UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
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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:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant’s telephone number, including area code)
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.
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).
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 the “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
Securities registered pursuant to 12(b) of the Act:
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Title of Class |
Trading Symbol |
Name of exchange on which registered |
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As of August 4, 2020, there were
Aldeyra Therapeutics, Inc.
Quarterly Report on Form 10-Q
For the Quarter Ended June 30, 2020
INDEX
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Page |
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PART I – FINANCIAL INFORMATION |
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ITEM 1. |
3 |
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Consolidated Balance Sheets at June 30, 2020 (Unaudited) and December 31, 2019 |
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4 |
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5 |
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6 |
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Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019 (Unaudited) |
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9 |
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ITEM 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 |
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ITEM 3. |
26 |
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ITEM 4. |
26 |
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PART II – OTHER INFORMATION |
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ITEM 1. |
27 |
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ITEM 1A. |
27 |
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ITEM 2. |
64 |
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ITEM 3. |
64 |
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ITEM 4. |
64 |
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ITEM 5. |
64 |
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ITEM 6. |
64 |
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65 |
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2
Part I – FINANCIAL INFORMATION
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Item 1. |
Condensed Consolidated Financial Statements |
ALDEYRA THERAPEUTICS, INC.
CONSOLIDATED BALANCE SHEETS
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June 30, |
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2020 |
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December 31, |
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(unaudited) |
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2019 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Cash equivalent - reverse repurchase agreements |
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Marketable securities |
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Prepaid expenses and other current assets |
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Total current assets |
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Right-of-use assets |
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Fixed assets, net |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Current portion of credit facility |
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- |
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Current portion of operating lease liabilities |
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Total current liabilities |
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Long-term debt |
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Total liabilities |
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Commitments and contingencies (Notes 13 and 14) |
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Stockholders' equity: |
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Common stock, voting, $ and |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
ALDEYRA THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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Operating expenses: |
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Research and development |
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$ |
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$ |
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$ |
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$ |
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Acquired in-process research and development |
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— |
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( |
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— |
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General and administrative |
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Loss from operations |
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( |
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( |
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( |
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( |
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Other income (expense): |
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Interest income |
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Interest expense |
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( |
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( |
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( |
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( |
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Total other income (expense), net |
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( |
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( |
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Loss before income taxes |
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( |
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( |
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( |
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( |
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Income tax benefit |
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— |
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— |
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— |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Net loss per share - basic and diluted |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Weighted average common shares outstanding - basic and diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
ALDEYRA THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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Net loss |
$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Other comprehensive (loss) income: |
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Unrealized gain (loss) on marketable securities, net of tax |
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( |
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( |
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Total other comprehensive (loss) income |
$ |
( |
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$ |
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$ |
( |
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$ |
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Comprehensive loss |
$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
ALDEYRA THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
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Stockholders' Equity |
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Common Voting Stock |
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Accumulated |
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Shares |
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Amount |
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Additional Paid-in Capital |
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Other Comprehensive Income/(Loss), net of tax |
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Accumulated Deficit |
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Total Stockholders' Equity |
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Balance, December 31, 2019 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Release of restrictions on Helio founders’ shares |
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( |
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— |
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— |
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— |
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Issuance of common stock, net of issuance costs |
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— |
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— |
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Issuance of common stock, exercise of stock options |
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— |
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— |
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Issuance of common stock, employee stock purchase plan |
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— |
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— |
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Issuance of common stock, vested restricted stock awards |
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( |
) |
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— |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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Balance, June 30, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Balance, December 31, 2018 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Issuance of common stock, acquisition of Helio Vision, Inc. |
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— |
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— |
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Issuance of common stock, net of issuance costs |
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— |
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— |
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Issuance of common stock, employee stock purchase plan |
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— |
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— |
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Issuance of common stock, vested restricted stock awards |
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( |
) |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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Balance, June 30, 2019 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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6
ALDEYRA THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
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Stockholders' Equity |
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Common Voting Stock |
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Accumulated Other |
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Shares |
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Amount |
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Additional Paid-in Capital |
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Comprehensive Income/(Loss), net of tax |
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Accumulated Deficit |
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Total Stockholders' Equity |
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Balance, March 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Release of restrictions on Helio founders’ shares |
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( |
) |
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— |
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— |
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— |
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Issuance of common stock, net of issuance costs |
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— |
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— |
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Issuance of common stock, exercise of stock options |
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— |
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— |
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Issuance of common stock, vested restricted stock awards |
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( |
) |
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— |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
|
Balance, June 30, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Balance, March 31, 2019 |
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$ |
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$ |
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$ |
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$ |
( |
) |
|
$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Issuance of common stock, employee stock purchase plan |
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— |
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— |
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Issuance of common stock, vested restricted stock awards |
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( |
) |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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|
( |
) |
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|
( |
) |
|
Balance, June 30, 2019 |
|
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|
$ |
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$ |
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|
$ |
|
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|
$ |
( |
) |
|
$ |
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|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
ALDEYRA THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
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Six Months Ended June 30, |
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2020 |
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2019 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
|
$ |
( |
) |
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$ |
( |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
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Acquired in-process research and development |
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— |
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Deferred taxes |
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— |
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( |
) |
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Stock-based compensation |
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Non-cash interest expense |
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Accretion on debt securities available for sale, net |
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( |
) |
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( |
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Depreciation and amortization expense |
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Change in assets and liabilities: |
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Prepaid expenses and other current assets |
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( |
) |
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( |
) |
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Accounts payable |
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( |
) |
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( |
) |
|
Accrued expenses |
|
|
( |
) |
|
|
( |
) |
|
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Acquisitions of fixed assets |
|
|
— |
|
|
|
( |
) |
|
Cash acquired in Helio asset acquisition |
|
|
— |
|
|
|
|
|
|
Purchases of marketable securities |
|
|
( |
) |
|
|
( |
) |
|
Sales of marketable securities |
|
|
|
|
|
|
|
|
|
Net cash provided by investing activities |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock, net of issuance costs |
|
|
|
|
|
|
|
|
|
Proceeds from exercise of stock options |
|
|
|
|
|
|
— |
|
|
Proceeds from employee stock purchase plan |
|
|
|
|
|
|
|
|
|
Debt issuance costs paid in cash |
|
|
— |
|
|
|
( |
) |
|
Net cash provided by financing activities |
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
|
|
|
|
( |
) |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION AND DISCLOSURES OF NONCASH ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Helio acquisition: |
|
|
|
|
|
|
|
|
|
Assets acquired |
|
$ |
— |
|
|
$ |
|
|
|
Liabilities acquired |
|
$ |
— |
|
|
$ |
|
|
|
Fair value of securities issued |
|
$ |
— |
|
|
$ |
|
|
|
Debt issuance costs not yet paid |
|
$ |
— |
|
|
$ |
|
|
|
Right-of-use assets acquired through operating leases |
|
$ |
— |
|
|
$ |
|
|
|
Receivable for proceeds from the issuance of common stock, net of issuance costs |
|
$ |
|
|
|
$ |
— |
|
|
Cash paid during the period for interest |
|
$ |
|
|
|
$ |
— |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
ALDEYRA THERAPEUTICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
|
1. |
NATURE OF BUSINESS |
Aldeyra Therapeutics, Inc., together with its wholly-owned subsidiaries (the “Company” or “Aldeyra”), a Delaware corporation, is a clinical-stage biotechnology company focused on the development of novel therapies with the potential to improve the lives of patients with immune-mediated diseases.
The Company’s principal activities to date include raising capital and research and development activities.
|
2. |
BASIS OF PRESENTATION |
The accompanying interim condensed consolidated financial statements and related disclosures are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission on March 12, 2020 (the “2019 Form 10-K”).
The financial information as of June 30, 2020, and the three and six months ended June 30, 2020 and 2019, respectively, is unaudited. In the opinion of management all adjustments, consisting only of normal recurring adjustments considered necessary for the fair presentation of financial position, results of operations, and cash flows at the dates and for the periods presented, have been included. The balance sheet data as of December 31, 2019 was derived from audited consolidated financial statements. The results of the Company’s operations for any interim periods are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year.
Based on its current operating plan, and not including additional access to capital that may become available under the Company’s credit facility, the Company believes that its cash, cash equivalents, and marketable securities as of June 30, 2020, along with sales of common stock pursuant to the Company’s Open Market Sales Agreement SM (“Jefferies Sales Agreement”) made between July 1, 2020 and July 13, 2020, will be sufficient to fund currently anticipated operating expenses through the end of 2022, including potential new drug application (NDA) approvals for reproxalap in dry eye disease and allergic conjunctivitis, assuming positive clinical trial results, and planned NDA submissions, acceptances, and approvals; the Phase 2 clinical trials of ADX-629 in COVID-19-associated respiratory compromise, atopic asthma, and psoriasis; and the continuation of Part 1 of the adaptive Phase 3 clinical trial in proliferative vitreoretinopathy contingent on patient enrollment. As a result of the COVID-19 pandemic, clinical site availability, staffing, and patient recruitment have been negatively affected and the timelines to complete the Company’s clinical trials may be delayed. The Company’s assessment of its liquidity and capital resources includes an estimate of the financial impacts of these changes. The Company will need to secure additional funding in the future, from one or more equity or debt financings, collaborations, or other sources, in order to carry out all of the Company’s planned research and development activities and regulatory activities; commercialize product candidates; or conduct any substantial, additional development requirements requested by the FDA. Additional funding may not be available to the Company on acceptable terms, or at all. If the Company is unable to secure additional capital, it will be required to significantly decrease the amount of planned expenditures and may be required to cease operations. In addition, the disruption in the capital markets caused by the COVID-19 outbreak could make any financing more challenging, and there can be no assurance that Aldeyra will be able to obtain such financing on commercially reasonable terms or at all.
Curtailment of operations would cause significant delays in the Company’s efforts to develop and introduce its products to market, which is critical to the realization of its business plan and the future operations of the Company.
9
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions, including fair value estimates for investments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting periods. The Company’s management evaluates its estimates and assumptions on an ongoing basis. Management’s most significant estimates in the Company’s conso