Cogent Biosciences(COGT) - 2019 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION This section covers unaudited financial statements, management's analysis, market risk, and internal controls Financial Statements (Unaudited) Unaudited financial statements reflect a decrease in total assets and an increased net loss for the period, primarily due to cash consumption and higher operating expenses Consolidated Balance Sheets This section presents the company's financial position, including assets, liabilities, and equity, as of June 30, 2019, and December 31, 2018 | Financial Metric | June 30, 2019 (in thousands) | December 31, 2018 (in thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $55,863 | $55,671 | | Marketable securities | $0 | $22,923 | | Total current assets | $58,598 | $81,002 | | Total assets | $69,308 | $85,927 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $24,307 | $24,945 | | Total liabilities | $29,550 | $25,693 | | Accumulated deficit | ($114,266) | ($92,059) | | Total stockholders' equity | $39,758 | $60,234 | Consolidated Statements of Operations and Comprehensive Loss This section details the company's revenues, expenses, and net loss for the three and six months ended June 30, 2019 and 2018 | Metric (in thousands, except per share data) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $3,138 | $1,666 | $6,191 | $3,886 | | Research and development | $10,617 | $9,126 | $23,020 | $17,268 | | General and administrative | $3,062 | $1,979 | $5,553 | $3,043 | | Loss from operations | ($10,541) | ($9,439) | ($22,382) | ($16,425) | | Net loss | ($10,516) | ($9,023) | ($22,207) | ($15,758) | | Net loss per share, basic and diluted | ($0.34) | ($0.31) | ($0.73) | ($0.80) | Consolidated Statements of Cash Flows This section outlines the company's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2019 and 2018 | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | ($22,862) | ($15,894) | | Net cash provided by (used in) investing activities | $22,946 | ($35,445) | | Net cash provided by financing activities | $108 | $69,776 | | Net increase (decrease) in cash | $192 | $18,437 | | Cash, cash equivalents and restricted cash at end of period | $57,118 | $48,037 | Notes to Unaudited Consolidated Financial Statements This section provides additional details and explanations supporting the unaudited consolidated financial statements - The company is a clinical-stage biopharmaceutical firm focused on cell therapies for cancer, utilizing its proprietary ACTR and BOXR platforms[24] - The company has incurred recurring losses since inception, with a net loss of $22.2 million for the six months ended June 30, 2019, and an accumulated deficit of $114.3 million; management expects cash on hand to be sufficient for at least 12 months[27] - Under its collaboration agreement with Seattle Genetics, the company recognized revenue of $6.2 million for the six months ended June 30, 2019, with an estimated $42.4 million remaining performance obligation[68] - As of June 30, 2019, the company had non-cancelable minimum purchase commitments totaling $2.4 million over the following 12 months[87] Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes the company's financial condition, operational results, and liquidity, highlighting cell therapy development, clinical program updates, and key financial metrics Overview This section provides a high-level introduction to the company's business, strategic focus, and recent significant developments - Unum is a clinical-stage biopharmaceutical company focused on developing cell therapies for cancer using its proprietary Antibody-Coupled T cell Receptor (ACTR) and Bolt-On Chimeric Receptor (BOXR) platforms[97] - The company's most advanced programs, ATTCK-20-2 and ATTCK-20-03, test ACTR087 or ACTR707 with rituximab in patients with relapsed or refractory CD20+ non-Hodgkin lymphoma (r/r NHL)[99] - In July 2019, the FDA placed a clinical hold on the ATTCK-20-2 trial (ACTR087) following a safety report of a patient who experienced serious adverse events and a fatal outcome[101] Results of Operations This section analyzes the company's financial performance, including revenue, expenses, and net loss, for the three and six months ended June 30, 2019 and 2018 | Metric (in thousands) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Change | | :--- | :--- | :--- | :--- | | Collaboration Revenue | $3,138 | $1,666 | $1,472 | | Research and Development | $10,617 | $9,126 | $1,491 | | General and Administrative | $3,062 | $1,979 | $1,083 | | Net Loss | ($10,516) | ($9,023) | ($1,493) | | Metric (in thousands) | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | Change | | :--- | :--- | :--- | :--- | | Collaboration Revenue | $6,191 | $3,886 | $2,305 | | Research and Development | $23,020 | $17,268 | $5,752 | | General and Administrative | $5,553 | $3,043 | $2,510 | | Net Loss | ($22,207) | ($15,758) | ($6,449) | - The increase in R&D expenses for the six months ended June 30, 2019, was primarily due to increased clinical activity, patient manufacturing, and personnel-related costs from increased headcount[140][142] - The increase in G&A expenses for the six months ended June 30, 2019, was mainly driven by higher professional fees (legal, audit, accounting), personnel costs, and insurance expenses associated with operating as a public company[143] Liquidity and Capital Resources This section discusses the company's cash position, funding sources, and ability to meet its short-term and long-term financial obligations - As of June 30, 2019, the company had $55.9 million in cash and cash equivalents and $15.0 million available under its loan and security agreement[147] - Management expects that current cash and cash equivalents will be sufficient to fund operating expenses and capital expenditure requirements into early 2021[163] - Net cash used in operating activities was $22.9 million for the six months ended June 30, 2019, an increase from $15.9 million in the same period of 2018, primarily due to a higher net loss and changes in operating assets and liabilities[150][151] - The company amended its loan agreement in June 2019 to extend the available date for borrowings to June 30, 2020; no amounts had been borrowed as of June 30, 2019[158] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Unum Therapeutics is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Unum Therapeutics is not required to provide quantitative and qualitative disclosures about market risk[171] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2019, with no material changes to internal control over financial reporting - The company's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2019[172] - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2019[173] PART II—OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity sales, and exhibits Legal Proceedings The company is not currently a party to any material legal proceedings - The company is not currently a party to any material legal proceedings[176] Risk Factors The company highlights significant risks, including high dependency on lead product candidates, the FDA clinical hold on ACTR087, and potential for adverse side effects in clinical trials - The company's business is highly dependent on the success of its lead product candidates, including ACTR707 and potential BOXR candidates like BOXR1030[178] - A Phase 1 clinical trial for ACTR087 was placed on clinical hold by the FDA in July 2019 following a safety report, highlighting a significant risk to the ACTR platform[178] - The company's product candidates may cause undesirable side effects such as Cytokine Release Syndrome (CRS), neurotoxicity, and other issues that could halt clinical development, as observed in the ATTCK-20-2 trial which led to a clinical hold[186][187] Unregistered Sales of Equity Securities and Use of Proceeds This section details the use of proceeds from the March 2018 IPO and private placement, including amounts used for clinical development and the anticipated funding timeline - The company raised net proceeds of approximately $63.9 million from its IPO and $5.0 million from a concurrent private placement in March/April 2018[191] - As of June 30, 2019, the company has used approximately $45.4 million of the net proceeds for clinical development, research, and working capital[191] - The company anticipates the remaining net proceeds will fund operating expenses and capital expenditures into early 2021[191] Exhibits This section lists all exhibits filed with the Form 10-Q, including agreements, contracts, and officer certifications