vie-10q_20200930.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 September 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 November 10, 2020, the registrant had 54,837,541 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

27

Item 4.

Controls and Procedures

28

 

 

 

PART II.

OTHER INFORMATION

29

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

71

Item 3.

Defaults Upon Senior Securities

72

Item 4.

Mine Safety Disclosures

72

Item 5.

Other Information

72

Item 6.

Exhibits

73

Signatures

74

 

 

 

 

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 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 Uplizna®, and if approved, our other product candidates;

 

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

 

our ability to build our own sales and marketing capabilities, or seek collaborative partners, to commercialize Uplizna® 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 Uplizna® and, if approved, our other product candidates;

 

the degree of market acceptance of Uplizna® 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 Uplizna®, 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)

 

 

 

September 30,

2020

 

 

December 31,

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

111,649

 

 

$

200,851

 

Marketable securities

 

 

273,534

 

 

 

113,945

 

Accounts receivable, net

 

 

2,507

 

 

 

30,000

 

Inventory

 

 

438

 

 

 

 

Prepaid and other current assets

 

 

14,944

 

 

 

6,242

 

Total current assets

 

 

403,072

 

 

 

351,038

 

Marketable securities, non-current

 

 

2,354

 

 

 

31,415

 

Property and equipment, net

 

 

1,933

 

 

 

1,499

 

Capital lease assets

 

 

965

 

 

 

 

Intangible assets, net

 

 

19,151

 

 

 

 

Other assets

 

 

122

 

 

 

102

 

Total assets

 

$

427,597

 

 

$

384,054

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

5,083

 

 

$

7,459

 

Accrued expenses and other current liabilities

 

 

10,752

 

 

 

9,192

 

Related party liability

 

 

4,638

 

 

 

12,892

 

Capital lease liability - current

 

 

186

 

 

 

 

Total current liabilities

 

 

20,659

 

 

 

29,543

 

Capital lease liability - non-current

 

 

788

 

 

 

 

Total liabilities

 

 

21,447

 

 

 

29,543

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

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

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

    as of September 30, 2020 and December 31, 2019

 

 

 

 

 

 

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

   September 30, 2020 and December 31, 2019; 54,835,873 and 50,617,868

    shares issued and outstanding as of September 30, 2020 and

    December 31, 2019, respectively

 

 

55

 

 

 

51

 

Additional paid-in capital

 

 

799,720

 

 

 

631,154

 

Accumulated other comprehensive income

 

 

353

 

 

 

5

 

Accumulated deficit

 

 

(393,978

)

 

 

(276,699

)

Total stockholders’ equity

 

 

406,150

 

 

 

354,511

 

Total liabilities and stockholders’ equity

 

$

427,597

 

 

$

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

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product revenue, net

 

$

2,316

 

 

$

 

 

$

2,316

 

 

$

 

License revenue

 

 

 

 

 

 

 

 

 

 

 

20,000

 

Total revenue

 

 

2,316

 

 

 

 

 

 

2,316

 

 

 

20,000

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold

 

 

650

 

 

 

 

 

 

650

 

 

 

 

Research and development

 

 

25,890

 

 

 

38,700

 

 

 

78,131

 

 

 

72,113

 

Selling, general and administrative

 

 

13,995

 

 

 

10,230

 

 

 

43,685

 

 

 

24,575

 

Total operating expenses

 

 

40,535

 

 

 

48,930

 

 

 

122,466

 

 

 

96,688

 

Loss from operations

 

 

(38,219

)

 

 

(48,930

)

 

 

(120,150

)

 

 

(76,688

)

Other income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

574

 

 

 

520

 

 

 

2,871

 

 

 

1,829

 

Total other income

 

 

574

 

 

 

520

 

 

 

2,871

 

 

 

1,829

 

Net loss

 

$

(37,645

)

 

$

(48,410

)

 

$

(117,279

)

 

$

(74,859

)

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

 

$

(0.69

)

 

$

(64.59

)

 

$

(2.23

)

 

$

(150.34

)

Weighted average common shares outstanding—basic and diluted

 

 

54,760,381

 

 

 

749,539

 

 

 

52,583,103

 

 

 

497,924

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (loss) on marketable securities, net

 

$

(302

)

 

$

(30

)

 

$

348

 

 

$

(30

)

Total other comprehensive income (loss)

 

 

(302

)

 

 

(30

)

 

 

348

 

 

 

(30

)

Total comprehensive loss

 

$

(37,947

)

 

$

(48,440

)

 

$

(116,931

)

 

$

(74,889

)

 

 

 

 

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 A-3

 

 

Series B

 

 

Common stock

 

 

paid-in

 

 

comprehensive

 

 

Accumulated

 

 

equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

deficit

 

 

(deficit)

 

Balances at July 1, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

54,722,948

 

 

$

54

 

 

$

795,842

 

 

$

655

 

 

$

(356,333

)

 

$

440,218

 

Stock-based compensation

    expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,351

 

 

 

 

 

 

 

 

 

3,351

 

Issuance of common stock

    for stock options

    exercised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

97,925

 

 

 

 

 

 

528

 

 

 

 

 

 

 

 

 

528

 

Issuance of common stock

    upon vesting of RSAs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,000

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive

    loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(302

)

 

 

 

 

 

(302

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(37,645

)

 

 

(37,645

)

Balances at September 30, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

54,835,873

 

 

$

55

 

 

$

799,720

 

 

$

353

 

 

$

(393,978

)

 

$

406,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at July 1, 2019

 

 

14,225,324

 

 

$

142,253

 

 

 

17,000,000

 

 

$

170,000

 

 

 

 

 

$

 

 

 

4,687,500

 

 

$

75,000

 

 

 

724,795

 

 

$

1

 

 

$

4,190

 

 

$

 

 

$

(216,719

)

 

$

(212,528

)

Stock-based compensation

    expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

931

 

 

 

 

 

 

 

 

 

931

 

Issuance of common stock

    for stock options exercised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

132,529

 

 

 

 

 

 

377

 

 

 

 

 

 

 

 

 

377

 

Issuance of common stock

    upon vesting of RSAs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,705,882

 

 

 

80,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive

    loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30

)

 

 

 

 

 

(30

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(48,410

)

 

 

(48,410

)

Balances at September 30, 2019

 

 

14,225,324

 

 

$

142,253

 

 

 

17,000,000

 

 

$

170,000

 

 

 

4,705,882

 

 

$

80,000

 

 

 

4,687,500

 

 

$

75,000

 

 

 

872,324

 

 

$

1

 

 

$

5,498

 

 

$

(30

)

 

$

(265,129

)

 

$

(259,660

)

 

 

 

 

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 A-3

 

 

Series B

 

 

Common stock

 

 

paid-in

 

 

comprehensive

 

 

Accumulated

 

 

equity

 

 

 

Shares

 

 

Amount

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,148

 

 

 

 

 

 

 

 

 

9,148

 

Issuance of common stock

    for stock options

    exercised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

245,848

 

 

 

 

 

 

1,084

 

 

 

 

 

 

 

 

 

1,084

 

Issuance of common stock

    upon vesting of RSAs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

372,157

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Issuance of common stock,

    net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,600,000

 

 

 

3

 

 

 

158,335

 

 

 

 

 

 

 

 

 

158,338

 

Other comprehensive

    income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

348

 

 

 

 

 

 

348

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(117,279

)

 

 

(117,279

)

Balances at September 30, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

54,835,873

 

 

$

55

 

 

$

799,720

 

 

$

353

 

 

$

(393,978

)

 

$

406,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at January 1, 2019

 

 

14,225,324

 

 

$

142,253

 

 

 

17,000,000

 

 

$

170,000