SEC Filing | Cogent Biosciences, Inc.

View:

Download DOC

Download PDF

Download XLS

Download XBRL

10-Q

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, 2022

☐ 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)

200 Cambridge Park Drive, Suite 2500

Cambridge, Massachusetts 02140

(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 November 11, 2022, there were 69,893,434 shares of the registrant’s Common Stock, $0.001 par value per share, outstanding.

Summary of the Material Risks Associated with Our Business

Our business is subject to numerous risks and uncertainties that you should be aware of in evaluating our business. These risks include, but are not limited to, the following:

•

Our business is highly dependent on the success of our bezuclastinib program and our ability to discover and develop additional product candidates. We may not be successful in our efforts to develop bezuclastinib or expand our pipeline of drug candidates.

•

Since the number of patients that we have dosed to date in our clinical trials is small, the results from such clinical trials may be less reliable than results achieved in larger clinical trials.

•

Clinical trials are expensive, time-consuming, and difficult to design and implement.

•

The current pandemic of the novel coronavirus, or COVID-19, and the future outbreak of other highly infectious or contagious diseases, could seriously harm our development efforts, increase our costs and expenses and have a material adverse effect on our business, financial condition and results of operations.

•

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

•

We may choose not to develop a potential product candidate, or we may suspend, deprioritize or terminate one or more discovery programs or preclinical or clinical product candidates or programs.

•

Regulatory authorities, including the U.S. Food and Drug Administration (“FDA”), may disagree with our regulatory plan and we may fail to obtain regulatory approval of our product candidates.

•

The impact on our business of healthcare legislation and other changes in the healthcare industry and in healthcare spending is currently unknown and may adversely affect our business model.

•

We contract with third parties for the manufacture of our product candidates for preclinical development and clinical trials. This reliance on third parties increases the risk that we will not have sufficient quantities of our drug candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

•

The third parties upon whom we rely for the supply of the API and drug product used in bezuclastinib are our sole source of supply, and the loss of any of these suppliers could significantly harm our business.

•

We may form or seek collaborations or strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such collaborations, alliances or licensing arrangements.

•

If our efforts to protect the proprietary nature of the intellectual property related to our technologies are not adequate, we may not be able to compete effectively in our market.

•

We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

•

We have incurred net losses in every year since our inception and anticipate that we will continue to incur net losses in the future.

•

We will require substantial additional funding. If we fail to obtain additional financing when needed, or on attractive terms, we may be unable to complete the development and commercialization of our product candidates

•

The price of our stock may be volatile, and you could lose all or part of your investment.

The summary risk factors described above should be read together with the text of the full risk factors in Item 1A. “Risk Factors” and the other information set forth in this Quarterly Report on Form 10-Q, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC. The risks summarized above or described in full below are not the only risks that we face. Additional risks and uncertainties not precisely known to us, or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations and future growth prospects.

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;

•

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 duration of our product development activities and clinical trials;

•

the timing of our planned regulatory submissions to the FDA for our bezuclastinib product candidate, 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 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;

•

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 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; and

•

our expectations regarding our ability to obtain and maintain intellectual property protection for our bezuclastinib product candidate and future 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.

iii

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	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Recent Sales of Unregistered Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
Signatures		44

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,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	140,568		$	219,684
Marketable securities		148,526		$	—
Prepaid expenses and other current assets		6,068			2,949
Restricted cash		1,255			—
Total current assets		296,417			222,633
Operating lease, right-of-use asset		23,832			2,771
Property and equipment, net		6,543			1,706
Restricted cash		—			1,255
Other assets		4,768			3,727
Total assets	$	331,560		$	232,092
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	4,093		$	3,483
Accrued expenses and other current liabilities		14,384			8,210
CVR liability (Note 3)		3,060			3,060
Operating lease liability		2,014			2,324
Total current liabilities		23,551			17,077
Operating lease liability, net of current portion		18,067			831
Total liabilities		41,618			17,908
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; 81,050 and 103,289 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		65,830			85,400
Common stock, $0.001 par value; 150,000,000 shares authorized; 69,857,972 shares and 43,805,922 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		70			44
Additional paid-in capital		595,801			399,713
Accumulated other comprehensive loss		(163	)		—
Accumulated deficit		(371,596	)		(270,973	)
Total stockholders’ equity		289,942			214,184
Total liabilities and stockholders’ equity	$	331,560		$	232,092

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

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,
	2022			2021			2022			2021
Operating expenses:
Research and development		29,936			14,798			84,885			35,399
General and administrative		6,885			5,021			19,209			14,512
Total operating expenses		36,821			19,819			104,094			49,911
Loss from operations		(36,821	)		(19,819	)		(104,094	)		(49,911	)
Other income:
Interest income		1,500			115			1,879			360
Other income, net		259			620			1,592			1,847
Change in fair value of CVR liability		—			—			—			343
Total other income, net		1,759			735			3,471			2,550
Net loss	$	(35,062	)	$	(19,084	)	$	(100,623	)	$	(47,361	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.50	)	$	(0.48	)	$	(1.84	)	$	(1.25	)
Weighted average common shares outstanding, basic and diluted		69,576,359			39,848,943			54,780,041			37,741,526
Comprehensive loss:
Net loss	$	(35,062	)	$	(19,084	)	$	(100,623	)	$	(47,361	)
Other comprehensive loss
Net unrealized losses on marketable securities		(163	)		—			(163	)		—
Total other comprehensive loss		(163	)		—			(163	)		—
Comprehensive loss	$	(35,225	)	$	(19,084	)	$	(100,786	)	$	(47,361	)

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

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		Loss			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 under Employee Stock Purchase Plan		—			—			18,995		—		129		—			—			129
Issuance of common stock upon exercise of stock options		—			—			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
Conversion of Series A non-voting preferred stock into common stock		(6,329	)		(5,570	)		1,582,250		2		5,568		—			—		$	—
Pre-funded warrant exercise		—			—			2,424,242		2		22		—			—		$	24
Issuance of common stock under Employee Stock Purchase Plan		—			—			30,005		—		222		—			—			222
Issuance of common stock upon exercise of stock options		—			—			113,761		—		914		—			—			914
Net unrealized losses on marketable securities		—			—			—		—		—		(163	)		—			(163	)
Stock-based compensation expense		—			—			—		—		4,622		—			—			4,622
Net loss		—			—			—		—		—		—			(35,062	)		(35,062	)
Balances at September 30, 2022		81,050			65,830			69,857,972		70		595,801		(163	)		(371,596	)		289,942


	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