Cortexyme Earnings 2020-06-30

Cortexyme Earnings 2020-06-30

CRTX 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

10-Q 1 crtx-10q_20200630.htm 10-Q crtx-10q_20200630.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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

☐	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: 001-38890

Cortexyme, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	90-1024039
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
269 East Grand Ave. South San Francisco, California	94080
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (415) 910-5717

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, par value $0.001 per share

CRTX

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.

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 29,487,674 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Balance Sheets	1
	Condensed Statements of Operations and Comprehensive Loss	2
	Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity	3
	Condensed Statements of Cash Flows	5
	Notes to Unaudited Condensed 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	23
Item 4.	Controls and Procedures	23
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
Signatures		31

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Cortexyme, Inc.

Condensed Balance Sheets

(Unaudited)

(In thousands, except share and per share amounts)

	June 30, 2020			December 31, 2019 (1)
ASSETS
Current assets:
Cash and cash equivalents	$	66,156		$	51,214
Short term investments		78,348			48,650
Prepaid expenses and other current assets		7,104			6,192
Total current assets		151,608			106,056
Property and equipment, net		565			709
Operating lease right-of-use assets, net		686			625
Long term investments		66,107			16,763
Other assets		244			217
Total assets	$	219,210		$	124,370

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,091		$	3,075
Accrued expenses and other current liabilities		8,602			5,817
Total current liabilities		13,693			8,892
Long-term operating lease liability		50			—
Total liabilities		13,743			8,892
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 authorized, no shares issued and outstanding as of June 30, 2020 and December 31, 2019		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized, 29,486,269 and 26,869,413 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		29			27
Additional paid in capital		309,320			185,196
Accumulated other comprehensive income		711			60
Accumulated deficit		(104,593	)		(69,805	)
Total stockholders’ equity		205,467			115,478
Total liabilities and stockholders’ equity	$	219,210		$	124,370

(1)	The balance sheet as of December 31, 2019 is derived from the audited financial statements as of that date

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

Cortexyme, Inc.

Condensed Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share amounts)

	Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Operating expenses:
Research and development	$	14,086		$	7,109		$	28,467		$	11,934
General and administrative		4,185			2,466			7,662			3,716
Total operating expenses		18,271			9,575			36,129			15,650
Loss from operations		(18,271	)		(9,575	)		(36,129	)		(15,650	)
Interest income		659			513			1,341			907
Net loss		(17,612	)		(9,062	)		(34,788	)		(14,743	)
Other comprehensive income:
Unrealized gain on available for sales securities		748			103			651			129
Total comprehensive loss	$	(16,864	)	$	(8,959	)	$	(34,137	)	$	(14,614	)
Net loss per share - basic and diluted	$	(0.60	)	$	(0.57	)	$	(1.21	)	$	(1.52	)
Weighted average shares of common stock outstanding - basic and diluted		29,442,915			15,849,189			28,852,317			9,719,173

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

Cortexyme, Inc.

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity

(Unaudited)

(In thousands, except share and per share amounts)

For the three months ended June 30, 2020 and 2019
	Series A Redeemable Convertible Preferred Stock						Series B Redeemable Convertible Preferred Stock						Common Stock				Additional Paid in			Other Comprehensive			Accumulated			Shareholders'
	Shares			Amount			Shares			Amount			Shares		Amount		Capital			Income / (Loss)			Deficit			Equity
Balance March 31, 2020		—		$	—			—		$	—			29,404,540	$	29	$	305,030		$	(37	)	$	(86,981	)	$	218,041
Issuance cost related to private placement		—			—			—			—			—		—		(62	)		—			—			(62	)
Exercise of stock options		—			—			—			—			81,729		—		954			—			—			954
Stock based compensation		—			—			—			—			—		—		3,398			—			—			3,398
Other comprehensive income		—			—			—			—			—		—		—			748			—			748
Net loss		—			—			—			—			—		—		—			—			(17,612	)		(17,612	)
Balance June 30, 2020		—		$	—			—		$	—			29,486,269	$	29	$	309,320		$	711		$	(104,593	)	$	205,467

Balance March 31, 2019		9,008,919		$	17,178			9,152,108		$	86,960			3,566,923	$	4	$	498		$	(23	)	$	(38,506	)	$	(38,027	)
Exercise of stock options		—			—			—			—			11,458		—		5			—			—			5
Stock based compensation		—			—			—			—			—		—		377			—			—			377
Vesting of Series B redeemable convertible preferred stock in lieu of rent		—			—			—			856			—		—		—			—			—			—
Conversion of redeemable convertible preferred stock to common stock		(9,008,919	)		(17,178	)		(9,152,108	)		(87,816	)		18,161,027		18		104,976			—			—			104,994
Initial public offering of common stock, net of issuance costs of $8,427		—			—			—			—			5,073,800		5		77,822			—			—			77,827
Exercise of stock warrant		—			—			—			—			27,941		—		—			—			—			—
Other comprehensive income		—			—			—			—			—		—		—			103			—			103
Net loss		—			—			—			—			—		—		—			—			(9,062	)		(9,062	)
Balance June 30, 2019		—		$	—			—		$	—			26,841,149	$	27	$	183,678		$	80		$	(47,568	)	$	136,217

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

Cortexyme, Inc.

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity

(Unaudited)

(In thousands, except share and per share amounts)

For the six months ended June 30, 2020 and 2019
	Series A Redeemable Convertible Preferred Stock						Series B Redeemable Convertible Preferred Stock						Common Stock				Additional Paid in		Other Comprehensive			Accumulated			Shareholders'
	Shares			Amount			Shares			Amount			Shares		Amount		Capital		Income / (Loss)			Deficit			Equity
Balance January 1, 2020		—		$	—			—		$	—			26,869,413	$	27	$	185,196	$	60		$	(69,805	)	$	115,478
Issuance of common stock in connection with private placement, net of issuance costs of $7,372		—			—			—			—			2,500,000		2		117,626		—			—			117,628
Exercise of stock options		—			—			—			—			116,856		—		1,145		—			—			1,145
Stock based compensation		—			—			—			—			—		—		5,353		—			—			5,353
Other comprehensive income		—			—			—			—			—		—		—		651			—			651
Net loss		—			—			—			—			—		—		—		—			(34,788	)		(34,788	)
Balance June 30, 2020		—		$	—			—		$	—			29,486,269	$	29	$	309,320	$	711		$	(104,593	)	$	205,467

Balance January 1, 2019		9,008,919		$	17,178			9,152,108		$	86,868			3,412,366	$	3	$	245	$	(49	)	$	(32,825	)	$	(32,626	)
Exercise of stock options		—			—			—			—			166,015		1		68		—			—			69
Stock based compensation		—			—			—			—			—		—		567		—			—			567
Vesting of Series B redeemable convertible preferred stock in lieu of rent		—			—			—			948			—		—		—		—			—			—
Conversion of redeemable convertible preferred stock to common stock		(9,008,919	)		(17,178	)		(9,152,108	)		(87,816	)		18,161,027		18		104,976		—			—			104,994
Initial public offering of common stock, net of issuance costs of $8,427		—			—			—			—			5,073,800		5		77,822		—			—			77,827
Exercise of stock warrant		—			—			—			—			27,941		—		—		—			—			—
Other comprehensive income		—			—			—			—			—		—		—		129			—			129
Net loss		—			—			—			—			—		—		—		—			(14,743	)		(14,743	)
Balance June 30, 2019		—		$	—			—		$	—			26,841,149	$	27	$	183,678	$	80		$	(47,568	)	$	136,217

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

Cortexyme, Inc.

Condensed Statements of Cash Flows

(Unaudited)

	For the Six Months Ended June 30,
	2020			2019
Cash flows from operating activities:
Net loss	$	(34,788	)	$	(14,743	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash rent expense		184			184
Stock based compensation		5,353			567
Depreciation and amortization		163			53
Amortization of (discount) premium on available for sale investments		228			(395	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(880	)		(4,515	)
Other assets		(27	)		(250	)
Accounts payable		2,016			4,621
Accrued expenses and other current liabilities		2,580			947
Net cash used in operating activities		(25,171	)		(13,531	)
Cash flow from investing activities:
Purchase of investments		(139,407	)		(88,593	)
Proceeds from maturities of investments		60,801			43,940
Purchase of property and equipment		(22	)		(20	)
Net cash used in investing activities		(78,628	)		(44,673	)
Cash flows from financing activities:
Payments of finance leases		(32	)		—
Proceeds from issuance of common stock upon exercise of stock options

Price	24.65	EPS	-1
Shares	27	P/E	-27
MCap	662	P/FCF	-30
Net Debt	-121	EBIT	-25
TEV	541	TEV/EBIT	-22
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-08-14
S-1	2020-04-07	Public Filing
10-Q	2020-03-31	Filed 2020-05-12
10-K	2019-12-31	Filed 2020-03-16
10-Q	2019-09-30	Filed 2019-11-12
10-Q	2019-06-30	Filed 2019-08-09
S-1	2019-04-12	Public Filing
10-Q	2019-03-31	Filed 2019-06-12

8-K	2020-06-08
8-K	2020-05-18
8-K	2020-05-12
8-K	2020-04-27
8-K	2020-03-17
8-K	2020-02-05
8-K	2019-05-13

EX-10.1	crtx-ex101_245.htm
EX-10.3	crtx-ex103_166.htm
EX-31.1	crtx-ex311_9.htm
EX-31.2	crtx-ex312_6.htm
EX-32.1	crtx-ex321_7.htm
EX-32.2	crtx-ex322_8.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company