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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from    to   

Commission File Number: 001-39512

 

 

Metacrine, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

47-2297384

(State or other jurisdiction of

incorporation or organization)

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

3985 Sorrento Valley Blvd., Suite C

San Diego, California

92121

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (858) 369-7800

 

 

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 $0.0001 per share

 

MTCR

 

The Nasdaq Global Market

 

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, 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  

The number of outstanding shares of the registrant’s common stock on November 5, 2021 was 27,314,553.

 

 

 


 

Metacrine, Inc.

Table of Contents

 

 

 

Page

PART I. FINANCIAL INFORMATION

 

Item 1.

Financial Statements

1

Item 2.

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

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

23

Item 4.

Controls and Procedures

24

PART II. OTHER INFORMATION

 

Item 1.

Legal Proceedings

25

Item 1A.

Risk Factors

25

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

63

Item 3.

Defaults Upon Senior Securities

63

Item 4.

Mine Safety Disclosures

63

Item 5.

Other Information

63

Item 6.

Exhibits

63

 

 

 

 


 

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Metacrine, Inc.

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except par value and share amounts)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

17,029

 

 

$

24,393

 

Short-term investments

 

 

44,699

 

 

 

71,783

 

Prepaid expenses and other current assets

 

 

3,852

 

 

 

5,847

 

Total current assets

 

 

65,580

 

 

 

102,023

 

Property and equipment, net

 

 

415

 

 

 

634

 

Operating lease right-of-use asset

 

 

1,077

 

 

 

1,579

 

Other non-current assets

 

 

438

 

 

-

 

Total assets

 

$

67,510

 

 

$

104,236

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

323

 

 

$

334

 

Accrued liabilities

 

 

8,770

 

 

 

2,951

 

Current portion of operating lease liability

 

 

804

 

 

 

741

 

Current portion of long-term debt

 

 

459

 

 

 

-

 

Total current liabilities

 

 

10,356

 

 

 

4,026

 

Operating lease liability, net of current portion

 

 

395

 

 

 

1,007

 

Long-term debt, net of debt discount

 

 

9,106

 

 

 

9,372

 

Other long-term liabilities

 

 

531

 

 

 

552

 

Commitments and contingencies (Note 3)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value; authorized shares - 10,000,000 at September 30, 2021 and December 31, 2020, respectively; issued and outstanding shares - none at September 30, 2021 and December 31, 2020, respectively.

 

 

-

 

 

 

-

 

Common stock, $0.0001 par value; authorized shares – 200,000,000 at September 30, 2021 and December 31, 2020, respectively; issued shares – 26,540,753 and 26,005,934 at September 30, 2021 and December 31, 2020, respectively; outstanding shares – 26,535,218 and 25,969,442 at September 30, 2021 and December 31, 2020, respectively.

 

 

3

 

 

 

3

 

Additional paid-in-capital

 

 

216,544

 

 

 

210,021

 

Accumulated other comprehensive income

 

 

2

 

 

 

1

 

Accumulated deficit

 

 

(169,427

)

 

 

(120,746

)

Total stockholders’ equity

 

 

47,122

 

 

 

89,279

 

Total liabilities and stockholders’ equity

 

$

67,510

 

 

$

104,236

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

1


 

Metacrine, Inc.

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

14,072

 

 

$

6,217

 

 

$

36,297

 

 

$

19,973

 

General and administrative

 

 

4,007

 

 

 

2,693

 

 

 

11,695

 

 

 

6,087

 

Total operating expenses

 

 

18,079

 

 

 

8,910

 

 

 

47,992

 

 

 

26,060

 

Loss from operations

 

 

(18,079

)

 

 

(8,910

)

 

 

(47,992

)

 

 

(26,060

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

22

 

 

 

82

 

 

 

85

 

 

 

445

 

Interest expense

 

 

(252

)

 

 

(258

)

 

 

(743

)

 

 

(765

)

Other income (expense)

 

 

(19

)

 

 

32

 

 

 

(31

)

 

 

(108

)

Total other income (expense)

 

 

(249

)

 

 

(144

)

 

 

(689

)

 

 

(428

)

Net loss

 

$

(18,328

)

 

$

(9,054

)

 

$

(48,681

)

 

$

(26,488

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(5

)

 

 

(65

)

 

 

1

 

 

 

(27

)

Comprehensive loss

 

$

(18,333

)

 

$

(9,119

)

 

$

(48,680

)

 

$

(26,515

)

Net loss per share, basic and diluted

 

$

(0.69

)

 

$

(1.41

)

 

$

(1.85

)

 

$

(6.89

)

Weighted average shares of common stock outstanding, basic and diluted

 

 

26,521,689

 

 

 

6,436,546

 

 

 

26,300,676

 

 

 

3,845,793

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

2


Metacrine, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(48,681

)

 

$

(26,488

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

227

 

 

 

217

 

Stock-based compensation

 

 

5,260

 

 

 

3,151

 

Non-cash interest expense

 

 

193

 

 

 

210

 

Amortization (accretion) of premiums/discounts on investments, net

 

 

320

 

 

 

(91

)

Amortization of right-of-use asset

 

 

502

 

 

 

463

 

Change in fair value of warrant liability

 

 

-

 

 

 

75

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

1,995

 

 

 

29

 

Accounts payable and accrued liabilities

 

 

5,407

 

 

 

(1,260

)

Lease liability

 

 

(549

)

 

 

(427

)

Net cash used in operating activities

 

 

(35,326

)

 

 

(24,121

)

Investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(8

)

 

 

(172

)

Purchases of short-term investments

 

 

(39,176

)

 

 

(7,944

)

Sales and maturities of short-term investments

 

 

65,941

 

 

 

37,033

 

Net cash provided by investing activities

 

 

26,757

 

 

 

28,917

 

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock from initial public offering, net of issuance costs

 

 

-

 

 

 

77,750

 

Proceeds from exercise of common stock options

 

 

1,096

 

 

 

69

 

Repurchase of unvested common stock

 

 

(1

)

 

 

(2

)

Deferred issuance costs

 

 

(37

)

 

 

-

 

Proceeds from issuance of common stock from employee stock purchase plan

 

 

147

 

 

 

-

 

Net cash provided by financing activities

 

 

1,205

 

 

 

77,817

 

Net (decrease) increase in cash and cash equivalents

 

 

(7,364

)

 

 

82,613

 

Cash and cash equivalents at beginning of period

 

 

24,393

 

 

 

15,668

 

Cash and cash equivalents at end of period

 

$

17,029

 

 

$

98,281

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

552

 

 

$

554

 

Supplemental non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Conversion of convertible preferred stock to common stock

 

$

-

 

 

$

122,465

 

Conversion of convertible preferred stock warrant to common stock warrant

 

$

-

 

 

$

259

 

Issuance costs in accounts payable and accrued liabilities

 

$

401

 

 

$

852

 

Vesting of common stock

 

$

20

 

 

$

73

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

3


 

 

Metacrine, Inc.

Unaudited Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

For the Nine Months Ended September 30, 2021 and 2020

(In thousands, except share amounts)

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Additional

paid-in

capital

 

 

Accumulated

other

comprehensive

income (loss)

 

 

Accumulated

deficit

 

 

Total

stockholders'

equity

 

Balance at December 31, 2020

 

 

 

 

$

 

 

 

25,969,442

 

 

$

3

 

 

$

210,021

 

 

$

1

 

 

$

(120,746

)

 

$

89,279

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,260

 

 

 

 

 

 

 

 

 

5,260

 

Exercise of stock options

 

 

 

 

 

 

 

 

489,179

 

 

 

 

 

 

1,096

 

 

 

 

 

 

 

 

 

1,096

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

28,262

 

 

 

 

 

 

20

 

 

 

 

 

 

 

 

 

20

 

Issuance of common stock from employee stock purchase plan

 

 

 

 

 

 

 

 

48,335

 

 

 

 

 

 

147

 

 

 

 

 

 

 

 

 

147

 

Unrealized gain on investment securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(48,681

)

 

 

(48,681

)

Balance at September 30, 2021

 

 

 

 

$

 

 

 

26,535,218

 

 

$

3

 

 

$

216,544

 

 

$

2

 

 

$

(169,427

)

 

$

47,122

 

 

 

 

 

Convertible Preferred Stock

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Additional

paid-in

capital

 

 

Accumulated

other

comprehensive

income (loss)

 

 

Accumulated

deficit

 

 

Total

stockholders'

equity (deficit)

 

Balance at December 31, 2019

 

 

85,093,688

 

 

$

122,465

 

 

 

2,484,848

 

 

$

 

 

$

5,164

 

 

$

41

 

 

$

(83,442

)

 

$

(78,237

)

Issuance of common stock from initial public offering, net of issuance costs

 

 

 

 

 

 

 

 

6,540,000

 

 

 

1

 

 

 

76,897

 

 

 

 

 

 

 

 

 

76,898

 

Conversion of preferred stock to common stock from completion of initial public offering

 

 

(85,093,688

)

 

 

(122,465

)

 

 

16,685,014

 

 

 

2

 

 

 

122,463

 

 

 

 

 

 

 

 

 

122,465

 

Conversion of convertible preferred stock warrant to common stock warrant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

259

 

 

 

 

 

 

 

 

 

259

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,151

 

 

 

 

 

 

 

 

 

3,151

 

Exercise of stock options

 

 

 

 

 

 

 

 

54,266

 

 

 

 

 

 

69

 

 

 

 

 

 

 

 

 

69

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

145,360

 

 

 

 

 

 

73

 

 

 

 

 

 

 

 

 

73

 

Unrealized loss on investment securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27

)

 

 

 

 

 

(27

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,488

)

 

 

(26,488

)

Balance at September 30, 2020

 

 

-

 

 

$

-

 

 

 

25,909,488

 

 

$

3

 

 

$

208,076

 

 

$

14

 

 

$

(109,930

)

 

$

98,163

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.


4


 

 

Metacrine, Inc.

Unaudited Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

For the Three Months Ended September 30, 2021 and 2020

(In thousands, except share amounts)

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Additional

paid-in

capital

 

 

Accumulated

other

comprehensive

income (loss)

 

 

Accumulated

deficit

 

 

Total

stockholders'

equity

 

Balance at June 30, 2021

 

 

 

 

$

 

 

 

26,505,924

 

 

$

3

 

 

$

214,348

 

 

$

7

 

 

$

(151,099

)

 

$

63,259

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,154

 

 

 

 

 

 

 

 

 

2,154

 

Exercise of stock options

 

 

 

 

 

 

 

 

22,368

 

 

 

 

 

 

37

 

 

 

 

 

 

 

 

 

37

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

6,926

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

5

 

Unrealized loss on investment securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,328

)

 

 

(18,328

)

Balance at September 30, 2021

 

 

 

 

$

 

 

 

26,535,218

 

 

$

3

 

 

$

216,544

 

 

$

2

 

 

$

(169,427

)

 

$

47,122

 

 

 

 

 

Convertible Preferred Stock

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Additional

paid-in

capital

 

 

Accumulated

other

comprehensive

income

 

 

Accumulated

deficit

 

 

Total

stockholders'

equity (deficit)

 

Balance at June 30, 2020

 

 

85,093,688

 

 

$

122,465

 

 

 

2,600,373

 

 

$

 

 

$

6,584

 

 

$

79

 

 

$

(100,876

)

 

$

(94,213

)

Issuance of common stock from initial public offering, net of issuance costs

 

 

 

 

 

 

 

 

6,540,000

 

 

 

1

 

 

 

76,897

 

 

 

 

 

 

 

 

 

76,898

 

Conversion of preferred stock to common stock from completion of initial public offering

 

 

(85,093,688

)

 

 

(122,465

)

 

 

16,685,014

 

 

 

2

 

 

 

122,463

 

 

 

 

 

 

 

 

 

122,465

 

Conversion of convertible preferred stock warrant to common stock warrant