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

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: 001-39381

 

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.

 

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 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.

i


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.

ii


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.

1


 

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.

 

2


 

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.

3


 

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