Viridian Therapeutics, Inc. annual report, FY2018

Filing identity and reporting period

The supplied filing is Miragen Therapeutics, Inc.’s Form 10-K for the fiscal year ended December 31, 2018, filed March 14, 2019. This does not match the request metadata naming Viridian Therapeutics, Inc. or “2018 Q4”; the filing is an annual report, though it includes unaudited fourth-quarter results. Confirm the issuer and intended filing before relying on this summary.

Business context

Miragen was a clinical-stage biopharmaceutical company developing RNA-targeted microRNA therapies. Its clinical candidates were cobomarsen (blood cancers), remlarsen (fibrotic conditions), and MRG-110 (cardiovascular and wound-healing indications, in collaboration with Servier). It had no approved products and no product-sale revenue.

Financial results and liquidity

FY 2018 revenue comprised $7.373 million of collaboration revenue and $1.013 million of grant revenue, not product sales. Collaboration revenue included a $3.690 million Servier milestone and $3.683 million of reimbursable research and development costs. Gross margin is not meaningful for this pre-commercial business; the filing does not report product sales or a product gross margin.

Fourth-quarter 2018 revenue was $0.476 million and net loss was $10.317 million, or $0.33 per share. Revenue and losses were uneven across quarters, partly reflecting collaboration milestone timing.

Cash and short-term investments totaled approximately $62.5 million at year-end. Management said available resources were expected to fund operations in the normal course through the first quarter of 2020; the company also stated it would need substantial additional capital thereafter. Net cash used in investing activities was $29.907 million, primarily reflecting purchases of short-term investments. Financing activities provided $41.916 million, mainly from a public offering. Total liabilities were $14.803 million and total assets were $66.147 million.

Changes versus the prior year

• Revenue more than doubled, mainly because of the Servier milestone and higher reimbursed development costs.
• Research and development expense rose $10.8 million, principally due to cobomarsen Phase 2 SOLAR preparation and MRG-110 clinical and manufacturing costs, increased personnel, and a license milestone.
• Net loss widened by $6.2 million as higher research and development spending outweighed increased collaboration revenue.
• Cash and cash equivalents fell by $14.8 million, while $29.9 million of short-term investments were held at year-end. Cash flow from operations improved by $1.3 million year over year.
• Shares issued and outstanding increased from 22.568 million to 30.839 million, including the February 2018 public offering; additional equity issuance could dilute shareholders.

Outlook, commentary, and risks

• Management expected continued significant expenses and operating losses as clinical programs advanced, with quarterly and annual results likely to fluctuate.
• Planned milestones included cobomarsen ATLL data in the first half of 2019 and CTCL Phase 2 data in the second half of 2020; remlarsen keloid Phase 2 data in the second half of 2019 and additional preclinical ocular-fibrosis data in the first half of 2019; and MRG-110 Phase 1 systemic and local-administration data in 2019. These are management expectations, not assurances.
• The Phase 2 SOLAR trial was planned to compare cobomarsen with vorinostat in moderate-to-severe mycosis fungoides; management said a successful outcome might support an accelerated-approval application, but approval was uncertain.
• Key risks include clinical failure or delay, uncertain safety and efficacy of the novel microRNA approach, patient-enrollment and manufacturing constraints, dependence on contract research and manufacturing providers, reliance on Servier and other funding, and the need for further capital.
• Servier holds cardiovascular rights outside the United States and Japan for covered targets. The collaboration provides potential future milestones and royalties, but depends on development and commercialization success.
• Debt is under a Silicon Valley Bank agreement bearing interest at prime (5.50% at December 31, 2018), with a $0.9 million final payment fee and restrictive covenants. The filing reports no material legal proceedings and no off-balance-sheet arrangements.

Important facts for investors to verify

1. Confirm that Miragen Therapeutics, Inc.—not Viridian Therapeutics, Inc.—and the fiscal 2018 annual period are the intended subject.
2. Check subsequent filings for actual cash runway, financing, debt repayment terms, and any material changes to the stated first-quarter 2020 runway estimate.
3. Verify the status and results of the named clinical trials and whether planned data releases or regulatory milestones occurred.
4. Review the Servier agreement, including cost reimbursement, territory and indication rights, and conditions for future milestone or royalty payments.
5. Assess dilution from the ATM facility, the LLS purchase agreement, equity compensation plans, and any later capital raises.
6. Note that KPMG audited the financial statements, but was not engaged to audit internal control over financial reporting; management reported controls effective as of year-end.