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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, 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: 001-38707

 

LogicBio Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

47-1514975

(State or other jurisdiction of

incorporation or organization)

 

65 Hayden Avenue, 2nd Floor, Lexington, MA

(Address of principal executive offices)

 

(I.R.S. Employer

Identification No.)

02421

(Zip code)

 

(617) 245-0399

(Registrant’s telephone number, including area code)

 

n/a

(Former name, former address and formal 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 $0.0001 per share

 

LOGC

 

The Nasdaq Global 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 August 9, 2022, the registrant had 32,962,733 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


 

 

Table of Contents

 

 

Page  

PART I.

FINANCIAL INFORMATION

7

Item 1.

Financial Statements (Unaudited)

7

 

Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021

7

 

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021

8

 

Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021

9

 

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021

10

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021

11

 

Notes to Unaudited Condensed Consolidated Financial Statements

12

Item 2.

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

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

34

Item 4.

Controls and Procedures

34

 

 

 

PART II.        

OTHER INFORMATION

35

Item 1.

Legal Proceedings

35

Item 1A.

Risk Factors

35

Item 6.

Exhibits

86

Signatures

87

 

 

2


 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of this Quarterly Report on Form 10-Q. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “approach,” “believe,” “continue,” “designed,” “estimate,” “expect,”  “goal,” “intend,” “may,” “plan,” “potential,” “projection,” “strategy,” “will,” “would,” “should,” “seek,” “likely,” “become,” “develop,” “engage,” “expand,” “leverage,” “future” or similar expressions, or the negative or plural of these words or expressions. These forward-looking statements may include statements concerning the following:

 

the design, cost, initiation, timing, progress and results of our current and future research and development activities, including statements with respect to our Phase 1/2 SUNRISE clinical trial and other development activities for our product candidate, LB-001, in methylmalonic acidemia, or MMA;  

 

early clinical results and the significance and interpretation thereof and the expected timing to reinitiate dosing in our Phase 1/2 SUNRISE clinical trial following the removal of the clinical hold announced in May 2022;

 

potential attributes and benefits of our GeneRide® and sAAVyTM platforms, our proprietary manufacturing process, mAAVRxTM, and our existing or future product candidates, including any potential benefit of such platforms and technologies over competing platforms and technologies;

 

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

 

our ability to take advantage of the modular nature of our GeneRide platform to simplify and accelerate development of new product candidates;

 

our ability to optimize certain components of our viral vector manufacturing process, including production yields, drug product purity, decreasing “empty” capsids and developing reliable characterization methods;

 

the potential benefits of our collaboration and license agreements and our ability to enter into future collaboration and licensing arrangements;

 

the timing of, and our ability to obtain and maintain, regulatory approvals for our existing or future product candidates;

 

our ability to quickly and efficiently identify and develop additional product candidates;

 

our ability to obtain the funding for our operations necessary to continue the advancement of any product candidates;

 

our ability to advance any product candidate into and successfully complete clinical trials;

 

our intellectual property position, including obtaining and maintaining patents, the duration of our patent protection and trade secret protection; and

 

our estimates regarding expenses, future revenues, capital requirements, the sufficiency of our current and expected cash resources and our need for additional financing.

Any or all of these forward-looking statements in this Quarterly Report on Form 10-Q may turn out to be inaccurate. These forward-looking statements involve risks and uncertainties, including those that are discussed below under the heading “Risk Factors Summary”, and the risk factors identified further in Part II, Item 1A. "Risk Factors" included in this Quarterly Report on Form 10-Q and elsewhere in this Quarterly Report on Form 10-Q, that could cause our actual results, financial condition, performance or achievements to be materially different from those indicated in these forward-looking statements. In particular, the actual time it may take to demonstrate clinical efficacy, the potential timing and cost impacts of the SUNRISE protocol amendments relating to the lifting of the clinical hold announced in May 2022, the impact of the ongoing COVID-19 pandemic on our ability to progress with our research, development, manufacturing and regulatory efforts, and the value of and market for our common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as safety concerns that the U.S. Food and Drug Administration, or FDA, and other regulatory bodies may continue to have and the ultimate duration of the pandemic. In addition we are subject to the following risks: existing preclinical or clinical data may not be predictive of the results of ongoing or later clinical trials; clinical trials may not be successful or may be discontinued or delayed for any reason; manufacturing and process development risks, including delays relating to continuously improving our manufacturing processes; risks associated with management and key personnel changes and transitional periods; the actual funding required to develop and commercialize product candidates, including for safety, tolerability, enrollment, manufacturing or economic reasons; the timing and content of decisions made by regulatory authorities; the actual time it takes to initiate and complete preclinical and clinical studies; the competitive landscape; changes in our economic and financial conditions; and our ability to obtain, maintain and enforce patent and other intellectual property protection for our product candidates and technologies. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update or revise these forward-looking statements for

3


 

any reason. Unless otherwise stated, our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms “LogicBio,” “LogicBio Therapeutics, Inc.,” the “Company,” “we,” “us,” “our” and similar references in this Quarterly Report on Form 10-Q refer to LogicBio Therapeutics, Inc. and its subsidiaries.

LOGICBIO®, GENERIDE®, SAAVYTM, MAAVRXTM and any associated logos are trademarks of LogicBio and/or its affiliates. All other trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. The use or display of other parties’ trademarks, trade dress or products in this Quarterly Report on Form 10-Q does not imply that we have a relationship with, or endorsement or sponsorship of, the trademark or trade dress owners. Any website addresses given in this Quarterly Report on Form 10-Q are for information only and are not intended to be an active link or to incorporate any website information into this document.

 


4


 

 

RISK FACTORS SUMMARY

The following is a summary of the principal risks that could adversely affect our business, financial condition and results of operations:

 

Risks Related to Our Financial Position and Need for Additional Capital

 

We have incurred significant losses since inception and anticipate that we will incur continued losses for the foreseeable future. We may never achieve or maintain profitability.

 

Under our ASC 205-40 analysis, there is “substantial doubt” that we will have sufficient funds to satisfy our obligations through the next twelve months from the date of issuance of this Quarterly Report on Form 10-Q.

 

We will require additional capital to fund our operations, and if we fail to obtain necessary financing, we may not be able to complete the development and commercialization of any product candidates.

Risks Related to Discovery, Development, Clinical Testing, Manufacturing and Regulatory Approval

 

Our product candidates may cause serious adverse events or undesirable side effects or have other properties that may delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following marketing approval, if any.

 

We intend to identify and develop product candidates based on our novel GeneRide and sAAVy technology platforms, which makes it difficult to predict the time and cost of product candidate development.

 

Because gene delivery is novel and the regulatory landscape that governs any product candidates we may develop is uncertain and may change, we cannot predict the time and cost of obtaining regulatory approval, if we receive it at all, for any product candidates we may develop.

 

Clinical trials are expensive, time-consuming, difficult to design and implement and involve an uncertain outcome.

 

If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

 

Even if we complete the necessary clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize a product candidate we may develop, and any such approval may be for a more narrow indication than we seek.

 

We may not be successful in our efforts to identify additional product candidates.

 

The regulatory approval processes of the FDA, the EMA and other regulatory authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

 

We are heavily dependent on the success of LB-001 and if LB-001 does not receive regulatory approval in the United States or other jurisdictions, or is not successfully commercialized, our business will be harmed.

 

Interim “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

Risks Related to Our Dependence on Third Parties

 

Reliance on third-party manufacturers increases the risk that we will not have sufficient quantities of testing materials, product candidates or any medicines that we may develop and commercialize, or that such supply will not be available to us at an acceptable cost.

 

If the third parties that conduct, supervise and monitor our clinical trials do not successfully carry out their contractual duties, or if they perform in an unsatisfactory manner, it may harm our business.

 

Collaborations we enter into with third parties for the research, development and commercialization of certain of our product candidates or technologies may not be successful, we may not be able to capitalize on the market potential of those product candidates or technologies.

 

Our collaborators or strategic partners may decide to adopt alternative technologies or may be unable to develop commercially viable products with our technology, which would negatively impact our revenues and our strategy to develop these products.

 

If we fail to comply with obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.

5


 

Risks Related to Our Intellectual Property

 

If we are unable to obtain and maintain sufficient patent protection for any product candidates and for our technology, our competitors could develop and commercialize products and technology similar or identical to ours.

 

If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.

 

Patent terms and market exclusivity for our product candidates may be inadequate to protect our competitive position for an adequate amount of time.

 

The intellectual property landscape around genetic medicines 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.

 

We may be subject to claims challenging the inventorship of our patents and other intellectual property.

Risks Related to Healthcare Laws and Other Legal Compliance Matters

 

Our current and future business operations are and will be subject to applicable healthcare regulatory laws, which could expose us to penalties and other sanctions.

 

We are subject to stringent privacy laws, information security laws, regulations, policies and contractual obligations related to data privacy and security and changes in such laws, regulations, policies and contractual obligations could adversely affect our business.

Risks Related to Employee Matters and Managing Growth

 

Our future success depends on our ability to retain our key personnel and to attract, retain and motivate qualified personnel.

Risks Related to Our Common Stock and Indebtedness

 

If we cannot comply with Nasdaq’s continued listing standards, our common stock could be delisted.

 

6


 

 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

LogicBio Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

 

 

 

June 30, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

38,846

 

 

$

53,480

 

Accounts receivable

 

 

 

 

 

30

 

Prepaid expenses and other current assets

 

 

1,940

 

 

 

2,156

 

Total current assets

 

 

40,786

 

 

 

55,666

 

Property and equipment, net

 

 

1,614

 

 

 

1,911

 

Restricted cash

 

 

622

 

 

 

622

 

Operating lease right-of-use asset

 

 

3,995

 

 

 

4,571

 

TOTAL ASSETS

 

$

47,017

 

 

$

62,770

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,257

 

 

$

718

 

Accrued expenses and other current liabilities

 

 

1,788

 

 

 

3,704

 

Operating lease liabilities

 

 

1,298

 

 

 

1,227

 

Current portion of long-term debt

 

 

3,302

 

 

 

3,295

 

Current portion of deferred revenue

 

 

10,440

 

 

 

10,639

 

Total current liabilities

 

 

18,085

 

 

 

19,583

 

Long-term debt, net of issuance costs and discount

 

 

3,424

 

 

 

5,006

 

Operating lease liabilities, net of current portion

 

 

3,063

 

 

 

3,725

 

Deferred revenue, net of current portion

 

 

1,729

 

 

 

3,729

 

Total liabilities

 

 

26,301

 

 

 

32,043

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

Preferred stock, par value of $0.0001 per share; 25,000,000 shares authorized;

no shares issued and outstanding as of June 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, par value of $0.0001 per share; 175,000,000 shares authorized; 32,962,733 and 32,952,306 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

 

 

3

 

 

 

3

 

Additional paid-in capital

 

 

172,439

 

 

 

170,744

 

Accumulated deficit

 

 

(151,726

)

 

 

(140,020

)

Total stockholders’ equity

 

 

20,716

 

 

 

30,727

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

47,017

 

 

$

62,770

 

 

See notes to unaudited condensed consolidated financial statements.

 

7


 

 

LogicBio Therapeutics, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and service revenue

 

$

3,199

 

 

$

802

 

 

$

6,015

 

 

$

1,263

 

Total revenue

 

 

3,199

 

 

 

802

 

 

 

6,015

 

 

 

1,263

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

4,832

 

 

 

7,257

 

 

 

10,473

 

 

 

13,676

 

General and administrative

 

 

3,259

 

 

 

3,765

 

 

 

6,883

 

 

 

7,824

 

Total operating expenses

 

 

8,091

 

 

 

11,022

 

 

 

17,356

 

 

 

21,500

 

LOSS FROM OPERATIONS

 

 

(4,892

)

 

 

(10,220

)

 

 

(11,341

)

 

 

(20,237

)

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

45

 

 

 

4

 

 

 

50

 

 

 

10

 

Interest expense

 

 

(197

)

 

 

(283

)

 

 

(415

)

 

 

(554

)

Total other expense, net

 

 

(152

)

 

 

(279

)

 

 

(365

)

 

 

(544

)

Net loss

 

$

(5,044

)

 

$

(10,499

)

 

$

(11,706

)

 

$

(20,781

)

Net loss per share—basic and diluted

 

$

(0.15

)

 

$

(0.33

)

 

$

(0.36

)

 

$

(0.65

)

Weighted-average common stock outstanding—basic and diluted

 

 

32,962,733

 

 

 

32,162,375

 

 

 

32,961,961

 

 

 

32,048,716

 

 

See notes to unaudited condensed consolidated financial statements.

 

8


 

 

LogicBio Therapeutics, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net loss

 

$

(5,044

)

 

$

(10,499

)

 

$

(11,706

)

 

$

(20,781

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on investments

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

$

(5,044

)

 

$

(10,499

)

 

$

(11,706

)

 

$

(20,781

)

 

See notes to unaudited condensed consolidated financial statements.

 

9


 

 

LogicBio Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

$0.0001 Par Value

 

 

Additional

Paid-in

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

BALANCE, January 1, 2021

 

 

31,775,748

 

 

$

3

 

 

$

161,415

 

 

$

 

 

$

(99,991

)

 

$

61,427

 

Vesting of restricted stock

 

 

31,372

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock related to at-the-market offerings, net of issuance costs of $65

 

 

251,086

 

 

 

 

 

 

2,091

 

 

 

 

 

 

 

 

 

2,091

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

989

 

 

 

 

 

 

 

 

 

989

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,282

)

 

 

(10,282

)

BALANCE, March 31, 2021

 

 

32,058,206

 

 

 

3

 

 

 

164,495

 

 

 

 

 

 

(110,273

)

 

 

54,225

 

Vesting of restricted stock

 

 

84,384

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of options

 

 

70,620

 

 

 

 

 

 

52

 

 

 

 

 

 

 

 

 

 

 

52

 

Issuance of common stock related to at-the-market offerings, net of issuance costs of $1

 

 

9,156

 

 

 

 

 

 

45

 

 

 

 

 

 

 

 

 

45

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

997

 

 

 

 

 

 

 

 

 

997

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,499

)

 

 

(10,499

)

BALANCE, June 30, 2021

 

 

32,222,366

 

 

$

3

 

 

$

165,589

 

 

$

 

 

$

(120,772

)

 

$

44,820

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, January 1, 2022

 

 

32,952,306

 

 

$

3

 

 

$

170,744

 

 

$

 

 

$

(140,020

)

 

$

30,727

 

Vesting of restricted stock

 

 

10,427

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

846

 

 

 

 

 

 

 

 

 

846

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,662

)

 

 

(6,662

)

BALANCE, March 31, 2022

 

 

32,962,733

 

 

 

3

 

 

 

171,590

 

 

 

 

 

 

(146,682

)

 

 

24,911

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

849

 

 

 

 

 

 

 

 

 

849

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,044

)

 

 

(5,044

)

BALANCE, June 30, 2022

 

 

32,962,733

 

 

$

3

 

 

$

172,439

 

 

$

 

 

$

(151,726

)

 

$

20,716

 

 

See notes to unaudited condensed consolidated financial statements.

 

10


 

 

LogicBio Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(11,706

)

 

$

(20,781

)

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

 

 

 

 

 

 

 

 

Depreciation expense

 

 

344

 

 

 

286

 

Stock-based compensation expense

 

 

1,695

 

 

 

1,986

 

Non-cash interest expense

 

 

91

 

 

 

114

 

Non-cash lease expense

 

 

562

 

 

 

542

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

216

 

 

 

366

 

Accounts receivable

 

 

30

 

 

 

186

 

Accounts payable

 

 

539

 

 

 

502

 

Accrued expenses and other current liabilities

 

 

(2,492

)

 

 

463

 

Deferred revenue

 

 

(2,199

)

 

 

12,810

 

Net cash used in operating activities

 

 

(12,920

)

 

 

(3,526

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(47

)

 

 

(352

)

Net cash used in investing activities

 

 

(47

)

 

 

(352

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

 

 

 

52

 

Net proceeds from at-the-market common stock issuances

 

 

 

 

 

2,136

 

Principal repayments on term loan

 

 

(1,667

)

 

 

(277

)

Net cash (used in) provided by financing activities

 

 

(1,667

)

 

 

1,911

 

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED

   CASH

 

 

(14,634

)

 

 

(1,967

)

Cash, cash equivalents and restricted cash at beginning of year

 

 

54,102

 

 

 

70,697

 

Cash, cash equivalents and restricted cash at end of period

 

$

39,468

 

 

$

68,730

 

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED

   CASH

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

38,846

 

 

$

68,108

 

Long-term restricted cash

 

 

622

 

 

 

622

 

Total cash, cash equivalents and restricted cash

 

$

39,468

 

 

$

68,730

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

324

 

 

$

440

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:

 

 

 

 

 

 

 

 

Property and equipment purchases in accrued expenses and accounts payable

 

$

 

 

$

340

 

 

See notes to unaudited condensed consolidated financial statements.

 

11


 

 

LogicBio Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Dollars in thousands, except share and per share data)

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

 

Business Overview

 

LogicBio® Therapeutics, Inc. (“LogicBio” or the “Company”) was incorporated in 2014 as a Delaware corporation. Its principal office is in Lexington, Massachusetts. LogicBio is a clinical-stage genetic medicine company pioneering genome editing and gene delivery platforms to address rare and serious diseases from infancy through adulthood. The Company's genome editing platform, GeneRide®, is a new approach to precise gene insertion harnessing a cell's natural deoxyribonucleic acid (“DNA”) repair process potentially leading to durable therapeutic protein expression levels. The Company's gene delivery platform, sAAVy™, is an adeno-associated virus (“AAV”) capsid engineering platform designed to optimize gene delivery for treatments in a broad range of indications and tissues. The Company’s proprietary manufacturing process, mAAVRxTM, is a novel process aimed at improving production yields for viral vector manufacturing.

 

The Company’s lead product candidate, LB-001, is a single-administration, genome editing therapy developed using its GeneRide technology, currently in Phase 1/2 development for the treatment of methylmalonic acidemia (“MMA”) in pediatric patients. MMA is a rare and life-threatening genetic disorder affecting approximately 1 in 50,000 newborns in the United States that often results in developmental delays and other long-term complications and a high rate of hospitalizations.

 

In April 2021, the Company entered into an Exclusive Research Collaboration, License and Option Agreement with CANbridge Care Pharma Hong Kong Limited (“CANbridge”), pursuant to which LogicBio granted CANbridge (a) an exclusive worldwide license to certain of the Company’s intellectual property rights, including those relating to AAV sL65 (“sL65”), the first capsid produced from the sAAVy platform, to develop, manufacture and commercialize gene therapy candidates for the treatment of Fabry and Pompe diseases, (b) an option to obtain an exclusive worldwide license to certain of the Company’s intellectual property rights, including those relating to sL65, to develop and commercialize gene therapy candidates for the treatment of two additional indications, and (c) an exclusive option to obtain an exclusive license to develop and commercialize LB-001 for the treatment of MMA in China, Taiwan, Hong Kong and Macau. Also in April 2021, the Company announced a research collaboration with Daiichi Sankyo Company, Limited (“Daiichi”) for the development of treatments for two indications based on GeneRide. In addition, the Company entered into a research collaboration with Takeda Pharmaceutical Company Limited (“Takeda”) in January 2020 to develop LB-301, an investigational therapy leveraging GeneRide, for the treatment of Crigler-Najjar syndrome (“CN”), a rare pediatric disease. The work under the research plan was completed in 2021.  

 

Since its inception, the Company has devoted the majority of its efforts to research and development, including its preclinical and clinical development activities and its manufacturing and process development activities, raising capital, and providing general and administrative support for these operations. The Company is subject to a number of risks similar to those of other companies conducting high-risk, early-stage research and development. Principal among these risks are clinical and regulatory risks associated with drug development, a dependency on key individuals and intellectual property, competition from other products and companies, and the technical risks associated with the successful research, development and clinical manufacturing of its product candidates. The Company’s success is dependent upon its ability to continue to raise additional capital in order to fund ongoing research and development, meet its obligations and, ultimately, obtain regulatory approval of its product candidates, successfully commercialize its products and technologies, if approved, generate revenue and attain profitable operations.

 

COVID-19 Impact

 

The Company continues to closely monitor the COVID-19 pandemic in order to promote the safety of its personnel and to continue advancing its research and development activities. The Company is following federal, state and local requirements and guidelines with respect to the COVID-19 pandemic and has allowed its employees to work on-premises in accordance with those requirements and guidelines.

 

The COVID-19 pandemic did not have a material impact on the Company’s results of operations, cash flow and financial position as of and for the quarter ended June 30, 2022. However, the Company is aware that certain of its third-party vendors are being affected by import/export and other restrictions due to COVID-19, which may have an impact on certain of the Company’s research, development and manufacturing activities. The full extent to which the COVID-19 pandemic, including the development of new variants, could directly or indirectly impact the Company’s business, results of operations and financial position will depend on future developments that are uncertain and cannot be accurately predicted.

12


 

 

We cannot predict the impact of the progression of the COVID-19 pandemic on future results due to a variety of factors, including the health of our and our third-party vendors’, suppliers’ and collaborators’ employees, our ability to maintain operations, the ability of our third-party vendors, suppliers and collaborators to continue operations, any further government and/or public actions taken in response to the pandemic and ultimately the length of the pandemic. We plan to continue to closely monitor the COVID-19 pandemic in order to ensure the safety of our personnel and to continue advancing our research and development activities.

 

Liquidity and Capital Resources

 

The Company has had recurring losses since inception and incurred a loss of $11,706 during the six months ended June 30, 2022. Net cash used in operations for the six months ended June 30, 2022 was $12,920. The Company expects to continue to generate operating losses and use cash in operations for the foreseeable future. As of June 30, 2022, the Company had cash and cash equivalents of $38,846 which management believes will be sufficient to fund its operating expenses and capital expenditure requirements into the second quarter of 2023, however due to the uncertainties described below, there is substantial doubt about the Company’s ability to continue as a going concern. On a quarterly basis, the Company is required to conduct an accounting analysis under ASC 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, (“ASC 205-40”). The result of the Company’s ASC 205-40 analysis is that there is substantial doubt about the Company’s ability to continue as a going concern through the next twelve months from the date of issuance of these unaudited condensed consolidated financial statements.

 

The Company will require substantial additional capital to fund its research and development, including its preclinical and clinical development activities and its manufacturing and process development activities, and ongoing operating expenses. Management’s plans to mitigate the conditions that raise substantial doubt include raising additional capital through equity or debt financings, payments from its collaborators, strategic transactions, or a combination of those approaches. These plans may also include the possible elimination or deferral of certain operating expenses unless and until additional capital is received. There can be no assurance that the Company will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to the Company, or that the Company will be successful in deferring certain operating expenses. 

 

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

 

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 4, 2022.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments which are necessary for a fair statement of the Company’s financial position as of June 30, 2022, consolidated results of operations for the three and six months ended June 30, 2022 and 2021 and cash flows for the six months ended June 30, 2022 and 2021. Such adjustments are of a normal and recurring nature. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2022.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 4, 2022. Since the date of those financial statements, there have been no material changes to its significant accounting policies.

13


 

Recently Issued Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption.

In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). This ASU provides optional expedients and exceptions for applying U.S. GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The ASU is effective now through December 31, 2022. The Company will evaluate transactions or contract modifications, including any related to its July 2019 loan and security agreement which uses LIBOR as a reference rate, occurring as a result of reference rate reform and determine whether to apply the optional guidance on an ongoing basis. The ASU is currently not expected to have a material impact on the Company’s consolidated financial statements and related disclosures.

 

3. FAIR VALUE MEASUREMENTS

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values:

 

Description

 

June 30, 2022

 

 

Quoted Prices in

Active Markets

for Identical

Assets (Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Other

Observable

Inputs

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds and other cash equivalents

 

$

37,900

 

 

$

37,900

 

 

$

 

 

$

 

Total financial assets

 

$

37,900

 

 

$

37,900

 

 

$

 

 

$

 

 

Description

 

December 31,

2021

 

 

Quoted Prices in

Active Markets

for Identical

Assets (Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Other

Observable

Inputs

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds and other cash equivalents

 

$

52,866

 

 

$

52,866

 

 

$

 

 

$

 

Total financial assets

 

$

52,866

 

 

$

52,866

 

 

$

 

 

$

 

 

When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure fair value. The valuation technique used to measure fair value for the Company’s financial assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases where market rate assumptions are not available, the Company is required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument.

 

The Company did not have any transfers of assets between levels of the fair value measurement hierarchy during the six months ended June 30, 2022.

14


 

4. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities at June 30, 2022 and December 31, 2021 consisted of the following:

 

 

 

June 30,

2022

 

 

December 31,

2021

 

Accrued compensation and benefits

 

$

766

 

 

$

2,289

 

Accrued professional services

 

 

939

 

 

 

1,341

 

Other

 

 

83

 

 

 

74

 

Total accrued expenses and other current liabilities

 

$

1,788

 

 

$

3,704

 

 

Accrued compensation and benefits consists primarily of accrued bonuses. Accrued professional services consists primarily of consulting services, legal services and services provided by contract research organizations (“CRO”) and contract manufacturing organizations (“CMO”).

5. DEBT

On July 2, 2019 (the “Closing Date”), the Company entered into a loan and security agreement (the “Loan Agreement”), for term loans with Oxford Finance LLC (“Oxford”) and Horizon Technology Finance Corporation (“Horizon,” and, together with Oxford, the “Lenders”). The Loan Agreement allowed the Company to borrow up to $20,000 issuable in two equal tranches (the “Term Loans”). On the Closing Date, the first tranche of $10,000 was drawn down by the Company. In September 2020 and March 2021, the Company entered into amendments to the Loan Agreement, each of which extended the availability of the $