SEC Filing | Taysha Gene Therapies

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tsha-10q_20210930.htm

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

☐	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: 001-39536

Taysha Gene Therapies, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	84-3199512
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3000 Pegasus Park Drive Ste 1430 Dallas, Texas	75247
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (214) 612-0000

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, par value $0.00001 per share

TSHA

The Nasdaq Stock Market LLC

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.

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 10, 2021, the registrant had 38,473,945 shares of common stock, $0.00001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Balance Sheets	1
	Statements of Operations	2
	Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)	3
	Statements of Cash Flows	5
	Notes to Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	48
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	51
Signatures		52

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Taysha Gene Therapies, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)


	September 30, 2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	188,785		$	251,253
Prepaid expenses and other current assets		8,385			6,626
Total current assets		197,170			257,879
Restricted cash		2,628			—
Deferred lease asset		691			715
Property, plant and equipment, net		40,553			287
Total assets	$	241,042		$	258,881

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	22,051		$	1,994
Accrued expenses and other current liabilities		21,163			5,135
Total current liabilities		43,214			7,129
Build-to-suit lease liability		26,607			—
Term loan		27,812			—
Other non-current liabilities		3,015			450
Total liabilities		100,648			7,579
Commitments and contingencies - Note 11
Stockholders' equity
Preferred stock, $0.00001 par value per share; 10,000,000 shares authorized and no shares issued and outstanding as of September 30, 2021 and December 31, 2020		—			—
Common stock, $0.00001 par value per share; 200,000,000 shares authorized and 38,473,945 and 37,761,435 issued and outstanding as of September 30, 2021 and December 31, 2020		—			—
Additional paid-in capital		325,657			312,428
Accumulated deficit		(185,263	)		(61,126	)
Total stockholders’ equity		140,394			251,302
Total liabilities and stockholders' equity	$	241,042		$	258,881

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

Taysha Gene Therapies, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020
Operating expenses:
Research and development	$	39,528		$	11,057		$	94,025		$	19,633
General and administrative		11,153			3,984			29,518			5,002
Total operating expenses		50,681			15,041			123,543			24,635
Loss from operations		(50,681	)		(15,041	)		(123,543	)		(24,635	)
Other income (expense):
Change in fair value of preferred stock tranche liability		—			—			—			(17,030	)
Interest income		37			—			143			—
Interest expense		(543	)		(1	)		(737	)		(28	)
Total other expense, net		(506	)		(1	)		(594	)		(17,058	)
Net loss	$	(51,187	)	$	(15,042	)	$	(124,137	)	$	(41,693	)
Net loss per common share, basic and diluted	$	(1.35	)	$	(1.28	)	$	(3.31	)	$	(3.73	)
Weighted average common shares outstanding, basic and diluted		38,003,954			11,733,170			37,495,537			11,176,429

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

Taysha Gene Therapies, Inc.

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

(in thousands, except share data)

(Unaudited)

For the Three Months Ended September 30, 2021


					Additional					Total
	Common Stock				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balance as of June 30, 2021		38,391,165	$	—	$	320,571	$	(134,076	)	$	186,495
Stock-based compensation		—		—		5,086		—			5,086
Issuance of common stock, upon vesting and settlement of restricted stock units		82,780		—		—		—			—
Net loss		—		—		—		(51,187	)		(51,187	)
Balance as of September 30, 2021		38,473,945	$	—	$	325,657	$	(185,263	)	$	140,394

For the Three Months Ended September 30, 2020

	Series A						Series B															Total
	Convertible						Convertible										Additional					Stockholders'
	Preferred Stock						Preferred Stock						Common Stock				Paid-in		Accumulated			Equity
	Shares			Amount			Shares			Amount			Shares		Amount		Capital		Deficit			(Deficit)
Balance as of June 30, 2020		6,200,000		$	18,014			—		$	—			10,894,999	$	—	$	980	$	(27,766	)	$	(26,786	)
Issuance of Series A convertible preferred stock, net of offering costs of $165		3,800,000			11,235			—			—			—		—		—		—			—
Issuance of Series B convertible preferred stock net of offering costs of $185		—			—			5,647,048			95,815			—		—		—		—			—
Reclassification of preferred stock tranche liability upon issuance of Series A milestone shares		—			17,176			—			—			—		—		—		—			—
Conversion of Series A and B convertible preferred stock to common stock		(10,000,000	)		(46,425	)		(5,647,048	)		(95,815	)		17,047,378		—		142,240		—			142,240
Issuance of shares of common stock in initial public offering, net of offering costs and underwriting discounts and commissions of $15,111		—			—			—			—			9,050,000		—		165,889		—			165,889
Issuance of restricted stock award		—			—			—			—			769,058		—		—		—			—
Stock-based compensation		—			—			—			—			—		—		1,341		—			1,341
Net loss		—			—			—			—			—		—		—		(15,042	)		(15,042	)
Balance as of September 30, 2020		—		$	—			—		$	—			37,761,435	$	—	$	310,450	$	(42,808	)	$	267,642

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

Taysha Gene Therapies, Inc.

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

(in thousands, except share data)

(Unaudited)

For the Nine Months Ended September 30, 2021

					Additional					Total
	Common Stock				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balance as of December 31, 2020		37,761,435	$	—	$	312,428	$	(61,126	)	$	251,302
Stock-based compensation		—		—		13,229		—			13,229
Issuance of common stock, upon vesting and settlement of restricted stock units		712,510		—		—		—			—
Net loss		—		—		—		(124,137	)		(124,137	)
Balance as of September 30, 2021		38,473,945	$	—	$	325,657	$	(185,263	)	$	140,394

For the Nine Months Ended September 30, 2020

	Series A						Series B															Total
	Convertible						Convertible										Additional					Stockholders'
	Preferred Stock						Preferred Stock						Common Stock				Paid-in		Accumulated			Equity
	Shares			Amount			Shares			Amount			Shares		Amount		Capital		Deficit			(Deficit)
Balance as of December 31, 2019		—			—			—			—			10,894,999		—		980		(1,115	)		(135	)
Issuance of Series A convertible preferred stock, net of offering costs of $605 and issuance of preferred stock tranche liability of $1,050		10,000,000			28,345			—			—			—		—		—		—			—
Issuance of Series B convertible preferred stock net of offering costs of $185		—			—			5,647,048			95,815			—		—		—		—			—
Reclassification of preferred stock tranche liability upon issuance of Series A milestone shares		—			18,080			—			—			—		—		—		—			—
Conversion of Series A and Series B convertible preferred stock to common stock		(10,000,000	)		(46,425	)		(5,647,048	)		(95,815	)		17,047,378		—		142,240		—			142,240
Issuance of shares of common stock in initial public offering, net of offering costs and underwriting discounts and commissions of $15,111		—			—			—			—			9,050,000		—		165,889		—			165,889
Issuance of restricted stock award		—			—			—			—			769,058		—		—		—			—
Stock-based compensation		—			—			—			—			—		—		1,341		—			1,341
Net loss		—			—			—			—			—		—		—		(41,693	)		(41,693	)
Balance as of September 30, 2020		—		$	—			—		$	—			37,761,435	$	—	$	310,450	$	(42,808	)	$	267,642

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

Taysha Gene Therapies, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	For the Nine Months Ended September 30,
	2021			2020
Cash flows from operating activities
Net loss	$	(124,137	)	$	(41,693	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		283			3
Change in fair value of preferred stock tranche liability		—			17,030
Research and development license expense		6,750			6,000
Stock-based compensation		13,229			1,341
Build-to-suit lease		357			—
Other		93			—
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(1,530	)		(604	)
Accounts payable		16,000			5,403
Accrued expenses and other liabilities		12,179			1,579
Due to related party		(8	)		60
Net cash used in operating activities		(76,784	)		(10,881	)
Cash flows from investing activities
Purchase of research and development license		(6,000	)		(3,000	)
Purchase of property, plant and equipment		(7,034	)		(31	)
Net cash used in investing activities		(13,034	)		(3,031	)
Cash flows from financing activities
Proceeds from Term Loan, net		29,978