etnb-10q_20210630.htm
false Q2 0001785173 --12-31 2019-06-30 P3Y P1Y 10 years 0.940 0.864 0.007 0.004 P5Y6M P5Y6M P6Y1M9D P6Y1M9D 0.976 0.913 0.010 0.015 P8Y7M6D P8Y6M25D P7Y10M28D 0001785173 2021-01-01 2021-06-30 xbrli:shares 0001785173 2021-08-06 iso4217:USD 0001785173 2021-06-30 0001785173 2020-12-31 0001785173 2021-04-01 2021-06-30 0001785173 2020-04-01 2020-06-30 0001785173 2020-01-01 2020-06-30 iso4217:USD xbrli:shares 0001785173 us-gaap:CommonStockMember 2020-12-31 0001785173 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001785173 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-12-31 0001785173 us-gaap:RetainedEarningsMember 2020-12-31 0001785173 us-gaap:CommonStockMember 2021-01-01 2021-03-31 0001785173 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0001785173 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-01 2021-03-31 0001785173 2021-01-01 2021-03-31 0001785173 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0001785173 us-gaap:CommonStockMember 2021-03-31 0001785173 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001785173 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-03-31 0001785173 us-gaap:RetainedEarningsMember 2021-03-31 0001785173 2021-03-31 0001785173 us-gaap:CommonStockMember 2021-04-01 2021-06-30 0001785173 us-gaap:AdditionalPaidInCapitalMember 2021-04-01 2021-06-30 0001785173 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-04-01 2021-06-30 0001785173 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0001785173 us-gaap:CommonStockMember 2021-06-30 0001785173 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001785173 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-06-30 0001785173 us-gaap:RetainedEarningsMember 2021-06-30 0001785173 us-gaap:CommonStockMember 2019-12-31 0001785173 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001785173 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001785173 us-gaap:RetainedEarningsMember 2019-12-31 0001785173 2019-12-31 0001785173 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001785173 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001785173 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001785173 2020-01-01 2020-03-31 0001785173 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001785173 us-gaap:CommonStockMember 2020-03-31 0001785173 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001785173 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001785173 us-gaap:RetainedEarningsMember 2020-03-31 0001785173 2020-03-31 0001785173 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001785173 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001785173 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001785173 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001785173 us-gaap:CommonStockMember 2020-06-30 0001785173 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001785173 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001785173 us-gaap:RetainedEarningsMember 2020-06-30 0001785173 2020-06-30 0001785173 us-gaap:EmployeeStockMember 2021-01-01 2021-06-30 0001785173 us-gaap:EmployeeStockMember 2020-01-01 2020-06-30 0001785173 us-gaap:CommonStockMember etnb:UnderwrittenPublicOfferingMember 2020-07-01 2020-07-31 0001785173 us-gaap:CommonStockMember etnb:UnderwrittenPublicOfferingMember 2020-07-31 0001785173 us-gaap:CommonStockMember etnb:UnderwrittenPublicOfferingMember 2020-09-01 2020-09-30 0001785173 us-gaap:CommonStockMember etnb:UnderwrittenPublicOfferingMember 2020-09-30 0001785173 us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:AgencySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:USGovernmentAgenciesShorttermDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:MunicipalBondsMember us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001785173 us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001785173 us-gaap:CashEquivalentsMember us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001785173 us-gaap:ShortTermInvestmentsMember us-gaap:FairValueMeasurementsRecurringMember 2021-06-30 0001785173 us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:AgencySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:USGovernmentAgenciesShorttermDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:MunicipalBondsMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001785173 us-gaap:FairValueInputsLevel2Member us-gaap:USTreasuryBillSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001785173 us-gaap:FairValueInputsLevel2Member etnb:AgencyDiscountSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001785173 us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001785173 us-gaap:CashEquivalentsMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001785173 us-gaap:ShortTermInvestmentsMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001785173 etnb:TevaAgreementMember 2018-04-01 2018-04-30 0001785173 etnb:TevaAgreementMember etnb:TevasGlycoPEGylatedFGF21ProgramMember 2018-04-01 2018-04-30 0001785173 etnb:TevaAgreementMember etnb:TevasDevelopmentProgramMember 2018-04-01 2018-04-30 0001785173 etnb:TevaAgreementMember 2021-01-01 2021-06-30 0001785173 etnb:TevaAgreementMember us-gaap:ResearchAndDevelopmentExpenseMember 2021-04-01 2021-06-30 0001785173 etnb:TevaAgreementMember us-gaap:ResearchAndDevelopmentExpenseMember 2020-04-01 2020-06-30 0001785173 etnb:TevaAgreementMember us-gaap:ResearchAndDevelopmentExpenseMember 2021-01-01 2021-06-30 0001785173 etnb:TevaAgreementMember us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-06-30 0001785173 etnb:TermALoanFacilityMember etnb:LoanAndSecurityAgreementMember 2020-04-30 0001785173 etnb:TermBLoanFacilityMember etnb:LoanAndSecurityAgreementMember 2020-04-30 0001785173 etnb:LoanAndSecurityAgreementMember 2020-04-01 2020-04-30 0001785173 etnb:LoanAndSecurityAgreementMember 2020-04-30 0001785173 etnb:LoanAndSecurityAgreementMember 2020-07-31 0001785173 etnb:LoanAndSecurityAgreementMember us-gaap:OtherAssetsMember 2020-04-30 0001785173 etnb:LoanAndSecurityAgreementMember etnb:TermALoanFacilityMember 2021-05-31 0001785173 etnb:LoanAndSecurityAgreementMember 2021-05-01 2021-05-31 0001785173 etnb:LoanAndSecurityAgreementMember srt:MaximumMember 2021-05-31 0001785173 etnb:LoanAndSecurityAgreementMember etnb:TermBLoanFacilityMember 2021-05-31 0001785173 etnb:LoanAndSecurityAgreementMember etnb:TermALoanFacilityMember 2021-06-30 0001785173 etnb:LoanAndSecurityAgreementMember etnb:TermALoanFacilityMember 2021-01-01 2021-06-30 0001785173 etnb:LoanAndSecurityAgreementMember 2021-01-01 2021-06-30 xbrli:pure 0001785173 etnb:LoanAndSecurityAgreementMember srt:MinimumMember 2021-01-01 2021-06-30 0001785173 etnb:LoanAndSecurityAgreementMember us-gaap:PrimeRateMember 2021-01-01 2021-06-30 0001785173 etnb:LoanAndSecurityAgreementMember 2021-05-31 0001785173 etnb:LoanAndSecurityAgreementMember us-gaap:ValuationTechniqueOptionPricingModelMember us-gaap:MeasurementInputRiskFreeInterestRateMember 2021-05-31 0001785173 etnb:LoanAndSecurityAgreementMember us-gaap:MeasurementInputExpectedDividendPaymentMember 2021-05-01 2021-05-31 0001785173 etnb:LoanAndSecurityAgreementMember us-gaap:ValuationTechniqueOptionPricingModelMember us-gaap:MeasurementInputPriceVolatilityMember 2021-05-31 0001785173 etnb:LoanAndSecurityAgreementMember us-gaap:ValuationTechniqueOptionPricingModelMember us-gaap:MeasurementInputExpectedTermMember 2021-05-01 2021-05-31 0001785173 etnb:LoanAndSecurityAgreementMember 2021-06-30 0001785173 srt:MaximumMember 2021-01-01 2021-06-30 0001785173 us-gaap:EmployeeStockMember 2019-10-01 2019-10-31 0001785173 us-gaap:EmployeeStockMember srt:MaximumMember 2019-10-01 2019-10-31 0001785173 us-gaap:EmployeeStockMember 2021-06-30 0001785173 us-gaap:ResearchAndDevelopmentExpenseMember 2021-04-01 2021-06-30 0001785173 us-gaap:ResearchAndDevelopmentExpenseMember 2020-04-01 2020-06-30 0001785173 us-gaap:ResearchAndDevelopmentExpenseMember 2021-01-01 2021-06-30 0001785173 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-06-30 0001785173 us-gaap:GeneralAndAdministrativeExpenseMember 2021-04-01 2021-06-30 0001785173 us-gaap:GeneralAndAdministrativeExpenseMember 2020-04-01 2020-06-30 0001785173 us-gaap:GeneralAndAdministrativeExpenseMember 2021-01-01 2021-06-30 0001785173 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-06-30 0001785173 srt:MinimumMember 2021-01-01 2021-06-30 0001785173 srt:MinimumMember 2020-01-01 2020-06-30 0001785173 srt:MaximumMember 2020-01-01 2020-06-30 0001785173 2020-01-01 2020-12-31 0001785173 etnb:ServiceBasedRSUsMember us-gaap:ShareBasedPaymentArrangementEmployeeMember 2021-02-01 2021-02-28 0001785173 etnb:ServiceBasedRSUsMember us-gaap:ShareBasedPaymentArrangementEmployeeMember 2021-04-01 2021-06-30 0001785173 etnb:ServiceBasedRSUsMember us-gaap:ShareBasedPaymentArrangementEmployeeMember 2021-01-01 2021-06-30 0001785173 etnb:PerformanceRSUsMember srt:ExecutiveOfficerMember 2021-02-01 2021-02-28 0001785173 etnb:PerformanceRSUsMember srt:ExecutiveOfficerMember 2021-04-01 2021-06-30 0001785173 etnb:PerformanceRSUsMember srt:ExecutiveOfficerMember 2021-01-01 2021-06-30 0001785173 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-06-30 0001785173 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0001785173 etnb:UnvestedRestrictedStockUnitsMember 2021-01-01 2021-06-30 0001785173 us-gaap:WarrantMember 2021-01-01 2021-06-30

 

 

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 June 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: 001-39122

 

89bio, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

36-4946844

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

142 Sansome Street, Second Floor

San Francisco, California 94104

94104

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (415) 500-4614

 

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 $0.001 per share

 

ETNB

 

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   

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     Yes      No  

As of August 6, 2021, the registrant had 20,087,816 shares of common stock, $0.001 par value per share, outstanding.

 

 

 


 

 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

2

 

Condensed Consolidated Statements of Stockholder’s Equity

3

 

Condensed Consolidated Statements of Cash Flows

4

 

Notes to Unaudited Condensed Consolidated Financial Statements

5

Item 2.

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

13

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

19

Item 4.

Controls and Procedures

19

PART II.

OTHER INFORMATION

21

Item 1.

Legal Proceedings

21

Item 1A.

Risk Factors

21

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

37

Item 3.

Default Upon Senior Securities

38

Item 4.

Mine Safety Disclosures

38

Item 5.

Other Information

38

Item 6.

Exhibits

39

Signatures

40

 

 

i


 

 

PART I—FINANCIAL INFORMATION

 

Item 1. Financial Statements.

89bio, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

June 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

35,714

 

 

$

98,183

 

Restricted cash

 

 

25

 

 

 

25

 

Short-term available-for-sale securities

 

 

135,249

 

 

 

106,446

 

Prepaid and other current assets

 

 

9,585

 

 

 

5,548

 

Total current assets

 

 

180,573

 

 

 

210,202

 

Property and equipment, net

 

 

154

 

 

 

166

 

Other assets

 

 

984

 

 

 

706

 

Total assets

 

$

181,711

 

 

$

211,074

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,915

 

 

$

2,065

 

Accrued expenses

 

 

5,665

 

 

 

6,048

 

Total current liabilities

 

 

7,580

 

 

 

8,113

 

Term loan, non-current, net

 

 

1,426

 

 

 

 

Total liabilities

 

 

9,006

 

 

 

8,113

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock

 

 

20

 

 

 

20

 

Additional paid-in capital

 

 

331,281

 

 

 

326,046

 

Accumulated other comprehensive income (loss)

 

 

4

 

 

 

(10

)

Accumulated deficit

 

 

(158,600

)

 

 

(123,095

)

Total stockholders’ equity

 

 

172,705

 

 

 

202,961

 

Total liabilities and stockholders’ equity

 

$

181,711

 

 

$

211,074

 

 

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

 

 

1


 

 

89bio, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share amounts)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

15,630

 

 

$

8,443

 

 

$

25,761

 

 

$

16,221

 

General and administrative

 

 

4,921

 

 

 

3,230

 

 

 

9,529

 

 

 

6,154

 

Total operating expenses

 

 

20,551

 

 

 

11,673

 

 

 

35,290

 

 

 

22,375

 

Loss from operations

 

 

(20,551

)

 

 

(11,673

)

 

 

(35,290

)

 

 

(22,375

)

Other (expenses) income, net

 

 

(172

)

 

 

(98

)

 

 

(215

)

 

 

59

 

Net loss before tax

 

 

(20,723

)

 

 

(11,771

)

 

 

(35,505

)

 

 

(22,316

)

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

1

 

Net loss

 

$

(20,723

)

 

$

(11,771

)

 

$

(35,505

)

 

$

(22,315

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on available-for-sale securities

 

 

13

 

 

 

 

 

 

9

 

 

 

 

Foreign currency translation adjustments

 

 

(6

)

 

 

 

 

 

5

 

 

 

 

Total other comprehensive income

 

$

7

 

 

$

 

 

$

14

 

 

$

 

Comprehensive loss

 

$

(20,716

)

 

$

(11,771

)

 

$

(35,491

)

 

$

(22,315

)

Net loss per share, basic and diluted

 

$

1.03

 

 

$

0.85

 

 

$

1.77

 

 

$

1.62

 

Weighted-average shares used to compute net loss per share, basic

   and diluted

 

 

20,060,061

 

 

 

13,797,356

 

 

 

20,017,677

 

 

 

13,793,544

 

 

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

 

 

2


 

 

89bio, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the Three and Six Months Ended June 30, 2021 and 2020

(Unaudited)

(In thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

(Loss) Income

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2020

 

 

19,931,660

 

 

$

20

 

 

$

326,046

 

 

$

(10

)

 

$

(123,095

)

 

$

202,961

 

Issuance of common stock upon exercise of stock options

 

 

103,170

 

 

 

 

 

 

216

 

 

 

 

 

 

 

 

 

216

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,793

 

 

 

 

 

 

 

 

 

1,793

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,782

)

 

 

(14,782

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

 

 

 

7

 

Balance as of March 31, 2021

 

 

20,034,830

 

 

 

20

 

 

 

328,055

 

 

 

(3

)

 

 

(137,877

)

 

 

190,195

 

Issuance of common stock upon exercise of stock options

 

 

40,628

 

 

 

 

 

 

152

 

 

 

 

 

 

 

 

 

152

 

Issuance of common stock upon ESPP purchase

 

 

5,207

 

 

 

 

 

 

83

 

 

 

 

 

 

 

 

 

83

 

Issuance of common stock warrant in connection with term

   loan facility

 

 

 

 

 

 

 

 

574

 

 

 

 

 

 

 

 

 

574

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,417

 

 

 

 

 

 

 

 

 

2,417

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,723

)

 

 

(20,723

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

 

 

 

7

 

Balance as of June 30, 2021

 

 

20,080,665

 

 

$

20

 

 

$

331,281

 

 

$

4

 

 

$

(158,600

)

 

$

172,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2019

 

 

13,788,982

 

 

$

14

 

 

$

163,526

 

 

$

 

 

$

(73,596

)

 

$

89,944

 

Issuance of common stock upon exercise of stock options

 

 

4,876

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

9

 

Stock-based compensation

 

 

 

 

 

 

 

 

493

 

 

 

 

 

 

 

 

 

493

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,544

)

 

 

(10,544

)

Balance as of March 31, 2020

 

 

13,793,858

 

 

 

14

 

 

 

164,028

 

 

 

 

 

 

(84,140

)

 

 

79,902

 

Issuance of common stock upon exercise of stock options

 

 

6,919

 

 

 

 

 

 

21

 

 

 

 

 

 

 

 

 

21

 

Issuance of common stock upon ESPP purchase

 

 

4,427

 

 

 

 

 

 

75

 

 

 

 

 

 

 

 

 

75

 

Issuance of common stock warrant in connection with term

   loan facility

 

 

 

 

 

 

 

 

634

 

 

 

 

 

 

 

 

 

634

 

Stock-based compensation

 

 

 

 

 

 

 

 

910

 

 

 

 

 

 

 

 

 

910

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,771

)

 

 

(11,771

)

Balance as of June 30, 2020

 

 

13,805,204

 

 

$

14

 

 

$

165,668

 

 

$

 

 

$

(95,911

)

 

$

69,771

 

 

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

 

3


 

89bio, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(35,505

)

 

$

(22,315

)

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

 

 

 

 

 

 

 

 

Depreciation

 

 

35

 

 

 

29

 

Stock-based compensation

 

 

4,210

 

 

 

1,403

 

Amortization of premium on available-for-sale securities

 

 

472

 

 

 

1

 

Amortization of debt issuance costs

 

 

194

 

 

 

77

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid and other current assets

 

 

(4,032

)

 

 

595

 

Other assets

 

 

77

 

 

 

 

Accounts payable

 

 

(159

)

 

 

2,123

 

Accrued expenses

 

 

(383

)

 

 

(1,189

)

Net cash used in operating activities

 

 

(35,091

)

 

 

(19,276

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of available-for-sale securities

 

 

(93,218

)

 

 

(5,698

)

Proceeds from sales and maturities of available-for-sale securities

 

 

63,952

 

 

 

 

Purchases of property and equipment

 

 

(20

)

 

 

(107

)

Net cash used in investing activities

 

 

(29,286

)

 

 

(5,805

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from term loan facility, net of issuance costs

 

 

1,457

 

 

 

 

Proceeds from issuance of common stock upon stock option exercises

 

 

368

 

 

 

30

 

Proceeds from issuance of common stock upon ESPP purchase

 

 

83

 

 

 

75

 

Payment of debt issuance costs

 

 

 

 

 

(161

)

Net cash provided by (used in) financing activities

 

 

1,908

 

 

 

(56

)

Net decrease in cash and cash equivalents, and restricted cash

 

 

(62,469

)

 

 

(25,137

)

Cash and cash equivalents, and restricted cash at beginning of period

 

 

98,208

 

 

 

93,360

 

Cash and cash equivalents, and restricted cash at end of period

 

$

35,739

 

 

$

68,223

 

Components of cash and cash equivalents, and restricted cash:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

35,714

 

 

$

68,199

 

Restricted cash

 

 

25

 

 

 

24

 

Total cash and cash equivalents, and restricted cash

 

$

35,739

 

 

$

68,223

 

Supplemental cash flow disclosures:

 

 

 

 

 

 

 

 

Property and equipment purchases included in accounts payable and accrued expenses

 

$

3

 

 

$

13

 

Issuance of common stock warrant in connection with term loan facility

 

$

574

 

 

$

634

 

Debt issuance costs included in accounts payable

 

$

6

 

 

$

 

Deferred offering costs included in accrued expenses

 

$

 

 

$

290

 

 

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

 

 

4


 

89bio, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

 

1. Organization and Basis of Presentation

Description of Business

89bio, Inc. (“89bio” or the “Company”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of liver and cardio-metabolic diseases. The Company’s lead product candidate, BIO89-100, a specifically engineered glycoPEGylated analog of fibroblast growth factor 21, is currently being developed for the treatment of nonalcoholic steatohepatitis and for the treatment of severe hypertriglyceridemia.

89bio, Inc. was formed as a Delaware corporation in June 2019, for the purpose of completing an initial public offering and related transactions in order to carry on the business of 89Bio Ltd., which was incorporated in Israel in January 2018.

Public Offerings

In July 2020, the Company completed an underwritten public offering of 3,047,040 shares of its common stock, at the public offering price of $27.50 per share. The Company raised a total of $78.2 million in net proceeds after deducting underwriting discounts and commissions of $5.0 million and offering costs of $0.6 million.

In September 2020, the Company completed an underwritten public offering of 3,025,000 shares of its common stock, at a public offering price of $28.00 per share. The Company raised a total of $79.5 million in net proceeds after deducting underwriting discounts and commissions of $4.6 million and offering costs of $0.6 million.

Liquidity

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. To date, the Company has not generated revenues from its activities and has incurred substantial operating losses. Management expects the Company to continue to generate substantial operating losses for the foreseeable future until it completes development of its products and seeks regulatory approvals to market such products. The Company had cash, cash equivalents and short-term available-for-sale securities of $171.0 million as of June 30, 2021.

The Company expects that its cash, cash equivalents and short-term available-for-sale securities as of June 30, 2021, together with proceeds available from the Company’s term loan (see Note 6), will be sufficient to fund operating expenses and capital expenditure requirements for a period of at least one year from the date these unaudited condensed consolidated financial statements are filed with the Securities and Exchange Commission (“SEC”).

2. Summary of Significant Accounting Policies

Unaudited Condensed Consolidated Financial Statements

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting.

The accompanying interim condensed consolidated financial statements are unaudited. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2020 and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s consolidated financial position, results of operations and comprehensive loss, and cash flows. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other future annual or interim period. The condensed consolidated balance sheet as of December 31, 2020 was derived from the audited financial statements as of that date. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on March 25, 2021.

5


 

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include but are not limited to the fair value of stock options and certain accrued expenses. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates.

Fair Value Measurements

Financial assets and liabilities are recorded at fair value on a recurring basis in the condensed consolidated balance sheets. The carrying values of Company’s financial assets and liabilities, including cash and cash equivalents, restricted cash, prepaid and other current assets, accounts payable and accrued expenses approximate to their fair value due to the short-term nature of these instruments. The fair value of the Company’s term loan approximates to its carrying value, or amortized cost, due to the short-term nature of this obligation and the market rates of interest rates it bears. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. Assets and liabilities recorded at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are directly related to the amount of subjectivity with the inputs to the valuation of these assets or liabilities as follows:

Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active;

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Risks and Uncertainties

The ongoing COVID-19 pandemic has disrupted and may continue to disrupt the Company’s business and delay its preclinical and clinical programs and timelines. The Company does not yet know the full extent of potential delays to clinical trials, which could prevent or delay the Company from obtaining approval for BIO89-100. The extent to which the COVID-19 pandemic may impact the Company’s future operating results and financial condition is uncertain.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds and commercial paper that are stated at fair value.

Investments

Investments have been classified as available-for-sale and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its available-for-sale investments in debt securities at the time of purchase. Generally, investments with original maturities beyond three months at the date of purchase are classified as short-term because it is management’s intent to use the investments to fund current operations or to make them available for current operations.  

Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. The Company periodically evaluates whether declines in fair values of its available-for-sale securities below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as the Company’s ability and intent to hold the available-for-sale security until a forecasted recovery occurs. Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any available-for-sale securities before recovery of its amortized cost basis. Realized gains and losses and declines in fair value judged to be other than

6


 

temporary, if any, on available-for-sale securities are included in other (expenses) income, net. The cost of investments sold is based on the specific-identification method. There are no material realized gains or losses on investments for the periods presented. Interest on available-for-sale securities is included in other (expenses) income, net.

Comprehensive Loss

The Company’s comprehensive loss is comprised of net loss and changes in unrealized gains or losses on available-for-sale securities and foreign currency translation adjustments.

 

Recent Accounting Pronouncements

In February 2016, the Financial Standards Accounting Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-02—Leases (“ASU 2016-02”), requiring the recognition of lease assets and liabilities on the balance sheet. The standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease-term of more than twelve months. The standard is effective for public entities for fiscal years beginning after December 15, 2018 and for nonpublic entities for fiscal years beginning after December 15, 2021. As an emerging growth company, ASU 2016-02 is effective for the Company for the year ending December 31, 2022 and interim periods within the year ending December 31, 2023. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The standard is effective for public entities for fiscal years beginning after December 15, 2019 and for nonpublic entities for fiscal years beginning after December 15, 2022. As an emerging growth company, ASU 2016-13 is effective for the Company for the year ending December 31, 2023 and interim periods within that fiscal year and must be adopted using a modified retrospective approach, with certain exceptions. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

 

 

3. Fair Value Measurements

The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as of June 30, 2021 (in thousands):

 

 

 

 

June 30, 2021

 

 

 

Valuation

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

 

 

 

 

 

Hierarchy

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

Money market funds

 

Level 1

 

$

30,046

 

 

$

 

 

$

 

 

$

30,046

 

Commercial paper

 

Level 2

 

 

76,319

 

 

 

5

 

 

 

(3

)

 

 

76,321

 

Agency bonds

 

Level 2

 

 

18,788

 

 

 

7

 

 

 

 

 

 

18,795

 

Corporate debt securities

 

Level 2

 

 

18,683

 

 

 

3

 

 

 

(1

)

 

 

18,685

 

U.S. government bonds

 

Level 2

 

 

16,665

 

 

 

4

 

 

 

(1

)

 

 

16,668

 

Municipal bonds

 

Level 2

 

 

6,852

 

 

 

3

 

 

 

 

 

 

6,855

 

Non-U.S. debt securities

 

Level 2

 

 

2,527

 

 

 

 

 

 

 

 

 

2,527

 

Total cash equivalents and available-for-sale securities

 

 

 

$

169,880

 

 

$

22

 

 

$

(5

)

 

$

169,897

 

Classified as:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

34,648

 

Short-term available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

135,249

 

Total cash equivalents and available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

169,897

 

 

The following table summarizes the Company’s available-for-sale securities by contractual maturity as of June 30, 2021 (in thousands):

 

 

June 30, 2021

 

Within one year

 

$

152,622

 

After one year through two years

 

 

17,275

 

Total cash equivalents and available-for-sale securities

 

$