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, 2021

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: 001-39509

 

 

Dyne Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

36-4883909

(State or other jurisdiction of

incorporation or organization)

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

830 Winter Street

Waltham, Massachusetts

02451

(Address of principal executive offices)

(Zip Code)

(781) 786-8230

(Registrant’s telephone number, including area code)

 

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

DYN

 

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 October 31, 2021, the registrant had 51,528,469 shares of common stock, $0.0001 par value per share, outstanding.

 

 


 

Table of Contents

 

 

 

Page

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

2

PART I.

FINANCIAL INFORMATION

4

Item 1.

Financial Statements (Unaudited)

4

 

Condensed Consolidated Balance Sheets

4

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

5

 

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

6

 

Condensed Consolidated Statements of Cash Flows

8

 

Notes to Unaudited Condensed Consolidated Financial Statements

9

Item 2.

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

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

29

Item 4.

Controls and Procedures

29

PART II.

OTHER INFORMATION

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

83

Item 3.

Defaults Upon Senior Securities

84

Item 4.

Mine Safety Disclosures

84

Item 5.

Other Information

84

Item 6.

Exhibits

85

Signatures

86

 

 

We own or have rights to trademarks, service marks and trade names that we use in connection with the operation of our business, including our corporate name, logos and website names. The service marks and trademarks that we own include the marks Dyne Therapeutics™ and FORCE™. Other trademarks, service marks and trade names appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, some of the trademarks, service marks and trade names referred to in this Quarterly Report on Form 10-Q are listed without the ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our trademarks, service marks and trade names.

1


 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q, or this Quarterly Report, contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risk and uncertainties. All statements other than statements of historical fact, contained in this Quarterly Report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” or the negative of these words or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

 

The forward-looking statements in this Quarterly Report include, among other things, statements about:

 

the initiation, timing, progress and results of our research and development programs and preclinical studies and clinical trials;
the anticipated timing of the submission of investigational new drug applications, or INDs, for any product candidates we may develop;
the impact of the ongoing COVID-19 pandemic and our response to it;
our estimates regarding expenses, future revenue, capital requirements, need for additional financing and the period over which we believe our cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements;
our plans to develop and, if approved, subsequently commercialize any product candidates we may develop;
the timing of and our ability to submit applications for, obtain and maintain regulatory approvals for any product candidates we may develop;
the potential advantages of our FORCE platform;
our commercialization, marketing and manufacturing capabilities and strategy;
our intellectual property position and our expectations regarding our ability to obtain and maintain intellectual property protection;
our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;
the impact of government laws and regulations;
our competitive position and expectations regarding developments and projections relating to our competitors and any competing therapies that are or become available;
developments and expectations regarding developments and projections relating to our competitors and our industry;
our ability to establish and maintain collaborations or obtain additional funding; and
our expectations regarding the time during which we will be an emerging growth company under the JOBS Act.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report, particularly in Item 1A. “Risk Factors” in this Quarterly Report, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Moreover, we operate in a competitive and rapidly changing environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments we may make or enter into.

 

You should read this Quarterly Report and the documents that we have filed or incorporated by reference as exhibits to this Quarterly Report with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report are made as of the date of this Quarterly Report, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

2


 

RISK FACTOR SUMMARY

 

Our business is subject to a number of risks that, if realized, could materially affect our business, prospects, operating results and financial condition. These risks are discussed more fully in the “Risk Factors” section of this Quarterly Report. These risks include, but are not limited to, the following:

 

our limited operating history may make it difficult to evaluate the success of our business to date and to assess our future viability;

 

we are very early in our development efforts. Our product candidates are in varying stages of preclinical development, and we have not advanced any product candidate into clinical development. As a result it will be many years before we commercialize a product candidate, if ever. If we are unable to advance product candidates through preclinical studies and clinical trials, obtain marketing approval and ultimately commercialize them, or experience significant delays in doing so, our business will be materially harmed;

 

we may encounter substantial delays in commencement, enrollment or completion of our clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities, which could prevent us from commercializing any product candidates we determine to develop on a timely basis, if at all;

 

our approach to the discovery and development of product candidates based on our FORCE platform is unproven, and we may not be successful in our efforts to develop our product candidates;

 

the outcome of preclinical studies and earlier-stage clinical trials may not be predictive of future results or the success of later preclinical studies and clinical trials;

 

if our product candidates cause undesirable side effects or have other unexpected adverse properties, such side effects or properties could delay or prevent regulatory approval, limit the commercial potential or result in significant negative consequences following any potential marketing approval;

 

we rely, and expect to continue to rely, on third parties to conduct some or all aspects of our product manufacturing, research, preclinical and clinical testing, and these third parties may not perform satisfactorily;

 

we face substantial competition, which may result in others discovering, developing or commercializing products before us or more successfully than we do;

 

our rights to develop and commercialize any product candidates are subject and may in the future be subject, in part, to the terms and conditions of licenses granted to us by third parties. If we fail to comply with our obligations under current or future intellectual property license agreements or otherwise experience disruptions to our business relationships with our current or any future licensors, we could lose intellectual property rights that are important to our business;

 

if we or our licensors are unable to obtain, maintain and defend patent and other intellectual property protection for any product candidates or technology, or if the scope of the patent or other intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully develop and commercialize our product candidates or our technology may be adversely affected due to such competition; and

 

the COVID-19 pandemic may affect our ability to initiate and complete preclinical studies, delay the initiation of our planned clinical trials or future clinical trials, disrupt regulatory activities, or have other adverse effects on our business and operations. In addition, this pandemic has caused substantial disruption to supply chains and may adversely impact economies worldwide, which could negatively impact our operations.

 

3


 

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

Dyne Therapeutics, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share data)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

229,042

 

 

$

300,852

 

Marketable securities

 

 

178,481

 

 

 

44,462

 

Prepaid expenses and other current assets

 

 

17,132

 

 

 

3,773

 

Total current assets

 

 

424,655

 

 

 

349,087

 

Property and equipment, net

 

 

2,988

 

 

 

1,946

 

Right-of-use assets

 

 

36,927

 

 

 

 

Restricted cash and other assets

 

 

2,308

 

 

 

2,301

 

Total assets

 

$

466,878

 

 

$

353,334

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

 

7,088

 

 

 

3,440

 

Accrued expenses and other current liabilities

 

 

11,674

 

 

 

7,527

 

Lease liabilities

 

 

4,589

 

 

 

 

Total current liabilities

 

 

23,351

 

 

 

10,967

 

Lease liabilities, net of current portion

 

 

29,411

 

 

 

 

Total liabilities

 

 

52,762

 

 

 

10,967

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 10,000,000 shares authorized at September 30, 2021 and December 31, 2020

 

 

 

 

 

 

Common stock, $0.0001 par value; 200,000,000 shares authorized at September 30, 2021 and December 31, 2020; 51,607,908 and 45,446,903 shares issued and 51,483,643 and 45,076,574 shares outstanding at September 30, 2021 and December 31, 2020, respectively

 

 

6

 

 

 

5

 

Additional paid-in capital

 

 

590,832

 

 

 

421,572

 

Accumulated other comprehensive loss

 

 

(34

)

 

 

(27

)

Accumulated deficit

 

 

(176,688

)

 

 

(79,183

)

Total stockholders’ equity

 

 

414,116

 

 

 

342,367

 

Total liabilities and stockholders’ equity

 

$

466,878

 

 

$

353,334

 

 

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

 

 

4


 

Dyne Therapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except share and per share data)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

36,510

 

 

$

9,679

 

 

$

79,007

 

 

$

23,102

 

General and administrative

 

 

6,256

 

 

 

3,841

 

 

 

19,058

 

 

 

6,945

 

Total operating expenses

 

 

42,766

 

 

 

13,520

 

 

 

98,065

 

 

 

30,047

 

Loss from operations

 

 

(42,766

)

 

 

(13,520

)

 

 

(98,065

)

 

 

(30,047

)

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

184

 

 

 

 

 

 

560

 

 

 

24

 

Interest expense

 

 

 

 

 

(130

)

 

 

 

 

 

(315

)

Change in success fee obligation

 

 

 

 

 

(270

)

 

 

 

 

 

(450

)

Total other (expense) income, net

 

 

184

 

 

 

(400

)

 

 

560

 

 

 

(741

)

Net loss

 

$

(42,582

)

 

$

(13,920

)

 

$

(97,505

)

 

$

(30,788

)

Net loss per share—basic and diluted

 

$

(0.83

)

 

$

(2.01

)

 

$

(1.92

)

 

$

(7.51

)

Weighted-average common shares outstanding used in net
   loss per share—basic and diluted

 

 

51,320,940

 

 

 

6,920,008

 

 

 

50,676,668

 

 

 

4,100,504

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(42,582

)

 

$

(13,920

)

 

$

(97,505

)

 

$

(30,788

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on marketable securities, net

 

 

7

 

 

 

 

 

 

(7

)

 

 

 

Comprehensive loss

 

$

(42,575

)

 

$

(13,920

)

 

$

(97,512

)

 

$

(30,788

)

 

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

5


 

Dyne Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited)

(in thousands, except share data and issuance costs)

 

 

 

Convertible Preferred
Stock

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other

 

 

Accumulated

 

 

Stockholders’
Equity

 

(in thousands, except per share data)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Comprehensive Loss

 

 

Deficit

 

 

(Deficit)

 

Balance at January 1, 2021

 

 

 

 

$

 

 

 

45,076,574

 

 

$

5

 

 

$

421,572

 

 

$

(27

)

 

$

(79,183

)

 

$

342,367

 

Issuance of common stock upon follow-on public offering, net of issuance costs of $0.7 million

 

 

 

 

 

 

 

 

6,000,000

 

 

 

1

 

 

 

157,236

 

 

 

 

 

 

 

 

 

157,237

 

Exercise of stock options

 

 

 

 

 

 

 

 

11,163

 

 

 

 

 

 

13

 

 

 

 

 

 

 

 

 

13

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,652

 

 

 

 

 

 

 

 

 

3,652

 

Vesting of restricted shares

 

 

 

 

 

 

 

 

70,539

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized losses on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(41

)

 

 

 

 

 

(41

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,968

)

 

 

(24,968

)

Balance at March 31, 2021

 

 

 

 

$

 

 

 

51,158,276

 

 

$

6

 

 

$

582,473

 

 

$

(68

)

 

$

(104,151

)

 

$

478,260

 

Exercise of stock options

 

 

 

 

 

 

 

 

10,088

 

 

 

 

 

 

25

 

 

 

 

 

 

 

 

 

25

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,239

 

 

 

 

 

 

 

 

 

4,239

 

Vesting of restricted shares

 

 

 

 

 

 

 

 

63,977

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27

 

 

 

 

 

 

27

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(29,955

)

 

 

(29,955

)

Balance at June 30, 2021

 

 

 

 

$

 

 

 

51,232,341

 

 

$

6

 

 

$

586,737

 

 

$

(41

)

 

$

(134,106

)

 

$

452,596

 

Exercise of stock options

 

 

 

 

 

 

 

 

99,679

 

 

 

 

 

 

457

 

 

 

 

 

 

 

 

 

457

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,638

 

 

 

 

 

 

 

 

 

3,638

 

Vesting of restricted shares

 

 

 

 

 

 

 

 

63,977

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

 

 

 

 

 

 

 

87,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

 

 

 

7

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(42,582

)

 

 

(42,582

)

Balance at September 30, 2021

 

 

 

 

$

 

 

 

51,483,643

 

 

$

6

 

 

$

590,832

 

 

$

(34

)

 

$

(176,688

)

 

$

414,116

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible Preferred
Stock

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other

 

 

Accumulated

 

 

Stockholders’
Equity

 

(in thousands, except per share data)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Comprehensive Loss

 

 

Deficit

 

 

(Deficit)

 

Balance at January 1, 2020

 

 

32,500,000

 

 

$

27,429

 

 

 

2,586,535

 

 

$

1

 

 

$

6,352

 

 

$

 

 

$

(19,746

)

 

$

14,036

 

Issuance of Series A convertible preferred stock, net of issuance costs of $0.1 million

 

 

2,000,000

 

 

 

1,972

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,972

 

Vesting of restricted shares

 

 

 

 

 

 

 

 

70,538

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

66

 

 

 

 

 

 

 

 

 

66

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,886

)

 

 

(7,886

)

Balance at March 31, 2020

 

 

34,500,000

 

 

$

29,401

 

 

 

2,657,073

 

 

$

1

 

 

$

6,418

 

 

$

 

 

$

(27,632

)

 

$

8,188

 

Exercise of stock options

 

 

 

 

 

 

 

 

753

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

75

 

 

 

 

 

 

 

 

 

75

 

Vesting of restricted shares

 

 

 

 

 

 

 

 

70,539

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,982

)

 

 

(8,982

)

Balance at June 30, 2020

 

 

34,500,000

 

 

$

29,401

 

 

 

2,728,365

 

 

$

1

 

 

$

6,493

 

 

$

 

 

$

(36,614

)

 

$

(719

)

Issuance of Series A convertible preferred stock, net of issuance costs of $0.1 million

 

 

17,500,000

 

 

 

17,495

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17,495

 

Issuance of Series B convertible preferred stock, net of issuance costs of $0.4 million

 

 

41,159,724

 

 

 

115,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

115,319

 

Conversion of convertible preferred stock into common stock upon initial public offering

 

 

(93,159,724

)

 

 

(162,215

)

 

 

28,086,375

 

 

 

3

 

 

 

162,212

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon initial public offering, net of issuance costs of $2.6 million

 

 

 

 

 

 

 

 

14,089,314

 

 

 

1

 

 

 

246,410

 

 

 

 

 

 

 

 

 

246,411

 

Exercise of stock options

 

 

 

 

 

 

 

 

29,656

 

 

 

 

 

 

24

 

 

 

 

 

 

 

 

 

24

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,235