Viridian Therapeutics, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. Viridian is a clinical-stage biotechnology company developing treatments for thyroid eye disease (TED) and other underserved conditions. Its lead programs are VRDN-001 and VRDN-002; it has no approved products and has generated no product-sale revenue.
Financial performance and liquidity
| Metric | Q1 2021 | Q1 2020 |
|---|---|---|
| Revenue | $1.45 million | $0.83 million |
| Research and development expense | $13.81 million | $6.10 million |
| General and administrative expense | $6.16 million | $2.72 million |
| Net loss | $18.46 million | $8.04 million |
| Net loss per share, basic and diluted | $2.91 | $2.65 |
| Net cash used in operating activities | $11.54 million | $8.46 million |
- Revenue was primarily from the Zenas BioPharma collaboration in 2021; 2020 revenue primarily reflected reimbursable legacy-program research under the Servier collaboration. Viridian reports no product revenue, so product margins are not applicable.
- At March 31, 2021, cash and cash equivalents were $46.49 million and short-term investments were $70.61 million, totaling $117.10 million. Current assets were $121.53 million versus current liabilities of $16.44 million.
- Net cash provided by investing activities was $10.87 million, largely reflecting maturities of short-term investments, partly offset by purchases. Financing provided $1.26 million, including warrant exercises. Cash increased by $0.59 million during the quarter.
- No notes payable were outstanding at quarter-end. Accumulated deficit was $297.35 million; stockholders’ equity was $106.00 million.
Changes versus prior comparable period
- Revenue rose about 75%, while operating expenses increased substantially. R&D increased $7.70 million, mainly due to development, manufacturing, and IND-enabling work for VRDN-001 and VRDN-002; reduced spending on legacy microRNA programs partly offset the increase.
- G&A increased $3.44 million, primarily from personnel-related costs, including share-based compensation and severance. Total share-based compensation was $3.18 million, up from $0.66 million.
- Net loss increased $10.42 million, and operating cash use increased $3.08 million. The quarter’s financing cash inflow was much lower than in Q1 2020, when common-stock and warrant issuance generated substantial proceeds.
Outlook, risks and other notable items
- Management expected available resources to fund planned operations into 2024, but stated that additional capital will be needed over time. This estimate depends on development costs, clinical progress, financing availability, and other assumptions.
- Management said VRDN-001 IND-enabling work remained on track, with an IND filing planned for Q4 2021 and initial patient proof-of-concept data expected in Q2 2022. VRDN-002 IND filing was planned by year-end 2021, with Phase 1 data expected mid-2022 and patient dosing anticipated in 2022. These are forward-looking plans, not guaranteed outcomes.
- In April 2021, Viridian entered a Jefferies at-the-market equity program for up to $50 million and terminated its Cowen ATM agreement. Through May 4, it had sold 403,768 shares at a weighted-average $18.00 per share for approximately $7.0 million net proceeds. Further equity issuance may dilute stockholders.
- Series A preferred stock remained convertible into common stock. At May 4, 2021, approximately 31.29 million common shares were outstanding on an as-converted basis, including approximately 22.86 million shares issuable upon preferred-stock conversion.
- Potential future payments under the ImmunoGen license include up to $48 million in development milestones and $95 million in commercial milestones, plus royalties. The Xencor license includes up to $30 million in development milestones and $25 million in commercial milestones, plus royalties. These are contingent obligations, not amounts reported as currently payable.
- Key risks include clinical and regulatory uncertainty, reliance on third-party manufacturers and clinical providers, the need for additional financing, possible dilution, competition, and potential COVID-19-related disruption. The company reported no material COVID-19 impact through March 31, 2021. It reported no legal proceedings believed likely to have a material adverse effect.
- The Zenas collaboration may be a related-party transaction because of overlapping significant investors and a Zenas board relationship. The filing reports disclosure controls as effective at a reasonable level of assurance and no material quarterly change in internal control over financial reporting.
Important facts for investors to verify
- Whether clinical, manufacturing, and regulatory milestones for VRDN-001 and VRDN-002 remain on schedule, and whether the planned data support continued development.
- Whether the stated cash runway into 2024 remains achievable as R&D spending rises, and what additional financing may be required.
- The extent of dilution from preferred-stock conversions, ATM sales, options, and warrants; reconcile the quarter-end share count with subsequent and as-converted figures.
- Progress and economics of the Zenas collaboration, including related-party governance and any milestone or royalty realization.
- Potential timing and scale of contingent license payments, and any changes to clinical, regulatory, supply-chain, or COVID-19 risks.