Vigil Neuroscience, Inc. [VIGL] Filings

10-Q 1 vigl-20230930.htm 10-Q 10-Q

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 Number 001-41200

VIGIL NEUROSCIENCE, INC.

(Exact name of Registrant as specified in its Charter)


Delaware	85-1880494
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
100 Forge Road, Suite 700 Watertown, MA	02472
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (857) 254-4445

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

VIGL

The Nasdaq Global Select 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 ☒

The number of shares of Registrant’s Common Stock outstanding as of October 31, 2023 was 35,877,421, par value $0.0001 per share.

Table of Contents


		Page
PART I	FINANCIAL INFORMATION	4

Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss	5
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

PART II	OTHER INFORMATION	29

Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77
Item 3.	Defaults Upon Senior Securities	77
Item 4.	Mine Safety Disclosures	77
Item 5.	Other Information	77
Item 6.	Exhibits	78
Signatures		79

SUMMARY RISK FACTORS

We are subject to numerous risks and uncertainties, including those further described below in the section entitled “Risk Factors” in this Quarterly Report on Form 10-Q, that represent challenges that we face in connection with the successful implementation of our strategy and the growth of our business. In particular, the following considerations, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could materially adversely affect our business, financial conditions, results of operations, future growth prospects, or cause a decline in the price of our common stock:

•

We have a limited operating history, have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future. We may never generate any revenue or become profitable, and, if we achieve profitability, we may not be able to sustain it.

•

We will require additional financing to achieve our goals, and a failure to obtain this necessary capital when needed and on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our development programs, commercialization efforts or other operations.

•

We are early in our development efforts and have never successfully completed any clinical trials, and if we are unable to identify and advance therapeutic candidates through preclinical studies and clinical trials, obtain marketing approval and ultimately commercialize them, or experience significant delays in doing so, our business will be materially harmed.

•

The results of early preclinical studies are not necessarily predictive of the results of later preclinical studies and any clinical trials of our therapeutic candidates, and interim, topline and preliminary data from our preclinical studies and planned and ongoing clinical trials that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data.

•

We may expend our limited resources to pursue a particular therapeutic candidate or indication, such as our initial focus on developing VGL101 for ALSP and VG-3927 for Alzheimer's disease (AD), and fail to capitalize on therapeutic candidates or indications that may be more profitable or for which there is a greater likelihood of success. As such, our business is highly dependent on the clinical advancement of our programs and is especially dependent on the success of our lead clinical candidate, VGL101.

•

We have concentrated a substantial portion of our research and development efforts on the treatment of neurodegenerative diseases, a field that has seen limited success in drug development. Further, our therapeutic candidates are based on new approaches, which makes it difficult to predict the time and cost of therapeutic candidate development and subsequently obtaining regulatory approval.

•

We may encounter substantial delays in the commencement, enrollment or completion of our planned clinical trials, which could prevent us from receiving necessary regulatory approvals or commercializing any therapeutic candidates we develop on a timely basis, if at all.

•

Use of our therapeutic candidates could be associated with side effects, adverse events or other properties or safety risks, which could delay or preclude approval, cause us to suspend or discontinue clinical trials, abandon a therapeutic candidate, limit the commercial profile of an approved label or result in other significant negative consequences that could severely harm our business, prospects, operating results and financial condition.

•

Our therapeutic candidates are subject to extensive regulation and compliance, which is costly and time-consuming, and such regulation may cause unanticipated delays or prevent the receipt of the required approvals to commercialize our therapeutic candidates.

•

We rely, and expect to continue to rely, on third parties to conduct some or all aspects of our product manufacturing, research and preclinical and clinical testing, and these third parties may not perform satisfactorily.

•

If we are unable to obtain and maintain patent protection for our therapeutic programs and other proprietary technologies we develop, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our therapeutic programs and other proprietary technologies we may develop may be adversely affected.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains express or implied forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other 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 these forward-looking statements. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•

the initiation timing, progress, results and cost of VGL101 and VG-3927, as well as our research and development programs and our current and future preclinical and clinical studies, 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 current and future programs;

•

the application of our precision medicine approach to develop microglia-targeted therapies for patients with rare, genetically defined neurodegenerative diseases and subsequently advance into neurodegenerative diseases affecting larger patient populations;

•

the expansion of our modality agnostic product pipeline to other microglial targets beyond Triggering Receptor Expressed on Myeloid Cells 2, or TREM2;

•

the ability of our preclinical studies and clinical trials to demonstrate safety and efficacy of our product candidates, as well as the beneficial characteristics, therapeutic effects and other positive results;

•

our estimates of the number of patients that we will enroll and our ability to initiate, recruit and enroll patients in and conduct, and successfully complete, our clinical trials, including at the pace that we project;

•

the ability to efficiently discover, identify, research and develop product candidates;

•

the timing, scope and likelihood of regulatory filings and approvals, including timing of any Investigational New Drug applications, or INDs, and final U.S. Food and Drug Administration, or FDA, approval of our current product candidates or any future product candidates;

•

the timing, scope or likelihood of foreign regulatory filings and approvals;

•

the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and other 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 ability to scale up our manufacturing and processing approaches to appropriately address our anticipated commercial needs, which will require significant resources;

•

the ability and willingness of our third-party strategic collaborators to continue research and development activities relating to our development candidates and product candidates;

•

our ability to obtain funding for our operations necessary to complete further development and commercialization of our product candidates;

•

our ability to commercialize our products, if approved;

•

the pricing and reimbursement of our product candidates, if approved;

•

the implementation of our business model, and strategic plans for our business, product candidates, and technology;

•

estimates of our future expenses, revenues and capital requirements and our needs for additional financing;

•

future agreements with third parties in connection with the development and commercialization of product candidates and any other approved product;

•

the size and growth potential of the markets for our product candidates and our ability to serve those markets;

•

our financial performance;

•

the rate and degree of market acceptance of our product candidates;

•

regulatory developments in the United States and foreign countries;

•

our ability to attract and retain key scientific or management personnel;

•

our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•

our ability to produce our products or product candidates with advantages in turnaround times or manufacturing cost;

•

the success of competing therapies that are or may become available;

•

the impact of laws and regulations;

•

developments relating to our competitors and our industry;

•

the effect of a public health crisis, such as the COVID-19 pandemic, on any of the foregoing or other aspects of our business operations, including any negative impact on enrollment in our ongoing clinical trial as well as any other impacts on our existing and future clinical trials or our preclinical studies; and

•

other risks and uncertainties, including those listed under the caption “Risk Factors.”

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. All statements other than statements of historical facts are statements that could be deemed forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed above under “Summary of the Material Risks Associated with Our Business” and under the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the Securities and Exchange Commission, or the SEC, as exhibits hereto completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business and the markets for our product candidates. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from our own internal estimates and research as well as from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. While we are not aware of any misstatements regarding any third-party information presented in this Quarterly Report on Form 10-Q, their estimates, in particular as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties and are subject to change based on various factors, including those discussed under the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

VIGIL NEUROSCIENCE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)


	September 30, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	56,794		$	186,605
Marketable securities		76,849			—
Prepaid expenses and other current assets		6,204			11,200
Total current assets		139,847			197,805
Property and equipment, net		1,839			1,184
Operating lease right-of-use assets		16,488			141
Financing lease right-of-use assets		55			70
Restricted cash		927			927
Other assets		—			266
Total assets	$	159,156		$	200,393
Liabilities, Convertible Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,302		$	1,942
Accrued expenses and other current liabilities (1)		7,966			9,194
Operating lease liabilities		874			153
Financing lease liabilities		—			23
Total current liabilities		10,142			11,312
Operating lease liabilities, net of current portion		13,178			—
Total liabilities		23,320			11,312
Commitments and contingencies (Note 12)
Stockholders’ equity:
Undesignated preferred stock, $0.0001 par value, 10,000,000 shares authorized as of September 30, 2023 and December 31, 2022, respectively; 0 share issued and outstanding at September 30, 2023 and December 31, 2022, respectively		—			—
Common stock, $0.0001 par value; 150,000,000 shares authorized at September 30, 2023 and December 31, 2022; 35,917,744 shares issued as of September 30, 2023 and 35,664,658 shares issued as of December 31, 2022; and 35,873,421 shares outstanding as of September 30, 2023 and 35,620,335 shares outstanding as of December 31, 2022		4			4
Additional paid-in capital		336,486			329,211
Accumulated other comprehensive income (loss)		(56	)		—
Accumulated deficit		(200,598	)		(140,134	)
Total stockholders’ equity		135,836			189,081
Total liabilities and stockholders’ equity	$	159,156		$	200,393

(1)

Includes related party amounts of $0 (accrued expenses and other current liabilities) at September 30, 2023; $78 (accrued expenses and other current liabilities) at December 31, 2022 (see Note 11).

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

VIGIL NEUROSCIENCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Operating expenses:
Research and development (2)	$	15,415		$	12,791		$	44,152		$	35,253
General and administrative		6,906			4,846			20,857			14,758
Total operating expenses		22,321			17,637			65,009			50,011
Loss from operations		(22,321	)		(17,637	)		(65,009	)		(50,011	)
Other income (expense):
Interest income, net		1,829			163			4,560			197
Other income (expense), net		(3	)		(26	)		(15	)		(35	)
Total other income (expense), net		1,826			137			4,545			162
Net loss	$	(20,495	)	$	(17,500	)	$	(60,464	)	$	(49,849	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.53	)	$	(0.53	)	$	(1.56	)	$	(1.70	)
Weighted-average common shares outstanding, basic and diluted		38,809,109			33,303,345			38,671,739			29,395,548
Comprehensive loss:
Net loss	$	(20,495	)	$	(17,500	)	$	(60,464	)	$	(49,849	)
Unrealized gain (loss) on available for sale securities		14			—			(56	)		—
Total comprehensive loss	$	(20,481	)	$	(17,500	)	$	(60,520	)	$	(49,849	)

(2)

Includes related party amounts of $0 and $50 for the three and nine months ended September 30, 2023, and $76 and $218 for the three and nine months ended September 30, 2022 (see Note 11).

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

VIGIL NEUROSCIENCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share amounts)

(Unaudited)


	Convertible Preferred Stock						Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares			Amount			Shares		Amount		Capital		Income (Loss)			Deficit			Equity (Deficit)
Balances at December 31, 2021		54,179,688		$	161,939			1,724,950	$	—	$	2,386	$	—		$	(71,829	)	$	(69,443	)
Conversion of convertible preferred stock to common stock upon closing of initial public offering		(54,179,688	)		(161,939	)		19,536,870		2		161,937		—			—			161,939
Issuance of common stock from initial public offering, net of issuance costs of $10.0 million		—			—			7,000,000		1		87,985		—			—			87,986
Exercise of stock options		—			—			4,995		—		9		—			—			9
Stock-based compensation		—			—			—		—		1,021		—			—			1,021
Net loss		—			—			—		—		—		—			(15,334	)		(15,334	)
Balances at March 31, 2022		—		$	—			28,266,815	$	3	$	253,338	$	—		$	(87,163	)	$	166,178
Exercise of stock options		—			—			799		—		2		—			—			2
Stock-based compensation		—			—			—		—		1,461		—			—			1,461
Net loss		—			—			—		—		—		—			(17,015	)		(17,015	)
Balances at June 30, 2022		—		$	—			28,267,614	$	3	$	254,801	$	—		$	(104,178	)	$	150,626
Issuance of common stock from PIPE, net of issuance costs of $2.6 million		—			—			7,293,084		1		50,594		—			—			50,595
Issuance of prefunded warrants for the purchase of common stock, net of issuance costs of $1.1 million		—			—			—		—		20,678		—			—			20,678
Exercise of stock options		—			—			7,235		—		19		—			—			19
Stock-based compensation		—			—			—		—		1,494		—			—			1,494
Net loss		—			—			—		—		—		—			(17,500	)		(17,500	)
Balances at September 30, 2022		—		$	—			35,567,933	$	4	$	327,586	$	—		$	(121,678	)	$	205,912

Balances at December 31, 2022		—		$	—			35,620,335	$	4	$	329,211	$	—		$	(140,134	)	$	189,081
Exercise of stock options		—			—			45,449		—		214		—			—			214
Stock-based compensation		—			—			—		—		1,734		—			—			1,734
Unrealized gain (loss) on available for sale securities		—			—			—		—		—		106			—			106
Net loss		—			—			—		—		—		—			(19,795	)		(19,795	)
Balances at March 31, 2023		—		$	—			35,665,784	$	4	$	331,159	$	106		$	(159,929	)	$	171,340
Exercise of stock options		—			—			195,930		—		589		—			—			589
Stock-based compensation		—			—			—		—		2,257		—			—			2,257
Unrealized gain (loss) on available for sale securities		—			—			—		—		—		(176	)		—			(176	)
Net loss		—			—			—		—		—		—			(20,174	)		(20,174	)
Balances at June 30, 2023		—		$	—			35,861,714	$	4	$	334,005	$	(70	)	$	(180,103	)	$	153,836
Exercise of stock options		—			—			11,707		—		55		—			—			55
Stock-based compensation		—			—			—		—		2,426		—			—			2,426
Unrealized gain (loss) on available for sale securities		—			—			—		—		—		14			—			14
Net loss		—			—			—		—		—		—			(20,495	)		(20,495	)
Balances at September 30, 2023		—		$	—			35,873,421	$	4	$	336,486	$	(56	)	$	(200,598	)	$	135,836

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

VIGIL NEUROSCIENCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(60,464	)	$	(49,849	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		6,417			3,976
Non-cash operating lease expense		1,023			679
Depreciation and amortization		286			57
Amortization of premium/discount on marketable securities		(1,772	)		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		1,945			(1,196	)
Other non-current assets		—			(175	)
Accounts payable		(639	)		(2,108	)
Accrued expenses and other current liabilities		(1,228	)		1,230
Operating lease liabilities		(421	)		(676	)
Net cash used in operating activities		(54,853	)		(48,062	)
Cash flows from investing activities:
Purchases of marketable securities		(117,132	)		—
Proceeds from maturities of marketable securities		42,000			—
Purchases of property and equipment		(661	)		(649	)
Net cash used in investing activities		(75,793	)		(649	)
Cash flows from financing activities:
Proceeds from issuance of common stock upon initial public offering, net of offering costs		—			89,872
Proceeds from issuance of common stock from PIPE, net of offering costs		—			50,602
Proceeds from issuance of pre-funded warrants from PIPE, net of offering costs		—			20,682
Payments of finance lease obligations		(23	)		(32	)
Proceeds from stock options exercised		858			30

Vigil Neuroscience, Inc. [VIGL] Filings
10-Q	[2023-11-07]
10-Q	[2023-08-08]
10-Q	[2023-05-10]
10-K	[2023-03-21]
10-Q	[2022-11-10]
S-1	[2022-09-30]
10-Q	[2022-08-08]
10-Q	[2022-05-12]
10-K	[2022-03-25]
S-1	[2021-11-19]