Gossamer Bio Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow

10-Q 1 goss-10q_20200630.htm 10-Q goss-10q_20200630.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	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: 001-38796

GOSSAMER BIO, INC.

(Exact name of Registrant as specified in its charter)

Delaware		47-5461709
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3013 Science Park Road San Diego, California		92121
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (858) 684-1300

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, $0.0001 par value per share

GOSS

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 6, 2020, the registrant had 75,828,140 shares of common stock ($0.0001 par value) outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months ended June 30, 2020 and 2019	4
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity for the Six Months ended June 30, 2020 and 2019	5
	Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2020 and 2019	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	31
Item 1A	Risk Factors	31
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3	Defaults Upon Senior Securities	32
Item 4	Mine Safety Disclosures	32
Item 5	Other Information	32
Item 6	Exhibits	32
	Exhibit Index	33
	Signatures	34

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

GOSSAMER BIO, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and par value amounts)

	June 30, 2020			December 31, 2019
ASSETS
Current assets
Cash and cash equivalents	$	486,062		$	135,089
Marketable securities		114,302			266,740
Prepaid expenses and other current assets		8,036			7,488
Total current assets		608,400			409,317
Property and equipment, net		5,757			5,425
Operating lease right-of-use assets		10,292			10,303
Other assets		627			1,559
Total assets	$	625,076		$	426,604
LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	222		$	956
Accrued research and development expenses		13,155			19,258
Accrued expenses and other current liabilities		14,167			16,709
Total current liabilities		27,544			36,923
Long-term convertible senior notes		140,715			—
Long-term debt		28,637			28,459
Operating lease liabilities - long-term		7,856			8,737
Total liabilities		204,752			74,119
Commitments and contingencies
Stockholders' equity
Common stock, $0.0001 par value; 700,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 75,811,862 shares issued and 71,972,610 shares outstanding as of June 30, 2020, and 66,284,003 shares issued and 61,635,477 shares outstanding as of December 31, 2019		8			7
Additional paid-in capital		874,863			686,390
Accumulated deficit		(455,114	)		(334,170	)
Accumulated other comprehensive income		567			258
Total stockholders' equity		420,324			352,485
Total liabilities and stockholders' equity	$	625,076		$	426,604

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

GOSSAMER BIO, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share amounts)

	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Operating expenses:
Research and development	$	38,684		$	35,676		$	80,098		$	60,659
In process research and development		15,000			1,000			17,805			2,000
General and administrative		11,655			9,673			22,403			17,707
Total operating expenses		65,339			46,349			120,306			80,366
Loss from operations		(65,339	)		(46,349	)		(120,306	)		(80,366	)
Other income (expense), net		(1,531	)		1,851			(638	)		3,257
Net loss	$	(66,870	)	$	(44,498	)	$	(120,944	)	$	(77,109	)
Other comprehensive income:
Foreign currency translation, net of tax		78			—			(9	)		—
Unrealized gain on marketable securities, net of tax		994			417			318			557
Other comprehensive income		1,072			417			309			557
Comprehensive loss		(65,798	)		(44,081	)		(120,635	)		(76,552	)
Net loss per share, basic and diluted	$	(1.00	)	$	(0.74	)	$	(1.88	)	$	(1.59	)
Weighted average common shares outstanding, basic and diluted		66,599,915			60,265,046			64,245,119			48,357,294

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

GOSSAMER BIO, INC.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity

(Unaudited)

(in thousands, except share amounts)

	Series Seed				Series A				Series B														Accumulated
	convertible preferred stock				convertible preferred stock				convertible preferred stock				Common stock				Additional paid-in			Accumulated			other comprehensive			Total stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		capital			deficit			income (loss)			equity
Balance as of December 31, 2019		—	$	—		—	$	—		—	$	—		61,635,477	$	7	$	686,390		$	(334,170	)	$	258		$	352,485
Vesting of restricted stock		—		—		—		—		—		—		404,637		—		—			—			—			—
Exercise of stock options		—		—		—		-		—		—		4,309		—		15			—			—			15
Stock-based compensation		—		—		—		—		—		—		—		—		8,244			—			—			8,244
Issuance of common stock pursuant to Employee Stock Purchase Plan		—		—		—		—		—		—		49,889		—		556			—			—			556
Net loss		—		—		—		—		—		—		—		—		—			(54,074	)		—			(54,074	)
Other comprehensive loss		—		—		—		—		—		—		—		—		—			—			(763	)		(763	)
Balance as of March 31, 2020		—	$	—		—	$	—		—	$	—		62,094,312	$	7	$	695,205		$	(388,244	)	$	(505	)	$	306,463
Issuance of common stock in connection with public offering, net of underwriting discounts, commissions, and offering costs		—		—		—		—		—		—		9,433,963		1		117,093			—			—			117,094
Equity component of convertible note issuance		—		—		—		—		—		—		—		—		53,635			—			—			53,635
Debt issuance costs attributable to convertible feature		—		—		—		—		—		—		—		—		(109	)		—			—			(109	)
Vesting of restricted stock		—		—		—		—		—		—		404,637		—		—			—			—			—
Exercise of stock options		—		—		—		—		—		—		39,698		—		139			—			—			139
Stock-based compensation		—		—		—		—		—		—		—		—		8,900			—			—			8,900
Net loss		—		—		—		—		—		—		—		—		—			(66,870	)		—			(66,870	)
Other comprehensive income		—		—		—		—		—		—		—		—		—			—			1,072			1,072
Balance as of June 30, 2020		—	$	—		—	$	—		—	$	—		71,972,610	$	8	$	874,863		$	(455,114	)	$	567		$	420,324

	Series Seed						Series A						Series B															Accumulated
	convertible preferred stock						convertible preferred stock						convertible preferred stock						Common stock				Additional paid-in		Accumulated			other comprehensive			Total stockholders'
	Shares			Amount			Shares			Amount			Shares			Amount			Shares		Amount		capital		deficit			income (loss)			equity
Balance as of December 31, 2018		20,000,000		$	29,200			45,714,286		$	79,615			71,506,513		$	229,552			8,051,418	$	2	$	33,853	$	(153,863	)	$	(61	)	$	(120,069	)
Issuance of common stock in connection with a public offering, net of underwriting discounts, commissions, and offering costs		—			—			—			—			—			—			19,837,500		2		291,342		—			—			291,344
Conversion of convertible preferred stock into common stock		(20,000,000	)		(29,200	)		(45,714,286	)		(79,615	)		(71,506,513	)		(229,552	)		30,493,460		3		338,364		—			—			338,367
Vesting of restricted stock		—			—			—			—			—			—			1,619,592		—		—		—			—			—
Stock-based compensation		—			—			—			—			—			—			27,500		—		3,089		—			—			3,089
Net loss		—			—			—			—			—			—			—		—		—		(32,611	)		—			(32,611	)
Other comprehensive income		—			—			—			—			—			—			—		—		—		—			140			140
Balance as of March 31, 2019		—		$	—			—		$	—			—		$	—			60,029,470	$	7	$	666,648	$	(186,474	)	$	79		$	480,260
Vesting of restricted stock		—			—			—			—			—			—			404,637		—		—		—			—			—
Exercise of stock options		—			—			—			—			—			—			33,273		—		86		—			—			86
Stock-based compensation		—			—			—			—			—			—			—		—		5,140		—			—			5,140
Other additional paid-in capital		—			—			—			—			—			—			—		—		39		—			—			39
Net loss		—			—			—			—			—			—			—		—		—		(44,498	)		—			(44,498	)
Other comprehensive income		—			—			—			—			—			—			—		—		—		—			417			417
Balance as of June 30, 2019		—		$	—			—		$	—			—		$	—			60,467,380	$	7	$	671,913	$	(230,972	)	$	496		$	441,444

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

nGOSSAMER BIO, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Six months ended June 30,
	2020			2019
Cash flows from operating activities
Net loss	$	(120,944	)	$	(77,109	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		679			374
Stock-based compensation expense		17,144			8,229
In process research and development expenses		17,805			2,000
Amortization of operating lease right-of-use assets		1,203			1,080
Amortization of debt discount and issuance costs		823			59
Amortization of premium on investments, net of accretion of discounts		(33	)		(1,464	)
Net realized gain on investments		(253	)		(1	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(548	)		(4,243	)
Other assets		932			2,906
Operating lease liabilities		(715	)		(1,032	)
Accounts payable		(727	)		823
Accrued expenses		(982	)		(1,018	)
Accrued research and development expenses		(6,103	)		4,624
Accrued compensation and benefits		(2,975	)		188
Net cash used in operating activities		(94,694	)		(64,584	)
Cash flows from investing activities
Research and development asset acquisitions, net of cash acquired		(17,805	)		(2,000	)
Purchase of marketable securities		(73,777	)		(287,038	)
Maturities of marketable securities		143,304			74,897
Sales of marketable securities		83,515			3,842
Purchase of property and equipment		(954	)		(1,727	)
Net cash provided by (used in) investing activities		134,283			(212,026	)
Cash flows from financing activities
Proceeds from issuance of common stock in a public offering, net		117,094			291,311
Proceeds from issuance of convertible debt, net		193,596			—
Proceeds from the issuance of long-term debt, net of issuance costs of $1,778		—			28,222
Purchase of shares pursuant to Employee Stock Purchase Plan		556			—
Proceeds from the exercise of stock options		154			158
Net cash provided by financing activities		311,400			319,691
Effect of exchange rate changes on cash and cash equivalents		(16	)		—
Net increase in cash and cash equivalents

Price	17.19	EPS	-2
Shares	61	P/E	-8
MCap	1,048	P/FCF	-10
Net Debt	-101	EBIT	-126
TEV	948	TEV/EBIT	-8
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-08-11
10-Q	2020-03-31	Filed 2020-05-12
10-K	2019-12-31	Filed 2020-03-24
10-Q	2019-09-30	Filed 2019-11-12
10-Q	2019-06-30	Filed 2019-08-08
10-Q	2019-03-31	Filed 2019-05-14
10-K	2018-12-31	Filed 2019-03-22
S-1	2018-12-21	Public Filing

8-K	2020-08-11	Earnings, Exhibits
8-K	2020-07-02	Enter Agreement, Off-BS Arrangement, Exhibits
8-K	2020-06-17
8-K	2020-05-18
8-K	2020-05-12
8-K	2020-03-24
8-K	2020-01-13
8-K	2019-11-12
8-K	2019-09-12
8-K	2019-08-08
8-K	2019-06-10
8-K	2019-05-30
8-K	2019-05-14
8-K	2019-05-02
8-K	2019-03-22
8-K	2019-03-07
8-K	2019-02-12

EX-10.2	goss-ex102_35.htm
EX-31.1	goss-ex311_9.htm
EX-31.2	goss-ex312_6.htm
EX-32.1	goss-ex321_7.htm
EX-32.2	goss-ex322_11.htm

GOSS 10Q Quarterly Report

Gossamer Bio Earnings 2020-06-30