10-Q
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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 June 30, 2023

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: 001-38443

 

Cogent Biosciences, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

46-5308248

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

 

275 Wyman Street, 3rd Floor

Waltham, Massachusetts

 

02451

(Address of principal executive offices)

 

(Zip code)

(617) 945-5576

(Registrant’s telephone number, including area code)

 

 

(Former name or former address, if changed since last report)

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, $0.001 Par Value

 

COGT

 

The 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 August 4, 2023, there were 85,465,249 shares of the registrant’s Common Stock, $0.001 par value per share, outstanding.

 

 

 


FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements, which reflect our current views with respect to, among other things, our operations and financial performance. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expects,” “might,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “seek,” “would” or “continue,” or the negative of these terms or other similar expressions. The forward looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in Item 1A. “Risk Factors.” Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include:

the potential impacts of raising additional capital, including dilution to our existing stockholders, restrictions on our operations or requirements that we relinquish rights to our technologies or product candidates;
the success, cost, and duration of our product development activities and clinical trials, including the enrollment rates in our clinical trials;
the timing of our planned regulatory submissions to the FDA for our bezuclastinib product candidate and any other product candidates we may develop;
our ability to obtain and maintain regulatory approval for our bezuclastinib product candidate and any other product candidates we may develop, and any related restrictions, limitations, and/or warnings in the label of an approved product candidate;
the potential for our identified research priorities to advance our bezuclastinib product candidate or for our teams to discover and develop additional product candidates;
the ability to license additional intellectual property rights relating to our bezuclastinib product candidate or future product candidates from third-parties and to comply with our existing or future license agreements and/or collaboration agreements;
our ability to commercialize our bezuclastinib product candidate and future product candidates in light of the intellectual property rights of others;
our ability to obtain funding for our operations, including funding necessary to complete further discovery, development and commercialization of our existing and future product candidates;
the scalability and commercial viability of our manufacturing methods and processes;
the commercialization of our product candidates, if approved;
our ability to attract collaborators with development, regulatory, and commercialization expertise;
future agreements with third parties in connection with the commercialization of our product candidates and any other approved product;
the size and growth potential of the markets for our product candidates, and our ability to serve those markets;
the rate and degree of market acceptance of our product candidates;
the pricing and reimbursement of our product candidates, if approved;
regulatory developments in the United States and foreign countries;

i


the impact of adverse business and economic conditions including inflationary pressures, general economic slowdown or a recession, increasing interest rates, changes in monetary policy, banking institution instability and the prospect of a shutdown of the U.S. federal government;
our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;
the development and success of competing therapies that are or may be under development in clinical trials or that are or may become available commercially;
our ability to attract and retain key scientific and management personnel;
the accuracy of our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing;
our use of the proceeds from the private placements, sales of our preferred stock and public offerings of our common stock from time to time;
our expectations regarding our ability to obtain and maintain intellectual property protection for our bezuclastinib product candidate and future product candidates; and
business interruptions resulting from public health crises, which could cause a disruption to the development of our product candidates and adversely impact our business.

While we may elect to update these forward-looking statements at some point in the future, whether as a result of any new information, future events, or otherwise, we have no current intention of doing so except to the extent required by applicable law.

ii


Cogent Biosciences, Inc.

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

4

 

Notes to Unaudited Condensed Consolidated Financial Statements

5

Item 2.

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

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

27

Item 4.

Controls and Procedures

27

 

PART II—OTHER INFORMATION

 

Item 1.

Legal Proceedings

28

Item 1A.

Risk Factors

28

Item 2.

Recent Sales of Unregistered Securities and Use of Proceeds

28

Item 3.

Defaults Upon Senior Securities

28

Item 4.

Mine Safety Disclosures

28

Item 5.

Other Information

28

Item 6.

Exhibits

29

Signatures

30

 

iii


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

COGENT BIOSCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

214,317

 

 

$

139,886

 

Short-term marketable securities

 

 

115,082

 

 

 

119,390

 

Prepaid expenses and other current assets

 

 

5,120

 

 

 

4,435

 

Restricted cash

 

 

 

 

 

1,255

 

Total current assets

 

 

334,519

 

 

 

264,966

 

Long-term marketable securities

 

 

21,512

 

 

 

 

Operating lease, right-of-use asset

 

 

22,468

 

 

 

23,316

 

Property and equipment, net

 

 

9,095

 

 

 

7,783

 

Other assets

 

 

4,775

 

 

 

4,745

 

Total assets

 

$

392,369

 

 

$

300,810

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

7,161

 

 

$

5,842

 

Accrued expenses and other current liabilities

 

 

17,419

 

 

 

17,884

 

CVR liability (Note 3)

 

 

 

 

 

1,700

 

Operating lease liability

 

 

1,177

 

 

 

1,423

 

Total current liabilities

 

 

25,757

 

 

 

26,849

 

Operating lease liability, net of current portion

 

 

18,184

 

 

 

18,226

 

Total liabilities

 

 

43,941

 

 

 

45,075

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value; 9,000,000 shares authorized; no shares issued
   or outstanding

 

 

 

 

 

 

Series A non-voting convertible preferred stock, $0.001 par value; 1,000,000 
   shares authorized;
77,050 and 81,050 shares issued and outstanding at
   June 30, 2023 and December 31, 2022, respectively

 

 

62,310

 

 

 

65,830

 

Common stock, $0.001 par value; 150,000,000 shares authorized; 85,334,165
   shares and
69,893,434 shares issued and outstanding at June 30, 2023 and
   December 31, 2022, respectively

 

 

85

 

 

 

70

 

Additional paid-in capital

 

 

780,007

 

 

 

601,153

 

Accumulated other comprehensive loss

 

 

(97

)

 

 

(104

)

Accumulated deficit

 

 

(493,877

)

 

 

(411,214

)

Total stockholders’ equity

 

 

348,428

 

 

 

255,735

 

Total liabilities and stockholders’ equity

 

$

392,369

 

 

$

300,810

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


 

COGENT BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

(unaudited)

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development

$

38,871

 

 

$

29,479

 

 

$

74,909

 

 

$

54,949

 

General and administrative

 

8,214

 

 

 

6,376

 

 

 

15,413

 

 

 

12,324

 

Total operating expenses

 

47,085

 

 

 

35,855

 

 

 

90,322

 

 

 

67,273

 

Loss from operations

 

(47,085

)

 

 

(35,855

)

 

 

(90,322

)

 

 

(67,273

)

Other income:

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

2,741

 

 

 

272

 

 

 

5,009

 

 

 

379

 

Other income, net

 

268

 

 

 

656

 

 

 

950

 

 

 

1,333

 

Change in fair value of CVR liability

 

 

 

 

 

 

 

1,700

 

 

 

 

Total other income, net

 

3,009

 

 

 

928

 

 

 

7,659

 

 

 

1,712

 

Net loss

$

(44,076

)

 

$

(34,927

)

 

$

(82,663

)

 

$

(65,561

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.59

)

 

$

(0.71

)

 

$

(1.14

)

 

$

(1.39

)

Weighted average common shares outstanding, basic and diluted

 

74,753,269

 

 

 

49,388,936

 

 

 

72,755,210

 

 

 

47,259,261

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(44,076

)

 

$

(34,927

)

 

$

(82,663

)

 

$

(65,561

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses) on marketable securities

 

(113

)

 

 

 

 

 

7

 

 

 

 

Total other comprehensive loss

 

(113

)

 

 

 

 

 

7

 

 

 

 

Comprehensive loss

$

(44,189

)

 

$

(34,927

)

 

$

(82,656

)

 

$

(65,561

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


 

COGENT BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(unaudited)

 

 

 

Series A Non-Voting
Convertible Preferred
Stock

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated Other Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2022

 

 

81,050

 

 

$

65,830

 

 

 

69,893,434

 

 

$

70

 

 

$

601,153

 

 

$

(104

)

 

$

(411,214

)

 

$

255,735

 

Conversion of Series A non-voting preferred
   stock into common stock

 

 

(4,000

)

 

 

(3,520

)

 

 

1,000,000

 

 

 

1

 

 

 

3,519

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under Employee
   Stock Purchase Plan

 

 

 

 

 

 

 

 

39,228

 

 

 

 

 

 

313

 

 

 

 

 

 

 

 

 

313

 

Issuance of common stock upon exercise of
   stock options

 

 

 

 

 

 

 

 

14,128

 

 

 

 

 

 

132

 

 

 

 

 

 

 

 

 

132

 

Unrealized gains on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

120

 

 

 

 

 

 

120

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,850

 

 

 

 

 

 

 

 

 

5,850

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(38,587

)

 

 

(38,587

)

Balances at March 31, 2023

 

 

77,050

 

 

$

62,310

 

 

 

70,946,790

 

 

$

71

 

 

$

610,967

 

 

$

16

 

 

$

(449,801

)

 

$

223,563

 

Issuance of common stock in underwritten public
   offering, net of offering costs of $
10.7 million

 

 

 

 

 

 

 

 

14,375,000

 

 

 

14

 

 

 

161,775

 

 

 

 

 

 

 

 

 

161,789

 

Issuance of common stock upon exercise of
   stock options

 

 

 

 

 

 

 

 

12,375

 

 

 

 

 

 

102

 

 

 

 

 

 

 

 

 

102

 

Unrealized losses on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

(113

)

 

 

 

 

 

(113

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,163

 

 

 

 

 

 

 

 

 

7,163

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

(44,076

)

 

 

(44,076

)

Balances at June 30, 2023

 

 

77,050

 

 

$

62,310

 

 

 

85,334,165

 

 

$

85

 

 

$

780,007

 

 

$

(97

)

 

$

(493,877

)

 

$

348,428

 

 

 

 

 

Series A Non-Voting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible Preferred
Stock

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2021

 

 

103,289

 

 

$

85,400

 

 

 

43,805,922

 

 

$

44

 

 

$

399,713

 

 

$

(270,973

)

 

$

214,184

 

Conversion of Series A non-voting preferred
   stock into common stock

 

 

(7,955

)

 

 

(7,000

)

 

 

1,988,750

 

 

 

2

 

 

 

6,998

 

 

 

 

 

 

 

Issuance of common stock to settle CVR
   liability

 

 

 

 

 

 

 

 

18,995

 

 

 

 

 

 

129

 

 

 

 

 

 

129

 

Issuance of common stock for services

 

 

 

 

 

 

 

 

5,599

 

 

 

 

 

 

9

 

 

 

 

 

 

9

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,175

 

 

 

 

 

 

4,175

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30,634

)

 

 

(30,634

)

Balances at March 31, 2022

 

 

95,334

 

 

$

78,400

 

 

 

45,819,266

 

 

$

46

 

 

$

411,024

 

 

$

(301,607

)

 

$

187,863

 

Issuance of common stock and pre-funded
   warrants in underwritten public offering,
   net of offering costs of $
10.8 million

 

 

 

 

 

 

 

 

17,899,698

 

 

 

18

 

 

 

161,897

 

 

 

 

 

 

161,915

 

Conversion of Series A non-voting preferred
   stock into common stock

 

 

(7,955

)

 

 

(7,000

)

 

 

1,988,750

 

 

 

2

 

 

 

6,998

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,534

 

 

 

 

 

 

4,534

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34,927

)

 

 

(34,927

)

Balances at June 30, 2022

 

 

87,379

 

 

$

71,400

 

 

 

65,707,714

 

 

$

66

 

 

$

584,453

 

 

$

(336,534

)

 

$

319,385

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


 

COGENT BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(82,663

)

 

$

(65,561

)

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

 

 

 

 

 

 

Depreciation and amortization expense

 

 

1,091

 

 

 

166

 

Stock-based compensation expense

 

 

13,013

 

 

 

8,709

 

Amortization of operating leases, right-of-use assets

 

 

848

 

 

 

1,064

 

Change in fair value of CVR liability

 

 

(1,700

)

 

 

 

Net amortization (accretion) of premiums (discounts) on marketable securities

 

 

(1,780

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(685

)

 

 

(909

)

Other assets

 

 

(30

)

 

 

(1,168

)

Accounts payable

 

 

1,319

 

 

 

9

 

Accrued expenses and other current liabilities

 

 

(708

)

 

 

3,173

 

Operating lease liability

 

 

(288

)

 

 

(273

)

Net cash used in operating activities

 

 

(71,583

)