Janux Therapeutics, Inc. [JANX] Filings

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10-Q 1 janx-20230930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 Number: 001-40475

Janux Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	82-2289112
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
10955 Vista Sorrento Parkway, Suite 200, San Diego, California	92130
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 751-4493

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, $0.001 par value per share

JANX

The 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, 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 November 3, 2023, the Registrant had 46,168,430 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents

JANUX THERAPEUTICS, INC.

Quarterly Report on Form 10-Q

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements:	1
	Condensed Balance Sheets	1
	Unaudited Condensed Statements of Operations and Comprehensive Loss	2
	Unaudited Condensed Statements of Stockholders’ Equity	3
	Unaudited 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	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	76
Item 5.	Other Information	76
Item 6.	Exhibits	77
SIGNATURES		78

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Janux Therapeutics, Inc.

Condensed Balance Sheets

(in thousands, except share and par value data)


	September 30, 2023			December 31, 2022
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	17,152		$	51,426
Short-term investments		332,560			275,590
Prepaid expenses and other current assets		5,483			5,423
Total current assets		355,195			332,439
Restricted cash		816			816
Property and equipment, net		7,317			7,086
Operating lease right-of-use assets		21,208			22,279
Other long-term assets		2,314			1,390
Total assets	$	386,850		$	364,010

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,505		$	2,159
Accrued liabilities		6,831			8,010
Current portion of deferred revenue		3,648			5,406
Unvested stock liabilities		25			169
Current portion of operating lease liabilities		1,462			763
Total current liabilities		14,471			16,507
Deferred revenue, net of current portion		—			2,221
Operating lease liabilities, net of current portion		23,431			24,542
Total liabilities		37,902			43,270

Commitments and contingencies (Note 3)

Stockholders’ equity:
Preferred stock, $0.001 par value; authorized shares – 10,000,000 at September 30, 2023 and December 31, 2022, respectively; no shares issued and outstanding at September 30, 2023 and December 31, 2022		—			—
Common stock, $0.001 par value; authorized shares – 200,000,000 at September 30, 2023 and December 31, 2022, respectively; issued shares – 46,168,430 and 41,684,666 at September 30, 2023 and December 31, 2022, respectively; outstanding shares – 46,151,427 and 41,616,260 at September 30, 2023 and December 31, 2022, respectively		46			42
Additional paid-in capital		507,082			432,703
Accumulated other comprehensive loss		(1,175	)		(1,535	)
Accumulated deficit		(157,005	)		(110,470	)
Total stockholders’ equity		348,948			320,740
Total liabilities and stockholders’ equity	$	386,850		$	364,010

See accompanying notes.

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Janux Therapeutics, Inc.

Unaudited Condensed Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Collaboration revenue	$	2,517		$	1,813		$	5,622		$	5,767
Operating expenses:
Research and development		11,892			13,737			42,681			38,007
General and administrative		6,438			6,098			19,783			16,585
Total operating expenses		18,330			19,835			62,464			54,592
Loss from operations		(15,813	)		(18,022	)		(56,842	)		(48,825	)
Other income:
Interest income		4,245			1,326			10,307			1,831
Total other income		4,245			1,326			10,307			1,831
Net loss	$	(11,568	)	$	(16,696	)	$	(46,535	)	$	(46,994	)
Other comprehensive gain (loss):
Unrealized gain (loss) on available-for-sale securities, net		(115	)		(370	)		360			(2,007	)
Comprehensive loss	$	(11,683	)	$	(17,066	)	$	(46,175	)	$	(49,001	)
Net loss per common share, basic and diluted	$	(0.25	)	$	(0.40	)	$	(1.08	)	$	(1.13	)
Weighted-average shares of common stock outstanding, basic and diluted		45,708,649			41,526,524			43,117,403			41,431,023

See accompanying notes.

Table of Contents

Janux Therapeutics, Inc.

Unaudited Condensed Statements of Stockholders’ Equity

For the Nine Months Ended September 30, 2023 and 2022

(in thousands, except share data)


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at December 31, 2022		41,616,260	$	42	$	432,703	$	(1,535	)	$	(110,470	)	$	320,740
Issuance of common stock and pre-funded common stock warrants, net of issuance costs		4,153,717		4		56,526		—			—			56,530
Exercise of pre-funded common stock warrants		80,257		—		—		—			—			—
Exercise of common stock options		191,879		—		1,659		—			—			1,659
Shares issued under employee stock purchase plan		57,911		—		528		—			—			528
Vesting of restricted shares		51,403		—		144		—			—			144
Stock-based compensation		—		—		15,522		—			—			15,522
Unrealized gain on available-for-sale securities, net		—		—		—		360			—			360
Net loss		—		—		—		—			(46,535	)		(46,535	)
Balance at September 30, 2023		46,151,427	$	46	$	507,082	$	(1,175	)	$	(157,005	)	$	348,948


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at December 31, 2021		41,243,137	$	41	$	413,967	$	(270	)	$	(47,411	)	$	366,327
Exercise of common stock options		7,405		—		1		—			—			1
Shares issued under employee stock purchase plan		32,662		—		307		—			—			307
Vesting of restricted shares		267,500		1		880		—			—			881
Stock-based compensation		—		—		12,998		—			—			12,998
Unrealized loss on available-for-sale securities, net		—		—		—		(2,007	)		—			(2,007	)
Net loss		—		—		—		—			(46,994	)		(46,994	)
Balance at September 30, 2022		41,550,704	$	42	$	428,153	$	(2,277	)	$	(94,405	)	$	331,513

See accompanying notes.

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Janux Therapeutics, Inc.

Unaudited Condensed Statements of Stockholders’ Equity

For the Three Months Ended September 30, 2023 and 2022

(in thousands, except share data)


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at June 30, 2023		41,867,536	$	42	$	445,924	$	(1,060	)	$	(145,437	)	$	299,469
Issuance of common stock and pre-funded common stock warrants, net of issuance costs		4,153,717		4		56,526		—			—			56,530
Exercise of pre-funded common stock warrants		80,257		—		—		—			—			—
Exercise of common stock options		43,230		—		79		—			—			79
Vesting of restricted shares		6,687		—		5		—			—			5
Stock-based compensation		—		—		4,548		—			—			4,548
Unrealized loss on available-for-sale securities, net		—		—		—		(115	)		—			(115	)
Net loss		—		—		—		—			(11,568	)		(11,568	)
Balance at September 30, 2023		46,151,427	$	46	$	507,082	$	(1,175	)	$	(157,005	)	$	348,948


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at June 30, 2022		41,501,269	$	42	$	423,388	$	(1,907	)	$	(77,709	)	$	343,814
Vesting of restricted shares		49,435		—		169		—			—			169
Stock-based compensation		—		—		4,596		—			—			4,596
Unrealized loss on available-for-sale securities, net		—		—		—		(370	)		—			(370	)
Net loss		—		—		—		—			(16,696	)		(16,696	)
Balance at September 30, 2022		41,550,704	$	42	$	428,153	$	(2,277	)	$	(94,405	)	$	331,513

See accompanying notes.

Table of Contents

Janux Therapeutics, Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(46,535	)	$	(46,994	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,424			438
Stock-based compensation		15,522			12,998
Accretion of discounts on investments, net		(5,627	)		(891	)
Changes in operating assets and liabilities:
Accounts receivable		—			(500	)
Prepaid expenses and other current assets		(60	)		(3,288	)
Other long-term assets		(924	)		(957	)
Accounts payable		(50	)		(517	)
Accrued expenses		(1,104	)		3,151
Deferred revenue		(3,979	)		3,859
Operating lease right-of-use assets and liabilities, net		659			1,692
Net cash used in operating activities		(40,674	)		(31,009	)
Cash flows from investing activities
Purchases of property and equipment		(1,335	)		(4,389	)
Purchases of short-term investments		(284,232	)		(208,341	)
Maturities of short-term investments		233,250			272,600
Net cash provided by (used in) investing activities		(52,317	)		59,870
Cash flows from financing activities
Proceeds from exercise of common stock options and employee stock purchase plan		2,187			309
Proceeds from the issuance of common stock and pre-funded common stock warrants, net of issuance costs		56,530			—
Net cash provided by financing activities		58,717			309
Net increase (decrease) in cash, cash equivalents and restricted cash		(34,274	)		29,170
Cash, cash equivalents and restricted cash – beginning of year		52,242			36,398
Cash, cash equivalents and restricted cash – end of period	$	17,968		$	65,568

Supplemental disclosure of noncash investing and financing activities
Unpaid property and equipment	$	430		$	1,189
Vesting of restricted common stock	$	144		$	880
Unrealized gain (loss) on available-for-sale securities, net	$	360		$	(2,007	)
Operating lease liabilities arising from right-of-use assets	$	—		$	23,078

See accompanying notes.

Table of Contents

Janux Therapeutics, Inc.

Notes to Unaudited Condensed Financial Statements

1. Organization and Summary of Significant Accounting Policies

Organization

Janux Therapeutics, Inc. (the “Company”) was incorporated in the State of Delaware in June 2017 and is based in San Diego, California. The Company is a clinical-stage biopharmaceutical company developing a broad pipeline of novel immunotherapies by applying its proprietary technology to its Tumor Activated T Cell Engager (“TRACTr”) and Tumor Activated Immunomodulator (“TRACIr”) platforms to better treat patients suffering from cancer.

Liquidity and Capital Resources

From its inception through September 30, 2023, the Company has devoted substantially all its efforts to organizing and staffing, business planning, raising capital and developing its TRACTr and TRACIr therapeutic platforms and assets. The Company has incurred net losses and negative cash flows from operations since inception and had an accumulated deficit of $157.0 million as of September 30, 2023. The Company has a limited operating history, has not generated any product revenue, and the sales and income potential of its business is unproven. To date the Company has funded its operations primarily with the net proceeds from the issuance of convertible promissory notes, the issuance of convertible preferred stock, the issuance of common stock in its initial public offering (“IPO”), the issuance of common stock and pre-funded common stock warrants in an underwritten offering, the exercise of common stock options, and amounts received under a collaboration agreement. The Company expects to incur substantial operating losses for the next several years and will need to obtain additional financing in order to continue its research and development activities, initiate and complete clinical trials and launch and commercialize any product candidates for which it receives regulatory approval. The Company plans to continue to fund its losses from operations and capital funding needs through public or private equity or debt financings or other sources. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations and future prospects. There can be no assurance that such financing will be available or will be at terms acceptable to the Company, especially in light of COVID-19 and other public health crises, current financial conditions within the banking industry, including the effects of recent failures of financial institutions and liquidity levels, as well as recent or anticipated changes in interest rates and the inflationary macro environment. Management believes the Company has sufficient capital to fund its operation for at least 12 months from the issuance date of these unaudited condensed financial statements.

Unaudited Interim Financial Information

The unaudited condensed financial statements as of September 30, 2023, and for the three and nine months ended September 30, 2023 and 2022, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial statements. These unaudited condensed financial statements have been prepared on the same basis as the Company’s audited financial statements and include all adjustments, consisting of only normal recurring accruals, which in the opinion of management are necessary to present fairly the Company’s financial position as of the interim date and results of operations for the interim periods presented. Interim results are not necessarily indicative of results for a full year or future periods. The condensed balance sheet data as of December 31, 2022 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2022.

Use of Estimates

The Company’s financial statements are prepared in accordance with GAAP. The preparation of the Company’s financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The most significant estimates in the Company’s financial statements relate to estimates to complete the performance obligations and the estimated transaction price for collaboration revenue, accruals for research and development expenses, stock-based compensation and fair value measurements. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenues and expenses that are not readily apparent from other sources. The Company continues to use the best information available to update its accounting estimates. Actual results may differ materially and adversely from these estimates.

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Janux Therapeutics, Inc.

Notes to Unaudited Condensed Financial Statements–(Continued)

Fair Value Measurements

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets.

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, prepaid and other current assets, accounts payable, and accrued liabilities, approximate fair value due to the short-term nature of those instruments. The fair value of assets classified within Level 1 is based on quoted prices in active markets as provided by the Company’s investment managers. The fair value of short-term investments classified within Level 2 is based on standard observable inputs, including reported trades, broker/dealer quotes, and bids and/or offers. The Company validates the quoted market prices provided by its investment managers by comparing the investment managers’ assessment of the fair values of the Company’s investment portfolio balance against the fair values of the Company’s investment portfolio balance obtained from an independent source. The Company has no financial liabilities recorded at fair value on a recurring basis. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

The following tables summarize the Company’s financial instruments measured at fair value on a recurring basis (in thousands):


			Fair Value Measurements at Reporting Date Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of September 30, 2023:
Assets:
Cash equivalents:
Money market funds	$	15,258	$	15,258	$	—	$	—
Total cash equivalents		15,258		15,258		—		—
Short-term investments:
U.S. Treasury securities		70,366		70,366		—		—
U.S. agency bonds		147,405		—		147,405		—
U.S. agency discount notes		4,480		—		4,480		—
Asset-backed securities		4,976		—

Janux Therapeutics, Inc. [JANX] Filings
10-Q	[2023-11-07]
10-Q	[2023-08-08]
10-Q	[2023-05-09]
10-K	[2023-03-10]
10-Q	[2022-11-10]
10-Q	[2022-08-09]
10-Q	[2022-05-10]
10-K	[2022-03-18]
10-Q	[2021-11-09]
10-Q	[2021-08-10]
S-1	[2021-05-19]