10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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 June 30, 2022

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: 001-40407

 

Vera Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Delaware

81-2744449

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

8000 Marina Boulevard, Suite 120

Brisbane, California

94005

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650) 770-0077

 

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

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

 

Class A common stock, $0.001 par value per
share

VERA

The Nasdaq Stock Market LLC

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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

As of August 8, 2022, the registrant had 27,141,514 shares of common stock, $0.001 par value per share, outstanding, consisting of 27,042,276 shares of Class A common stock, $0.001 par value per share and 99,238 shares of Class B common stock, $0.001 par value per share.

 

 


 

Table of Contents

 

 

Page

Number

 

 

SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS

1

 

 

PART I. FINANCIAL INFORMATION

4

 

 

Item 1. Condensed Financial Statements (Unaudited)

4

 

 

Condensed Balance Sheets

4

 

 

Condensed Statements of Operations and Comprehensive Loss

5

 

 

Condensed Statements of Stockholders’ Equity

6

 

 

Condensed Statements of Cash Flows

8

 

 

Notes to Condensed Financial Statements

9

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

31

 

 

Item 4. Controls and Procedures

31

 

 

PART II. OTHER INFORMATION

32

 

 

Item 1. Legal Proceedings

32

 

 

Item 1A. Risk Factors

33

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

84

 

 

Item 3. Defaults Upon Senior Securities

84

 

 

Item 4. Mine Safety Disclosures

84

 

 

Item 5. Other Information

84

 

 

Item 6. Exhibits

85

 

 

SIGNATURES

86

In this Quarterly Report on Form 10-Q, unless otherwise stated or as the context otherwise requires, references to “Vera,” “the Company,” “we,” “us,” “our” and similar references refer to Vera Therapeutics, Inc.

This Quarterly Report on Form 10-Q also contains registered marks, trademarks and trade names of other companies. All other trademarks, registered marks and trade names appearing in this report are the property of their respective holders. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

 

SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS

An investment in shares of our Class A common stock involves a high degree of risk. Below is a list of some of the material risks associated with our business. This summary does not address all of the risks that we face. Additional discussion of the risks listed in this summary, as well as other risks that we face, are set forth under Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q:

We have not completed any clinical trials for our lead product candidate, atacicept, and have no products approved for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability.
We will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs of our product candidates or future commercialization efforts.

 

1


 

We have incurred net losses since inception, and we expect to continue to incur net losses for the foreseeable future. In addition, we may be unable to continue as a going concern over the long-term.
We are substantially dependent on the success of our product candidates, atacicept and MAU868, which are currently in the clinical development stage. If we are unable to complete development of, obtain regulatory approval for and commercialize our product candidates in one or more indications and in a timely manner, our business, financial condition, results of operations and prospects will be significantly harmed.
Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, including difficulties in identifying patients with immunoglobulin A nephropathy (IgAN), the availability of competitive products, and significant competition for recruiting patients in clinical trials.
The incidence and prevalence for target patient populations of atacicept in specific indications are based on estimates and third-party sources. If the market opportunities for atacicept, or any future product candidate we may develop, if and when approved, are smaller than we estimate or if any approval that we obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability might be materially and adversely affected.
Interim, initial, “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
We face significant competition, which may result in others discovering, developing or commercializing products before or more successfully than us.
Changes in methods of manufacturing or formulation of our product candidates may result in additional costs or delays.
Our product candidates may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs that may result in a safety profile that could inhibit regulatory approval, prevent market acceptance, limit their commercial potential or result in significant negative consequences.
Even if any product candidate we develop receives regulatory approval, it could be subject to significant post-marketing regulatory requirements and will be subject to continued regulatory oversight.
Biosimilars to our product candidates may provide competition sooner than anticipated.
The outbreak of the novel coronavirus disease, COVID-19, could adversely impact our business, including our clinical trials.
Unfavorable global economic conditions could adversely affect our business, financial condition and results of operations.
Our success depends on our ability to protect our intellectual property and our proprietary technologies. If we or our potential licensors, licensees, or collaborators are unable to obtain or maintain patent protection with respect to our product candidates, proprietary technologies and their uses, our business, financial condition, results of operations and prospects could be significantly harmed.
The terms of our loan agreement place restrictions on our operating and financial flexibility. If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.
Our success is highly dependent on our ability to attract and retain highly skilled executive officers and employees and key consultants.
We have never commercialized a product candidate before and may lack the necessary expertise, personnel and resources to successfully commercialize any products on our own or together with suitable collaborators.
If we breach our license agreement (Ares Agreement) with Ares Trading S.A. (Ares), an affiliate of Merck KGaA, Darmstadt, Germany, related to atacicept, or the license agreement with Novartis International Pharmaceutical AG (Novartis) related to MAU868, we could lose the ability to continue the development and commercialization of atacicept or MAU868, respectively.
If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical product candidates would be adversely affected.
Patent terms may be inadequate to protect our competitive position on atacicept, MAU868 or any future product candidates we may develop for an adequate amount of time.

2


 

We rely, and expect to continue to rely, on third parties, including independent clinical investigators and CROs, to conduct certain aspects of our nonclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize atacicept, MAU868 or future product candidates we may develop and our business, financial condition, results of operations and prospects could be significantly harmed.
The manufacture of drugs is complex and our third-party manufacturers may encounter difficulties in production. If any of our third-party manufacturers encounter such difficulties, our ability to provide adequate supply of our product candidates for clinical trials or our product for patients, if approved, could be delayed or prevented.
If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.
The price of our Class A common stock may be volatile, and you could lose all or part of your investment.
If we experience material weaknesses in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our Class A common stock.
Our principal stockholders and management own a significant percentage of our outstanding voting stock and will be able to exert significant control over matters subject to stockholder approval.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
We may be subject to securities litigation, which is expensive and could divert management attention.

3


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VERA THERAPEUTICS, INC.

Condensed Balance Sheets

(in thousands, except share amounts)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

50,427

 

 

$

79,674

 

Marketable securities

 

 

81,501

 

 

 

 

Prepaid expenses and other current assets

 

 

10,410

 

 

 

2,863

 

Total current assets

 

 

142,338

 

 

 

82,537

 

Restricted cash, noncurrent

 

 

293

 

 

 

293

 

Property and equipment, net

 

 

21

 

 

 

 

Operating lease right-of-use assets

 

 

5,724

 

 

 

 

Prepaid expenses and other noncurrent assets

 

 

82

 

 

 

51

 

Non-marketable equity securities

 

 

324

 

 

 

867

 

Total assets

 

$

148,782

 

 

$

83,748

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

7,084

 

 

$

1,385

 

Operating lease liabilities

 

 

2,450

 

 

 

 

Restructuring liability

 

 

 

 

 

377

 

Accrued expenses and other current liabilities

 

 

7,745

 

 

 

5,928

 

Total current liabilities

 

 

17,279

 

 

 

7,690

 

Long-term debt

 

 

4,952

 

 

 

4,923

 

Operating lease liabilities, noncurrent

 

 

4,761

 

 

 

 

Restructuring liability, noncurrent

 

 

 

 

 

1,257

 

Accrued and other noncurrent liabilities

 

 

286

 

 

 

286

 

Total liabilities

 

 

27,278

 

 

 

14,156

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 authorized
   as of June 30, 2022 and December 31, 2021;
no shares issued
   and outstanding as of June 30, 2022 and December 31, 2021

 

 

 

 

 

 

Class A common stock, $0.001 par value; 500,000,000 shares
   authorized as of June 30, 2022 and December 31, 2021;
   
26,998,306 and 20,968,376 shares issued and outstanding as of
   June 30, 2022 and December 31, 2021, respectively

 

 

27

 

 

 

21

 

Class B non-voting common stock, $0.001 par value; 14,600,000 
   shares authorized as of June 30, 2022 and December 31, 2021;
   
99,238 and 309,238 shares issued and outstanding as of June 30, 2022
   and December 31, 2021, respectively.

 

 

 

 

 

 

Additional paid-in capital

 

 

277,623

 

 

 

193,627

 

Accumulated other comprehensive loss

 

 

(152

)

 

 

 

Accumulated deficit

 

 

(155,994

)

 

 

(124,056

)

Total stockholders’ equity

 

 

121,504

 

 

 

69,592

 

Total liabilities and stockholders’ equity

 

$

148,782

 

 

$

83,748

 

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

 

4


 

VERA THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

10,112

 

 

$

3,235

 

 

$

22,661

 

 

$

6,167

 

General and administrative

 

 

4,945

 

 

 

2,614

 

 

 

9,417

 

 

 

4,398

 

Total operating expenses

 

 

15,057

 

 

 

5,849

 

 

 

32,078

 

 

 

10,565

 

Loss from operations

 

 

(15,057

)

 

 

(5,849

)

 

 

(32,078

)

 

 

(10,565

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

263

 

 

 

2

 

 

 

289

 

 

 

4

 

Interest expense

 

 

(128

)

 

 

 

 

 

(246

)

 

 

 

Other income

 

 

325

 

 

 

 

 

 

640

 

 

 

 

Change in fair value of non-marketable equity securities

 

 

(256

)

 

 

(281

)

 

 

(543

)

 

 

(281

)

Gain on sale of PNAi technology

 

 

 

 

 

2,691

 

 

 

 

 

 

2,691

 

Total other income

 

 

204

 

 

 

2,412

 

 

 

140

 

 

 

2,414

 

Net loss

 

$

(14,853

)

 

$

(3,437

)

 

$

(31,938

)

 

$

(8,151

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized loss on marketable securities

 

 

(140

)

 

 

 

 

 

(152

)

 

 

 

Total loss and other comprehensive loss

 

$

(14,993

)

 

$

(3,437

)

 

$

(32,090

)

 

$

(8,151

)

Net loss per share attributable to common stockholders,
   basic and diluted

 

$

(0.55

)

 

$

(0.33

)

 

$

(1.24

)

 

$

(1.49

)

Weighted-average shares used in computing net loss per share
   attributable to common stockholders, basic and diluted

 

 

27,078,450

 

 

 

10,499,937

 

 

 

25,660,742

 

 

 

5,470,609

 

 

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

 

 

5


 

VERA THERAPEUTICS, INC.

Condensed Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

 

Class B Common Stock

 

 

Additional
Paid-in

 

 

Accumulated Other

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Comprehensive Loss

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2021

 

 

20,968,376

 

 

$

21

 

 

 

309,238

 

 

$

 

 

$

193,627

 

 

$

 

 

$

(124,056

)

 

$

69,592

 

Issuance of common stock from underwritten follow-on offering, net of offering costs

 

 

5,742,026

 

 

 

6

 

 

 

 

 

 

 

 

 

80,028

 

 

 

 

 

 

 

 

 

80,034

 

Issuance of common stock pursuant to exercise of options

 

 

17,946

 

 

 

 

 

 

 

 

 

 

 

 

65

 

 

 

 

 

 

 

 

 

65

 

Issuance of common stock pursuant to employee stock purchase plan

 

 

8,458

 

 

 

 

 

 

 

 

 

 

 

 

169

 

 

 

 

 

 

 

 

 

169

 

Issuance of common stock upon vesting of restricted stock units

 

 

19,429

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,662

 

 

 

 

 

 

 

 

 

1,662

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12

)

 

 

 

 

 

(12

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,085

)

 

 

(17,085

)

Balances as of March 31, 2022

 

 

26,756,235

 

 

$

27

 

 

 

309,238

 

 

$

 

 

$

275,551

 

 

$

(12

)

 

$

(141,141

)

 

$

134,425

 

Issuance of Class A common stock upon exercise of options

 

 

12,641

 

 

 

 

 

 

 

 

 

 

 

 

47

 

 

 

 

 

 

 

 

 

47

 

Issuance of common stock upon vesting of restricted stock units

 

 

19,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of Class B common stock into Class A common stock

 

 

210,000

 

 

 

 

 

 

(210,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,025

 

 

 

 

 

 

 

 

 

2,025

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(140

)

 

 

 

 

 

(140

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,853

)

 

 

(14,853

)

Balances as of June 30, 2022

 

 

26,998,306

 

 

$

27

 

 

 

99,238

 

 

$

 

 

$

277,623

 

 

$

(152

)

 

$

(155,994

)

 

$

121,504

 

 

6


 

 

 

 

 

Redeemable Convertible
Preferred Stock

 

 

Class A Common Stock

 

 

Class B Common
Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholders’
Equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

(Deficit)

 

Balance as of December 31,
   2020

 

 

182,772,372

 

 

$

139,576

 

 

 

355,296

 

 

$

 

 

 

 

 

$

 

 

$

2,099

 

 

$

(91,447

)

 

$

(89,348

)

Issuance of Class A common
   stock upon exercise of options

 

 

 

 

 

 

 

 

113,683

 

 

 

 

 

 

 

 

 

 

 

 

342

 

 

 

 

 

 

342

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

404

 

 

 

 

 

 

404

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,714

)

 

 

(4,714

)

Balances as of March 31, 2021

 

 

182,772,372

 

 

$

139,576

 

 

 

468,979

 

 

$

 

 

 

 

 

$

 

 

$

2,845

 

 

$

(96,161

)

 

$

(93,316

)

Class A common stock issued
   pursuant to initial public
   offering, net of issuance costs

 

 

 

 

 

 

 

 

5,002,500

 

 

 

5

 

 

 

 

 

 

 

 

 

48,406

 

 

 

 

 

 

48,411

 

Conversion of preferred stock
   into Class A common stock
   and Class B common stock

 

 

(182,772,372

)

 

 

(139,576

)

 

 

15,464,775

 

 

 

16

 

 

 

309,238

 

 

 

 

 

 

139,560

 

 

 

 

 

 

139,576

 

Issuance of Class A common
   stock upon exercise of options

 

 

 

 

 

 

 

 

32,122

 

 

 

 

 

 

 

 

 

 

 

 

208

 

 

 

 

 

 

208

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

713

 

 

 

 

 

 

713

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,437

)

 

 

(3,437

)

Balances as of June 30, 2021

 

 

 

 

$

 

 

 

20,968,376

 

 

$

21

 

 

 

309,238