SEC Filing | Vera Therapeutics

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10-Q

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, 2023


☐		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 7, 2023, the registrant had 44,318,429 shares of common stock, $0.001 par value per share, outstanding, consisting solely of Class A 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	7

Notes to Condensed Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3. Quantitative and Qualitative Disclosures About Market Risk	29

Item 4. Controls and Procedures	29

PART II. OTHER INFORMATION	30

Item 1. Legal Proceedings	30

Item 1A. Risk Factors	31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	81

Item 3. Defaults Upon Senior Securities	81

Item 4. Mine Safety Disclosures	81

Item 5. Other Information	81

Item 6. Exhibits	82

SIGNATURES	83

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.

•

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.

•

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.

•

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 our product candidates 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.

•

Unfavorable geopolitical and macroeconomic conditions could adversely affect our business, financial condition and results of operations.

•

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.

•

Our success depends on our ability to protect our intellectual property and our proprietary technologies.

•

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.

•

We may be required to make significant payments under our license agreements related to atacicept and MAU868.

•

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.

•

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.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VERA THERAPEUTICS, INC.

Condensed Balance Sheets

(in thousands, except share amounts)


	June 30,			December 31,
	2023			2022
	(unaudited)
Assets
Current assets:
Cash, cash equivalents and short-term marketable securities	$	33,889		$	43,459
Marketable securities		147,132			71,194
Prepaid expenses and other current assets		9,593			11,045
Total current assets		190,614			125,698
Restricted cash, noncurrent		-			293
Property and equipment, net		40			51
Operating lease right-of-use assets		4,030			5,173
Prepaid expenses and other noncurrent assets		465			162
Non-marketable equity securities		29			58
Total assets	$	195,178		$	131,435
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	13,280		$	11,991
Operating lease liabilities		2,560			2,645
Accrued expenses and other current liabilities		10,995			10,964
Total current liabilities		26,835			25,600
Long-term debt		24,962			24,810
Operating lease liabilities, noncurrent		2,571			3,831
Accrued and other noncurrent liabilities		287			286
Total liabilities		54,655			54,527
Stockholders’ equity
Preferred stock, $0.001 par value; 10,000,000 authorized as of June 30, 2023 and December 31, 2022; no shares issued and outstanding as of June 30, 2023 and December 31, 2022		—			—
Class A common stock, $0.001 par value; 500,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 44,308,429 and 27,800,861 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		44			28
Additional paid-in capital		403,964			290,216
Accumulated other comprehensive loss		(142	)		(224	)
Accumulated deficit		(263,343	)		(213,112	)
Total stockholders’ equity		140,523			76,908
Total liabilities and stockholders’ equity	$	195,178		$	131,435

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

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,
	2023			2022			2023			2022
Operating expenses:
Research and development	$	16,231		$	10,112		$	41,340		$	22,661
General and administrative		5,739			4,945			11,887			9,417
Total operating expenses		21,970			15,057			53,227			32,078
Loss from operations		(21,970	)		(15,057	)		(53,227	)		(32,078	)
Other income (expense):
Interest income		2,239			263			3,862			289
Interest expense		(914	)		(128	)		(1,789	)		(246	)
Other income		511			325			953			640
Change in fair value of non-marketable equity securities		(28	)		(256	)		(30	)		(543	)
Total other income		1,808			204			2,996			140
Net loss	$	(20,162	)	$	(14,853	)	$	(50,231	)	$	(31,938	)
Other comprehensive loss:
Change in unrealized loss on marketable securities		(138	)		(140	)		82			(152	)
Comprehensive loss	$	(20,300	)	$	(14,993	)	$	(50,149	)	$	(32,090	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.46	)	$	(0.55	)	$	(1.23	)	$	(1.24	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted		44,269,772			27,078,450			40,986,907			25,660,742

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

VERA THERAPEUTICS, INC.

Condensed Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share amounts)



	Class A Common Stock				Additional Paid-in		Accumulated Other			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Comprehensive Loss			Deficit			Equity
Balance as of December 31, 2022		27,800,861	$	28	$	290,216	$	(224	)	$	(213,112	)	$	76,908
Issuance of Class A common stock from underwritten follow-on offering, net of offering costs		16,428,572		16		107,727		—			—			107,743
Issuance of Class A common stock pursuant to exercise of options		3,750		—		65		—			—			65
Issuance of Class A common stock pursuant to employee stock purchase plan		27,926		—		175		—			—			175
Stock-based compensation		—		—		2,667		—			—			2,667
Unrealized loss on marketable securities		—		—		—		220			—			220
Net loss		—		—		—		—			(30,069	)		(30,069	)
Balances as of March 31, 2023		44,261,109	$	44	$	400,850	$	(4	)	$	(243,181	)	$	157,709
Issuance of Class A common stock pursuant to exercise of options		44,820		—		432		—			—			432
Issuance of Class A common stock upon vesting of restricted stock units		2,500		—		—		—			—			—
Stock-based compensation		—		—		2,682		—			—			2,682
Unrealized loss on marketable securities		—		—		—		(138	)		—			(138	)
Net loss		—		—		—		—			(20,162	)		(20,162	)
Balances as of June 30, 2023		44,308,429	$	44	$	403,964	$	(142	)	$	(263,343	)	$	140,523


	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 Class A common stock from underwritten follow-on offering, net of offering costs		5,742,026		6		—			—		80,028		—			—			80,034
Issuance of Class A common stock pursuant to exercise of options		17,946		—		—			—		65		—			—			65
Issuance of Class A common stock pursuant to employee stock purchase plan		8,458		—		—			—		169		—			—			169
Issuance of Class A 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 Class A 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

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

VERA THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)


	Six Months Ended June 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(50,231	)	$	(31,938	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion		(1,477	)		(97	)
Reduction in the carrying amount of operating lease right-of-use assets		1,143			1,115
Stock-based compensation		5,349