenta Therapeutics, Inc.

2016 Stock Option and Grant Plan, as amended (the “2016 Plan”) ,

but is no longer granting awards under the 2016 Plan.

As of June 30, 2020, 2,833,512 shares of common stock were available for issuance under the 2018 Plan.

2016 Stock Option and Grant Plan, as amended (the “2016 Plan”), but is no longer granting awards under the 2016 Plan.

As of September 30, 2020, 2,623,984 shares of common stock were available for issuance under the 2018 Plan.

2019 Employee Stock Purchase Plan

3 unchanged sentences

The initial offering period commenced on December 1, 2019 and ended on May 29,

The purchase price of common stock under the ESPP is equal to 85 % of the lower of the fair market value of the common stock on the offering date or the exercise date.

During the six months ended June 30, 2020, 5,653 shares of common stock were purchased under the ESPP at a purchase price per share of $ 7.51 .

As of June 30, 2020, 160,872 shares remained available for issuance under the ESPP.

Magenta Therapeutics, Inc.

Notes to Consolidated Financial Statements

The purchase price of common stock under the ESPP is equal to 85 % of the lower of the fair market value of the common stock on the offering date or the exercise date.

During the nine months ended September 30, 2020, 5,653 shares of common stock were purchased under the ESPP at a purchase price per share of $ 7.51 .

As of September 30, 2020, 160,872 shares remained available for issuance under the ESPP.

Grant of Stock Options

During the six months ended June 30, 2020, the Company granted options to certain employees, directors and consultants with service-based vesting conditions for the purchase of 1,759,596 shares of common stock with a weighted average grant date fair value of $ 8.04 per share.

During the nine months ended September 30, 2020, the Company granted options to certain employees, directors and consultants with service-based vesting conditions for the purchase of 2,084,796 shares of common stock with a weighted average grant date fair value of $ 7.62 per share.

Grant of Restricted Stock Units

During the nine months ended September 30, 2020, the Company granted 220,000 restricted stock units to certain employees with a weighted average grant date fair value of $ 6.80 per share calculated using the intrinsic value of the stock on the date of grant.

Stock-based compensation expense is being recognized over the requisite service period of three years .

Stock-Based Compensation

Stock-based compensation expense was classified in the statements of operations and comprehensive loss 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 expenses

General and administrative expenses

As of June 30, 2020, total unrecognized compensation cost related to unvested share-based awards was $ 22.0 million, which is expected to be recognized over a weighted average period of 2.5 years.

As of September 30, 2020, total unrecognized compensation expense

related to unvested share-based awards was $ 20.8 million, which is expected to be recognized over a weighted average period of 2.5 years.

Commitments and Contingencies

5 unchanged sentences

The Company is also obligated to pay real estate taxes and other costs related to the premises, including costs of operations and management of the leased premises.

In connection with the sublease, as amended, the sublandlord agreed to fund up to $ 5.5 million in tenant improvements to the leased facility, of which $ 5.2 million has been paid as of June 30, 2020.

In connection with the sublease, as amended, the sublandlord funded $ 5.2 million in tenant improvements to the leased facility during 2019.

The Company is required to maintain a cash balance of $ 1.8 million to secure a letter of credit associated with the sublease.

This amount was classified as noncurrent restricted cash in the consolidated balance sheets at June 30, 2020 and December 31, 2019.

As of June 30, 2020 and December 31, 2019, the Company had long-term deferred rent of $ 6.4 million and $ 6.2 million, respectively, related to lease incentives and payment escalations.

As of June 30, 2020 and December 31, 2019, the short-term portion of deferred rent of $ 0.6 million for each period was included in accrued expenses and other current liabilities.

The Company recorded rent expense of $ 1.6 million during each of the three months ended June 30, 2020 and 2019 and $ 3.1 million during each of the six months ended June 30, 2020 and 2019.

This amount was classified as noncurrent restricted cash in the consolidated balance sheets at September 30, 2020 and December 31, 2019.

As of September 30, 2020 and December 31, 2019, the Company had long-term deferred rent of $ 6.2 million for each period related to lease incentives and payment escalations.

As of September 30, 2020 and December 31, 2019, the short-term portion of deferred rent of $ 0.6 million for each period was included in accrued expenses and other current liabilities.

The Company recorded rent expense of $ 1.5 million during each of the three months ended September 30, 2020 and 2019 and $ 4.6 million during each of the nine months ended September 30, 2020 and 2019.

Magenta Therapeutics, Inc.

Notes to Consolidated Financial Statements

As of June 30, 2020, the future minimum lease payments due under the noncancelable operating lease is as follows (in thousands):

Remainder of 2020 (six months)

As of September 30, 2020, the future minimum lease payments due under the noncancelable operating lease is as follows (in thousands):

Remainder of 2020 (three months)

In the fourth quarter of 2018, the Company entered into two two -year

sub-subleases

of approximately 27,000 square feet of office space in Cambridge, Massachusetts which expire in the fourth quarter of 2020.

As of June 30, 2020, the remaining rent payments due to the Company under the sub-subleases

of approximately 27,000 square feet of office space in Cambridge, Massachusetts which were both

set to expire in the fourth quarter of 2020.

In the third quarter of 2020, the Company amended each of

the sub-subleases

to extend the ir

to July 2021 and April 2022, respectively.

As of September 30, 2020, the remaining rent payments due to the Company under the amended sub-subleases

was $ 2.9 million.

The Company recorded other income of $ 0.7 million during each of the three months ended June 30, 2020 and 2019 and $ 1.4 million during each of the six months ended June 30, 2020 and 2019 related to these sub-subleases.

The Company recorded other income of $ 0.6 million and $ 0.7 million, respectively, during the three months ended September 30, 2020 and 2019 and $ 2.0 million and $ 2.1 million, respectively, during the nine months ended September 30, 2020 and 2019 related to these sub-subleases.

Collaboration Agreement

2 unchanged sentences

Additionally, upon the exercise of certain license rights, the Company may be obligated to pay HDPR development, regulatory and commercial milestone payments of up to $ 83.5 million per target as well as royalties on net sales of products licensed under the agreement.

During each of the three months ended June 30, 2020 and 2019, the Company recorded less than $ 0.1 million of research and development expense related to this agreement for upfront technology access fees, research exclusivity fees and research support.

During the six months ended June 30, 2020 and 2019, the Company recorded less than $ 0.1 million and $ 0.4 million, respectively, of research and development expense related to this agreement for upfront technology access fees, research exclusivity fees and research support.

During the three months ended September 30, 2020 and 2019, the Company recorded $ 0.3 million and $ 0.5 million, respectively, of research and development expense related to this agreement for upfront technology access fees, research exclusivity fees and research support.

During the nine months ended September 30, 2020 and 2019, the Company recorded $ 0.6 million and $ 0.9 million, respectively, of research and development expense related to this agreement for upfront technology access fees, research exclusivity fees and research support.

Intellectual Property Licenses

4 unchanged sentences

basis on net sales of products licensed under the agreement.

During the six months ended June 30, 2020, the Company did no t incur any expense related to the achievement of these milestones.

During the six months ended June 30, 2019, the Company recorded $ 0.1 million of expense related to the achievement of one of these milestones.

nine months ended September 30, 2020 and the three months ended September 30, 2019

, the Company did no t incur any expense related to the achievement of these milestones.

During the nine months ended September 30, 2019, the Company recorded $ 0.1 million of expense related to the achievement of one of these milestones.

The Company has a license agreement with Novartis International Pharmaceutical Ltd.

5 unchanged sentences

basis, up to a maximum of 20 % on net sales of products licensed under the agreement.

As of June 30, 2020, no milestones related to the Novartis License have been met.

As of September 30, 2020, no milestones related to the Novartis License have been met.

The Company has agreements with third parties in the normal course of business, under which it can license certain developed technologies.

If the Company exercises its rights to license the respective technologies, it may be subject to additional fees and milestone payments.

During the three and six months ended June 30, 2020 and 2019, the Company did no t exercise its rights to the license of certain developed technologies under these agreements.

During the three and nine months ended September 30, 2020 and 2019, the Company did no t exercise its rights to the license of certain developed technologies under these agreements.

Magenta Therapeutics, Inc.

5 unchanged sentences

To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations as of June 30, 2020.

The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations as of September 30, 2020.

Legal Proceedings

9 unchanged sentences

National Marrow Donor Program (as successor in interest to Be The Match BioTherapies, LLC)

Effective March 2018, the President of Be The Match BioTherapies, LLC became a member of the Company’s board of directors and subsequently was appointed Chief Executive Officer of the Be The Match/National Marrow Donor Program organization in

Effective March 2018, the President of Be The Match BioTherapies, LLC became a member of the Company’s board of directors and subsequently was appointed Chief Executive Officer of the National Marrow Donor Program/Be The Match, or NMDP/Be The Match, organization in June 2020.

The Company has collaboration agreements with the National Marrow Donor Program (as successor in interest to Be The Match BioTherapies, LLC) and a research agreement with an affiliated organization, Center for International Blood and Marrow Transplant Research.

For each of the three months ended June 30, 2020 and 2019, the Company recorded expense of less than $ 0.1 million related to these agreements.

For the six months ended June 30, 2020 and 2019, the Company recorded expense of $ 0.2 million and $ 0.1 million, respectively, related to these agreements.

As of June 30, 2020 and December 31, 2019, amounts on the balance sheet related to these agreements were less than $ 0.1 million and $ 0.2 million, respectively, which amounts were included in accounts payable and accrued expenses and other current liabilities and less than $ 0.1 million as of June 30, 2020 and December 31, 2019, which amounts were included in prepaid expenses and other current assets.

In addition, in June 2020, the Company entered into a clinical collaboration agreement with NMDP/Be The Match to evaluate the potential utility of MGTA-145

for mobilizing and collecting hematopoietic stem cells from donors in a single day and then using them for allogeneic transplants in patients.

Under the terms of this agreement, the Company shall fund up to fifty percent of NMDP/Be The Match clinical trial costs and provide the trial drugs which will be included in research and development expense.

For the three months ended September 30, 2020 and 2019, the Company recorded expense of $

0.1 million and less than $ 0.1 million, respectively, related to these agreements.

For the nine months ended September 30, 2020 and 2019, the Company recorded expense of $ 0.3 million and $ 0.1 million, respectively, related to these agreements.

As of September 30, 2020 and December 31, 2019, amounts on the balance sheet related to these agreements were less than $ 0.1 million and $ 0.2 million, respectively, which amounts were included in accounts payable and accrued expenses and other current liabilities and less than $ 0.1 million as of September 30, 2020 and December 31, 2019, which amounts were included in prepaid expenses and other current assets.

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