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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 September 30, 2019

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 001-36500

 

CymaBay Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

94-3103561

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

7575 Gateway Blvd, Suite 110

NewarkCA

 

94560

(Address of principal executive offices)

 

(Zip Code)

 

(510) 293-8800

(Registrant’s telephone number, including area code)

 

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, $0.0001 par value per share

CBAY

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, 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.

 

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 31, 2019, there were 68,701,043 shares of the registrant’s Common Stock outstanding.

 

 

 

 


 

CYMABAY THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

 

 

 

 

 

Page

PART I

 

FINANCIAL INFORMATION

 

3

Item 1.

 

Financial Statements

 

3

 

 

Condensed Consolidated Balance Sheets at September 30, 2019 and December 31, 2018 (unaudited)

 

3

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2019 and 2018 (unaudited)

 

4

 

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)

 

5

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2019 and 2018 (unaudited)

 

6

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

8

Item 2.

 

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

 

19

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

25

Item 4.

 

Controls and Procedures

 

25

 

 

 

 

 

PART II

 

OTHER INFORMATION

 

26

Item 1A.

 

Risk Factors

 

26

Item 6.

 

Exhibits

 

49

 

 

 

 

 

Signatures

 

50

 

 

 

 

2


 

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

CymaBay Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

43,462

 

 

$

48,995

 

Marketable securities

 

 

175,132

 

 

 

129,669

 

Accrued interest receivable

 

 

509

 

 

 

304

 

Prepaid research and development expenses

 

 

7,900

 

 

 

1,670

 

Other prepaid expenses

 

 

768

 

 

 

924

 

Total current assets

 

 

227,771

 

 

 

181,562

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

2,549

 

 

 

2,905

 

Operating lease right-of-use asset

 

 

219

 

 

 

-

 

Other assets

 

 

1,261

 

 

 

2,280

 

Total assets

 

$

231,800

 

 

$

186,747

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,494

 

 

$

1,973

 

Accrued research and development expenses

 

 

10,819

 

 

 

8,588

 

Other accrued liabilities

 

 

5,045

 

 

 

3,854

 

Total current liabilities

 

 

17,358

 

 

 

14,415

 

Long-term portion of operating lease liability

 

 

1,851

 

 

 

-

 

Other liabilities

 

 

-

 

 

 

1,914

 

Total liabilities

 

 

19,209

 

 

 

16,329

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value: 10,000,000 shares authorized; no shares

   issued and outstanding

 

 

-

 

 

 

-

 

Common stock, $0.0001 par value: 100,000,000 shares authorized; 68,701,043

   and 59,456,493 shares issued and outstanding as of September 30, 2019 and

   December 31, 2018, respectively

 

 

7

 

 

 

6

 

Additional paid-in capital

 

 

808,866

 

 

 

693,534

 

Accumulated other comprehensive income (loss)

 

 

177

 

 

 

(58

)

Accumulated deficit

 

 

(596,459

)

 

 

(523,064

)

Total stockholders’ equity

 

 

212,591

 

 

 

170,418

 

Total liabilities and stockholders’ equity

 

$

231,800

 

 

$

186,747

 

 

See accompanying notes to the condensed consolidated financial statements.

3


 

CymaBay Therapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share information)

(unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

23,193

 

 

$

17,853

 

 

$

62,900

 

 

$

41,727

 

General and administrative

 

 

4,514

 

 

 

3,276

 

 

 

14,706

 

 

 

10,223

 

Total operating expenses

 

 

27,707

 

 

 

21,129

 

 

 

77,606

 

 

 

51,950

 

Loss from operations

 

 

(27,707

)

 

 

(21,129

)

 

 

(77,606

)

 

 

(51,950

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1,425

 

 

 

1,113

 

 

 

4,211

 

 

 

2,882

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(336

)

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(407

)

Other income (expense), net

 

 

-

 

 

 

1,453

 

 

 

-

 

 

 

(3,288

)

Total other income (expense)

 

 

1,425

 

 

 

2,566

 

 

 

4,211

 

 

 

(1,149

)

Net loss

 

$

(26,282

)

 

$

(18,563

)

 

$

(73,395

)

 

$

(53,099

)

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on marketable securities

 

 

(51

)

 

 

36

 

 

 

235

 

 

 

13

 

Total other comprehensive (loss) income

 

 

(51

)

 

 

36

 

 

 

235

 

 

 

13

 

Comprehensive loss

 

$

(26,333

)

 

$

(18,527

)

 

$

(73,160

)

 

$

(53,086

)

Basic net loss per common share

 

$

(0.38

)

 

$

(0.31

)

 

$

(1.10

)

 

$

(0.93

)

Diluted net loss per common share

 

$

(0.38

)

 

$

(0.34

)

 

$

(1.10

)

 

$

(0.93

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding used to

   calculate basic net loss per common share

 

 

68,701,043

 

 

 

59,121,600

 

 

 

66,454,750

 

 

 

57,255,666

 

Weighted average common shares outstanding used to

   calculate diluted net loss per common share

 

 

68,701,043

 

 

 

59,387,780

 

 

 

66,454,750

 

 

 

57,298,105

 

 

See accompanying notes to the condensed consolidated financial statements.

4


 

CymaBay Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2019

 

 

2018

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(73,395

)

 

$

(53,099

)

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

422

 

 

 

39

 

Stock-based compensation expense

 

 

7,483

 

 

 

5,275

 

Net accretion and amortization of investments in marketable securities

 

 

(1,909

)

 

 

(1,358

)

Non-cash interest associated with debt discount accretion

 

 

-

 

 

 

148

 

Loss on extinguishment of debt

 

 

-

 

 

 

407

 

Change in fair value of warrant liability

 

 

-

 

 

 

3,710

 

Gain on extinguishment of warrant liability

 

 

-

 

 

 

(422

)

Accretion of tenant improvement allowance

 

 

-

 

 

 

(154

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Receivable from collaboration

 

 

-

 

 

 

5,000

 

Interest receivable and other current assets

 

 

(205

)

 

 

(93

)

Prepaid expenses

 

 

(6,074

)

 

 

(585

)

Other assets

 

 

1,019

 

 

 

(729

)

Accounts payable

 

 

(479

)

 

 

318

 

Accrued liabilities

 

 

3,363

 

 

 

6,245

 

Accrued interest payable

 

 

-

 

 

 

(43

)

Net cash used in operating activities

 

 

(69,775

)

 

 

(35,341

)

Investing activities

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(289

)

 

 

(60

)

Purchases of marketable securities

 

 

(246,180

)

 

 

(249,422

)

Proceeds from maturities of marketable securities

 

 

198,881

 

 

 

168,600

 

Proceeds from sale of marketable securities

 

 

3,980

 

 

 

-

 

Net cash used in investing activities

 

 

(43,608

)

 

 

(80,882

)

Financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock, net of issuance costs

 

 

107,746

 

 

 

135,520

 

Proceeds from issuance of common stock pursuant to equity award plans

 

 

104

 

 

 

3,547

 

Proceeds from issuance of common stock upon exercise of warrants

 

 

-

 

 

 

2,550

 

Repayment of facility loan principal

 

 

-

 

 

 

(6,527

)

Payment of fees to extinguish facility loan

 

 

-

 

 

 

(126

)

Net cash provided by financing activities

 

 

107,850

 

 

 

134,964

 

Net (decrease) increase in cash and cash equivalents

 

 

(5,533

)

 

 

18,741

 

Cash and cash equivalents at beginning of period

 

 

48,995

 

 

 

23,054

 

Cash and cash equivalents at end of period

 

$

43,462

 

 

$

41,795

 

Supplemental disclosure

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities

 

$

470

 

 

$

-

 

Cash paid for interest

 

$

-

 

 

$

231

 

Supplemental non-cash investing and financing activities

 

 

 

 

 

 

 

 

Lessor funded lease incentives included in other current assets

 

$

-

 

 

$

2,100

 

Issuance of common stock upon warrant exercises

 

$

-

 

 

$

9,379

 

 

See accompanying notes to the condensed consolidated financial statements.

5


 

CymaBay Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share information)

(unaudited)

 

 

 

Three and Nine Months Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balances as of December 31, 2018

 

 

59,456,493

 

 

$

6

 

 

$

693,534

 

 

$

(58

)

 

$

(523,064

)

 

$

170,418

 

Issuance of common stock upon

   exercise of stock options

   and incentive awards

 

 

37,550

 

 

 

-

 

 

 

97

 

 

 

-

 

 

 

-

 

 

 

97

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

2,342

 

 

 

-

 

 

 

-

 

 

 

2,342

 

Issuance of common stock, net of

   $7,254 issuance costs

 

 

9,200,000

 

 

 

1

 

 

 

107,745

 

 

 

-

 

 

 

-

 

 

 

107,746

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(23,075

)

 

 

(23,075

)

Net unrealized gain on marketable

   securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

103

 

 

 

-

 

 

 

103

 

Balances as of March 31, 2019

 

 

68,694,043

 

 

$

7

 

 

$

803,718

 

 

$

45

 

 

$

(546,139

)

 

$

257,631

 

Issuance of common stock upon

   exercise of stock options

   and incentive awards

 

 

7,000

 

 

 

-

 

 

 

7

 

 

 

-

 

 

 

-

 

 

 

7

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

2,276

 

 

 

-

 

 

 

-

 

 

 

2,276

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(24,038

)

 

 

(24,038

)

Net unrealized gain on marketable

   securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

183

 

 

 

-

 

 

 

183

 

Balances as of June 30, 2019

 

 

68,701,043

 

 

$

7

 

 

$

806,001

 

 

$

228

 

 

$

(570,177

)

 

$

236,059

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

2,865

 

 

 

-

 

 

 

-

 

 

 

2,865

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(26,282

)

 

 

(26,282

)

Net unrealized loss on marketable

   securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(51

)

 

 

-

 

 

 

(51

)

Balances as of September 30, 2019

 

 

68,701,043

 

 

$

7

 

 

$

808,866

 

 

$

177

 

 

$

(596,459

)

 

$

212,591

 

 

See accompanying notes to the condensed consolidated financial statements.

 

6


 

CymaBay Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share information)

(unaudited)

 

 

 

Three and Nine Months Ended September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balances as of December 31, 2017

 

 

44,408,796

 

 

$

4

 

 

$

535,503

 

 

$

(44

)

 

$

(450,516

)

 

$

84,947

 

Issuance of common stock upon

   exercise of warrants

 

 

297,144

 

 

 

-

 

 

 

3,753

 

 

 

-

 

 

 

-

 

 

 

3,753

 

Issuance of common stock upon

   exercise of stock options

   and incentive awards

 

 

667,656

 

 

 

-

 

 

 

3,276

 

 

 

-

 

 

 

-

 

 

 

3,276

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

1,796

 

 

 

-

 

 

 

-

 

 

 

1,796

 

Issuance of common stock, net of

   $8,553 issuance costs

 

 

13,340,000

 

 

 

2

 

 

 

135,518

 

 

 

-

 

 

 

-

 

 

 

135,520

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(17,005

)

 

 

(17,005

)

Net unrealized loss on marketable

   securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(88

)

 

 

-

 

 

 

(88

)

Balances as of March 31, 2018

 

 

58,713,596

 

 

$

6

 

 

$

679,846

 

 

$

(132

)

 

$

(467,521

)

 

$

212,199

 

Issuance of common stock upon

   exercise of warrants

 

 

185,507

 

 

 

-

 

 

 

2,484

 

 

 

-

 

 

 

-

 

 

 

2,484

 

Issuance of common stock upon

   exercise of stock options

   and incentive awards

 

 

60,833

 

 

 

-

 

 

 

245

 

 

 

-

 

 

 

-

 

 

 

245

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

1,751

 

 

 

-

 

 

 

-

 

 

 

1,751

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(17,531

)

 

 

(17,531

)

Net unrealized gain on marketable

   securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

65

 

 

 

-

 

 

 

65

 

Balances as of June 30, 2018

 

 

58,959,936

 

 

$

6

 

 

$

684,326

 

 

$

(67

)

 

$

(485,052

)

 

$

199,213

 

Issuance of common stock upon

   exercise of warrants

 

 

474,194

 

 

 

-

 

 

 

5,691

 

 

 

-

 

 

 

-

 

 

 

5,691

 

Issuance of common stock upon

   exercise of stock options

   and incentive awards