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 June 30, 2023

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: 001-40522

 

Monte Rosa Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

84-3766197

(State or other jurisdiction of

incorporation or organization)

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

 

 

321 Harrison Avenue, Suite 900

Boston, Massachusetts

02118

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (617) 949-2643

 

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 $0.0001 per share

 

GLUE

 

The 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, 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 August 7, 2023, the registrant had 49,659,338 shares of common stock, $0.0001 per share, outstanding.

 

 

 

 


Special note regarding forward-looking statements


This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, or the or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, “continue” or the negative of these terms or other comparable terminology. These statements are not guarantees of future results or performance and involve substantial risks and uncertainties. Forward-looking statements in this Quarterly Report include, but are not limited to, statements about:

the initiation, timing, progress, results, costs, and any expectations and/or predictions of success of our current and future research and development programs and preclinical studies, including our expectations for our molecular glue degraders, or MGDs, molecules, including our GSPT1-directed MGD MRT-2359 and VAV1-directed MGD MRT-6160;
the initiation, timing, progress, results, costs, and any expectations and/or predictions of success of our current and any future clinical trials, including statements regarding the nature of or the timing for when any results of any clinical trials will become available;
our ability to continue to develop our proprietary platform, called QuEENTM, and to expand our proteomics and translational medicine capabilities;
the potential advantages of our platform technology and product candidates;
the extent to which our scientific approach and platform technology may target proteins that have been considered undruggable or inadequately drugged;
our plans to submit IND applications to the FDA for future product candidates;
the potential benefits of strategic collaborations and our ability to enter into strategic collaborations with third parties who have the expertise to enable us to further develop our biological targets, product candidates and platform technologies;
our ability to obtain and maintain regulatory approval of our product candidates;
our ability to maintain and expand, including through third-party vendors, our library of MGDs
our ability to manufacture, including through third-party manufacturers, our product candidates for preclinical use, future clinical trials and commercial use, if approved;
our ability to commercialize our product candidates, including our ability to establish sales, marketing and distribution capabilities for our product candidates;
the rate and degree of market acceptance of our product candidates;
the size and growth potential of the markets for our product candidates, and our ability to serve those markets;
our ability to establish and maintain intellectual property rights covering our current and future product candidates and technologies;
the implementation of our business model and strategic plans for our business, product candidates, and technology;
estimates of our future expenses, revenues, capital requirements, and our needs for additional financing;
our ability to obtain funding for our operations necessary to complete further development and commercialization of our product candidates;
our financial performance;
developments in laws and regulations in the United States, or the U.S., and foreign countries;
the success of competing therapies that are or may become available;
our ability to attract and retain key scientific or management personnel;

i


the impact of pandemics or other future large-scale adverse health events on our business and operations; and
other risks and uncertainties, including those listed under the section entitled “Risk factors" and those included in "Part 1, Item 1A, Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, or our 2022 Annual Report, filed with the Securities and Exchange Commission, or the SEC, on March 16, 2023.

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events and with respect to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those described under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

All of our forward-looking statements are as of the date of this Quarterly Report only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the SEC could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report, even if new information becomes available in the future or if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report that modify or impact any of the forward-looking statements contained in this Quarterly Report will be deemed to modify or supersede such statements in this Quarterly Report.

We may from time to time provide estimates, projections and other information concerning our industry, the general business environment, and the markets for certain diseases, including estimates regarding the potential size of those markets and the estimated incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events, circumstances or numbers, including actual disease prevalence rates and market size, may differ materially from the information reflected in this Quarterly Report. Unless otherwise expressly stated, we obtained this industry, business information, market data, prevalence information and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources, in some cases applying our own assumptions and analysis that may, in the future, prove not to have been accurate.

We have applied for various trademarks that we use in connection with the operation of our business. All other trade names, trademarks and service marks of other companies appearing in this Quarterly Report are the property of their respective holders. Solely for convenience, the trademarks and trade names in this Quarterly Report may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend to use or display other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

From time to time, we may use our website, our Twitter at @MonteRosaTx and on our LinkedIn account at linkedin.com/company/monte-rosa-therapeutics to distribute material information. Our financial and other material information is routinely posted to and accessible on the Investors section of our website, available at www.monterosatx.com. Investors are encouraged to review the Investor Relations section of our website because we may post material information on that site that is not otherwise disseminated by us. Information that is contained in and can be accessed through our website, our Twitter posts and our LinkedIn posts is not incorporated into, and does not form a part of, this Quarterly Report.

TRADEMARKS

Solely for convenience, our trademarks and trade names in this report are sometimes referred to without the ® and ™ symbols, but such references should not be construed as any indicator that we will not assert, to the fullest extent under applicable law, our rights thereto.

 

ii


Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

1

Condensed Consolidated Balance Sheets (Unaudited)

1

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

2

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

3

Condensed Consolidated Statements of Cash Flows (Unaudited)

4

Notes to the Condensed Consolidated Financial Statements (Unaudited)

5

Item 2.

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

14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

22

Item 4.

Controls and Procedures

22

 

 

 

PART II.

OTHER INFORMATION

23

Item 1.

Legal Proceedings

23

Item 1A.

Risk Factors

23

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

25

Item 3.

Defaults Upon Senior Securities

25

Item 4.

Mine Safety Disclosures

25

Item 5.

Other Information

25

Item 6.

Exhibits

27

Signatures

28

 





 

 

iii


Part I ─ Financial Information

Item 1. Financial Statements

Monte Rosa Therapeutics, Inc.

Condensed consolidated balance sheets (unaudited)

 

 

(in thousands, except share and per share amounts)

 

June 30,

 

 

December 31,

 

(unaudited)

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

47,027

 

 

$

54,912

 

Marketable securities

 

 

156,039

 

 

 

207,914

 

Other receivables

 

 

1,154

 

 

 

7,656

 

Prepaid expenses and other current assets

 

 

3,884

 

 

 

4,444

 

Current restricted cash

 

 

 

 

 

960

 

Total current assets

 

 

208,104

 

 

 

275,886

 

Property and equipment, net

 

 

35,335

 

 

 

27,075

 

Operating lease right-of-use assets

 

 

30,359

 

 

 

34,832

 

Restricted cash, net of current

 

 

4,527

 

 

 

4,318

 

Other long-term assets

 

 

291

 

 

 

278

 

Total assets

 

$

278,616

 

 

$

342,389

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

5,308

 

 

$

7,862

 

Accrued expenses and other current liabilities

 

 

11,114

 

 

 

14,580

 

Current portion of operating lease liability

 

 

2,667

 

 

 

3,127

 

Total current liabilities

 

 

19,089

 

 

 

25,569

 

Defined benefit plan liability

 

 

1,505

 

 

 

1,533

 

Operating lease liability

 

 

44,368

 

 

 

43,874

 

Total liabilities

 

 

64,962

 

 

 

70,976

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding

 

 

 

 

 

 

Common stock, $0.0001 par value; 500,000,000 shares authorized, 49,643,653 shares issued and 49,592,479 shares outstanding as of June 30, 2023; and 500,000,000 shares authorized, 49,445,802 shares issued and 49,323,531 shares outstanding as of December 31, 2022

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

513,041

 

 

 

503,696

 

Accumulated other comprehensive loss

 

 

(1,640

)

 

 

(1,752

)

Accumulated deficit

 

 

(297,752

)

 

 

(230,536

)

Total stockholders’ equity

 

 

213,654

 

 

 

271,413

 

Total liabilities and stockholders’ equity

 

$

278,616

 

 

$

342,389

 

 

See accompanying notes to the condensed consolidated financial statements.

1


Monte Rosa Therapeutics, Inc.

Condensed consolidated statements of operations and comprehensive loss (unaudited)

(in thousands, except share and per share amounts)

 

Three months ended
June 30,

 

 

Six months ended
June 30,

 

(unaudited)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

29,076

 

 

$

20,936

 

 

$

55,831

 

 

$

38,851

 

General and administrative

 

 

8,145

 

 

 

6,295

 

 

 

15,649

 

 

 

12,682

 

Total operating expenses

 

 

37,221

 

 

 

27,231

 

 

 

71,480

 

 

 

51,533

 

Loss from operations

 

 

(37,221

)

 

 

(27,231

)

 

 

(71,480

)

 

 

(51,533

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

2,302

 

 

 

628

 

 

 

4,739

 

 

 

777

 

Foreign currency exchange gain (loss), net

 

 

(93

)

 

 

134

 

 

 

(178

)

 

 

230

 

Gain on disposal of fixed assets

 

 

24

 

 

 

 

 

 

24

 

 

 

125

 

Loss on sale of marketable securities

 

 

 

 

 

 

 

 

(131

)

 

 

 

Total other income

 

 

2,233

 

 

 

762

 

 

 

4,454

 

 

 

1,132

 

Net loss before income taxes

 

 

(34,988

)

 

 

(26,469

)

 

 

(67,026

)

 

 

(50,401

)

Provision for income taxes

 

 

(190

)

 

 

 

 

 

(190

)

 

 

 

Net loss

 

$

(35,178

)

 

$

(26,469

)

 

$

(67,216

)

 

$

(50,401

)

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

 

$

(0.71

)

 

$

(0.57

)

 

$

(1.36

)

 

$

(1.08

)

Weighted-average number of shares outstanding used in computing
   net loss per common share—basic and diluted

 

 

49,431,922

 

 

 

46,668,369

 

 

 

49,389,931

 

 

 

46,632,279

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(35,178

)

 

$

(26,469

)

 

$

(67,216

)

 

$

(50,401

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Provision for pension benefit obligation

 

 

14

 

 

 

33

 

 

 

28

 

 

 

67

 

Unrealized gain (loss) on available-for-sale securities

 

 

(261

)

 

 

(358

)

 

 

84

 

 

 

(504

)

Comprehensive loss

 

$

(35,425

)

 

$

(26,794

)

 

$

(67,104

)

 

$

(50,838

)

 

See accompanying notes to the condensed consolidated financial statements.

 

 

 

2


Monte Rosa Therapeutics, Inc.

Condensed consolidated statements of stockholders’ equity (unaudited)

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except share amounts)
(unaudited)

 

Shares

 

 

Amount

 

 

Additional
paid-in
capital

 

 

Accumulated
other
comprehensive
loss

 

 

Accumulated
deficit

 

 

Total
Stockholders’
equity

 

Balance—January 1, 2022

 

 

46,535,966

 

 

$

5

 

 

$

471,566

 

 

$

(2,021

)

 

$

(122,035

)

 

$

347,515

 

Restricted common stock vesting

 

 

34,505

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of common stock options

 

 

60,240

 

 

 

 

 

 

153

 

 

 

 

 

 

 

 

 

153

 

Provision for pension benefit obligation

 

 

 

 

 

 

 

 

 

 

 

34

 

 

 

 

 

 

34

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

2,251

 

 

 

 

 

 

 

 

 

2,251

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(146

)

 

 

 

 

 

(146

)

Net Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,932

)

 

 

(23,932

)

Balance—March 31, 2022

 

 

46,630,711

 

 

$

5

 

 

 

473,970

 

 

$

(2,133

)

 

$

(145,967

)

 

$

325,875

 

Restricted common stock vesting

 

 

34,508

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of common stock options

 

 

19,439

 

 

 

 

 

 

96

 

 

 

 

 

 

 

 

 

96

 

Provision for pension benefit obligation

 

 

 

 

 

 

 

 

 

 

 

33

 

 

 

 

 

 

33

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

2,873

 

 

 

 

 

 

 

 

 

2,873

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(358

)

 

 

 

 

 

(358

)

Net Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,469

)

 

 

(26,469

)

Balance—June 30, 2022

 

 

46,684,658

 

 

$

5

 

 

$

476,939

 

 

$

(2,458

)

 

$

(172,436

)

 

$

302,050

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance—January 1, 2023

 

 

49,323,531

 

 

$

5

 

 

 

503,696

 

 

$

(1,752

)

 

$

(230,536

)

 

$

271,413

 

Restricted common stock vesting

 

 

33,192

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of common stock options

 

 

4,261

 

 

 

 

 

 

18

 

 

 

 

 

 

 

 

 

18

 

Provision for pension benefit obligation

 

 

 

 

 

 

 

 

 

 

 

14

 

 

 

 

 

 

14

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

3,974

 

 

 

 

 

 

 

 

 

3,974

 

Unrealized gain on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

345

 

 

 

 

 

 

345

 

Net Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(32,038

)

 

 

(32,038

)

Balance—March 31, 2023

 

 

49,360,984

 

 

$

5

 

 

 

507,688

 

 

$

(1,393

)

 

$

(262,574

)

 

$

243,726

 

Restricted common stock vesting

 

 

32,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of common stock options

 

 

147,333

 

 

 

 

 

 

897

 

 

 

 

 

 

 

 

 

897

 

Provision for pension benefit obligation

 

 

 

 

 

 

 

 

 

 

 

14

 

 

 

 

 

 

14

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,153

 

 

 

 

 

 

 

 

 

4,153

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(261

)

 

 

 

 

 

(261

)

Issuance of shares under employee stock purchase plan

 

 

51,977

 

 

 

 

 

 

303

 

 

 

 

 

 

 

 

 

303

 

Net Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(35,178

)

 

 

(35,178

)

Balance—June 30, 2023

 

 

49,592,479

 

 

$

5

 

 

 

513,041

 

 

$

(1,640

)

 

$

(297,752

)

 

$

213,654

 

See accompanying notes to the condensed consolidated financial statements

 

3


Monte Rosa Therapeutics, Inc.

Condensed consolidated statements of cash flows (unaudited)

(in thousands)

 

Six months ended
June 30,

 

(unaudited)

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(67,216

)

 

$

(50,401

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

Stock-based compensation expense

 

 

8,127

 

 

 

5,124

 

Depreciation

 

 

2,542

 

 

 

1,642

 

Noncash lease expense

 

 

 

 

 

1,659

 

Net accretion of discounts/premiums on marketable securities

 

 

(2,680

)

 

 

(331

)

Loss on sale of marketable securities

 

 

131

 

 

 

 

Gain on disposal of property and equipment

 

 

(24

)

 

 

(125

)

Changes in operating assets and liabilities

 

 

 

 

 

 

Other receivables

 

 

1,858

 

 

 

 

Prepaid expenses and other current assets

 

 

547

 

 

 

(688

)

Accounts payable

 

 

(696

)

 

 

(2,547

)

Accrued expenses and other current liabilities

 

 

(520

)

 

 

(2,196

)

Defined benefit plan liability

 

 

 

 

 

28

 

Right-of-use assets and operating lease liabilities

 

 

9,201

 

 

 

(70

)

Net cash used in operating activities

 

$

(48,730

)

 

$

(47,905

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(15,693

)

 

 

(4,240

)

Proceeds from sale of property and equipment

 

 

62

 

 

 

125

 

Purchases of marketable securities

 

 

(67,824

)

 

 

(230,654

)

Proceeds from sale of marketable securities

 

 

45,631

 

 

 

 

Proceeds from maturities of marketable securities

 

 

76,700