Viridian Therapeutics, Inc. — FY2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020. The company was renamed from miRagen Therapeutics, Inc. to Viridian Therapeutics, Inc. in January 2021. Viridian is a clinical-stage biotechnology company with no products approved for sale.
Financial performance and position
| Metric | 2020 | 2019 |
|---|---|---|
| Revenue | $1.05 million | $4.46 million |
| Research and development expense | $28.3 million | $34.8 million |
| General and administrative expense | $13.3 million | $11.6 million |
| Acquired in-process R&D expense | $69.9 million | None |
| Net loss | $110.7 million | $41.9 million |
| Net cash used in operating activities | $29.8 million | $36.1 million |
| Cash, cash equivalents and short-term investments at year-end | $127.6 million | $26.8 million |
- Revenue was collaboration and grant revenue, not product sales. No product-sale revenue or gross margin was reported.
- The 2020 net loss included $69.9 million of acquired in-process R&D from the Private Viridian acquisition, recorded as an expense because the acquired program had no alternative future use. The company reported an accumulated deficit of $278.9 million.
- Year-end current assets were $129.6 million and current liabilities were $10.7 million. Notes payable were zero after repayment of the Silicon Valley Bank loan and PPP loan in December 2020.
- Investing activities used $50.5 million; financing activities provided $101.3 million. The company raised approximately $91.0 million gross through its Series A preferred financing and reported $86.1 million net proceeds from preferred-stock issuance.
Material changes and business developments
- Revenue declined $3.4 million, primarily because reimbursable research activity under the Servier collaboration wound down; Servier's termination became effective in February 2020.
- R&D expense fell $6.5 million, mainly due to lower legacy microRNA program and personnel costs, partly offset by a $6.0 million Xencor license charge. G&A expense increased $1.6 million.
- Net loss increased substantially, principally reflecting the acquisition-related $69.9 million IPR&D charge.
- In October 2020, Viridian acquired Private Viridian in an asset acquisition and issued common and Series A convertible preferred shares. The preferred shares are convertible into common stock at 66.67 shares per preferred share, subject to ownership limits. Subsequent to year-end, 43,664 preferred shares converted into approximately 2.9 million common shares.
- The company completed a 1-for-15 reverse stock split in November 2020. The reported share and per-share amounts reflect the split.
Outlook, risks and unusual items
- Management expected year-end resources to fund operating expenses and capital requirements into the second half of 2023, but stated that additional capital will be needed. Funding availability, clinical results and spending rates could change that estimate.
- VRDN-001, an intravenous anti-IGF-1R antibody for thyroid eye disease (TED), was in development. Management expected clinical drug product in Q3 2021, an IND filing in Q4 2021 and initial patient proof-of-concept data in Q2 2022.
- VRDN-002 is an engineered anti-IGF-1R antibody intended to extend half-life and potentially enable subcutaneous dosing. Management expected an IND before the end of 2021, Phase 1 data around mid-2022 and patient dosing later in 2022. These are forward-looking expectations, not reported outcomes.
- Key risks include early-stage clinical and regulatory uncertainty, continued operating losses and financing needs, possible dilution, dependence on third-party manufacturers and a single-source CDMO, and potential clinical or supply-chain disruption from COVID-19. The filing reported no material COVID-19 impact through year-end but noted future effects were uncertain.
- Licensing commitments include up to $48 million in development milestones and $95 million in commercial milestones under the ImmunoGen license, plus up to $30 million in development and $25 million in commercial milestones under the Xencor license; royalties may also apply if products are commercialized.
- The company reported no material pending legal proceedings. Management concluded disclosure controls and internal control over financial reporting were effective at year-end; the auditor issued an unqualified opinion on the financial statements.
Important facts for investors to verify
- Whether cash runway remains consistent with management's estimate of funding into the second half of 2023, and the timing and terms of any future financing.
- Actual clinical, manufacturing and regulatory progress for VRDN-001 and VRDN-002 versus the stated milestones.
- The common-stock dilution and ownership effects of Series A preferred conversions, options and warrants.
- How the related-party Zenas license, contingent milestones and potential royalties develop; the license covers specified IGF-1R antibody products in greater China.
- Whether third-party manufacturing capacity, clinical-trial enrollment and COVID-19-related conditions affect development schedules or costs.