vie-10q_20200630.htm

 

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, 2020

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: 001-39067

 

VIELA BIO, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

82-4187338

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

 

 

One MedImmune Way

 

First Floor, Area Two

 

Gaithersburg, MD

20878

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (240) 558-0038

 

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 per share

 

VIE

 

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 12, 2020, the registrant had 54,724,991 shares of common stock, $0.001 par value per share, outstanding.

 

 

 

 


Table of Contents

 

 

 

Page

 

Special Note Regarding Forward-Looking Statements

1

PART I.

FINANCIAL INFORMATION

3

Item 1.

Financial Statements (Unaudited)

3

 

Consolidated Balance Sheets

3

 

Consolidated Statements of Operations and Comprehensive Loss

4

 

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholder’s Equity (Deficit)

5

 

Consolidated Statements of Cash Flows

7

 

Notes to Unaudited Consolidated Financial Statements

8

Item 2.

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

18

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

29

 

 

 

PART II.

OTHER INFORMATION

30

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

72

Item 3.

Defaults Upon Senior Securities

73

Item 4.

Mine Safety Disclosures

73

Item 5.

Other Information

73

Item 6.

Exhibits

74

Signatures

75

 

 

 

 

All brand names, trademarks or service marks appearing in this quarterly report are the property of their respective owners. The Registrant’s use or display of another party’s trademark, service mark, trade dress or product in this quarterly report is not intended to, and does not, imply a relationship with, or endorsement or sponsorship of, the registrant by such other party.

 

 

 

i


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts contained in in this Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

 

our ability to maintain regulatory approval of UpliznaTM, and if approved, our other product candidates;

 

our ability to successfully commercialize and market UpliznaTM, and if approved, our other product candidates;

 

our ability to contract with third-party suppliers, manufacturers and other service providers and their ability to perform adequately;

 

the potential market size, opportunity and growth potential for UpliznaTM, and if approved, our other product candidates;

 

our ability to build our own sales and marketing capabilities, or seek collaborative partners, to commercialize UpliznaTM outside the United States, and if approved, our other product candidates;

 

our ability to obtain funding for our operations;

 

the initiation, timing, progress and results of our pre-clinical studies and clinical trials, and our research and development programs;

 

our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals;

 

our ability to advance product candidates into, and successfully complete, clinical trials;

 

our ability to recruit and enroll suitable patients in our clinical trials;

 

the timing or likelihood of the accomplishment of various scientific, clinical, regulatory filings and approvals and other product development objectives;

 

the reimbursement for UpliznaTM and, if approved, our other product candidates;

 

the degree of market acceptance of UpliznaTM and/or our other product candidates by physicians, patients, third-party payors and others in the medical community;

 

the rate and degree of market acceptance of UpliznaTM, and if approved, our other product candidates;

 

the implementation of our business model, strategic plans for our business, product candidates and technology;

 

the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;

 

developments relating to our competitors and our industry;

 

the accuracy of our estimates regarding expenses, capital requirements and needs for additional financing;

 

the development of major public health concerns, including the novel coronavirus outbreak or other pandemics arising globally, and the current and future impact of it and COVID-19 on our clinical trials, commercialization efforts, business operations and funding requirements; and

 

our financial performance.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the “Risk Factors” section and elsewhere in this Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable as of the date of this Form 10-Q, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-

1


looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q to conform these statements to new information, actual results or to changes in our expectations, except as required by law.

You should read this Form 10-Q and the documents that we reference in this Form 10-Q and have filed with the Securities and Exchange Commission, or SEC, as exhibits to this Form 10-Q with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

2


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

VIELA BIO, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

June 30,

2020

 

 

December 31,

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

131,551

 

 

$

200,851

 

Marketable securities

 

 

293,995

 

 

 

113,945

 

Accounts receivable

 

 

 

 

 

30,000

 

Prepaid and other current assets

 

 

11,261

 

 

 

6,242

 

Total current assets

 

 

436,807

 

 

 

351,038

 

Marketable securities, non-current

 

 

22,832

 

 

 

31,415

 

Property and equipment, net

 

 

1,517

 

 

 

1,499

 

Capital lease assets

 

 

1,017

 

 

 

 

Intangible assets

 

 

19,700

 

 

 

 

Other assets

 

 

122

 

 

 

102

 

Total assets

 

$

481,995

 

 

$

384,054

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

6,337

 

 

$

7,459

 

Accrued expenses and other current liabilities

 

 

29,930

 

 

 

9,192

 

Related party liability

 

 

4,490

 

 

 

12,892

 

Capital lease liability - current

 

 

184

 

 

 

 

Total current liabilities

 

 

40,941

 

 

 

29,543

 

Capital lease liability - non-current

 

 

836

 

 

 

 

Total liabilities

 

 

41,777

 

 

 

29,543

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized as of

   June 30, 2020 and December 31, 2019; no shares issued or outstanding

    as of June 30, 2020 and December 31, 2019

 

 

 

 

 

 

Common stock, $0.001 par value; 200,000,000 shares authorized as of

    June 30, 2020 and December 31, 2019; 54,722,948 and 50,617,868

    shares issued and outstanding as of June 30, 2020 and December 31, 2019,

    respectively

 

 

54

 

 

 

51

 

Additional paid-in capital

 

 

795,842

 

 

 

631,154

 

Accumulated other comprehensive income

 

 

655

 

 

 

5

 

Accumulated deficit

 

 

(356,333

)

 

 

(276,699

)

Total stockholders’ equity

 

 

440,218

 

 

 

354,511

 

Total liabilities and stockholders’ equity

 

$

481,995

 

 

$

384,054

 

 

 

 

 

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

 

3


 

VIELA BIO, INC.

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,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License revenue

 

$

 

 

$

20,000

 

 

$

 

 

$

20,000

 

Total revenue

 

 

 

 

 

20,000

 

 

 

 

 

 

20,000

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

25,412

 

 

 

16,811

 

 

 

52,241

 

 

 

33,426

 

General and administrative

 

 

14,408

 

 

 

9,296

 

 

 

29,690

 

 

 

14,333

 

Total operating expenses

 

 

39,820

 

 

 

26,107

 

 

 

81,931

 

 

 

47,759

 

Loss from operations

 

 

(39,820

)

 

 

(6,107

)

 

 

(81,931

)

 

 

(27,759

)

Other income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

963

 

 

 

634

 

 

 

2,297

 

 

 

1,310

 

Total other income

 

 

963

 

 

 

634

 

 

 

2,297

 

 

 

1,310

 

Net loss

 

$

(38,857

)

 

$

(5,473

)

 

$

(79,634

)

 

$

(26,449

)

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

 

$

(0.74

)

 

$

(8.94

)

 

$

(1.55

)

 

$

(72.06

)

Weighted average common shares outstanding—basic and diluted

 

 

52,212,006

 

 

 

612,059

 

 

 

51,482,502

 

 

 

367,041

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on marketable securities, net

 

$

776

 

 

$

 

 

$

650

 

 

$

 

Total other comprehensive income

 

 

776

 

 

 

 

 

 

650

 

 

 

 

Total comprehensive loss

 

$

(38,081

)

 

$

(5,473

)

 

$

(78,984

)

 

$

(26,449

)

 

 

 

 

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

 

 

4


 

 

VIELA BIO, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Total

 

 

 

Redeemable convertible preferred stock

 

 

 

 

 

 

 

 

 

 

Additional

 

 

other

 

 

 

 

 

 

stockholders'

 

 

 

Series A-1

 

 

Series A-2

 

 

Series B

 

 

Common stock

 

 

paid-in

 

 

comprehensive

 

 

Accumulated

 

 

equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

deficit

 

 

(deficit)

 

Balances at April 1, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

50,997,300

 

 

$

51

 

 

$

633,967

 

 

$

(121

)

 

$

(317,476

)

 

$

316,421

 

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,086

 

 

 

 

 

 

 

 

 

3,086

 

Issuance of common stock for

   stock options exercised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

125,648

 

 

 

 

 

 

454

 

 

 

 

 

 

 

 

 

454

 

Issuance of common stock, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,600,000

 

 

 

3

 

 

 

158,335

 

 

 

 

 

 

 

 

 

158,338

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

776

 

 

 

 

 

 

776

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(38,857

)

 

 

(38,857

)

Balances at June 30, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

54,722,948

 

 

$

54

 

 

$

795,842

 

 

$

655

 

 

$

(356,333

)

 

$

440,218

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at April 1, 2019

 

 

14,225,324

 

 

$

142,253

 

 

 

17,000,000

 

 

$

170,000

 

 

 

 

 

$

 

 

 

363,799

 

 

$

 

 

$

2,518

 

 

$

 

 

$

(211,246

)

 

$

(208,728

)

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

648

 

 

 

 

 

 

 

 

 

648

 

Issuance of common stock for

   stock options exercised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

360,996

 

 

 

 

 

 

1,025

 

 

 

 

 

 

 

 

 

1,025

 

Issuance of common stock upon

   vesting of RSAs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Issuance of preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,687,500

 

 

 

75,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,473

)

 

 

(5,473

)

Balances at June 30, 2019

 

 

14,225,324

 

 

$

142,253

 

 

 

17,000,000

 

 

$

170,000

 

 

 

4,687,500

 

 

$

75,000

 

 

 

724,803

 

 

$

1

 

 

$

4,190

 

 

$

 

 

$

(216,719

)

 

$

(212,528

)

 

 

 

 

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

 

5


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Total

 

 

 

Redeemable convertible preferred stock

 

 

 

 

 

Additional

 

 

other

 

 

 

 

 

 

stockholders'

 

 

 

Series A-1

 

 

Series A-2

 

 

Series B

 

 

Common stock

 

 

paid-in

 

 

comprehensive

 

 

Accumulated

 

 

equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

deficit

 

 

deficit

 

Balances at January 1, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

50,617,868

 

 

$

51

 

 

$

631,154

 

 

$

5

 

 

$

(276,699

)

 

$

354,511

 

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,797

 

 

 

 

 

 

 

 

 

5,797

 

Issuance of common stock for

   stock options exercised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

147,923

 

 

 

 

 

 

556

 

 

 

 

 

 

 

 

 

556

 

Issuance of common stock upon

   vesting of RSAs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

357,157

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,600,000

 

 

 

3

 

 

 

158,335

 

 

 

 

 

 

 

 

 

158,338

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

650

 

 

 

 

 

 

650

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(79,634

)

 

 

(79,634

)

Balances at June 30, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

54,722,948

 

 

$

54

 

 

$

795,842

 

 

$

655

 

 

$

(356,333

)

 

$

440,218

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at January 1, 2019

 

 

14,225,324

 

 

$

142,253

 

 

 

17,000,000

 

 

$

170,000

 

 

 

 

 

$

 

 

 

10

 

 

$

 

 

$

1,879

 

 

$

 

 

$

(190,270

)

 

$

(188,391

)

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,287

 

 

 

 

 

 

 

 

 

1,287

 

Issuance of common stock for

   stock options exercised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

360,996

 

 

 

 

 

 

1,025

 

 

 

 

 

 

 

 

 

1,025

 

Issuance of common stock upon

   vesting of RSAs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

363,797

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Issuance of preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,687,500

 

 

 

75,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,449

)

 

 

(26,449

)

Balances at June 30, 2019

 

 

14,225,324

 

 

$

142,253

 

 

 

17,000,000

 

 

$

170,000

 

 

 

4,687,500

 

 

$

75,000

 

 

 

724,803

 

 

$

1

 

 

$

4,190

 

 

$

 

 

$

(216,719

)

 

$

(212,528

)

 

 

 

 

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

 

 

 

6