igms-10q_20200930.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended September 30, 2020

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: 001-39045

 

IGM Biosciences, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

77-0349194

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

325 E. Middlefield Road

Mountain View, CA

94043

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650) 965-7873

 

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 $0.01 per share

 

IGMS

 

The Nasdaq Global Select Market

 

 

 

 

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 October 30, 2020, the registrant had 24,269,386 shares of common stock, $0.01 par value per share, and 6,431,205 shares of non-voting common stock, $0.01 par value per share, outstanding.

 

 

 


Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Condensed Financial Statements (Unaudited)

1

 

Condensed Balance Sheets

1

 

Condensed Statements of Operations

2

 

Condensed Statements of Comprehensive Loss

3

 

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

4

 

Condensed Statements of Cash Flows

6

 

Notes to Unaudited Condensed Financial Statements

7

Item 2.

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

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

26

Item 4.

Controls and Procedures

26

 

PART II.

 

OTHER INFORMATION

27

Item 1.

Legal Proceedings

27

Item 1A.

Risk Factors

27

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

68

Item 3.

Defaults Upon Senior Securities

69

Item 4.

Mine Safety Disclosures

69

Item 5.

Other Information

69

Item 6.

Exhibits

70

Signatures

71

 

 

 

 

i


Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical facts contained in this report are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that are in some cases beyond our control and may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” or “would,” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about: the timing of the initiation, progress and potential results of our preclinical studies, clinical trials and our discovery programs; our ability to utilize our IgM antibody platform to generate and advance additional product candidates; our ability to advance product candidates into, and successfully complete, clinical trials; the timing or likelihood of regulatory filings and approvals; our estimates of the number of patients who suffer from the diseases we are targeting and the number of patients that may enroll in our clinical trials; the commercializing of our product candidates, if approved; our ability and the potential to successfully manufacture and supply our product candidates for clinical trials and for commercial use, if approved; future strategic arrangements and/or collaborations and the potential benefits of such arrangements; our expectations regarding the impact of the coronavirus (COVID-19) pandemic on our business; our anticipated use of our existing resources; our estimates regarding expenses, future revenue, capital requirements and needs for additional financing and our ability to obtain additional capital; the sufficiency of our existing cash and investments to fund our future operating expenses and capital expenditure requirements; our ability to retain the continued service of our key personnel and to identify, hire and retain additional qualified professionals; the implementation of our business model, strategic plans for our business and product candidates; the scope of protection we are able to establish and maintain for intellectual property rights, including our IgM platform, product candidates and discovery programs; our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately; the pricing, coverage and reimbursement of our product candidates, if approved; developments relating to our competitors and our industry, including competing product candidates and therapies; and the ability of our clinical trials to demonstrate the safety and efficacy of our product candidates, and other positive results.

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations, and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties, and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein until after we distribute this Quarterly Report on Form 10-Q, whether as a result of any new information, future events, or otherwise.

 

 

 

i


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

IGM Biosciences, Inc.

Condensed Balance Sheets

(Unaudited)

(in thousands, except share and per share data)

 

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

27,284

 

 

$

35,891

 

Short-term investments

 

 

152,952

 

 

 

188,743

 

Prepaid expenses and other current assets

 

 

4,416

 

 

 

6,431

 

Income tax receivable

 

 

 

 

 

35

 

Total current assets

 

 

184,652

 

 

 

231,100

 

Property, plant and equipment, net

 

 

14,347

 

 

 

3,882

 

Long-term investments

 

 

 

 

 

11,973

 

Operating lease right-of-use asset

 

 

12,232

 

 

 

14,137

 

Other assets

 

 

486

 

 

 

258

 

Total assets

 

$

211,717

 

 

$

261,350

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,189

 

 

$

3,087

 

Accrued liabilities

 

 

7,472

 

 

 

3,305

 

Lease liabilities, current

 

 

2,621

 

 

 

2,483

 

Total current liabilities

 

 

13,282

 

 

 

8,875

 

Lease liabilities, non-current

 

 

10,259

 

 

 

12,244

 

Total liabilities

 

 

23,541

 

 

 

21,119

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value; 200,000,000 shares authorized as of September 30, 2020 and

   December 31, 2019; 0 shares issued and outstanding as of September 30, 2020 and

   December 31, 2019

 

 

 

 

 

 

Common stock, $0.01 par value; 1,000,000,000 shares authorized as of September 30, 2020 and

   December 31, 2019; 24,261,412 and 24,053,921 shares issued and outstanding as of

   September 30, 2020 and December 31, 2019, respectively

 

 

243

 

 

 

240

 

Non-voting common stock, $0.01 par value; 6,431,208 shares authorized as of

   September 30, 2020 and December 31, 2019; 6,431,205 shares issued and outstanding as of

   September 30, 2020 and December 31, 2019

 

 

64

 

 

 

64

 

Additional paid-in-capital

 

 

351,694

 

 

 

347,089

 

Accumulated other comprehensive income

 

 

113

 

 

 

43

 

Accumulated deficit

 

 

(163,938

)

 

 

(107,205

)

Total stockholders’ equity

 

 

188,176

 

 

 

240,231

 

Total liabilities and stockholders’ equity

 

$

211,717

 

 

$

261,350

 

 

 

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

1


IGM Biosciences, Inc.

Condensed Statements of Operations

(Unaudited)

(in thousands, except share and per share data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

15,829

 

 

$

8,279

 

 

$

45,431

 

 

$

22,494

 

General and administrative

 

 

4,732

 

 

 

2,394

 

 

 

13,110

 

 

 

6,067

 

Total operating expenses

 

 

20,561

 

 

 

10,673

 

 

 

58,541

 

 

 

28,561

 

Loss from operations

 

 

(20,561

)

 

 

(10,673

)

 

 

(58,541

)

 

 

(28,561

)

Other income, net

 

 

291

 

 

 

501

 

 

 

1,808

 

 

 

243

 

Net loss

 

$

(20,270

)

 

$

(10,172

)

 

$

(56,733

)

 

$

(28,318

)

Net loss per share, basic and diluted

 

$

(0.66

)

 

$

(2.41

)

 

$

(1.86

)

 

$

(16.13

)

Weighted-average common shares outstanding, basic and diluted

 

 

30,646,729

 

 

 

4,222,259

 

 

 

30,563,614

 

 

 

1,755,526

 

 

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

 

2


IGM Biosciences, Inc.

Condensed Statements of Comprehensive Loss

(Unaudited)

(in thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

 

$

(20,270

)

 

$

(10,172

)

 

$

(56,733

)

 

$

(28,318

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on investments

 

 

(183

)

 

 

29

 

 

 

70

 

 

 

29

 

Comprehensive loss

 

$

(20,453

)

 

$

(10,143

)

 

$

(56,663

)

 

$

(28,289

)

 

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

 

 

3


IGM Biosciences, Inc.

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

(Unaudited)

(in thousands, except share amounts)

 

 

 

Convertible

 

 

 

 

 

 

 

 

 

 

 

Non-Voting

 

 

Additional

 

 

Due To (From)

 

 

Accumulated

Other

 

 

 

 

 

 

Total

 

 

 

Preferred Stock

 

 

 

Common Stock

 

 

Common Stock

 

 

Paid-In-

 

 

Related

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Party

 

 

Income

 

 

Deficit

 

 

Equity

 

Balance—December 31, 2019

 

 

 

 

$

 

 

 

 

24,053,921

 

 

$

240

 

 

 

6,431,205

 

 

$

64

 

 

$

347,089

 

 

$

 

 

$

43

 

 

$

(107,205

)

 

$

240,231

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

15,885

 

 

 

1

 

 

 

 

 

 

 

 

 

21

 

 

 

 

 

 

 

 

 

 

 

 

22

 

Unrealized gain on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

162

 

 

 

 

 

 

162

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,220

 

 

 

 

 

 

 

 

 

 

 

 

1,220

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,624

)

 

 

(17,624

)

Balance—March 31, 2020

 

 

 

 

 

 

 

 

 

24,069,806

 

 

 

241

 

 

 

6,431,205

 

 

 

64

 

 

 

348,330

 

 

 

 

 

 

205

 

 

 

(124,829

)

 

 

224,011

 

Exercise of stock options, net of shares withheld for taxes and exercise costs

 

 

 

 

 

 

 

 

 

67,947

 

 

 

1

 

 

 

 

 

 

 

 

 

(552

)

 

 

 

 

 

 

 

 

 

 

 

(551

)

Issuance of common stock upon restricted stock unit settlement

 

 

 

 

 

 

 

 

 

1,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases under employee stock purchase plan

 

 

 

 

 

 

 

 

 

23,295

 

 

 

 

 

 

 

 

 

 

 

 

317

 

 

 

 

 

 

 

 

 

 

 

 

317

 

Unrealized gain on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

91

 

 

 

 

 

 

91

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,924

 

 

 

 

 

 

 

 

 

 

 

 

1,924

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,839

)

 

 

(18,839

)

Balance—June 30, 2020

 

 

 

 

 

 

 

 

 

24,162,876

 

 

 

242

 

 

 

6,431,205

 

 

 

64

 

 

 

350,019

 

 

 

 

 

 

296

 

 

 

(143,668

)

 

 

206,953

 

Exercise of stock options, net of shares withheld for taxes and exercise costs

 

 

 

 

 

 

 

 

 

38,366

 

 

 

 

 

 

 

 

 

 

 

 

(917

)

 

 

 

 

 

 

 

 

 

 

 

(917

)

Vesting of restricted stock

 

 

 

 

 

 

 

 

 

58,259

 

 

 

1

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon restricted stock unit settlement

 

 

 

 

 

 

 

 

 

1,911

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(183

)

 

 

 

 

 

(183

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,593

 

 

 

 

 

 

 

 

 

 

 

 

2,593

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,270

)

 

 

(20,270

)

Balance—September 30, 2020

 

 

 

 

$

 

 

 

 

24,261,412

 

 

$

243

 

 

 

6,431,205

 

 

$

64

 

 

$

351,694

 

 

$

 

 

$

113

 

 

$

(163,938

)

 

$

188,176

 

4


IGM Biosciences, Inc.

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

(Unaudited)

(in thousands, except share amounts)

 

 

 

Convertible

 

 

 

 

 

 

 

 

 

 

 

Non-Voting

 

 

Additional

 

 

Due To (From)

 

 

Accumulated

Other

 

 

 

 

 

 

Total

Stockholders'

 

 

 

Preferred Stock

 

 

 

Common Stock

 

 

Common Stock

 

 

Paid-In-

 

 

Related

 

 

Comprehensive

 

 

Accumulated

 

 

Equity

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Party

 

 

Income

 

 

Deficit

 

 

(Deficit)

 

Balance—December 31, 2018

 

 

9,501,620

 

 

$

60,917

 

 

 

 

438,074

 

 

$

4

 

 

 

 

 

$

 

 

$

751

 

 

$

(2,511

)

 

$

 

 

$

(64,072

)

 

$

(65,828

)

Exercise of stock options

 

 

 

 

 

 

 

 

 

7,566

 

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

10

 

Capital contribution from related party

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23

 

 

 

 

 

 

 

 

 

 

 

 

23

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

139

 

 

 

 

 

 

 

 

 

 

 

 

139

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,470

)

 

 

(7,470

)

Balance—March 31, 2019

 

 

9,501,620

 

 

 

60,917

 

 

 

 

445,640

 

 

 

4

 

 

 

 

 

 

 

 

 

923

 

 

 

(2,511

)

 

 

 

 

 

(71,542

)

 

 

(73,126

)

Exercise of stock options

 

 

 

 

 

 

 

 

 

165,656

 

 

 

2

 

 

 

 

 

 

 

 

 

152

 

 

 

 

 

 

 

 

 

 

 

 

154

 

Issuance of common stock

 

 

 

 

 

 

 

 

 

7,565

 

 

 

 

 

 

 

 

 

 

 

 

11

 

 

 

 

 

 

 

 

 

 

 

 

11

 

Related party equity transaction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16

 

 

 

2,511

 

 

 

 

 

 

 

 

 

2,527

 

Issuance of Series C convertible preferred stock, net of issuance costs of $0.1 million

 

 

4,690,997

 

 

 

61,868

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

141

 

 

 

 

 

 

 

 

 

 

 

 

141

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,676

)

 

 

(10,676

)

Balance—June 30, 2019

 

 

14,192,617

 

 

 

122,785

 

 

 

 

618,861

 

 

 

6

 

 

 

 

 

 

 

 

 

1,243

 

 

 

 

 

 

 

 

 

(82,218

)

 

 

(80,969

)

Exercise of stock options

 

 

 

 

 

 

 

 

 

3,329

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

5

 

Issuance of Series C convertible preferred stock, net of issuance costs of $0.3 million

 

 

3,026,449

 

 

 

39,768

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock

 

 

 

 

 

 

 

 

 

58,259

 

 

 

1

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of convertible preferred stock into common stock and non-voting common stock

 

 

(17,219,066

)

 

 

(162,553

)

 

 

 

10,787,861

 

 

 

108

 

 

 

6,431,205

 

 

 

64

 

 

 

162,381

 

 

 

 

 

 

 

 

 

 

 

 

162,553

 

Issuance of common stock upon initial public offering, net of issuance costs of 4.3 million