harp-10q_20190630.htm

 

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, 2019 

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 No. 001-38800

 

Harpoon Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

47-3458693

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

131 Oyster Point Blvd, Suite 300

South San Francisco, CA 94080

(Address of principal executive offices)

Registrant’s telephone number, including area code: (650) 443-7400

 

4000 Shoreline Court, Suite 250

South San Francisco, CA 94080

(Former name or former address, if changed since last report)

 

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 $0.0001 per share

HARP

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 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 $0.0001, as of July 31, 2019 was 24,564,479.

 

 

 

 


 

HARPOON THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2019

 

TABLE OF CONTENTS

 

 

 

Page

 

 

Special Note Regarding Forward-Looking Statements

3

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

Item

 

 

1.

Condensed Financial Statements (unaudited):

4

 

a.

Condensed Balance Sheets as of June 30, 2019 and December 31, 2018

4

 

b.

Condensed Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2019 and 2018

5

 

c.

Condensed Statements of Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2019 and 2018

6

 

d.

Condensed Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018

7

 

e.

Notes to Condensed Financial Statements

8

2.

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

24

4.

Controls and Procedures

32

 

PART II. OTHER INFORMATION

 

1.

Legal Proceedings

33

1A.

Risk Factors

33

2.

Unregistered Sales of Equity Securities and Use of Proceeds

75

3.

Defaults Upon Senior Securities

75

4.

Mine Safety Disclosures

75

5.

Other Information

75

6.

Exhibits

76

 

Signatures

77

 


2


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by words 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 words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

 

the timing of the initiation, progress and expected results of our preclinical studies, clinical trials and our research and development programs;

 

our ability to retain the continued service of our key executives and to identify, hire and retain additional qualified professionals;

 

our ability to advance product candidates into, and successfully complete, preclinical studies and clinical trials;

 

the timing or likelihood of regulatory filings and approvals;

 

the commercialization of our product candidates, if approved;

 

the pricing, coverage and reimbursement of our product candidates, if approved;

 

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 covering our technology platforms, including TriTAC and ProTriTAC, and product candidates, including the projected terms of patent protection;

 

our ability to enter into strategic arrangements and/or collaborations and the potential benefits of such arrangements;

 

our estimates regarding the market opportunity for our product candidates;

 

our estimates regarding expenses, capital requirements and needs for additional financing and our ability to obtain additional capital;

 

our financial performance; and

 

developments relating to our competitors and our industry, including competing therapies.

These forward-looking statements are based on our management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate, and management’s beliefs and assumptions and are not guarantees of future performance or development. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described under “Risk Factors” and elsewhere in this report. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this report. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to new information, actual results or changes in our expectations, except as required by law.

 

Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “company,” “Harpoon,” “we,” “us” and “our” refer to Harpoon Therapeutics, Inc.

3


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

 

HARPOON THERAPEUTICS, INC.

Condensed Balance Sheets

(unaudited)

(in thousands, except share and per share data)

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

52,094

 

 

$

89,493

 

Short-term marketable securities

 

 

81,790

 

 

 

 

Prepaid expenses and other current assets

 

 

3,438

 

 

 

730

 

Total current assets

 

 

137,322

 

 

 

90,223

 

Property and equipment, net

 

 

11,773

 

 

 

2,998

 

Operating lease right-of-use asset

 

 

7,454

 

 

 

 

Tenant improvement allowance receivable

 

 

 

 

 

5,784

 

Other assets

 

 

467

 

 

 

3,575

 

Total assets

 

$

157,016

 

 

$

102,580

 

Liabilities, convertible preferred stock and stockholders' equity (deficit)

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

 

4,519

 

 

 

4,357

 

Accrued liabilities

 

 

4,876

 

 

 

3,341

 

Deferred revenue, current

 

 

4,250

 

 

 

4,250

 

Operating lease liabilities, current

 

 

862

 

 

 

 

Total current liabilities

 

 

14,507

 

 

 

11,948

 

Deferred revenue, noncurrent

 

 

5,667

 

 

 

7,792

 

Operating lease liabilities, net of current portion

 

 

14,369

 

 

 

 

Other long-term liabilities

 

 

 

 

 

6,742

 

Total liabilities

 

 

34,543

 

 

 

26,482

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

Convertible preferred stock, $0.0001 par value; no shares and 82,000,000 shares

   authorized at June 30, 2019 and December 31, 2018, respectively; no shares and

   16,618,448 shares issued and outstanding at June 30, 2019 and December 31, 2018,

   respectively; $0 and $130,178 aggregate liquidation preference at June 30, 2019 and

   December 31, 2018, respectively

 

 

 

 

 

129,577

 

Stockholders' equity (deficit)

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value; 150,000,000 shares and 114,000,000 shares

  authorized at June 30, 2019 and December 31, 2018, respectively; 24,557,526 shares

  and 1,383,221 shares issued and outstanding at June 30, 2019 and December 31, 2018,

  respectively

 

 

3

 

 

 

1

 

Additional paid-in capital

 

 

210,347

 

 

 

9,111

 

Accumulated other comprehensive income

 

 

110

 

 

 

 

Accumulated deficit

 

 

(87,987

)

 

 

(62,591

)

Total stockholders' equity (deficit)

 

 

122,473

 

 

 

(53,479

)

Total liabilities, convertible preferred stock and stockholders' equity (deficit)

 

$

157,016

 

 

$

102,580

 

 

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

4


 

HARPOON THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenue

 

$

1,063

 

 

$

1,063

 

 

$

2,126

 

 

$

2,626

 

Total revenue

 

 

1,063

 

 

 

1,063

 

 

 

2,126

 

 

 

2,626

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

9,971

 

 

 

6,151

 

 

 

19,353

 

 

 

11,684

 

General and administrative

 

 

3,734

 

 

 

967

 

 

 

9,566

 

 

 

1,949

 

Total operating expenses

 

 

13,705

 

 

 

7,118

 

 

 

28,919

 

 

 

13,633

 

Loss from operations

 

 

(12,642

)

 

 

(6,055

)

 

 

(26,793

)

 

 

(11,007

)

Interest income

 

 

840

 

 

 

66

 

 

 

1,416

 

 

 

139

 

Other expense

 

 

(15

)

 

 

(5

)

 

 

(19

)

 

 

(7

)

Net loss

 

 

(11,817

)

 

 

(5,994

)

 

 

(25,396

)

 

 

(10,875

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gain on marketable securities

 

 

84

 

 

 

 

 

 

110

 

 

 

 

Comprehensive loss

 

$

(11,733

)

 

$

(5,994

)

 

$

(25,286

)

 

$

(10,875

)

Net loss per share, basic and diluted

 

$

(0.49

)

 

$

(5.89

)

 

$

(1.30

)

 

$

(10.95

)

Weighted-average common shares used in

   computing net loss per share, basic and

   diluted

 

 

24,294,211

 

 

 

1,017,336

 

 

 

19,548,600

 

 

 

993,418

 

 

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

 

 

 

5


 

HARPOON THERAPEUTICS, INC.

Condensed Statements of Stockholders’ Equity (Deficit)

(unaudited)

(in thousands, except share data)

 

 

 

Convertible

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Note

Receivable

 

 

Accumulated

Other

 

 

 

 

 

 

Total

 

 

 

Preferred Stock

 

 

 

Common Stock

 

 

Paid-In

 

 

from

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stockholder

 

 

Income

 

 

Deficit

 

 

Equity (Deficit)

 

Balances at December 31, 2018

 

 

16,618,448

 

 

 

129,577

 

 

 

 

1,211,419

 

 

 

1

 

 

 

9,111

 

 

 

 

 

 

 

 

 

 

(62,591

)

 

 

(53,479

)

Conversion of Series A, B, and C convertible preferred stock

   into common stock

 

 

(16,618,448

)

 

 

(129,577

)

 

 

 

16,618,448

 

 

 

1

 

 

 

129,575

 

 

 

 

 

 

 

 

 

 

 

 

129,576

 

Issuance of common stock upon exercise of warrants

 

 

 

 

 

 

 

 

 

563,043

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon initial public offering, net

   of offering costs of $10,122

 

 

 

 

 

 

 

 

 

5,769,201

 

 

 

1

 

 

 

70,646

 

 

 

 

 

 

 

 

 

 

 

 

70,647

 

Issuance of common stock for exercise of stock options

 

 

 

 

 

 

 

 

 

18,036

 

 

 

 

 

 

25

 

 

 

 

 

 

 

 

 

 

 

 

25

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

11,900

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

9

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

369

 

 

 

 

 

 

 

 

 

 

 

 

369

 

Vesting of Founder's shares

 

 

 

 

 

 

 

 

 

16,302

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,579

)

 

 

(13,579

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26

 

 

 

 

 

 

 

26

 

Balances at March 31, 2019

 

 

 

 

 

 

 

 

 

24,208,349

 

 

 

3

 

 

 

209,735

 

 

 

 

 

 

26

 

 

 

(76,170

)

 

 

133,594

 

Issuance of common stock for exercise of stock options

 

 

 

 

 

 

 

 

 

205,328

 

 

 

 

 

 

136

 

 

 

 

 

 

 

 

 

 

 

 

136

 

Issuance of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

11,898

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

9

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

467

 

 

 

 

 

 

 

 

 

 

 

 

467

 

Vesting of Founder's shares

 

 

 

 

 

 

 

 

 

5,879

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,817

)

 

 

(11,817

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

84

 

 

 

 

 

 

 

84

 

Balances at June 30, 2019

 

 

 

 

 

 

 

 

 

24,431,454

 

 

 

3

 

 

 

210,347

 

 

 

 

 

 

110

 

 

 

(87,987

)

 

 

122,473

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Note

Receivable

 

 

Accumulated

Other

 

 

 

 

 

 

Total

 

 

 

Preferred Stock

 

 

 

Common Stock

 

 

Paid-In

 

 

from

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stockholder

 

 

Income

 

 

Deficit

 

 

Equity (Deficit)

 

Balances at December 31, 2017

 

 

6,989,973

 

 

 

39,841

 

 

 

 

948,294

 

 

 

1

 

 

 

8,309

 

 

 

(28

)

 

 

 

 

 

(35,225

)

 

 

(26,943

)

Issuance of common stock for exercise of stock options

 

 

 

 

 

 

 

 

 

10,248

 

 

 

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Issuance of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

4,575

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

3

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

147

 

 

 

 

 

 

 

 

 

 

 

 

 

147

 

Vesting of Founder's shares

 

 

 

 

 

 

 

 

 

20,980

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,881

)

 

 

(4,881

)

Balances at March 31, 2018

 

 

6,989,973

 

 

 

39,841

 

 

 

 

984,097

 

 

 

1

 

 

 

8,466

 

 

 

(28

)

 

 

 

 

 

(40,106

)

 

 

(31,667

)

Issuance of common stock for exercise of stock options

 

 

 

 

 

 

 

 

 

10,168

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

6

 

Issuance of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

28,809

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

 

 

 

17

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Vesting of Founder's shares

 

 

 

 

 

 

 

 

 

20,201

 

 

 

 

 

 

140

 

 

 

 

 

 

 

 

 

 

 

 

140

 

Repurchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,994

)

 

 

(5,994

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2018

 

 

6,989,973

 

 

 

39,841

 

 

 

 

1,043,275

 

 

 

1

 

 

 

8,629

 

 

 

(28

)

 

 

 

 

 

(46,100

)

 

 

(37,498

)

 

 

 

6


 

HARPOON THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

Six months ended June 30,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(25,396

)

 

$

(10,875

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

836

 

 

 

287

 

Depreciation and amortization

 

 

596

 

 

 

288

 

Non cash lease expense

 

 

762

 

 

 

 

Net amortization of discounts on marketable securities

 

 

(221

)

 

 

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

(2,707

)

 

 

(762

)

Other assets

 

 

3,107

 

 

 

 

Accounts payable

 

 

(876

)

 

 

(32

)

Accrued liabilities

 

 

380

 

 

 

(369

)

Deferred revenue

 

 

(2,125

)

 

 

(2,125

)

Operating lease liabilities

 

 

272

 

 

 

 

Other long-term liabilities

 

 

 

 

 

8

 

Net cash used in operating activities

 

 

(25,372

)

 

 

(13,580

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,393

)

 

 

(315

)

Purchases of marketable securities

 

 

(82,294

)

 

 

 

Maturities and sales of marketable securities

 

 

835

 

 

 

 

Net cash used in investing activities

 

 

(82,852

)

 

 

(315

)

Cash flows from financing activities