iXBRL+
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
or
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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:
Flexion Therapeutics, Inc.
(Exact name of registrant as specified in its charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) |
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(Zip Code) |
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(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading symbol(s) |
Name of each exchange on which registered |
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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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or 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.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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).
As of August 1, 2020, the registrant had
FLEXION THERAPEUTICS, INC.
TABLE OF CONTENTS
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Flexion Therapeutics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited in thousands, except share amounts)
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June 30, 2020 |
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December 31, 2019 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Accounts receivable, net |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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$ |
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$ |
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Property and equipment, net |
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Right-of-use assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Deferred revenue |
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— |
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Operating lease liabilities |
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Current portion of long-term debt |
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— |
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Total current liabilities |
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$ |
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$ |
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Long-term operating lease liability, net |
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Long-term debt, net |
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2024 convertible notes, net |
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Other long-term liabilities |
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Total liabilities |
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$ |
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$ |
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Commitments and contingencies |
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Preferred stock, $ and December 31, 2019 and and December 31, 2019 |
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Stockholders' equity |
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Common stock, $ December 31, 2019, respectively |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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Total stockholders' equity (deficit) |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Flexion Therapeutics, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited in thousands, except per share amounts)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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Revenues |
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Product revenue, net |
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$ |
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$ |
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$ |
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$ |
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Operating expenses |
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Cost of sales |
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Research and development |
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Selling, general and administrative |
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Total operating expenses |
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Loss from operations |
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Other (expense) income |
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Interest income |
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Interest expense |
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Other (expense) income |
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Total other (expense) income |
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( |
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Loss before income taxes |
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( |
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( |
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Income tax expense |
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— |
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— |
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Net loss |
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$ |
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$ |
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Net loss per common share, basic and diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average common shares outstanding, basic and diluted |
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Other comprehensive (loss) income: |
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Unrealized (losses) gains from available-for-sale securities, net of tax of $ |
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Total other comprehensive (loss) income |
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( |
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Comprehensive loss |
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$ |
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$ |
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$ |
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$ |
( |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Flexion Therapeutics, Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited in thousands)
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Common Stock |
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Additional |
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Accumulated Other |
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Total Stockholders' |
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Shares |
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Par Value |
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Paid-in- Capital |
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Comprehensive Income (Loss) |
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Accumulated Deficit |
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Equity (Deficit) |
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Balance at December 31, 2019 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Issuance of common stock for equity awards, net of shares withheld for taxes |
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Stock-based compensation expense |
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Net loss |
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( |
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( |
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Other comprehensive loss |
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( |
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Balance at March 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Issuance of common stock net of issuance costs |
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Issuance of common stock for equity awards, net of shares withheld for taxes |
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Employee stock purchase plan |
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Stock-based compensation expense |
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Net loss |
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( |
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( |
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Other comprehensive loss |
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( |
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( |
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Balance at June 30, 2020 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Common Stock |
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Additional |
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Accumulated Other |
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Total |
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Shares |
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Par Value |
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Paid-in- Capital |
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Comprehensive Income (Loss) |
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Accumulated Deficit |
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Stockholders' Equity |
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Balance at December 31, 2018 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Issuance of common stock for equity awards |
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— |
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— |
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— |
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Stock-based compensation expense |
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Net loss |
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( |
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( |
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Other comprehensive income |
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Balance at March 31, 2019 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Issuance of common stock for equity awards |
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— |
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— |
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— |
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Employee stock purchase plan |
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Stock-based compensation expense |
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Net loss |
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( |
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( |
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Other comprehensive income |
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Balance at June 30, 2019 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Flexion Therapeutics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited in thousands)
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Six Months Ended |
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June 30, |
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2020 |
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2019 |
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Cash flows from operating activities |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to cash used in operating activities |
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Depreciation |
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Amortization of right-of-use assets |
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Stock-based compensation expense |
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Non cash interest expense |
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— |
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Accretion of discount on marketable securities |
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( |
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( |
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Loss on disposal of fixed assets |
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— |
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Amortization of debt discount and debt issuance costs |
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Premium paid on securities purchased |
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( |
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( |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
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Inventory |
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( |
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( |
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Prepaid expenses and other current assets |
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Accounts payable |
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( |
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( |
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Accrued expenses and other current liabilities |
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( |
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Deferred revenue |
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— |
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Lease liabilities |
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( |
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( |
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Net cash used in operating activities |
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( |
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( |
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Cash flows from investing activities |
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Purchases of property and equipment |
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( |
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( |
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Purchases of marketable securities |
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( |
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( |
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Sale and redemption of marketable securities |
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Net cash provided by investing activities |
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Cash flows from financing activities |
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Proceeds from borrowings under term loan |
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— |
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Proceeds from revolving line of credit |
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— |
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Repayments of revolving line of credit |
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( |
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— |
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Proceeds from the offering of common stock |
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— |
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Payments of public offering costs |
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( |
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— |
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Payments on notes payable |
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— |
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( |
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Proceeds from the exercise of stock options |
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— |
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Proceeds from employee stock purchase plan |
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Net cash provided by (used in) financing activities |
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( |
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Net increase (decrease) in cash and cash equivalents |
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( |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Non-cash investing and financing activities |
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Right-of-use asset obtained in exchange for operating lease obligation |
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— |
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Purchases of property and equipment in accounts payable and accrued expenses |
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— |
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Public offering costs included in accounts payable or accrued |
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— |
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Supplemental disclosures of cash flow information |
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Cash paid for interest |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Flexion Therapeutics, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Overview and Nature of the Business
Flexion Therapeutics, Inc. (“Flexion” or the “Company”) was incorporated under the laws of the state of Delaware on
The accompanying condensed consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has incurred recurring losses and negative cash flows from operations. As of June 30, 2020, the Company had cash, cash equivalents, and marketable securities of approximately $
The Company is subject to risks and uncertainties common to companies in the biopharmaceutical industry, including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, and the ability to secure additional capital to fund operations. Successfully commercializing ZILRETTA requires significant sales and marketing efforts and the Company’s pipeline programs will require significant additional research and development efforts, including extensive preclinical and clinical testing. These activities will in turn require significant amounts of capital, qualified personnel and adequate infrastructure. There can be no assurance when, if ever, the Company will realize significant revenue from the sales of ZILRETTA or if the development efforts supporting the Company’s pipeline, including future clinical trials, will be successful.
The Company