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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, 2020

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: 001-38470

 

Unity Biotechnology, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

26-4726035

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

285 East Grand Ave.

South San Francisco, CA

94080

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650) 416-1192

 

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

UBX

The Nasdaq Global Select 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 

As of October 30, 2020, the registrant had 52,913,180 shares of common stock outstanding.

 

 


 

UNITY BIOTECHNOLOGY, INC.

QUARTERLY REPORT ON FORM 10-Q

Table of Contents

 

PART I. FINANCIAL INFORMATION

 

Item 1

Condensed Financial Statements

2

 

Condensed Balance Sheets as of September 30, 2020 (unaudited) and December 31, 2019

2

 

Condensed Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2020 and 2019 (unaudited)

3

 

Condensed Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2020 and 2019 (unaudited)

4

 

Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019 (unaudited)

6

 

Notes to Condensed Financial Statements (unaudited)

7

Item 2

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

27

Item 3

Quantitative and Qualitative Disclosures About Market Risk

37

Item 4

Controls and Procedures

37

 

 

 

PART II. OTHER INFORMATION

 

 

 

Item 1

Legal Proceedings

38

Item 1A

Risk Factors

38

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

83

Item 3

Default Upon Senior Securities

83

Item 4

Mine Safety Disclosures

83

Item 5

Other Information

83

Item 6

Exhibits

84

Signatures

86

 

 

1


 

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

 

Unity Biotechnology, Inc.

Condensed Balance Sheets

(In thousands, except for share amounts and par value)

 

 

 

September 30,

2020

 

 

December 31,

2019

 

 

 

(Unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

48,581

 

 

$

37,473

 

Short-term marketable securities

 

 

83,633

 

 

 

84,508

 

Strategic investment

 

 

 

 

 

5,507

 

Prepaid expenses and other current assets

 

 

3,476

 

 

 

1,999

 

Total current assets

 

 

135,690

 

 

 

129,487

 

Property and equipment, net

 

 

13,503

 

 

 

16,636

 

Operating lease right of use asset

 

 

24,330

 

 

 

 

Long-term marketable securities

 

 

 

 

 

3,025

 

Restricted cash

 

 

1,446

 

 

 

1,446

 

Other long-term assets

 

 

2

 

 

 

627

 

Total assets

 

$

174,971

 

 

$

151,221

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,255

 

 

$

5,185

 

Accrued compensation

 

 

5,730

 

 

 

5,905

 

Accrued and other current liabilities

 

 

6,940

 

 

 

4,995

 

Contingent consideration liability

 

 

 

 

 

1,131

 

Total current liabilities

 

 

16,925

 

 

 

17,216

 

Operating lease liability, net of current portion

 

 

35,632

 

 

 

 

Deferred rent, net of current portion

 

 

 

 

 

13,298

 

Long-term debt, net

 

 

24,313

 

 

 

 

Total liabilities

 

 

76,870

 

 

 

30,514

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Convertible preferred stock, $0.0001 par value; 10,000,000 shares

   authorized; no shares issued and outstanding

 

 

 

 

 

 

Common stock, $0.0001 par value; 300,000,000 shares

   authorized as of September 30, 2020 and December 31, 2019;

  52,883,169 and 47,227,065 shares issued and outstanding

   as of September 30, 2020 and December 31, 2019, respectively

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

417,952

 

 

 

366,695

 

Related party promissory notes for purchase of common stock

 

 

(210

)

 

 

(210

)

Employee promissory notes for purchase of common stock

 

 

 

 

 

(418

)

Accumulated other comprehensive income

 

 

66

 

 

 

90

 

Accumulated deficit

 

 

(319,712

)

 

 

(245,455

)

Total stockholders’ equity

 

 

98,101

 

 

 

120,707

 

Total liabilities and stockholders’ equity

 

$

174,971

 

 

$

151,221

 

 

See accompanying notes to the condensed financial statements.

2


 

Unity Biotechnology, Inc.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

18,830

 

 

$

17,777

 

 

$

54,218

 

 

$

52,750

 

General and administrative

 

 

6,530

 

 

 

5,692

 

 

 

18,803

 

 

 

15,139

 

Change in fair value of contingent consideration

 

 

(718

)

 

 

(1,115

)

 

 

(33

)

 

 

(1,327

)

Impairment of long-lived assets

 

 

 

 

 

 

 

 

2,159

 

 

 

 

Total operating expenses

 

 

24,642

 

 

 

22,354

 

 

 

75,147

 

 

 

66,562

 

Loss from operations

 

 

(24,642

)

 

 

(22,354

)

 

 

(75,147

)

 

 

(66,562

)

Interest income

 

 

226

 

 

 

756

 

 

 

1,093

 

 

 

2,663

 

Interest expense

 

 

(499

)

 

 

 

 

 

(499

)

 

 

 

Other income (expense), net

 

 

(2,637

)

 

 

(112

)

 

 

296

 

 

 

(251

)

Net loss

 

 

(27,552

)

 

 

(21,710

)

 

 

(74,257

)

 

 

(64,150

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable debt

  securities

 

 

(166

)

 

 

(18

)

 

 

(24

)

 

 

190

 

Comprehensive loss

 

$

(27,718

)

 

$

(21,728

)

 

$

(74,281

)

 

$

(63,960

)

Net loss per share, basic and diluted

 

$

(0.52

)

 

$

(0.51

)

 

$

(1.49

)

 

$

(1.51

)

Weighted-average number of shares used in

  computing net loss per share, basic and diluted

 

 

52,482,200

 

 

 

42,965,945

 

 

 

49,926,396

 

 

 

42,584,835

 

 

See accompanying notes to the condensed financial statements.


 

3


 

Unity Biotechnology, Inc.

Condensed Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

 

For the Nine Months Ended September 30, 2020

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Related Party

Promissory Notes

for Purchase of

 

 

Employee Promissory Notes for Purchase of

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Common Stock

 

 

Common Stock

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2019

 

 

47,227,065

 

 

$

5

 

 

$

366,695

 

 

$

(210

)

 

$

(418

)

 

$

90

 

 

$

(245,455

)

 

$

120,707

 

Issuance of common stock, net of issuance costs,

   under at-the-market ("ATM") equity offering program

 

 

1,513,840

 

 

 

 

 

 

8,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,763

 

Issuance of common stock upon exercise of stock options

 

 

73,049

 

 

 

 

 

 

249

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

249

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,225

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,225

 

Common stock issued for services

 

 

43,550

 

 

 

 

 

 

100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

100

 

Change in unrealized gain on available-for-sale

   marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

283

 

 

 

 

 

 

283

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,038

)

 

 

(28,038

)

Balances at March 31, 2020

 

 

48,857,504

 

 

$

5

 

 

$

379,072

 

 

$

(210

)

 

$

(418

)

 

$

373

 

 

$

(273,493

)

 

$

105,329

 

Issuance of common stock, net of issuance costs,

   under ATM equity offering program

 

 

2,594,030

 

 

 

 

 

 

20,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20,731

 

Issuance of common stock upon exercise of stock options

 

 

105,142

 

 

 

 

 

 

355

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

355

 

Issuance of common stock from restricted stock units

 

 

103,020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

132

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

132

 

Stock-based compensation

 

 

 

 

 

 

 

 

4,079

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,079

 

Issuance of common stock under employee stock

  purchase plan ("2018 ESPP")

 

 

69,815

 

 

 

 

 

 

385

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

385

 

Repayment of promissory note from employee from

  purchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

56

 

 

 

 

 

 

 

 

 

56

 

Change in unrealized loss on available-for-sale

   marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(141

)

 

 

 

 

 

(141

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,667

)

 

 

(18,667

)

Balances at June 30, 2020

 

 

51,729,511

 

 

$

5

 

 

$

404,754

 

 

$

(210

)

 

$

(362

)

 

$

232

 

 

$

(292,160

)

 

$

112,259

 

Issuance of common stock, net of issuance costs,

   under ATM equity offering program

 

 

894,387

 

 

 

 

 

 

7,776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,776

 

Issuance of common stock upon exercise of stock options

 

 

138,846

 

 

 

 

 

 

582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

582

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,742

 

Issuance of common stock in settlement of contingent

  consideration milestone

 

 

133,334

 

 

 

 

 

 

1,098

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,098

 

Repayment of promissory note from employee from

  purchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

318

 

 

 

 

 

 

 

 

 

318

 

Repayment of promissory note from employee through

   repurchase of early exercise shares

 

 

(12,909

)

 

 

 

 

 

 

 

 

 

 

 

44

 

 

 

 

 

 

 

 

 

44

 

Change in unrealized loss on available-for-sale

   marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(166

)

 

 

 

 

 

(166

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27,552

)

 

 

(27,552

)

Balances at September 30, 2020

 

 

52,883,169

 

 

$

5

 

 

$

417,952

 

 

$

(210

)

 

$

 

 

$

66

 

 

$

(319,712

)

 

$

98,101

 

4


 

 

For the Nine Months Ended September 30, 2019

 

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Related Party

Promissory Notes

for Purchase of

 

 

Employee Promissory Notes for Purchase of

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Common Stock

 

 

Common Stock

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2018

 

 

42,414,294

 

 

$

4

 

 

$

324,663

 

 

$

(201

)

 

$

(400

)

 

$

(95

)

 

$

(163,278

)

 

$

160,693

 

Issuance of common stock upon exercise of stock options

 

 

340,731

 

 

 

 

 

 

300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

300

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

207

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,997

 

Common stock issued to third parties

 

 

133,334

 

 

 

 

 

 

2,059

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,059

 

Change in unrealized gain on available-for-sale

   marketable debt securities, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

114

 

 

 

 

 

 

114

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,767

)

 

 

(18,767

)

Balances at March 31, 2019