Quarterly report pursuant to Section 13 or 15(d)

Organization and Description of Business

v3.21.2
Organization and Description of Business
9 Months Ended
Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business
1. Organization and Description of Business
CymaBay Therapeutics, Inc. (the Company or CymaBay) is a clinical-stage biopharmaceutical
 
company focused on developing and providing access to innovative therapies for patients with liver and other chronic diseases with high unmet medical need. The Company’s key clinical development candidate is seladelpar. Seladelpar has been under development primarily for the treatment of liver diseases, including primary biliary cholangitis (PBC) and nonalcoholic steatohepatitis (NASH). The Company was incorporated in Delaware in October 1988 as Transtech Corporation. The Company’s headquarters and operations are located in Newark, California and it operates in one segment.
Liquidity
The Company has incurred net operating losses and negative cash flows from operations since its inception. During the three and nine months ended September 30, 2021, the Company incurred a net loss of $22.7 million and $63.5 million, respectively. During the nine months ended September 30, 2021, the Company used $55.2 million of cash in operations. At September 30, 2021, the Company had an accumulated deficit of $740.3 million.
Historically, the Company has incurred substantial research and development expenses in the course of studying its product candidates in clinical trials. To date, none of the Company’s product candidates have been approved for marketing and sale, and the Company has not recorded any revenue from product sales. Generally, the Company’s ability to achieve profitability is dependent on its ability to successfully develop, acquire or
in-license
additional product candidates, conduct clinical trials for those product candidates, obtain regulatory approvals, and support commercialization activities for those product candidates. Any products developed will require approval of the U.S. Food and Drug Administration (FDA) or a foreign regulatory authority prior to commercial sale. The regulatory approval process is expensive, time-consuming, and uncertain, and any denial or delay of approval could have a material adverse effect on the Company. Even if approved, the Company’s products may not achieve market acceptance and will face competition from both generic and branded pharmaceutical products.
As of September 30, 2021, the Company had cash, cash equivalents and marketable securities totaling $113.8 million. On July 30, 2021, the Company entered into a Development Financing Agreement (the “Financing Agreement”) with ABW Cyclops SPV LP, an affiliate of Abingworth LLP (“Abingworth”), pursuant to which Abingworth committed to provide $75.0 million in funding in three equal quarterly installments, and an additional amount of $
25.0
 million at the Company’s option, for a total funding commitment of up to $
100
 million, to support the Company’s development of seladelpar for the treatment of primary biliary cholangitis. The Company received the first $25.0 million installment during the three months ended September 30, 2021, and the second $25 million installment in November 2021. Refer to
Note 5—Development Financing
Agreement
for further details. As the Company continues to advance its clinical studies of seladelpar, the Company believes existing cash, cash equivalents, and marketable securities on hand as of September 30, 2021 together with additional proceeds expected from the development financing will be sufficient to fund the Company’s operating plan into 2023.
The Company has historically obtained, and expects to obtain in the future, additional financing to fund its business strategy through: future equity offerings; debt financing; one or more possible licenses, collaborations or other similar arrangements with respect to development and/or commercialization rights of the Company’s product candidates; or a combination of the above. The Company’s failure to raise capital as and when needed could have a negative impact on its financial condition and its ability to pursue its business strategies. If adequate funds are not available to the Company, it could have a material adverse effect on the Company’s business, results of operations, and financial condition. Market volatility resulting from the global novel coronavirus disease
(COVID-19)
pandemic or other factors could also adversely impact the Company’s ability to access capital when and as needed. Failure to raise sufficient capital when needed could require the Company to significantly delay, scale back or discontinue one or more of its product development programs, commercialization efforts, or other aspects of its business plans, and the Company’s operating results and financial condition would be adversely affected.