Viridian Therapeutics, Inc. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021. Viridian is a clinical-stage biotechnology company with no approved products and no product-sales revenue. Its main programs target thyroid eye disease (TED).
Financial results and liquidity
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $0.2 million | $0 | $2.7 million | $1.0 million |
| Research and development | $8.1 million | $3.1 million | $34.5 million | $13.1 million |
| General and administrative | $6.2 million | $2.3 million | $18.9 million | $7.7 million |
| Net loss | $14.0 million | $5.5 million | $50.5 million | $20.0 million |
| Net loss per share, basic and diluted | $1.25 | $1.48 | $5.95 | $5.82 |
At September 30, 2021, cash and cash equivalents were $138.9 million and short-term investments were $74.9 million, totaling $213.8 million. Working capital was $203.6 million; total liabilities were $16.6 million and stockholders’ equity was $204.6 million. The company had no notes payable outstanding. Operating cash use was $38.0 million for the nine months, versus $20.3 million a year earlier. Financing provided $125.1 million, primarily from equity offerings; investing provided $5.9 million. No operating margin was reported, and revenue remained small relative to operating expenses.
Changes versus comparable periods
- Q3 revenue of $0.2 million came from the Zenas BioPharma collaboration; the prior-year quarter had no revenue. Nine-month revenue rose from $1.0 million to $2.7 million, reflecting Zenas collaboration revenue in 2021 and legacy collaboration activity in 2020.
- Q3 R&D increased $5.0 million, chiefly from preclinical outsourcing and manufacturing for Viridian programs, partly offset by lower legacy microRNA clinical activity. Nine-month R&D increased $21.4 million, primarily for preclinical and manufacturing work.
- Q3 G&A increased $3.9 million; nine-month G&A increased $11.2 million, driven mainly by personnel, share-based compensation, consulting, and recruiting costs.
- Net loss widened in dollars as development and administrative spending rose. Per-share loss was lower in Q3 than in Q3 2020, but higher for the nine-month period; weighted-average shares increased substantially.
Capital, outlook, and material items
- Viridian completed a September public offering of common and Series B preferred shares, generating approximately $97.7 million gross proceeds. It also reported $32.4 million of net proceeds from its 2021 at-the-market (ATM) sales through September 30. These financings materially increased cash and shares outstanding.
- Management expected existing resources to fund planned operations into 2024, while stating that additional capital will be needed. The company expects significant operating losses for years; cash needs depend on clinical progress, spending, financing access, and collaboration activity.
- VRDN-001: The company reported submitting an IND to the FDA on October 14, 2021, after quarter-end. It expected initial TED proof-of-concept data in Q2 2022, followed by dose exploration.
- VRDN-002: IND-enabling work was described as on track, with an IND filing planned by year-end 2021. The company expected Phase 1 data by mid-2022 and planned to evaluate low-volume subcutaneous dosing in 2022.
- Collaboration revenue is not product revenue and may vary with services, milestones, and other contract events. No royalty revenue had been recognized to date.
- License commitments include up to $48 million in development milestones and $95 million in commercial milestones to ImmunoGen, plus mid-single-digit royalties; the Xencor agreement includes up to $30 million in development milestones and $25 million in commercial milestones, plus mid-single-digit royalties. These are contingent on future events and sales.
- COVID-19 had no material effect reported through September 30, 2021, but could delay trials, vendor work, manufacturing, or financing. Key risks include clinical failure or adverse effects, dependence on third-party manufacturers and CROs, competition, intellectual-property and licensing risks, and the need for further capital and potential dilution.
- The company reported effective disclosure controls and no material change in internal control over financial reporting during the quarter. It reported no material legal proceedings.
Important facts for investors to verify
- Whether the FDA permits the VRDN-001 Phase 1/2 trial to proceed and whether the stated clinical-data timelines are met.
- Actual cash burn and whether the stated runway into 2024 remains supported as trials and manufacturing advance.
- Further financing needs, remaining ATM capacity, dilution from common and convertible preferred stock, and the potential effect of outstanding equity awards.
- Progress, costs, and contingent payment terms under the ImmunoGen, Xencor, and Zenas agreements, including milestones, royalties, and collaboration revenue recognition.
- Clinical safety and efficacy, enrollment and manufacturing execution, COVID-19 or other operational delays, and the competitive position of TED therapies.