10-Q
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`

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, 2022

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, 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 4, 2022, the registrant had 7,534,892 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, 2022 and December 31, 2021

2

 

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021

3

 

Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021

4

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021

5

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021

7

 

Notes to the Condensed Consolidated Financial Statements

8

Item 2.

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

21

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35

Item 4.

Controls and Procedures

35

PART II.

OTHER INFORMATION

36

Item 1.

Legal Proceedings

36

Item 1A.

Risk Factors

36

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

95

Item 6.

Exhibits

96

 

Signatures

97

 

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,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

48,790

 

 

$

119,136

 

Available-for-sale securities

 

 

93,367

 

 

 

88,643

 

Prepaid expenses and other current assets

 

 

5,115

 

 

 

14,723

 

Restricted cash, current

 

 

237

 

 

 

 

Accounts receivable - related party

 

 

 

 

 

110

 

Total current assets

 

 

147,509

 

 

 

222,612

 

Property and equipment, net

 

 

6,266

 

 

 

6,462

 

Operating lease, right-of-use assets

 

 

28,444

 

 

 

1,142

 

Other non-current assets

 

 

422

 

 

 

94

 

Restricted cash

 

 

1,833

 

 

 

2,070

 

Total assets

 

$

184,474

 

 

$

232,380

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

5,150

 

 

$

4,463

 

Accrued expenses

 

 

10,275

 

 

 

9,528

 

Operating lease liabilities

 

 

1,062

 

 

 

1,263

 

Finance lease liabilities

 

 

353

 

 

 

232

 

Other current liabilities

 

 

85

 

 

 

35

 

Deferred revenue - related party

 

 

 

 

 

8,080

 

Total current liabilities

 

 

16,925

 

 

 

23,601

 

Operating lease liabilities, excluding current portion

 

 

24,274

 

 

 

275

 

Finance lease liabilities, excluding current portion

 

 

 

 

 

293

 

Total liabilities

 

 

41,199

 

 

 

24,169

 

Commitments and contingencies

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized
   at September 30, 2022 and December 31, 2021;
no shares issued and
   outstanding at September 30, 2022 and December 31, 2021

 

 

 

 

Common stock, $0.001 par value; 20,000,000 shares authorized at
   September 30, 2022 and December 31, 2021;
7,533,081 shares
    issued and outstanding at September 30, 2022 and
7,356,017 
   shares issued and outstanding at December 31, 2021;
no pre-funded warrants
   outstanding at September 30, 2022 and
143,888 pre-funded warrants
   outstanding at December 31, 2021

 

 

8

 

 

 

7

 

Additional paid-in capital

 

 

691,050

 

 

 

685,006

 

Accumulated other comprehensive loss

 

 

(196

)

 

 

(45

)

Accumulated deficit

 

 

(547,587

)

 

 

(476,757

)

Total stockholders’ equity

 

 

143,275

 

 

 

208,211

 

Total liabilities and stockholders’ equity

 

$

184,474

 

 

$

232,380

 

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Collaboration revenue - related party

 

$

 

 

$

3,537

 

 

$

8,094

 

 

$

10,466

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

14,005

 

 

 

14,425

 

 

 

57,130

 

 

 

44,144

 

General and administrative

 

 

7,127

 

 

 

7,143

 

 

 

21,330

 

 

 

19,924

 

Restructuring charges

 

 

 

 

 

 

 

 

1,520

 

 

 

 

Total operating expenses

 

 

21,132

 

 

 

21,568

 

 

 

79,980

 

 

 

64,068

 

Loss from operations

 

 

(21,132

)

 

 

(18,031

)

 

 

(71,886

)

 

 

(53,602

)

Other income (expense), net

 

 

722

 

 

 

48

 

 

 

1,056

 

 

 

24

 

Net loss

 

$

(20,410

)

 

$

(17,983

)

 

$

(70,830

)

 

$

(53,578

)

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

 

$

(2.71

)

 

$

(2.40

)

 

$

(9.42

)

 

$

(7.68

)

Weighted average shares of common stock outstanding,
   basic and diluted

 

 

7,532,706

 

 

 

7,487,531

 

 

 

7,521,411

 

 

 

6,980,453

 

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net loss

 

$

(20,410

)

 

$

(17,983

)

 

$

(70,830

)

 

$

(53,578

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available-for-sale securities

 

 

(74

)

 

 

(11

)

 

 

(151

)

 

 

(22

)

Comprehensive loss

 

$

(20,484

)

 

$

(17,994

)

 

$

(70,981

)

 

$

(53,600

)

 

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, 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
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 ESPP shares

 

 

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

 

 

5


 

 

 

For the Three Months Ended September 30, 2021

 

 

 

Common
Stock

 

 

Amount

 

 

Additional
Paid
in Capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Accumulated
Deficit

 

 

Total
Stockholders'
Equity

 

Balance at June 30, 2021

 

 

7,496,954

 

 

$

7

 

 

$

678,106

 

 

$

(11

)

 

$

(440,164

)

 

$

237,938

 

Equity-based compensation

 

 

 

 

 

 

 

 

3,416

 

 

 

 

 

 

 

 

 

3,416

 

Exercise of stock options

 

 

67

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

3

 

Forfeiture of restricted stock awards

 

 

(92

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(11

)

 

 

 

 

 

(11

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,983

)

 

 

(17,983

)

Balance at September 30, 2021

 

 

7,496,929

 

 

$

7

 

 

$

681,525

 

 

$

(22

)

 

$

(458,147

)

 

$

223,363

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2021

 

 

 

Common
Stock

 

 

Amount

 

 

Additional
Paid
In capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Accumulated
Deficit

 

 

Total
Stockholders'
Equity

 

Balance at December 31, 2020

 

 

5,803,487

 

 

$

6

 

 

$

536,649

 

 

$

 

 

$

(404,569

)

 

$

132,086

 

Equity-based compensation

 

 

 

 

 

 

 

 

9,958

 

 

 

 

 

 

 

 

 

9,958

 

Sale of common stock, net of issuance costs of $8,872

 

 

1,666,666

 

 

 

1

 

 

 

134,877

 

 

 

 

 

 

 

 

 

134,878

 

Exercise of stock options

 

 

775

 

 

 

 

 

 

41

 

 

 

 

 

 

 

 

 

41

 

Vesting of restricted stock units

 

 

27,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeiture of restricted stock awards

 

 

(1,946

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(22

)

 

 

 

 

 

(22

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(53,578

)

 

 

(53,578

)

Balance at September 30, 2021

 

 

7,496,929

 

 

$

7

 

 

$

681,525

 

 

$

(22

)

 

$

(458,147

)

 

$

223,363

 

 

 

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,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(70,830

)

 

$

(53,578

)

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

 

 

 

 

 

 

Amortization of premium on available-for-sale securities

 

 

509

 

 

 

535

 

Equity-based compensation expense

 

 

5,950

 

 

 

9,958

 

Depreciation expense

 

 

1,869

 

 

 

2,204

 

Loss on disposal of property and equipment

 

 

 

 

 

9

 

Gain on termination of lease

 

 

(249

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current and non-current assets

 

 

3,301

 

 

 

(1,639

)

Accounts receivable - related party

 

 

110

 

 

 

(594

)

Accounts payable

 

 

660

 

 

 

639

 

Accrued expenses and other current and non-current liabilities

 

 

3,263

 

 

 

(4,831

)

Deferred revenue- related party, current and non-current

 

 

(8,080

)

 

 

(9,593

)