SEC Filing - Metacrine, Inc.

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mtcr-10q_20220630.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2022

☐	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.)
4225 Executive Square, Suite 600 San Diego, California	92037
(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 Capital 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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 August 4, 2022 was 42,569,515.

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	24
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	65
Item 3.	Defaults Upon Senior Securities	65
Item 4.	Mine Safety Disclosures	65
Item 5.	Other Information	65
Item 6.	Exhibits	65

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Metacrine, Inc.

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except par value and share amounts)

	June 30,			December 31,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	45,348		$	48,910
Short-term investments		10,182			27,517
Prepaid expenses and other current assets		3,611			2,313
Total current assets		59,141			78,740
Property and equipment, net		—			347
Operating lease right-of-use asset		—			902
Total assets	$	59,141		$	79,989
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	503		$	368
Accrued liabilities		2,150			6,567
Current portion of operating lease liability		—			825
Total current liabilities		2,653			7,760
Operating lease liability, net of current portion		—			181
Long-term debt, net of debt discount		13,616			13,303
Other long-term liabilities		1,388			1,390
Commitments and contingencies (Note 3)
Stockholders’ equity:
Preferred stock, $0.0001 par value; authorized shares – 10,000,000 as of June 30, 2022 and December 31, 2021; issued and outstanding shares – none as of June 30, 2022 and December 31, 2021		—			—
Common stock, $0.0001 par value; authorized shares – 200,000,000 as of June 30, 2022 and December 31, 2021; issued shares – 42,569,515 and 42,110,560 as of June 30, 2022 and December 31, 2021, respectively; outstanding shares – 42,569,515 and 42,108,428 as of June 30, 2022 and December 31, 2021, respectively		4			4
Additional paid-in-capital		243,595			240,309
Accumulated other comprehensive loss		(20	)		(5	)
Accumulated deficit		(202,095	)		(182,953	)
Total stockholders’ equity		41,484			57,355
Total liabilities and stockholders’ equity	$	59,141		$	79,989

See accompanying notes to the unaudited condensed consolidated financial statements.

Metacrine, Inc.

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Operating expenses:
Research and development	$	2,309		$	11,368		$	8,989		$	22,225
General and administrative		3,412			3,992			8,894			7,688
Restructuring charges		44			—			902			—
Gain from lease termination and asset sale		—			—			(508	)		—
Total operating expenses		5,765			15,360			18,277			29,913
Loss from operations		(5,765	)		(15,360	)		(18,277	)		(29,913	)
Other income (expense):
Interest income		67			27			90			63
Interest expense		(511	)		(247	)		(925	)		(491	)
Other expense, net		(53	)		(5	)		(30	)		(12	)
Total other income (expense)		(497	)		(225	)		(865	)		(440	)
Net loss	$	(6,262	)	$	(15,585	)	$	(19,142	)	$	(30,353	)
Other comprehensive loss:
Unrealized gain (loss) on available-for-sale securities, net		23			8			(15	)		6
Comprehensive loss	$	(6,239	)	$	(15,577	)	$	(19,157	)	$	(30,347	)
Net loss per share, basic and diluted	$	(0.15	)	$	(0.59	)	$	(0.45	)	$	(1.16	)
Weighted average shares of common stock outstanding, basic and diluted		42,430,487			26,369,636			42,278,932			26,189,664

See accompanying notes to the unaudited condensed consolidated financial statements.

Metacrine, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)

	Six Months Ended
	June 30,
	2022			2021
Operating activities:
Net loss	$	(19,142	)	$	(30,353	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		68			154
Stock-based compensation		3,282			3,106
Non-cash interest expense		313			126
Amortization (accretion) of premiums/discounts on investments, net		(4	)		263
Amortization of right-of-use asset		179			331
Gain on lease termination and asset sale		(508	)		—
Changes in operating assets and liabilities
Prepaid expenses and other current assets		(1,298	)		1,006
Accounts payable and accrued liabilities		(4,281	)		3,425
Lease liability		(196	)		(361	)
Net cash used in operating activities		(21,587	)		(22,303	)
Investing activities:
Purchases of property and equipment		—			(8	)
Proceeds from asset sale		700			—
Purchases of short-term investments		(12,676	)		(34,681	)
Sales and maturities of short-term investments		30,000			48,541
Net cash provided by investing activities		18,024			13,852
Financing activities:
Proceeds from exercise of common stock options		—			1,059
Repurchase of unvested common stock		—			(1	)
Proceeds from issuance of common stock from employee stock purchase plan		1			147
Net cash provided by financing activities		1			1,205
Net decrease in cash and cash equivalents		(3,562	)		(7,246	)
Cash and cash equivalents at beginning of period		48,910			24,393
Cash and cash equivalents at end of period	$	45,348		$	17,147
Supplemental disclosure of cash flow information:
Cash paid for interest	$	601		$	367
Supplemental non-cash investing and financing activities:
Vesting of common stock	$	3		$	15

See accompanying notes to the unaudited condensed consolidated financial statements.

Metacrine, Inc.

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

For the Six Months Ended June 30, 2022 and 2021

(In thousands, except share amounts)

	Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Additional paid-in capital		Accumulated other comprehensive loss			Accumulated deficit			Total stockholders' equity
Balance as of December 31, 2021		—	$	—		42,108,428	$	4	$	240,309	$	(5	)	$	(182,953	)	$	57,355
Stock-based compensation		—		—		—		—		3,282		—			—			3,282
Vesting of early exercised stock options		—		—		2,132		—		3		—			—			3
Vesting of restricted stock units		—		—		453,500		—		—		—			—			—
Issuance of common stock from employee stock purchase plan		—		—		5,455		—		1		—			—			1
Unrealized loss on investment securities		—		—		—		—		—		(15	)		—			(15	)
Net loss		—		—		—		—		—		—			(19,142	)		(19,142	)
Balance as of June 30, 2022		—	$	—		42,569,515	$	4	$	243,595	$	(20	)	$	(202,095	)	$	41,484

	Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Additional paid-in capital		Accumulated other comprehensive income		Accumulated deficit			Total stockholders' equity
Balance as of December 31, 2020		—	$	—		25,969,442	$	3	$	210,021	$	1	$	(120,746	)	$	89,279
Stock-based compensation		—		—		—		—		3,106		—		—			3,106
Exercise of stock options		—		—		466,811		—		1,059		—		—			1,059
Vesting of early exercised stock options		—		—		21,336		—		15		—		—			15
Issuance of common stock from employee stock purchase plan		—		—		48,335		—		147		—		—			147
Unrealized gain on investment securities		—		—		—		—		—		6		—			6
Net loss		—		—		—		—		—		—		(30,353	)		(30,353	)
Balance as of June 30, 2021		—	$	—		26,505,924	$	3	$	214,348	$	7	$	(151,099	)	$	63,259

See accompanying notes to the unaudited condensed consolidated financial statements.

Metacrine, Inc.

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

For the Three Months Ended June 30, 2022 and 2021

(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 as of March 31, 2022		—	$	—		42,163,510	$	4	$	242,322	$	(43	)	$	(195,833	)	$	46,450
Stock-based compensation		—		—		—		—		1,272		—			—			1,272
Vesting of restricted stock units		—		—		400,550		—		—		—			—			—
Issuance of common stock from employee stock purchase plan		—		—		5,455		—		1		—			—			1
Unrealized gain on investment securities		—		—		—		—		—		23			—			23
Net loss		—		—		—		—		—		—			(6,262	)		(6,262	)
Balance as of June 30, 2022		—	$	—		42,569,515	$	4	$	243,595	$	(20	)	$	(202,095	)	$	41,484

	Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Additional paid-in capital		Accumulated other comprehensive income (loss)			Accumulated deficit			Total stockholders' equity
Balance as of March 31, 2021		—	$	—		26,209,327	$	3	$	212,172	$	(1	)	$	(135,514	)	$	76,660
Stock-based compensation		—		—		—		—		1,586		—			—			1,586
Exercise of stock options		—		—		238,133		—		436		—			—			436
Vesting of early exercised stock options		—		—		10,129		—		7		—			—			7
Issuance of common stock from employee stock purchase plan		—		—		48,335		—		147		—			—			147
Unrealized gain on investment securities		—		—		—		—		—		8