Avidity Biosciences, Inc. [RNA] Filings

10-Q 1 rna-10q_20220930.htm 10-Q rna-10q_20220930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022

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

Commission File Number 001-39321

Avidity Biosciences, Inc.

(Exact name of registrant as specified in its charter)

Delaware		46-1336960
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

10578 Science Center Drive, Suite 125 San Diego, California		92121
(Address of principal executive offices)		(Zip Code)

(858) 401-7900

(Registrant’s telephone number, including area code)

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

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value

RNA

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.

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 25, 2022, the registrant had 54,462,518 shares of common stock outstanding.

Avidity Biosciences, Inc.

FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements (unaudited)	3
	Condensed Balance Sheets (unaudited)	3
	Condensed Statements of Operations and Comprehensive Loss (unaudited)	4
	Condensed Statements of Stockholders' Equity (unaudited)	5
	Condensed Statements of Cash Flows (unaudited)	7
	Notes to Condensed Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
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	31
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33

SIGNATURES		34

PART I - FINANCIAL INFORMATION

Item 1. Condensed Financial Statements (unaudited)

Avidity Biosciences, Inc.

Condensed Balance Sheets

(in thousands, except par value)

	September 30, 2022			December 31, 2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	143,699		$	320,448
Marketable securities		261,849			85,095
Prepaid and other assets		8,916			5,598
Total current assets		414,464			411,141
Property and equipment, net		6,037			4,805
Restricted cash		251			251
Right-of-use assets		9,264			10,784
Other assets		523			599
Total assets	$	430,539		$	427,580
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	26,375		$	14,085
Accrued compensation		7,747			8,940
Lease liabilities, current portion		3,090			1,769
Deferred revenue, current portion		5,454			4,864
Total current liabilities		42,666			29,658
Lease liabilities, net of current portion		8,185			9,960
Deferred revenue, net of current portion		2,706			6,532
Total liabilities		53,557			46,150
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock, $0.0001 par value; authorized shares – 400,000; issued and outstanding shares – 54,446 and 47,754 at September 30, 2022 and December 31, 2021, respectively		5			5
Additional paid-in capital		688,513			566,161
Accumulated other comprehensive loss		(3,463	)		(187	)
Accumulated deficit		(308,073	)		(184,549	)
Total stockholders’ equity		376,982			381,430
Total liabilities and stockholders’ equity	$	430,539		$	427,580

See accompanying notes.

Avidity Biosciences, Inc.

Condensed Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Collaboration revenue	$	2,482		$	2,163		$	6,455		$	7,474
Operating expenses:
Research and development		37,317			24,831			104,794			68,214
General and administrative		10,094			6,612			27,349			18,764
Total operating expenses		47,411			31,443			132,143			86,978
Loss from operations		(44,929	)		(29,280	)		(125,688	)		(79,504	)
Other income (expense):
Interest income		1,342			17			2,203			49
Other expense		(12	)		(11	)		(39	)		(16	)
Total other income		1,330			6			2,164			33
Net loss		(43,599	)		(29,274	)		(123,524	)		(79,471	)
Other comprehensive income (loss):
Net unrealized (losses) gains on marketable securities		(477	)		(1	)		(3,276	)		4
Comprehensive loss	$	(44,076	)	$	(29,275	)	$	(126,800	)	$	(79,467	)
Net loss per share, basic and diluted	$	(0.82	)	$	(0.68	)	$	(2.45	)	$	(2.01	)
Weighted-average shares outstanding, basic and diluted		53,069			43,265			50,432			39,477

See accompanying notes.

Avidity Biosciences, Inc.

Condensed Statements of Stockholders' Equity

(in thousands)

(unaudited)

	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at December 31, 2021		47,754	$	5	$	566,161	$	(187	)	$	(184,549	)	$	381,430
Issuance of common stock upon exercise of stock options		7		—		10		—			—			10
Vesting of early exercise options		—		—		1		—			—			1
Issuance of common stock in public offerings, net of issuance costs of $745		1,520		—		24,103		—			—			24,103
Stock-based compensation		—		—		6,238		—			—			6,238
Net loss		—		—		—		—			(34,235	)		(34,235	)
Other comprehensive loss		—		—		—		(1,839	)		—			(1,839	)
Balance at March 31, 2022		49,281	$	5	$	596,513	$	(2,026	)	$	(218,784	)	$	375,708
Issuance of common stock upon exercise of stock options		5		—		4		—			—			4
Issuance of common stock in public offerings, net of issuance costs of $1,184		2,746		—		38,281		—			—			38,281
Issuance of common stock under employee stock purchase plan		49		—		499		—			—			499
Vesting of early exercise options		—		—		1		—			—			1
Stock-based compensation		—		—		6,508		—			—			6,508
Net loss		—		—		—		—			(45,690	)		(45,690	)
Other comprehensive loss		—		—		—		(960	)		—			(960	)
Balance at June 30, 2022		52,081	$	5	$	641,806	$	(2,986	)	$	(264,474	)	$	374,351
Issuance of common stock upon exercise of stock options		270		—		303		—			—			303
Issuance of common stock in public offering, net of issuance costs of $1,216		2,095		—		39,317								39,317
Vesting of early exercise options		—		—		1		—			—			1
Stock-based compensation		—		—		7,086		—			—			7,086
Net loss		—		—		—		—			(43,599	)		(43,599	)
Other comprehensive loss		—		—		—		(477	)		—			(477	)
Balance at September 30, 2022		54,446	$	5	$	688,513	$	(3,463	)	$	(308,073	)	$	376,982

See accompanying notes.

Avidity Biosciences, Inc.

Condensed Statements of Stockholders' Equity

(in thousands)

(unaudited)

	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at December 31, 2020		37,569	$	4	$	372,764	$	(5	)	$	(66,540	)	$	306,223
Issuance of common stock upon exercise of stock options		31		—		24		—			—			24
Vesting of early exercise options		—		—		10		—			—			10
Stock-based compensation		—		—		3,701		—			—			3,701
Net loss		—		—		—		—			(23,844	)		(23,844	)
Other comprehensive gain		—		—		—		2			—			2
Balance at March 31, 2021		37,600	$	4	$	376,499	$	(3	)	$	(90,384	)	$	286,116
Issuance of common stock upon exercise of stock options		51		—		98		—			—			98
Issuance of common stock under employee stock purchase plan		14		—		318		—			—			318
Vesting of early exercise options		—		—		9		—			—			9
Stock-based compensation		—		—		4,289		—			—			4,289
Net loss		—		—		—		—			(26,353	)		(26,353	)
Other comprehensive gain		—		—		—		3			—			3
Balance at June 30, 2021		37,665	$	4	$	381,213	$	—		$	(116,737	)	$	264,480
Issuance of common stock upon exercise of stock options		32		—		34		—			—			34
Vesting of early exercise options		—		—		6		—			—			6
Issuance of common stock in public offering, net of issuance costs of $10,518		9,200		1		155,081		—			—			155,082
Stock-based compensation		—		—		4,550		—			—			4,550
Net loss		—		—		—		—			(29,274	)		(29,274	)
Other comprehensive loss		—		—		—		(1	)		—			(1	)
Balance at September 30, 2021		46,897	$	5	$	540,884	$	(1	)	$	(146,011	)	$	394,877

See accompanying notes.

Avidity Biosciences, Inc.

Condensed Statements of Cash Flows

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	2022			2021
Cash flows from operating activities
Net loss	$	(123,524	)	$	(79,471	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,006			431
Stock-based compensation expense		19,832			12,540
Amortization of premiums and discounts on marketable securities, net		184			87
Gain on disposal of property and equipment		—			(16	)
Changes in operating assets and liabilities:
Prepaid and other assets		(3,242	)		(5,654	)
Accounts payable and accrued liabilities		12,028			3,869
Accrued compensation		(1,193	)		3,001
Operating lease right-of-use assets and liabilities, net		1,066			449
Deferred revenue		(3,236	)		(3,834	)
Net cash used in operating activities		(97,079	)		(68,598	)
Cash flows from investing activities
Maturities of marketable securities		85,975			3,580
Purchases of marketable securities		(266,189	)		—
Purchases of property and equipment		(1,973	)		(2,033	)
Net cash (used in) provided by investing activities		(182,187	)		1,547
Cash flows from financing activities
Proceeds from issuance of common stock in public offerings, gross		104,846			165,600
Payment of issuance costs related to public offerings		(3,145	)		(10,399	)
Proceeds from issuance of common stock under employee stock purchase plan		499			318
Proceeds from exercise of stock options

Avidity Biosciences, Inc. [RNA] Filings
10-Q	[2022-11-08]
10-Q	[2022-08-09]
10-Q	[2022-05-10]
10-K	[2022-03-01]
10-Q	[2021-11-09]
10-Q	[2021-08-09]
10-Q	[2021-05-12]
10-K	[2021-03-15]
10-Q	[2020-11-10]
10-Q	[2020-08-11]
S-1	[2020-05-22]