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FORM 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Regulus Therapeutics Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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26-4738379
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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10628 Science Center Drive
San Diego, CA
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92121
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
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Smaller reporting company
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x
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Emerging growth company
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¨
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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RGLS
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The Nasdaq Capital Market
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PART I. FINANCIAL INFORMATION
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PART II. OTHER INFORMATION
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ITEM 1.
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FINANCIAL STATEMENTS
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March 31,
2019 |
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December 31,
2018 |
||||
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(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
10,320
|
|
|
$
|
13,935
|
|
Contract and other receivables
|
2,792
|
|
|
26
|
|
||
Prepaid materials, net
|
3,826
|
|
|
4,194
|
|
||
Prepaid expenses and other current assets
|
801
|
|
|
1,140
|
|
||
Total current assets
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17,739
|
|
|
19,295
|
|
||
Property and equipment, net
|
1,598
|
|
|
7,806
|
|
||
Intangibles, net
|
407
|
|
|
500
|
|
||
Other assets
|
133
|
|
|
326
|
|
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Total assets
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$
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19,877
|
|
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$
|
27,927
|
|
Liabilities and stockholders’ deficit
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,650
|
|
|
$
|
1,714
|
|
Accrued liabilities
|
1,745
|
|
|
1,625
|
|
||
Accrued compensation
|
1,915
|
|
|
1,601
|
|
||
Current portion of term loan, less debt issuance costs
|
15,225
|
|
|
16,575
|
|
||
Current portion of contract liabilities
|
60
|
|
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2,572
|
|
||
Other current liabilities
|
3,245
|
|
|
2,559
|
|
||
Total current liabilities
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24,840
|
|
|
26,646
|
|
||
Contract liabilities, less current portion
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—
|
|
|
6
|
|
||
Deferred rent, less current portion
|
—
|
|
|
6,820
|
|
||
Other long-term liabilities
|
1,106
|
|
|
309
|
|
||
Total liabilities
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25,946
|
|
|
33,781
|
|
||
Stockholders’ deficit:
|
|
|
|
||||
Common stock, $0.001 par value; 200,000,000 shares authorized, 10,817,916
and 8,818,019 shares issued and outstanding at March 31, 2019 (unaudited) and December 31, 2018, respectively
|
11
|
|
|
9
|
|
||
Additional paid-in capital
|
389,903
|
|
|
386,860
|
|
||
Accumulated deficit
|
(395,983
|
)
|
|
(392,723
|
)
|
||
Total stockholders’ deficit
|
(6,069
|
)
|
|
(5,854
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
19,877
|
|
|
$
|
27,927
|
|
|
Three months ended
March 31, |
||||||
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2019
|
|
2018
|
||||
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(Unaudited)
|
||||||
Revenues:
|
|
|
|
||||
Revenue under strategic alliances and collaborations
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$
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6,778
|
|
|
$
|
18
|
|
Total revenues
|
6,778
|
|
|
18
|
|
||
Operating expenses:
|
|
|
|
||||
Research and development
|
5,983
|
|
|
11,828
|
|
||
General and administrative
|
3,533
|
|
|
3,773
|
|
||
Total operating expenses
|
9,516
|
|
|
15,601
|
|
||
Loss from operations
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(2,738
|
)
|
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(15,583
|
)
|
||
Other income (expense):
|
|
|
|
||||
Interest and other income
|
56
|
|
|
164
|
|
||
Interest and other expense
|
(578
|
)
|
|
(605
|
)
|
||
Loss before income taxes
|
(3,260
|
)
|
|
(16,024
|
)
|
||
Income tax expense
|
—
|
|
|
(1
|
)
|
||
Net loss
|
$
|
(3,260
|
)
|
|
$
|
(16,025
|
)
|
Other comprehensive loss:
|
|
|
|
||||
Unrealized gain on short-term investments, net
|
—
|
|
|
7
|
|
||
Comprehensive loss
|
$
|
(3,260
|
)
|
|
$
|
(16,018
|
)
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Net loss per share, basic and diluted
|
$
|
(0.31
|
)
|
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$
|
(1.85
|
)
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Weighted average shares used to compute basic and diluted net loss per share
|
10,379,830
|
|
|
8,668,695
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|
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Common stock
|
|
Additional paid-in capital
|
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Accumulated other comprehensive income (loss)
|
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Accumulated deficit
|
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Total stockholders’ equity (deficit)
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|||||||||||||
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Shares
|
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Amount
|
|
||||||||||||||||||
Balance at December 31, 2018
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8,818,019
|
|
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$
|
9
|
|
|
$
|
386,860
|
|
|
$
|
—
|
|
|
$
|
(392,723
|
)
|
|
$
|
(5,854
|
)
|
Issuance of common stock upon vesting of restricted stock units
|
93,648
|
|
|
—
|
|
|
—
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|
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—
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|
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—
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|
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—
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
959
|
|
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—
|
|
|
—
|
|
|
959
|
|
|||||
Issuance of common stock under Employee Stock Purchase Plan
|
2,369
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Issuance of common stock
|
1,903,880
|
|
|
2
|
|
|
2,082
|
|
|
—
|
|
|
—
|
|
|
2,084
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,260
|
)
|
|
(3,260
|
)
|
|||||
Balance at March 31, 2019
|
10,817,916
|
|
|
$
|
11
|
|
|
$
|
389,903
|
|
|
$
|
—
|
|
|
$
|
(395,983
|
)
|
|
$
|
(6,069
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2017
|
8,662,435
|
|
|
$
|
9
|
|
|
$
|
381,199
|
|
|
$
|
(134
|
)
|
|
$
|
(345,858
|
)
|
|
$
|
35,216
|
|
Issuance of common stock upon exercise of options
|
328
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Issuance of common stock upon vesting of restricted stock units
|
8,660
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
1,627
|
|
|
—
|
|
|
—
|
|
|
1,627
|
|
|||||
Cumulative effect of accounting change (ASU 2014-09)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,843
|
|
|
1,843
|
|
|||||
Issuance of common stock under Employee Stock Purchase Plan
|
21,377
|
|
|
—
|
|
|
207
|
|
|
—
|
|
|
—
|
|
|
207
|
|
|||||
Unrealized gain on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,025
|
)
|
|
(16,025
|
)
|
|||||
Balance at March 31, 2018
|
8,692,800
|
|
|
$
|
9
|
|
|
$
|
383,034
|
|
|
$
|
(127
|
)
|
|
$
|
(360,040
|
)
|
|
$
|
22,876
|
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Unaudited)
|
||||||
Operating activities
|
|
|
|
||||
Net loss
|
$
|
(3,260
|
)
|
|
$
|
(16,025
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities
|
|
|
|
||||
Depreciation and amortization expense
|
502
|
|
|
563
|
|
||
Stock-based compensation
|
959
|
|
|
1,627
|
|
||
Amortization of premium on investments, net
|
—
|
|
|
47
|
|
||
Gain on reduction of lease liability
|
1,317
|
|
|
—
|
|
||
Other
|
139
|
|
|
93
|
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Contracts and other receivables
|
(2,766
|
)
|
|
185
|
|
||
Prepaid materials
|
368
|
|
|
128
|
|
||
Prepaid expenses and other assets
|
532
|
|
|
26
|
|
||
Accounts payable
|
936
|
|
|
(1,347
|
)
|
||
Accrued liabilities
|
120
|
|
|
377
|
|
||
Accrued compensation
|
314
|
|
|
(868
|
)
|
||
Contract liabilities
|
(2,518
|
)
|
|
(18
|
)
|
||
Deferred rent and other liabilities
|
—
|
|
|
(300
|
)
|
||
Other liabilities
|
(1,076
|
)
|
|
(90
|
)
|
||
Net cash used in operating activities
|
(4,433
|
)
|
|
(15,602
|
)
|
||
Investing activities
|
|
|
|
||||
Sales and maturities of short-term investments
|
—
|
|
|
11,439
|
|
||
Sales and disposals of property and equipment
|
161
|
|
|
—
|
|
||
Net cash provided by investing activities
|
161
|
|
|
11,439
|
|
||
Financing activities
|
|
|
|
||||
Proceeds from issuance of common stock, net
|
2,086
|
|
|
208
|
|
||
Proceeds from exercise of common stock options
|
—
|
|
|
1
|
|
||
Principal payments on term loan
|
(1,364
|
)
|
|
—
|
|
||
Proceeds from capital lease financing
|
—
|
|
|
492
|
|
||
Payments on financing leases
|
(65
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
657
|
|
|
701
|
|
||
Net decrease in cash and cash equivalents
|
(3,615
|
)
|
|
(3,462
|
)
|
||
Cash and cash equivalents at beginning of period
|
13,935
|
|
|
13,519
|
|
||
Cash and cash equivalents at end of period
|
$
|
10,320
|
|
|
$
|
10,057
|
|
Supplemental disclosure of cash flow information
|
|
|
|
||||
Interest paid
|
$
|
(437
|
)
|
|
$
|
(506
|
)
|
Income taxes paid
|
$
|
—
|
|
|
$
|
(1
|
)
|
Supplemental disclosure of non-cash investing and financing activities
|
|
|
|
||||
Non-cash acquisition of property and equipment
|
$
|
—
|
|
|
$
|
191
|
|
•
|
Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets.
|
•
|
Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets with insufficient volume or infrequent transactions (less active markets) or model-driven valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
|
•
|
Level 3 includes financial instruments for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including management’s own assumptions.
|
|
Fair value as of March 31, 2019
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (money market funds)
|
$
|
8,228
|
|
|
$
|
8,228
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,228
|
|
|
$
|
8,228
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair value as of December 31, 2018
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (money market funds)
|
$
|
11,173
|
|
|
$
|
11,173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,173
|
|
|
$
|
11,173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2019
|
9,176
|
|
|
2020
|
6,118
|
|
|
|
$
|
15,294
|
|
Common stock options outstanding
|
390
|
|
RSUs outstanding
|
790
|
|
Common stock available for future grant under 2012 Equity Incentive Plan
|
193
|
|
Common stock available for future grant under 2015 Inducement Plan
|
83
|
|
Employee Stock Purchase Plan
|
195
|
|
Total common shares reserved for future issuance
|
1,651
|
|
|
Number of
options
|
|
Weighted
average
exercise
price
|
|
Number of
RSUs
|
|
Weighted average grant date fair value
|
||||||
Stock Awards outstanding at December 31, 2018
|
59
|
|
|
$
|
45.60
|
|
|
606
|
|
|
$
|
1.58
|
|
Granted
|
331
|
|
|
$
|
0.95
|
|
|
287
|
|
|
$
|
0.95
|
|
Exercised (options) or Vested (RSUs)
|
—
|
|
|
$
|
—
|
|
|
(94
|
)
|
|
$
|
1.08
|
|
Canceled/forfeited/expired
|
0
|
|
|
$
|
4.56
|
|
|
(4
|
)
|
|
$
|
1.50
|
|
Stock Awards outstanding at March 31, 2019
|
390
|
|
|
|
|
|
795
|
|
|
$
|
1.41
|
|
|
Three months ended
March 31, |
||||
|
2019
|
|
2018
|
||
Stock options
|
|
|
|
||
Risk-free interest rate
|
2.6
|
%
|
|
2.6
|
%
|
Volatility
|
93.8
|
%
|
|
87.9
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
Expected term (years)
|
6.1
|
|
|
6.1
|
|
Performance stock options
|
|
||||
Risk-free interest rate
|
2.6
|
%
|
|
2.7
|
%
|
Volatility
|
93.8
|
%
|
|
87.4
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
Expected term (years)
|
6.1
|
|
|
5.7
|
|
Employee stock purchase plan shares
|
|
||||
Risk-free interest rate
|
2.4
|
%
|
|
1.4
|
%
|
Volatility
|
119.4
|
%
|
|
89.0
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
Expected term (years)
|
0.5
|
|
|
0.5
|
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Research and development
|
$
|
471
|
|
|
$
|
666
|
|
General and administrative
|
488
|
|
|
961
|
|
||
Total
|
$
|
959
|
|
|
$
|
1,627
|
|
Assets
|
|
||
Operating
|
$
|
—
|
|
Financing
|
603
|
|
|
Total ROU assets
|
$
|
603
|
|
|
|
||
Liabilities
|
|
||
Current:
|
|
||
Operating
|
$
|
—
|
|
Financing
|
287
|
|
|
Long-term:
|
|
||
Operating
|
—
|
|
|
Financing
|
245
|
|
|
Total lease liabilities
|
$
|
532
|
|
Lease cost:
|
|
||
Operating lease cost
|
$
|
326
|
|
Finance lease cost:
|
|
||
Amortization of right-of-use assets
|
46
|
|
|
Interest expense on lease liabilities
|
6
|
|
|
Total lease cost
|
$
|
378
|
|
|
|
||
Cash payment information:
|
|
||
Operating cash used for operating leases
|
$
|
651
|
|
Operating cash used for finance leases
|
7
|
|
|
Financing cash used for finance leases
|
65
|
|
|
Total cash paid for amounts included in the measurement of lease liabilities
|
$
|
723
|
|
|
|
|
|
Supplemental non-cash information:
|
|
|
|
Operating lease liabilities arising from obtaining right-of-use assets
|
$
|
—
|
|
|
|
||
Weighted-average remaining lease term (years) - operating leases
|
—
|
|
|
Weighted-average remaining lease term (years) - finance leases
|
2
|
|
|
Weighted-average discount rate - operating leases
|
—
|
|
|
Weighted-average discount rate - finance leases
|
4.9
|
%
|
|
Finance Leases
|
||
Remaining 2019
|
$
|
215
|
|
2020
|
287
|
|
|
2021
|
57
|
|
|
Total lease payments
|
$
|
559
|
|
Less: amount representing interest
|
(27
|
)
|
|
Present value of obligations under leases
|
532
|
|
|
Less: current portion
|
(287
|
)
|
|
Long-term finance lease obligations
|
$
|
245
|
|
•
|
the initiation, cost, timing, progress and results of, and our expected ability to undertake certain activities and accomplish certain goals with respect to our research and development activities, preclinical studies and clinical trials;
|
•
|
our ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations, and/or warnings in the label of an approved product candidate;
|
•
|
our ability to obtain funding for our operations;
|
•
|
our plans to research, develop and commercialize our product candidates;
|
•
|
the potential election of any strategic alliance or collaboration partner to pursue development and commercialization of any programs or product candidates that are subject to a collaboration with such partner;
|
•
|
our ability to attract collaborators with relevant development, regulatory and commercialization expertise;
|
•
|
future activities to be undertaken by our strategic alliance partners, collaborators and other third parties;
|
•
|
our ability to obtain and maintain intellectual property protection for our product candidates;
|
•
|
the size and growth potential of the markets for our product candidates, and our ability to serve those markets;
|
•
|
our ability to successfully commercialize, and our expectations regarding future therapeutic and commercial potential with respect to our product candidates;
|
•
|
the rate and degree of market acceptance of our product candidates;
|
•
|
our ability to develop sales and marketing capabilities, whether alone or with potential future collaborators;
|
•
|
regulatory developments in the United States and foreign countries;
|
•
|
the performance of our third-party suppliers and manufacturers;
|
•
|
the success of competing therapies that are or may become available;
|
•
|
the loss of key scientific or management personnel;
|
•
|
our ability to successfully secure and deploy capital;
|
•
|
our ability to satisfy our debt obligations;
|
•
|
the accuracy of our estimates regarding future expenses, future revenues, capital requirements and need for additional financing; and
|
•
|
the risks and other forward-looking statements described under the caption “Risk Factors” under Part II, Item 1A of this quarterly report on Form 10-Q.
|
•
|
micro
RNAs play a critical role in regulating biological pathways by controlling the translation of many target genes;
|
•
|
micro
RNA therapeutics regulate disease pathways which may result in more effective treatment of complex multi-factorial diseases;
|
•
|
many human pathogens, including viruses, bacteria and parasites, use
micro
RNAs (host and pathogen encoded) to enable their replication and suppression of host immune responses; and
|
•
|
micro
RNA therapeutics may be synergistic with other therapies because of their different mechanism of action.
|
•
|
employee-related expenses, including salaries, benefits, travel and stock-based compensation expense;
|
•
|
external research and development expenses incurred under arrangements with third parties, such as contract research organizations, or CROs, contract manufacturing organizations, or CMOs, other clinical trial related vendors, consultants and our scientific advisors;
|
•
|
license fees; and
|
•
|
facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and laboratory and other supplies.
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Revenue under strategic alliances and collaborations
|
$
|
6,778
|
|
|
$
|
18
|
|
Research and development expenses
|
5,983
|
|
|
11,828
|
|
||
General and administrative expenses
|
3,533
|
|
|
3,773
|
|
||
Interest and other expenses, net
|
(522
|
)
|
|
(441
|
)
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
|
|||||||||||
|
Three months ended March 31, 2019
|
|
% of total
|
|
Three months ended March 31, 2018
|
|
% of total
|
|
$
|
|
%
|
|||||||||
Research and development
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel and internal expenses
|
$
|
2,795
|
|
|
47
|
%
|
|
$
|
4,643
|
|
|
39
|
%
|
|
$
|
(1,848
|
)
|
|
(40
|
)%
|
Third-party and outsourced expenses
|
2,519
|
|
|
42
|
%
|
|
6,291
|
|
|
53
|
%
|
|
(3,772
|
)
|
|
(60
|
)%
|
|||
Non-cash stock-based compensation
|
489
|
|
|
8
|
%
|
|
666
|
|
|
6
|
%
|
|
(177
|
)
|
|
(27
|
)%
|
|||
Depreciation
|
180
|
|
|
3
|
%
|
|
228
|
|
|
2
|
%
|
|
(48
|
)
|
|
(21
|
)%
|
|||
Total research and development expenses
|
$
|
5,983
|
|
|
100
|
%
|
|
$
|
11,828
|
|
|
100
|
%
|
|
$
|
(5,845
|
)
|
|
(49
|
)%
|
•
|
whether and when we achieve any milestones under our strategic alliance agreement with Sanofi;
|
•
|
the terms and timing of any other strategic alliance, licensing and other arrangements that we may establish;
|
•
|
the initiation, progress, timing and completion of preclinical studies and clinical trials for our development programs and product candidates, and associated costs;
|
•
|
the number and characteristics of product candidates that we pursue;
|
•
|
the outcome, timing and cost of regulatory approvals;
|
•
|
delays that may be caused by changing regulatory requirements;
|
•
|
the cost and timing of hiring new employees;
|
•
|
the costs involved in filing and prosecuting patent applications and enforcing and defending patent claims;
|
•
|
the costs and timing of procuring clinical and commercial supplies of our product candidates;
|
•
|
the costs and timing of establishing sales, marketing and distribution capabilities;
|
•
|
the extent to which we acquire or invest in businesses, products or technologies; and
|
•
|
payments under our Term Loan.
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(unaudited)
|
||||||
Net cash (used in) provided by:
|
|
|
|
||||
Operating activities
|
$
|
(4,433
|
)
|
|
$
|
(15,602
|
)
|
Investing activities
|
161
|
|
|
11,439
|
|
||
Financing activities
|
657
|
|
|
701
|
|
||
Total
|
$
|
(3,615
|
)
|
|
$
|
(3,462
|
)
|
•
|
significantly delay, scale back or discontinue the development or commercialization of any future product candidates;
|
•
|
seek strategic alliances, or amend existing alliances, for research and development programs at an earlier stage than otherwise would be desirable or for the development of programs that we otherwise would have sought to develop independently, or on terms that are less favorable than might otherwise be available;
|
•
|
dispose of technology assets, or relinquish or license on unfavorable terms, our rights to technologies or any future product candidates that we otherwise would seek to develop or commercialize ourselves;
|
•
|
pursue the sale of our company to a third party at a price that may result in a loss on investment for our stockholders; or
|
•
|
file for bankruptcy or cease operations altogether.
|
•
|
On August 6, 2018, we and Oxford entered into an amendment to the parties’ Loan Agreement. Under the terms of the amendment, we were required to make payments of interest-only for an additional three-month period, from August 2018 through October 2018. Amortization payments commenced in November 2018.
|
•
|
On November 5, 2018 and in connection with the 2018 Sanofi Amendment we entered into the Fourth Amendment. Under the terms of the Fourth Amendment, we are required to prepay part of the Term Loan with 25% of certain payments we receive under the 2018 Sanofi Amendment, which payments consist of the Upfront Amendment Payments and the first development milestone payment in the amount of $10.0 million. We will also be required to pay the applicable 5.5% final payment fee related to each such 2018 Sanofi Amendment prepayment.
|
•
|
On January 31, 2019, we and Oxford entered into the Fifth Amendment, under which our required monthly payment to Oxford for the month of February 2019 was comprised of interest only.
|
•
|
On March 7, 2019, we and Oxford entered into the Sixth Amendment, under which our required monthly payment to Oxford for the month of March 2019 was comprised of interest only.
|
•
|
On April 9, 2019, we and Oxford entered into the Seventh Amendment. Under the terms of the Seventh Amendment, our required monthly payments to the Lender will be comprised of interest only through and including the payment date immediately preceding the Second Amortization Date: (i) April 1, 2019, if we do not receive unrestricted gross cash proceeds of not less than $10 million on or before April 30, 2019 from (a) the issuance and sale of our unsecured subordinated convertible debt and/or equity securities and/or (b) “up front” or milestone payments in connection with a joint venture, collaboration or other partnering transaction other than pursuant to the Sanofi License (the receipt of such net proceeds, a “Capital Event”), and (ii) May 1, 2019, if the Capital Event occurs. Commencing on the Second Amortization Date, and continuing on each successive payment date thereafter, we are required to make consecutive equal monthly payments of principal, together with applicable interest, in arrears, to the Lender; provided, however, that we are required to make the monthly principal payment due April 1, 2019 on May 1, 2019 (in addition to all other payments due on May 1, 2019) if the Capital Event does not occur. Payments under the Loan Agreement could result in a significant reduction of our assets. The Seventh Amendment also provides that we can irrevocably elect to increase the prepayment percentage for the funds that we are required to prepay under the Term Loan in the event we receive $10.0 million from the first development milestone under the Sanofi License from 25% to 75% (the “Applicable Sanofi Percentage”). Under the Seventh Amendment, we are required to maintain cash in a collateral account controlled by the Lender of (i) $10.0 million if the Applicable Sanofi Percentage is 25% and if we have not prepaid an aggregate of $5 million under the Term Loan (which amount shall not include any Sanofi License prepayments) on or before April 30, 2019 (such prepayment, the “Principal Paydown Event”), (ii) $5.0 million if the Applicable Sanofi Percentage is 75% and the Principal Paydown Event has not occurred and (iii) zero if the Principal Paydown Event has occurred.
|
•
|
On May 3, 2019, we entered into the Eighth Amendment. Pursuant to the terms of the Eighth Amendment and as a result of the completion of the Initial Closing under the Private Placement, our required monthly payments to the Lender will be comprised of interest only from May 2019 through and including the payment to be made in April 2020, in exchange for an interest only period extension fee of $0.1 million. Additionally, under the Eighth Amendment, the Term Loan maturity date was extended from June 2020 to May 2022, in exchange for a maturity date extension fee of $0.7 million. Pursuant to the Eighth Amendment, if an additional $20.0 million in capital is received by us on or before December 31, 2019 (the “December Capital Event”), our required monthly payments to the Lender will be comprised of interest only through and including the payment to be made in April 2021. Commencing in May 2020, or, if the December Capital Event occurs, May 2021, and continuing on each successive payment date thereafter, we are required to make consecutive equal monthly payments of principal, together with applicable interest, in arrears, to the Lender. The Eighth Amendment also provides that we have increased the prepayment percentage for the funds that it is required to prepay under the Term Loan, in the event that we receive the $10.0 million first development milestone payment (the “Milestone Payment”) under the 2018 Sanofi Amendment from 75% to 100% of the Milestone Payment. Upon payment of the Milestone Payment to the Lender, we will no longer be required to maintain cash in a collateral account controlled by Lender and the lien on our intellectual property will be released.
|
•
|
dispose of assets;
|
•
|
complete mergers or acquisitions;
|
•
|
incur indebtedness;
|
•
|
encumber assets;
|
•
|
pay dividends or make other distributions to holders of our capital stock;
|
•
|
make specified investments; and
|
•
|
engage in transactions with our affiliates.
|
•
|
identifying and validating new
micro
RNAs as therapeutic targets;
|
•
|
completing our research and preclinical development of product candidates;
|
•
|
initiating and completing clinical trials for product candidates;
|
•
|
seeking and obtaining marketing approvals for product candidates that successfully complete clinical trials;
|
•
|
establishing and maintaining supply and manufacturing relationships with third parties;
|
•
|
launching and commercializing product candidates for which we obtain marketing approval, with an alliance partner or, if launched independently, successfully establishing a sales force, marketing and distribution infrastructure;
|
•
|
maintaining, protecting and expanding our intellectual property portfolio; and
|
•
|
attracting, hiring and retaining qualified personnel.
|
•
|
our research methodology or that of any strategic alliance partner may be unsuccessful in identifying potential product candidates;
|
•
|
potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval; or
|
•
|
our current or future strategic alliance partners may change their development profiles for potential product candidates or abandon a therapeutic area.
|
•
|
successfully designing preclinical studies which may be predictive of clinical outcomes;
|
•
|
successful results from preclinical and clinical studies;
|
•
|
receipt of marketing approvals from applicable regulatory authorities;
|
•
|
obtaining and maintaining patent and trade secret protection for future product candidates;
|
•
|
establishing and maintaining manufacturing relationships with third parties or establishing our own manufacturing capability; and
|
•
|
successfully commercializing our products, if and when approved, whether alone or in collaboration with others.
|
•
|
delays in reaching an agreement with the FDA or other regulatory authorities on final trial design;
|
•
|
imposition of a clinical hold of our clinical trial operations or trial sites by the FDA or other regulatory authorities;
|
•
|
delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites;
|
•
|
our inability to adhere to clinical trial requirements directly or with third parties such as CROs;
|
•
|
delays in obtaining required institutional review board approval at each clinical trial site;
|
•
|
delays in recruiting suitable patients to participate in a trial;
|
•
|
delays in the testing, validation, manufacturing and delivery of the product candidates to the clinical sites;
|
•
|
delays in having patients complete participation in a trial or return for post-treatment follow-up;
|
•
|
delays caused by patients dropping out of a trial due to protocol procedures or requirements, product side effects or disease progression;
|
•
|
clinical sites dropping out of a trial to the detriment of enrollment;
|
•
|
time required to add new clinical sites; or
|
•
|
delays by our contract manufacturers to produce and deliver sufficient supply of clinical trial materials.
|
•
|
be delayed in obtaining marketing approval for our future product candidates;
|
•
|
not obtain marketing approval at all;
|
•
|
obtain approval for indications or patient populations that are not as broad as originally intended or desired;
|
•
|
obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;
|
•
|
be subject to additional post-marketing testing requirements; or
|
•
|
have the product removed from the market after obtaining marketing approval.
|
•
|
regulatory authorities may withdraw their approval of the product or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy;
|
•
|
regulatory authorities may require the addition of labeling statements, such as warnings or contraindications;
|
•
|
we may be required to change the way the product is administered or conduct additional clinical trials;
|
•
|
we could be sued and held liable for harm caused to patients; or
|
•
|
our reputation may suffer.
|
•
|
issue a warning letter asserting that we are in violation of the law;
|
•
|
seek an injunction or impose civil or criminal penalties or monetary fines;
|
•
|
suspend or withdraw regulatory approval;
|
•
|
suspend any ongoing clinical trials;
|
•
|
refuse to approve a pending NDA or supplements to an NDA submitted by us;
|
•
|
seize product; or
|
•
|
refuse to allow us to enter into supply contracts, including government contracts.
|
•
|
an alliance partner may shift its priorities and resources away from our programs due to a change in business strategies, or a merger, acquisition, sale or downsizing of its company or business unit;
|
•
|
an alliance partner may cease development in therapeutic areas which are the subject of our strategic alliances;
|
•
|
an alliance partner may change the success criteria for a particular program or potential product candidate thereby delaying or ceasing development of such program or candidate;
|
•
|
a significant delay in initiation of certain development activities by an alliance partner will also delay payment of milestones tied to such activities, thereby impacting our ability to fund our own activities;
|
•
|
an alliance partner could develop a product that competes, either directly or indirectly, with an alliance product;
|
•
|
an alliance partner with commercialization obligations may not commit sufficient financial or human resources to the marketing, distribution or sale of a product;
|
•
|
an alliance partner with manufacturing responsibilities may encounter regulatory, resource or quality issues and be unable to meet demand requirements;
|
•
|
an alliance partner may exercise its rights under the agreement to terminate a strategic alliance;
|
•
|
a dispute may arise between us and an alliance partner concerning the research, development or commercialization of a program or product candidate resulting in a delay in milestones, royalty payments or termination of a program and possibly resulting in costly litigation or arbitration which may divert management attention and resources; and
|
•
|
an alliance partner may use our proprietary information or intellectual property in such a way as to invite litigation from a third party or fail to maintain or prosecute intellectual property rights such that our rights in such property are jeopardized.
|
•
|
in the case of Sanofi, under certain circumstances, we may owe Sanofi royalties with respect to product candidates covered by our agreement with Sanofi that we elect to continue to commercialize, depending upon the stage of development at which such product commercialization rights reverted back to us, or additional payments if we license such product candidates to third parties;
|
•
|
product candidates subject to the Sanofi agreement, as applicable, may be terminated or significantly delayed;
|
•
|
our cash expenditures could increase significantly if it is necessary for us to hire additional employees and allocate scarce resources to the development and commercialization of product candidates that were previously funded, or expected to be funded, by AstraZeneca or Sanofi, as applicable;
|
•
|
we would bear all of the risks and costs related to the further development and commercialization of product candidates that were previously the subject of the AstraZeneca agreement or the Sanofi agreement, as applicable, including the reimbursement of third parties; for example, upon expiration of the AstraZeneca termination period, we will be responsible for any further costs of development. In addition, we may owe AstraZeneca certain consideration for use of any intellectual property generated by AstraZeneca; and
|
•
|
in order to fund further development and commercialization, we may need to seek out and establish alternative strategic alliances with third-party partners; this may not be possible, or we may not be able to do so on terms which are acceptable to us, in which case it may be necessary for us to limit the size or scope of one or more of our programs or increase our expenditures and seek additional funding by other means.
|
•
|
the inability to meet any product specifications and quality requirements consistently;
|
•
|
a delay or inability to procure or expand sufficient manufacturing capacity;
|
•
|
manufacturing and product quality issues related to scale-up of manufacturing;
|
•
|
costs and validation of new equipment and facilities required for scale-up;
|
•
|
a failure to comply with cGMP and similar foreign standards;
|
•
|
the inability to negotiate manufacturing or supply agreements with third parties under commercially reasonable terms;
|
•
|
termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;
|
•
|
the reliance on a limited number of sources, and in some cases, single sources for raw materials, such that if we are unable to secure a sufficient supply of these product components, we will be unable to manufacture and sell future product candidates in a timely fashion, in sufficient quantities or under acceptable terms;
|
•
|
the lack of qualified backup suppliers for any raw materials that are currently purchased from a single source supplier;
|
•
|
operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier;
|
•
|
carrier disruptions or increased costs that are beyond our control; and
|
•
|
the failure to deliver products under specified storage conditions and in a timely manner.
|
•
|
discover and develop therapeutics that are superior to other products in the market;
|
•
|
attract qualified scientific, product development and commercial personnel;
|
•
|
obtain patent and/or other proprietary protection for our
micro
RNA product platform and future product candidates;
|
•
|
obtain required regulatory approvals; and
|
•
|
successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new therapeutics.
|
•
|
demonstration of clinical safety and efficacy compared to other products;
|
•
|
the relative convenience, ease of administration and acceptance by physicians, patients and healthcare payors;
|
•
|
the prevalence and severity of any AEs;
|
•
|
limitations or warnings contained in the FDA-approved label for such products;
|
•
|
availability of alternative treatments;
|
•
|
pricing and cost-effectiveness;
|
•
|
the effectiveness of our or any collaborators’ sales and marketing strategies;
|
•
|
our ability to obtain hospital formulary approval;
|
•
|
our ability to obtain and maintain sufficient third party coverage and adequate reimbursement; and
|
•
|
the willingness of patients to pay out-of-pocket in the absence of third party coverage.
|
•
|
different regulatory requirements for drug approvals in foreign countries;
|
•
|
reduced protection for intellectual property rights;
|
•
|
unexpected changes in tariffs, trade barriers and regulatory requirements;
|
•
|
economic weakness, including inflation, or political instability in particular foreign economies and markets;
|
•
|
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
|
•
|
foreign taxes, including withholding of payroll taxes;
|
•
|
foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;
|
•
|
workforce uncertainty in countries where labor unrest is more common than in the United States;
|
•
|
production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and
|
•
|
business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
|
•
|
the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under a federal healthcare program, such as the Medicare and Medicaid programs;
|
•
|
federal civil and criminal false claims laws and civil monetary penalty laws, including the civil False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment to the federal government, including Medicare or Medicaid, that are false or fraudulent;
|
•
|
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;
|
•
|
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their implementing regulations, which imposes certain requirements on certain types of individuals and entities relating to the privacy, security and transmission of individually identifiable health information;
|
•
|
the European General Data Protection Regulation, or GDPR, adopted by the European Union, or EU, in May 2018, which contains provisions specifically directed at the processing of health information, higher sanctions and extra-territoriality measures intended to bring non-EU companies under the regulation; we anticipate that over time we may expand our business operations to include additional operations in the EU, including potentially conducting preclinical and clinical trials and, with such expansion, we would be subject to increased governmental regulation in the EU countries in which we might operate, including the GDPR;
|
•
|
California recently enacted legislation that has been dubbed the first “GDPR-like” law in the United States. Known as the California Consumer Privacy Act, or CCPA, it will create new individual privacy rights for consumers (as that word is broadly defined in the law) and place increased privacy and security obligations on entities handling personal data of consumers or households. When it goes into effect on January 1, 2020, the CCPA will require covered companies to provide new disclosures to California consumers, provide such consumers new ways to opt-out of certain sales of personal information, and allow for a new cause of action for data breaches. Legislators have stated that amendments will be proposed to the CCPA before it goes into effect, but it remains unclear what, if any, modifications will be made to this legislation or how it will be interpreted. As currently written, the CCPA will likely impact (possibly significantly) our business activities and exemplifies the vulnerability of our business to not only cyber threats but also the evolving regulatory environment related to personal data and protected health information;
|
•
|
the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other transfers of value made to physicians, and further
|
•
|
state and foreign law equivalents of each of the above federal laws, such as: anti-kickback and false claims laws which may apply to items or services reimbursed by any third party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; state laws that require the reporting of information related to drug pricing; state and local laws that require the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
|
•
|
impairment of our business reputation;
|
•
|
withdrawal of clinical trial participants;
|
•
|
costs due to related litigation;
|
•
|
distraction of management’s attention from our primary business;
|
•
|
substantial monetary awards to patients or other claimants;
|
•
|
the inability to commercialize our product candidates; and
|
•
|
decreased demand for our product candidates, if approved for commercial sale.
|
•
|
adverse results or delays in preclinical studies or clinical trials;
|
•
|
inability to obtain additional funding;
|
•
|
any delay in filing an IND or NDA for any of our product candidates and any adverse development or perceived adverse development with respect to the FDA’s review of that IND or NDA;
|
•
|
failure to maintain our existing strategic alliances or enter into new alliances;
|
•
|
failure of our strategic alliance partners to elect to develop and commercialize product candidates under our alliance agreements or the termination of any programs under our alliance agreements;
|
•
|
failure by us or our licensors and strategic alliance partners to prosecute, maintain or enforce our intellectual property rights;
|
•
|
failure to successfully develop and commercialize our product candidates;
|
•
|
changes in laws or regulations applicable to our preclinical and clinical development activities, product candidates or future products;
|
•
|
inability to obtain adequate product supply for our product candidates or the inability to do so at acceptable prices;
|
•
|
adverse regulatory decisions;
|
•
|
introduction of new products, services or technologies by our competitors;
|
•
|
failure to meet or exceed financial projections we may provide to the public;
|
•
|
failure to meet or exceed the estimates and projections of the investment community;
|
•
|
the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community;
|
•
|
announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic alliance partners or our competitors;
|
•
|
disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;
|
•
|
additions or departures of key scientific or management personnel;
|
•
|
significant lawsuits, including patent or stockholder litigation;
|
•
|
changes in the market valuations of similar companies;
|
•
|
sales of our common stock by us or our stockholders in the future; and
|
•
|
trading volume of our common stock.
|
•
|
authorizing the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval;
|
•
|
prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders;
|
•
|
eliminating the ability of stockholders to call a special meeting of stockholders;
|
•
|
establishing the state of Delaware as the sole forum for certain legal actions against the Company, its officers and directors; and
|
•
|
establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings.
|
Exhibit
Number
|
Description
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
4.1
|
|
Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
*
|
Indicates management contract or compensatory plan.
|
**
|
These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
|
|
Regulus Therapeutics Inc.
|
||
Date: May 9, 2019
|
By:
|
|
/s/ Joseph P. Hagan
|
|
|
|
Joseph P. Hagan
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date: May 9, 2019
|
By:
|
|
/s/ Daniel R. Chevallard
|
|
|
|
Daniel R. Chevallard
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
1.
|
EMPLOYMENT.
|
2.
|
LOYAL AND CONSCIENTIOUS PERFORMANCE.
|
3.
|
COMPENSATION OF THE EXECUTIVE.
|
4.
|
DEFINITIONS.
|
5.
|
COMPENSATION UPON TERMINATION.
|
6.
|
CONFIDENTIAL AND PROPRIETARY INFORMATION; NONSOLICITATION.
|
7.
|
ASSIGNMENT AND BINDING EFFECT.
|
8.
|
CHOICE OF LAW.
|
9.
|
INTEGRATION.
|
10.
|
AMENDMENT.
|
11.
|
WAIVER.
|
12.
|
SEVERABILITY.
|
13.
|
INTERPRETATION; CONSTRUCTION.
|
14.
|
REPRESENTATIONS AND WARRANTIES.
|
15.
|
COUNTERPARTS; FACSIMILE.
|
16.
|
DISPUTE RESOLUTION.
|
17.
|
TRADE SECRETS.
|
18.
|
ADVERTISING WAIVER.
|
19.
|
APPLICATION OF SECTION 409A.
|
20.
|
PARACHUTE PAYMENTS.
|
1.
|
Capitalized terms used herein but not otherwise defined shall have the respective meanings given to them in the Loan Agreement.
|
2.
|
Section 2.2(b) of the Loan Agreement is hereby amended and restated in its entirety as follows:
|
3.
|
(b)
Repayment
. Borrower shall make monthly payments of interest only commencing on the first (1st) Payment Date following the Funding Date of each Term Loan, and continuing on the Payment Date of each successive month thereafter through and including the Payment Date immediately preceding the Amortization Date. Borrower agrees to pay, on the Funding Date of each Term Loan, any initial partial monthly interest payment otherwise due for the period between the Funding Date of such Term Loan and the last day of the calendar month during which the Funding Date occurs. Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall make consecutive equal monthly payments of principal, together with applicable interest, in arrears, to each Lender, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon: (1) the amount of such Lender’s Term Loan, (2) the effective rate of interest, as determined in Section 2.3(a), and (3) a repayment schedule with respect to the Term Loans as set forth on the Amortization Table (as amended from time to time) attached to the Disbursement Letter entered into as of the Effective Date. Notwithstanding the foregoing, Borrower shall make monthly payments of interest only commencing on August 1, 2018, and continuing on the Payment Date of each successive two (2) months thereafter through and including the October 1, 2018. Thereafter, Borrower will resume making consecutive equal monthly payments of principal, together with applicable interest, in arrears, to each Lender in accordance with this Section 2.2(b). Furthermore, notwithstanding the foregoing, Borrower shall make monthly payments of interest only on February 1, 2019 and continuing on the Payment Date of each successive month thereafter through and including the Payment Date immediately preceding the Second Amortization Date. Commencing on the Second Amortization Date, and continuing on each successive Payment Date thereafter, Borrower shall make consecutive equal monthly payments of principal, together with applicable interest, in arrears, to each Lender, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon: (1) the amount of such Lender’s Term Loan, (2) the effective rate of interest, as determined in Section 2.3(a), and (3) a repayment schedule with respect to the Term Loans as set forth on the Amortization Table (as amended from time to time) attached to the Disbursement Letter entered into as of the Effective Date; provided, however, Borrower shall make the monthly principal
|
4.
|
Section 2.2(d)(iii) of the Loan Agreement is hereby amended and restated as follows:
|
5.
|
Section 2.5 of the Loan Agreement is hereby amended by deleting the word “and” immediately following Section 2.5(h), replacing “.” at the end of Section 2.5(i) with “; and” and adding the following Section 2.5(j) thereto:
|
6.
|
Section 13.1 of the Loan Agreement is hereby amended by adding the following definitions thereto in alphabetical order:
|
7.
|
Section 13.1 of the Loan Agreement is hereby further amended by amending and restating the following definitions therein as follows:
|
8.
|
The Amortization Table attached to the Disbursement Letter dated as of the Effective Date is hereby amended and restated as set forth on the Amortization Table attached as
Exhibit A
hereto.
|
9.
|
Limitation of Amendment.
|
a.
|
The amendments set forth above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right, remedy or obligation which Lenders or Borrower may now have or may have in the future under or in connection with any Loan Document, as amended hereby.
|
b.
|
This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.
|
10.
|
To induce Collateral Agent and Lenders to enter into this Amendment, Borrower hereby represents and warrants to Collateral Agent and Lenders as follows:
|
a.
|
Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;
|
b.
|
Borrower has the power and due authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;
|
c.
|
The organizational documents of Borrower delivered to Collateral Agent on the Effective Date, and updated pursuant to subsequent deliveries by the Borrower to the Collateral Agent, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;
|
d.
|
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (i) any law or regulation binding on or affecting Borrower, (ii) any contractual restriction with a Person binding on Borrower, (iii) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (iv) the organizational documents of Borrower;
|
e.
|
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or
|
f.
|
This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights; and
|
g.
|
The Borrower hereby remises, releases, acquits, satisfies and forever discharges the Lenders and Collateral Agent, their agents, employees, officers, directors, predecessors, attorneys and all others acting or purporting to act on behalf of or at the direction of the Lenders and Collateral Agent (“
Releasees
”), of and from any and all manner of actions, causes of action, suit, debts, accounts, covenants, contracts, controversies, agreements, variances, damages, judgments, claims and demands whatsoever, in law or in equity, which any of such parties ever had, now has or, to the extent arising from or in connection with any act, omission or state of facts taken or existing on or prior to the date hereof, may have after the date hereof against the Releasees, for, upon or by reason of any matter, cause or thing whatsoever relating to or arising out of the Loan Agreement or the other Loan Documents on or prior to the date hereof through the date hereof. Without limiting the generality of the foregoing, the Borrower waives and affirmatively agrees not to allege or otherwise pursue any defenses, affirmative defenses, counterclaims, claims, causes of action, setoffs or other rights they do, shall or may have as of the date hereof, including the rights to contest: (a) the right of Collateral Agent and each Lender to exercise its rights and remedies described in the Loan Documents; (b) any provision of this Amendment or the Loan Documents; or (c) any conduct of the Lenders or other Releasees relating to or arising out of the Loan Agreement or the other Loan Documents on or prior to the date hereof.
|
11.
|
Except as expressly set forth herein, the Loan Agreement shall continue in full force and effect without alteration or amendment. This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.
|
12.
|
Borrower agrees to promptly pay (but in no event in less than 5 Business Days of invoice date) all unpaid Lenders’ Expenses incurred through the date hereof, which may be debited (or ACH’d) from any of Borrower’s accounts.
|
13.
|
This Amendment shall be deemed effective as of the Seventh Amendment Date upon the due execution and delivery to Collateral Agent of this Amendment by each party hereto.
|
14.
|
This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.
|
15.
|
This Amendment and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of California.
|
BORROWER:
|
|
|
|
|
|
REGULUS THERAPEUTICS INC.
|
|
|
|
|
|
|
|
|
By
/s/ Daniel Chevallard
|
|
|
Name: Daniel Chevallard
|
|
|
Title: Chief Financial Officer
|
|
|
|
|
|
|
|
|
COLLATERAL AGENT AND LENDER:
|
|
|
|
|
|
OXFORD FINANCE LLC
|
|
|
|
|
|
|
|
|
By
/s/ Colette H. Featherly
|
|
|
Name: Colette H. Featherly
|
|
|
Title: Senior Vice President
|
|
|
Oxford Finance LLC
|
Amortization Table
|
Regulus Total
|
Start Date:
|
6/22/2016
|
|
Disclaimer:
|
Interest Rate:
|
8.97885%
|
|
THIS IS A STANDARD AMORTIZATION
|
Term:
|
47
|
23 IO + 24 PI
|
SCHEDULE. IT IS NOT INTENDED TO BE
|
Payment:
|
Varies
|
|
USED FOR PAYOFF PURPOSES.
|
Final Payment:
|
$1,041,496.77
|
5.50%
|
|
3rd Amendment Fee:
|
$25,000.00
|
|
|
Fifth Amendment Fee:
|
$25,000.00
|
|
|
Sixth Amendment Fee:
|
$17,000.00
|
|
|
Amount:
|
20,000,000.00
|
|
THIS AMORTIZATION SCHEDULE REPRESENTS A
|
Interim Interest Days:
|
9
|
|
FLOATING INTEREST RATE LOAN. INTEREST RATE
|
Interim Interest:
|
$44,894.25
|
|
CHARGED MAY DIFFER FROM RATE PER THIS
|
|
|
|
SCHEDULE BASED ON THE TERMS OF THE
|
|
|
|
LOAN AGREEMENT
|
Note:
|
Interest rate floats monthly (greater of 1 Month Libor + 8.51%
or
8.95%).
|
|
|
Oxford Finance LLC
|
|
|
|
Amortization Table
|
|
|
|
Regulus Total
|
|
Start Date:
|
6/22/2016
|
|
Disclaimer:
|
Interest Rate:
|
8.97885%
|
|
THIS IS A STANDARD AMORTIZATION
|
Term:
|
47
|
23 IO + 24 PI
|
SCHEDULE. IT IS NOT INTENDED TO BE
|
Payment:
|
Varies
|
|
USED FOR PAYOFF PURPOSES.
|
Final Payment:
|
$1,041,496.77
|
5.50%
|
|
3rd Amendment Fee:
|
$25,000.00
|
|
|
Fifth Amendment Fee:
|
$25,000.00
|
|
|
Sixth Amendment Fee:
|
$17,000.00
|
|
|
Amount:
|
20,000,000.00
|
|
THIS AMORTIZATION SCHEDULE REPRESENTS A
|
Interim Interest Days:
|
9
|
|
FLOATING INTEREST RATE LOAN. INTEREST RATE
|
Interim Interest:
|
$44,894.25
|
|
CHARGED MAY DIFFER FROM RATE PER THIS
|
|
|
|
SCHEDULE BASED ON THE TERMS OF THE
|
|
|
|
LOAN AGREEMENT
|
Note:
|
Interest rate floats monthly (greater of 1 Month Libor + 8.51%
or
8.95%).
|
|
|
|
May 9, 2019
|
|
/s/ Joseph P. Hagan
|
|
|
Joseph P. Hagan
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
May 9, 2019
|
|
/s/ Daniel R. Chevallard
|
|
|
Daniel R. Chevallard
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
May 9, 2019
|
|
/s/ Joseph P. Hagan
|
|
|
Joseph P. Hagan
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
May 9, 2019
|
|
/s/ Daniel R. Chevallard
|
|
|
Daniel R. Chevallard
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|