10-Q 1 nuvb-20220930.htm 10-Q 10-Q
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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, 2022

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: 001-39351

 

Nuvation Bio Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

85-0862255

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

1500 Broadway, Suite 1401

New York, New York

10036

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (332) 208-6102

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value per share

Redeemable Warrants, each whole warrant

exercisable for one share of Common Stock at an

exercise price of $11.50 per share

 

NUVB

 

 

NUVB.WS

 

The New York Stock Exchange

 

 

The New York Stock Exchange

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 October 28, 2022, the registrant had 218,392,607 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


 

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will” and “would,” or the negative of these terms or other similar expressions intended to identify statements about the future. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements include, without limitation, statements about:

our ability to recognize the anticipated benefits of the Merger (as defined below), which may be affected by, among other things, competition and our ability to grow and manage growth profitably;
our plans to develop and commercialize our product candidates;
the initiation, timing, progress and results of our current and future preclinical studies and clinical trials, as well as our research and development programs;
our expectations regarding the impact of the ongoing COVID-19 pandemic on our business, industry and the economy;
our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
our ability to successfully acquire or in-license additional product candidates on reasonable terms;
our ability to maintain and establish collaborations or obtain additional funding;
our ability to obtain regulatory approval of our current and future product candidates;
our expectations regarding the potential market size and the rate and degree of market acceptance of such product candidates;
our continued reliance on third parties to conduct clinical trials of our product candidates, and for the manufacture of our product candidates for preclinical studies and clinical trials;
our ability to fund our working capital requirements and expectations regarding the sufficiency of our capital resources;
the implementation of our business model and strategic plans for our business and product candidates;
our intellectual property position and the duration of our patent rights;
developments or disputes concerning our intellectual property or other proprietary rights;
our expectations regarding government and third-party payor coverage and reimbursement;
our ability to compete in the markets we serve;
the impact of government laws and regulations and liabilities thereunder;
our need to hire additional personnel and our ability to attract and retain such personnel;
our ability to raise additional funding in the future; and
the anticipated use of our cash and cash equivalents.

The foregoing list of forward-looking statements is not exhaustive. These statements speak only as of the date of this report and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The section of Part II of this report titled “Section 1A. Risk Factors” identifies important factors that could harm our business and financial performance and cause our actual results to differ materially from those expressed or implied by our forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise, except as required by law.

 


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

1

 

 

 

Item 1.

Financial Statements (Unaudited)

1

 

Consolidated Balance Sheets

1

 

Consolidated Statements of Operations and Comprehensive Loss

2

 

Consolidated Statements of Stockholders' Equity

3

 

Consolidated Statements of Cash Flows

5

 

Notes to Unaudited Consolidated Financial Statements

6

Item 2.

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

18

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25

Item 4.

Controls and Procedures

25

 

 

 

PART II.

OTHER INFORMATION

27

 

 

 

Item 1.

Legal Proceedings

27

Item 1A.

Risk Factors

27

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

64

Item 3.

Defaults Upon Senior Securities

64

Item 4.

Mine Safety Disclosures

64

Item 5.

Other Information

64

Item 6.

Exhibits

65

Signatures

66

 

 


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

NUVATION BIO INC. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

 

 

 

September 30,
2022

 

 

December 31,
2021

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

138,690

 

 

$

132,423

 

Prepaid expenses and other current assets

 

 

5,094

 

 

 

3,642

 

Marketable securities

 

 

535,255

 

 

 

632,969

 

Interest receivable on marketable securities

 

 

2,350

 

 

 

3,039

 

Total current assets

 

 

681,389

 

 

 

772,073

 

Property and equipment, net

 

 

902

 

 

 

786

 

Lease security deposit

 

 

138

 

 

 

421

 

Operating lease right-of-use assets

 

 

4,060

 

 

 

2,871

 

Total assets

 

$

686,489

 

 

$

776,151

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,995

 

 

$

3,925

 

Current operating lease liabilities

 

 

1,100

 

 

 

863

 

Accrued expenses

 

 

9,916

 

 

 

12,137

 

Total current liabilities

 

 

14,011

 

 

 

16,925

 

Warrant liability

 

 

1,171

 

 

 

11,037

 

Non-current operating lease liabilities

 

 

3,372

 

 

 

2,192

 

Total liabilities

 

 

18,554

 

 

 

30,154

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Class A and Class B common stock and additional paid in capital, $0.0001 par value per share; 1,060,000,000 (Class A 1,000,000,000, Class B 60,000,000) shares authorized as of September 30, 2022 and December 31, 2021, respectively, 218,392,607 (Class A 217,392,607, Class B 1,000,000) and 217,948,568 (Class A 216,948,568, Class B 1,000,000) shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

 

922,209

 

 

 

909,985

 

Accumulated deficit

 

 

(246,157

)

 

 

(162,803

)

Accumulated other comprehensive income

 

 

(8,117

)

 

 

(1,185

)

Total stockholders’ equity

 

 

667,935

 

 

 

745,997

 

Total liabilities and stockholders’ equity

 

$

686,489

 

 

$

776,151

 

See accompanying notes to the unaudited consolidated financial statements.

 

 

1


 

NUVATION BIO INC. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited, In thousands, except per share data)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

21,294

 

 

$

17,122

 

 

$

70,944

 

 

$

47,035

 

General and administrative

 

 

8,044

 

 

 

5,669

 

 

 

24,455

 

 

 

16,674

 

Total operating expenses

 

 

29,338

 

 

 

22,791

 

 

 

95,399

 

 

 

63,709

 

Loss from operations

 

 

(29,338

)

 

 

(22,791

)

 

 

(95,399

)

 

 

(63,709

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

2,127

 

 

 

847

 

 

 

3,925

 

 

 

2,061

 

Investment advisory fees

 

 

(263

)

 

 

(170

)

 

 

(647

)

 

 

(454

)

Change in fair value of warrant liability

 

 

462

 

 

 

125

 

 

 

9,866

 

 

 

332

 

Realized (loss) gain on marketable securities

 

 

(191

)

 

 

10

 

 

 

(1,099

)

 

 

56

 

Total other (expense) income, net

 

 

2,135

 

 

 

812

 

 

 

12,045

 

 

 

1,995

 

Loss before income taxes

 

 

(27,203

)

 

 

(21,979

)

 

 

(83,354

)

 

 

(61,714

)

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(27,203

)

 

$

(21,979

)

 

$

(83,354

)

 

$

(61,714

)

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

 

$

(0.12

)

 

$

(0.11

)

 

$

(0.39

)

 

$

(0.32

)

Weighted average common shares outstanding, basic and diluted

 

 

218,300

 

 

 

207,101

 

 

 

216,123

 

 

 

193,730

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(27,203

)

 

$

(21,979

)

 

$

(83,354

)

 

$

(61,714

)

Other comprehensive income, net of taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized loss on available-for-sale securities

 

 

(1,139

)

 

 

(369

)

 

 

(6,932

)

 

 

(1,169

)

Comprehensive loss

 

$

(28,342

)

 

$

(22,348

)

 

$

(90,286

)

 

$

(62,883

)

See accompanying notes to the unaudited consolidated financial statements.

 

 

2


 

NUVATION BIO INC. and Subsidiaries

Consolidated Statements of Stockholders' Equity

(Unaudited, In thousands, except share data)

For the Three and Nine Months Ended September 30, 2022 and 2021

 

 

 

Redeemable Series A
Convertible Preferred Stock

 

 

Common Stock and
Additional Paid-in Capital

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Class A Shares

 

 

Class B Shares

 

 

Amount

 

 

Deficit

 

 

Loss

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2021

 

 

 

 

$

 

 

 

216,948,568

 

 

 

1,000,000

 

 

$

909,985

 

 

$

(162,803

)

 

$

(1,185

)

 

$

745,997

 

Exercise of stock options

 

 

 

 

 

 

 

 

180,557

 

 

 

 

 

 

314

 

 

 

 

 

 

 

 

 

314

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,577

 

 

 

 

 

 

 

 

 

3,577

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21,293

)

 

 

 

 

 

(21,293

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,032

)

 

 

(5,032

)

Balance, March 31, 2022

 

 

 

 

 

 

 

 

217,129,125

 

 

 

1,000,000

 

 

 

913,876

 

 

 

(184,096

)

 

 

(6,217

)

 

 

723,563

 

Exercise of stock options

 

 

 

 

 

 

 

 

31,896

 

 

 

 

 

 

56

 

 

 

 

 

 

 

 

 

56

 

Exercise of warrants

 

 

 

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for purchase under the ESPP

 

 

 

 

 

 

 

 

83,269

 

 

 

 

 

 

292

 

 

 

 

 

 

 

 

 

292

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,787

 

 

 

 

 

 

 

 

 

4,787

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34,858

)

 

 

 

 

 

(34,858

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(761

)

 

 

(761

)

Balance, June 30, 2022

 

 

 

 

$

 

 

 

217,244,300

 

 

 

1,000,000

 

 

$

919,011

 

 

$

(218,954

)

 

$

(6,978

)

 

$

693,079

 

Exercise of stock options

 

 

 

 

 

 

 

 

148,307

 

 

 

 

 

 

258

 

 

 

 

 

 

 

 

 

258

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,940

 

 

 

 

 

 

 

 

 

2,940

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27,203

)

 

 

 

 

 

(27,203

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,139

)

 

 

(1,139

)

Balance, September 30, 2022

 

 

 

 

$

 

 

 

217,392,607

 

 

 

1,000,000

 

 

$

922,209

 

 

$

(246,157

)

 

$

(8,117

)

 

$

667,935

 

 

 

3


 

 

 

Redeemable Series A
Convertible Preferred Stock

 

 

Common Stock and
Additional Paid-in Capital

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Class A Shares

 

 

Class B Shares

 

 

Amount

 

 

Deficit

 

 

Income

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020

 

 

347,423,117

 

 

$

267,521

 

 

 

118,869,102

 

 

 

294,094,678

 

 

$

21,961

 

 

$

(75,955

)

 

$

1,557

 

 

$

(52,437

)

Retroactive application of the recapitalization due to
   the Merger

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

(347,423,117

)

 

 

(267,521

)

 

 

68,097,805

 

 

 

 

 

 

267,521

 

 

 

 

 

 

 

 

 

267,521

 

Common stock

 

 

 

 

 

 

 

 

(95,569,765

)

 

 

(236,449,665

)

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020 after effect of the Merger

 

 

 

 

$

 

 

 

91,397,142

 

 

 

57,645,013

 

 

$

289,482

 

 

$

(75,955

)

 

$

1,557

 

 

$

215,084

 

Issuance and exchange of common stock, net of issuance cost upon the Merger

 

 

 

 

 

 

 

 

125,252,913

 

 

 

(56,645,013

)

 

 

606,885

 

 

 

 

 

 

 

 

 

606,885

 

Issuance of common stock

 

 

 

 

 

 

 

 

368,408

 

 

 

 

 

 

3,787

 

 

 

 

 

 

 

 

 

3,787

 

Treasury stock, acquired and retired, at cost

 

 

 

 

 

 

 

 

(368,408

)