10-Q 1 etnb-20230930.htm 10-Q 10-Q
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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 September 30, 2023

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: 001-39122

 

89bio, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

36-4946844

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

142 Sansome Street, Second Floor

San Francisco, California 94104

94104

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (415) 432-9270

 

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

 

ETNB

 

Nasdaq Global 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, 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 6, 2023, the registrant had 75,638,516 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 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

22

Item 4.

Controls and Procedures

23

PART II.

OTHER INFORMATION

24

Item 1.

Legal Proceedings

24

Item 1A.

Risk Factors

24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

42

Item 3.

Default Upon Senior Securities

42

Item 4.

Mine Safety Disclosures

42

Item 5.

Other Information

42

Item 6.

Exhibits

43

Signatures

44

 

 

i


 

PART I—FINANCIAL INFORMATION

 

Item 1. Financial Statements.

89bio, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

September 30,
2023

 

 

December 31,
2022

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

251,926

 

 

$

55,255

 

Short-term available-for-sale securities

 

 

196,378

 

 

 

132,905

 

Prepaid and other current assets

 

 

11,222

 

 

 

7,920

 

Total current assets

 

 

459,526

 

 

 

196,080

 

Operating lease right-of-use asset

 

 

238

 

 

 

363

 

Property and equipment, net

 

 

58

 

 

 

92

 

Other assets

 

 

289

 

 

 

289

 

Total assets

 

$

460,111

 

 

$

196,824

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

10,903

 

 

$

12,502

 

Accrued expenses

 

 

14,133

 

 

 

11,944

 

Operating lease liability, current

 

 

176

 

 

 

168

 

Total current liabilities

 

 

25,212

 

 

 

24,614

 

Operating lease liability, non-current

 

 

53

 

 

 

186

 

Term loan, non-current, net

 

 

24,637

 

 

 

20,192

 

Total liabilities

 

 

49,902

 

 

 

44,992

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock

 

 

75

 

 

 

51

 

Additional paid-in capital

 

 

827,878

 

 

 

467,374

 

Accumulated other comprehensive loss

 

 

(547

)

 

 

(350

)

Accumulated deficit

 

 

(417,197

)

 

 

(315,243

)

Total stockholders’ equity

 

 

410,209

 

 

 

151,832

 

  Total liabilities and stockholders’ equity

 

$

460,111

 

 

$

196,824

 

 

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

1


 

89bio, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share amounts)

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2023

 

 

2022

 

2023

 

 

2022

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

31,417

 

 

$

22,197

 

$

88,638

 

 

$

61,732

 

General and administrative

 

 

7,928

 

 

 

4,844

 

 

21,360

 

 

 

15,155

 

Total operating expenses

 

 

39,345

 

 

 

27,041

 

 

109,998

 

 

 

76,887

 

Loss from operations

 

 

(39,345

)

 

 

(27,041

)

 

(109,998

)

 

 

(76,887

)

Interest expense

 

 

(959

)

 

 

(535

)

 

(3,928

)

 

 

(1,377

)

Interest income and other, net

 

 

5,579

 

 

 

773

 

 

11,972

 

 

 

843

 

Net loss before income tax

 

 

(34,725

)

 

 

(26,803

)

 

(101,954

)

 

 

(77,421

)

Income tax expense

 

 

 

 

 

(2

)

 

 

 

 

(3

)

Net loss

 

$

(34,725

)

 

$

(26,805

)

$

(101,954

)

 

$

(77,424

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale securities

 

 

41

 

 

 

(136

)

 

(200

)

 

 

(408

)

Foreign currency translation adjustments

 

 

6

 

 

 

14

 

 

3

 

 

 

32

 

Total other comprehensive income (loss)

 

$

47

 

 

$

(122

)

$

(197

)

 

$

(376

)

Comprehensive loss

 

$

(34,678

)

 

$

(26,927

)

$

(102,151

)

 

$

(77,800

)

Net loss per share, basic and diluted

 

$

(0.45

)

 

$

(0.57

)

$

(1.50

)

 

$

(2.63

)

Weighted-average shares used to compute net loss per share,
   basic and diluted

 

 

76,336,050

 

 

 

47,253,527

 

 

67,962,848

 

 

 

29,413,421

 

 

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

2


 

89bio, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the Three and Nine Months Ended September 30, 2023

(Unaudited)

(In thousands, except share amounts)

 

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amounts

 

 

Capital

 

 

(Loss) Income

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2022

 

 

50,560,590

 

 

$

51

 

 

$

467,374

 

 

$

(350

)

 

$

(315,243

)

 

$

151,832

 

Issuance of common stock in public offering, net of issuance costs

 

 

19,461,538

 

 

 

19

 

 

 

296,798

 

 

 

 

 

 

 

 

 

296,817

 

Issuance of common stock in at-the-market public offerings,
   net of issuance costs

 

 

968,000

 

 

 

1

 

 

 

13,421

 

 

 

 

 

 

 

 

 

13,422

 

Issuance of common stock upon exercise of warrants

 

 

1,682,500

 

 

 

2

 

 

 

8,958

 

 

 

 

 

 

 

 

 

8,960

 

Issuance of common stock upon exercise of stock options

 

 

61,408

 

 

 

 

 

 

185

 

 

 

 

 

 

 

 

 

185

 

Issuance of common stock upon vesting of restricted stock units,
   net of withholding taxes

 

 

133,669

 

 

 

 

 

 

(693

)

 

 

 

 

 

 

 

 

(693

)

Issuance of common stock warrants in connection with term loan

 

 

 

 

 

 

 

 

482

 

 

 

 

 

 

 

 

 

482

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,551

 

 

 

 

 

 

 

 

 

3,551

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,836

)

 

 

(28,836

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

110

 

 

 

 

 

 

110

 

Balance as of March 31, 2023

 

 

72,867,705

 

 

$

73

 

 

$

790,076

 

 

$

(240

)

 

$

(344,079

)

 

$

445,830

 

Issuance of common stock in at-the-market public offerings,
   net of issuance costs

 

 

1,200,539

 

 

 

1

 

 

 

23,666

 

 

 

 

 

 

 

 

 

23,667

 

Issuance of common stock upon exercise of warrants

 

 

1,245,070

 

 

 

1

 

 

 

6,629

 

 

 

 

 

 

 

 

 

6,630

 

Issuance of common stock upon exercise of stock options

 

 

107,832

 

 

 

 

 

 

327

 

 

 

 

 

 

 

 

 

327

 

Issuance of common stock upon vesting of restricted stock units,
   net of withholding taxes

 

 

31,527

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon ESPP purchases

 

 

13,927

 

 

 

 

 

 

142

 

 

 

 

 

 

 

 

 

142

 

Stock-based compensation

 

 

 

 

 

 

 

 

4,137

 

 

 

 

 

 

 

 

 

4,137

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(38,393

)

 

 

(38,393

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(354

)

 

 

 

 

 

(354

)

Balance as of June 30, 2023

 

 

75,466,600

 

 

$

75

 

 

 

824,977

 

 

$

(594

)

 

$

(382,472

)

 

$

441,986

 

Issuance of common stock upon exercise of stock options

 

 

27,372

 

 

 

 

 

 

117

 

 

 

 

 

 

 

 

 

117

 

Issuance of common stock upon vesting of restricted stock units,
   net of withholding taxes

 

 

144,544

 

 

 

 

 

 

(1,597

)

 

 

 

 

 

 

 

 

(1,597

)

Stock-based compensation

 

 

 

 

 

 

 

 

4,381

 

 

 

 

 

 

 

 

 

4,381

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34,725

)

 

 

(34,725

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

47

 

 

 

 

 

 

47

 

Balance as of September 30, 2023

 

 

75,638,516

 

 

$

75

 

 

$

827,878

 

 

$

(547

)

 

$

(417,197

)

 

$

410,209

 

 

3


 

89bio, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the Three and Nine Months Ended September 30, 2022

(Unaudited)

(In thousands, except share amounts)

 

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amounts

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2021

 

 

20,317,204

 

 

$

20

 

 

$

339,218

 

 

$

(64

)

 

$

(213,217

)

 

$

125,957

 

Issuance of common stock upon exercise of stock options

 

 

12,065

 

 

 

 

 

 

29

 

 

 

 

 

 

 

 

 

29

 

Issuance of common stock upon vesting of restricted stock units, net

 

 

22,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,512

 

 

 

 

 

 

 

 

 

2,512

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,565

)

 

 

(25,565

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(192

)

 

 

 

 

 

(192

)

Balance as of March 31, 2022

 

 

20,351,384

 

 

$

20

 

 

$

341,759

 

 

$

(256

)

 

$

(238,782

)

 

$

102,741

 

Issuance of common stock upon ESPP purchases

 

 

15,979

 

 

 

 

 

 

43

 

 

 

 

 

 

 

 

 

43

 

Withholding taxes related to restricted stock units

 

 

 

 

 

 

 

 

(69

)

 

 

 

 

 

 

 

 

(69

)

Stock-based compensation

 

 

 

 

 

 

 

 

2,586

 

 

 

 

 

 

 

 

 

2,586

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,054

)

 

 

(25,054

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(62

)

 

 

 

 

 

(62

)

Balance as of June 30, 2022

 

 

20,367,363

 

 

$

20

 

 

$

344,319

 

 

$

(318

)

 

$

(263,836

)

 

$

80,185

 

Issuance of common stock and warrants in public offering,
   net of issuance costs

 

 

18,675,466

 

 

 

20

 

 

 

88,219

 

 

 

 

 

 

 

 

 

88,239

 

Issuance of common stock in at-the-market public offering,
   net of issuance costs

 

 

1,242,132

 

 

 

1

 

 

 

8,369

 

 

 

 

 

 

 

 

 

8,370

 

Issuance of common stock upon cashless exercise of warrants

 

 

3,143,682

 

 

 

3

 

 

 

(3

)

 

 

 

 

 

 

 

 

 

Issuance of common stock upon exercise of warrants

 

 

10,000

 

 

 

 

 

 

53

 

 

 

 

 

 

 

 

 

53

 

Issuance of common stock upon exercise of stock options

 

 

114,203

 

 

 

 

 

 

208

 

 

 

 

 

 

 

 

 

208

 

Issuance of common stock upon vesting of restricted stock units,
   net of withholding taxes

 

 

71,779

 

 

 

 

 

 

(53

)

 

 

 

 

 

 

 

 

(53

)

Stock-based compensation

 

 

 

 

 

 

 

 

2,500

 

 

 

 

 

 

 

 

 

2,500

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,805

)

 

 

(26,805

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(122

)

 

 

 

 

 

(122

)

Balance as of September 30, 2022

 

 

43,624,625

 

 

$

44

 

 

$

443,612

 

 

$

(440

)

 

$

(290,641

)

 

$

152,575

 

 

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

4


 

89bio, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

Nine Months Ended
September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(101,954

)

 

$

(77,424

)

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

 

 

 

 

 

 

Stock-based compensation

 

 

12,069

 

 

 

7,598

 

Net accretion on available-for-sale securities

 

 

(4,297

)

 

 

(183

)

Accretion of final payment fee on term loan

 

 

285

 

 

 

365

 

Amortization of debt issuance costs

 

 

410

 

 

 

227

 

Loss on extinguishment of term loan facility

 

 

1,208

 

 

 

 

Noncash operating lease expense

 

 

125

 

 

 

135

 

Depreciation

 

 

34

 

 

 

50

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid and other current assets

 

 

(3,238

)

 

 

4,756

 

Other assets

 

 

 

 

 

72

 

Accounts payable

 

 

(1,599

)

 

 

7,308

 

Accrued expenses

 

 

2,189

 

 

 

3,243

 

Operating lease liability

 

 

(125

)

 

 

(141

)

Net cash used in operating activities

 

 

(94,893

)