goss-10q_20190930.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

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

For the quarterly period ended September 30, 2019

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: 001-38796

 

GOSSAMER BIO, INC.

(Exact name of Registrant as specified in its charter)

 

 

Delaware

 

47-5461709

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

3013 Science Park Road

San Diego, California

 

92121

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (858) 684-1300

 

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

 

GOSS

 

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 6, 2019, the registrant had 66,038,122 shares of common stock ($0.0001 par value) outstanding.

 

 

 

 


TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

 

Item 1

 

Condensed Consolidated Financial Statements (unaudited)

3

 

 

Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018

3

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months ended September 30, 2019 and 2018

4

 

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Nine Months ended September 30, 2019 and 2018

5

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2019 and 2018

7

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2

 

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

19

Item 3

 

Quantitative and Qualitative Disclosures About Market Risk

27

Item 4

 

Controls and Procedures

27

 

PART II. OTHER INFORMATION

 

Item 1

 

Legal Proceedings

28

Item 1A

 

Risk Factors

28

Item 2

 

Unregistered Sales of Equity Securities and Use of Proceeds

28

Item 3

 

Defaults Upon Senior Securities

28

Item 4

 

Mine Safety Disclosures

28

Item 5

 

Other Information

28

Item 6

 

Exhibits

28

 

 

Exhibit Index

29

 

 

Signatures

30


2


PART I. FINANCIAL INFORMATION

 

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

 

GOSSAMER BIO, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and par value amounts)

 

 

 

September 30, 2019

 

 

December 31, 2018

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

130,708

 

 

$

105,219

 

Marketable securities

 

 

315,764

 

 

 

123,439

 

Restricted cash

 

 

 

 

 

200

 

Prepaid expenses and other current assets

 

 

5,902

 

 

 

3,095

 

Total current assets

 

 

452,374

 

 

 

231,953

 

Property and equipment, net

 

 

5,133

 

 

 

3,193

 

Operating lease right-of-use assets

 

 

10,860

 

 

 

 

Other assets

 

 

1,387

 

 

 

4,273

 

Total assets

 

$

469,754

 

 

$

239,419

 

LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS' EQUITY

   (DEFICIT)

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,555

 

 

$

2,182

 

Accrued research and development expenses

 

 

19,171

 

 

 

10,653

 

Accrued expenses

 

 

11,443

 

 

 

7,568

 

Total current liabilities

 

 

33,169

 

 

 

20,403

 

Long-term debt

 

 

28,370

 

 

 

 

Operating lease liabilities

 

 

9,342

 

 

 

 

Accrued expenses - long-term

 

 

 

 

 

718

 

Total liabilities

 

 

70,881

 

 

 

21,121

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Series Seed convertible preferred stock, $0.0001 par value; no shares issued and outstanding as

   of September 30, 2019 and 20,000,000 shares issued and outstanding as of December 31, 2018;

   liquidation preference of $0 and $20,000 as of September 30, 2019 and

   December 31, 2018, respectively

 

 

 

 

 

29,200

 

Series A convertible preferred stock, $0.0001 par value; no shares issued and outstanding as of

   September 30, 2019 and 45,714,286 shares issued and outstanding as of December 31, 2018;

   liquidation preference of $0 and $80,000 as of September 30, 2019 and December 31, 2018,

   respectively

 

 

 

 

 

79,615

 

Series B convertible preferred stock, $0.0001 par value; no shares issued and outstanding as of

   September 30, 2019 and 71,506,513 shares issued and outstanding as of December 31, 2018;

   liquidation preference of $0 and $230,000 as of September 30, 2019 and December 31, 2018,

   respectively

 

 

 

 

 

229,552

 

Stockholders' equity (deficit)

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value; 700,000,000 shares authorized as of September 30, 2019 and

   49,160,177 shares authorized as of December 31, 2018; 66,038,122 shares issued and

   60,984,958 shares outstanding as of September 30, 2019, and 15,533,450 shares issued and

   8,051,418 shares outstanding as of December 31, 2018

 

 

7

 

 

 

2

 

Additional paid-in capital

 

 

678,010

 

 

 

33,853

 

Accumulated deficit

 

 

(279,472

)

 

 

(153,863

)

Accumulated other comprehensive income (loss)

 

 

328

 

 

 

(61

)

Total stockholders' equity (deficit)

 

 

398,873

 

 

 

(120,069

)

Total liabilities, convertible preferred stock and stockholders' equity (deficit)

 

$

469,754

 

 

$

239,419

 

 

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

3


GOSSAMER BIO, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

40,148

 

 

$

18,857

 

 

$

100,807

 

 

$

29,411

 

In process research and development

 

 

 

 

 

8,261

 

 

 

2,000

 

 

 

49,659

 

General and administrative

 

 

9,838

 

 

 

22,906

 

 

 

27,544

 

 

 

30,116

 

Total operating expenses

 

 

49,986

 

 

 

50,024

 

 

 

130,351

 

 

 

109,186

 

Loss from operations

 

 

(49,986

)

 

 

(50,024

)

 

 

(130,351

)

 

 

(109,186

)

Other income, net

 

 

1,486

 

 

 

622

 

 

 

4,742

 

 

 

1,011

 

Net loss

 

$

(48,500

)

 

$

(49,402

)

 

$

(125,609

)

 

$

(108,175

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable securities, net of tax

 

 

(168

)

 

 

232

 

 

 

389

 

 

 

235

 

Other comprehensive income (loss)

 

 

(168

)

 

 

232

 

 

 

389

 

 

 

235

 

Comprehensive loss

 

 

(48,668

)

 

 

(49,170

)

 

 

(125,220

)

 

 

(107,940

)

Net loss per share, basic and diluted

 

$

(0.80

)

 

$

(7.69

)

 

$

(2.39

)

 

$

(17.64

)

Weighted average common shares outstanding, basic and diluted

 

 

60,755,872

 

 

 

6,423,397

 

 

 

52,535,569

 

 

 

6,133,911

 

 

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

 

 

4


GOSSAMER BIO, INC.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(Unaudited)

(in thousands, except share amounts)

 

 

Series Seed

 

Series A

 

Series B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

convertible

preferred stock

 

convertible

preferred stock

 

convertible

preferred stock

 

 

 

Common stock

 

Additional

paid-in

 

Accumulated

 

other

comprehensive

 

Total

stockholders'

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

 

 

Shares

 

Amount

 

capital

 

deficit

 

income (loss)

 

equity (deficit)

 

Balance as of

   December 31, 2018

 

20,000,000

 

$

29,200

 

 

45,714,286

 

$

79,615

 

 

71,506,513

 

$

229,552

 

 

 

 

8,051,418

 

$

2

 

$

33,853

 

$

(153,863

)

$

(61

)

$

(120,069

)

Issuance of common

   stock in connection

   with a public offering,

   net of underwriting

   discounts,

   commissions,

   and offering costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19,837,500

 

 

2

 

 

291,342

 

 

 

 

 

 

291,344

 

Conversion of

   convertible preferred

   stock into common

   stock

 

(20,000,000

)

 

(29,200

)

 

(45,714,286

)

 

(79,615

)

 

(71,506,513

)

 

(229,552

)

 

 

 

30,493,460

 

 

3

 

 

338,364

 

 

 

 

 

 

338,367

 

Vesting of restricted

   stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,619,592

 

 

 

 

 

 

 

 

 

 

 

Stock-based

   compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,500

 

 

 

 

3,089

 

 

 

 

 

 

3,089

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(32,611

)

 

 

 

(32,611

)

Other comprehensive

   income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

140

 

 

140

 

Balance as of

   March 31, 2019

 

 

$

 

 

 

$

 

 

 

$

 

 

 

 

60,029,470

 

$

7

 

$

666,648

 

$

(186,474

)

$

79

 

$

480,260

 

Vesting of restricted

   stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

404,637

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,273

 

 

 

 

86

 

 

 

 

 

 

86

 

Stock-based

   compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,140

 

 

 

 

 

 

5,140

 

Other additional paid-in

   capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

39

 

 

 

 

 

 

39

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(44,498

)

 

 

 

(44,498

)

Other comprehensive

   income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

417

 

 

417

 

Balance as of

   June 30, 2019

 

 

$

 

 

 

$

 

 

 

$

 

 

 

 

60,467,380

 

$

7

 

$

671,913

 

$

(230,972

)

$

496

 

$

441,444

 

Vesting of restricted

   stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

404,639

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

112,939

 

 

 

 

369

 

 

 

 

 

 

369

 

Stock-based

   compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,728

 

 

 

 

 

 

5,728

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(48,500

)

 

 

 

(48,500

)

Other comprehensive

   income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(168

)

 

(168

)

Balance as of

   September 30, 2019

 

 

$

 

 

 

$

 

 

 

$

 

 

 

 

60,984,958

 

$

7

 

$

678,010

 

$

(279,472

)

$

328

 

$

398,873

 

 

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

5


 

 

Series Seed

 

Series A

 

Series B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

convertible

preferred stock

 

convertible

preferred stock

 

convertible

preferred stock

 

 

 

Common stock

 

Additional

paid-in

 

Accumulated

 

other

comprehensive

 

Total

stockholders'

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

 

 

Shares

 

Amount

 

capital

 

deficit

 

income (loss)

 

deficit

 

Balance as of

   December 31, 2017

 

 

$

 

 

 

$

 

 

 

$

 

 

 

 

9,160,888

 

$

 

$

32

 

$

(6,894

)

$

 

$

(6,862

)

Issuance of Series A

   preferred stock for

   cash, net of $0.4

   million in offering

   costs

 

 

 

 

 

41,328,286

 

 

71,944

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of stock for

   acquisition

 

20,000,000

 

 

29,200

 

 

 

 

 

 

 

 

 

 

 

 

1,101,278

 

 

1

 

 

2,874

 

 

 

 

 

 

2,875

 

Issuance of Series A

   preferred stock to

   convert debt and

   accrued interest

 

 

 

 

 

3,499,209

 

 

6,124

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based

   compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

605

 

 

 

 

 

 

605

 

Incremental vesting

   conditions placed

   on previously issued

   common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,580,444

)

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,037

)

 

 

 

(26,037

)

Balance as of

   March 31, 2018

 

20,000,000

 

$

29,200

 

 

44,827,495

 

$

78,068

 

 

 

$

 

 

 

 

5,681,722

 

$

1

 

$

3,511

 

$

(32,931

)

$

 

$

(29,419

)

Issuance of Series A

   preferred stock to

   convert debt and

   accrued interest

 

 

 

 

 

886,791

 

 

1,547

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted

   stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

251,542

 

 

 

 

 

 

 

 

 

 

 

Stock-based

   compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,374

 

 

 

 

 

 

1,374

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(32,736

)

 

 

 

(32,736

)

Other comprehensive

   income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

3

 

Balance as of

   June 30, 2018

 

20,000,000

 

$

29,200

 

 

45,714,286

 

$

79,615

 

 

 

$

 

 

 

 

5,933,264

 

$

1

 

$

4,885

 

$

(65,667

)

$

3

 

$

(60,778

)

Issuance of Series B

   preferred stock for

   cash, net of $0.5

   million in offering

   costs

 

 

 

 

 

 

 

 

 

71,506,513

 

 

229,552

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted

   stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,800,581

 

 

1

 

 

 

 

 

 

 

 

1

 

Stock-based

   compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,169

 

 

 

 

 

 

18,169

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(49,402

)

 

 

 

(49,402

)

Other comprehensive

   income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

232

 

 

232

 

Balance as of

   September 30, 2018

 

20,000,000

 

$

29,200

 

 

45,714,286

 

$

79,615

 

 

71,506,513

 

$

229,552

 

 

 

 

7,733,845

 

$

2

 

$

23,054

 

$

(115,069

)

$

235

 

$

(91,778

)

 

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

6


GOSSAMER BIO, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Nine months ended September 30,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(125,609

)

 

$

(108,175

)

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

625

 

 

 

163

 

Stock-based compensation expense

 

 

13,957

 

 

 

20,148

 

In process research and development expenses

 

 

2,000

 

 

 

49,659

 

Amortization of long-term debt discount and issuance costs

 

 

148