sldb-10q_20200930.htm
false 2020 Q3 0001707502 --12-31 0.8485 true true us-gaap:AccountingStandardsUpdate201813Member 0.8485 0001707502 2020-01-01 2020-09-30 xbrli:shares 0001707502 2020-11-01 iso4217:USD 0001707502 2020-09-30 0001707502 2019-12-31 iso4217:USD xbrli:shares 0001707502 2020-07-01 2020-09-30 0001707502 2019-07-01 2019-09-30 0001707502 2019-01-01 2019-09-30 0001707502 us-gaap:CommonStockMember 2020-06-30 0001707502 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001707502 us-gaap:RetainedEarningsMember 2020-06-30 0001707502 2020-06-30 0001707502 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001707502 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001707502 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001707502 us-gaap:CommonStockMember 2020-09-30 0001707502 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001707502 us-gaap:RetainedEarningsMember 2020-09-30 0001707502 us-gaap:CommonStockMember 2019-12-31 0001707502 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001707502 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001707502 us-gaap:RetainedEarningsMember 2019-12-31 0001707502 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-09-30 0001707502 us-gaap:RetainedEarningsMember 2020-01-01 2020-09-30 0001707502 us-gaap:CommonStockMember 2020-01-01 2020-09-30 0001707502 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-09-30 0001707502 us-gaap:CommonStockMember 2019-06-30 0001707502 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001707502 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001707502 us-gaap:RetainedEarningsMember 2019-06-30 0001707502 2019-06-30 0001707502 us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2019-09-30 0001707502 us-gaap:CommonStockMember 2019-07-01 2019-09-30 0001707502 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0001707502 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-07-01 2019-09-30 0001707502 us-gaap:CommonStockMember 2019-09-30 0001707502 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0001707502 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-30 0001707502 us-gaap:RetainedEarningsMember 2019-09-30 0001707502 2019-09-30 0001707502 us-gaap:CommonStockMember 2018-12-31 0001707502 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001707502 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001707502 us-gaap:RetainedEarningsMember 2018-12-31 0001707502 2018-12-31 0001707502 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-09-30 0001707502 us-gaap:CommonStockMember 2019-01-01 2019-09-30 0001707502 us-gaap:RetainedEarningsMember 2019-01-01 2019-09-30 0001707502 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-09-30 xbrli:pure 0001707502 sldb:CorporateConversionMember 2018-01-25 0001707502 us-gaap:SubsequentEventMember sldb:UltragenyxMember us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMember 2020-10-01 2020-10-31 0001707502 us-gaap:SubsequentEventMember sldb:ATMSalesAgreementMember sldb:JeffriesLLCMember 2020-10-01 2020-10-31 0001707502 us-gaap:FairValueInputsLevel2Member 2020-09-30 0001707502 us-gaap:FairValueInputsLevel2Member 2019-12-31 0001707502 2019-01-01 2019-12-31 0001707502 us-gaap:CorporateBondSecuritiesMember 2019-12-31 0001707502 us-gaap:CommercialPaperMember 2019-12-31 0001707502 us-gaap:FurnitureAndFixturesMember 2020-09-30 0001707502 us-gaap:FurnitureAndFixturesMember 2019-12-31 0001707502 us-gaap:EquipmentMember 2020-09-30 0001707502 us-gaap:EquipmentMember 2019-12-31 0001707502 us-gaap:LeaseholdImprovementsMember 2020-09-30 0001707502 us-gaap:LeaseholdImprovementsMember 2019-12-31 0001707502 us-gaap:ComputerEquipmentMember 2020-09-30 0001707502 us-gaap:ComputerEquipmentMember 2019-12-31 0001707502 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2020-09-30 0001707502 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2019-12-31 0001707502 us-gaap:ConstructionInProgressMember 2020-09-30 0001707502 us-gaap:ConstructionInProgressMember 2019-12-31 0001707502 sldb:AccruedResearchAndDevelopmentMember 2020-09-30 0001707502 sldb:AccruedResearchAndDevelopmentMember 2019-12-31 0001707502 sldb:AccruedCompensationMember 2020-09-30 0001707502 sldb:AccruedCompensationMember 2019-12-31 0001707502 sldb:AccruedExpensesAndOtherMember 2020-09-30 0001707502 sldb:AccruedExpensesAndOtherMember 2019-12-31 0001707502 us-gaap:PrivatePlacementMember us-gaap:CommonStockMember 2019-07-30 2019-07-30 0001707502 us-gaap:PrivatePlacementMember us-gaap:CommonStockMember 2019-07-30 0001707502 us-gaap:PrivatePlacementMember sldb:PreFundedWarrantsMember 2019-07-30 0001707502 2019-07-30 2019-07-30 0001707502 us-gaap:PrivatePlacementMember 2019-07-30 2019-07-30 0001707502 sldb:PreFundedWarrantsMember 2020-07-01 2020-09-30 0001707502 sldb:PreFundedWarrantsMember 2020-01-01 2020-09-30 0001707502 sldb:TwoThousandAndEighteenOmnibusIncentivePlanMember 2020-09-30 0001707502 sldb:TwoThousandAndTwentyEquityIncentivePlanMember 2020-06-16 0001707502 sldb:TwoThousandAndTwentyEquityIncentivePlanMember srt:MaximumMember 2020-06-16 2020-06-16 0001707502 sldb:TwoThousandAndEighteenOmnibusIncentivePlanMember 2020-07-01 2020-09-30 0001707502 sldb:TwoThousandAndEighteenOmnibusIncentivePlanMember 2020-01-01 2020-09-30 0001707502 sldb:TwoThousandAndEighteenOmnibusIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember 2020-07-01 2020-09-30 0001707502 sldb:TwoThousandAndEighteenOmnibusIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-09-30 0001707502 us-gaap:ResearchAndDevelopmentExpenseMember 2020-07-01 2020-09-30 0001707502 us-gaap:ResearchAndDevelopmentExpenseMember 2019-07-01 2019-09-30 0001707502 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-09-30 0001707502 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-09-30 0001707502 us-gaap:GeneralAndAdministrativeExpenseMember 2020-07-01 2020-09-30 0001707502 us-gaap:GeneralAndAdministrativeExpenseMember 2019-07-01 2019-09-30 0001707502 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-09-30 0001707502 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-09-30 0001707502 us-gaap:RestructuringChargesMember 2020-01-01 2020-09-30 0001707502 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001707502 us-gaap:CommonStockMember 2019-07-01 2019-09-30 0001707502 us-gaap:CommonStockMember 2020-01-01 2020-09-30 0001707502 us-gaap:CommonStockMember 2019-01-01 2019-09-30 0001707502 sldb:PreFundedWarrantsMember 2019-07-01 2019-09-30 0001707502 sldb:PreFundedWarrantsMember 2019-01-01 2019-09-30 0001707502 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-09-30 0001707502 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-09-30 0001707502 sldb:UnvestedCommonStockMember 2020-01-01 2020-09-30 0001707502 sldb:UnvestedCommonStockMember 2019-01-01 2019-09-30 0001707502 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-09-30 0001707502 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-09-30 0001707502 us-gaap:EmployeeStockOptionMember 2020-07-01 2020-09-30 0001707502 us-gaap:EmployeeStockOptionMember 2019-07-01 2019-09-30 0001707502 sldb:UnvestedCommonStockMember 2020-07-01 2020-09-30 0001707502 sldb:UnvestedCommonStockMember 2019-07-01 2019-09-30 0001707502 us-gaap:RestrictedStockUnitsRSUMember 2020-07-01 2020-09-30 0001707502 us-gaap:RestrictedStockUnitsRSUMember 2019-07-01 2019-09-30 0001707502 us-gaap:OneTimeTerminationBenefitsMember 2020-01-01 2020-03-31 0001707502 us-gaap:OneTimeTerminationBenefitsMember 2020-03-31 0001707502 us-gaap:OneTimeTerminationBenefitsMember 2020-04-01 2020-06-30 0001707502 us-gaap:OneTimeTerminationBenefitsMember 2020-06-30 0001707502 us-gaap:OneTimeTerminationBenefitsMember 2020-07-01 2020-09-30 0001707502 us-gaap:OneTimeTerminationBenefitsMember 2020-09-30 0001707502 us-gaap:SubsequentEventMember us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMember sldb:UltragenyxMember 2020-10-22 2020-10-22 0001707502 us-gaap:SubsequentEventMember us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMember sldb:UltragenyxMember 2020-10-22 0001707502 us-gaap:SubsequentEventMember us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMember sldb:UltragenyxMember 2020-10-21 2020-10-21 0001707502 us-gaap:SubsequentEventMember sldb:ATMSalesAgreementMember 2020-10-01 2020-10-31

 

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, 2020

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.)

 

 

 

141 Portland Street, Fifth Floor

Cambridge, MA

 

02139

(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, 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 1, 2020, the registrant had 60,449,341 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, 2020 and December 31, 2019

2

 

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019

3

 

Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019

4

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2020 and 2019

5

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019

7

 

Notes to the Condensed Consolidated Financial Statements

8

Item 2.

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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

27

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

75

Item 6.

Exhibits

76

 

Signatures

77

 

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,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

24,797

 

 

$

76,043

 

Available-for-sale-securities

 

 

 

 

 

7,481

 

Prepaid expenses and other current assets

 

 

2,365

 

 

 

2,778

 

Total current assets

 

 

27,162

 

 

 

86,302

 

Property and equipment, net

 

 

8,869

 

 

 

11,645

 

Operating lease, right-of-use assets

 

 

3,951

 

 

 

4,988

 

Other non-current assets

 

 

209

 

 

 

209

 

Restricted cash

 

 

327

 

 

 

327

 

Total assets

 

$

40,518

 

 

$

103,471

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,083

 

 

$

7,124

 

Accrued expenses

 

 

8,550

 

 

 

9,178

 

Operating lease liabilities

 

 

1,930

 

 

 

1,736

 

Finance lease liabilities

 

 

202

 

 

 

186

 

Other current liabilities

 

 

 

 

 

52

 

Total current liabilities

 

 

14,765

 

 

 

18,276

 

Operating lease liabilities, excluding current portion

 

 

2,943

 

 

 

4,414

 

Finance lease liabilities, excluding current portion

 

 

579

 

 

 

733

 

Total liabilities

 

 

18,287

 

 

 

23,423

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized

  at September 30, 2020 and December 31, 2019; no shares issued and

  outstanding at September 30, 2020 and December 31, 2019

 

 

 

 

Common stock, $0.001 par value; 300,000,000 shares authorized at

   September 30, 2020 and December 31, 2019; 46,178,519 shares issued and

   outstanding at September 30, 2020 and 45,987,571 shares issued and

   outstanding at December 31, 2019; 2,295,699 pre-funded warrants outstanding at

   September 30, 2020 and December 31, 2019

 

 

48

 

 

 

48

 

Additional paid-in capital

 

 

405,389

 

 

 

396,278

 

Accumulated other comprehensive income

 

 

 

 

 

1

 

Accumulated deficit

 

 

(383,206

)

 

 

(316,279

)

Total stockholders’ equity

 

 

22,231

 

 

 

80,048

 

Total liabilities and stockholders’ equity

 

$

40,518

 

 

$

103,471

 

 

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,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue

 

$

 

 

$

 

 

$

 

 

$

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

16,045

 

 

 

22,792

 

 

 

49,158

 

 

 

67,671

 

General and administrative

 

 

5,181

 

 

 

6,925

 

 

 

15,957

 

 

 

19,317

 

Restructuring charges

 

 

 

 

 

 

 

 

1,944

 

 

 

 

Total operating expenses

 

 

21,226

 

 

 

29,717

 

 

 

67,059

 

 

 

86,988

 

Loss from operations

 

 

(21,226

)

 

 

(29,717

)

 

 

(67,059

)

 

 

(86,988

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest (expense) income

 

 

(20

)

 

 

406

 

 

 

131

 

 

 

1,281

 

Other income

 

 

 

 

 

56

 

 

 

1

 

 

 

345

 

Total other income (expense), net

 

 

(20

)

 

 

462

 

 

 

132

 

 

 

1,626

 

Net loss

 

$

(21,246

)

 

$

(29,255

)

 

$

(66,927

)

 

$

(85,362

)

Net loss per share attributable to common stockholders,

   basic and diluted

 

$

(0.44

)

 

$

(0.67

)

 

$

(1.39

)

 

$

(2.26

)

Weighted average shares of common stock outstanding,

   basic and diluted

 

 

48,295,468

 

 

 

43,467,618

 

 

 

48,172,686

 

 

 

37,727,640

 

 

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,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

 

$

(21,246

)

 

$

(29,255

)

 

$

(66,927

)

 

$

(85,362

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

(5

)

 

 

(1

)

 

3

 

Comprehensive loss

 

$

(21,246

)

 

$

(29,260

)

 

$

(66,928

)

 

$

(85,359

)

 

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 / unit data)

 

 

 

For the Three Months Ended September 30, 2020

 

 

 

Common

Stock

 

 

Amount

 

 

Additional

paid

in capital

 

 

Accumulated

other

comprehensive

income (loss)

 

 

Accumulated

Deficit

 

 

Total

Stockholders'

Equity

 

Balance at June 30, 2020

 

 

48,364,092

 

 

$

48

 

 

$

402,625

 

 

$

 

 

$

(361,960

)

 

$

40,713

 

Equity-based compensation

 

 

 

 

 

 

 

 

2,764

 

 

 

 

 

 

 

 

 

2,764

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21,246

)

 

 

(21,246

)

Vesting of restricted stock units

 

 

162,725

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeiture of restricted stock awards

 

 

(52,599

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2020

 

 

48,474,218

 

 

$

48

 

 

$

405,389

 

 

$

 

 

$

(383,206

)

 

$

22,231

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2020

 

 

 

Common

Stock

 

 

Amount

 

 

Additional

paid

in capital

 

 

Accumulated

other

comprehensive

income (loss)

 

 

Accumulated

Deficit

 

 

Total

Stockholders'

Equity

 

Balance at December 31, 2019

 

 

48,283,270

 

 

$

48

 

 

$

396,278

 

 

$

1

 

 

$

(316,279

)

 

$

80,048

 

Equity-based compensation

 

 

 

 

 

 

 

 

9,111

 

 

 

 

 

 

 

 

 

9,111

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(66,927

)

 

 

(66,927

)

Vesting of restricted stock units

 

 

284,700

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeiture of restricted stock awards

 

 

(93,752

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available for sale

   securities

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Balance at September 30, 2020

 

 

48,474,218

 

 

$

48

 

 

$

405,389

 

 

$

 

 

$

(383,206

)

 

$

22,231

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5


 

 

 

 

For the Three Months Ended September 30, 2019

 

 

 

Common

Stock

 

 

Amount

 

 

Additional

paid

in capital

 

 

Accumulated

other

comprehensive

income (loss)

 

 

Accumulated

Deficit

 

 

Total

Stockholders'

Equity

 

Balance at June 30, 2019

 

 

35,398,894

 

 

$

35

 

 

$

331,620

 

 

$

3

 

 

$

(255,163

)

 

$

76,495

 

Equity-based compensation

 

 

 

 

 

 

 

 

3,392

 

 

 

 

 

 

 

 

 

3,392

 

Sale of common stock, net of issuance costs of $2,079

 

 

10,607,525

 

 

 

11

 

 

 

47,235

 

 

 

 

 

 

 

 

 

47,246

 

Sale of pre-funded warrants

 

 

2,295,699

 

 

 

2

 

 

 

10,650

 

 

 

 

 

 

 

 

 

10,652

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(29,255

)

 

 

(29,255

)

Repurchase of shares of common stock

 

 

(7,475

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available for sale

   securities

 

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

Balance at September 30, 2019

 

 

48,294,643

 

 

$

48

 

 

$

392,897

 

 

$

(2

)

 

$

(284,418

)

 

$

108,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2019

 

 

 

Common

Stock

 

 

Amount

 

 

Additional

paid

in capital

 

 

Accumulated

other

comprehensive

income (loss)

 

 

Accumulated

Deficit

 

 

Total

Stockholders'

Equity

 

Balance at December 31, 2018

 

 

35,432,460

 

 

$

35

 

 

$

324,209

 

 

$

(5

)

 

$

(199,056

)

 

$

125,183

 

Equity-based compensation

 

 

 

 

 

 

 

 

10,803

 

 

 

 

 

 

 

 

 

10,803

 

Sale of common stock, net of issuance costs of $2,079

 

 

10,607,525

 

 

 

11

 

 

 

47,235

 

 

 

 

 

 

 

 

 

47,246

 

Sale of pre-funded warrants

 

 

2,295,699

 

 

 

2

 

 

 

10,650

 

 

 

 

 

 

 

 

 

10,652

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(85,362

)

 

 

(85,362

)

Repurchase of shares of common stock

 

 

(41,041

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on available for sale

   securities

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

Balance at September 30, 2019

 

 

48,294,643

 

 

$

48

 

 

$

392,897

 

 

$

(2

)

 

$

(284,418

)

 

$

108,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(66,927

)

 

$

(85,362

)

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

 

 

 

 

 

 

 

 

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

 

 

(20

)

 

 

(246

)

Equity-based compensation expense

 

 

9,111

 

 

 

10,803

 

Depreciation expense

 

 

3,126

 

 

 

2,018

 

Loss on sale of property and equipment

 

 

 

 

 

2

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other current and non-current assets

 

 

1,450

 

 

 

(1,106

)

Accounts payable

 

 

(2,602

)

 

 

8

 

Accrued expenses and other current and non-current liabilities

 

 

(2,044

)

 

 

2,414

 

Net cash used in operating activities

 

 

(57,906

)

 

 

(71,469

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(839

)

 

 

(3,742

)

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

 

 

7,900

 

 

 

56,899

 

Purchases of available-for-sale securities

 

 

(401

)

 

 

(31,496

)

Net cash provided by investing activities

 

 

6,660

 

 

 

21,661

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

 

 

 

49,325

 

Proceeds from issuance of warrants

 

 

 

 

 

10,652

 

Payment of offering costs

 

 

 

 

 

(1,815

)

Net cash provided by financing activities

 

 

 

 

 

58,162

 

Net (decrease)/increase in cash, cash equivalents and restricted cash

 

 

(51,246

)

 

 

8,354

 

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

 

 

76,370

 

 

 

86,693

 

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

 

$

25,124

 

 

$

95,047

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Operating lease liabilities arising from obtaining right-of-use asset

 

$

 

 

$

1,629

 

Property and equipment included in accounts payable and accruals

 

$

 

 

$

51

 

Offering costs included in accounts payable and accruals

 

$

 

 

$

264

 

 

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 / unit and per share / unit 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. In October 2013, the company changed its name to Solid Ventures, LLC and in June 2015, the company changed its name to Solid Biosciences, LLC. The company operated as a Delaware limited liability company under the name Solid Biosciences, LLC 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 (the “Corporate Conversion”) and changed its name to Solid Biosciences Inc. (the “Company”). In addition, entities formed solely for the purpose of holding membership interests in the Company’s limited liability company were merged with and into the Company. As a result of the Corporate Conversion, all of the Series 1 and 2 Senior Preferred, Junior Preferred Units, Series A, B, C and D Common Units of Solid Biosciences, LLC converted into shares of common stock of Solid Biosciences Inc. on a one for 0.8485 basis and all of the unit holders of Solid Biosciences, LLC became holders of common stock of Solid Biosciences Inc.  

The Company’s mission is to cure Duchenne muscular dystrophy (“Duchenne”), a genetic muscle-wasting disease predominantly affecting boys. It is caused by mutations in the dystrophin gene, which result in the absence or near-absence of dystrophin protein. Dystrophin protein works to strengthen muscle fibers and protect them from daily wear and tear. Without functioning dystrophin and certain associated proteins, muscles suffer excessive damage from normal daily activities and are unable to regenerate, leading to the build-up of fibrotic, or scar, and fat tissue. The Company’s lead product candidate, SGT-001, is a gene transfer candidate under investigation for its ability to drive functional dystrophin protein expression in patients’ muscles and improve the course of the disease. SGT-001 has been granted Rare Pediatric Disease Designation and Fast Track in the United States and Orphan Drug Designations in both the United States and European Union. The Company filed an Investigational New Drug application (“IND”) in September 2017 and initiated a Phase I/II clinical trial for SGT-001 in the United States during the fourth quarter of 2017, which is called IGNITE DMD. In November 2019, IGNITE DMD was placed on clinical hold by the U.S. Food and Drug Administration (“FDA”). In April 2020, the Company submitted a response to the FDA that included changes to the clinical protocol designed to enhance patient safety, as well as information related to improvements to its manufacturing process. The FDA responded by maintaining the clinical hold and requesting further data and analyses relating to this manufacturing process. In June 2020, the Company submitted a response to the FDA that provided data related to manufacturing process improvements. In July 2020, the Company announced that the FDA responded by maintaining the clinical hold and requesting further manufacturing information and updated safety and efficacy data for all patients dosed in the trial, as well as providing direction on the total viral load to be administered per patient. In October 2020, the Company announced that the FDA lifted the clinical hold placed on the Company’s IGNITE DMD Phase I/II clinical trial.  

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 product 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.   

Liquidity

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, 2020, 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.

 

 

8


 

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, 2020, the Company had an accumulated deficit of $383,206. During the three and nine months ended September 30, 2020, the Company incurred a net loss of $21,246 and $66,927, respectively, and the Company used $57,906 of cash in operations for the nine months ended September 30, 2020. 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 and cash equivalents of $24,797 as of September 30, 2020, together with the proceeds of $40,000                received in October 2020 from the sale of shares of common stock to Ultragenyx Pharmaceutical, Inc. (“Ultragenyx”) as well as the net proceeds of $23,209 received from the sale of shares of common stock in October 2020 pursuant to a sales agreement, dated March 13, 2019, between the Company and Jefferies LLC (the “ATM Sales Agreement”) will be sufficient to fund its operating expenses and capital requirements into the second half of 2021. 

In accordance with the requirements of ASC 205-40, the Company determined that there is substantial doubt about the Company’s ability to continue as a going concern within twelve months of the issuance date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all, nor is it considered probable under the accounting standards. As such, under the requirements of ASC 205-40, management may not consider the potential for future capital raises or management plans to reduce costs that are not considered probable in its assessment of the Company’s ability to meet its obligations for the next twelve months. 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 Solid Biosciences Inc. 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, 2019. 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, 2020 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, 2019 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 expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, 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. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including clinical trials and employee-related amounts, will depend on future developments that are highly uncertain, including new information that may emerge concerning COVID-19 and the actions taken to contain it or treat its impact. The Company has made estimates of the impact of COVID-19 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.

9


 

Restricted Cash

The Company held restricted cash of $327 in separate restricted bank accounts as security deposits for leases of the Company’s facilities as of September 30, 2020 and December 31, 2019. The Company has included restricted cash of $327 as a non-current asset as of September 30, 2020 and December 31, 2019. 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,

2020

 

 

December 31,

2019

 

Cash and cash equivalents as presented on balance sheet

 

$

24,797

 

 

$

76,043

 

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

 

 

327

 

 

 

327

 

Cash and cash equivalents and restricted cash as presented on

   cash flow statement

 

$

25,124

 

 

$

76,370

 

 

Segment Data

The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s singular focus is on developing treatments through gene therapy and other means for patients with Duchenne. All of the Company’s tangible assets are held in the United States.

Recently Adopted Accounting Pronouncements

 

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This new standard modifies certain disclosure requirements on fair value measurements. This new standard became effective for the Company on January 1, 2020. The adoption of this new standard did not have a material impact on the Company’s disclosures.

Recently Issued Accounting Pronouncements  

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (‘‘ASU 2016-13’’), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes may result in earlier recognition of credit losses. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which narrowed the scope and changed the effective date for non-public entities for ASU 2016-13. The FASB subsequently issued supplemental guidance within ASU No. 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (‘‘ASU 2019-05’’). ASU 2019-05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For public entities that are Securities and Exchange Commission filers, excluding entities eligible to be smaller reporting companies, ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. This standard will be effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact that this standard may have on its financial statements and related disclosures.

 

3. Fair Value of Financial Assets and Liabilities

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values:

 

 

 

Fair Value Measurements as of September 30, 2020

Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

 

 

$

14,462

 

 

$

 

 

$

14,462

 

 

 

$

 

 

$

14,462

 

 

$

 

 

$

14,462

 

10


 

 

 

 

Fair Value Measurements as of December 31, 2019

Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3