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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, 2022

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) 432-9270

 

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   

 As of November 7, 2022, the registrant had 46,536,970 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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

24

Item 4.

Controls and Procedures

24

PART II.

OTHER INFORMATION

25

Item 1.

Legal Proceedings

25

Item 1A.

Risk Factors

25

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

42

Item 3.

Default Upon Senior Securities

42

Item 4.

Mine Safety Disclosures

42

Item 5.

Other Information

42

Item 6.

Exhibits

43

Signatures

44

 

 

i


 

 

PART I—FINANCIAL INFORMATION

 

Item 1. Financial Statements.

89bio, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

72,401

 

 

$

52,432

 

Restricted cash

 

 

 

 

 

25

 

Short-term available-for-sale securities

 

 

120,940

 

 

 

98,288

 

Prepaid and other current assets

 

 

6,513

 

 

 

11,237

 

Total current assets

 

 

199,854

 

 

 

161,982

 

Operating lease right-of-use asset

 

 

403

 

 

 

 

Property and equipment, net

 

 

105

 

 

 

150

 

Other assets

 

 

218

 

 

 

290

 

Total assets

 

$

200,580

 

 

$

162,422

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

14,151

 

 

$

6,843

 

Accrued expenses

 

 

13,437

 

 

 

10,194

 

Operating lease liability, current

 

 

168

 

 

 

 

Term loan, current

 

 

6,667

 

 

 

2,500

 

Total current liabilities

 

 

34,423

 

 

 

19,537

 

Operating lease liability, non-current

 

 

229

 

 

 

 

Term loan, non-current, net

 

 

12,958

 

 

 

16,898

 

Other non-current liability

 

 

395

 

 

 

30

 

Total liabilities

 

 

48,005

 

 

 

36,465

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock

 

 

44

 

 

 

20

 

Additional paid-in capital

 

 

443,612

 

 

 

339,218

 

Accumulated other comprehensive loss

 

 

(440

)

 

 

(64

)

Accumulated deficit

 

 

(290,641

)

 

 

(213,217

)

Total stockholders’ equity

 

 

152,575

 

 

 

125,957

 

Total liabilities and stockholders’ equity

 

$

200,580

 

 

$

162,422

 

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

22,197

 

 

$

23,590

 

 

$

61,732

 

 

$

49,351

 

General and administrative

 

 

4,844

 

 

 

4,622

 

 

 

15,155

 

 

 

14,151

 

Total operating expenses

 

 

27,041

 

 

 

28,212

 

 

 

76,887

 

 

 

63,502

 

Loss from operations

 

 

(27,041

)

 

 

(28,212

)

 

 

(76,887

)

 

 

(63,502

)

Other income (expenses), net

 

 

238

 

 

 

(117

)

 

 

(534

)

 

 

(332

)

Net loss before tax

 

 

(26,803

)

 

 

(28,329

)

 

 

(77,421

)

 

 

(63,834

)

Income tax expense

 

 

(2

)

 

 

 

 

 

(3

)

 

 

 

Net loss

 

$

(26,805

)

 

$

(28,329

)

 

$

(77,424

)

 

$

(63,834

)

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(136

)

 

 

(4

)

 

 

(408

)

 

 

5

 

Foreign currency translation adjustments

 

 

14

 

 

 

6

 

 

 

32

 

 

 

11

 

Total other comprehensive (loss) income

 

$

(122

)

 

$

2

 

 

$

(376

)

 

$

16

 

Comprehensive loss

 

$

(26,927

)

 

$

(28,327

)

 

$

(77,800

)

 

$

(63,818

)

Net loss per share, basic and diluted

 

$

(0.57

)

 

$

(1.41

)

 

$

(2.63

)

 

$

(3.18

)

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

 

 

47,253,527

 

 

 

20,092,094

 

 

 

29,413,421

 

 

 

20,043,301

 

 

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, 2022

(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, 2021

 

 

20,317,204

 

 

$

20

 

 

$

339,218

 

 

$

(64

)

 

$

(213,217

)

 

$

125,957

 

Issuance of common stock upon exercise of stock options

 

 

12,065

 

 

 

 

 

 

29

 

 

 

 

 

 

 

 

 

29

 

Issuance of common stock upon vesting of restricted stock units, net

 

 

22,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,512

 

 

 

 

 

 

 

 

 

2,512

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,565

)

 

 

(25,565

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(192

)

 

 

 

 

 

(192

)

Balance as of March 31, 2022

 

 

20,351,384

 

 

 

20

 

 

 

341,759

 

 

 

(256

)

 

 

(238,782

)

 

 

102,741

 

Issuance of common stock upon ESPP purchases

 

 

15,979

 

 

 

 

 

 

43

 

 

 

 

 

 

 

 

 

43

 

Withholding taxes related to restricted stock units

 

 

 

 

 

 

 

 

(69

)

 

 

 

 

 

 

 

 

(69

)

Stock-based compensation

 

 

 

 

 

 

 

 

2,586

 

 

 

 

 

 

 

 

 

2,586

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,054

)

 

 

(25,054

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(62

)

 

 

 

 

 

(62

)

Balance as of June 30, 2022

 

 

20,367,363

 

 

 

20

 

 

 

344,319

 

 

 

(318

)

 

 

(263,836

)

 

 

80,185

 

Issuance of common stock and warrants in public offering, net of issuance costs

 

 

18,675,466

 

 

 

20

 

 

 

88,219

 

 

 

 

 

 

 

 

 

88,239

 

Issuance of common stock in at-the-market public offering, net of issuance costs

 

 

1,242,132

 

 

 

1

 

 

 

8,369

 

 

 

 

 

 

 

 

 

8,370

 

Issuance of common stock upon cashless exercise of warrants

 

 

3,143,682

 

 

 

3

 

 

 

(3

)

 

 

 

 

 

 

 

 

 

Issuance of common stock upon exercise of warrants

 

 

10,000

 

 

 

 

 

 

53

 

 

 

 

 

 

 

 

 

53

 

Issuance of common stock upon exercise of stock options

 

 

114,203

 

 

 

 

 

 

208

 

 

 

 

 

 

 

 

 

208

 

Issuance of common stock upon vesting of restricted stock units, net of withholding taxes

 

 

71,779

 

 

 

 

 

 

(53

)

 

 

 

 

 

 

 

 

(53

)

Stock-based compensation

 

 

 

 

 

 

 

 

2,500

 

 

 

 

 

 

 

 

 

2,500

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,805

)

 

 

(26,805

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(122

)

 

 

 

 

 

(122

)

Balance as of September 30, 2022

 

 

43,624,625

 

 

$

44

 

 

$

443,612

 

 

$

(440

)

 

$

(290,641

)

 

$

152,575

 

3


 

 

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

 

 

(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 purchases

 

 

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

 

 

 

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,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(77,424

)

 

$

(63,834

)

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

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

7,598

 

 

 

6,524

 

Accretion of final payment fee on term loan

 

 

365

 

 

 

 

Amortization of debt issuance costs

 

 

227

 

 

 

392

 

Amortization of premium on available-for-sale securities

 

 

(183

)

 

 

704

 

Non-cash operating lease expense

 

 

135

 

 

 

 

Depreciation

 

 

50

 

 

 

58

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid and other current assets

 

 

4,756

 

 

 

(4,119

)

Other assets

 

 

72

 

 

 

4

 

Accounts payable