ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
(Address of principal executive offices at December 31, 2018) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
The |
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Smaller reporting company | ||||
Emerging growth company |
Page |
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PART I |
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Item 1. |
3 |
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Item 1A. |
25 |
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Item 1B. |
49 |
|||||
Item 2. |
49 |
|||||
Item 3. |
49 |
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Item 4. |
49 |
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PART II |
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Item 5. |
50 |
|||||
Item 6. |
52 |
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Item 7. |
53 |
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Item 7A. |
61 |
|||||
Item 8. |
61 |
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Item 9. |
61 |
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Item 9A. |
61 |
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Item 9B. |
62 |
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PART III |
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Item 10. |
63 |
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Item 11. |
63 |
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Item 12. |
63 |
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Item 13. |
63 |
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Item 14. |
63 |
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PART IV |
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Item 15. |
64 |
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Item 16. |
66 |
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67 |
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• | Anticipated or estimated future results, including the risks and uncertainties associated with our future operating performance and financial position, |
• | Our possible or assumed future results of operations and expenses, business strategies and plans, capital needs and financing plans, market trends, competitive position, industry environment and potential growth opportunities, |
• | Our clinical trials, research and development activities, and the timing and results associated with the future development of our lead product candidate, MGL-3196 (resmetirom), |
• | Our primary and secondary study endpoints for resmetirom, the potential for achieving such endpoints and projections, including those regarding potential future NASH resolution, safety, fibrosis treatment, cardiovascular effects and lipid treatment with resmetirom, |
• | Optimal dosing levels for resmetirom and projections regarding potential NASH or NAFLD patient benefits with resmetirom, |
• | Market demand for and acceptance of our products, |
• | Research, development and commercialization of new products, |
• | Obtaining and maintaining regulatory approvals, including, but not limited to, potential regulatory delays or rejections, |
• | Risks associated with meeting the objectives of clinical studies, including, but not limited to our ability to achieve enrollment objectives concerning patient number (including an adequate safety database) and/or timing for our studies, any delays or failures in enrollment, the occurrence of adverse safety events, and the risks of successfully conducting trials that are substantially larger than our past trials, |
• | Risks related to our ability to accomplish our business development objectives and realize the anticipated benefit of any such transactions, and |
• | Assumptions underlying any of the foregoing. |
Item 1. |
Business |
MGL-3196 |
MGL-3196 MRI-PDFF Responders(1) |
Placebo |
||||||||||
Number of patients with baseline and end-of-study liver biopsies(2) |
73 |
46 |
34 |
|||||||||
> 2 Point Decrease in NAS |
56% |
70% |
32 |
% | ||||||||
p=0.02 |
p=0.001 |
|||||||||||
NASH Resolution |
27% |
39% |
6 |
% | ||||||||
p=0.02 |
p=0.001 |
(1) |
resmetirom MRI-PDFF Responders = resmetirom treated patients with >=30% relative fat reduction on Week 12 MRI-PDFF |
(2) |
does not include one end-of-study liver biopsy that was inadequate |
• | Sustained, highly statistically significant (p<0.0001) reduction in liver fat compared with placebo on 36-week MRI-PDFF and mean relative fat reduction of 37% with resmetirom treated patients in contrast with 8.5% with placebo patients; |
• | Sustained, statistically significant reductions (p<0.0001) in resmetirom compared to placebo treated patients in low-density lipoprotein cholesterol (LDL-C) and apolipoprotein B (ApoB) of more than 20%, triglycerides (TG) of 36% and lipoprotein(a) of 37%; |
• | Statistically significant reductions in liver enzymes (ALT, AST and GGT) relative to placebo (all p=0.002) and a 40% reduction in ALT in patients with elevated baseline levels (p=0.01); |
• | Statistically significant reductions in fibrosis biomarkers in MGL-3196 treated patients as compared with placebo patients; |
• | On liver biopsy, fibrosis was reduced by at least one point in 23% of placebo patients and 29% of resmetirom treated patients; |
• | Very good all subject tolerability: mostly mild and a few moderate adverse events, or AEs, which were balanced between drug treated patients and placebo patients; and |
• | An increase in incidence of a transient mild diarrhea at beginning of study, often a single episode, in resmetirom treated patients compared with placebo patients. |
• | Complete clinical development and seek regulatory approval of MGL-3196 (resmetirom) in NASH. first-in-class pleiotrophic actions in liver cells and potential to reduce cardiovascular risk in NASH patients. |
• | Establish commercial capabilities to market MGL-3196 (resmetirom) as a leading treatment for NASH. |
• | Grow our pipeline through additional indications for MGL-3196 (resmetirom) potentially including orphan indications. |
• | Our potential competitors may have substantially greater financial, technical, and personnel resources than us. In addition, many of these competitors have significantly greater commercial infrastructures. Our ability to compete successfully will depend largely on our ability to leverage our collective experience in drug discovery, development and commercialization to: |
• | discover and develop medicines that are differentiated from other products in the market, |
• | obtain patent and/or proprietary protection for our products and technologies; |
• | obtain required regulatory approvals; |
• | obtain a commercial partner; |
• | commercialize our drugs, if approved; and |
• | attract and retain high-quality research, development and commercial personnel. |
• | completion of preclinical laboratory tests, animal studies and formulation studies according to GLP or other applicable regulations; |
• | submission to the FDA of an IND which must become effective before human clinical trials may begin; |
• | performance of adequate and well-controlled human clinical trials according to Good Clinical Practices, or GCP, to establish the safety and efficacy of the proposed drug for its intended use; |
• | submission to the FDA of an NDA; |
• | completion of registration batches and validation of the manufacturing process to show ability to consistently produce quality batches of product; |
• | satisfactory completion of a FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current good manufacturing practice, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and |
• | FDA review and approval of the NDA. |
• | Phase 1: |
• | Phase 2: |
• | Phase 3: |
Item 1A. |
Risk Factors |
• | we may not have sufficient financial and other resources to complete the necessary clinical trials for resmetirom, including, but not limited to, our planned registrational clinical trials to obtain drug approval; |
• | the mechanism of action of resmetirom is complex and we do not know the degree to which it will translate into a therapeutic benefit, if any, in NASH, dyslipidemia or any other indication, and we do not know the degree to which the complex mechanism of action may contribute to long term safety |
issues or adverse events, if any, when resmetirom is taken for prolonged periods such as in the treatment of NASH, dyslipidemia or any other indication; |
• | we may not be able to obtain adequate evidence from clinical trials of efficacy and safety for resmetirom in NASH, dyslipidemia or any other indication; |
• | we do not know the degree to which resmetirom will be accepted as a therapy by physicians, patients and payors, even if approved; |
• | in our clinical programs for resmetirom, we may experience variability in patients, adjustments to clinical trial procedures and the need for additional clinical trial sites, which could delay our clinical trial progress; |
• | the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA or comparable foreign regulatory bodies for marketing approval; |
• | patients in our clinical trials may die or suffer other adverse effects for reasons that may or may not be related to resmetirom, which could delay or prevent further clinical development; |
• | the standards implemented by clinical or regulatory agencies may change at any time; |
• | we cannot be certain what efficacy endpoints foreign clinical or regulatory agencies may require in a Phase 3 clinical trial of NASH or dyslipidemia or for approval of our product candidates; we also cannot be certain if we will be able to gain accelerated approval of any of our product candidates based on surrogate endpoints; |
• | foreign clinical or regulatory agencies will likely require efficacy endpoints for Phase 3 clinical trials for the treatment of NASH or dyslipidemia that differ from the endpoints of our current Phase 2 trials and the results of our Phase 3 clinical trials may not be as favorable as the results we have observed to date in our current trials; |
• | other differences in the design of our planned Phase 3 clinical trials of the treatment of NASH, including the use of a new tablet formulation of resmetirom and the inclusion of patients with more advanced NASH, could cause the results of our Phase 3 trials to be less favorable than the results we observed in our Phase 2 trials in NASH; |
• | if we obtain accelerated approval of a product candidate based on a surrogate endpoint, we will likely be required to conduct a post-approval clinical outcomes trial to confirm the clinical benefit of the product candidate and if the post-approval trial is not successful we may not be able to continue marketing the product; |
• | we cannot be certain of the number and type of clinical trials and non-clinical studies that FDA or other regulatory agencies will require in order to approve resmetirom or NASH or dyslipidemia; |
• | if approved for NASH, resmetirom will likely compete with the off-label use of currently marketed products and other therapies in development that may reach approval for NASH prior to resmetirom; |
• | if approved for dyslipidemia, resmetirom will likely compete with currently approved and marketed products and other therapies in development that may reach approval for dyslipidemia prior to resmetirom; and |
• | we may not be able to obtain, maintain or enforce our patents and other intellectual property rights. |
• | conditions imposed on us by the FDA or other regulatory authorities regarding the scope or design of our clinical trials; |
• | insufficient supply of our product candidates or other materials necessary to conduct and complete our clinical trials; |
• | slow enrollment and retention rate of subjects in our clinical trials; and |
• | serious and unexpected drug-related side effects related to the product candidate being tested. |
• | restrictions on the products, manufacturers, or manufacturing processes; |
• | warning letters or untitled letters; |
• | civil or criminal penalties; |
• | fines; |
• | injunctions; |
• | product seizures or detentions; |
• | pressure to initiate voluntary product recalls; |
• | suspension or withdrawal of regulatory approvals; and |
• | refusal to approve pending applications for marketing approval of new products or supplements to approved applications. |
• | timing of market introduction of competitive products; |
• | demonstration of clinical safety and efficacy compared to other products; |
• | cost-effectiveness; |
• | limited or no coverage by third-party payers; |
• | convenience and ease of administration; |
• | prevalence and severity of adverse side effects; |
• | restrictions in the label of the drug; |
• | other potential advantages of alternative treatment methods; and |
• | ineffective marketing and distribution support of its products. |
• | decreased demand for any of our future approved products; |
• | injury to our reputation; |
• | withdrawal of clinical trial participants; |
• | termination of clinical trial sites or entire trial programs; |
• | significant litigation costs; |
• | substantial monetary awards to or costly settlements with patients or other claimants; |
• | product recalls or a change in the indications for which products may be used; |
• | loss of revenue; |
• | diversion of management and scientific resources from our business operations; and |
• | the inability to commercialize our product candidates. |
• | the scope of rights granted under the license agreement and other interpretation-related issues; |
• | the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; |
• | the sublicensing of patent and other rights; |
• | our diligence obligations under the license agreement and what activities satisfy those diligence obligations; |
• | the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by us and our licensors and collaborators; and |
• | the priority of invention of patented technology. |
• | the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process and after a patent has issued. There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case; |
• | patent applications may not result in any patents being issued; |
• | patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; |
• | we and our licensor(s) may not have been the first to make the inventions covered by pending patent applications or issued patents; |
• | we and our licensor(s) may not have been the first to file patent applications for our product candidates or the compositions developed, or for their uses; |
• | others may independently develop identical, similar or alternative products or compositions and uses thereof; |
• | we and our licensor(s)’ disclosures in patent applications may not be sufficient to meet the statutory requirements for patentability; |
• | others may design around our owned and licensed patent claims to produce competitive products which fall outside of the scope of the patents; |
• | others may identify prior art or other bases which could invalidate our or licensor(s)’ patents; |
• | our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where us and our licensor(s) do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in major commercial markets; |
• | there may be significant pressure on the United States government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and |
• | countries other than the United States may have patent laws less favorable to patentees than those upheld by United States courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates. |
• | result in costly litigation; |
• | divert the time and attention of our technical personnel and management; |
• | cause development delays; |
• | prevent us from commercializing resmetirom for NASH or dyslipidemia or our other product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law; |
• | require us to develop non-infringing technology, which may not be possible on a cost-effective basis; or |
• | require us to enter into royalty or licensing agreements. |
• | the type, number, scope, progress, expansion costs, results of and timing of our future clinical trials or the need for additional clinical trials of resmetirom for NASH and dyslipidemia or any of our other product candidates which we are pursuing or may choose to pursue in the future; |
• | the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; |
• | the costs and timing of obtaining regulatory approval for resmetirom for NASH and dyslipidemia and any of our other product candidates; |
• | the costs and timing of obtaining or maintaining manufacturing for resmetirom for NASH and dyslipidemia and any of our other product candidates, including commercial manufacturing if any product candidate is approved; |
• | the costs and timing of establishing sales, marketing and reimbursement capabilities and enhanced internal controls over financial reporting; |
• | the terms and timing of establishing and maintaining collaborations, license agreements and other partnerships; |
• | costs associated with any new product candidates that we may develop, in-license or acquire; |
• | the effect of competing technological and market developments; and |
• | the costs associated with operating as a public company. |
• | the losses we may incur; |
• | developments in patent or other proprietary rights owned or licensed by us, our collaborative partners or our competitors; |
• | public concern as to the safety and efficacy of products developed by us or others; and |
• | litigation. |
Item 1B. |
Unresolved Staff Comments |
Item 2. |
Properties |
Item 3. |
Legal Proceedings |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities. |
Item 6. |
Selected Financial Data |
Years Ended December 31, |
||||||||||||||||||||
2019 |
2018 |
2017 |
2016 |
2015 |
||||||||||||||||
(in thousands, except per share amounts) |
||||||||||||||||||||
Consolidated Statements of Operations Data: |
||||||||||||||||||||
Revenues: |
||||||||||||||||||||
Total revenues |
$ | — |
$ | — |
$ | — |
$ | — |
$ | — |
||||||||||
Operating expenses: |
||||||||||||||||||||
Research and development |
72,324 |
25,389 |
24,390 |
15,933 |
2,427 |
|||||||||||||||
General and administrative |
22,648 |
15,293 |
7,672 |
9,290 |
806 |
|||||||||||||||
Total operating expenses |
94,972 |
40,682 |
32,062 |
25,223 |
3,233 |
|||||||||||||||
Loss from operations |
(94,972 |
) | (40,682 |
) | (32,062 |
) | (25,223 |
) | (3,233 |
) | ||||||||||
Interest income (expense), net |
11,024 |
7,671 |
558 |
(1,165 |
) | (3,612 |
) | |||||||||||||
Other income |
— |
200 |
350 |
— |
— |
|||||||||||||||
Net loss |
$ | (83,948 |
) | $ | (32,811 |
) | $ | (31,154 |
) | $ | (26,388 |
) | $ | (6,845 |
) | |||||
Net loss per common share: |
||||||||||||||||||||
Basic and diluted net loss per common share |
$ | (5.45 |
) | $ | (2.22 |
) | $ | (2.54 |
) | $ | (5.07 |
) | $ | (40.03 |
) | |||||
Basic and diluted weighted average number of common shares outstanding |
15,394,659 |
14,796,712 |
12,244,939 |
5,204,644 |
171,012 |
As of December 31, |
||||||||||||||||||||
2019 |
2018 |
2017 |
2016 |
2015 |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Consolidated Balance Sheet Data: |
||||||||||||||||||||
Cash, cash equivalents and marketable securities |
$ | 439,045 |
$ | 483,718 |
$ | 191,527 |
$ | 40,500 |
$ | 306 |
||||||||||
Total assets |
442,056 |
485,428 |
192,313 |
41,210 |
364 |
|||||||||||||||
Total liabilities |
25,491 |
8,444 |
10,054 |
4,800 |
49,277 |
|||||||||||||||
Accumulated deficit |
(223,220 |
) | (139,272 |
) | (106,461 |
) | (75,307 |
) | (48,920 |
) | ||||||||||
Total stockholders’ equity (deficit) |
$ | 416,565 |
$ | 476,984 |
$ | 182,259 |
$ | 36,410 |
$ | (48,913 |
) |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | salaries and related expense, including stock-based compensation; |
• | external expenses paid to clinical trial sites, contract research organizations, laboratories, database software and consultants that conduct clinical trials; |
• | expenses related to development and the production of nonclinical and clinical trial supplies, including fees paid to contract manufacturers; |
• | expenses related to preclinical studies; |
• | expenses related to compliance with drug development regulatory requirements; and |
• | other allocated expenses, which include direct and allocated expenses for depreciation of equipment and other supplies. |
Year ended December 31, |
Increase / (Decrease) |
|||||||||||||||
2019 |
2018 |
$ |
% |
|||||||||||||
Research and Development Expenses |
$ | 72,324 |
$ | 25,389 |
46,935 |
185 |
% | |||||||||
General and Administrative Expenses |
22,648 |
15,293 |
7,355 |
48 |
% | |||||||||||
Interest (Income) |
(11,024 |
) | (7,671 |
) | 3,353 |
44 |
% | |||||||||
Other (Income) |
— |
(200 |
) | (200 |
) | (100 |
%) | |||||||||
$ | 83,948 |
$ | 32,811 |
51,137 |
156 |
% |
Year ended December 31, |
Increase / (Decrease) |
|||||||||||||||
2018 |
2017 |
$ |
% |
|||||||||||||
Research and Development Expenses |
$ | 25,389 |
$ | 24,390 |
999 |
4 |
% | |||||||||
General and Administrative Expenses |
15,293 |
7,672 |
7,621 |
99 |
% | |||||||||||
Interest (Income) |
(7,671 |
) | (558 |
) | 7,113 |
1275 |
% | |||||||||
Other (Income) |
(200 |
) | (350 |
) | (150 |
) | (43 |
%) | ||||||||
$ | 32,811 |
$ | 31,154 |
1,657 |
5 |
% |
Year ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Net cash used in operating activities |
$ | (41,624 |
) | $ | (25,507 |
) | $ | (22,317 |
) | |||
Net cash (used in) provided by investing activities |
30,707 |
(380,076 |
) | (22,006 |
) | |||||||
Net cash provided by financing activities |
235 |
314,335 |
173,805 |
|||||||||
Net (decrease) increase in cash and cash equivalents |
$ | (10,682 |
) | $ | (91,248 |
) | $ | 129,482 |
Payments Due by Period |
||||||||||||||||||||
Contractual Obligations |
Total |
Less Than 1 Year |
1 - 3 Years |
4 - 5 Years |
More Than 5 Years |
|||||||||||||||
Operating Leases |
765 |
363 |
402 |
— |
— |
|||||||||||||||
Total Contractual Obligations |
765 |
363 |
402 |
— |
— |
|||||||||||||||
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk. |
Item 8. |
Financial Statements and Supplementary Data. |
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item 9A. |
Controls and Procedures. |
Item 9B. |
Other Information. |
Item 10. |
Directors, Executive Officers and Corporate Governance. |
Item 11. |
Executive Compensation. |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence. |
Item 14. |
Principal Accountant Fees and Services |
Item 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | |
Item 15(a) |
The following documents are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K: | |
Item 15(a)(1) and (2) |
The Consolidated Financial Statements beginning on page F-1 are filed as part of this Annual Report on Form 10-K. Other financial statement schedules have been omitted because the information required to be presented in them is not applicable or is shown in the financial statements or related notes. | |
Item 15(a)(3) |
We have filed, or incorporated into this Annual Report on Form 10-K by reference, the exhibits listed on the accompanying Exhibit Index. | |
Item 15(b) |
See Item 15(a)(3) above. | |
Item 15(c) |
See Item 15(a)(2) above. |
Exhibit Number |
Exhibit Description |
Filed Herewith |
Incorporated by Reference herein from Form or Schedule |
Filing Date |
SEC File / Registration Number |
|||||||||||||
2.1 |
DEFA14A; Form 8-K (Exhibit 2.1) |
4/14/2016 |
001-33277 |
|||||||||||||||
3.1 |
Form 10-K (Exhibit 3.1) |
3/31/2017 |
001-33277 |
|||||||||||||||
3.2 |
Form 8-K (Exhibit 3.1) |
6/21/2017 |
001-33277 |
|||||||||||||||
3.3 |
DEFA14A; Form 8-K (Exhibit 3.1) |
4/14/2016 |
001-33277 |
|||||||||||||||
4.1 |
X |
|||||||||||||||||
Equity Agreements |
||||||||||||||||||
10.1 |
Form 8-K (Exhibit 10.1) |
6/21/2017 |
001-33277 |
|||||||||||||||
Agreements with Respect to Collaborations, Licenses, Research and Development |
||||||||||||||||||
10.2 |
Form 10-Q (Exhibit 10.5) |
11/14/2016 |
001-33277 |
Exhibit Number |
Exhibit Description |
Filed Herewith |
Incorporated by Reference herein from Form or Schedule |
Filing Date |
SEC File / Registration Number |
|||||||||||||
Equity Compensation Plans |
||||||||||||||||||
10.3* |
Definitive Proxy Statement(Annex A) |
5/15/2019 |
001-33277 |
|||||||||||||||
10.4* |
Form 10-K (Exhibit 10.10) |
3/31/2017 |
001-33277 |
|||||||||||||||
10.5* |
Form 10-K (Exhibit 10.11) |
3/31/2017 |
001-33277 |
|||||||||||||||
10.7* |
Form 10-K (Exhibit 10.12) |
3/31/2017 |
001-33277 |
|||||||||||||||
10.8* |
Form 10-Q (Exhibit 10.1) |
5/10/2016 |
001-33277 |
|||||||||||||||
Agreements with Executive Officers and Directors |
||||||||||||||||||
10.9* |
Form 8-K (Exhibit 10.3) |
12/4/2014 |
001-33277 |
|||||||||||||||
10.11* |
Form 8-K (Exhibit 10.4) |
12/4/2014 |
001-33277 |
|||||||||||||||
10.12* |
Form 10-K (Exhibit 10.46) |
3/12/2015 |
001-33277 |
|||||||||||||||
10.13* |
Form 8-K (Exhibit 10.3) |
7/22/2016 |
001-33277 |
|||||||||||||||
10.14* |
Form 8-K (Exhibit 10.4) |
7/22/2016 |
001-33277 |
|||||||||||||||
21.1 |
X |
|||||||||||||||||
23.1 |
X |
Exhibit Number |
Exhibit Description |
Filed Herewith |
Incorporated by Reference herein from Form or Schedule |
Filing Date |
SEC File / Registration Number |
|||||||||||||||
31.1 |
X |
|||||||||||||||||||
31.2 |
X |
|||||||||||||||||||
32.1** |
X |
|||||||||||||||||||
101.INS |
Inline XBRL Instance Document. |
X |
||||||||||||||||||
101.SCH |
Inline XBRL Taxonomy Extension Schema Document. |
X |
||||||||||||||||||
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
X |
||||||||||||||||||
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document. |
X |
||||||||||||||||||
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document. |
X |
||||||||||||||||||
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
X |
||||||||||||||||||
104 |
Inline XBRL for the cover page of this Annual Report on Form 10-K, included in the Exhibit 101 Inline XBRL Document Set. |
X |
* | Indicates a management contract, compensatory plan or arrangement. |
** | The certifications attached as Exhibit 32.1 that accompany this Annual Report on Form 10-K are not deemed filed with the SEC and are not to be incorporated by reference into any filing of the registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, regardless of any general incorporation language contained in any filing. |
† |
Confidential portions of these documents have been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. |
Item 16. |
Form 10-K Summary. |
MADRIGAL PHARMACEUTICALS INC. | ||||||
Date: February 26, 2020 |
By: |
/s/ PAUL A. FRIEDMAN, M.D. | ||||
Paul A. Friedman, M.D. | ||||||
Chief Executive Officer | ||||||
(Principal Executive Officer) |
Signatures |
Title |
Date | ||
/s/ PAUL A. FRIEDMAN, M.D. Paul A. Friedman, M.D. |
Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer) |
February 26, 2020 | ||
/s/ MARC R. SCHNEEBAUM Marc R. Schneebaum |
Senior Vice President and Chief Financial Officer (Principal Accounting and Financial Officer) |
February 26, 2020 | ||
/s/ REBECCA TAUB, M.D. Rebecca Taub, M.D. |
Director |
February 26, 2020 | ||
/s/ FRED B. CRAVES, PH.D. Fred B. Craves, Ph.D. |
Director |
February 26, 2020 | ||
/s/ KENNETH M. BATE Kenneth M. Bate |
Director |
February 26, 2020 | ||
/s/ KEITH R. GOLLUST Keith R. Gollust |
Director |
February 26, 2020 |
Signatures |
Title |
Date | ||
/s/ DAVID MILLIGAN, PH.D. David Milligan, Ph.D. |
Director |
February 26, 2020 | ||
/s/ RICHARD S. LEVY, M.D. Richard S. Levy, M.D. |
Director |
February 26, 2020 | ||
/s/ JAMES M. DALY James M. Daly |
Director |
February 26, 2020 |
Page |
||||
F-2 |
||||
F-5 |
||||
F-6 |
||||
F-7 |
||||
F-8 |
||||
F-9 |
||||
F-10 |
December 31, 2019 |
December 31, 2018 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | |
$ | |
||||
Marketable securities |
|
|
||||||
Prepaid expenses and other current assets |
|
|
||||||
Total current assets |
|
|
||||||
Property and equipment, net |
|
|
||||||
Right-of-use asset |
|
— |
||||||
Total assets |
$ | |
$ | |
||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | |
$ | |
||||
Accrued expenses |
|
|
||||||
Lease liability |
|
— |
||||||
Total current liabilities |
|
|
||||||
Long term liabilities: |
||||||||
Lease liability |
|
— |
||||||
Total long term liabilities |
|
— |
||||||
Total liabilities |
|
|
||||||
Stockholders’ equity: |
||||||||
Preferred stock, par value $ |
|
|
||||||
Common stock, par value $ |
|
|
||||||
Additional paid-in-capital |
|
|
||||||
Accumulated other comprehensive gain (loss) |
|
( |
) | |||||
Accumulated deficit |
( |
) | ( |
) | ||||
Total stockholders’ equity |
|
|
||||||
Total liabilities and stockholders’ equity |
$ | |
$ | |
||||
Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Revenues: |
||||||||||||
Total revenues |
$ | — |
$ | — |
$ | — |
||||||
Operating expenses: |
||||||||||||
Research and development |
|
|
|
|||||||||
General and administrative |
|
|
|
|||||||||
Total operating expenses |
|
|
|
|||||||||
Loss from operations |
( |
) | ( |
) | ( |
) | ||||||
Interest income |
|
|
|
|||||||||
Other income |
— |
|
|
|||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Net loss per common share: |
||||||||||||
Basic and diluted net loss per common share |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Basic and diluted weighted average number of common shares outstanding |
|
|
|
Year Ended December 31, |
||||||||||||
2019 |
2018 |
201 7 |
||||||||||
Net Loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Other comprehensive income (loss): |
||||||||||||
Unrealized gain (loss) on available-for-sale securities |
|
( |
) | ( |
) | |||||||
Comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Preferred stock |
Common stock |
Additional paid-in Capital |
Accumulated other comprehensive income (loss) |
Accumulated deficit |
Total stockholders’ equity |
|||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||
Balance at December 31, 2016 |
— |
$ |
— |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||||||||||||||
Issuance of common and preferred shares in equity offerings, net of transaction costs |
|
— |
|
— |
|
— |
— |
|
||||||||||||||||||||||||
Compensation expense related to stock options for services |
— |
— |
— |
— |
|
— |
— |
|
||||||||||||||||||||||||
Unrealized loss on marketable securities |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | ||||||||||||||||||||||
Balance at December 31, 2017 |
|
$ |
— |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
||||||||||||||||
Issuance of common shares in equity offering, excluding to related parties, net of transaction costs |
— |
— |
|
|
|
— |
— |
|
||||||||||||||||||||||||
Sale of common shares to related parties and exercise of common stock options, net of transaction costs |
— |
— |
|
— |
|
— |
— |
|
||||||||||||||||||||||||
Compensation expense related to stock options for services |
— |
— |
— |
— |
|
— |
— |
|
||||||||||||||||||||||||
Unrealized loss on marketable securities |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | ||||||||||||||||||||||
Balance at December 31, 2018 |
|
$ |
— |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
||||||||||||||||
Sale of common shares to related parties and exercise of common stock options, net of transaction costs |
— |
— |
|
— |
|
— |
— |
|
||||||||||||||||||||||||
Compensation expense related to stock options for services |
— |
— |
— |
— |
|
— |
— |
|
||||||||||||||||||||||||
Unrealized gain on marketable securities |
— |
— |
— |
— |
— |
|
— |
|
||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | ||||||||||||||||||||||
Balance at December 31, 2019 |
|
$ |
— |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||||||||||||||
Years Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||||||
Stock-based compensation expense |
|
|
|
|||||||||
Depreciation and amortization expense |
|
|
|
|||||||||
Changes in operating assets and liabilities: |
||||||||||||
Prepaid expenses and other current assets |
|
( |
) | |
||||||||
Accounts payable |
( |
) | |
|
||||||||
Accrued expense |
|
( |
) | |
||||||||
Accrued interest, net of interest received on maturity of investments |
|
( |
) | — |
||||||||
Net cash used in operating activities |
( |
) | ( |
) | ( |
) | ||||||
Cash flows from investing activities: |
||||||||||||
Purchases of marketable securities |
( |
) | ( |
) | ( |
) | ||||||
Sales and maturities of marketable securities |
|
|
|
|||||||||
Purchases of property and equipment, net of disposals |
( |
) | ( |
) | ( |
) | ||||||
Net cash provided by (used in) investing activities |
|
( |
) | ( |
) | |||||||
Cash flows from financing activities: |
||||||||||||
Proceeds from issuances of stock, excluding related parties, net of transaction costs |
— |
|
|
|||||||||
Proceeds from the sale of related party stock and exercise of common stock options, net of transaction costs |
|
|
— |
|||||||||
Net cash provided by financing activities |
|
|
|
|||||||||
Net increase (decrease) in cash and cash equivalents |
( |
) | ( |
) | |
|||||||
Cash and cash equivalents at beginning of period |
|
|
|
|||||||||
Cash and cash equivalents at end of period |
$ | |
$ | |
$ | |
||||||
Supplemental disclosure of cash flow information: |
||||||||||||
Obtaining a right-of-use asset in exchange for a lease liability |
$ | |
$ | — |
$ | — |
||||||
Purchases of property and equipment in accounts payable or accrued expense at period end |
|
— |
|
As of December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Common stock options |
|
|
|
|||||||||
Unvested restricted common stock |
— |
|
|
|||||||||
Preferred stock |
|
|
|
December 31, 2019 |
||||||||||||||||
Cost |
Unrealized gains |
Unrealized losses |
Fair value |
|||||||||||||
Cash and cash equivalents: |
||||||||||||||||
Cash (Level 1) |
$ | |
$ | — |
$ | — |
$ | |
||||||||
Money market funds (Level 1) |
|
— |
— |
|
||||||||||||
Corporate debt securities due within |
— |
— |
— |
— |
||||||||||||
Total cash and cash equivalents |
|
— |
— |
|
||||||||||||
Marketable securities: |
||||||||||||||||
Corporate debt securities due within |
|
|
( |
) | |
|||||||||||
Corporate debt securities due within |
|
|
( |
) | |
|||||||||||
Total cash, cash equivalents and marketable securities |
$ | |
$ | |
$ | ( |
) | $ | |
|||||||
December 31, 2018 |
||||||||||||||||
Cost |
Unrealized gains |
Unrealized losses |
Fair value |
|||||||||||||
Cash and cash equivalents: |
||||||||||||||||
Cash (Level 1) |
$ | |
$ | — |
$ | — |
$ | |
||||||||
Money market funds (Level 1) |
|
— |
— |
|
||||||||||||
Corporate debt securities due within |
|
— |
— |
|
||||||||||||
Total cash and cash equivalents |
|
— |
— |
|
||||||||||||
Marketable securities: |
||||||||||||||||
Corporate debt securities due within |
|
|
( |
) | |
|||||||||||
Total cash, cash equivalents and marketable securities |
$ | |
$ | |
$ | ( |
) | $ | |
|||||||
December 31, 2019 |
December 31, 2018 |
|||||||
C ontract research costs |
$ | |
$ | |
||||
Compensation and benefits |
|
|
||||||
Professional fees |
|
|
|
|
|
| ||
Other |
|
|
||||||
$ | |
$ | |
|||||
Shares |
Weighted average exercise price |
Weighted average remaining contractual life (years) |
Aggregate intrinsic value (in thousands) |
|||||||||||||
Outstanding at January 1, 2019 |
$ | |||||||||||||||
Options granted |
||||||||||||||||
Options exercised |
( |
) | ||||||||||||||
Options cancelled |
( |
) | ||||||||||||||
Outstanding at December 31, 2019 |
$ | $ | ||||||||||||||
Exercisable at December 31, 2019 |
$ | $ |
Shares |
Weighted average exercise price |
|||||||
Outstanding at January 1, 2019 |
$ | |||||||
Vested |
( |
) | ||||||
Outstanding at December 31, 2019 |
$ | |||||||
Years Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Stock-based compensation expense by type of award: |
||||||||||||
Stock options |
$ | $ | $ | |||||||||
Restricted stock |
||||||||||||
Total stock-based compensation expense |
$ | $ | $ | |||||||||
Effect of stock-based compensation expense by line item: |
||||||||||||
Research and development |
$ | $ | $ | |||||||||
General and administrative |
||||||||||||
Total stock-based compensation expense included in net loss |
$ | $ | $ | |||||||||
Operating Leases |
||||
2020 |
$ | |||
2021 |
||||
2022 |
||||
Thereafter |
— |
|||
Total minimum payments |
$ | |||
Less: imputed interest |
||||
Present value of lease liabilities |
$ |
For the years ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Deferred Tax Liabilities |
||||||||||||
Unrealized gains on investments |
$ | $ | — |
$ | — |
|||||||
Total deferred tax liabilities |
$ |
$ |
— |
$ |
— |
|||||||
Deferred Tax Assets |
||||||||||||
Charitable contributions |
$ |
$ |
$ |
|||||||||
Accrued expenses |
||||||||||||
Intangibles |
||||||||||||
Stock compensation |
||||||||||||
Property, plant & equipment |
— |
|||||||||||
Unrealized loss on investment |
— |
|||||||||||
Net operating losses |
||||||||||||
Capitalized R&D |
For the years ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
R&D credit |
$ |
|
$ |
|
$ |
|
||||||
Total deferred tax assets before valuation allowance |
|
|
|
|||||||||
Valuation allowance |
( |
) |
( |
) |
( |
) | ||||||
Total deferred tax assets |
|
— |
— |
|||||||||
Net deferred tax assets |
$ |
— |
$ |
— |
$ |
— |
||||||
For the years ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Tax benefit at U.S. federal statutory rate |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Stock based compensation |
( |
) | ( |
) | |
|||||||
Effect of tax reform, change in federal tax rate |
— |
— |
|
|||||||||
Other n ondeductible e xpenses |
|
— |
|
|||||||||
State income taxes benefit before valuation allowance, net of federal benefit |
( |
) | ( |
) | ( |
) | ||||||
Increase in domestic valuation allowance |
|
|
|
|||||||||
Research and development credit |
( |
) | ( |
) | ( |
) | ||||||
Other adjustments |
|
( |
) | ( |
) | |||||||
Income tax expense (benefit) |
$ | — |
$ | — |
$ | — |
||||||
Three months ended |
||||||||||||||||
March 31, 2019 |
June 30, 2019 |
September 30, 2019 |
December 31, 2019 |
|||||||||||||
Revenues: |
||||||||||||||||
Total revenues |
$ | — |
$ | — |
$ | — |
$ | — |
||||||||
Operating expenses: |
||||||||||||||||
Research and development |
|
|
|
|
||||||||||||
General and administrative |
|
|
|
|
||||||||||||
Total operating expenses |
|
|
|
|
||||||||||||
Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Interest income |
|
|
|
|
||||||||||||
Other income |
— |
— |
— |
— |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Net loss per common share: |
||||||||||||||||
Basic and diluted net loss per common share |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Basic and diluted weighted average number of common shares outstanding |
|
|
|
|
Three months ended |
||||||||||||||||
March 31, 2018 |
June 30, 2018 |
September 30, 2018 |
December 31, 2018 |
|||||||||||||
Revenues: |
||||||||||||||||
Total revenues |
$ | — |
$ | — |
$ | — |
$ | — |
||||||||
Operating expenses: |
||||||||||||||||
Research and development |
|
|
|
|
||||||||||||
General and administrative |
|
|
|
|
||||||||||||
Total operating expenses |
|
|
|
|
||||||||||||
Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Interest income |
|
|
|
|
||||||||||||
Other income |
— |
|
— |
— |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Net loss per common share: |
||||||||||||||||
Basic and diluted net loss per common share |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Basic and diluted weighted average number of common shares outstanding |
|
|
|
|