harp-10q_20190930.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 September 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

 

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 October 31, 2019 was 24,638,428.

 

 

 

 


 

HARPOON THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 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 September 30, 2019 and December 31, 2018

4

 

b.

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

5

 

c.

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

6

 

d.

Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018

8

 

e.

Notes to Condensed Financial Statements

9

2.

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

25

4.

Controls and Procedures

34

 

PART II. OTHER INFORMATION

 

1.

Legal Proceedings

35

1A.

Risk Factors

35

2.

Unregistered Sales of Equity Securities and Use of Proceeds

78

3.

Defaults Upon Senior Securities

78

4.

Mine Safety Disclosures

78

5.

Other Information

78

6.

Exhibits

79

 

Signatures

80

 


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.“TriTAC” is a registered trademark and “Harpoon Therapeutics,” “Harpoon,” the Harpoon logo, and ProTriTAC are trademarks, all owned by Harpoon Therapeutics, Inc.  This report also contains trademarks and trade names that are property of their respective owners.

3


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

 

HARPOON THERAPEUTICS, INC.

Condensed Balance Sheets

(unaudited)

(in thousands, except share and per share data)

 

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

56,764

 

 

$

89,493

 

Short-term marketable securities

 

 

64,463

 

 

 

 

Prepaid expenses and other current assets

 

 

1,764

 

 

 

730

 

Total current assets

 

 

122,991

 

 

 

90,223

 

Property and equipment, net

 

 

11,770

 

 

 

2,998

 

Operating lease right-of-use asset

 

 

7,106

 

 

 

 

Tenant improvement allowance receivable

 

 

 

 

 

5,784

 

Other assets

 

 

521

 

 

 

3,575

 

Total assets

 

$

142,388

 

 

$

102,580

 

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

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

 

3,900

 

 

 

4,357

 

Accrued liabilities

 

 

7,719

 

 

 

3,341

 

Deferred revenue, current

 

 

4,080

 

 

 

4,250

 

Operating lease liabilities, current

 

 

987

 

 

 

 

Total current liabilities

 

 

16,686

 

 

 

11,948

 

Deferred revenue, noncurrent

 

 

4,420

 

 

 

7,792

 

Operating lease liabilities, net of current portion

 

 

14,051

 

 

 

 

Other long-term liabilities

 

 

 

 

 

6,742

 

Total liabilities

 

 

35,157

 

 

 

26,482

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

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

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

   and 16,618,448 shares issued and outstanding at September 30, 2019 and December

   31, 2018, respectively; $0 and $130,178 aggregate liquidation preference at

   September 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 September 30, 2019 and December 31, 2018, respectively; 24,613,803

   shares and 1,383,221 shares issued and outstanding at September 30, 2019 and

   December 31, 2018, respectively

 

 

3

 

 

 

1

 

Additional paid-in capital

 

 

211,038

 

 

 

9,111

 

Accumulated other comprehensive income

 

 

85

 

 

 

 

Accumulated deficit

 

 

(103,895

)

 

 

(62,591

)

Total stockholders' equity (deficit)

 

 

107,231

 

 

 

(53,479

)

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

 

$

142,388

 

 

$

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenue

 

$

1,417

 

 

$

1,063

 

 

$

3,543

 

 

$

3,689

 

Total revenue

 

 

1,417

 

 

 

1,063

 

 

 

3,543

 

 

 

3,689

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

9,533

 

 

 

5,967

 

 

 

28,886

 

 

 

17,651

 

General and administrative

 

 

8,493

 

 

 

1,942

 

 

 

18,059

 

 

 

3,891

 

Total operating expenses

 

 

18,026

 

 

 

7,909

 

 

 

46,945

 

 

 

21,542

 

Loss from operations

 

 

(16,609

)

 

 

(6,846

)

 

 

(43,402

)

 

 

(17,853

)

Interest income

 

 

727

 

 

 

109

 

 

 

2,143

 

 

 

248

 

Other expense

 

 

(26

)

 

 

(22

)

 

 

(45

)

 

 

(29

)

Net loss

 

 

(15,908

)

 

 

(6,759

)

 

 

(41,304

)

 

 

(17,634

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gain (loss) on marketable securities

 

 

(25

)

 

 

 

 

 

85

 

 

 

 

Comprehensive loss

 

$

(15,933

)

 

$

(6,759

)

 

$

(41,219

)

 

$

(17,634

)

Net loss per share, basic and diluted

 

$

(0.65

)

 

$

(6.23

)

 

$

(1.95

)

 

$

(17.22

)

Weighted-average common shares used in

   computing net loss per share, basic and

   diluted

 

 

24,457,402

 

 

 

1,084,477

 

 

 

21,202,848

 

 

 

1,024,105

 

 

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

Stockholders'

 

 

 

Preferred Stock

 

 

 

Common Stock

 

 

Paid-In

 

 

from

 

 

Comprehensive

 

 

Accumulated

 

 

Equity

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stockholder

 

 

Income/(Loss)

 

 

Deficit

 

 

(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

 

 

 

129,576

 

 

 

 

 

 

 

 

 

 

 

 

129,577

 

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

 

 

$

209,736

 

 

$

 

 

$

26

 

 

$

(76,170

)

 

$

133,595

 

Issuance of common stock for exercise

   of stock options

 

 

 

 

 

 

 

 

 

205,328

 

 

 

 

 

 

136

 

 

 

 

 

 

 

 

 

 

 

 

136

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

11,898

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

9

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

467

 

 

 

 

 

 

 

 

 

 

 

 

467

 

Vesting of Founder's shares

 

 

 

 

 

 

 

 

 

5,879

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,817

)

 

 

(11,817

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

84

 

 

 

 

 

 

84

 

Balances at June 30, 2019

 

 

 

 

 

 

 

 

 

24,431,454

 

 

$

3

 

 

$

210,348

 

 

$

 

 

$

110

 

 

$

(87,987

)

 

$

122,474

 

Issuance of common stock for exercise

   of stock options

 

 

 

 

 

 

 

 

 

56,680

 

 

 

 

 

 

89

 

 

 

 

 

 

 

 

 

 

 

 

89

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

11,893

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

9

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

592

 

 

 

 

 

 

 

 

 

 

 

 

592

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,908

)

 

 

(15,908

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25

)

 

 

 

 

 

(25

)

Balances at September 30, 2019

 

 

 

 

 

 

 

 

 

24,500,027

 

 

$

3

 

 

$

211,038

 

 

$

 

 

$

85

 

 

$

(103,895

)

 

$

107,231

 

6


 

HARPOON THERAPEUTICS, INC.

Condensed Statements of Stockholders’ Equity (Deficit)

(unaudited)

(in thousands, except share data)

 

 

 

Convertible

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Note

Receivable

 

 

Accumulated

Other

 

 

 

 

 

 

Total

Stockholders'

 

 

 

Preferred Stock

 

 

 

Common Stock

 

 

Paid-In

 

 

from

 

 

Comprehensive

 

 

Accumulated

 

 

Equity

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stockholder

 

 

Income

 

 

Deficit

 

 

(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

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

4,575

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

3

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

147

 

 

 

 

 

 

 

 

 

 

 

 

 

147

 

Vesting of Founder's shares

 

 

 

 

 

 

 

 

 

20,980

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

28,809

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

 

 

 

17

 

Vesting of Founder's shares

 

 

 

 

 

 

 

 

 

20,201

 

 

 

 

 

 

140

 

 

 

 

 

 

 

 

 

 

 

 

140

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,994

)

 

 

(5,994

)

Balances at June 30, 2018

 

 

6,989,973

 

 

 

39,841

 

 

 

 

1,043,275

 

 

$

1

 

 

$

8,629

 

 

$

(28

)

 

$

 

 

$

(46,100

)

 

$

(37,498

)

Issuance of Series B convertible preferred

   stock at $6.39 per share upon extinguishment

   of 2016 Notes and 2017 Notes net

   of issuance costs of $8

 

 

3,128,540

 

 

 

1,992

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for exercise

   of stock options

 

 

 

 

 

 

 

 

 

95,191

 

 

 

 

 

 

95

 

 

 

28

 

 

 

 

 

 

 

 

 

123

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

10,744

 

 

 

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Vesting of Founder's shares

 

 

 

 

 

 

 

 

 

24,097

 

 

 

 

 

 

146

 

 

 

 

 

 

 

 

 

 

 

 

146

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,759

)

 

 

(6,759

)

Balances at September 30, 2018

 

 

10,118,513

 

 

 

41,833

 

 

 

 

1,173,307

 

 

$

1

 

 

$

8,877

 

 

$

 

 

$

 

 

$

(52,859

)

 

$

(43,981

)

 

 

 

7


 

HARPOON THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

Nine months ended September 30,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(41,304

)

 

$

(17,635

)

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

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

1,428

 

 

 

461

 

Depreciation and amortization

 

 

400

 

 

 

447

 

Non cash lease expense

 

 

1,110

 

 

 

 

Net amortization of discounts on marketable securities

 

 

(482

)

 

 

 

Changes in operating assets and liabilities