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S

 

 

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 September 30, 2021

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)

 

200 Cambridge Park Drive, Suite 2500

Cambridge, Massachusetts

 

02140

(Address of principal executive offices)

 

(Zip code)

(617) 945-5576

(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, $0.001 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 November 8, 2021, there were 39,851,022 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” in our most recent Annual Report on Form 10-K. 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;

 

business interruptions resulting from the coronavirus disease (“COVID-19”) outbreak or similar public health crises, which could cause a disruption to the development of our product candidates and adversely impact our business;

 

the success, cost, and timing of our product development activities and clinical trials;

 

the timing of our planned regulatory submissions to the FDA for our product candidate bezuclastinib, also known as CGT9486;

 

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 research team to discover additional product candidates;

 

the ability to license additional intellectual property rights relating to our current 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 current 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 plans to research, discover, develop, and commercialize our product candidates;

 

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


 

 

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 become available in clinical trials or 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 expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act;

 

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; and

 

our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates.

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

5

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

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

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

26

Item 4.

Controls and Procedures

26

 

PART II—OTHER INFORMATION

 

Item 1.

Legal Proceedings

27

Item 1A.

Risk Factors

27

Item 6.

Exhibits

28

Signatures

29

 

 

 

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)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

202,888

 

 

$

242,190

 

Prepaid expenses and other current assets

 

 

4,616

 

 

 

2,722

 

Total current assets

 

 

207,504

 

 

 

244,912

 

Operating lease, right-of-use asset

 

 

3,249

 

 

 

4,615

 

Property and equipment, net

 

 

1,341

 

 

 

134

 

Restricted cash

 

 

1,255

 

 

 

1,255

 

Other assets

 

 

2,036

 

 

 

 

Total assets

 

$

215,385

 

 

$

250,916

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,349

 

 

$

732

 

Accrued expenses and other current liabilities

 

 

7,047

 

 

 

4,779

 

CVR liability (Note 3)

 

 

3,060

 

 

 

5,531

 

Operating lease liability

 

 

2,253

 

 

 

2,052

 

Total current liabilities

 

 

16,709

 

 

 

13,094

 

Operating lease liability, net of current portion

 

 

1,438

 

 

 

3,155

 

Total liabilities

 

 

18,147

 

 

 

16,249

 

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; 103,289 and 132,244 shares issued and outstanding at

   September 30, 2021 and December 31, 2020, respectively

 

 

85,400

 

 

 

110,881

 

Common stock, $0.001 par value; 150,000,000 shares authorized; 39,851,022

   shares and 32,347,905 shares issued and outstanding at September 30, 2021 and

   December 31, 2020, respectively

 

 

40

 

 

 

32

 

Additional paid-in capital

 

 

357,859

 

 

 

322,454

 

Accumulated deficit

 

 

(246,061

)

 

 

(198,700

)

Total stockholders’ equity

 

 

197,238

 

 

 

234,667

 

Total liabilities and stockholders’ equity

 

$

215,385

 

 

$

250,916

 

 

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Collaboration revenue

 

$

 

 

$

312

 

 

$

 

 

$

7,871

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

14,798

 

 

 

5,003

 

 

 

35,399

 

 

 

19,630

 

General and administrative

 

 

5,021

 

 

 

5,598

 

 

 

14,512

 

 

 

12,074

 

Acquired in-process research and development

 

 

 

 

 

46,910

 

 

 

 

 

 

46,910

 

Total operating expenses

 

 

19,819

 

 

 

57,511

 

 

 

49,911

 

 

 

78,614

 

Loss from operations

 

 

(19,819

)

 

 

(57,199

)

 

 

(49,911

)

 

 

(70,743

)

Other income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

115

 

 

 

23

 

 

 

360

 

 

 

73

 

Gain on disposal of long-lived assets

 

 

 

 

 

7,463

 

 

 

 

 

 

7,470

 

Other income

 

 

620

 

 

 

239

 

 

 

1,847

 

 

 

239

 

Change in fair value of CVR liability

 

 

 

 

 

(509

)

 

 

343

 

 

 

(509

)

Total other income

 

 

735

 

 

 

7,216

 

 

 

2,550

 

 

 

7,273

 

Net loss and comprehensive loss

 

$

(19,084

)

 

$

(49,983

)

 

$

(47,361

)

 

$

(63,470

)

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

 

$

(0.48

)

 

$

(5.07

)

 

$

(1.25

)

 

$

(7.56

)

Weighted average common shares outstanding, basic and diluted

 

 

39,848,943

 

 

 

9,850,530

 

 

 

37,741,526

 

 

 

8,392,741

 

 

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

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2020

 

 

132,244

 

 

$

110,881

 

 

 

32,347,905

 

 

$

32

 

 

$

322,454

 

 

$

(198,700

)

 

$

234,667

 

Conversion of Series A non-voting preferred

   stock into common stock

 

 

(18,409

)

 

 

(16,200

)

 

 

4,602,250

 

 

 

5

 

 

 

16,195

 

 

 

 

 

 

 

Issuance of common stock to settle CVR liability

 

 

 

 

 

 

 

 

212,429

 

 

 

 

 

 

2,043

 

 

 

 

 

 

2,043

 

Issuance of common stock for services

 

 

 

 

 

 

 

 

31,683

 

 

 

 

 

 

260

 

 

 

 

 

 

260

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,521

 

 

 

 

 

 

1,521

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,728

)

 

 

(11,728

)

Balances at March 31, 2021

 

 

113,835

 

 

$

94,681

 

 

 

37,194,267

 

 

$

37

 

 

$

342,473

 

 

$

(210,428

)

 

$

226,763

 

Conversion of Series A non-voting preferred

   stock into common stock

 

 

(10,546

)

 

 

(9,281

)

 

 

2,636,500

 

 

 

3

 

 

 

9,278

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,590

 

 

 

 

 

 

2,590

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,549

)

 

 

(16,549

)

Balances at June 30, 2021

 

 

103,289

 

 

$

85,400

 

 

 

39,830,767

 

 

$

40

 

 

$

354,341

 

 

$

(226,977

)

 

$

212,804

 

Issuance of common stock upon exercise of

   stock options

 

 

 

 

 

 

 

 

15,758

 

 

 

 

 

 

24

 

 

 

 

 

 

24

 

Issuance of common stock under Employee

   Stock Purchase Plan

 

 

 

 

 

 

 

 

4,497

 

 

 

 

 

 

31

 

 

 

 

 

 

31

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,463

 

 

 

 

 

 

3,463

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,084

)

 

 

(19,084

)

Balances at September 30, 2021

 

 

103,289

 

 

 

85,400

 

 

 

39,851,022

 

 

 

40

 

 

 

357,859

 

 

 

(246,061

)

 

 

197,238

 

 

3


 

 

 

 

 

 

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, 2019

 

 

 

 

$

 

 

 

7,665,763

 

 

$

8

 

 

$

155,646

 

 

$

(123,892

)

 

$

31,762

 

Issuance of common stock upon

   exercise of stock options

 

 

 

 

 

 

 

 

51,823

 

 

 

 

 

 

38

 

 

 

 

 

 

38

 

Issuance of common stock under

   Employee Stock Purchase Plan

 

 

 

 

 

 

 

 

14,252

 

 

 

 

 

 

35

 

 

 

 

 

 

35

 

Issuance of common stock to LPC as

   a commitment fee

 

 

 

 

 

 

 

 

181,595

 

 

 

 

 

 

262

 

 

 

 

 

 

262

 

Acquisition and retirement of

   treasury stock

 

 

 

 

 

 

 

 

(207,961

)

 

 

 

 

 

(808

)

 

 

 

 

 

 

(808

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

507

 

 

 

 

 

 

507

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,094

)

 

 

(6,094

)

Balances at March 31, 2020

 

 

 

 

$

-

 

 

 

7,705,472

 

 

$

8

 

 

$

155,680

 

 

$

(129,986

)

 

$

25,702

 

Issuance of common stock upon

   exercise of stock options

 

 

 

 

 

 

 

 

85,012

 

 

 

 

 

 

62

 

 

 

 

 

 

62

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

870

 

 

 

 

 

 

870

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,393

)

 

 

(7,393

)

Balances at June 30, 2020

 

 

 

 

$

 

 

 

7,790,484

 

 

$

8

 

 

$

156,612

 

 

$

(137,379

)

 

$

19,241

 

Issuance of common stock upon

   exercise of stock options

 

 

 

 

 

 

 

 

201,017

 

 

 

 

 

 

335

 

 

 

 

 

 

335

 

Issuance of common stock under

   Employee Stock Purchase Plan

 

 

 

 

 

 

 

 

8,293

 

 

 

 

 

 

13

 

 

 

 

 

 

13

 

Issuance of common stock upon

   RSU vesting

 

 

 

 

 

 

 

 

56,933

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock to LPC

 

 

 

 

 

 

 

 

1,061,583

 

 

 

1

 

 

 

10,669

 

 

 

 

 

 

10,670

 

Issuance of Series A non-voting

   preferred stock and common stock

   in connection with the Kiq

   acquisition

 

 

44,687

 

 

 

39,325

 

 

 

1,558,975

 

 

 

2

 

 

 

5,486

 

 

 

 

 

 

5,488

 

Issuance of Series A non-voting

   preferred stock, net of issuance

   costs of $5,493

 

 

118,638

 

 

 

98,907

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend payable to common

   stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,450

)

 

 

 

 

 

(11,450

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,512

 

 

 

 

 

 

3,512

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(49,983

)

 

 

(49,983

)

Balances at September 30, 2020

 

 

163,325

 

 

 

138,232

 

 

 

10,677,285

 

 

$

11

 

 

$

165,177

 

 

$

(187,362

)

 

$

(22,174

)

 

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

4


 

COGENT BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Nine Months Ended

September 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(47,361

)

 

$

(63,470

)

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

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

79

 

 

 

703

 

Stock-based compensation expense

 

 

7,834

 

 

 

5,151

 

Noncash consideration received from a customer

 

 

 

 

 

(808

)

Noncash portion of acquired in-process research and development

 

 

 

 

 

44,812

 

Gain on disposal of long-lived assets

 

 

 

 

 

(7,470

)

Change in fair value of CVR liability

 

 

(343

)

 

 

509

 

Changes in operating assets and liabilities: