SEC Filing | Harpoon Therapeutics, Inc.

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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, 2022

 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 July 29, 2022 was 33,106,768.

HARPOON THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

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, 2022 and December 31, 2021	4
		b. Condensed Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021	5
		c. Condensed Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021	6
		d. Condensed Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021	7
		e. Notes to Condensed Financial Statements	8
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
3.	Quantitative and Qualitative Disclosures About Market Risk			35
4.	Controls and Procedures			35

PART II. OTHER INFORMATION


1.	Legal Proceedings	36
1A.	Risk Factors	36
2.	Unregistered Sales of Equity Securities and Use of Proceeds	82
3.	Defaults Upon Senior Securities	82
4.	Mine Safety Disclosures	82
5.	Other Information	82
6.	Exhibits	83
	Signatures	84

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, safety profiles and expected results of our preclinical studies, clinical trials and our research and development programs, as affected by various factors, including patient enrollment, rate of dose escalation and available drug supply, including impacts on the manufacturing supply chain due to the COVID-19 pandemic;

•

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

•

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;

•

the ongoing effects of the COVID-19 pandemic on our business, including impacts on the manufacturing supply chain, results of operations and 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 in the "Risk Factor Summary" below, under the heading “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 among the trademarks owned by Harpoon Therapeutics, Inc. This report also contains trademarks and trade names that are property of their respective owners.

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,
	2022			2021
Assets
Current assets
Cash and cash equivalents	$	68,568		$	44,687
Short-term marketable securities		21,585			90,411
Prepaid expenses and other current assets		3,884			2,597
Total current assets		94,037			137,695
Property and equipment, net		8,247			9,248
Long-term marketable securities		—			1,522
Operating lease right-of-use asset		5,798			6,127
Other assets		869			860
Total assets	$	108,951		$	155,452
Liabilities and stockholders' equity
Current liabilities
Accounts payable		2,790			2,666
Accrued liabilities		17,162			17,362
Deferred revenue, current		36,504			37,462
Operating lease liabilities, current		1,767			1,649
Total current liabilities		58,223			59,139
Deferred revenue, noncurrent		14,454			27,705
Operating lease liabilities, net of current portion		9,632			10,538
Total liabilities		82,309			97,382
Commitments and contingencies (Note 6)
Stockholders' equity
Common stock, $0.0001 par value; 150,000,000 shares authorized at June 30, 2022 and December 31, 2021; 33,105,312 shares and 32,765,788 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		4			4
Additional paid-in capital		349,158			342,905
Accumulated other comprehensive loss		(56	)		(47	)
Accumulated deficit		(322,464	)		(284,792	)
Total stockholders' equity		26,642			58,070
Total liabilities and stockholders' equity	$	108,951		$	155,452

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

HARPOON THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share data)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2022			2021			2022			2021
Revenue
Collaboration and license revenue	$	8,303		$	5,838		$	14,209		$	14,845
Total revenue		8,303			5,838			14,209			14,845
Operating expenses
Research and development		20,651			18,271			41,469			34,487
General and administrative		5,063			4,335			10,464			8,939
Litigation settlement		—			—			—			49,954
Total operating expenses		25,714			22,606			51,933			93,380
Loss from operations		(17,411	)		(16,768	)		(37,724	)		(78,535	)
Interest income, net		104			62			144			156
Other expense, net		(44	)		(58	)		(92	)		(108	)
Net loss		(17,351	)		(16,764	)		(37,672	)		(78,487	)
Other comprehensive loss:
Net unrealized gain (loss) on marketable securities		32			16			(9	)		(4	)
Comprehensive loss	$	(17,319	)	$	(16,748	)	$	(37,681	)	$	(78,491	)
Net loss per share, basic and diluted		(0.53	)		(0.52	)	$	(1.14	)	$	(2.45	)
Weighted-average shares used in computing net loss per share, basic and diluted		33,036,873			32,505,777			32,958,711			32,044,767

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

HARPOON THERAPEUTICS, INC.

Condensed Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share data)



					Additional		Accumulated Other						Total
	Common Stock				Paid-In		Comprehensive			Accumulated			Stockholders'
	Shares		Amount		Capital		Loss			Deficit			Equity
Balances at December 31, 2021		32,765,788	$	4	$	342,905	$	(47	)	$	(284,792	)	$	58,070
Issuance of common stock under equity incentive plans including exercise of stock options		309,905		—		830		—			—			830
Vesting of early exercisable stock options		1,728		—		3		—			—			3
Stock-based compensation		—		—		2,843		—			—			2,843
Net loss		—		—		—		—			(20,321	)		(20,321	)
Unrealized loss on marketable securities		—		—		—		(41	)		—			(41	)
Balances at March 31, 2022		33,077,421		4		346,581		(88	)		(305,113	)		41,384
Issuance of common stock under equity incentive plans including exercise of stock options		26,163		—		53		—			—			53
Vesting of early exercisable stock options		1,728		—		3		—			—			3
Stock-based compensation		—		—		2,521		—			—			2,521
Net loss		—		—		—		—			(17,351	)		(17,351	)
Unrealized gain on marketable securities		—		—		—		32			—			32
Balances at June 30, 2022		33,105,312	$	4	$	349,158	$	(56	)	$	(322,464	)	$	26,642

					Additional		Accumulated Other						Total
	Common Stock				Paid-In		Comprehensive			Accumulated			Stockholders'
	Shares		Amount		Capital		Income (Loss)			Deficit			Equity
Balances at December 31, 2020		25,553,172	$	3	$	221,904	$	3		$	(168,071	)	$	53,839
Issuance of common stock in follow-on offering, net of underwriter discounts, commissions and issuance costs of $7,400		6,764,704		1		107,581		—			—			107,582
Issuance of common stock under equity incentive plans including exercise of stock options		113,538		—		561		—			—			561
Vesting of early exercisable stock options		7,319		—		6		—			—			6
Stock-based compensation		—		—		2,136		—			—			2,136
Net loss		—		—		—		—			(61,724	)		(61,724	)
Unrealized loss on marketable securities		—		—		—		(20	)		—			(20	)
Balances at March 31, 2021		32,438,733		4		332,188		(17	)		(229,795	)		102,380
Issuance of common stock pursuant to ATM facility, net of offering costs		138,153		—		2,767		—			—			2,767
Issuance of common stock under equity incentive plans including exercise of stock options		56,934		—		186		—			—			186
Vesting of early exercisable stock options		5,456		—		5		—			—			5
Stock-based compensation		—		—		2,338		—			—			2,338
Net loss		—		—		—		—			(16,764	)		(16,764	)
Unrealized gain on marketable securities		—		—		—		16						16
Balances at June 30, 2021		32,639,276		4		337,484		(1	)		(246,559	)		90,928

HARPOON THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)


	Six Months Ended June 30,
	2022			2021
Cash flows from operating activities
Net loss	$	(37,672	)	$	(78,487	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Stock-based compensation expense		5,364			4,473
Depreciation and amortization		1,152			1,098
Non-cash lease expense		329			160
Net amortization of discounts on marketable securities		446			1,168
Changes in operating assets and liabilities
Prepaid expenses and other assets		(1,287	)		(937	)
Other assets		(10	)		382
Accounts payable		125			426
Accrued liabilities		(290	)		2,500
Deferred revenue		(14,209	)		(14,846	)
Operating lease liabilities		(789	)		(580	)
Net cash used in operating activities		(46,841	)		(84,643	)
Cash flows from investing activities
Purchases of property and equipment		(53	)		(45	)
Purchases of marketable securities		(11,509	)		(100,469	)
Maturities of marketable securities		81,402			130,304
Net cash provided by investing activities		69,840			29,790
Cash flows from financing activities
Proceeds from follow-on offering, net of issuance costs		—			107,581
Proceeds from issuance of common stock in connection with employee benefit plans		882			748
Proceeds from issuance of common stock, net of issuance cost		—			2,767
Net cash provided by financing activities		882			111,096
Net increase in cash, cash equivalents, and restricted cash		23,881			56,243
Cash, cash equivalents, and restricted cash at beginning of period		45,360			21,637
Cash, cash equivalents, and restricted cash at end of period	$	69,241		$	77,880
Supplemental disclosures of non-cash investing and financing information
Purchases of property and equipment included in accrued liabilities and accounts payable	$	98		$	—
Reclassification of employee stock liability to equity upon vesting	$	6		$	12