10-Q
0001707502--12-31falseQ3000000000001707502us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001707502sldb:AmendedAndRestatedTwoThousandAndTwentyIncentivePlanMember2022-12-0100017075022022-01-012022-09-300001707502us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembersldb:UltragenyxMemberus-gaap:RelatedPartyMember2023-07-012023-09-300001707502us-gaap:CommonStockMember2023-01-012023-09-300001707502us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001707502us-gaap:RetainedEarningsMember2023-01-012023-09-300001707502us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001707502sldb:OfficeAndLaboratoryLeaseMember2023-09-300001707502sldb:AccruedExpensesAndOtherMember2023-09-300001707502us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300001707502sldb:AmendedAndRestatedTwoThousandAndTwentyIncentivePlanMember2023-01-012023-09-300001707502us-gaap:CommonStockMember2023-09-300001707502us-gaap:OneTimeTerminationBenefitsMembersldb:November2022WorkforceReductionPlanMember2023-01-012023-09-300001707502sldb:IncentiveStockOptionsMember2022-12-0100017075022023-07-012023-09-300001707502sldb:AtTheMarketOfferingSalesAgreementMember2023-07-012023-09-300001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001707502us-gaap:AdditionalPaidInCapitalMember2021-12-3100017075022022-06-300001707502us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001707502us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembersldb:UltragenyxMemberus-gaap:RelatedPartyMember2023-09-300001707502us-gaap:AdditionalPaidInCapitalMember2023-06-300001707502us-gaap:CorporateBondSecuritiesMember2022-12-310001707502sldb:AavantibioIncMember2022-12-022022-12-020001707502us-gaap:GeneralAndAdministrativeExpenseMember2022-07-012022-09-300001707502us-gaap:PrivatePlacementMemberus-gaap:CommonStockMember2022-12-020001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001707502us-gaap:AdditionalPaidInCapitalMember2022-09-300001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001707502us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001707502sldb:OfficeLaboratoryMembersldb:HoodParkLLCMember2021-06-300001707502sldb:HoodParkLLCMembersldb:OfficeLaboratoryMember2023-01-012023-09-300001707502srt:MaximumMembersldb:MaugeriLicenseAgreementMember2023-06-292023-06-290001707502us-gaap:AdditionalPaidInCapitalMember2022-12-310001707502us-gaap:CommonStockMember2023-06-300001707502sldb:AavantibioIncMember2022-12-020001707502us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001707502sldb:TreasuryBillMember2022-12-310001707502us-gaap:FurnitureAndFixturesMember2022-12-310001707502sldb:AavantibioIncMember2022-12-032022-12-310001707502sldb:SecuritiesPurchaseAgreementMemberus-gaap:CommonStockMember2022-12-022022-12-020001707502us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-300001707502us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-300001707502sldb:OfficeAndLaboratoryLeaseMember2022-12-310001707502us-gaap:AdditionalPaidInCapitalMember2023-09-300001707502us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-300001707502sldb:HoodParkLLCMembersldb:OfficeLaboratoryMember2023-09-300001707502us-gaap:FairValueInputsLevel2Member2022-12-310001707502sldb:November2022PlanMember2022-11-012022-11-300001707502us-gaap:FurnitureAndFixturesMember2023-09-300001707502us-gaap:RetainedEarningsMember2022-07-012022-09-300001707502us-gaap:RetainedEarningsMember2022-09-300001707502us-gaap:RetainedEarningsMember2023-09-300001707502us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001707502srt:MinimumMembersldb:AavantibioIncMember2022-12-022022-12-020001707502sldb:AmendmentAndRestatementOfEsppMember2023-06-060001707502sldb:November2022PlanMember2022-10-012022-12-310001707502sldb:AccruedExpensesAndOtherMember2022-12-310001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMember2021-06-012021-06-300001707502us-gaap:CommonStockMember2023-07-012023-09-3000017075022022-01-012022-12-310001707502sldb:MaugeriLicenseAgreementMember2023-06-292023-06-290001707502us-gaap:LeaseholdImprovementsMember2023-09-300001707502sldb:AccruedCompensationMember2023-09-300001707502sldb:November2022PlanMember2022-01-012022-12-310001707502sldb:HoodParkLLCMembersldb:OfficeLaboratoryMember2021-06-012021-06-300001707502us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembersldb:UltragenyxMember2022-12-3100017075022022-09-300001707502sldb:AccruedResearchAndDevelopmentMember2022-12-3100017075022022-10-270001707502us-gaap:OneTimeTerminationBenefitsMembersldb:November2022WorkforceReductionPlanMember2022-12-310001707502us-gaap:AdditionalPaidInCapitalMember2022-06-300001707502us-gaap:RelatedPartyMember2022-01-012022-09-300001707502us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300001707502sldb:AccruedResearchAndDevelopmentMember2023-09-300001707502us-gaap:RetainedEarningsMember2021-12-310001707502us-gaap:ComputerEquipmentMember2023-09-300001707502us-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300001707502sldb:InducementAwardMember2023-01-012023-09-300001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMember2023-01-012023-09-3000017075022022-10-272022-10-270001707502sldb:TwoThousandAndTwentyOneEmployeeStockPurchasePlanMember2023-09-300001707502us-gaap:EquipmentMember2023-09-300001707502sldb:SecuritiesPurchaseAgreementMember2022-12-022022-12-020001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMembersrt:MaximumMember2020-06-162020-06-1600017075022021-12-310001707502us-gaap:RetainedEarningsMember2023-06-300001707502us-gaap:CommonStockMember2022-01-012022-09-300001707502us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMember2022-07-012022-09-300001707502us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-12-310001707502us-gaap:CommonStockMember2022-07-012022-09-300001707502us-gaap:OneTimeTerminationBenefitsMembersldb:November2022WorkforceReductionPlanMember2022-01-012022-12-310001707502us-gaap:CommonStockMember2022-06-300001707502sldb:TwoThousandAndEighteenOmnibusIncentivePlanMember2023-09-300001707502us-gaap:FairValueInputsLevel2Member2023-09-300001707502us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001707502sldb:April2022PlanMember2022-04-012022-04-300001707502us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-09-300001707502us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000017075022023-11-060001707502us-gaap:ConstructionInProgressMember2022-12-310001707502us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-3000017075022023-09-300001707502us-gaap:CommonStockMember2022-09-300001707502us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2023-09-300001707502us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001707502us-gaap:RetainedEarningsMember2022-12-310001707502sldb:AtTheMarketOfferingSalesAgreementMember2023-01-012023-09-3000017075022022-07-012022-09-3000017075022022-10-2800017075022022-12-310001707502sldb:November2022PlanMembersrt:ScenarioForecastMember2024-03-310001707502us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembersldb:UltragenyxMemberus-gaap:RelatedPartyMember2022-12-310001707502us-gaap:CommonStockMember2021-12-310001707502sldb:AccruedCompensationMember2022-12-310001707502us-gaap:LeaseholdImprovementsMember2022-12-310001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001707502sldb:November2022PlanMember2023-01-012023-09-300001707502us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembersldb:UltragenyxMemberus-gaap:RelatedPartyMember2022-07-012022-09-300001707502us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001707502us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300001707502us-gaap:ConstructionInProgressMember2023-09-300001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMember2020-06-160001707502us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembersldb:UltragenyxMemberus-gaap:RelatedPartyMember2023-01-012023-09-300001707502sldb:TwoThousandAndTwentyOneEmployeeStockPurchasePlanMember2021-06-300001707502sldb:InducementAwardMember2023-07-012023-09-3000017075022023-06-300001707502sldb:AmendmentAndRestatementOfEsppMember2023-06-052023-06-050001707502us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001707502us-gaap:RetainedEarningsMember2023-07-012023-09-300001707502sldb:AmendmentAndRestatementOfEsppMembersrt:MinimumMember2023-01-012023-09-300001707502us-gaap:OneTimeTerminationBenefitsMembersldb:November2022WorkforceReductionPlanMember2023-09-300001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMember2023-07-012023-09-300001707502us-gaap:CommonStockMembersldb:AavantibioIncMember2022-12-020001707502sldb:AmendmentAndRestatementOfEsppMember2023-01-012023-09-300001707502us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembersldb:UltragenyxMemberus-gaap:RelatedPartyMember2022-01-012022-09-300001707502sldb:April2022CorporateStrategyChangeMemberus-gaap:OneTimeTerminationBenefitsMember2022-01-012022-12-310001707502us-gaap:CommonStockMember2022-12-310001707502us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001707502us-gaap:RetainedEarningsMember2022-06-300001707502sldb:TreasuryBillMember2023-09-300001707502us-gaap:RetainedEarningsMember2022-01-012022-09-300001707502us-gaap:EquipmentMember2022-12-3100017075022023-01-012023-09-300001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMember2023-09-300001707502us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001707502sldb:InducementAwardMember2022-01-012022-09-300001707502sldb:TwoThousandAndTwentyEquityIncentivePlanMember2022-01-012022-09-300001707502us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300001707502us-gaap:ComputerEquipmentMember2022-12-310001707502sldb:InducementAwardMember2022-07-012022-09-300001707502us-gaap:PrivatePlacementMemberus-gaap:CommonStockMember2022-12-022022-12-020001707502us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembersldb:UltragenyxMember2023-09-30iso4217:EURiso4217:USDxbrli:sharesxbrli:pureutr:sqftxbrli:sharesiso4217:USD

`

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 September 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: 001-38360

Solid Biosciences Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

 

90-0943402

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

500 Rutherford Avenue, Third Floor

Charlestown, MA

 

02129

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (617) 337-4680

 

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

Title of each class

Trading Symbol

Name of exchange on which registered

Common Stock $0.001 par value per share

SLDB

The 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 November 06, 2023, the registrant had 20,177,440 shares of common stock, $0.001 par value per share, outstanding.


 

Table of Contents

Page

PART I.

FINANCIAL INFORMATION

2

Item 1.

Financial Statements (Unaudited)

2

Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022

2

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022

3

Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022

4

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

5

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022

7

Notes to the Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

28

PART II.

OTHER INFORMATION

29

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

81

Item 6.

Exhibits

82

Signatures

83

 

1


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except share and per share data)

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

49,037

 

 

$

155,384

 

Available-for-sale securities

 

 

93,847

 

 

 

58,338

 

Prepaid expenses and other current assets

 

 

5,462

 

 

 

5,916

 

Total current assets

 

 

148,346

 

 

 

219,638

 

Operating lease, right-of-use assets

 

 

27,189

 

 

 

28,949

 

Property and equipment, net

 

 

7,045

 

 

 

9,657

 

Other non-current assets

 

 

315

 

 

 

175

 

Restricted cash

 

 

1,833

 

 

 

1,833

 

Total assets

 

$

184,728

 

 

$

260,252

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,898

 

 

$

3,238

 

Accrued expenses

 

 

11,466

 

 

 

16,691

 

Operating lease liabilities

 

 

1,847

 

 

 

1,897

 

Finance liabilities and finance lease liabilities

 

 

443

 

 

 

668

 

Other current liabilities

 

 

162

 

 

 

14

 

Total current liabilities

 

 

15,816

 

 

 

22,508

 

Operating lease liabilities, excluding current portion

 

 

23,189

 

 

 

24,279

 

Finance liabilities and finance lease liabilities, excluding current portion

 

 

1,362

 

 

 

1,703

 

Other non-current liabilities

 

 

 

 

 

96

 

Total liabilities

 

 

40,367

 

 

 

48,586

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized
   at September 30, 2023 and December 31, 2022;
no shares issued and
   outstanding at September 30, 2023 and December 31, 2022

 

 

 

 

 

Common stock, $0.001 par value; 60,000,000 shares authorized at
   September 30, 2023 and December 31, 2022;
20,061,751 shares
    issued and outstanding at September 30, 2023 and
19,556,732 
   shares issued and outstanding at December 31, 2022

 

 

20

 

 

 

20

 

Additional paid-in capital

 

 

782,756

 

 

 

774,452

 

Accumulated other comprehensive income (loss)

 

 

2

 

 

 

(68

)

Accumulated deficit

 

 

(638,417

)

 

 

(562,738

)

Total stockholders’ equity

 

 

144,361

 

 

 

211,666

 

Total liabilities and stockholders’ equity

 

$

184,728

 

 

$

260,252

 

 

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

2


 

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except share and per share data)

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Collaboration revenue - related party

 

$

 

 

$

 

 

$

 

 

$

8,094

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

16,702

 

 

 

14,005

 

 

 

61,110

 

 

 

57,130

 

General and administrative

 

 

6,412

 

 

 

7,127

 

 

 

20,940

 

 

 

21,330

 

Restructuring charges

 

 

 

 

 

 

 

 

(63

)

 

 

1,520

 

Total operating expenses

 

 

23,114

 

 

 

21,132

 

 

 

81,987

 

 

 

79,980

 

Loss from operations

 

 

(23,114

)

 

 

(21,132

)

 

 

(81,987

)

 

 

(71,886

)

Other income, net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

1,856

 

 

 

735

 

 

 

5,483

 

 

 

1,082

 

Other income (expense), net

 

 

278

 

 

 

(13

)

 

 

825

 

 

 

(26

)

Total other income, net

 

 

2,134

 

 

 

722

 

 

 

6,308

 

 

 

1,056

 

Net loss

 

$

(20,980

)

 

$

(20,410

)

 

$

(75,679

)

 

$

(70,830

)

Net loss per share attributable to common stockholders,
   basic and diluted

 

$

(1.05

)

 

$

(2.71

)

 

$

(3.83

)

 

$

(9.42

)

Weighted average shares of common stock outstanding,
   basic and diluted

 

 

20,059,641

 

 

 

7,532,706

 

 

 

19,767,174

 

 

 

7,521,411

 

 

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

3


 

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited, in thousands)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net loss

 

$

(20,980

)

 

$

(20,410

)

 

$

(75,679

)

 

$

(70,830

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale securities

 

 

(12

)

 

 

(74

)

 

 

70

 

 

 

(151

)

Comprehensive loss

 

$

(20,992

)

 

$

(20,484

)

 

$

(75,609

)

 

$

(70,981

)

 

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

4


 

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited, in thousands, except share data)

 

 

 

 

For the Three Months Ended September 30, 2023

 

 

 

Common
Stock

 

 

Amount

 

 

Additional
Paid
in Capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Accumulated
Deficit

 

 

Total
Stockholders'
Equity

 

Balance at June 30, 2023

 

 

20,044,389

 

 

$

20

 

 

$

781,131

 

 

$

14

 

 

$

(617,437

)

 

$

163,728

 

Equity-based compensation

 

 

 

 

 

 

 

 

1,625

 

 

 

 

 

 

 

 

 

1,625

 

Vesting of restricted stock units

 

 

17,362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of common stock, net of issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on available-for-sale
   securities

 

 

 

 

 

 

 

 

 

 

 

(12

)

 

 

 

 

 

(12

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,980

)

 

 

(20,980

)

Balance at September 30, 2023

 

 

20,061,751

 

 

$

20

 

 

$

782,756

 

 

$

2

 

 

$

(638,417

)

 

$

144,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2023

 

 

 

Common
Stock

 

 

Amount

 

 

Additional
Paid
in Capital

 

 

Accumulated
Other
Comprehensive
Loss

 

 

Accumulated
Deficit

 

 

Total
Stockholders'
Equity

 

Balance at December 31, 2022

 

 

19,556,732

 

 

$

20

 

 

$

774,452

 

 

$

(68

)

 

$

(562,738

)

 

$

211,666

 

Equity-based compensation

 

 

 

 

 

 

 

 

5,687

 

 

 

 

 

 

 

 

 

5,687

 

Vesting of restricted stock units

 

 

70,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of common stock, net of issuance costs of $65

 

 

420,000

 

 

 

 

 

 

2,539

 

 

 

 

 

 

 

 

 

2,539

 

Issuance of common stock in connection with employee stock purchase plan

 

 

14,936

 

 

 

 

 

 

78

 

 

 

 

 

 

 

 

 

78

 

Unrealized gain on available-for-sale
   securities

 

 

 

 

 

 

 

 

 

 

 

70

 

 

 

 

 

 

70

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(75,679

)

 

 

(75,679

)

Balance at September 30, 2023

 

 

20,061,751

 

 

$

20

 

 

$

782,756

 

 

$

2

 

 

$

(638,417

)

 

$

144,361

 

 

5


 

 

 

For the Three Months Ended September 30, 2022

 

 

 

Common
Stock

 

 

Amount

 

 

Additional
Paid
in Capital

 

 

Accumulated
Other
Comprehensive
Loss

 

 

Accumulated
Deficit

 

 

Total
Stockholders'
Equity

 

Balance at June 30, 2022

 

 

7,530,978

 

 

$

8

 

 

$

689,526

 

 

$

(122

)

 

$

(527,177

)

 

$

162,235

 

Equity-based compensation

 

 

 

 

 

 

 

 

1,524

 

 

 

 

 

 

 

 

 

1,524

 

Vesting of restricted stock units

 

 

2,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(74

)

 

 

 

 

 

(74

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,410

)

 

 

(20,410

)

Balance at September 30, 2022

 

 

7,533,081

 

 

$

8

 

 

$

691,050

 

 

$

(196

)

 

$

(547,587

)

 

$

143,275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2022

 

 

 

Common
Stock

 

 

Amount

 

 

Additional
Paid
In capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Accumulated
Deficit

 

 

Total
Stockholders'
Equity

 

Balance at December 31, 2021

 

 

7,499,905

 

 

$

7

 

 

$

685,006

 

 

$

(45

)

 

$

(476,757

)

 

$

208,211

 

Equity-based compensation

 

 

 

 

 

 

 

 

5,950

 

 

 

 

 

 

 

 

 

5,950

 

Exercise of pre-funded warrants

 

 

 

 

 

 

 

 

22

 

 

 

 

 

 

 

 

 

22

 

Vesting of restricted stock units

 

 

22,988

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock in connection with employee stock purchase plan

 

 

10,188

 

 

 

1

 

 

 

72

 

 

 

 

 

 

 

 

 

73

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(151

)

 

 

 

 

 

(151

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(70,830

)

 

 

(70,830

)

Balance at September 30, 2022

 

 

7,533,081

 

 

$

8

 

 

$

691,050

 

 

$

(196

)

 

$

(547,587

)

 

$

143,275

 

 

 

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

6


 

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

 

 

Nine Months Ended
September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(75,679

)

 

$

(70,830

)

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

 

 

 

 

 

 

Amortization of (discount) premium on available-for-sale securities

 

 

(1,257

)

 

 

509

 

Equity-based compensation expense

 

 

5,687

 

 

 

5,950

 

Depreciation and impairment expense

 

 

2,368

 

 

 

1,869

 

Gain on termination of lease

 

 

 

 

 

(249

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current and non-current assets

 

 

3,312

 

 

 

3,301

 

Accounts receivable - related party

 

 

 

 

 

110

 

Accounts payable

 

 

(898

)

 

 

660

 

Accrued expenses and other current and non-current liabilities

 

 

(6,890

)

 

 

3,263

 

Deferred revenue- related party, current and non-current

 

 

 

 

 

(8,080

)

Net cash used in operating activities

 

 

(73,357

)

 

 

(63,497

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,425

)

 

 

(2,159

)

Proceeds from the sale of property and equipment

 

 

 

 

 

600

 

Proceeds from sale and maturities of available-for-sale securities

 

 

68,632

 

 

 

157,766

 

Purchases of available-for-sale securities

 

 

(102,814

)

 

 

(163,150

)

Net cash used in investing activities

 

 

(35,607

)

 

 

(6,943

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of common stock, net of issuance costs

 

 

2,539

 

 

 

 

Proceeds from exercise of warrants

 

 

 

 

 

22

 

Employee stock purchases and withholding

 

 

78

 

 

 

72

 

Net cash provided by financing activities

 

 

2,617

 

 

 

94

 

Net decrease in cash, cash equivalents and restricted cash

 

 

(106,347

)

 

 

(70,346

)

Cash, cash equivalents, and restricted cash at beginning of period

 

 

157,217

 

 

 

121,206

 

Cash, cash equivalents, and restricted cash at end of period

 

$

50,870

 

 

$

50,860

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

Right-of-use assets obtained in exchange for operating lease liabilities

 

$

428

 

 

$

29,126

 

Decrease in right-of-use asset due to lease termination

 

$

(252

)

 

$

(464

)

Decrease in property plant and equipment due to asset exchange

 

$

(950

)

 

$

 

Property and equipment included in accounts payable and accruals

 

$

 

 

$

217

 

 

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

7


 

SOLID BIOSCIENCES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, amounts in thousands, except share and per share data)

1. Nature of the Business and Basis of Presentation

Nature of Business

Solid Biosciences Inc. was organized in March 2013 under the name SOLID Ventures Management, LLC and operated as a Delaware limited liability company until immediately prior to the effectiveness of its registration statement on Form S-1 on January 25, 2018, at which time it completed a statutory corporate conversion into a Delaware corporation and changed its name to Solid Biosciences Inc. (the “Company” or “Solid”). On December 2, 2022, the Company completed its acquisition of AavantiBio, Inc. (“AavantiBio”), a privately held gene therapy company focused on transforming the lives of patients with Friedreich’s ataxia (“FA”) and rare cardiomyopathies (the “Acquisition”). Upon the consummation of the Acquisition, the Company acquired AavantiBio’s candidates, AVB-202-TT and AVB-401, as well as additional assets for the treatment of cardiac diseases, platform technologies and know-how related thereto. AavantiBio is a wholly owned subsidiary of the Company.

The Company is a life sciences company focused on advancing a portfolio of current and future gene therapy candidates and neuromuscular and cardiac programs (collectively, “Candidates”), including SGT-003 for the treatment of Duchenne muscular dystrophy (“Duchenne”), SGT-501 for the treatment of catecholaminergic polymorphic ventricular tachycardia (“CPVT”), AVB-401 for the treatment of BAG3-mediated dilated cardiomyopathy, AVB-202-TT for the treatment of Friedreich’s ataxia (“FA”), and additional assets for the treatment of cardiac diseases, at different stages of development with varying levels of investment. Solid is advancing its diverse pipeline across rare neuromuscular and cardiac diseases, bringing together experts in science, technology, disease management, and care. Patient-focused and founded by those directly impacted by Duchenne, Solid’s mandate is to improve the daily lives of patients living with these devastating diseases.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on licenses, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting capabilities.

The Company’s candidates are in development. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from, among others, other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, partners and consultants.

On October 27, 2022, the Company effected a reverse stock split of its outstanding shares of common stock at a ratio of one-for-15 pursuant to a certificate of amendment to its certificate of incorporation filed with the Secretary of State of the State of Delaware. The reverse stock split was reflected on the Nasdaq Stock Market (Nasdaq”) beginning with the opening of trading on October 28, 2022. Pursuant to the reverse stock split, every 15 shares of the Company's issued and outstanding shares of common stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share of the common stock. The reverse stock split reduced the authorized number of shares of common stock from 300,000,000 to 20,000,000 and, pursuant to the certificate of amendment, such reduced authorized number of shares of common stock was subsequently multiplied by three, such that following the reverse stock split the Company has 60,000,000 shares of common stock authorized. The reverse stock split affected all issued and outstanding shares of the Company's common stock, and the respective numbers of shares of common stock underlying the Company’s outstanding stock options, outstanding restricted stock units, outstanding warrants and the Company's equity incentive plans were proportionately adjusted. All share and per share amounts of the common stock included in the accompanying condensed consolidated financial statements have been retrospectively adjusted to give effect to the reverse stock split for all periods presented, including reclassifying an amount equal to the reduction in par value to additional paid-in capital.

8


 

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. Through September 30, 2023, the Company has funded its operations primarily with the proceeds from the sale of redeemable preferred units and member units as well as the sale of common stock and prefunded warrants to purchase shares of its common stock in private placements and the sale of common stock in its initial public offering, follow-on public offering in March 2021 and under its at-the-market sales agreement.

On September 29, 2022, the Company entered into a securities purchase agreement, pursuant to which, on December 2, 2022, the Company issued an aggregate of 10,638,290 shares of the Company’s common stock in a private placement. The private placement closed immediately following the closing of the Acquisition on December 2, 2022. The Company received net proceeds from the private placement of $72,551.

During the three and nine months ended September 30, 2023, the Company issued and sold 0 and 420,000 shares of its common stock, respectively, pursuant to the Company's “at-the-market-offering” sales agreement (the “ATM Sales Agreement”), between the Company and Jefferies LLC (“Jefferies”). During the three and nine months ended September 30, 2023, the Company received net proceeds of $0 and $2,539, respectively.

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. As of September 30, 2023, the Company had an accumulated deficit of $638,417. During the three and nine months ended September 30, 2023, the Company incurred a net loss of $20,980 and $75,679, respectively, and the Company used $73,357 of cash in operations for the nine months ended September 30, 2023. The Company expects to continue to generate operating losses in the foreseeable future. Based upon its current operating plan, the Company expects that its cash, cash equivalents and available-for-sale securities of $142,884, excluding restricted cash of $1,833, as of September 30, 2023, will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date of issuance of these financial statements. However, the Company has based this estimate on assumptions that may prove to be wrong, and its operating plan may change as a result of many factors currently unknown to it. As a result, the Company could deplete its capital resources sooner than it currently expects. The Company expects to finance its future cash needs through a combination of equity offerings, debt financings, collaborations, strategic partnerships and alliances or licensing arrangements. If the Company is unable to obtain funding, the Company would be forced to delay, reduce or eliminate some or all of its research and development programs, preclinical and clinical testing or commercialization efforts, which could adversely affect its business prospects.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned or controlled subsidiaries. All intercompany accounts and transactions have been eliminated. In the opinion of management, the Company’s accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair statement of the Company’s financial statements for interim periods in accordance with GAAP. The information included in this quarterly report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the operating results for the full year or for any other subsequent interim period.

2. Summary of Significant Accounting Policies

The Company’s accounting policies are described in the “Notes to Consolidated Financial Statements” in its Annual Report on Form 10-K for the year ended December 31, 2022 and updated, as necessary, in this report.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, estimates related to revenue recognition, the recognition of research and development expenses and equity-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates.

9


 

The Company has made estimates of the impact of the recent COVID-19 pandemic within its financial statements and there may be changes to those estimates in future periods. Actual results could differ from the Company’s estimates.

Cash Equivalents

The Company considers all short-term, highly liquid investments with original maturities of 90 days or less at acquisition date to be cash equivalents.

Restricted Cash

The Company held restricted cash of $1,833 in a restricted bank account as a security deposit for a lease of the Company’s facilities as of September 30, 2023 and December 31, 2022. The Company has included restricted cash of $1,833 classified as non-current assets as of September 30, 2023 and December 31, 2022. A reconciliation of the amounts of cash and cash equivalents and restricted cash from the cash flow statement to the balance sheet is as follows:

 

 

 

September 30,
2023

 

 

December 31,
2022

 

 

September 30,
2022

 

 

December 31,
2021

 

Cash and cash equivalents, as presented on balance sheet

 

$

49,037

 

 

$

155,384

 

 

$

48,790

 

 

$

119,136

 

Restricted cash, current, as presented on balance sheet

 

 

 

 

 

 

 

 

237

 

 

 

 

Restricted cash, non-current, as presented on balance sheet

 

 

1,833

 

 

 

1,833

 

 

 

1,833

 

 

 

2,070

 

Cash and cash equivalents and restricted cash, as presented on
   cash flow statement

 

$

50,870

 

 

$

157,217

 

 

$

50,860

 

 

$