Graybug Vision, Inc. — FY2020 Form 10-K
Issuer and period: The supplied filing is Graybug Vision, Inc.’s annual report for the fiscal year ended December 31, 2020 (ticker GRAY), not a CalciMedica, Inc. filing. It reports annual results; separate fourth-quarter results are not provided in the supplied text.
Business context
Graybug was a clinical-stage biopharmaceutical company developing sustained-release treatments for retinal and optic-nerve diseases. Its lead candidate, GB-102, was in Phase 2b testing for wet age-related macular degeneration (AMD); additional candidates included GB-103 for diabetic retinopathy and GB-401 for glaucoma. The company had no approved products or product sales.
Financial results and liquidity
| Metric | FY2020 | FY2019 |
|---|---|---|
| Revenue | None reported | None reported |
| Research and development expense | $21.0 million | $30.6 million |
| General and administrative expense | $8.9 million | $6.9 million |
| Total operating expenses | $29.8 million | $37.5 million |
| Net loss | $27.5 million | $37.0 million |
| Net loss attributable to common stockholders | $34.7 million | $44.1 million |
| Net loss per common share, basic and diluted | $5.25 | $33.41 |
| Cash used in operating activities | $32.1 million | $31.2 million |
At year-end, cash and cash equivalents were $33.4 million and short-term investments were $61.6 million, totaling $95.0 million. Current assets were $99.2 million and current liabilities $7.0 million. Total liabilities were $7.0 million; the filing reports no debt balance. No operating margin is meaningful because the company had no revenue.
The September 2020 IPO raised approximately $92.0 million net, including the underwriters’ option. The company reported an accumulated deficit of $133.4 million. Its independent auditor and management cited substantial doubt about its ability to continue as a going concern: management estimated available funds would support operations into the first quarter of 2022, but not for 12 months beyond the financial-statement issuance date.
Changes versus FY2019
- Net loss narrowed by $9.5 million, or 26%, while operating expenses declined 20%. R&D expense fell 31%, principally because major clinical-supply manufacturing had occurred in 2019 and there was no primary manufacturing activity in 2020.
- G&A expense rose 28%, mainly due to professional services related in part to the IPO and higher public-company insurance costs.
- Operating cash use increased to $32.1 million from $31.2 million. Investing cash use increased to $42.6 million, largely reflecting purchases of short-term investments.
- The IPO and conversion of preferred stock materially changed the capital structure: all outstanding preferred shares converted into common stock, and the preferred-stock tranche obligation expired in September 2020.
Outlook, commentary and key risks
- Management expected March 2021 topline results from the GB-102 Phase 2b ALTISSIMO wet-AMD trial. It planned two pivotal wet-AMD trials in the second half of 2021, subject to results, and a DME Phase 2b trial in the second half of 2021.
- GB-103’s Phase 1/2a trial was planned for the first half of 2022; an IND and Phase 1/2a trial for GB-401 were planned for the second half of 2021. These are forward-looking plans, not reported outcomes.
- The company discontinued the GB-102 2 mg dose after anterior-chamber medication and related ocular adverse events, including two serious events in one patient in the macular-edema trial. It selected 1 mg for repeat dosing in ALTISSIMO. The 1 mg dose and future efficacy and safety remained unproven in pivotal trials.
- Management said it would need additional financing and was pursuing alternatives including partnering and equity financing. No credit facility or committed capital source was available; failure to raise funds could force delays, reductions or termination of programs.
- COVID-19 had not significantly affected financial condition or operations to date, but could disrupt patient monitoring, trials, suppliers, manufacturing, hiring or access to capital.
- Other material risks include clinical and regulatory uncertainty, reliance on contract manufacturers and research organizations, ability to scale production, competition, reimbursement and market acceptance, patent challenges, and the boxed hepatotoxicity warning associated with oral sunitinib in oncology.
An unusual FY2020 item was a $2.2 million gain from the change in fair value and expiration of the preferred-stock tranche obligation, which reduced reported net loss; it was not operating revenue. Contracted CRO/CMO and vendor commitments were approximately $7.7 million, generally due within 3 to 15 months. Management reported no material legal proceedings and no off-balance-sheet arrangements.
Investor verification priorities
- Confirm the issuer identity: the supplied text is Graybug Vision’s filing, not CalciMedica’s.
- Check the actual ALTISSIMO results and subsequent regulatory and clinical decisions against the plans and expectations stated in this 2020 report.
- Verify current cash runway, financing raised since year-end, and the status of the auditor’s going-concern concern.
- Review the incidence and consequences of ocular adverse events, particularly for the discontinued 2 mg dose and the 1 mg regimen.
- Assess dilution and capital needs alongside the planned late-stage trials, manufacturing investment and commercialization costs.