10-Q
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2

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 001-39376

 

Poseida Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

47-2846548

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer
Identification No.)

9390 Towne Centre Drive, Suite 200, San Diego, California

92121

(Address of Principal Executive Offices)

(Zip Code)

(858) 779-3100

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

PSTX

Nasdaq Global Select Market

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of August 4, 2023, the registrant had 86,916,199 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


Table of Contents

 

POSEIDA THERAPEUTICS, INC.

Index

 

PART I. FINANCIAL INFORMATION

 

Page

 

 

 

Item 1. Financial Statements (Unaudited)

 

4

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

 

4

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2023 and 2022

 

5

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022

 

6

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022

 

7

Notes to Condensed Consolidated Financial Statements

 

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

22

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

35

Item 4. Controls and Procedures

 

35

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

Item 1. Legal Proceedings

 

36

Item 1A. Risk Factors

 

36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

84

Item 3. Defaults Upon Senior Securities

 

84

Item 4. Mine Safety Disclosures

 

84

Item 5. Other Information

 

84

Item 6. Exhibits

 

85

Signatures

 

86

 

1


Table of Contents

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q including statements regarding our future results of operations or financial condition, business strategy, plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

our expectations regarding the timing, scope and results of our development activities, including our ongoing and planned clinical trials;
the timing of and plans for regulatory filings;
our plans to obtain and maintain regulatory approvals of our product candidates in any of the indications for which we plan to develop them, and any related restrictions, limitations, and/or warnings in the label of an approved product candidate;
the potential benefits of our product candidates and technologies;
our expectations regarding the use of our platform technologies to generate novel product candidates;
the market opportunities for our product candidates and our ability to maximize those opportunities;
our business strategies and goals;
estimates of our expenses, capital requirements, any future revenue, and need for additional financing;
our expectations regarding manufacturing capabilities and plans, including the operation of our pilot manufacturing facility;
the performance of our third-party suppliers and manufacturers;
our ability to attract and/or retain new and existing collaborators with development, regulatory, manufacturing and commercialization expertise and our expectations regarding the potential benefits to be derived from such collaborations;
our expectations regarding our ability to obtain and maintain intellectual property protection for our platform technologies and product candidates and our ability to operate our business without infringing on the intellectual property rights of others;
our expectations regarding developments and projections relating to our competitors, competing therapies that are or become available, and our industry;
acts of terrorism, war and global conflicts, such as the Russia and Ukraine conflict, and the potential impact they may have on supply chains, the availability, and prices, of commodities, inflationary pressure and the overall U.S. and global financial markets;
current financial conditions within the banking industry, including the effects of recent failures of other financial institutions, liquidity levels, and responses by the Federal Reserve, Department of the Treasury, and the Federal Deposit Insurance Corporation to address these issues;
future changes in or impact of law and regulations in the United States and foreign countries; and
the sufficiency of our existing cash, cash equivalents and short-term investments to fund our operations.

We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short- and long-term business operations and objectives and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties

2


Table of Contents

 

and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, advancements, discoveries, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in our expectations.

Unless the context otherwise indicates, references in this Quarterly Report on Form 10-Q to the terms “Poseida”, “the Company,” “we,” “our” and “us” refer to Poseida Therapeutics, Inc. and its subsidiary.

We regularly make material business and financial information available to our investors using our investor relations website (https://investors.poseida.com). We therefore encourage investors and others interested in Poseida to review the information that we make available on our website, in addition to following our filings with the Securities and Exchange Commission, or the SEC, press releases and conference calls.

3


Table of Contents

 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

 

POSEIDA THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

 

 

 

June 30,
2023

 

 

December 31,
2022

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

49,911

 

 

$

81,378

 

Short-term investments

 

 

164,695

 

 

 

201,115

 

Accounts receivable

 

 

11,906

 

 

 

9,088

 

Prepaid expenses and other current assets

 

 

3,683

 

 

 

6,982

 

Total current assets

 

 

230,195

 

 

 

298,563

 

Property and equipment, net

 

 

21,011

 

 

 

21,586

 

Operating lease right-of-use assets

 

 

23,396

 

 

 

25,085

 

Intangible assets

 

 

1,320

 

 

 

1,320

 

Goodwill

 

 

4,228

 

 

 

4,228

 

Other long-term assets

 

 

1,065

 

 

 

1,055

 

Total assets

 

$

281,215

 

 

$

351,837

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,097

 

 

$

2,228

 

Accrued expenses and other liabilities

 

 

21,695

 

 

 

26,068

 

Operating lease liabilities, current

 

 

5,863

 

 

 

5,866

 

Deferred revenue, current

 

 

20,233

 

 

 

19,723

 

Total current liabilities

 

 

49,888

 

 

 

53,885

 

Term debt

 

 

58,402

 

 

 

58,250

 

Operating lease liabilities, non-current

 

 

22,816

 

 

 

24,636

 

Deferred CIRM grant liability

 

 

3,992

 

 

 

3,992

 

Deferred revenue, noncurrent

 

 

8,461

 

 

 

21,333

 

Other long-term liabilities

 

 

2,355

 

 

 

2,146

 

Total liabilities

 

 

145,914

 

 

 

164,242

 

Commitments and Contingencies (Note 11)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.0001 par value: 250,000,000 shares authorized at June 30, 2023 and December 31, 2022; 86,878,341 and 85,964,161 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

 

9

 

 

 

9

 

Additional paid-in capital

 

 

672,736

 

 

 

658,596

 

Accumulated other comprehensive loss

 

 

(280

)

 

 

(149

)

Accumulated deficit

 

 

(537,164

)

 

 

(470,861

)

Total stockholders’ equity

 

 

135,301

 

 

 

187,595

 

Total liabilities and stockholders’ equity

 

$

281,215

 

 

$

351,837

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4


Table of Contents

 

POSEIDA THERAPEUTICS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration revenue

 

$

20,013

 

 

$

2,700

 

 

$

30,356

 

 

$

4,135

 

Total revenue

 

 

20,013

 

 

 

2,700

 

 

 

30,356

 

 

 

4,135

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

39,192

 

 

 

35,008

 

 

 

77,244

 

 

 

83,858

 

General and administrative

 

 

8,676

 

 

 

9,237

 

 

 

20,483

 

 

 

18,782

 

Total operating expenses

 

 

47,868

 

 

 

44,245

 

 

 

97,727

 

 

 

102,640

 

Loss from operations

 

 

(27,855

)

 

 

(41,545

)

 

 

(67,371

)

 

 

(98,505

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(2,141

)

 

 

(1,543

)

 

 

(4,169

)

 

 

(2,620

)

Other income, net

 

 

2,540

 

 

 

52

 

 

 

5,237

 

 

 

32

 

Net loss

 

$

(27,456

)

 

$

(43,036

)

 

$

(66,303

)

 

$

(101,093

)

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive expense:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on short-term investments

 

 

(282

)

 

 

(132

)

 

 

(131

)

 

 

(132

)

Comprehensive loss

 

$

(27,738

)

 

$

(43,168

)

 

$

(66,434

)

 

$

(101,225

)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.32

)

 

$

(0.69

)

 

$

(0.77

)

 

$

(1.61

)

Weighted-average number of shares outstanding, basic and diluted

 

 

86,794,697

 

 

 

62,713,363

 

 

 

86,531,422

 

 

 

62,635,074

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents

 

POSEIDA THERAPEUTICS, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

 

Deficit

 

 

Equity

 

Balance at January 1, 2023

 

 

85,964,161

 

 

$

9

 

 

$

658,596

 

 

$

(149

)

 

 

$

(470,861

)

 

$

187,595

 

Issuance of common stock under employee stock compensation plans

 

 

675,726

 

 

 

 

 

 

258

 

 

 

 

 

 

 

 

 

 

258

 

Issuance of common stock through ATM offering, net of issuance cost

 

 

119,000

 

 

 

 

 

 

928

 

 

 

 

 

 

 

 

 

 

928

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

7,480

 

 

 

 

 

 

 

 

 

 

7,480

 

Unrealized gain on available-for-sale investments

 

 

 

 

 

 

 

 

 

 

 

151

 

 

 

 

 

 

 

151

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(38,847

)

 

 

(38,847

)

Balance at March 31, 2023

 

 

86,758,887

 

 

$

9

 

 

$

667,262

 

 

$

2

 

 

 

$

(509,708

)

 

$

157,565

 

Issuance of common stock under employee stock compensation plans

 

 

119,454

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

5,474

 

 

 

 

 

 

 

 

 

 

5,474

 

Unrealized loss on available-for-sale investments

 

 

 

 

 

 

 

 

 

 

 

(282

)

 

 

 

 

 

 

(282

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27,456

)

 

 

(27,456

)

Balance at June 30, 2023

 

 

86,878,341

 

 

$

9

 

 

$

672,736

 

 

$

(280

)

 

 

$

(537,164

)

 

$

135,301

 

 

 

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

 

Deficit

 

 

Equity

 

Balance at January 1, 2022

 

 

62,523,596

 

 

$

6

 

 

$

563,064

 

 

$

 

 

 

$

(406,859

)

 

$

156,211

 

Issuance of common stock under employee stock compensation plans

 

 

181,130

 

 

 

 

 

 

681

 

 

 

 

 

 

 

 

 

 

681

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,867

 

 

 

 

 

 

 

 

 

 

4,867

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(58,057

)

 

 

(58,057

)

Balance at March 31, 2022

 

 

62,704,726

 

 

$

6

 

 

$

568,612

 

 

$

 

 

 

$

(464,916

)

 

$

103,702

 

Issuance of common stock under employee stock compensation plans

 

 

24,000

 

 

 

 

 

 

32

 

 

 

 

 

 

 

 

 

 

32

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

5,234

 

 

 

 

 

 

 

 

 

 

5,234

 

Unrealized loss on available-for-sale investments

 

 

 

 

 

 

 

 

 

 

 

(132

)

 

 

 

 

 

 

(132

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(43,036

)

 

 

(43,036

)

Balance at June 30, 2022

 

 

62,728,726

 

 

$

6

 

 

$

573,878

 

 

$

(132

)

 

 

$

(507,952

)

 

$

65,800

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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POSEIDA THERAPEUTICS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Operating Activities:

 

 

 

 

 

 

Net loss

 

$

(66,303

)

 

$

(101,093

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization expense

 

 

2,732

 

 

 

2,467

 

Non-cash loss on contract termination

 

 

 

 

 

5,687

 

Loss on disposal of property and equipment

 

 

3

 

 

 

205

 

Stock-based compensation

 

 

12,954

 

 

 

10,101

 

Accretion of discount on issued term debt

 

 

361

 

 

 

405

 

Accretion on investment securities, net

 

 

(4,244

)

 

 

(97

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(2,818

)

 

 

(232

)

Prepaid expenses and other current assets

 

 

3,207

 

 

 

1,017

 

Operating lease right-of-use assets

 

 

1,689

 

 

 

2,262

 

Other long-term assets

 

 

(10

)

 

 

610

 

Accounts payable

 

 

(131

)

 

 

(5,859

)

Accrued expenses and other liabilities

 

 

(4,565

)

 

 

(205

)

Operating lease liabilities

 

 

(1,823

)

 

 

(2,418

)

Deferred revenue

 

 

(12,363

)

 

 

(3,903

)

Net cash used in operating activities

 

 

(71,311

)

 

 

(91,053

)

Investing Activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,968

)

 

 

(1,961

)

Purchases of short-term investments

 

 

(109,374

)

 

 

(79,611

)

Proceeds from maturities of short-term investments

 

 

150,000

 

 

 

 

Net cash provided by (used in) investing activities

 

 

38,658

 

 

 

(81,572

)

Financing Activities:

 

 

 

 

 

 

Proceeds from issuance of common stock under employee stock compensation plans

 

 

752

 

 

 

713

 

Payment of taxes related to net share settlement of equity awards

 

 

(494

)

 

 

 

Proceeds from issuance of common stock through ATM offering, net of issuance costs

 

 

928

 

 

 

 

Payment of debt issuance costs

 

 

 

 

 

(1,450

)

Proceeds from term debt

 

 

 

 

 

30,000

 

Net cash provided by financing activities

 

 

1,186

 

 

 

29,263

 

Net decrease in cash and cash equivalents

 

 

(31,467

)

 

 

(143,362

)

Cash and cash equivalents at beginning of period

 

 

81,378

 

 

 

206,325

 

Cash and cash equivalents at end of period

 

$

49,911

 

 

$

62,963

 

 

 

 

 

 

 

 

Non-cash operating, investing and financing activities:

 

 

 

 

 

 

Purchases of property and equipment in accounts payable and accrued liabilities

 

$

193

 

 

$

1,429

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Interest paid

 

$

3,775

 

 

$

1,996

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7


Table of Contents

 

Note 1. Nature of Business and Basis of Presentation

Nature of Operations

Poseida Therapeutics, Inc. (the “Company” or “Poseida”) is a clinical-stage cell and gene therapy company advancing a new class of treatments for patients with cancer and rare diseases. The Company has discovered and is developing a broad portfolio of product candidates in a variety of indications based on its core proprietary platforms, including its non-viral piggyBac DNA Delivery System, Cas-CLOVER Site-specific Gene Editing System and nanoparticle- and AAV-based gene delivery technologies.

The Company is subject to risks and uncertainties common to development-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s therapeutic development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Liquidity and Capital Resources

The Company has experienced net losses and negative cash flows from operations since its inception and has relied on its ability to fund its operations primarily through equity and debt financings and strategic collaborations. For the six months ended June 30, 2023, the Company incurred a net loss of $66.3