10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

Form 10-Q

 

(Mark One)

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

For the quarterly period ended September 30, 2021

or

 

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

For the transition period from to

 

Commission File Number: 001-35420

ChemoCentryx, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

94-3254365

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

 

 

835 Industrial Road, Suite 600

San Carlos, California

94070

(Address of Principal Executive Offices)

(Zip Code)

 

(650) 210-2900

(Registrant’s Telephone Number, Including Area Code)

 

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

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

CCXI

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 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 ☒

The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of October 29, 2021 was 70,031,462.

 

 

 


 

CHEMOCENTRYX, INC.

 

QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended September 30, 2021

Table of Contents

 

PART I. FINANCIAL INFORMATION

Page

 

 

 

Item 1.

Financial Statements (Unaudited)

3

 

 

 

 

Condensed Consolidated Balance Sheets – September 30, 2021 and December 31, 2020

3

 

 

 

 

Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2021 and 2020

4

 

 

 

 

Condensed Consolidated Statements of Comprehensive Loss – Three and Nine Months Ended September 30, 2021 and 2020

5

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity – Three and Nine Months Ended September 30, 2021 and 2020

6

 

 

 

 

Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2021 and 2020

8

 

 

 

 

Notes to Condensed Consolidated Financial Statements

9

 

 

 

Item 2.

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

20

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

26

 

 

 

Item 4.

Controls and Procedures

26

 

 

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

43

 

 

 

Item 3.

Defaults Upon Senior Securities

43

 

 

 

Item 4.

Mine Safety Disclosures

43

 

 

 

Item 5.

Other Information

43

 

 

 

Item 6.

Exhibits

43

 

 

EXHIBIT INDEX

44

 

 

SIGNATURES

45

 

2


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and par value data)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

93,726

 

 

$

32,297

 

Short-term investments

 

 

175,701

 

 

 

404,273

 

Accounts receivable from related party

 

 

20,005

 

 

 

32

 

Accounts receivable, other

 

 

52

 

 

 

137

 

Prepaid expenses and other current assets

 

 

3,899

 

 

 

4,831

 

Total current assets

 

 

293,383

 

 

 

441,570

 

Property and equipment, net

 

 

33,002

 

 

 

25,160

 

Long-term investments

 

 

102,030

 

 

 

23,800

 

Operating lease right-of-use assets

 

 

25,035

 

 

 

26,911

 

Other assets

 

 

1,395

 

 

 

1,458

 

Total assets

 

$

454,845

 

 

$

518,899

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

4,414

 

 

$

12,875

 

Accrued and other current liabilities

 

 

25,984

 

 

 

19,794

 

Long-term debt, current

 

 

14,013

 

 

 

6,302

 

Deferred revenue from related party

 

 

15,618

 

 

 

12,587

 

Total current liabilities

 

 

60,029

 

 

 

51,558

 

Long-term debt, net

 

 

9,560

 

 

 

18,099

 

Non-current deferred revenue from related party

 

 

21,423

 

 

 

24,000

 

Non-current lease liabilities

 

 

46,672

 

 

 

38,671

 

Other non-current liabilities

 

 

1,267

 

 

 

958

 

Total liabilities

 

 

138,951

 

 

 

133,286

 

Commitments (Note 7)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value, 10,000,000 shares authorized;
   
no shares issued and outstanding

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized;
  
69,937,510 and 69,452,466 shares issued and outstanding at
   September 30, 2021 and December 31, 2020, respectively

 

 

70

 

 

 

69

 

Additional paid-in capital

 

 

892,446

 

 

 

870,788

 

Note receivable

 

 

(16

)

 

 

(16

)

Accumulated other comprehensive (loss) income

 

 

(37

)

 

 

114

 

Accumulated deficit

 

 

(576,569

)

 

 

(485,342

)

Total stockholders’ equity

 

 

315,894

 

 

 

385,613

 

Total liabilities and stockholders’ equity

 

$

454,845

 

 

$

518,899

 

 

See accompanying notes.

3


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenue from related party

 

$

17,691

 

 

$

5,027

 

 

$

29,613

 

 

$

60,165

 

Grant revenue

 

 

52

 

 

 

58

 

 

 

296

 

 

 

368

 

Total revenue

 

 

17,743

 

 

 

5,085

 

 

 

29,909

 

 

 

60,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

19,948

 

 

 

18,582

 

 

 

64,219

 

 

 

56,655

 

General and administrative

 

 

19,598

 

 

 

10,362

 

 

 

55,558

 

 

 

29,474

 

Total operating expenses

 

 

39,546

 

 

 

28,944

 

 

 

119,777

 

 

 

86,129

 

Loss from operations

 

 

(21,803

)

 

 

(23,859

)

 

 

(89,868

)

 

 

(25,596

)

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

164

 

 

 

499

 

 

 

693

 

 

 

2,059

 

Interest expense

 

 

(668

)

 

 

(700

)

 

 

(2,052

)

 

 

(1,943

)

Total other (expense) income, net

 

 

(504

)

 

 

(201

)

 

 

(1,359

)

 

 

116

 

Net loss

 

$

(22,307

)

 

$

(24,060

)

 

$

(91,227

)

 

$

(25,480

)

Basic and diluted net loss per common share

 

$

(0.32

)

 

$

(0.35

)

 

$

(1.31

)

 

$

(0.40

)

Shares used to compute net loss per common share

 

 

69,894

 

 

 

68,922

 

 

 

69,764

 

 

 

64,500

 

 

See accompanying notes.

4


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

 

(in thousands)

(unaudited)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

 

$

(22,307

)

 

$

(24,060

)

 

$

(91,227

)

 

$

(25,480

)

Unrealized gain (loss) on available-for-sale securities

 

 

44

 

 

 

(216

)

 

 

(151

)

 

 

(46

)

Comprehensive loss

 

$

(22,263

)

 

$

(24,276

)

 

$

(91,378

)

 

$

(25,526

)

 

See accompanying notes.

5


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

 

(in thousands, except share data)

(unaudited)

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Note

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

 

Amount

 

 

Capital

 

 

Receivable

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance as of June 30, 2021

 

 

69,885,975

 

 

 

$

70

 

 

$

884,559

 

 

$

(16

)

 

$

(81

)

 

$

(554,262

)

 

$

330,270

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,307

)

 

 

(22,307

)

Unrealized gain on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44

 

 

 

 

 

 

44

 

Issuance of common stock under
    equity incentive plans

 

 

51,535

 

 

 

 

 

 

 

463

 

 

 

 

 

 

 

 

 

 

 

 

463

 

Employee stock-based compensation

 

 

 

 

 

 

 

 

 

7,165

 

 

 

 

 

 

 

 

 

 

 

 

7,165

 

Compensation expense related to
    options granted to consultants

 

 

 

 

 

 

 

 

 

259

 

 

 

 

 

 

 

 

 

 

 

 

259

 

Balance as of September 30, 2021

 

 

69,937,510

 

 

 

$

70

 

 

$

892,446

 

 

$

(16

)

 

$

(37

)

 

$

(576,569

)

 

$

315,894

 

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Note

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

 

Amount

 

 

Capital

 

 

Receivable

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2020

 

 

69,452,466

 

 

 

$

69

 

 

$

870,788

 

 

$

(16

)

 

$

114

 

 

$

(485,342

)

 

$

385,613

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(91,227

)

 

 

(91,227

)

Unrealized loss on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(151

)

 

 

 

 

 

(151

)

Issuance of common stock under
    equity incentive plans

 

 

571,387

 

 

 

 

1

 

 

 

3,724

 

 

 

 

 

 

 

 

 

 

 

 

3,725

 

Repurchased shares upon vesting of
    restricted stock units for tax
    withholdings

 

 

(86,343

)

 

 

 

 

 

 

(5,273

)

 

 

 

 

 

 

 

 

 

 

 

(5,273

)

Employee stock-based compensation

 

 

 

 

 

 

 

 

 

22,459

 

 

 

 

 

 

 

 

 

 

 

 

22,459

 

Compensation expense related to
    options granted to consultants

 

 

 

 

 

 

 

 

 

748

 

 

 

 

 

 

 

 

 

 

 

 

748

 

Balance as of September 30, 2021

 

 

69,937,510

 

 

 

$

70

 

 

$

892,446

 

 

$

(16

)

 

$

(37

)

 

$

(576,569

)

 

$

315,894

 

 

See accompanying notes.

 

 

6


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

 

(in thousands, except share data)

(unaudited)

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Note

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

 

Amount

 

 

Capital

 

 

Receivable

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance as of June 30, 2020

 

 

68,803,400

 

 

 

$

69

 

 

$

852,006

 

 

$

(16

)

 

$

488

 

 

$

(431,406

)

 

$

421,141

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,060

)

 

 

(24,060

)

Unrealized loss on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(216

)

 

 

 

 

 

(216

)

Issuance of common stock under
    equity incentive plans

 

 

305,173

 

 

 

 

 

 

 

2,005

 

 

 

 

 

 

 

 

 

 

 

 

2,005

 

Employee stock-based compensation

 

 

 

 

 

 

 

 

 

5,721

 

 

 

 

 

 

 

 

 

 

 

 

5,721

 

Compensation expense related to
    options granted to consultants

 

 

 

 

 

 

 

 

 

228

 

 

 

 

 

 

 

 

 

 

 

 

228

 

Balance as of September 30, 2020

 

 

69,108,573

 

 

 

$

69

 

 

$

859,960

 

 

$

(16

)

 

$

272

 

 

$

(455,466

)

 

$

404,819

 

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Note

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

 

Amount

 

 

Capital

 

 

Receivable

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2019

 

 

60,234,784

 

 

 

$

60

 

 

$

495,624

 

 

$

(16

)

 

$

318

 

 

$

(429,986

)

 

$

66,000

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,480

)

 

 

(25,480

)

Unrealized loss on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(46

)

 

 

 

 

 

(46

)

Issuance of common stock upon
    follow-on offering, net of
    issuance costs

 

 

5,980,000

 

 

 

 

6

 

 

 

325,648

 

 

 

 

 

 

 

 

 

 

 

 

325,654

 

Issuance of common stock under
    equity incentive plans

 

 

2,986,248

 

 

 

 

3

 

 

 

26,495

 

 

 

 

 

 

 

 

 

 

 

 

26,498

 

Repurchased shares upon vesting of
    restricted stock units for tax
    withholdings

 

 

(92,459

)

 

 

 

 

 

 

(3,709

)

 

 

 

 

 

 

 

 

 

 

 

(3,709

)

Employee stock-based compensation

 

 

 

 

 

 

 

 

 

15,171

 

 

 

 

 

 

 

 

 

 

 

 

15,171

 

Compensation expense related to
    options granted to consultants

 

 

 

 

 

 

 

 

 

731

 

 

 

 

 

 

 

 

 

 

 

 

731

 

Balance as of September 30, 2020

 

 

69,108,573