What changed in this filing

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Item 1. Financial Statements

2023-08-07 compared with 2023-05-15 · 65 added, 53 removed, 290 unchanged (29% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

March 31, December 31,

June 30, December 31,

Current assets:

12 unchanged sentences

Commitments and contingencies (Note 4)

Series A convertible preferred stock, $ 0.0001 par value, 0 and 86,332,216 shares authorized and 0 and 86,332,216 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively, $ 0 and $ 41,180 aggregate liquidation preference as of March 31, 2023 and December 31, 2022, respectively

Series B convertible preferred stock, $ 0.0001 par value, 0 and 136,510,868 shares authorized and 0 and 136,510,868 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively, $ 0 and $ 118,000 aggregate liquidation preference as of March 31, 2023 and December 31, 2022, respectively

Series A convertible preferred stock, $ 0.0001 par value, 0 and 86,332,216 shares authorized and 0 and 86,332,216 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively, $ 0 and $ 41,180 aggregate liquidation preference as of June 30, 2023 and December 31, 2022, respectively

Series B convertible preferred stock, $ 0.0001 par value, 0 and 136,510,868 shares authorized and 0 and 136,510,868 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively, $ 0 and $ 118,000 aggregate liquidation preference as of June 30, 2023 and December 31, 2022, respectively

Stockholders’ equity (deficit):

Common stock, $ 0.0001 par value, 500,000,000 and 319,000,000 shares authorized and 40,856,653 and 6,419,238 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

Common stock, $ 0.0001 par value, 500,000,000 and 319,000,000 shares authorized and 40,856,653 and 6,419,238 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 362,565 540

6 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Operating expenses:

26 unchanged sentences

Balance as of March 31, 2022 86,332,216 40,987 — — 5,614,424 1 104 ( 30,580 ) ( 30,475 )

Issuance of Series B convertible preferred stock, net of issuance costs of $ 343

— — 136,510,868 117,657 — — — — —

Stock-based compensation — — — — — — 26 — 26

Net loss — — — — — — — ( 6,479 ) ( 6,479 )

Balance as of June 30, 2022 86,332,216 $ 40,987 136,510,868 $ 117,657 5,614,424 $ 1 $ 130 $ ( 37,059 ) $ ( 36,928 )

Convertible Preferred Stock Series B

11 unchanged sentences

Balance as of March 31, 2023 — — — — 40,856,653 4 361,289 ( 65,418 ) 295,875

Stock-based compensation — — — — — — 1,276 — 1,276

Net loss — — — — — — — ( 12,141 ) ( 12,141 )

Balance as of June 30, 2023 — $ — — $ — 40,856,653 $ 4 $ 362,565 $ ( 77,559 ) $ 285,010

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

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

15 unchanged sentences

Proceeds from the issuance of Series A convertible preferred stock, net of offering costs — 11,991

Proceeds from the issuance of Series B convertible preferred stock, net of offering costs — 117,657

Net cash provided by financing activities 202,990 129,648

Net increase in cash, cash equivalents, and restricted cash 50,545 5,419

Net increase in cash and cash equivalents 13,439 117,601

Cash, cash equivalents, and restricted cash - beginning 87,701 10,662

Cash, cash equivalents, and restricted cash - ending (1)

Cash and cash equivalents - ending (1)

$ 101,140 $ 128,263

1 unchanged sentence

Conversion of convertible preferred stock to common stock upon closing of initial public offering $ 159,180 $ —

Deferred offering costs included in accounts payable and accrued liabilities $ 581 $ —

(1) Cash and cash equivalents as of March 31, 2023 exclude investments of $ 163.5 million.

Cash, cash equivalents, and investments amounted to $ 301.8 million as of March 31, 2023.

(1) Cash and cash equivalents as of June 30, 2023 exclude investments of $ 181.6 million.

Cash, cash equivalents, and investments amounted to $ 282.8 million as of June 30, 2023.

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

4 unchanged sentences

(the Company) is a clinical-stage biopharmaceutical company focused on developing medicines to target diseases driven by abnormally elevated aldosterone.

The Company’s clinical-stage product candidate, lorundrostat, is a proprietary, orally administered, highly selective aldosterone synthase inhibitor that the Company is initially developing for the treatment of patients with uncontrolled or resistant hypertension.

The Company has initiated a pivotal clinical program of lorundrostat for the treatment of uncontrolled or resistant hypertension.

The Company’s clinical-stage product candidate, lorundrostat, is a proprietary, orally administered, aldosterone synthase inhibitor that the Company is initially developing for the treatment of cardiorenal conditions affected by abnormally elevated aldosterone, including hypertension and chronic kidney disease.

The Company has initiated a pivotal clinical program of lorundrostat for the treatment of uncontrolled or resistant hypertension and has plans to initiate a Phase 2 trial in the second half of 2023 for lorundrostat as a potential therapy to treat patients with Stage 2 to 4 chronic kidney disease.

The Company was incorporated as a Delaware corporation in May 2019, and it is headquartered in Radnor, Pennsylvania.

9 unchanged sentences

The Company’s primary uses of cash to date have been to fund research and development activities, business planning, establishing and maintaining the Company’s intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations.

As of March 31, 2023, the Company had an accumulated deficit of $ 65.4 million and cash, cash equivalents, and investments of $ 301.8 million.

For the three months ended March 31, 2023, the Company had a net loss of $ 12.6 million and net cash used in operating activities of $ 12.8 million.

From inception to March 31, 2023, the Company has funded its operations by raising aggregate gross proceeds of approximately $ 378.8 million from the sale of the Company’s common stock, convertible preferred stock, and convertible notes.

As of June 30, 2023, the Company had an accumulated deficit of $ 77.6 million and cash, cash equivalents, and investments of $ 282.8 million.

For the six months ended June 30, 2023, the Company had a net loss of $ 24.7 million and net cash used in operating activities of $ 33.2 million.

From inception to June 30, 2023, the Company has funded its operations by raising aggregate gross proceeds of approximately $ 378.8 million from the sale of the Company’s common stock, convertible preferred stock, and convertible notes.

The Company has a limited operating history, and the sales and income potential of its business is unproven.

2 unchanged sentences

The Company expects to finance its operations through equity offerings, debt financings, and other capital sources, including potential strategic collaborations, licensing, and other similar arrangements.

The Company believes that its cash, cash equivalents, and investments as of March 31, 2023 will be sufficient to allow the Company to fund operations for at least twelve months from the issuance date of these condensed financial statements.

The Company believes that its cash, cash equivalents, and investments as of June 30, 2023 will be sufficient to allow the Company to fund operations for at least twelve months from the issuance date of these condensed financial statements.

Mineralys Therapeutics, Inc.

8 unchanged sentences

These condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the Company’s financial information.

These unaudited condensed financial statements should be read in conjunction with the audited financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, 2022.

These unaudited condensed financial statements should be read in conjunction with the audited financial statements and related notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S.

11 unchanged sentences

All highly-liquid investments that have maturities of 90 days or less at the date of purchase are classified as cash equivalents.

As of March 31, 2023 and December 31, 2022, the Company did not have any restricted cash balances.

As of June 30, 2023 and December 31, 2022, the Company did not have any restricted cash balances.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported in the statement of cash flows to the balance sheets (in thousands):

March 31, December 31,

June 30, December 31,

Cash $ 7,633 $ 2,872

1 unchanged sentence

Total cash and cash equivalents $ 101,140 $ 87,701

The Company’s cash and cash equivalents balances as of March 31, 2023 include cash balances, bank deposits, and amounts held primarily in interest-bearing money market accounts.

As of December 31, 2021, the Company had $ 50 thousand classified as restricted cash, which is reported in the 2022 opening and closing cash, cash equivalent, and restricted cash balances reported in the consolidated statements of cash flows.

The Company’s cash and cash equivalents balances as of June 30, 2023 include cash balances, bank deposits, and amounts held primarily in interest-bearing money market accounts.

As of December 31, 2021, the Company had $ 50 thousand classified as restricted cash, which is reported in the 2022 opening cash, cash equivalents, and restricted cash balance reported in the condensed statements of cash flows.

Mineralys Therapeutics, Inc.

22 unchanged sentences

Held-to-maturity securities are carried at amortized cost, adjusted for the accretion of discounts using the interest method.

The Company invested in marketable securities during the three months ended March 31, 2023 and 2022, and no impairment charges were recorded.

The Company invested in marketable securities during the six months ended June 30, 2023 and 2022, and no impairment charges were recorded.

For held-to-maturity investments, the Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other-than-temporary.

6 unchanged sentences

Should the equity issuance be abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the statement of operations.

Deferred offering costs as of March 31, 2023 and December 31, 2022 were $ 0 and $ 1,631 thousand, respectively.

Deferred offering costs as of June 30, 2023 and December 31, 2022 were $ 0 and $ 1.6 million, respectively.

Such costs are classified in other assets on the condensed balance sheets.

10 unchanged sentences

Expected Dividends — To date, the Company has not issued any dividends and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero.

Subsequent to the closing of the Company’s IPO, the Company determines the fair market value of its common stock using the closing price of our common stock as reported on the Nasdaq Global Select Market.

Prior to the closing of the Company’s IPO, there was no public market for the Company’s common stock, and the Company determined the fair value of the shares of its common stock underlying its share-based awards by considering a number of objective and subjective factors, including third-party valuations of the Company’s common stock, the valuation of comparable companies, the Company’s operating and financial performance, and general and industry-specific economic outlook, amongst other factors.

Subsequent to the closing of the Company’s IPO, the Company determines the fair market value of its common stock using the closing price of its common stock as reported on the Nasdaq Global Select Market.

The assumptions underlying these valuations represented management’s best estimate, with the assistance of a third-party valuation specialist, which involved inherent uncertainties and the application of management’s judgment.

9 unchanged sentences

The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:

Three Months Ended

Six Months Ended

Outstanding options 2,657,113 527,387

6 unchanged sentences

Fair Value of Financial Instruments

The following table presents financial instruments measured at fair value on a recurring basis based on the fair value hierarchy as of March 31, 2023 and December 31, 2022 (in thousands):

March 31, December 31,

The following table presents financial instruments measured at fair value on a recurring basis based on the fair value hierarchy as of June 30, 2023 and December 31, 2022 (in thousands):

June 30, December 31,

Cash equivalents

Money market funds $ 85,100 $ 84,829

Bank deposits $ 50,877 $ —

Money market funds 49,793 84,829

Total cash equivalents $ 100,670 $ 84,829

1 unchanged sentence

The following methods and assumptions were used by the Company in estimating the fair values of each class of financial instrument disclosed herein:

Money Market Funds and Bank Deposits—The carrying amounts of money market funds and bank deposits reported as cash and cash equivalents in the balance sheets approximate their fair values due to their short-term nature.

Money Market Funds and Bank Deposits—The carrying amounts of money market funds and bank deposits reported as cash and cash equivalents in the condensed balance sheets approximate their fair values due to their short-term nature.

The fair values of money market funds are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.

1 unchanged sentence

Notes to Condensed Financial Statements

Treasury Bills—As of March 31, 2023 and December 31, 2022, the Company had short- and/or long-term U.S.

Treasury Bills—As of June 30, 2023 and December 31, 2022, the Company had short- and/or long-term U.S.

Treasury bills.

2 unchanged sentences

Treasury bills information as of each reported date:

As of March 31, 2023

As of June 30, 2023

Balance Sheet Location Original Maturities Amortized Cost Estimated Fair Value

7 unchanged sentences

License Agreement with Mitsubishi Tanabe

In July 2020, the Company entered into a license agreement (the Mitsubishi License) with Mitsubishi Tanabe Pharmaceutical Company (Mitsubishi Tanabe), pursuant to which Mitsubishi Tanabe granted the Company an exclusive, worldwide, royalty-bearing, sublicensable license under Mitsubishi Tanabe’s patent and other intellectual property rights to exploit products incorporating lorundrostat (Lorundrostat Products) for the prevention, treatment, diagnosis, detection, monitoring, or predisposition testing with respect to indications, diseases, and conditions in humans.

In July 2020, the Company entered into a license agreement (the Mitsubishi License) with Mitsubishi Tanabe Pharmaceutical Company (Mitsubishi Tanabe), pursuant to which Mitsubishi Tanabe granted the Company an exclusive, worldwide, royalty-bearing, sublicensable license under Mitsubishi Tanabe’s patent and other intellectual property rights to exploit products incorporating lorundrostat (formerly MT-4129) (Lorundrostat Products) for the prevention, treatment, diagnosis, detection, monitoring, or predisposition testing with respect to indications, diseases, and conditions in humans.

Pursuant to the Mitsubishi License, the Company paid Mitsubishi Tanabe a $ 1.0 million upfront fee, and the Company is obligated to pay Mitsubishi Tanabe development milestone payments of up to $ 9.0 million in the aggregate and commercial milestone payments of up to $ 155.0 million in the aggregate upon first commercial sale and upon meeting certain annual sales targets, as well as additional commercial milestone payments of up to $ 10.0 million for a second indication.

1 unchanged sentence

Such royalties are subject to reduction under specified conditions, including lack of patent coverage and generic competition.

The Company is obligated to use commercially reasonable efforts to conduct and complete the development activities and to file for regulatory approval for at least one Lorundrostat Product in a major market country and consider in good faith to develop at least one Lorundrostat Product in a non-major market country.

The Company is obligated to use commercially reasonable efforts to conduct and complete the development activities and to file for regulatory approval for at least one Lorundrostat Product in a major market country and consider in good faith developing at least one Lorundrostat Product in a non-major market country.

If the Company elects to sublicense its rights under the Mitsubishi License to a third party with respect to exploitation of lorundrostat or any Lorundrostat Product in certain countries in Asia, the Company has agreed to negotiate such a sublicense first, for a specified period of time, with Mitsubishi Tanabe, if Mitsubishi Tanabe notifies the Company that it would like to obtain such a sublicense.

The Company agreed not to commercialize any competing product prior to three years following the first commercial sale of the first Lorundrostat Product in any country without Mitsubishi Tanabe’s prior consent.

The Company also agreed not to commercialize any competing product prior to three years following the first commercial sale of the first Lorundrostat Product in any country without Mitsubishi Tanabe’s prior consent.

Unless terminated earlier, the Mitsubishi License will continue until the expiration of all of the Company’s royalty obligations to Mitsubishi Tanabe.

The Company may terminate the Mitsubishi License for any or no reason upon 90 or 180 days’ prior written notice to Mitsubishi Tanabe depending on whether the Mitsubishi Tanabe Product has received regulatory approval.

Mitsubishi Tanabe may terminate the Mitsubishi License if the Company has not initiated regulatory consultation for the first global clinical trials of lorundrostat

The Company may terminate the Mitsubishi License for any or no reason upon 90 or 180 days’ prior written notice to Mitsubishi Tanabe depending on whether the Lorundrostat Product has received regulatory approval.

Mitsubishi Tanabe may terminate the Mitsubishi

Mineralys Therapeutics, Inc.

Notes to Condensed Financial Statements

in at least one major market country within a specified amount of time or if the Company or its affiliates or sublicensees initiate a challenge to the patent rights licensed to the Company by Mitsubishi Tanabe.

License if the Company has not initiated regulatory consultation for the first global clinical trials of lorundrostat in at least one major market country within a specified amount of time or if the Company or its affiliates or sublicensees initiate a challenge to the patent rights licensed to the Company by Mitsubishi Tanabe.

In addition, either party may terminate the Mitsubishi License in the event of an uncured material breach by or bankruptcy of the other party, subject to certain notice and cure periods, or upon the other party’s bankruptcy or insolvency.

The Company incurred $ 4.0 million and $ 0 of research and development expenses related to the Mitsubishi License during the three months ended March 31, 2023 and 2022, respectively.

A development milestone was achieved during the three months ended March 31, 2023 related to the Company’s planned initiation of its pivotal clinical program of lorundrostat.

This milestone payment was not paid until after March 31, 2023 and was reported as an accrued liability in the condensed balance sheet as of March 31, 2023.

The Company incurred $ 4.0 million and $ 0 of research and development expenses related to the Mitsubishi License during the six months ended June 30, 2023 and 2022, respectively.

A development milestone was achieved in March 2023 related to the Company’s planned initiation of its pivotal clinical program of lorundrostat.

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business.

The Company was not subject to any material legal proceedings during the three months ended March 31, 2023 and 2022, and no material legal proceedings are currently pending or threatened.

The Company was not subject to any material legal proceedings during the six months ended June 30, 2023 and 2022, and no material legal proceedings are currently pending or threatened.

Indemnification Agreements

3 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 in its condensed financial statements as of March 31, 2023 and December 31, 2022.

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

March 31, December 31,

Mitsubishi License milestone $ 4,000 $ —

June 30, December 31,

Research and development expenses $ 2,452 $ 4,846

Professional fees and other 571 649

Compensation and benefits 764 665

Professional fees and other 795 649

Total $ 4,011 $ 6,160

2 unchanged sentences

Capital Stock

As of March 31, 2023, the Company has reserved authorized shares of common stock for future issuance as follows:

As of June 30, 2023, the Company had reserved authorized shares of common stock for future issuance as follows:

Common stock options outstanding 2,657,113

4 unchanged sentences

The Restated Certificate amended and restated the Company’s amended and restated certificate of incorporation, in its entirety to, among other things, increase the authorized number of shares of common stock to 500,000,000 shares and authorize 50,000,000 shares of undesignated preferred stock that may be issued from time to time by the Company’s board of directors in one or more series.

Immediately prior to the closing of the IPO, 86,332,216 shares of Series A Preferred Stock and 136,510,868 shares of Series B Preferred Stock converted into 20,637,415 shares of the Company’s common stock of which carrying value of Series A Preferred Stock and Series B Preferred Stock was converted to permanent equity.

Immediately prior to the closing of the IPO, 86,332,216 shares of Series A Preferred Stock and 136,510,868 shares of Series B Preferred Stock converted into 20,637,415 shares of the Company’s common stock, and the carrying value of Series A Preferred Stock and Series B Preferred Stock was converted to permanent equity.

Preferred Stock Offerings

18 unchanged sentences

On July 7, 2020, the board of directors adopted, and the Company’s stockholders approved, the 2020 Equity Incentive Plan.

The 2020 Equity Incentive Plan, as amended and restated (the 2020 Plan), provided for the grant of incentive stock options to employees of the Company, and for the grant of non-statutory stock options, restricted stock awards (RSAs), restricted stock unit awards, and other forms of stock awards to employees, directors, and consultants of the Company.

The 2020 Equity Incentive Plan, as amended and restated (the 2020 Plan), provided for the grant of incentive stock options to employees of the Company, and for the grant of non-statutory stock options, restricted stock awards, restricted stock unit awards, and other forms of stock awards to employees, directors, and consultants of the Company.

The board of directors or a designated committee of the board of directors is responsible for the administration of the 2020 Plan and determined the term, exercise price, and vesting terms of each award.

Under the terms of existing awards, all stock option grants expire ten years from grant date.

Under the terms of existing awards, all stock option grants expire ten years from the grant date.

New option grants could not have an exercise price less than 100% of the fair market value of the Company’s common stock on the grant date, and generally vest over a period of four years .

6 unchanged sentences

A total of 400,000 shares of the Company’s common stock was initially reserved for issuance under the ESPP.

The ESPP offering periods will commence when determined by the board of directors or a committee of the board of directors and the offering period, offering price, and other terms will be determined subject to the terms of the ESPP.

The first ESPP offering period commenced on July 1, 2023, with each new six-month offering period beginning each January 1 and July 1.

ESPP purchases of common stock occur at a price equal to 85 % of the lower of (i) the closing price on the first trading day of the offering period or (ii) the closing price on the last trading day of the offering period.

In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2024 and ending in and including 2033, by an amount equal to the lesser of (i) 1 % of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Company’s board of directors, provided that no more than 15,000,000 shares of the Company’s common stock may be issued under the ESPP.

2 unchanged sentences

Total stock-based compensation expense reported in the statements of operations was allocated as follows (in thousands):

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Research and development $ 525 $ 15 $ 860 $ 30

General and administrative 751 11 1,165 15

$ 1,276 $ 26 $ 2,025 $ 45

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