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 September 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 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.)

611 Gateway Boulevard, Suite 400

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	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, 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, 2023 was 16,932,272.

HARPOON THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED September 30, 2023

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, 2023 and December 31, 2022	5
		b. Condensed Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2023 and 2022	6
		c. Condensed Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022	7
		d. Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022	8
		e. Notes to Condensed Financial Statements	9
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		27
3.	Quantitative and Qualitative Disclosures About Market Risk		39
4.	Controls and Procedures		39

PART II. OTHER INFORMATION


1.	Legal Proceedings	40
1A.	Risk Factors	40
2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	86
3.	Defaults Upon Senior Securities	86
4.	Mine Safety Disclosures	86
5.	Other Information	86
6.	Exhibits	87
	Signatures	89

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;

•

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

•

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

•

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

•

the potential benefits of the completed 1 to 10 reverse stock split and our ability to maintain compliance with the listing requirements of Nasdaq;

•

the implementation of our business model, strategic plans for our business and product candidates;

•

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 potential benefits of our recently completed corporate restructuring and cost reduction initiatives;

•

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; and

•

the effects on our operations of general political and economic conditions, including any health pandemic, current or anticipated military conflicts or other geopolitical events, economic slowdowns, recessions or market corrections, inflationary pressures, rising interest rates and tightening of credit markets.

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)


	September 30,			December 31,
	2023			2022
Assets
Current assets
Cash and cash equivalents	$	17,738		$	51,614
Short-term marketable securities		13,870			1,498
Prepaid expenses and other current assets		2,688			1,615
Total current assets		34,296			54,727
Property and equipment, net		3,527			7,237
Operating lease right-of-use asset		8,857			10,854
Other assets		898			911
Total assets	$	47,578		$	73,729
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	3,435		$	4,712
Accrued liabilities		11,697			14,361
Deferred revenue, current		—			30,937
Operating lease liabilities, current		2,974			2,423
Total current liabilities		18,106			52,433
Deferred revenue, noncurrent		—			2,314
Operating lease liabilities, net of current portion		11,530			13,583
Embedded redemption liability		4,574			—
Series A mandatorily redeemable preferred stock		8,827			—
Total liabilities		43,037			68,330
Commitments and contingencies (Note 6)
Stockholders' equity
Common stock, $0.0001 par value; 150,000,000 shares authorized at September 30, 2023 and December 31, 2022; 4,108,769 shares and 3,578,668 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		1			4
Additional paid-in capital		369,141			357,921
Accumulated other comprehensive income (loss)		1			(3	)
Accumulated deficit		(364,602	)		(352,523	)
Total stockholders' equity		4,541			5,399
Total liabilities and stockholders' equity	$	47,578		$	73,729

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 September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022
Revenue
Collaboration and license revenue	$	4,448		$	13,617		$	33,252		$	27,826
Total revenue		4,448			13,617			33,252			27,826
Operating expenses
Research and development		12,325			20,977			39,684			62,446
General and administrative		4,262			4,529			12,250			14,993
Impairment of long-lived assets		—			—			1,729			—
Total operating expenses		16,587			25,506			53,663			77,439
Loss from operations		(12,139	)		(11,889	)		(20,411	)		(49,613	)
Interest income, net		480			289			1,520			433
Interest expense		(2,046	)		—			(3,744	)		—
Other income (expense), net		11,903			(40	)		10,556			(132	)
Net loss attributable to common stockholders		(1,802	)		(11,640	)		(12,079	)		(49,312	)
Other comprehensive loss:
Net unrealized (loss) gain on marketable securities		(4	)		28			4			19
Comprehensive loss	$	(1,806	)	$	(11,612	)	$	(12,075	)	$	(49,293	)
Net loss attributable to common stockholders per share, basic and diluted	$	(0.46	)	$	(3.52	)	$	(3.17	)	$	(14.95	)
Weighted-average shares used in computing net loss per share, basic and diluted		3,947,995			3,306,215			3,807,955			3,299,357

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		Income (Loss)			Deficit			Equity
Balances at December 31, 2022		3,578,668	$	4		$	357,921	$	(3	)	$	(352,523	)	$	5,399
Issuance of common stock under equity incentive plan		14,825		—			93		—			—			93
Issuance of common stock warrants in connection with the sale of Series A mandatorily redeemable preferred stock		—		—			3,881		—			—			3,881
Issuance of common stock pursuant to ATM facility		166,078		—			1,525		—			—			1,525
Stock-based compensation		—		—			1,133		—			—			1,133
Vesting of Founder's shares				—			—		—			—			—
Repurchase of common stock		—		—			—		—			—			—
Net loss		—		—			—		—			(11,338	)		(11,338	)
Unrealized gain on marketable securities		—		—			—		3			—			3
Balances at March 31, 2023		3,759,571		4			364,553		—			(363,861	)		696
Issuance of common stock pursuant to ATM facility		37,684		—			171		—			—			171
Stock-based compensation		—		—			1,065		—			—			1,065
Net income		—		—			—		—			1,061			1,061
Unrealized gain on marketable securities		—		—			—		5			—			5
Balances at June 30, 2023		3,797,256	$	4		$	365,789	$	5		$	(362,800	)	$	2,998
Par value reclass for 1 for 10 reverse stock split		—		(3	)		3		—			—			—
Issuance of common stock pursuant to ATM facility		283,525		—			2,335		—			—			2,335
Issuance of common stock under equity incentive plan		27,989		—			96		—			—			96
Stock-based compensation		—		—			918		—			—			918
Net income		—		—			—		—			(1,802	)		(1,802	)
Unrealized gain on marketable securities		—		—			—		(4	)		—			(4	)
Balances at September 30, 2023		4,108,769	$	1		$	369,141	$	1		$	(364,602	)	$	4,541


						Additional		Accumulated Other						Total
	Common Stock					Paid-In		Comprehensive			Accumulated			Stockholders'
	Shares		Amount			Capital		Income (Loss)			Deficit			Equity
Balances at December 31, 2021		3,276,579	$	4		$	342,905	$	(47	)	$	(284,792	)	$	58,070
Issuance of common stock under equity incentive plans including exercise of stock options		30,991		—			830		—			—			830
Vesting of early exercisable stock options		173		—			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		3,307,742		4			346,581		(88	)		(305,113	)		41,384
Issuance of common stock under equity incentive plans including exercise of stock options		2,616		—			53		—			—			53
Vesting of early exercisable stock options		173		—			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		3,310,531	$	4		$	349,158	$	(56	)	$	(322,464	)	$	26,642
Issuance of common stock under equity incentive plans including exercise of stock options		12,224		—			101		—			—			101
Vesting of early exercisable stock options		115		—			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		3,322,871	$	4		$	351,040	$	(28	)	$	(334,104	)	$	16,912

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

HARPOON THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities
Net loss attributable to common stockholders	$	(12,079	)	$	(49,312	)
Adjustments to reconcile net loss attributable to common stockholders to net cash provided by (used in) operating activities
Stock-based compensation expense		3,116			7,143
Depreciation and amortization		1,268			1,679
Non-cash lease expense		1,079			508
Loss on sale and disposal of fixed assets		443			—
Impairment of long-lived assets		1,729			—
Change in fair value of embedded redemption liability		(10,971	)		—
Issuance cost for embedded redemption liability		807			—
Accretion of redemption value discount		3,744			—
Net amortization of (discounts) and premiums on marketable securities		(215	)		413
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(1,344	)		(455	)
Other assets		41			49
Accounts payable		(1,008	)		(53	)
Accrued liabilities		(2,848	)		(1,724	)
Deferred revenue		(33,251	)		(27,826	)
Operating lease liabilities		(1,502	)		(1,214	)
Net cash used in operating activities		(50,991	)		(70,792	)
Cash flows from investing activities