10-Q 1 harp-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

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-38800

 

Harpoon Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

47-3458693

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

611 Gateway Boulevard, Suite 400

South San Francisco, CA 94080

(Address of principal executive offices)

Registrant’s telephone number, including area code: (650) 443-7400

 

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 $0.0001 per share

 

HARP

 

The Nasdaq Stock Market LLC

 

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 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

The number of outstanding shares of the Registrant’s common stock, par value $0.0001, as of October 31, 2023 was 16,932,272.


 

HARPOON THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED September 30, 2023

 

TABLE OF CONTENTS

 

Page

 

Special Note Regarding Forward-Looking Statements

3

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

Item

 

 

1.

Condensed Financial Statements (unaudited):

5

 

 

a. Condensed Balance Sheets as of September 30, 2023 and December 31, 2022

5

 

 

b. Condensed Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2023 and 2022

6

 

 

c. Condensed Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022

7

 

 

d. Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022

8

 

 

e. Notes to Condensed Financial Statements

9

2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

3.

Quantitative and Qualitative Disclosures About Market Risk

39

4.

Controls and Procedures

39

 

 

 

 

PART II. OTHER INFORMATION

 

1.

Legal Proceedings

40

1A.

Risk Factors

40

2.

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

86

3.

Defaults Upon Senior Securities

86

4.

Mine Safety Disclosures

86

5.

Other Information

86

6.

Exhibits

87

 

Signatures

89

 

 

2


 

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 Quarterly Report on 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” or “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

the timing of the initiation, progress, safety profiles, expected results and any winddowns of our preclinical studies, clinical trials and our research and development programs as affected by various factors, including patient enrollment, rate of dose escalation, adverse events, and available drug supply;
developments relating to our competitors and our industry, including competing therapies;
our ability to advance product candidates into, and successfully complete, preclinical studies and clinical trials;
our estimates regarding expenses, capital sufficiency and requirements and needs for additional financing and our ability to obtain additional capital;
the potential benefits of the completed 1 to 10 reverse stock split and our ability to maintain compliance with the listing requirements of Nasdaq;
the implementation of our business model, strategic plans for our business and product candidates;
the timing or likelihood of regulatory filings and approvals;
the commercialization of our product candidates, if approved;
the pricing, coverage, and reimbursement of our product candidates, if approved;
the potential benefits of our recently completed corporate restructuring and cost reduction initiatives;
the scope of protection we are able to establish and maintain for intellectual property rights covering our technology platforms, including TriTAC, ProTriTAC and TriTAC-XR and our product candidates, including the projected terms of patent protection;
our ability to enter into strategic arrangements and/or collaborations and the potential benefits of such arrangements;
our ability to retain the continued service of our key executives and to identify, hire and retain additional qualified professionals;
our estimates regarding the market opportunity for our product candidates;
our financial performance; and
the effects on our operations of general political and economic conditions, including any health pandemic, current or anticipated military conflicts or other geopolitical events, economic slowdowns, recessions or market corrections, inflationary pressures, rising interest rates and tightening of credit markets.

These forward-looking statements are based on our management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate, and management’s beliefs and assumptions and are not guarantees of future performance or development. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the "Risk Factor Summary" below, under the heading “Risk Factors” and elsewhere in this report. 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 report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this report. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information.

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, we cannot guarantee that the future results, levels of activity, performance,

3


 

or events and circumstances reflected in the forward-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 report to conform these statements to new information, actual results or changes in our expectations, except as required by law.

Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “company,” “Harpoon,” “we,” “us” and “our” refer to Harpoon Therapeutics, Inc.“TriTAC” is a registered trademark and “Harpoon Therapeutics,” “Harpoon,” the Harpoon logo and ProTriTAC are among the trademarks owned by Harpoon Therapeutics, Inc. This report also contains trademarks and trade names that are property of their respective owners.

4


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

HARPOON THERAPEUTICS, INC.

Condensed Balance Sheets

(unaudited)

(in thousands, except share and per share data)

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

17,738

 

 

$

51,614

 

Short-term marketable securities

 

 

13,870

 

 

 

1,498

 

Prepaid expenses and other current assets

 

 

2,688

 

 

 

1,615

 

Total current assets

 

 

34,296

 

 

 

54,727

 

Property and equipment, net

 

 

3,527

 

 

 

7,237

 

Operating lease right-of-use asset

 

 

8,857

 

 

 

10,854

 

Other assets

 

 

898

 

 

 

911

 

Total assets

 

$

47,578

 

 

$

73,729

 

Liabilities and stockholders' equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

3,435

 

 

$

4,712

 

Accrued liabilities

 

 

11,697

 

 

 

14,361

 

Deferred revenue, current

 

 

 

 

 

30,937

 

Operating lease liabilities, current

 

 

2,974

 

 

 

2,423

 

Total current liabilities

 

 

18,106

 

 

 

52,433

 

Deferred revenue, noncurrent

 

 

 

 

 

2,314

 

Operating lease liabilities, net of current portion

 

 

11,530

 

 

 

13,583

 

Embedded redemption liability

 

 

4,574

 

 

 

 

Series A mandatorily redeemable preferred stock

 

 

8,827

 

 

 

 

Total liabilities

 

 

43,037

 

 

 

68,330

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Common stock, $0.0001 par value; 150,000,000 shares authorized at September 30, 2023 and December 31, 2022; 4,108,769 shares and 3,578,668 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

 

 

1

 

 

 

4

 

Additional paid-in capital

 

 

369,141

 

 

 

357,921

 

Accumulated other comprehensive income (loss)

 

 

1

 

 

 

(3

)

Accumulated deficit

 

 

(364,602

)

 

 

(352,523

)

Total stockholders' equity

 

 

4,541

 

 

 

5,399

 

Total liabilities and stockholders' equity

 

$

47,578

 

 

$

73,729

 

 

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

5


 

HARPOON THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share data)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenue

 

$

4,448

 

 

$

13,617

 

 

$

33,252

 

 

$

27,826

 

  Total revenue

 

 

4,448

 

 

 

13,617

 

 

 

33,252

 

 

 

27,826

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

12,325

 

 

 

20,977

 

 

 

39,684

 

 

 

62,446

 

General and administrative

 

 

4,262

 

 

 

4,529

 

 

 

12,250

 

 

 

14,993

 

Impairment of long-lived assets

 

 

 

 

 

 

 

 

1,729

 

 

 

 

  Total operating expenses

 

 

16,587

 

 

 

25,506

 

 

 

53,663

 

 

 

77,439

 

Loss from operations

 

 

(12,139

)

 

 

(11,889

)

 

 

(20,411

)

 

 

(49,613

)

Interest income, net

 

 

480

 

 

 

289

 

 

 

1,520

 

 

 

433

 

Interest expense

 

 

(2,046

)

 

 

 

 

 

(3,744

)

 

 

 

Other income (expense), net

 

 

11,903

 

 

 

(40

)

 

 

10,556

 

 

 

(132

)

Net loss attributable to common stockholders

 

 

(1,802

)

 

 

(11,640

)

 

 

(12,079

)

 

 

(49,312

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized (loss) gain on marketable securities

 

 

(4

)

 

 

28

 

 

 

4

 

 

 

19

 

Comprehensive loss

 

$

(1,806

)

 

$

(11,612

)

 

$

(12,075

)

 

$

(49,293

)

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

 

$

(0.46

)

 

$

(3.52

)

 

$

(3.17

)

 

$

(14.95

)

Weighted-average shares used in computing net loss per share, basic and diluted

 

 

3,947,995

 

 

 

3,306,215

 

 

 

3,807,955

 

 

 

3,299,357

 

 

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

6


 

HARPOON THERAPEUTICS, INC.

Condensed Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share data)

 

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated Other

 

 

 

 

 

Total

 

 

Common Stock

 

Paid-In

 

Comprehensive

 

Accumulated

 

Stockholders'

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2022

 

3,578,668

 

 

$

4

 

 

$

357,921

 

 

$

(3

)

 

$

(352,523

)

 

$

5,399

 

Issuance of common stock under equity incentive plan

 

14,825

 

 

 

 

 

 

93

 

 

 

 

 

 

 

 

 

93

 

Issuance of common stock warrants in connection with the sale of Series A mandatorily redeemable preferred stock

 

 

 

 

 

 

 

3,881

 

 

 

 

 

 

 

 

 

3,881

 

Issuance of common stock pursuant to ATM facility

 

166,078

 

 

 

 

 

 

1,525

 

 

 

 

 

 

 

 

 

1,525

 

Stock-based compensation

 

 

 

 

 

 

 

1,133

 

 

 

 

 

 

 

 

 

1,133

 

Vesting of Founder's shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,338

)

 

 

(11,338

)

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

Balances at March 31, 2023

 

3,759,571

 

 

 

4

 

 

 

364,553

 

 

 

 

 

 

(363,861

)

 

 

696

 

Issuance of common stock pursuant to ATM facility

 

37,684

 

 

 

 

 

 

171

 

 

 

 

 

 

 

 

 

171

 

Stock-based compensation

 

 

 

 

 

 

 

1,065

 

 

 

 

 

 

 

 

 

1,065

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

1,061

 

 

 

1,061

 

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

5

 

Balances at June 30, 2023

 

3,797,256

 

 

$

4

 

 

$

365,789

 

 

$

5

 

 

$

(362,800

)

 

$

2,998

 

Par value reclass for 1 for 10 reverse stock split

 

 

 

 

(3

)

 

 

3

 

 

 

 

 

 

 

 

 

 

Issuance of common stock pursuant to ATM facility

 

283,525

 

 

 

 

 

 

2,335

 

 

 

 

 

 

 

 

 

2,335

 

Issuance of common stock under equity incentive plan

 

27,989

 

 

 

 

 

 

96

 

 

 

 

 

 

 

 

 

96

 

Stock-based compensation

 

 

 

 

 

 

 

918

 

 

 

 

 

 

 

 

 

918

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,802

)

 

 

(1,802

)

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

(4

)

 

 

 

 

 

(4

)

Balances at September 30, 2023

 

4,108,769

 

 

$

1

 

 

$

369,141

 

 

$

1

 

 

$

(364,602

)

 

$

4,541

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated Other

 

 

 

 

 

Total

 

 

Common Stock

 

Paid-In

 

Comprehensive

 

Accumulated

 

Stockholders'

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2021

 

3,276,579

 

 

$

4

 

 

$

342,905

 

 

$

(47

)

 

$

(284,792

)

 

$

58,070

 

Issuance of common stock under equity incentive plans
   including exercise of stock options

 

30,991

 

 

 

 

 

 

830

 

 

 

 

 

 

 

 

 

830

 

Vesting of early exercisable stock options

 

173

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

3

 

Stock-based compensation

 

 

 

 

 

 

 

2,843

 

 

 

 

 

 

 

 

 

2,843

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,321

)

 

 

(20,321

)

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

(41

)

 

 

 

 

 

(41

)

Balances at March 31, 2022

 

3,307,742

 

 

 

4

 

 

 

346,581

 

 

 

(88

)

 

 

(305,113

)

 

 

41,384

 

Issuance of common stock under equity incentive plans
   including exercise of stock options

 

2,616

 

 

 

 

 

 

53

 

 

 

 

 

 

 

 

 

53

 

Vesting of early exercisable stock options

 

173

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

3

 

Stock-based compensation

 

 

 

 

 

 

 

2,521

 

 

 

 

 

 

 

 

 

2,521

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,351

)

 

 

(17,351

)

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

32

 

 

 

 

 

 

32

 

Balances at June 30, 2022

 

3,310,531

 

 

$

4

 

 

$

349,158

 

 

$

(56

)

 

$

(322,464

)

 

$

26,642

 

Issuance of common stock under equity incentive plans
   including exercise of stock options

 

12,224

 

 

 

 

 

 

101

 

 

 

 

 

 

 

 

 

101

 

Vesting of early exercisable stock options

 

115

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

2

 

Stock-based compensation

 

 

 

 

 

 

 

1,779

 

 

 

 

 

 

 

 

 

1,779

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,640

)

 

 

(11,640

)

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

28

 

 

 

 

 

 

28

 

Balances at September 30, 2022

 

3,322,871

 

 

$

4

 

 

$

351,040

 

 

$

(28

)

 

$

(334,104

)

 

$

16,912

 

 

 

 

 

 

 

 

 

 

 

 

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

7


 

HARPOON THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss attributable to common stockholders

 

$

(12,079

)

 

$

(49,312

)

Adjustments to reconcile net loss attributable to common stockholders to net cash provided by (used in) operating activities

 

 

 

 

 

 

Stock-based compensation expense

 

 

3,116

 

 

 

7,143

 

Depreciation and amortization

 

 

1,268

 

 

 

1,679

 

Non-cash lease expense

 

 

1,079

 

 

 

508

 

Loss on sale and disposal of fixed assets

 

 

443

 

 

 

 

Impairment of long-lived assets

 

 

1,729

 

 

 

 

Change in fair value of embedded redemption liability

 

 

(10,971

)

 

 

 

Issuance cost for embedded redemption liability

 

 

807

 

 

 

 

Accretion of redemption value discount

 

 

3,744

 

 

 

 

Net amortization of (discounts) and premiums on marketable securities

 

 

(215

)

 

 

413

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

(1,344

)

 

 

(455

)

Other assets

 

 

41

 

 

 

49

 

Accounts payable

 

 

(1,008

)

 

 

(53

)

Accrued liabilities

 

 

(2,848

)

 

 

(1,724

)

Deferred revenue

 

 

(33,251

)

 

 

(27,826

)

Operating lease liabilities

 

 

(1,502

)

 

 

(1,214

)

Net cash used in operating activities

 

 

(50,991

)

 

 

(70,792

)

Cash flows from investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(91

)

 

 

(319

)

Purchases of marketable securities

 

 

(15,652

)

 

 

(24,426

)

Maturities of marketable securities

 

 

3,500

 

 

 

100,235

 

Proceeds from sale of equipment

 

 

1,279

 

 

 

 

Net cash (used in) provided by investing activities

 

 

(10,964