Viridian Therapeutics, Inc. — 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a quarterly filing. Viridian is a clinical-stage biotechnology company developing antibody therapies, principally for thyroid eye disease (TED). Its candidates were not approved for sale, and it had no product-sales revenue.
Financial performance and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Revenue | $3.0 million | $1.1 million |
| Research and development expense | $56.9 million | $28.3 million |
| General and administrative expense | $25.8 million | $13.3 million |
| Net loss | $79.4 million | $110.7 million |
| Net loss per share, basic and diluted | $6.66 | $31.13 |
| Net cash used in operating activities | $54.6 million | $29.8 million |
- Revenue was collaboration revenue, primarily from the Zenas BioPharma arrangement in 2021; there were no product sales. The filing does not present a meaningful product gross margin.
- 2020 net loss included $69.9 million of acquired in-process research and development expense from the 2020 Private Viridian acquisition. This was not repeated in 2021; the smaller 2021 net loss therefore does not by itself indicate improved underlying operating economics.
- At year-end, cash and cash equivalents were $42.3 million and short-term investments were $154.7 million, totaling approximately $197.0 million. Total assets were $203.7 million, total liabilities $16.0 million, and stockholders’ equity $187.7 million.
- Cash used in investing activities was $74.3 million, primarily net purchases of short-term investments; cash provided by financing activities was $125.3 million. Cash and cash equivalents decreased by $3.6 million during the year.
- No notes payable were outstanding at December 31, 2021; the prior Silicon Valley Bank loan and PPP loan had been repaid in 2020. Lease liabilities remained outstanding.
Material changes and business developments
- R&D expense increased $28.6 million year over year, driven mainly by preclinical outsourcing and manufacturing for VRDN programs, personnel, and licensing fees. G&A expense increased $12.5 million, mainly from personnel costs, consulting and recruiting, and board compensation.
- Viridian opened the IND for VRDN-001 in November 2021 and began a Phase 1/2 proof-of-concept trial in TED patients in December. It expected initial patient data in the second quarter of 2022.
- VRDN-002 is designed for potential low-volume subcutaneous administration. The FDA cleared its IND in January 2022; the company expected to start a Phase 1 study in healthy volunteers during the first quarter of 2022 and report data in mid-2022. These are forward-looking plans, not reported results.
- Viridian raised approximately $97.7 million gross in a September 2021 public offering and received net proceeds from its 2021 ATM sales. It also established a new ATM facility of up to $75 million in November; no shares had been sold under that new facility by year-end.
- Common shares outstanding increased substantially during 2021 through the public offering, ATM sales, preferred-stock conversions, and other issuances. The filing also reports 23.0 million potential common shares from preferred stock, options, and warrants, excluded from diluted loss per share as antidilutive.
Outlook, risks, and unusual items
- Management estimated that year-end resources would fund planned operating expenses and capital expenditures into 2024. The company expects continued losses and significant R&D spending, and will need additional capital to fund future operations; the runway estimate depends on assumptions and development costs.
- Key risks include early-stage clinical uncertainty, potential safety or efficacy failures, regulatory delays, competition in TED, and dependence on third-party manufacturing. Viridian relied on a single multi-site CDMO and reported constrained biologics manufacturing capacity, including competing demand related to COVID-19 vaccines; it said available supply supported current programs but had no redundant supply arrangements.
- COVID-19 had not materially affected the business by year-end, but could disrupt trials, manufacturing, or financing. The filing also highlights reimbursement and drug-pricing pressures, intellectual-property and licensing risks, and the possibility of further dilution or unfavorable financing terms.
- License obligations include potential ImmunoGen development milestones of up to $48 million and commercial milestones of up to $95 million, plus mid-single-digit royalties; a $2.5 million milestone was paid after the VRDN-001 IND submission. Xencor agreements also carry potential development/commercial milestones and royalties. These are contingent obligations, not current debt.
- The Zenas collaboration is a related-party arrangement. Viridian reported no material legal proceedings and no cash dividends are anticipated in the foreseeable future.
Important facts for investors to verify
- Whether VRDN-001 clinical results support efficacy, safety, dose selection, and progression to pivotal trials.
- Whether VRDN-002 can achieve the intended low-volume or less-frequent subcutaneous dosing profile, and whether the anticipated trial milestones were met.
- Cash burn, investment balances, and the assumptions supporting the stated runway into 2024; whether additional financing will be required and on what terms.
- The scale of future share issuance, including ATM usage, preferred-stock conversion, options, and warrants, and the resulting dilution.
- Manufacturing capacity and backup supply plans, plus the timing and amount of contingent license milestones and royalties.