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 September 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 October 31, 2022 was 33,228,781.

 

 


 

HARPOON THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED September 30, 2022

 

TABLE OF CONTENTS

 

Page

 

Special Note Regarding Forward-Looking Statements

3

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

Item

 

 

1.

Condensed Financial Statements (unaudited):

5

 

 

a. Condensed Balance Sheets as of September 30, 2022 and December 31, 2021

5

 

 

b. Condensed Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2022 and 2021

6

 

 

c. Condensed Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021

7

 

 

d. Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021

8

 

 

e. Notes to Condensed Financial Statements

9

2.

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

24

3.

Quantitative and Qualitative Disclosures About Market Risk

37

4.

Controls and Procedures

37

 

 

 

 

PART II. OTHER INFORMATION

 

1.

Legal Proceedings

39

1A.

Risk Factors

39

2.

Unregistered Sales of Equity Securities and Use of Proceeds

85

3.

Defaults Upon Senior Securities

85

4.

Mine Safety Disclosures

85

5.

Other Information

85

6.

Exhibits

86

 

Signatures

87

 

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, safety profiles, expected results and any winddowns of our preclinical studies, clinical trials and our research and development programs, as affected by various factors, including patient enrollment, rate of dose escalation, adverse events, and available drug supply;
our ability to advance product candidates into, and successfully complete, preclinical studies and clinical trials;
our estimates regarding expenses, capital requirements and needs for additional financing and our ability to obtain additional capital;
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;
our corporate restructuring plans and the potential benefits of such plans;
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 financial performance;
the ongoing effects of the COVID-19 pandemic on our business, 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,”

3


 

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.

4


 

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,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

50,368

 

 

$

44,687

 

Short-term marketable securities

 

 

15,730

 

 

 

90,411

 

Prepaid expenses and other current assets

 

 

3,051

 

 

 

2,597

 

Total current assets

 

 

69,149

 

 

 

137,695

 

Property and equipment, net

 

 

7,917

 

 

 

9,248

 

Long-term marketable securities

 

 

 

 

 

1,522

 

Operating lease right-of-use asset

 

 

5,619

 

 

 

6,127

 

Other assets

 

 

811

 

 

 

860

 

Total assets

 

$

83,496

 

 

$

155,452

 

Liabilities and stockholders' equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

 

2,640

 

 

 

2,666

 

Accrued liabilities

 

 

15,630

 

 

 

17,362

 

Deferred revenue, current

 

 

33,963

 

 

 

37,462

 

Operating lease liabilities, current

 

 

1,828

 

 

 

1,649

 

Total current liabilities

 

 

54,061

 

 

 

59,139

 

Deferred revenue, noncurrent

 

 

3,378

 

 

 

27,705

 

Operating lease liabilities, net of current portion

 

 

9,145

 

 

 

10,538

 

Total liabilities

 

 

66,584

 

 

 

97,382

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Common stock, $0.0001 par value; 150,000,000 shares authorized at September 30, 2022 and December 31, 2021; 33,228,708 shares and 32,765,788 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

351,040

 

 

 

342,905

 

Accumulated other comprehensive loss

 

 

(28

)

 

 

(47

)

Accumulated deficit

 

 

(334,104

)

 

 

(284,792

)

Total stockholders' equity

 

 

16,912

 

 

 

58,070

 

Total liabilities and stockholders' equity

 

$

83,496

 

 

$

155,452

 

 

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

5


 

HARPOON THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share data)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenue

 

$

13,617

 

 

$

4,484

 

 

$

27,826

 

 

$

19,329

 

Total revenue

 

 

13,617

 

 

 

4,484

 

 

 

27,826

 

 

 

19,329

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

20,977

 

 

 

16,973

 

 

 

62,446

 

 

 

51,460

 

General and administrative

 

 

4,529

 

 

 

4,186

 

 

 

14,993

 

 

 

13,125

 

Litigation settlement

 

 

 

 

 

 

 

 

 

 

 

49,954

 

Total operating expenses

 

 

25,506

 

 

 

21,159

 

 

 

77,439

 

 

 

114,539

 

Loss from operations

 

 

(11,889

)

 

 

(16,675

)

 

 

(49,613

)

 

 

(95,210

)

Interest income, net

 

 

289

 

 

 

48

 

 

 

433

 

 

 

204

 

Other expense, net

 

 

(40

)

 

 

(55

)

 

 

(132

)

 

 

(163

)

Net loss

 

 

(11,640

)

 

 

(16,682

)

 

 

(49,312

)

 

 

(95,169

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gain (loss) on marketable securities

 

 

28

 

 

 

1

 

 

 

19

 

 

 

(3

)

Comprehensive loss

 

$

(11,612

)

 

$

(16,681

)

 

$

(49,293

)

 

$

(95,172

)

Net loss per share, basic and diluted

 

 

(0.35

)

 

 

(0.51

)

 

$

(1.49

)

 

$

(2.96

)

Weighted-average shares used in computing net loss per share, basic and diluted

 

 

33,062,148

 

 

 

32,637,660

 

 

 

32,993,568

 

 

 

32,176,132

 

 

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

6


 

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 exercised 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 exercised 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

 

Issuance of common stock under equity
   incentive plans including exercise
   of stock options

 

122,244

 

 

 

 

 

 

101

 

 

 

 

 

 

 

 

 

101

 

Vesting of early exercisable stock options

 

1,152

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

2

 

Stock-based compensation

 

 

 

 

 

 

 

1,779

 

 

 

 

 

 

 

 

 

1,779

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,640

)

 

 

(11,640

)

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

28

 

 

 

 

 

 

28

 

Balances at September 30, 2022

 

33,228,708

 

 

$

4

 

 

$

351,040

 

 

$

(28

)

 

$

(334,104

)

 

$

16,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 exercised 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 exercised 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

 

Issuance of common stock under equity
   incentive plans including exercise
   of stock options

 

99,921

 

 

 

 

 

 

381

 

 

 

 

 

 

 

 

 

381

 

Vesting of early exercised stock options

 

1,728

 

 

 

 

 

 

3