SEC Filing | Pandion Therapeutics, Inc.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

View:

Download DOC

Download PDF

Download XLS

Download XBRL

pand-10q_20200930.htm

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, 2020

☐	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: 001-39381

PANDION THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	83-3015614
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
134 Coolidge Avenue Watertown, Massachusetts	02472
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 393-5925

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

PAND

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.

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 12, 2020, the registrant had 29,519,902 shares of common stock, $0.001 par value 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,” “continue” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and 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:

•

our Phase 1a clinical trial of PT101;

•

the initiation, timing, progress and results of our current and future preclinical studies and clinical trials, and our research and development programs;

•

our plans to develop our current and future product candidates;

•

the utility of our TALON platform in identifying and discovering product candidates;

•

the timing of and our ability to submit applications for and obtain and maintain regulatory approvals for our current and future product candidates;

•

our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash and cash equivalents;

•

the potential advantages of our current and future product candidates;

•

the rate and degree of market acceptance and clinical utility of our products, if approved;

•

our estimates regarding the potential market opportunity for our current and future product candidates;

•

our commercialization, marketing and manufacturing capabilities and strategy;

•

our intellectual property position;

•

our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;

•

our estimates regarding expenses, future revenue, timing of any future revenue, capital requirements and needs for additional financing;

•

the impact of government laws and regulations;

•

our competitive position;

•

developments relating to our competitors and our industry;

•

our ability to maintain and establish collaborations or obtain additional funding;

•

the potential direct or indirect impact of the COVID-19 pandemic on our business, operations, and the markets and communities in which we and our partners, collaborators, vendors and customers operate; and

•

our expectations regarding the time during which we will be an emerging growth company under the JOBS 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 SEC 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.

BASIS OF PRESENTATION

As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to “we,” “us,” “our,” the “Company,” “Pandion” and similar references refer: (1) following the consummation of our conversion to a Delaware corporation on July 16, 2020 in connection with our initial public offering, to Pandion Therapeutics, Inc., and (2) prior to the completion of such conversion, to Pandion Therapeutics Holdco LLC. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Corporate Conversion” in this Quarterly Report on Form 10-Q for further information.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Redeemable Convertible Preferred Shares and Stockholders’/Members’ 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	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
PART II.	OTHER INFORMATION	31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	78
Item 6.	Exhibits	79
Signatures		80

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

PANDION THERAPEUTICS INC. (SUCCESSOR TO PANDION THERAPEUTICS HOLDCO LLC)

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

	September 30, 2020			December 31, 2019
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	232,324		$	15,970
Accounts receivable		2,108			1,035
Prepaid expenses and other current assets		3,009			2,960
Total current assets		237,441			19,965
Property and equipment, net		3,012			1,054
Restricted cash		502			—
Total assets	$	240,955		$	21,019
Liabilities and stockholders'/members’ equity (deficit)
Current liabilities:
Accounts payable	$	2,881		$	1,207
Accrued expenses and other current liabilities		4,084			1,455
Current portion of deferred revenue		4,724			4,365
Total current liabilities		11,689			7,027
Deferred revenue, net of current portion		4,075			6,053
Long-term debt, net of issuance costs		—			3,676
Other long-term liabilities		356			85
Total liabilities		16,120			16,841
Commitments and contingencies (Note 7)
Redeemable convertible preferred shares, no par value; no shares authorized, issued and outstanding at September 30, 2020; 51,217,321 shares authorized at December 31, 2019; 35,524,212 shares issued and outstanding at December 31, 2019		—			46,967
Stockholders'/Members’ equity (deficit)
Common stock, $0.001 par value; 200,000,000 shares authorized at September 30, 2020; 29,519,902 shares issued at September 30, 2020; 28,311,130 shares outstanding at September 30, 2020; no shares authorized, issued and outstanding at December 31, 2019		28			—
Common shares, no par value; no shares authorized, issued and outstanding at September 30, 2020; 62,000,000 shares authorized at December 31, 2019; 1,237,639 shares issued at December 31, 2019; 1,110,767 shares outstanding at December 31, 2019		—			—
Incentive shares, no par value; no shares authorized, issued and outstanding at September 30, 2020; 7,717,678 shares authorized at December 31, 2019; 946,751 shares issued and outstanding at December 31, 2019		0			172
Additional paid-in capital		299,567			—
Accumulated deficit		(74,760	)		(42,961	)
Total stockholders'/members’ equity (deficit)		224,835			(42,789	)
Total liabilities, redeemable convertible preferred shares and stockholders'/members’ equity (deficit)	$	240,955		$	21,019

See accompanying notes to the condensed consolidated financial statements.

PANDION THERAPEUTICS INC. (SUCCESSOR TO PANDION THERAPEUTICS HOLDCO LLC)

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Revenue	$	2,632		$	—		$	6,588		$	—
Operating expenses
Research and development		9,286			4,386			25,088			14,405
General and administrative		4,336			1,522			8,200			3,136
Total operating expenses		13,622			5,908			33,288			17,541
Loss from operations		(10,990	)		(5,908	)		(26,700	)		(17,541	)
Interest income		9			63			54			207
Interest expense		(251	)		—			(333	)		—
Fair value adjustments to convertible note		—			—			89			—
Net loss		(11,232	)		(5,845	)		(26,890	)		(17,334	)
Change in redemption value of redeemable convertible preferred shares		(664	)		(1,027	)		(4,909	)		(2,963	)
Net loss attributable to common shareholders		(11,896	)		(6,872	)		(31,799	)		(20,297	)
Net loss per common share, basic and diluted	$	(0.51	)	$	(6.72	)	$	(3.71	)	$	(19.91	)
Weighted-average number of shares outstanding used in computing net loss per common share, basic and diluted		23,274,944			1,022,464			8,582,039			1,019,673

See accompanying notes to the condensed consolidated financial statements.

PANDION THERAPEUTICS INC. (SUCCESSOR TO PANDION THERAPEUTICS HOLDCO LLC)

Condensed Consolidated Statements of Redeemable Convertible Preferred Shares and Members’ Deficit

(Unaudited)

(in thousands, except share amounts)

	Redeemable Convertible																					Additional					Total Members’/
	Preferred Shares						Common Stock				Common Shares					Incentive Shares						Paid-in		Accumulated			Stockholders'
	Shares			Amount			Shares		Amount		Shares			Amount		Shares			Amount			Capital		Deficit			Equity (Deficit)
Balance, January 1, 2020		35,524,212		$	46,967			—	$	—		1,110,767		$	—		946,751		$	172		$	—	$	(42,961	)	$	(42,789	)
Issuance of Series A redeemable convertible preferred shares, net of issuance costs of $20		15,693,109			17,980			—		—		—			—		—			—			—		—			—
Issuance of Series A Prime redeemable convertible preferred shares on conversion of JDRF note		948,225			1,811			—		—		—			—		—			—			—		—			—
Issuance of Series B redeemable convertible preferred shares, net of issuance costs of $271		19,158,922			39,728			—		—		—			—		—			—			—		—			—
Accretion of redeemable convertible preferred shares to redemption value		—			1,534			—		—		—			—		—			—			—		(1,534	)		(1,534	)
Issuance of incentive shares		—			—			—		—		—			—		—			60			—		—			60
Vesting of restricted common shares		—			—			—		—		54,770			—		—			—			—		—			—
Net loss		—			—			—		—		—			—		—			—			—		(6,420	)		(6,420	)
Balance, March 31, 2020		71,324,468		$	108,020			—	$	—		1,165,537		$	—		946,751		$	232		$	—	$	(50,915	)	$	(50,683	)
Issuance of Series B redeemable convertible preferred shares, net of issuance costs of $136		20,116,868			41,864			—		—		—			—		—			—			—		—			—
Accretion of redeemable convertible preferred shares to redemption value		—			2,712			—		—		—			—		—			—			—		(2,712	)		(2,712	)
Issuance of incentive shares		—			—			—		—		—			—		1,417,844			150			—		—			150
Vesting of restricted common shares		—			—			—		—		30,257			—		—			—			—		—			—
Net loss		—			—			—		—		—			—		—			—			—		(9,237	)		(9,237	)
Balance, June 30, 2020		91,441,336		$	152,596			—	$	—		1,195,794		$	—		2,364,595		$	382		$	—	$	(62,864	)	$	(62,482	)
Conversion of redeemable convertible preferred, common and incentive shares into common stock		(91,441,336	)		(153,260	)		19,291,235		19		(1,204,986	)		—		(2,364,595	)		(382	)		153,623		—			153,260
Common stock issued in IPO, net of issuance costs of $14,269		—			—			8,494,166		9		—			—		—			—			138,617		—			138,626
Common stock issued in SAFE		—			—			333,333		—		—			—		—			—			6,000		—			6,000
Accretion of redeemable convertible preferred shares to redemption value		—			664			—		—		—			—		—			—			—		(664	)		(664	)
Vesting of restricted common stock/shares		—			—			192,396		—		9,192			—		—			—			—		—			—
Stock-based compensation		—			—			—		—		—			—		—			—			1,327		—			1,327
Net loss		—			—			—		—		—			—		—			—			—		(11,232	)		(11,232	)
Balance, September 30, 2020		—		$	—			28,311,130	$	28		—		$	—		—		$	0		$	299,567	$	(74,760	)	$	224,835

See accompanying notes to the condensed consolidated financial statements.

PANDION THERAPEUTICS INC. (SUCCESSOR TO PANDION THERAPEUTICS HOLDCO LLC)

Condensed Consolidated Statements of Redeemable Convertible Preferred Shares and Members’/Stockholders’ Equity (Deficit)

(Unaudited)

(in thousands, except share amounts)

	Redeemable Convertible						Redeemable Convertible																	Additional						Total
	Preferred Stock						Preferred Shares				Common Stock					Common Shares				Incentive Shares				Paid-In			Accumulated			Members’
	Shares			Amount			Shares		Amount		Shares			Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Deficit
Balance, January 1, 2019		19,831,103		$	24,977			—	$	—		940,713		$	—		—	$	—		—	$	—	$	52		$	(17,109	)	$	(17,057	)
Reorganization		(19,831,103	)		(24,977	)		19,831,103		24,977		(940,713	)		—		940,713		—		—		52		(52	)		—			—
Issuance of Series A redeemable convertible preferred shares, net of issuance costs of $34		—			—			15,693,109		17,966		—			—		—		—		—		—		—			—			—
Accretion of redeemable convertible preferred shares to redemption value		—			—			—		954		—			—		—		—		—		—		—			(954	)		(954	)
Issuance of incentive shares		—			—			—		—		—			—		—		—		230,968		9		—			—			9
Vesting of restricted common shares		—			—			—		—		—			—		79,283		—		—		—		—			—			—
Net loss		—			—			—		—		—			—		—		—		—		—		—			(5,805	)		(5,805	)
Balance, March 31, 2019		—		$	—			35,524,212	$	43,897		—		$	—		1,019,996	$	—		230,968	$	61	$	—		$	(23,868	)	$	(23,807	)
Accretion of redeemable convertible preferred shares to redemption value		—			—			—		982		—			—		—		—		—		—		—			(982	)		(982	)
Issuance of incentive shares		—			—			—		—		—			—		—		—		66,532		11		—			—