10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number: 001-40489

 

VERVE THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

82-4800132

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

201 Brookline Avenue, Suite 601

Boston, Massachusetts

02215

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (617) 603-0070

 

500 Technology Square, Suite 901

Cambridge, Massachusetts 02139

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common stock, par value $0.001 per share

 

VERV

 

Nasdaq Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of November 3, 2022, the registrant had 61,603,788 shares of common stock, par value $0.001 per share, outstanding.

 

 

 


 

FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q includes forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” or the negative of these words or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

 

The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:

the initiation, timing, progress and results of our research and development programs, preclinical studies and clinical trials, including the timing of our submissions of investigational new drug, or IND, applications, and clinical trial applications to regulatory authorities;
the timing and conduct of our heart-1 clinical trial, an ongoing Phase 1 clinical trial of VERVE-101, including statements regarding the timing of enrollment and completion of the clinical trials and the period during which the results of the clinical trials will become available;
our expectations related to the hold that the U.S. Food and Drug Administration, or FDA, placed on our IND application to conduct a clinical trial evaluating VERVE-101 in the United States, including the communication plans and timing of the FDA and our plans and expectations for discussions with the FDA and the outcomes from the discussions;
our estimates regarding expenses, future revenue, capital requirements, need for additional financing and the period over which we believe our existing cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements;
the timing of and our ability to submit applications for and obtain and maintain regulatory approvals for our current and future product candidates;
the potential therapeutic attributes and advantages of our current and future product candidates;
our expectations about the translatability of non-human primates results into humans;
our plans to develop and, if approved, subsequently commercialize any product candidates we may develop;
the rate and degree of market acceptance and clinical utility of our products, if approved;
our estimates regarding the addressable patient population and potential market opportunity for our current and future product candidates;
our commercialization, marketing and manufacturing capabilities and strategy;
our expectations regarding our ability to obtain and maintain intellectual property protection;
our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;
the impact of government laws and regulations;
our competitive position and expectations regarding developments and projections relating to our competitors and any competing therapies that are or become available;
developments relating to our competitors and our industry;
our ability to establish and maintain collaborations or obtain additional funding;
the impact of the ongoing COVID-19 pandemic and our response to the pandemic; and
our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that

 


 

we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments we may make or enter into.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to our other filings with the Securities and Exchange Commission completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Except where the context otherwise requires or where otherwise indicated, the terms “we,” “us,” “our,” “our company,” “the company,” and “our business” in this Quarterly Report on Form 10-Q refer to Verve Therapeutics, Inc. and its consolidated subsidiary.

 

 


 

 

RISK FACTOR SUMMARY

 

Our business is subject to a number of risks of which you should be aware before making an investment decision. Below we summarize what we believe to be the principal risks facing our business, in addition to the risks described more fully in Item 1A, “Risk Factors” of Part II of this Quarterly Report on Form 10-Q and other information included in this report. The risks and uncertainties described below are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations.

If any of the following risks occurs, our business, financial condition and results of operations and future growth prospects could be materially and adversely affected, and the actual outcomes of matters as to which forward-looking statements are made in this report could be materially different from those anticipated in such forward-looking statements:

We will need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts;
Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability;
We are very early in our development efforts, and we only recently initiated our first clinical trial of a product candidate, VERVE-101, our product candidate targeting PCSK9. As a result, we expect it will be many years before we commercialize any product candidate, if ever. If we are unable to advance our current or future product candidates into and through clinical trials, obtain marketing approval and ultimately commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed;
The U.S. Food and Drug Administration, or the FDA, has placed the investigational new drug application to conduct a clinical trial evaluating VERVE-101 in the United States on hold. We cannot be certain that the hold will be lifted on a timely basis, or at all, and we may not be able to initiate our clinical trial of VERVE-101 in the United States;
Gene editing, including base editing, is a novel technology in a rapidly evolving field that is not yet clinically validated as being safe and efficacious for human therapeutic use. The approaches we are taking to discover and develop novel therapeutics are unproven and may never lead to marketable products. We are focusing our research and development efforts for VERVE-101 and VERVE-201, our product candidate targeting ANGPTL3, on gene editing using base editing technology, but other gene editing technologies may be discovered that provide significant advantages over base editing and we may not be able to access or use those technologies, which could materially harm our business. We are also seeking to discover new gene editing technologies and may not be successful in doing so;
The outcome of preclinical studies and earlier-stage clinical trials may not be predictive of future results or the success of later preclinical studies and clinical trials;
If any of the product candidates we may develop, or the delivery modes we rely on to administer them, cause serious adverse events, undesirable side effects or unexpected characteristics, such events, side effects or characteristics could delay or prevent regulatory approval of the product candidates, limit the commercial potential or result in significant negative consequences following any potential marketing approval;
Adverse public perception of genetic medicines, and gene editing and base editing in particular, may negatively impact regulatory approval of, and/or demand for, our potential products;
Genetic medicines are complex and difficult to manufacture. We could experience delays in satisfying regulatory authorities or production problems that result in delays in our development programs, limit the supply of our product candidates we may develop, or otherwise harm our business;
We rely, and expect to continue to rely, on third parties to conduct some or all aspects of our product manufacturing, research and preclinical and clinical testing, and these third parties may not perform satisfactorily;
We have entered into collaborations, and may enter into additional collaborations, with third parties for the research, development, manufacture and commercialization of programs or product candidates. If these collaborations are not successful, our business could be adversely affected;
If we or our licensors are unable to obtain, maintain, defend and enforce patent rights that cover our gene editing technology and product candidates or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully develop and commercialize our technology and product candidates may be adversely affected;

 


 

If we fail to comply with our obligations in our intellectual property license arrangements with third parties, or otherwise experience disruptions to our business relationships with our licensors, we could lose intellectual property rights that are important to our business;
The intellectual property landscape around genome editing technology, including base editing, is highly dynamic, and third parties may initiate legal proceedings alleging that we are infringing, misappropriating, or otherwise violating their intellectual property rights, the outcome of which would be uncertain and may prevent, delay or otherwise interfere with our product discovery, development and commercialization efforts;
We face substantial competition, which may result in others discovering, developing or commercializing products before us or more successfully than we do; and
The ongoing COVID-19 pandemic may affect our ability to initiate and complete preclinical studies, delay the initiation of future clinical trials, disrupt regulatory activities or have other adverse effects on our business and operations. In addition, this pandemic has adversely impacted economies worldwide, which could result in adverse effects on our business, operations and ability to raise capital.

 

 


 

 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

2

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

3

 

Condensed Consolidated Statements of Cash Flows

5

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

37

Item 4.

Controls and Procedures

37

 

 

 

PART II.

OTHER INFORMATION

39

Item 1.

Legal Proceedings

39

Item 1A.

Risk Factors

39

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

100

Item 6.

Exhibits

101

Signatures

102

 

 

 


 

Part I ─ Financial Information

Item 1. Financial Statements

Verve Therapeutics, Inc.

Condensed consolidated balance sheets

 

(in thousands, except share and per share amounts)
(unaudited)

 

September 30,
2022

 

 

December 31,
2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

277,019

 

 

$

64,330

 

Marketable securities

 

 

273,691

 

 

 

296,112

 

Collaboration receivable

 

 

929

 

 

 

 

Prepaid expenses and other current assets

 

 

9,991

 

 

 

6,686

 

Total current assets

 

 

561,630

 

 

 

367,128

 

Property and equipment, net

 

 

15,159

 

 

 

7,224

 

Restricted cash

 

 

4,824

 

 

 

5,237

 

Operating lease right-of-use assets

 

 

91,332

 

 

 

1,839

 

Other long-term assets

 

 

410

 

 

 

2,696

 

Total assets

 

$

673,355

 

 

$

384,124

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

465

 

 

$

7,077

 

Accrued expenses

 

 

19,649

 

 

 

12,992

 

Lease liability, current portion

 

 

8,904

 

 

 

1,955

 

Total current liabilities

 

 

29,018

 

 

 

22,024

 

Long-term lease liability

 

 

71,011

 

 

 

 

Success payment liability

 

 

5,062

 

 

 

4,371

 

Deferred revenue, non-current

 

 

20,014

 

 

 

 

Other long-term liabilities

 

 

307

 

 

 

377

 

Total liabilities

 

 

125,412

 

 

 

26,772

 

Commitments and contingencies (See Note 7 and Note 8)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding at September 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.001 par value; 200,000,000 shares authorized, 60,443,175 and 48,511,735 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

61

 

 

 

49

 

Additional paid-in capital

 

 

851,954

 

 

 

544,381

 

Accumulated other comprehensive loss

 

 

(920

)

 

 

(228

)

Accumulated deficit

 

 

(303,152

)

 

 

(186,850

)

Total stockholders’ equity

 

 

547,943

 

 

 

357,352

 

Total liabilities and stockholders’ equity

 

$

673,355

 

 

$

384,124

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


 

Verve Therapeutics, Inc.

Condensed consolidated statements of operations and comprehensive loss

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

(in thousands, except share and per share amounts)
(unaudited)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Collaboration revenue

 

$

929

 

 

$

 

 

$

929

 

 

$

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

35,197

 

 

 

17,495

 

 

 

92,811

 

 

 

42,263

 

General and administrative

 

 

9,592

 

 

 

6,007

 

 

 

26,095

 

 

 

12,264

 

Total operating expenses

 

 

44,789

 

 

 

23,502

 

 

 

118,906

 

 

 

54,527

 

Loss from operations

 

 

(43,860

)

 

 

(23,502

)

 

 

(117,977

)

 

 

(54,527

)

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of antidilution rights liability

 

 

 

 

 

 

 

 

 

 

 

(25,574

)

Change in fair value of success payment liability

 

 

(3,306

)

 

 

700

 

 

 

(691

)

 

 

(8,954

)

Interest and other income, net

 

 

1,976

 

 

 

53

 

 

 

2,366

 

 

 

78

 

Total other (expense) income, net

 

 

(1,330

)

 

 

753

 

 

 

1,675

 

 

 

(34,450

)

Net loss

 

$

(45,190

)

 

$

(22,749

)

 

$

(116,302

)

 

$

(88,977

)

Net loss per common share attributable to common stockholders, basic and diluted

 

$

(0.79

)

 

$

(0.47

)

 

$

(2.26

)

 

$

(4.52

)

Weighted-average common shares used in net loss per share attributable to common stockholders, basic and diluted

 

 

57,207,125

 

 

 

47,992,773

 

 

 

51,516,037

 

 

 

19,698,450

 

Comprehensive Loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(45,190

)

 

$

(22,749

)

 

$

(116,302

)

 

$

(88,977

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized income (loss) on marketable securities

 

 

18

 

 

 

(5

)

 

 

(692

)

 

 

(10

)

Comprehensive loss

 

$

(45,172

)

 

$

(22,754

)

 

$

(116,994

)

 

$

(88,987

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


 

Verve Therapeutics, Inc.

Condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit)

 

 

 

Convertible preferred stock

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except share amounts)
(unaudited)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Additional
paid-in
capital

 

 

Accumulated
other
comprehensive
income (loss)

 

 

Accumulated
deficit

 

 

Total
stockholders’
equity (deficit)

 

Balance at December 31, 2020

 

 

179,519,032

 

 

$

125,160

 

 

 

2,585,789

 

 

$

3

 

 

$

2,616

 

 

$

8

 

 

$

(66,536

)

 

$

(63,909

)

Issuance of Series B convertible preferred stock, net of issuance costs of $241

 

 

77,163,022

 

 

 

93,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted common stock

 

 

 

 

 

 

 

 

134,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

48,745

 

 

 

 

 

 

72

 

 

 

 

 

 

 

 

 

72

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

670

 

 

 

 

 

 

 

 

 

670

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,263

)

 

 

(13,263

)

Balance at March 31, 2021

 

 

256,682,054

 

 

$

218,919

 

 

 

2,768,943

 

 

$

3

 

 

$

3,358

 

 

$

7

 

 

$

(79,799

)

 

$

(76,431

)

Conversion of convertible preferred stock to common stock upon closing of initial public offering

 

 

(256,682,054

)

 

 

(218,919

)

 

 

27,720,923

 

 

 

28

 

 

 

218,891

 

 

 

 

 

 

 

 

 

218,919

 

Issuance of common stock from initial public offering, net of issuance costs of $25,098

 

 

 

 

 

 

 

 

16,141,157

 

 

 

16

 

 

 

281,568

 

 

 

 

 

 

 

 

 

281,584

 

Issuance of common stock to licensor institutions

 

 

 

 

 

 

 

 

878,098

 

 

 

1

 

 

 

32,489

 

 

 

 

 

 

 

 

 

32,490

 

Vesting of restricted common stock

 

 

 

 

 

 

 

 

134,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

303,467

 

 

 

 

 

 

452

 

 

 

 

 

 

 

 

 

452

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4

)

 

 

 

 

 

(4

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,351

 

 

 

 

 

 

 

 

 

1,351

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(52,965

)

 

 

(52,965

)

Balance at June 30, 2021

 

 

 

 

$

 

 

 

47,946,996

 

 

$

48

 

 

$

538,109

 

 

$

3

 

 

$

(132,764

)

 

$

405,396

 

Vesting of restricted common stock

 

 

 

 

 

 

 

 

134,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,293

 

 

 

 

 

 

 

 

 

2,293

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,749

)

 

 

(22,749

)

Balance at September 30, 2021

 

 

 

 

$

 

 

 

48,081,404

 

 

$

48

 

 

$

540,402

 

 

$

(2

)

 

$

(155,513

)

 

$

384,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

 

 

 

 

$

 

 

 

48,511,735

 

 

$

49

 

 

$

544,381

 

 

$

(228

)

 

$

(186,850

)

 

$

357,352

 

Exercise of stock options

 

 

 

 

 

 

 

 

143,506

 

 

 

 

 

 

505

 

 

 

 

 

 

 

 

 

505

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(504

)