cbay-10q_20190930.htm

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


☐	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 Newark, CA		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

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.

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.

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.

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.

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