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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: 001-39536

 

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.

 

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 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

 

 

 

i


 

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.

 

1


 

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.

 

 

 

2


 

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.

3


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.

 

 

4


 

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