Atea Pharmaceuticals(AVIR) - 2020 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Presents the unaudited consolidated financial statements and management's discussion and analysis for Atea Pharmaceuticals, Inc., along with disclosures on market risk and internal controls Item 1. Financial Statements (Unaudited) Presents unaudited consolidated financial statements, including balance sheets, income, equity, cash flow statements, and detailed notes Consolidated Balance Sheets Consolidated Balance Sheet Highlights (in thousands): | Metric | September 30, 2020 | December 31, 2019 | | :------------------------------------- | :------------------- | :------------------ | | Cash and cash equivalents | $105,383 | $21,661 | | Total current assets | $108,413 | $21,910 | | Total assets | $110,106 | $22,073 | | Total current liabilities | $10,816 | $2,435 | | Total liabilities | $10,872 | $2,530 | | Convertible preferred stock | $175,745 | $69,114 | | Accumulated deficit | $(85,816) | $(54,213) | | Total stockholders' deficit | $(76,511) | $(49,571) | Consolidated Statements of Operations and Comprehensive Loss Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share): | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :------------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Research and development expenses | $13,601 | $2,411 | $24,177 | $6,681 | | General and administrative expenses | $4,028 | $1,358 | $7,500 | $3,178 | | Total operating expenses | $17,629 | $3,769 | $31,677 | $9,859 | | Net loss and comprehensive loss | $(17,622) | $(3,632) | $(31,603) | $(9,379) | | Net loss per share—basic and diluted | $(1.74) | $(0.36) | $(3.13) | $(0.93) | Consolidated Statements of Convertible Preferred Stock and Stockholders' Deficit Changes in Convertible Preferred Stock and Stockholders' Deficit (in thousands): | Metric | Balance Dec 31, 2019 | Issuance of Series D Preferred Stock | Stock-based Compensation Expense | Net Loss | Balance Sep 30, 2020 | | :-------------------------------- | :------------------- | :----------------------------------- | :------------------------------- | :--------- | :------------------- | | Convertible Preferred Stock Amount | $69,114 | $106,631 | — | — | $175,745 | | Additional Paid-in Capital | $4,632 | — | $4,636 | — | $9,295 | | Accumulated Deficit | $(54,213) | — | — | $(31,603) | $(85,816) | | Total Stockholders' Deficit | $(49,571) | — | — | — | $(76,511) | Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows (in thousands): | Activity | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :------------------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(21,787) | $(8,886) | | Net cash used in investing activities | $(21) | $(2) | | Net cash provided by financing activities | $105,530 | $— | | Net increase (decrease) in cash, cash equivalents and restricted cash | $83,722 | $(8,888) | | Cash, cash equivalents and restricted cash at end of period | $105,490 | $25,711 | Notes to Unaudited Consolidated Financial Statements Details financial statements, covering business, accounting policies, material events, and various financial disclosures - Atea Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company focused on discovering, developing, and commercializing antiviral therapeutics for life-threatening viral infections[22] - In October 2020, the company issued 8,973,261 shares of Series D-1 Convertible Preferred Stock for gross proceeds of $107.5 million[23][80] - In October 2020, the company entered into the Roche License Agreement, granting Roche exclusive rights to develop and commercialize AT-527 outside the United States (excluding certain hepatitis C uses) and global manufacturing rights, with Roche paying an upfront payment of $350 million in November 2020[24][81][89] - In November 2020, the company completed an Initial Public Offering (IPO), issuing 14,375,000 shares of common stock at $24.00 per share for aggregate gross proceeds of $345 million, with all preferred stock converting into 57,932,090 shares of common stock[25][84] - As of September 30, 2020, the company had cash and cash equivalents of $105.383 million and an accumulated deficit of $85.816 million[13][14][28] - The company believes that its cash and cash equivalents as of September 30, 2020, combined with net proceeds from the Series D-1 Closing, the Roche Upfront Payment, and the IPO, will be sufficient to fund operations through at least 2023[28] Accrued Expenses and Other Current Liabilities (in thousands): | Category | September 30, 2020 | December 31, 2019 | | :--------------------------------------- | :------------------- | :------------------ | | Research and development | $4,892 | $1,326 | | License fees | $— | $200 | | Professional fees and other | $626 | $361 | | Payroll and payroll related | $822 | $— | | Total | $6,340 | $1,887 | - Total unrecognized compensation expense related to unvested stock option awards was $14,923 thousand as of September 30, 2020, to be recognized over a remaining weighted average period of 3.7 years[74] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, operations, product development, liquidity, funding, and critical accounting policies Overview Outlines the company's focus on antiviral therapeutics, lead product candidates, and key financial highlights, including recent funding - Atea Pharmaceuticals is a clinical-stage biopharmaceutical company focused on discovering, developing, and commercializing antiviral therapeutics for life-threatening viral infections, utilizing a proprietary purine nucleotide prodrug platform[88] - Lead product candidate AT-527 is an orally administered antiviral for COVID-19, currently in a Phase 2 clinical trial for hospitalized patients, with topline data expected in the first half of 2021 and a Phase 3 trial for mild to moderate outpatient COVID-19 anticipated in the first half of 2021[89] - AT-787, a combination of AT-527 and AT-777, is being evaluated for chronic HCV infection, with its Phase 1/2A clinical trial paused due to the COVID-19 pandemic and expected to restart upon resolution of industry-wide challenges[90][92] - AT-752 is an oral purine nucleotide prodrug for dengue virus, with plans to submit a Clinical Trial Application (CTA) in Q4 2020 and initiate Phase 1 and Phase 2 trials in the first half of 2021[93] - The company is evaluating AT-889 and AT-934, second-generation nucleoside pyrimidine prodrugs, for RSV treatment, with a product candidate nomination and clinical development initiation expected in the second half of 2021[94] Key Financial Overview (in millions): | Metric | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2020 | As of Sep 30, 2020 | | :-------------------- | :------------------------------ | :----------------------------- | :----------------- | | Net Loss | $(17.6) | $(31.6) | N/A | | Accumulated Deficit | N/A | N/A | $(85.8) | | Cash and Cash Equivalents | N/A | N/A | $105.4 | - The company expects operating expenses to increase significantly due to advancing product candidates, seeking regulatory approval, preparing for commercialization, expanding its intellectual property portfolio, and operating as a public company[95] - Post-September 30, 2020, the company secured significant funding, including $107.5 million from Series D-1 Preferred Stock, a $350 million upfront payment from Roche, and $345 million gross proceeds from its IPO, which is expected to fund operations through at least 2023[95][97] Components of Results of Operations Details the components of operating results, including revenue recognition, research and development, and general and administrative expenses - The company had not generated any revenue from product sales through September 30, 2020, but expects to recognize license revenue related to the Roche License Agreement during the three months ending December 31, 2020[98] - Research and development expenses are expensed as incurred, primarily consisting of outsourced activities, preclinical and clinical development, manufacturing, and personnel-related costs[99] Research and Development Expenses by Indication (in thousands): | Indication | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | COVID-19 external costs | $8,192 | $— | $13,679 | $— | | Dengue external costs | $608 | $80 | $1,657 | $287 | | RSV external costs | $263 | $428 | $923 | $1,084 | | HCV external costs | $92 | $1,416 | $1,775 | $3,769 | | Internal research and development costs | $4,446 | $487 | $6,143 | $1,541 | | Total research and development costs | $13,601 | $2,411 | $24,177 | $6,681 | - General and administrative expenses are expected to increase due to higher personnel costs, expanded infrastructure, and increased consulting, legal, and accounting services associated with operating as a public company[103] Results of Operations Compares financial performance for the three and nine months ended September 30, 2020, versus 2019, detailing expense and net loss changes Comparison of Three Months Ended September 30, 2020 vs. 2019 (in thousands): | Metric | 2020 | 2019 | Change | | :------------------------------------- | :----- | :----- | :------- | | Research and development expenses | $13,601 | $2,411 | $11,190 | | General and administrative expenses | $4,028 | $1,358 | $2,670 | | Total operating expenses | $17,629 | $3,769 | $13,860 | | Net loss | $(17,622) | $(3,632) | $(13,990) | - Research and development expenses increased by $11.2 million for the three months ended September 30, 2020, primarily due to a $7.2 million increase in external CRO/CMO services for COVID-19 and dengue product candidates, and a $4.0 million increase in internal spend (personnel-related expenses and consulting fees)[107] - General and administrative expenses increased by $2.6 million for the three months ended September 30, 2020, driven by organizational expansion, including a $2.0 million increase in payroll and personnel-related expenses, and a $0.5 million increase in professional fees[108] Comparison of Nine Months Ended September 30, 2020 vs. 2019 (in thousands): | Metric | 2020 | 2019 | Change | | :------------------------------------- | :----- | :----- | :------- | | Research and development expenses | $24,177 | $6,681 | $17,496 | | General and administrative expenses | $7,500 | $3,178 | $4,322 | | Total operating expenses | $31,677 | $9,859 | $21,818 | | Net loss | $(31,603) | $(9,379) | $(22,224) | - Research and development expenses increased by $17.5 million for the nine months ended September 30, 2020, primarily due to a $12.8 million increase in external CRO/CMO services for COVID-19 and dengue, and a $4.7 million increase in internal spend (personnel-related expenses and consulting fees)[112] - General and administrative expenses increased by $4.3 million for the nine months ended September 30, 2020, mainly due to a $2.3 million increase in payroll and personnel-related expenses, a $1.7 million increase in professional fees, and a $0.2 million license termination fee[113] Liquidity and Capital Resources Discusses the company's funding sources, cash position, and cash flow activities, including recent financing and future capital requirements - Through September 30, 2020, the company funded operations with $178.1 million from convertible preferred stock sales, with cash and cash equivalents totaling $105.4 million as of that date[114] - Subsequent to September 30, 2020, the company received $107.5 million from Series D-1 preferred stock, a $350 million upfront payment from Roche, and $345 million gross proceeds from its IPO[114] - The company incurred net losses of $17.6 million and $31.6 million for the three and nine months ended September 30, 2020, respectively, with an accumulated deficit of $85.8 million as of September 30, 2020[115] - Management believes that current cash and cash equivalents, combined with recent financing activities, will be sufficient to fund planned operations through at least 2023[116] Summary Statement of Cash Flows (in thousands): | Activity | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :------------------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(21,787) | $(8,886) | | Net cash used in investing activities | $(21) | $(2) | | Net cash provided by financing activities | $105,530 | $— | | Net increase (decrease) in cash, cash equivalents and restricted cash | $83,722 | $(8,888) | - Net cash used in operating activities increased to $21.8 million for the nine months ended September 30, 2020, primarily due to increased net loss offset by stock-based compensation and changes in operating assets and liabilities[119] - Net cash provided by financing activities was $105.5 million for the nine months ended September 30, 2020, mainly from $106.6 million in net proceeds from Series D convertible preferred stock, partially offset by $1.1 million in IPO-related deferred offering costs[121] - The company became obligated to pay a $7.0 million fee to a financial advisor in connection with the Roche License Agreement, which was paid in December 2020[122] Critical Accounting Policies, Significant Judgments and Use of Estimates Addresses critical accounting policies, significant judgments, and estimates, noting no material changes from prior disclosures - There were no material changes to the company's critical accounting policies during the three months ended September 30, 2020, from those previously disclosed in its Prospectus[124] Off-Balance Sheet Arrangements Confirms the absence of any off-balance sheet arrangements since the company's inception - The company has not engaged in any off-balance sheet arrangements since its inception[125] Indemnification Agreements Describes standard indemnification agreements with directors, officers, and third parties, noting minimal estimated fair value - The company enters into standard indemnification arrangements in the ordinary course of business, including for directors and executive officers, and for third-party claims related to intellectual property infringement[126] - The maximum potential amount of future payments under these agreements is not determinable, but the company believes the fair value of these agreements is minimal[126] JOBS Act Accounting Election States the company's election as an 'emerging growth company' to use the extended transition period for new accounting standards - As an 'emerging growth company' under the JOBS Act, the company has elected to use the extended transition period for complying with new or revised accounting standards[127] Recently Issued Accounting Pronouncements Refers to Note 2 of the consolidated financial statements for additional information on recently issued accounting pronouncements - Additional information on recently issued accounting pronouncements is provided in Note 2 to the consolidated financial statements[129] Item 3. Quantitative and Qualitative Disclosures About Market Risk Discusses the company's exposure to market risks, primarily interest rate sensitivity, and concludes that changes in interest rates, inflation, or foreign currency exchange rates have not had a significant impact on its operations - As of September 30, 2020, the company held $105.4 million in cash and cash equivalents, primarily in interest-bearing money market funds[130] - Due to the short-term maturities and low-risk profile of its cash equivalents, an immediate 10% change in interest rates would not materially affect the fair value of cash equivalents or future interest income[130] - The company does not believe that inflation, interest rate changes, or foreign currency exchange rate fluctuations have had a significant impact on its results of operations for any periods presented[130] Item 4. Controls and Procedures Details the effectiveness of disclosure controls and procedures, with no material changes in internal control over financial reporting - Management, with the participation of the principal executive officer and principal financial officer, evaluated the effectiveness of disclosure controls and procedures as of September 30, 2020, and concluded they were effective at the reasonable assurance level[132] - There were no changes in internal control over financial reporting during the quarter ended September 30, 2020, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[133] PART II. OTHER INFORMATION Presents other information including legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings The company is not currently subject to any material legal proceedings - The company is not subject to any material legal proceedings[135] Item 1A. Risk Factors Outlines various risks and uncertainties that could materially affect the company's business, financial condition, and operations Risks Related to COVID-19 Addresses risks associated with COVID-19, including development uncertainty, market competition, and operational impacts - There is significant uncertainty regarding the development of AT-527 as a potential treatment for COVID-19, and resources expended may not be recoverable if it is not approved or successfully commercialized[137][138] - The market for COVID-19 therapeutics may be significantly reduced if effective vaccines become widely available[6][137] - AT-527 faces significant competition from other COVID-19 treatments (e.g., remdesivir, antibody cocktails) and vaccines (e.g., Pfizer/BioNTech, Moderna) that are already marketed or in advanced development[6][141] - The COVID-19 pandemic may materially and adversely affect the company's business, financial results, and ability to raise additional capital, including causing delays in preclinical studies and clinical trials (e.g., pausing the AT-787 HCV trial)[6][142][145] Risks Related to Our Financial Condition and Capital Requirements Details risks related to limited operating history, significant losses, future financing needs, and tax attribute limitations - The company has a limited operating history and no track record of successfully developing or commercializing approved antiviral products, making it difficult to assess future viability[6][146] - The company has incurred significant operating losses since inception, with an accumulated deficit of $85.8 million as of September 30, 2020, and expects to incur substantial additional losses without generating commercial revenue[6][149] - Substantial additional financing will be required, which may not be available on acceptable terms, potentially forcing delays, reductions, or termination of product development or commercialization efforts[7][152][154] - The company's ability to use net operating loss carryforwards ($49.3 million federal, $49.2 million state as of December 31, 2019) and other tax attributes to offset future taxable income may be subject to limitations due to ownership changes under Sections 382 and 383 of the Internal Revenue Code[6][158] Risks Related to the Discovery, Development, Preclinical and Clinical Testing, Manufacturing and Regulatory Approval of Our Product Candidates Covers risks in product candidate development, regulatory approval, clinical trials, adverse events, and data integrity - The business is highly dependent on the success of its most advanced product candidates (AT-527, AT-787, AT-752); failure to obtain regulatory approval or successfully commercialize them would significantly harm the business[6][159][161] - The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, expensive, time-consuming, and inherently unpredictable, potentially preventing the company from generating product revenue[6][162][190] - Clinical development is lengthy and uncertain, with potential for substantial delays and costs due to factors like patient enrollment difficulties, regulatory holds, or changes in trial protocols[6][165][167][174] - Product candidates may be associated with serious adverse events or undesirable side effects, which could halt clinical development, prevent regulatory approval, limit commercial potential, or result in significant negative consequences[6][170] - Interim, 'topline,' and preliminary data from clinical trials are subject to change as more data become available and are subject to audit and verification, potentially leading to material changes in final data[179][181] - Disruptions at the FDA and other government agencies (e.g., funding shortages, global health concerns) could hinder their ability to review and approve new products in a timely manner[194] - The company's computer systems and those of its third-party contractors are vulnerable to failures, damage from cyber-attacks, or natural disasters, which could disrupt operations and compromise sensitive data[197] Risks Related to Healthcare Laws and Other Legal Compliance Matters Addresses extensive government regulations, healthcare legislation, post-marketing requirements, and data privacy laws - The company's product candidates are subject to extensive and costly government regulation by the FDA, CMS, DOJ, and comparable foreign authorities, covering all aspects from research to commercialization[200] - Enacted and future healthcare legislation and policies (e.g., ACA, Tax Act) may increase the difficulty and cost of obtaining marketing approval, restrict post-approval activities, and negatively impact pricing and reimbursement[201][203][205] - Approved products will remain subject to ongoing regulatory scrutiny and post-marketing requirements, including reporting, surveillance, and compliance with cGMP regulations, with potential for sanctions for non-compliance[206][208] - The FDA and other regulatory agencies actively enforce laws prohibiting off-label promotion, which could expose the company to significant liability if violated[209] - Business operations and relationships with healthcare professionals are subject to fraud and abuse laws (e.g., Anti-Kickback Statute, False Claims Act, HIPAA), with potential for significant penalties for non-compliance[211][213] - The company is subject to diverse laws and regulations relating to data privacy and security (e.g., HIPAA, GDPR, CCPA); actual or perceived failure to comply could harm the business through fines, litigation, and reputational damage[214][216] Risks Related to Commercialization Discusses risks in market competition, reimbursement, sales infrastructure, foreign markets, and product liability claims - Developments by competitors, including safer, more effective, or less expensive therapeutics, may render the company's products or technologies obsolete or non-competitive, reducing market size[222][223] - Successful commercialization depends on governmental authorities and health insurers establishing coverage, adequate reimbursement levels, and favorable pricing policies; failure to obtain these could limit marketability and revenue generation[224][225] - The company has limited sales, marketing, and distribution infrastructure and experience; inability to establish these capabilities or secure collaborations could hinder commercialization and revenue generation[227] - Future growth may depend on penetrating foreign markets, which involves additional regulatory burdens, risks related to reimbursement, trade restrictions, and currency fluctuations[229][231] - The use of product candidates in clinical trials and commercial sales exposes the company to product liability claims, which could result in substantial liabilities and limit commercialization[232] Risks Related to our Dependence on Third Parties and Manufacturing Highlights risks from reliance on third parties for manufacturing, clinical trials, collaborations, and potential misconduct - The company relies on third parties for the manufacture of raw materials for research, preclinical studies, and clinical trials, and for commercial manufacturing (including Roche for AT-527); lack of long-term contracts and sole suppliers increase the risk of insufficient quantities or unacceptable costs[8][234][239] - Third-party manufacturers may be unable to successfully scale up manufacturing of product candidates in sufficient quality and quantity, which could impair clinical advancement and commercialization[237] - The company depends on third parties (medical institutions, CROs, consultants) to conduct preclinical studies and clinical trials; any failure by these third parties to adhere to GCPs or timely execution may delay or prevent regulatory approval[8][240] - Collaborations with third parties for development and commercialization (e.g., Roche License Agreement) involve risks such as shared or limited control, potential disputes, and the possibility that collaborators may not commit sufficient resources or may terminate agreements[2][242][244][245][247][248] - Reliance on data from third-party vendors, scientists, and collaborators carries the risk that inaccurate, misleading, or incomplete data could materially adversely affect the business[249] - Misconduct or improper activities by employees and independent contractors (e.g., noncompliance with regulatory standards, fraud) could have a material adverse effect on the business[251] Risks Related to Intellectual Property Covers risks in obtaining, maintaining, and enforcing intellectual property, third-party infringement, and trade secret protection - Inability to obtain, maintain, enforce, and adequately protect intellectual property rights (patents, trade secrets) could allow competitors to develop and commercialize similar technologies and products, adversely affecting the company's competitive position[8][253][255][257][287] - The company faces risks of third-party claims of intellectual property infringement, misappropriation, or other violations, which could result in substantial costs, litigation, and delays in development and commercialization efforts[8][258][260] - Products are subject to the Hatch-Waxman Act in the United States, increasing the risk of litigation with generic companies seeking to sell bioequivalent versions, potentially leading to loss of patent protection[264][266] - Patent terms may be inadequate to protect the company's competitive position for a sufficient amount of time, especially given the lengthy development, testing, and regulatory review periods for new product candidates[268] - Inability to obtain necessary licenses from third parties on commercially reasonable terms or failure to comply with obligations under existing license agreements could materially harm the business[272][274] - The company may become involved in lawsuits to protect or enforce its patents or other intellectual property, which could be expensive, time-consuming, and unsuccessful, diverting management's attention and resources[275] - Protecting intellectual property rights globally is challenging due to varying laws, costs, and enforcement strengths in different countries, potentially limiting the company's ability to prevent infringement[279][280][282] - Inability to protect the confidentiality of trade secrets could harm the business and competitive position, as enforcing trade secret claims is difficult and uncertain[283] Risks Related to Employee Matters, Managing Growth and Other Risks Related to Our Business Addresses risks in managing growth, limited staffing, dependence on key personnel, market conditions, and Brexit impacts - The company expects significant growth in employees and operations, requiring improved managerial, operational, and financial systems, and recruitment of qualified personnel; difficulties in managing this growth could disrupt operations[8][289] - With only 27 full-time employees as of December 1, 2020, the company has limited staffing, which may be inadequate to manage and operate its business effectively[8][290] - The company is highly dependent on key management and scientific personnel; the loss of any such individuals could delay or prevent the successful completion of clinical trials and harm business strategy[8][292] - Unstable market and economic conditions, including those caused by the COVID-19 pandemic, may have serious adverse consequences on the company's business, financial condition, and share price[8][293] - The United Kingdom's withdrawal from the European Union (Brexit) may negatively affect global economic conditions, financial markets, and the company's business, potentially reducing its share price[294][296] Risks Related to Our Common Stock Details risks related to stockholder influence, stock sale eligibility, reduced disclosure, and anti-takeover provisions - Principal stockholders and management beneficially own at least 33.8% of common stock as of December 10, 2020, enabling them to exert significant influence over matters subject to stockholder approval[297] - A significant portion of outstanding shares will become eligible for sale in the near future (after lock-up expiration), which could cause the market price of common stock to drop significantly[298] - As an 'emerging growth company,' reduced disclosure requirements may make the common stock less attractive to investors, potentially leading to a less active trading market or increased price volatility[299][301] - Provisions in the company's restated certificate of incorporation and bylaws, along with Delaware law, could make an acquisition more difficult and may prevent attempts by stockholders to replace current management[303][305] - The restated certificate of incorporation designates specific courts as the exclusive forum for certain stockholder litigation, which could limit stockholders' ability to obtain a favorable judicial forum for disputes[306] General Risk Factors Covers general risks including dilution, patent law weakening, acquisitions, natural disasters, litigation, and stock volatility - Raising additional capital through equity or convertible debt securities will dilute existing stockholders' ownership and may impose restrictive covenants on operations[307][309] - Weakening patent laws and enforcement by courts and other authorities in the United States and other jurisdictions may impact the company's ability to protect its patents[310] - Engaging in acquisitions or strategic partnerships could disrupt the business, cause dilution, reduce financial resources, incur debt, or assume contingent liabilities[8][311] - Natural disasters or pandemics (beyond COVID-19) could severely disrupt operations, and existing business continuity and disaster recovery plans may not adequately protect the company[8][312][314] - Litigation against the company could be costly, time-consuming, and result in additional liabilities, diverting management's attention and resources[8][315] - The market price of the company's common stock is likely to be volatile and fluctuate substantially due to various internal and external factors[8][316][318] - Operating as a public company incurs increased costs and requires substantial management time for compliance with new initiatives and corporate governance practices (e.g., Sarbanes-Oxley Act)[319][321] - Failure to maintain effective internal control over financial reporting and disclosure controls could lead to inaccurate financial reporting, fraud, and adversely affect investor confidence[322][324] - The company does not anticipate paying any cash dividends on its common stock in the foreseeable future, making capital appreciation the sole source of gain for stockholders[326] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports on unregistered equity sales, including Series D-1 Preferred Stock, and details the use of proceeds from the IPO - On October 16, 2020, the company issued 8,973,261 shares of Series D-1 Preferred Stock for approximately $107.5 million to accredited investors in an unregistered sale, which subsequently converted into common stock upon the IPO[328] - The company completed its IPO on November 3, 2020, issuing 14,375,000 common shares at $24.00 per share, generating aggregate gross proceeds of $345.0 million (before deducting $24.2 million in underwriting discounts and $3.2 million in offering expenses)[329] - The net proceeds from the IPO have been primarily invested in money market accounts, with no material change in the expected use of proceeds as described in the Prospectus[329] Item 5. Other Information States that there is no other information to report - No other information is reported in this section[330] Item 6. Exhibits Lists exhibits filed with Form 10-Q, including corporate governance, equity plans, the Roche License Agreement, and certifications - The exhibits include corporate governance documents (Restated Certificate of Incorporation, Amended and Restated Bylaws), equity compensation plans (2020 Incentive Award Plan, 2020 Employee Stock Purchase Plan), the License Agreement with Roche, and certifications by the CEO and CFO[332][333] SIGNATURES Contains the official signatures of the company's President, CEO, and CFO, certifying the report's submission SIGNATURES Contains the official signatures of the company's President, CEO, and CFO, certifying the report's submission - The report was signed by Jean-Pierre Sommadossi, Ph.D., President and Chief Executive Officer, and Andrea Corcoran, Chief Financial Officer, Executive Vice President, Legal and Secretary, on December 10, 2020[334]