Tenaya Therapeutics(US:TNYA)2023-03-08 21:34Part I Business Tenaya Therapeutics is a clinical-stage biotechnology company developing curative therapies for heart disease using gene therapy, cellular regeneration, and precision medicine platforms - Tenaya is a clinical-stage biotechnology company focused on developing curative therapies for heart disease, the leading cause of death globally16 - The company's strategy is built upon three distinct product platforms: Gene Therapy, Cellular Regeneration, and Precision Medicine, supported by five core internal capabilities202831 Product Pipeline Overview | Program | Indication(s) | Stage | US Prevalence | Commercial Rights | | :--- | :--- | :--- | :--- | :--- | | TN-201 | MYBPC3+ HCM | Phase 1 | > 115K | Tenaya | | TN-301 | HFpEF | Phase 1 | > 3MM | Tenaya | | TN-401 | PKP2+ ARVC | Preclinical | > 70K | Tenaya | | DWORF | DCM and/or HFrEF | Research | Prevalent | Tenaya | | Reprogramming | Post-MI Heart Failure | Research | Prevalent | Tenaya | Our Programs The company's pipeline includes lead candidates TN-201 (HCM), TN-301 (HFpEF), and TN-401 (ARVC), alongside early-stage gene therapy and cellular reprogramming programs - TN-201 (MYBPC3-associated HCM): Received IND clearance for a Phase 1b clinical trial, with patient dosing expected in Q3 2023 and data in 20246667 - TN-301 (HDAC6 Inhibitor for HFpEF): Currently in a Phase 1 clinical trial, with SAD stage complete and MAD stage initiated in February 2023, and data expected in 2H 202386 - TN-401 (PKP2-associated ARVC): IND-enabling activities are underway, with IND submission planned for 2H 2023130 - Early-Stage Programs: Include a DWORF gene therapy for DCM and a cellular reprogramming therapy for post-MI heart failure, both at candidate selection stage131148 Our Product Platforms and Core Capabilities Tenaya's innovation is driven by integrated Gene Therapy, Cellular Regeneration, and Precision Medicine platforms, supported by five core in-house capabilities including disease models and cGMP manufacturing - Gene Therapy Platform: Utilizes AAVs to deliver healthy genes to heart cells, enhanced by internal capsid engineering for improved heart targeting29168172 - Cellular Regeneration Platform: Focuses on in vivo reprogramming of cardiac fibroblasts into new cardiomyocytes to replace cells lost due to disease32178 - Precision Medicine Platform: Employs human genetic data with iPSC-cardiomyocyte models and machine learning to identify novel heart disease targets32185 - Core Capabilities: Five key internalized capabilities, including Disease Models and Manufacturing, aim to accelerate development and reduce third-party reliance31191193 Competition, IP, and Manufacturing Tenaya faces competition in heart disease therapies, protects its innovations with patents, and has in-house cGMP manufacturing for gene therapies while using CDMOs for small molecules - Key competitors include Bristol Myers Squibb for oHCM, Novartis and Eli Lilly for HFpEF, and preclinical gene therapy programs for ARVC221222224 - The company's IP portfolio includes issued U.S. patents and pending applications for its programs, with expirations between 2037 and 2043228229232 - Tenaya has internalized AAV manufacturing with non-GMP, technology development, and cGMP facilities, including a 1000L GMMC for clinical and commercial supply217223 Government Regulation The company's products are subject to extensive FDA and international regulation, involving complex approval processes for biologics and small molecules, with potential for expedited pathways and significant post-approval reimbursement challenges - In the U.S., biologic products require a BLA and small molecules an NDA from the FDA, involving extensive preclinical and clinical data for approval247248 - The company may seek expedited development pathways like Fast Track and Breakthrough Therapy designations to accelerate review for serious conditions with unmet needs272275 - Orphan Drug Designation grants seven years of market exclusivity for diseases affecting fewer than 200,000 people, a designation received by TN-201 and TN-401267269455 - Commercial success depends on third-party payor reimbursement, with recent legislation like the IRA introducing Medicare price negotiation and inflation rebates that could impact revenue316323 Risk Factors The company faces significant financial, development, regulatory, manufacturing, competition, and intellectual property risks due to its early stage, lack of revenue, and need for substantial capital - Financial Risks: The company has a history of significant net losses, $123.7 million in 2022, and requires substantial additional capital, risking program delays or elimination341347 - Development & Regulatory Risks: Product candidates are early-stage with unproven mechanisms, facing complex and uncertain gene therapy regulations, and preclinical results may not predict clinical success357363373 - Manufacturing & Commercialization Risks: Gene therapy manufacturing is complex with limited company experience, risking production problems and potential lack of market acceptance or adequate reimbursement post-approval410412422 - Intellectual Property Risks: Success depends on obtaining and defending patents, with risks of infringement claims from third parties and inability to protect trade secrets515526 Properties Tenaya Therapeutics leases its corporate headquarters in South San Francisco and a manufacturing facility in Union City, CA, with leases expiring in 2025 and 2031 respectively - Corporate headquarters are leased in South San Francisco, CA, approximately 32,370 sq. ft., with the lease expiring on May 31, 2025627 - A manufacturing and office facility is leased in Union City, CA, with its lease expiring in July 2031628 Legal Proceedings The company is not currently involved in any material legal proceedings expected to adversely affect its business - As of the filing date, the company is not involved in any material legal proceedings629 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on Nasdaq under "TNYA" since its 2021 IPO, has never paid dividends, and generated $188.5 million in net IPO proceeds - The company's common stock trades on the Nasdaq Global Select Market under the symbol "TNYA"633 - The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future635 - Net proceeds from the Initial Public Offering (IPO) on August 3, 2021, were $188.5 million after deducting offering expenses638 Management's Discussion and Analysis of Financial Condition and Results of Operations Tenaya reported a $123.7 million net loss in 2022, a 70% increase from 2021, driven by higher R&D and G&A expenses, with $204.2 million in cash expected to fund operations for at least 12 months Results of Operations Total operating expenses increased 73% to $125.6 million in 2022, driven by a 74% rise in R&D and a 69% rise in G&A, resulting in a $123.7 million net loss Results of Operations Summary (2022 vs. 2021) (in thousands) | (in thousands) | 2022 | 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $94,537 | $54,393 | $40,144 | 74% | | General and administrative | $31,084 | $18,413 | $12,671 | 69% | | Total operating expenses | $125,621 | $72,806 | $52,815 | 73% | | Loss from operations | ($125,621) | ($72,806) | ($52,815) | 73% | | Net loss | ($123,665) | ($72,721) | ($50,944) | 70% | - Research and development expenses increased by $40.1 million (74%) in 2022, driven by higher outside services, personnel costs, and facility expenses655659 - General and administrative expenses increased by $12.7 million (69%) in 2022, primarily due to higher employee-related expenses, professional services, and insurance costs658 Liquidity and Capital Resources As of December 31, 2022, the company held $204.2 million in cash, cash equivalents, and marketable securities, bolstered by a $76.9 million follow-on offering, expected to fund operations for at least 12 months - As of December 31, 2022, the company held $204.2 million in cash, cash equivalents, and marketable securities663 - In November 2022, the company completed a follow-on public offering, raising total net proceeds of $76.9 million664 - Management believes existing cash is sufficient to fund operations through at least the next twelve months from the report filing date667 Cash Flow Summary (2022 vs. 2021) (in thousands) | (In thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(104,424) | $(60,812) | | Net cash provided by (used in) investing activities | $83,652 | $(238,564) | | Net cash provided by financing activities | $77,767 | $208,970 | Financial Statements and Supplementary Data Audited financial statements for 2022 and 2021 are presented, showing total assets of $278.9 million and a net loss of $123.7 million in 2022, with notes detailing accounting policies and commitments Key Balance Sheet Data (as of Dec 31) (in thousands) | (In thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Cash, cash equivalents & marketable securities | $204,230 | $251,300 | | Total current assets | $193,754 | $255,358 | | Total assets | $278,945 | $314,189 | | Total current liabilities | $24,248 | $21,774 | | Total liabilities | $35,569 | $35,663 | | Total stockholders' equity | $243,376 | $278,526 | Key Statement of Operations Data (Year Ended Dec 31) (in thousands) | (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Research and development | $94,537 | $54,393 | | General and administrative | $31,084 | $18,413 | | Loss from operations | ($125,621) | ($72,806) | | Net loss | ($123,665) | ($72,721) | | Net loss per share | ($2.76) | ($4.10) | Controls and Procedures Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with no attestation report required as an emerging growth company - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022818 - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2022, based on the COSO framework819 - No material changes in internal control over financial reporting occurred during the fourth quarter of 2022821 Part III Directors, Executive Officers, Corporate Governance, Executive Compensation, and Other Matters Information for Items 10 through 14, covering directors, executive officers, corporate governance, and compensation, is incorporated by reference from the company's definitive Proxy Statement - Information for Items 10 through 14 is incorporated by reference from the company's definitive Proxy Statement for its 2022 Annual Meeting of Stockholders826828831 Part IV Exhibits, Financial Statement Schedules This section lists all documents filed as part of the Annual Report on Form 10-K, including financial statements and an index of exhibits - This section contains the list of financial statements and an index of all exhibits filed as part of the 10-K report834836