REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
(The Nasdaq Global Select Market) | ||||
US$0.0001 per share* |
(The Nasdaq Global Select Market) |
* |
Large accelerated filer ☐ | ☒ |
Non-accelerated filer ☐ |
Emerging growth company |
† | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
☒ |
International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ |
Other ☐ |
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• | “ADSs” are to the American depositary shares, each of which represents five of our ordinary shares; |
• | “CAR” are to chimeric antigen receptor; |
• | “ADRs” are to the American depositary receipts that evidence the ADSs; |
• | “CDE” are to the Center for Drug Evaluation of the National Medical Products Administration in China; |
• | “China” and “PRC” are to the People’s Republic of China, excluding, for the purpose of this annual report only, the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan; “Greater China” does not exclude Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan; |
• | “CR” are to complete response, which generally means the disappearance of all signs of cancer in response to treatment, with the exact criteria varying from indication to indication; |
• | “CRi” are to complete response with incomplete hematologic recovery; |
• | “CRS” are to cytokine release syndrome, a symptom complex and an expected adverse event associated with CAR-T cell therapies and measured by Lee grading system or ASBMT grading system. Grade 1 CRS is generally associated with non-life threatening symptoms and requires symptomatic treatment only, Grade 2 or Grade 3 CRS requires moderate to more aggressive intervention, and Grade 4 or higher CRS is associated with life-threatening symptoms that require ventilation support, or death; |
• | “FDA” are to U.S. Food and Drug Administration; |
• | “Gracell,” “we,” “us,” “our company,” or “our” are to Gracell Biotechnologies Inc. and its subsidiaries and, in the context of describing our operations and consolidated financial information, also include the VIE and its subsidiary; |
• | “GvHD” are to graft versus host disease, where donor cells recognize the patient’s normal tissues as foreign and cause potentially lethal tissue damage; |
• | “HvG” are to host versus graft rejection, where a patient’s immune cells recognize infused non-HLA-matched |
• | “ICANS” are to immune effector cell-associated neurotoxicity syndrome, a common adverse event and treatment-related toxicity observed after CAR-T cell therapies and measured by ASBMT grading system. Grade 1 ICANS is generally associated with low depressed level of consciousness where patients awaken spontaneously, Grade 2 or Grade 3 ICANS is generally associated with moderate depressed level of consciousness where patients still awaken to voice or tactile stimulus, and clinical seizure that resolves rapidly, and Grade 4 ICANS is generally associated more serious symptoms such as stupor, coma, prolonged seizure and deep focal motor weakness; |
• | “MRD” are to minimal residual disease, the small number of cancer cells in the body after cancer treatment. An MRD positive or MRD+ test result means that disease was still detected after treatment; an MRD negative or MRD- result means that no disease was detected after treatment; |
• | “NMPA” are to the National Medical Products Administration in China; |
• | “Onset” are to the first appearance of any sign or symptom of an illness; |
• | “ordinary shares” are to ordinary shares of our company, par value US$0.0001 per share; |
• | “ORR” are to overall response rate, percentage of patients achieving a response to therapy; |
• | “Renminbi” and “RMB” are to the legal currency of the PRC; |
• | “PFS” are to progression-free survival, the length of time during and after the treatment of a disease, such as cancer, that a patient lives without the disease getting worse; |
• | “PR” are to partial response; |
• | “Preferred Shares” are to the series A, series B-1, series B-2 and series C preferred shares, par value $0.0001 per share; |
• | “sCR” are to stringent complete response, a deeper response category than CR used in multiple myeloma; |
• | “SOC” are to standard of care; |
• | “TME” are to tumor microenvironment; |
• | “US$,” “U.S. dollars,” “$,” and “dollars” are to the legal currency of the United States; |
• | “we,” “us,” “our company” and “our” are to Gracell Biotechnologies Inc., a Cayman Islands exempted company and its subsidiaries and, in the context of describing our operations and consolidated financial information, also include its consolidated PRC affiliated entities; and |
• | “VGPR” are to very good partial response. |
• | the ability of our investigator-initiated trials and clinical trials to demonstrate acceptable safety and efficacy of our product candidates, and other positive results; |
• | the timing, progress and results of preclinical studies, investigator-initiated trials and clinical trials for product candidates we may develop, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs; |
• | the timing, scope and likelihood of regulatory filings and approvals, including final regulatory approval of our product candidates; |
• | our ability to develop and advance our current product candidates and programs into, and successfully complete, clinical trials; |
• | our manufacturing, commercialization, and marketing capabilities and strategy; |
• | our plans relating to commercializing our product candidates, if approved, including the geographic areas of focus and sales strategy; |
• | the need to hire additional personnel and our ability to attract and retain such personnel; |
• | the size of the market opportunity for our product candidates, including our estimates of the number of patients who suffer from the diseases we are targeting; |
• | our expectations regarding the approval and use of our product candidates as first, second or subsequent lines of therapy or in combination with other drugs; |
• | our ability to consistently maintain effective internal control over financial reporting; |
• | our competitive position and the success of competing therapies that are or may become available; |
• | our estimates of the number of patients that we will enroll in our clinical trials; |
• | the beneficial characteristics, safety, efficacy and therapeutic effects of our product candidates; |
• | our ability to obtain and maintain regulatory approval of our product candidates; |
• | our plans relating to the further development of our product candidates, including additional indications we may pursue; |
• | our intellectual property position, including our ability to obtain, maintain, expand, protect and enforce our intellectual property rights covering product candidates we may develop, including the extensions of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights; |
• | our continued reliance on third parties to conduct additional clinical trials of our product candidates, and for the manufacture of our product candidates for preclinical studies and clinical trials; |
• | our ability to obtain, and negotiate favorable terms of, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates; |
• | the pricing and reimbursement of our product candidates we may develop, if approved; |
• | the rate and degree of market acceptance and clinical utility of our product candidates we may develop; |
• | our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; |
• | our financial performance; |
• | the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements; |
• | the impact of laws and regulations; |
• | our expectations regarding the period during which we will qualify as an emerging growth company under the JOBS Act; |
• | the effect of epidemics and pandemics, such as the COVID-19 pandemic, or other business disruptions on our business; and |
• | our anticipated use of our existing resources and the proceeds from our initial public offering. |
Item 1. |
Identity of Directors, Senior Management and Advisers |
Item 2. |
Offer Statistics and Expected Timetable |
Item 3. |
Key Information |
• | The PRC government has significant authority to regulate or intervene in the China operations of an offshore holding company, such as us, at any time. Therefore, investors in the ADSs and our business face potential uncertainty from the PRC government’s policy. The Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our ADSs. Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The PRC government has significant authority to regulate or intervene in the China operations of an offshore holding company, such as us, at any time. Therefore, investors in the ADSs and our business face potential uncertainty from the PRC government’s policy”; |
• | We believe that our corporate structure and contractual arrangements with the VIE comply with the current applicable PRC laws and regulations. As of the date of this annual report, we believe that our PRC subsidiaries and the VIE are not required to obtain permission or approval from the Chinese Securities Regulatory Commission, or the CSRC, or the Cyberspace Administration of China, or the CAC, to operate their respective business in China or to approve our contractual arrangements with the VIE and its shareholders. |
• | Recently, the PRC government initiated a series of regulatory actions and released guidelines to regulate business operations in China with little advance notice, including those related to data security or anti-monopoly concerns, which may have an impact on our ability to conduct certain business in China, accept foreign investments, or list on a U.S. or other foreign exchange. For a detailed description of risks and regulations related to doing business in China, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China.” |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(in thousands) |
||||||||||||||||
Fees paid for services to the VIE and its subsidiaries |
6,604 | 16,906 | 16,226 | 2,546 |
Hypothetical pre-tax earnings in the VIE(1) |
100 | % | ||
Tax on earnings at statutory rate of 25% at WFOE level |
(25 | )% | ||
|
|
|||
Amount to be distributed as dividend from WFOE to Gracell HK (2) |
75 | % | ||
Withholding tax at tax treaty rate of 5% |
(3.75 | )% | ||
|
|
|||
Amount to be distributed as dividend at Gracell HK level and net distribution to Gracell Cayman (3) |
71.25 | % | ||
|
|
(1) | For purposes of this example, the tax calculation has been simplified. The hypothetical book pre-tax earnings amount is assumed to equal Chinese taxable income. |
(2) | China’s Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a Foreign Invested Enterprise to its immediate holding company outside of Mainland China. A lower withholding income tax rate of 5% is applied if the Foreign Invested Enterprise’s immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with Mainland China, subject to a qualification review at the time of the distribution. There is no incremental tax at Gracell HK level for any dividend distribution to Gracell Cayman. |
(3) | If a 10% withholding income tax rate is imposed, the withholding tax will be 7.5 and the amount to be distributed as dividend at Gracell HK level and net distribution to Gracell Cayman will be 67.5. |
As of December 31, 2020 |
||||||||||||||||||||||||
Parent Only |
Other Equity Subsidiaries |
WFOE |
VIE and VIE’s Subsidiary |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||
ASSETS |
||||||||||||||||||||||||
Current assets: |
||||||||||||||||||||||||
Cash and cash equivalents |
683,565 | 448 | 20,546 | 49,749 | — | 754,308 | ||||||||||||||||||
Short-term investments |
— | — | — | 18,743 | — | 18,743 | ||||||||||||||||||
Amounts due from Group companies |
— | — | 270,885 | 48,505 | (319,390 | ) | — | |||||||||||||||||
Prepayments and other current assets |
— | 7 | 13,259 | 29,152 | — | 42,418 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total current assets |
683,565 |
455 |
304,690 |
146,149 |
(319,390 |
) |
815,469 |
|||||||||||||||||
Investment in subsidiaries |
148,654 | 149,678 | — | — | (298,332 | ) | — | |||||||||||||||||
Amounts due from Group companies-long-term |
29,915 | — | — | — | (29,915 | ) | — | |||||||||||||||||
Property, equipment and software |
— | — | 40,682 | 78,401 | — | 119,083 | ||||||||||||||||||
Other non-current assets |
17,568 | — | 3,086 | 9,744 | — | 30,398 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL ASSETS |
879,702 |
150,133 |
348,458 |
234,294 |
(647,637 |
) |
964,950 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY (DEFICIT) |
||||||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||||||
Amounts due to Group companies |
45,586 | — | 3,800 | 270,004 | (319,390 | ) | — | |||||||||||||||||
Accruals and other current liabilities |
14,453 | 1,479 | 15,312 | 11,157 | — | 42,401 | ||||||||||||||||||
Short-term borrowings |
— | — | — | 49,990 | — | 49,990 | ||||||||||||||||||
Current portion of long-term borrowings |
— | — | — | 970 | — | 970 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total current liabilities |
60,039 |
1,479 |
19,112 |
332,121 |
(319,390 |
) |
93,361 |
|||||||||||||||||
Deficit in subsidiaries |
— | — | — | — | — | — | ||||||||||||||||||
Deficit in VIEs |
— | — | 179,668 | — | (179,668 | ) | — | |||||||||||||||||
Amounts due to Group companies-long-term |
— | — | — | 29,915 | (29,915 | ) | — | |||||||||||||||||
Long-term borrowings |
— | — | — | 51,926 | — | 51,926 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL LIABILITIES |
60,039 |
1,479 |
198,780 |
413,962 |
(528,973 |
) |
145,287 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Mezzanine equity |
1,407,536 |
— |
— |
— |
— |
1,407,536 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Shareholders’ equity (deficit): |
||||||||||||||||||||||||
Ordinary shares |
68 | 336 | 469,813 | 6,016 | (476,165 | ) | 68 | |||||||||||||||||
Additional paid-in capital |
— | 552,447 | 72,150 | 66,134 | (690,731 | ) | — | |||||||||||||||||
Accumulated other comprehensive income |
(23,912 | ) | (1,408 | ) | — | — | 1,408 | (23,912 | ) | |||||||||||||||
Accumulated deficit |
(564,029 | ) | (402,721 | ) | (392,285 | ) | (251,818 | ) | 1,046,824 | (564,029 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total shareholders’ equity (deficit) |
(587,873 |
) |
148,654 |
149,678 |
(179,668 |
) |
(118,664 |
) |
(587,873 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY (DEFICIT) |
879,702 |
150,133 |
348,458 |
234,294 |
(647,637 |
) |
964,950 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2021 |
||||||||||||||||||||||||
Parent Only |
Other Equity Subsidiaries |
WFOE |
VIE and VIE’s Subsidiary |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||
ASSETS |
||||||||||||||||||||||||
Current assets: |
||||||||||||||||||||||||
Cash and cash equivalents |
1,517,362 | 106,790 | 82,634 | 122,220 | — | 1,829,006 | ||||||||||||||||||
Short-term investments |
— | — | — | 3,615 | — | 3,615 | ||||||||||||||||||
Amounts due from Group companies |
— | 50,000 | 487,676 | 65,705 | (603,381 | ) | — | |||||||||||||||||
Prepayments and other current assets |
26 | 11 | 11,454 | 40,968 | — | 52,459 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total current assets |
1,517,388 |
156,801 |
581,764 |
232,508 |
(603,381 |
) |
1,885,080 |
|||||||||||||||||
Investment in subsidiaries |
— | 159,818 | — | — | (159,818 | ) | — | |||||||||||||||||
Investment in VIEs |
— | — | — | — | — | — | ||||||||||||||||||
Amounts due from Group companies-long-term |
372,092 | — | — | — | (372,092 | ) | — | |||||||||||||||||
Property, equipment and software |
— | — | 62,874 | 60,944 | — | 123,818 | ||||||||||||||||||
Operating lease right-of-use |
— | — | 24,825 | 4,827 | — | 29,652 | ||||||||||||||||||
Other non-current assets |
— | — | 13,604 | 7,983 | — | 21,587 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL ASSETS |
1,889,480 |
316,619 |
683,067 |
306,262 |
(1,135,291 |
) |
2,060,137 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) |
||||||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||||||
Amounts due to Group companies |
45,587 | — | 71,000 | 486,794 | (603,381 | ) | — | |||||||||||||||||
Accruals and other current liabilities |
6,989 | 5,096 | 21,350 | 35,685 | — | 69,120 | ||||||||||||||||||
Short-term borrowings |
— | — | — | 66,100 | — | 66,100 | ||||||||||||||||||
Operating lease liabilities, current |
— | — | 13,160 | 4,367 | — | 17,527 | ||||||||||||||||||
Current portion of long-term borrowings |
— | — | — | 2,376 | — | 2,376 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total current liabilities |
52,576 |
5,096 |
105,510 |
595,322 |
(603,381 |
) |
155,123 |
|||||||||||||||||
Deficit in subsidiaries |
1,069 | — | — | — | (1,069 | ) | — | |||||||||||||||||
Deficit in VIEs |
— | — | 403,639 | — | (403,639 | ) | — | |||||||||||||||||
Amounts due to Group companies-long-term |
— | 312,592 | — | 59,500 | (372,092 | ) | — | |||||||||||||||||
Operating lease liabilities, non-current |
— | — | 14,100 | 730 | — | 14,830 | ||||||||||||||||||
Long-term borrowings |
— | — | — | 54,349 | — | 54,349 | ||||||||||||||||||
Other non-current liabilities |
8,464 | — | — | — | — | 8,464 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL LIABILITIES |
62,109 |
317,688 |
523,249 |
709,901 |
(1,380,181 |
) |
232,766 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Shareholders’ equity (deficit): |
||||||||||||||||||||||||
Ordinary shares |
223 | 336 | 820,452 | 6,016 | (826,804 | ) | 223 | |||||||||||||||||
Additional paid-in capital |
2,902,856 | 787,791 | 80,034 | 67,812 | (935,637 | ) | 2,902,856 | |||||||||||||||||
Accumulated other comprehensive income |
(57,936 | ) | (321 | ) | — | — | 321 | (57,936 | ) | |||||||||||||||
Accumulated deficit |
(1,017,772 | ) | (788,875 | ) | (740,668 | ) | (477,467 | ) | 2,007,010 | (1,017,772 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total shareholders’ equity (deficit) |
1,827,371 |
(1,069 |
) |
159,818 |
(403,639 |
) |
244,890 |
1,827,371 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL LIABILITIES, AND SHAREHOLDERS’ EQUITY (DEFICIT) |
1,889,480 |
316,619 |
683,067 |
306,262 |
(1,135,291 |
) |
2,060,137 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2019 |
||||||||||||||||||||||||
Parent Only |
Other Equity Subsidiaries |
WFOE |
VIE and VIE’s Subsidiary |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Other-intercompany(a) |
— | — | — | 6,604 | (6,604 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenues |
— | — | — | 6,604 | (6,604 | ) | — | |||||||||||||||||
Expenses |
||||||||||||||||||||||||
Research and development expenses |
(2,289 | ) | — | (34,073 | ) | (82,856 | ) | (119,218 | ) | |||||||||||||||
Administrative expenses |
(3,334 | ) | (2,812 | ) | (11,986 | ) | (9,230 | ) | — | (27,362 | ) | |||||||||||||
Other - intercompany(a) |
(6,604 | ) | — | 6,604 | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations |
(5,623 |
) |
(2,812 |
) |
(52,663 |
) |
(85,482 |
) |
— |
(146,580 |
) | |||||||||||||
Interest income(d) |
2,904 | — | 61 | 991 | (24 | ) | 3,932 | |||||||||||||||||
Interest expense(d) |
— | — | — | (24 | ) | 24 | — | |||||||||||||||||
Other income |
— | — | — | 1,449 | — | 1,449 | ||||||||||||||||||
Foreign exchange gain (loss), net |
— | — | 2,556 | — | — | 2,556 | ||||||||||||||||||
Equity in losses of subsidiaries and VIE(c) |
(135,924 | ) | (133,112 | ) | (83,066 | ) | — | 352,102 | — | |||||||||||||||
Others, net |
(21 | ) | — | — | — | — | (21 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss before income taxes |
(138,664 |
) |
(135,924 |
) |
(133,112 |
) |
(83,066 |
) |
352,102 |
(138,664 |
) | |||||||||||||
Income tax expense |
— | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss |
(138,664 |
) |
(135,924 |
) |
(133,112 |
) |
(83,066 |
) |
352,102 |
(138,664 |
) | |||||||||||||
Deemed contribution from convertible redeemable preferred shareholders |
(25,390 | ) | — | — | — | — | (25,390 | ) | ||||||||||||||||
Accretion of convertible redeemable preferred shares to redemption value |
(36,802 | ) | — | — | — | — | (36,802 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss attributable to Gracell Biotechnologies Inc.’s ordinary shareholders |
(200,856 |
) |
(135,924 |
) |
(133,112 |
) |
(83,066 |
) |
352,102 |
(200,856 |
) | |||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||
Foreign currency translation adjustments, net of nil tax |
(3,159 | ) | (159 | ) | — | — | 159 | (3,159 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive loss attributable to Gracell Biotechnologies Inc.’s ordinary shareholders |
(204,015 |
) |
(136,083 |
) |
(133,112 |
) |
(83,066 |
) |
352,261 |
(204,015 |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2020 |
||||||||||||||||||||||||
Parent Only |
Other Equity Subsidiaries |
WFOE |
VIE and VIE’s Subsidiary |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Other-intercompany(a) |
— | — | — | 16,906 | (16,906 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenues |
— | — | — | 16,906 | (16,906 | ) | — | |||||||||||||||||
Expenses |
||||||||||||||||||||||||
Research and development expenses |
(1,753 | ) | (1,185 | ) | (53,356 | ) | (112,536 | ) | (168,830 | ) | ||||||||||||||
Administrative expenses |
(13,745 | ) | (6,439 | ) | (18,463 | ) | (6,919 | ) | — | (45,566 | ) | |||||||||||||
Other - intercompany(a) |
(16,906 | ) | — | 16,906 | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations |
(15,498 |
) |
(7,624 |
) |
(88,725 |
) |
(102,549 |
) |
— |
(214,396 |
) | |||||||||||||
Interest income(d) |
2,179 | — | 822 | 554 | (685 | ) | 2,870 | |||||||||||||||||
Interest expense(d) |
— | — | — | (2,840 | ) | 685 | (2,155 | ) | ||||||||||||||||
Other income |
— | — | 54 | 4,653 | — | 4,707 | ||||||||||||||||||
Foreign exchange gain (loss), net |
(1,551 | ) | — | (1,362 | ) | (1 | ) | — | (2,914 | ) | ||||||||||||||
Equity in losses of subsidiaries and VIE(c) |
(197,030 | ) | (189,406 | ) | (100,195 | ) | — | 486,631 | — | |||||||||||||||
Others, net |
— | — | — | (12 | ) | — | (12 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss before income taxes |
(211,900 |
) |
(197,030 |
) |
(189,406 |
) |
(100,195 |
) |
486,631 |
(211,900 |
) | |||||||||||||
Income tax expense |
— | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss |
(211,900 |
) |
(197,030 |
) |
(189,406 |
) |
(100,195 |
) |
486,631 |
(211,900 |
) | |||||||||||||
Accretion of convertible redeemable preferred shares to redemption value |
(62,733 | ) | — | — | — | — | (62,733 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss attributable to Gracell Biotechnologies Inc.’s ordinary shareholders |
(274,633 |
) |
(197,030 |
) |
(189,406 |
) |
(100,195 |
) |
486,631 |
(274,633 |
) | |||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||
Foreign currency translation adjustments, net of nil tax |
(20,754 | ) | (1,249 | ) | — | — | 1,249 | (20,754 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive loss attributable to Gracell Biotechnologies Inc.’s ordinary shareholders |
(295,387 |
) |
(198,279 |
) |
(189,406 |
) |
(100,195 |
) |
487,880 |
(295,387 |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2021 |
||||||||||||||||||||||||
Parent Only |
Other Equity Subsidiaries |
WFOE |
VIE and VIE’s Subsidiary |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Licensing and collaboration revenue |
— | — | — | 366 | — | 366 | ||||||||||||||||||
Other-intercompany(a)(b) |
— | — | 22,958 | 16,226 | (39,184 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenues |
— | — | 22,958 | 16,592 | (39,184 | ) | 366 | |||||||||||||||||
Expenses |
||||||||||||||||||||||||
Research and development expenses |
(15,245 | ) | (24,296 | ) | (82,651 | ) | (204,707 | ) | — | (326,899 | ) | |||||||||||||
Administrative expenses |
(58,594 | ) | (14,202 | ) | (46,337 | ) | (17,907 | ) | — | (137,040 | ) | |||||||||||||
Other-intercompany(a)(b) |
(16,226 | ) | (22,958 | ) | 39,184 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations |
(73,839 |
) |
(38,498 |
) |
(122,256 |
) |
(228,980 |
) |
— |
(463,573 |
) | |||||||||||||
Interest income(d) |
8,292 | 36 | 1,413 | 630 | (1,255 | ) | 9,116 | |||||||||||||||||
Interest expense(d) |
— | — | — | (6,318 | ) | 1,255 | (5,063 | ) | ||||||||||||||||
Other income |
— | — | 45 | 9,075 | — | 9,120 | ||||||||||||||||||
Foreign exchange gain (loss), net |
(55 | ) | 691 | (1,933 | ) | — | — | (1,297 | ) | |||||||||||||||
Equity in losses of subsidiaries and VIE(c) |
(386,152 | ) | (348,381 | ) | (225,650 | ) | — | 960,183 | — | |||||||||||||||
Others, net |
— | — | — | (57 | ) | — | (57 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss before income taxes |
(451,754 |
) |
(386,152 |
) |
(348,381 |
) |
(225,650 |
) |
960,183 |
(451,754 |
) | |||||||||||||
Income tax expense |
— | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss |
(451,754 |
) |
(386,152 |
) |
(348,381 |
) |
(225,650 |
) |
960,183 |
(451,754 |
) | |||||||||||||
Accretion of convertible redeemable preferred shares to redemption value |
(1,989 | ) | — | — | — | — | (1,989 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss attributable to Gracell Biotechnologies Inc.’s ordinary shareholders |
(453,743 |
) |
(386,152 |
) |
(348,381 |
) |
(225,650 |
) |
960,183 |
(453,743 |
) | |||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||
Foreign currency translation adjustments, net of nil tax |
(34,024 | ) | 1,087 | — | — | (1,087 | ) | (34,024 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive loss attributable to Gracell Biotechnologies Inc.’s ordinary shareholders |
(487,767 |
) |
(385,065 |
) |
(348,381 |
) |
(225,650 |
) |
959,096 |
(487,767 |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Reflects elimination of inter-company technical service fees charged by VIE to the WFOE subsidiaries. The VIE provided research and development related service to the WFOE and recognized revenue of RMB6.6 million, RMB16.9 million and RMB16.2 million in the years ended December 31, 2019, 2020 and 2021, respectively. |
(b) | Reflects the elimination of the inter-company administrative expenses charged by WFOE to the VIE subsidiaries. The VIE received the business cooperation support from the WFOE and recognized the administrative expenses of RMB23.0 million in total in the year ended December 31, 2021. |
(c) | Reflects the equity in loss of subsidiaries and VIEs which is eliminated in consolidation. |
(d) | Reflects the elimination of the inter-company interest income and expenses. |
For the year ended December 31, 2019 |
||||||||||||||||||||||||
Parent Only |
Other Equity Subsidiaries |
WFOE |
VIE and VIE’s Subsidiary |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||
Net cash (used in) generated from operating activities |
(5,499 |
) |
(2,012 |
) |
(40,605 |
) |
(87,277 |
) |
— |
(135,393 |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash flows from investing activities: |
||||||||||||||||||||||||
Purchase of property, equipment and software |
— | — | (17,913 | ) | (38,519 | ) | (56,432 | ) | ||||||||||||||||
Investment in subsidiaries |
(174,739 | ) | (171,274 | ) | — | — | 346,013 | — | ||||||||||||||||
Loans to Group companies and VIEs(e)(f) |
(23,000 | ) | — | (80,024 | ) | — | 103,024 | — | ||||||||||||||||
Investments in short-term investments |
— | — | — | (80,200 | ) | (80,200 | ) | |||||||||||||||||
Proceeds from disposal of short-term investments |
— | — | — | 178,000 | 178,000 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash (used in) generated from investing activities |
(197,739 |
) |
(171,274 |
) |
(97,937 |
) |
59,281 |
449,037 |
41,368 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash flow from financing activities |
||||||||||||||||||||||||
Repurchase of ordinary shares and preferred shares |
— | — | — | (44,705 | ) | — | (44,705 | ) | ||||||||||||||||
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs |
439,501 | — | — | — | — | 439,501 | ||||||||||||||||||
Borrowings under loans from Group companies(e)(f) |
— | — | 60 | 102,964 | (103,024 | ) | — | |||||||||||||||||
Capital contribution from parent |
— | 174,739 | 171,274 | — | (346,013 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash (used in) generated from financing activities |
439,501 |
174,739 |
171,334 |
58,259 |
(449,037 |
) |
394,796 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Effect of exchange rate on cash and cash equivalents |
— | — | (603 | ) | — | — | (603 | ) | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents |
236,263 |
1,453 |
32,189 |
30,263 |
— |
300,168 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash and cash equivalents at the beginning of year |
— | — | — | 11,890 | — | 11,890 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash and cash equivalents at the end of year |
236,263 |
1,453 |
32,189 |
42,153 |
— |
312,058 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2020 |
||||||||||||||||||||||||
Parent Only |
Other Equity Subsidiaries |
WFOE |
VIE and VIE’s Subsidiary |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||
Net cash (used in) generated from operating activities |
(13,309 |
) |
(6,952 |
) |
(93,026 |
) |
(84,862 |
) |
— |
(198,149 |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash flows from investing activities: |
||||||||||||||||||||||||
Purchase of property, equipment and software |
— | — | (25,313 | ) | (54,087 | ) | (79,400 | ) | ||||||||||||||||
Investment in subsidiaries |
(305,734 | ) | (298,538 | ) | — | — | 604,272 | — | ||||||||||||||||
Loans to Group companies and VIEs(e)(f) |
(6,915 | ) | — | (189,980 | ) | — | 196,895 | — | ||||||||||||||||
Investments in short-term investments |
— | — | — | (28,055 | ) | (28,055 | ) | |||||||||||||||||
Proceeds from disposal of short-term investments |
— | — | — | 13,514 | — | 13,514 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash (used in) generated from investing activities |
(312,649 |
) |
(298,538 |
) |
(215,293 |
) |
(68,628 |
) |
801,167 |
(93,941 |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash flow from financing activities |
||||||||||||||||||||||||
Repayment of convertible loans |
(138,695 | ) | (138,695 | ) | ||||||||||||||||||||
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs |
795,420 | — | — | — | — | 795,420 | ||||||||||||||||||
Borrowings under loans from Group companies(e)(f) |
— | — | — | 196,895 | (196,895 | ) | — | |||||||||||||||||
Capital contribution from parent |
305,734 | 298,538 | (604,272 | ) | — | |||||||||||||||||||
Proceeds from bank borrowings |
— | — | — | 103,008 | — | 103,008 | ||||||||||||||||||
Repayments of bank borrowings |
— | — | (122 | ) | — | (122 | ) | |||||||||||||||||
Payment of initial public offering costs |
(2,645 | ) | — | (499 | ) | — | — | (3,144 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash (used in) generated from financing activities |
792,775 |
305,734 |
298,039 |
161,086 |
(801,167 |
) |
756,467 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Effect of exchange rate on cash and cash equivalents |
(19,515 | ) | (1,249 | ) | (1,363 | ) | — | — | (22,127 | ) | ||||||||||||||
Net increase (decrease) in cash and cash equivalents |
447,302 |
(1,005 |
) |
(11,643 |
) |
7,596 |
— |
442,250 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash and cash equivalents at the beginning of year |
236,263 | 1,453 | 32,189 | 42,153 | — | 312,058 | ||||||||||||||||||
|
|
|
|