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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: 001-39122

 

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 November 8, 2021, the registrant had 20,282,212 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 Stockholders’ Equity

3

 

Condensed Consolidated Statements of Cash Flows

5

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

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

14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

20

Item 4.

Controls and Procedures

21

PART II.

OTHER INFORMATION

22

Item 1.

Legal Proceedings

22

Item 1A.

Risk Factors

22

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

38

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)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

39,695

 

 

$

98,183

 

Restricted cash

 

 

25

 

 

 

25

 

Short-term available-for-sale securities

 

 

117,638

 

 

 

106,446

 

Prepaid and other current assets

 

 

9,678

 

 

 

5,548

 

Total current assets

 

 

167,036

 

 

 

210,202

 

Property and equipment, net

 

 

146

 

 

 

166

 

Other assets

 

 

874

 

 

 

706

 

Total assets

 

$

168,056

 

 

$

211,074

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

12,526

 

 

$

2,065

 

Accrued expenses

 

 

7,319

 

 

 

6,048

 

Total current liabilities

 

 

19,845

 

 

 

8,113

 

Term loan, non-current, net

 

 

1,441

 

 

 

 

Total liabilities

 

 

21,286

 

 

 

8,113

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock

 

 

20

 

 

 

20

 

Additional paid-in capital

 

 

333,673

 

 

 

326,046

 

Accumulated other comprehensive income (loss)

 

 

6

 

 

 

(10

)

Accumulated deficit

 

 

(186,929

)

 

 

(123,095

)

Total stockholders’ equity

 

 

146,770

 

 

 

202,961

 

Total liabilities and stockholders’ equity

 

$

168,056

 

 

$

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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

23,590

 

 

$

11,208

 

 

$

49,351

 

 

$

27,429

 

General and administrative

 

 

4,622

 

 

 

3,225

 

 

 

14,151

 

 

 

9,379

 

Total operating expenses

 

 

28,212

 

 

 

14,433

 

 

 

63,502

 

 

 

36,808

 

Loss from operations

 

 

(28,212

)

 

 

(14,433

)

 

 

(63,502

)

 

 

(36,808

)

Other expenses, net

 

 

(117

)

 

 

(146

)

 

 

(332

)

 

 

(87

)

Net loss before tax

 

 

(28,329

)

 

 

(14,579

)

 

 

(63,834

)

 

 

(36,895

)

Income tax expense

 

 

 

 

 

(24

)

 

 

 

 

 

(23

)

Net loss

 

$

(28,329

)

 

$

(14,603

)

 

$

(63,834

)

 

$

(36,918

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(4

)

 

 

7

 

 

 

5

 

 

 

7

 

Foreign currency translation adjustments

 

 

6

 

 

 

(10

)

 

 

11

 

 

 

(10

)

Total other comprehensive income (loss)

 

$

2

 

 

$

(3

)

 

$

16

 

 

$

(3

)

Comprehensive loss

 

$

(28,327

)

 

$

(14,606

)

 

$

(63,818

)

 

$

(36,921

)

Net loss per share, basic and diluted

 

 

(1.41

)

 

$

(0.86

)

 

 

(3.18

)

 

$

(2.49

)

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

   and diluted

 

 

20,092,094

 

 

 

16,884,244

 

 

 

20,043,301

 

 

 

14,809,131

 

 

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 Nine Months Ended September 30, 2021

(Unaudited)

(In thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

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

 

Issuance of common stock upon exercise of stock options

 

 

23,488

 

 

 

 

 

 

78

 

 

 

 

 

 

 

 

 

78

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,314

 

 

 

 

 

 

 

 

 

2,314

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,329

)

 

 

(28,329

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

 

 

 

2

 

Balance as of September 30, 2021

 

 

20,104,153

 

 

$

20

 

 

$

333,673

 

 

$

6

 

 

$

(186,929

)

 

$

146,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3


 

 

89bio, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the Three and Nine Months Ended September 30, 2020

(Unaudited)

(In thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Issuance of common stock upon public offerings net of issuance costs of $1,208

 

 

6,072,040

 

 

 

6

 

 

 

157,674

 

 

 

 

 

 

 

 

 

157,680

 

Issuance of common stock upon exercise of stock options

 

 

1,608

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

5

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,154

 

 

 

 

 

 

 

 

 

1,154

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,603

)

 

 

(14,603

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

 

 

 

(3

)

Balance as of September 30, 2020

 

 

19,878,852

 

 

$

20

 

 

$

324,501

 

 

$

(3

)

 

$

(110,514

)

 

$

214,004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

4


 

89bio, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(63,834

)

 

$

(36,918

)

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

 

 

 

 

 

 

 

 

Depreciation

 

 

58

 

 

 

47

 

Stock-based compensation

 

 

6,524

 

 

 

2,557

 

Amortization of premium on available-for-sale securities

 

 

704

 

 

 

85

 

Amortization of debt issuance costs

 

 

392

 

 

 

154

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid and other current assets

 

 

(4,119

)

 

 

(1,404

)

Other assets

 

 

4

 

 

 

 

Accounts payable

 

 

10,459

 

 

 

2,804

 

Accrued expenses

 

 

1,271

 

 

 

459

 

Net cash used in operating activities

 

 

(48,541

)

 

 

(32,216

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of available-for-sale securities

 

 

(119,518

)

 

 

(78,705

)

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

 

 

107,627

 

 

 

1,025

 

Purchases of property and equipment

 

 

(36

)

 

 

(124

)

Net cash used in investing activities

 

 

(11,927

)

 

 

(77,804

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock upon public offerings, net of issuance costs

 

 

 

 

 

158,287

 

Proceeds from term loan facility, net of issuance costs

 

 

1,451

 

 

 

 

Proceeds from issuance of common stock upon stock option exercises

 

 

446

 

 

 

35

 

Proceeds from issuance of common stock upon ESPP purchase

 

 

83

 

 

 

75

 

Payment of debt issuance costs

 

 

 

 

 

(161

)

Net cash provided by financing activities

 

 

1,980

 

 

 

158,236

 

Net change in cash and cash equivalents, and restricted cash

 

 

(58,488

)

 

 

48,216

 

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

 

$

39,720

 

 

$

141,576

 

Components of cash and cash equivalents, and restricted cash:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

39,695

 

 

$

141,551

 

Restricted cash

 

 

25

 

 

 

25

 

Total cash and cash equivalents, and restricted cash

 

$

39,720

 

 

$

141,576

 

Supplemental cash flow disclosures:

 

 

 

 

 

 

 

 

Issuance of common stock warrant in connection with term loan facility

 

$

574

 

 

$

634

 

Offering costs included in accounts payable and accrued expenses

 

$

 

 

$

607

 

Cash paid for income taxes

 

$

 

 

$

135

 

 

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

 

 

5


 

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 treatme