GlycoMimetics(GLYC) - 2020 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents GlycoMimetics, Inc.'s unaudited financial statements, including balance sheets, statements of operations, equity, and cash flows, with accompanying notes Balance Sheets The balance sheets provide a snapshot of the company's financial position, showing assets, liabilities, and stockholders' equity at specific dates | Financial Metric | June 30, 2020 (Unaudited) | December 31, 2019 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $149,844,590 | $158,201,441 | | Total current assets | $153,357,995 | $162,527,763 | | Total assets | $158,352,737 | $167,969,679 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $9,701,289 | $10,950,576 | | Total liabilities | $12,600,241 | $13,769,092 | | Total stockholders' equity | $145,752,496 | $154,200,587 | | Total liabilities and stockholders' equity | $158,352,737 | $167,969,679 | Statements of Operations and Comprehensive Loss This statement details the company's revenues, expenses, and net loss over specific periods, reflecting operational performance | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $0 | $0 | $9,000,000 | $0 | | Research and development expense | $9,870,813 | $13,065,359 | $22,539,073 | $24,838,025 | | General and administrative expense | $4,234,917 | $3,750,610 | $8,674,677 | $7,111,058 | | Loss from operations | $(14,105,730) | $(16,815,969) | $(22,213,750) | $(31,949,083) | | Net loss and comprehensive loss | $(14,079,029) | $(15,829,815) | $(21,741,633) | $(29,913,712) | | Basic and diluted net loss per common share | $(0.32) | $(0.37) | $(0.50) | $(0.69) | Statements of Stockholders' Equity This statement tracks changes in stockholders' equity, including net loss, stock issuance, and stock-based compensation - Total stockholders' equity decreased from $154.2 million at December 31, 2019, to $145.8 million at June 30, 2020. The decrease was primarily driven by a net loss of $21.7 million, partially offset by $9.6 million from the issuance of common stock and $3.6 million in stock-based compensation[15] Statements of Cash Flows This statement summarizes cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity (Six Months Ended June 30) | 2020 | 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(18,052,052) | $(25,742,497) | | Net cash used in investing activities | $(14,519) | $(114,305) | | Net cash provided by financing activities | $9,709,720 | $106,321 | | Net change in cash and cash equivalents | $(8,356,851) | $(25,750,481) | | Cash and cash equivalents, end of period | $149,844,590 | $184,167,114 | Notes to Unaudited Financial Statements These notes provide additional details and explanations for the financial statements, including significant accounting policies and business developments - The company is a clinical-stage biotechnology firm focused on developing novel glycomimetic drugs. It has incurred significant operating losses since inception and expects these to continue, with future funding intended to come from equity/debt offerings or strategic partnerships[20][21] - In January 2020, the company entered into a collaboration and license agreement with Apollomics for two compounds in Greater China. This resulted in a $9.0 million non-refundable upfront payment, which was recognized in full as revenue in the first quarter of 2020[76][77] - During Q2 2020, the company sold 3,126,709 shares of common stock under its at-the-market sales agreement, generating net proceeds of $9.6 million. As of June 30, 2020, $70.1 million remained available for sale under this agreement[60] - The COVID-19 pandemic resulted in slowed clinical site initiation and patient enrollment in April 2020, though rates have recently shown an encouraging upward trend. The full extent of the pandemic's impact on operations and financial condition remains uncertain[80] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's business overview, clinical pipeline, financial results including $9.0 million revenue from Apollomics, COVID-19 impacts, and liquidity, projecting sufficient cash into 2022 Overview This section provides a general business overview, detailing the company's focus on developing novel glycomimetic drugs and its lead clinical candidates - GlycoMimetics is a clinical-stage biotechnology company developing novel glycomimetic drugs. Its lead candidate, uproleselan, is an E-selectin inhibitor in a Phase 3 clinical trial for relapsed/refractory Acute Myeloid Leukemia (AML)[84][86][88] - The company is also collaborating with the National Cancer Institute (NCI) on a Phase 2/3 trial of uproleselan for older adults with previously untreated AML[90] - Other pipeline candidates include GMI-1687, a potential follow-on to uproleselan, and GMI-1359, a dual-target inhibitor of E-selectin and CXCR4, which is in a Phase 1b trial for breast cancer that has spread to bone[91][92][94] Impact of COVID-19 on Our Business This section discusses the operational and financial impacts of the COVID-19 pandemic on the company's clinical trials and business continuity - The COVID-19 pandemic led to slowed clinical site initiation and patient enrollment rates in April 2020 for the Phase 3 uproleselan trial. While enrollment has recently shown an upward trend, rising infection rates could negatively affect future enrollment[102] - The company has implemented business continuity plans, including a remote work policy, but acknowledges that the pandemic could materially adversely affect its business, financial condition, and growth prospects[103] Collaboration and License Agreements This section details key collaboration and license agreements, including the new partnership with Apollomics and the termination of the Pfizer agreement - In January 2020, the company entered an exclusive collaboration with Apollomics for the development and commercialization of uproleselan and GMI-1687 in Greater China. The company received a $9.0 million upfront payment and is eligible for up to $180.0 million in milestones plus tiered royalties[104] - The license agreement with Pfizer for rivipansel was terminated effective April 5, 2020, after the Phase 3 trial failed to meet its endpoints. All rights to rivipansel have returned to GlycoMimetics[105] Results of Operations This section analyzes the company's financial performance, focusing on revenue recognition and changes in research and development and general and administrative expenses - Revenue of $9.0 million was recognized in the first six months of 2020 from the Apollomics agreement; no revenue was recognized in the same period of 2019[121] - Research and development expenses decreased by $2.3 million (9%) for the six months ended June 30, 2020, compared to 2019. This was primarily due to a $6.0 million decrease in manufacturing and formulation costs, partially offset by a $3.5 million increase in clinical development expenses for the uproleselan trials[122] - General and administrative expenses increased by $1.6 million (22%) for the six months ended June 30, 2020, compared to 2019, mainly due to higher personnel-related costs and professional fees[123] Liquidity and Capital Resources This section assesses the company's cash position, capital raising activities, and projections for future funding requirements - As of June 30, 2020, the company had $149.8 million in cash and cash equivalents[125] - The company raised net proceeds of $9.6 million in Q2 2020 by selling 3.1 million shares through its at-the-market (ATM) sales facility. An additional $4.5 million was raised subsequent to the quarter end[128][129] - Management expects that existing cash and cash equivalents will be sufficient to fund operating expenses and capital expenditure requirements into 2022[138] Quantitative and Qualitative Disclosures about Market Risk The company's primary market risk is interest rate sensitivity on its $149.8 million cash and cash equivalents, with no material impact expected from rate changes due to short-term maturities - The company's main market risk is interest rate sensitivity on its $149.8 million cash and cash equivalents. Due to the short-term maturities of these investments, management believes a 1% change in interest rates would not have a material effect on their fair market value[145] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal controls during the quarter - Based on an evaluation as of June 30, 2020, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[148] - There were no changes in internal controls over financial reporting during the quarter ended June 30, 2020, that materially affected, or are reasonably likely to materially affect, these controls[149] PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings and is unaware of any pending actions that could materially affect its business - The company is not currently a party to any material legal proceedings[150] Risk Factors This section updates the company's risk factors, highlighting the significant impact of COVID-19, the need for additional funding, and stock price volatility - The COVID-19 pandemic poses a significant risk, potentially disrupting manufacturing, clinical trial sites, and supply chains. It could also negatively impact productivity and delay clinical programs and timelines[152][153][154] - The company will need substantial additional funding to continue its operations. The ability to raise capital could be adversely impacted by global economic conditions and market volatility resulting from the COVID-19 pandemic[158][159] - Delays in patient enrollment for clinical trials, such as those already experienced due to COVID-19, could delay regulatory approvals and increase development costs. The company's focus on rare diseases like AML may also limit the pool of eligible patients[160][163] - The company's common stock price has been and is expected to remain volatile, influenced by factors such as clinical trial results, regulatory actions, and broader market fluctuations, including those related to the COVID-19 pandemic[165][169] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the reporting period - There were no unregistered sales of equity securities during the period[171] Exhibits This section lists exhibits filed with the Form 10-Q, including certifications required by the Sarbanes-Oxley Act - The report lists exhibits filed, including certifications under Sections 302 and 906 of the Sarbanes-Oxley Act[173]