mlnd_Current_Folio_10Q

Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

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 No. 001‑35890


Millendo Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware

    

45‑1472564

(State or Other Jurisdiction of
Incorporation or Organization)

 

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

 

 

 

110 Miller Avenue, Suite 100
Ann Arbor, Michigan

 

48104

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (734) 845‑9000

301 North Main Street, Suite 100, Ann Arbor, Michigan 48104

(Former Name, Former Address and Former 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, $0.001 par value

MLND

The Nasdaq Capital Market, LLC

 

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 (§229.405 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 Act).   Yes ☐    No  ☒

The number of shares of Registrant’s Common Stock, $0.001 par value per share, outstanding as of August 9, 2019 was 13,412,058.

 

 

 

 

Table of Contents

 

INDEX TO FORM 10‑Q

 

 

 

 

 

 

 

    

 

    

Page

 

 

PART I — FINANCIAL INFORMATION

 

4

 

 

 

 

 

Item 1. 

 

Financial Statements (unaudited)

 

4

 

 

Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018

 

4

 

 

Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2019 and 2018    

 

5

 

 

Consolidated Statements of Convertible Preferred Stock, Redeemable Noncontrolling Interest and Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2019 and 2018

 

6

 

 

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018  

 

8

 

 

Notes to Interim Unaudited Consolidated Financial Statements  

 

9

Item 2. 

 

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

 

19

Item 3. 

 

Quantitative and Qualitative Disclosures About Market Risk

 

28

Item 4. 

 

Controls and Procedures

 

28

 

 

 

 

 

 

 

PART II — OTHER INFORMATION

 

29

 

 

 

 

 

Item 1. 

 

Legal Proceedings

 

29

Item 1A. 

 

Risk Factors

 

30

Item 2. 

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

72

Item 3. 

 

Defaults Upon Senior Securities

 

72

Item 4. 

 

Mine Safety Disclosures

 

72

Item 5. 

 

Other Information

 

72

Item 6. 

 

Exhibits

 

73

 

 

 

 

 

Signatures 

 

 

 

75

 

 

2

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Unless the context suggests otherwise, references in this Quarterly Report on Form 10‑Q, or Quarterly Report, to “Millendo,” “the Company,” “we,” “us,” and “our” refer to Millendo Therapeutics, Inc. and, where appropriate, its subsidiaries.

This Quarterly Report on Form 10‑Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect our plans, estimates and beliefs and include, but are not limited to, statements about our plans to develop and commercialize our product candidates; the progress and timing of our ongoing and planned clinical trials for our product candidates, including the timing of topline results from the Phase 2b portion of our Phase 2b/3 clinical trial of livoletide in Prader Willi syndrome (“PWS”) patients and the timeline for our Phase 2b clinical study of nevanimibe in congenital adrenal hyperplasia, the potential and timing for a neurokinin 3 receptor antagonist (MLE-301) as a potential treatment of vasomotor symptoms to enter clinical trials; the potential advantages of our discontinuation of our Phase 2 clinical study of nevanimibe in Cushing's syndrome; the timing of and our ability to obtain and maintain regulatory approvals for our product candidates; and our estimates regarding future revenue, if any, future expenses, the funding of our operations, including whether our existing cash, cash equivalents, marketable securities, and restricted cash will be sufficient to fund our current operating plans into the fourth quarter of 2020 and through the topline results of the Phase 2b portion of our Phase 2b/3 clinical trial of livoletide in PWS patients, as well as our future capital requirements and needs for additional financing. These statements 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, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Because of these risks and uncertainties, the forward-looking events and circumstances discussed in this report may not transpire. These risks and uncertainties include, but are not limited to, the risks included in this Quarterly Report on Form 10‑Q under Part II, Item 1A, “Risk Factors.”

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this document. You should read this document with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we do not undertake any obligation to update or revise any forward-looking statements contained in this report, whether as a result of new information, future events or otherwise.

3

Table of Contents

PART I – Financial Information

Item 1 – Financial Statements

MILLENDO THERAPEUTICS, INC.

Consolidated Balance Sheets

(Unaudited)

(in thousands except share and per share amounts)

 

 

 

 

 

 

 

 

    

June 30, 

    

December 31, 

 

 

2019

 

2018

Assets

 

 

  

 

 

  

Current assets:

 

 

  

 

 

  

Cash and cash equivalents

 

$

55,274

 

$

73,286

Short-term restricted cash

 

 

699

 

 

45

Marketable securities

 

 

 —

 

 

4,385

Prepaid expenses and other current assets

 

 

6,416

 

 

3,373

Refundable tax credit

 

 

2,123

 

 

2,333

Total current assets

 

 

64,512

 

 

83,422

Long-term restricted cash

 

 

658

 

 

439

Operating lease right of use assets

 

 

2,349

 

 

 —

Other assets

 

 

805

 

 

213

Total assets

 

$

68,324

 

$

84,074

Liabilities and stockholders’ equity

 

 

 

 

 

  

Current liabilities:

 

 

 

 

 

  

Current portion of debt

 

$

199

 

$

189

Accounts payable

 

 

3,091

 

 

1,998

Accrued expenses

 

 

6,147

 

 

7,630

Operating lease liabilities — current

 

 

1,492

 

 

 —

Total current liabilities

 

 

10,929

 

 

9,817

Debt, net of current portion

 

 

278

 

 

383

Operating lease liabilities

 

 

1,865

 

 

 —

Other liabilities

 

 

227

 

 

752

Total liabilities

 

 

13,299

 

 

10,952

Commitments and contingencies (Note 6)

 

 

  

 

 

  

Stockholders’ equity:

 

 

  

 

 

  

Preferred stock, $0.001 par value: 5,000,000 shares authorized; no shares issued and outstanding

 

 

 —

 

 

 —

Common stock, $0.001 par value: 100,000,000 shares authorized; 13,412,058 and 13,357,999 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively

 

 

13

 

 

13

Additional paid-in capital

 

 

237,136

 

 

234,876

Accumulated deficit

 

 

(184,323)

 

 

(164,086)

Accumulated other comprehensive income

 

 

140

 

 

148

Total stockholders’ equity attributable to Millendo Therapeutics, Inc.

 

 

52,966

 

 

70,951

Equity attributable to noncontrolling interests

 

 

2,059

 

 

2,171

Total stockholders’ equity

 

 

55,025

 

 

73,122

Total liabilities and stockholders’ equity

 

$

68,324

 

$

84,074

 

See accompanying notes to unaudited interim consolidated financial statements

4

Table of Contents

MILLENDO THERAPEUTICS, INC.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 

 

June 30, 

 

    

2019

    

2018

    

2019

    

2018

Operating expenses:

 

 

  

 

 

  

 

 

  

 

 

  

Research and development

 

$

5,981

 

$

3,200

 

$

12,185

 

$

5,969

General and administrative

 

 

4,179

 

 

1,786

 

 

8,632

 

 

3,405

Loss from operations

 

 

10,160

 

 

4,986

 

 

20,817

 

 

9,374

Other expenses:

 

 

  

 

 

  

 

 

  

 

 

  

Interest expense (income), net

 

$

(313)

 

$

(6)

 

$

(628)

 

$

(15)

Other loss

 

 

24

 

 

62

 

 

48

 

 

69

Net loss

 

$

(9,871)

 

$

(5,042)

 

$

(20,237)

 

$

(9,428)

Net loss attributable to noncontrolling interest

 

 

 —

 

 

196

 

 

 —

 

 

321

Net loss attributable to common stockholders

 

$

(9,871)

 

$

(4,846)

 

$

(20,237)

 

$

(9,107)

Net loss per share of common stock, basic and diluted

 

$

(0.74)

 

$

(6.82)

 

$

(1.51)

 

$

(12.82)

Weighted‑average shares of common stock outstanding, basic and diluted

 

 

13,379,842

 

 

710,390

 

 

13,368,981

 

 

710,390

Other comprehensive income (loss):

 

 

  

 

 

  

 

 

  

 

 

  

Foreign currency translation adjustment

 

$

 1

 

$

28

 

$

(8)

 

$

47

Comprehensive loss

 

$

(9,870)

 

$

(4,818)

 

$

(20,245)

 

$

(9,060)

Comprehensive income attributable to noncontrolling interest

 

$

 —

 

$

 4

 

$

 —

 

$

 7

Comprehensive loss attributable to Millendo Therapeutics, Inc.

 

$

(9,870)

 

$

(4,822)

 

$

(20,245)

 

$

(9,067)

 

See accompanying notes to unaudited interim consolidated financial statements

 

 

5

Table of Contents

 

MILLENDO THERAPEUTICS, INC.

Consolidated statements of convertible preferred stock, redeemable noncontrolling interests and stockholders’

(deficit) equity

(Unaudited)

(in thousands except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Three Months Ended June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

attributable

 

Total Equity

 

Total

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

to Millendo

 

Attributable to

 

Stockholders’

 

 

Common Stock

 

Paid-in

 

Accumulated

 

Comprehensive

 

Therapeutics,

 

Noncontrolling

 

(Deficit)

 

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income

    

Inc.

    

Interests

    

Equity

Balance at April 1, 2019

 

13,357,999

 

$

13

 

$

235,815

 

$

(174,452)

 

$

139

 

$

61,515

 

$

2,171

 

$

63,686

Exercise of stock options

 

45,947

 

 

 —

 

 

166

 

 

 —

 

 

 —

 

 

166

 

 

 —

 

 

166

Exercise of BSPCE warrants

 

8,112

 

 

 —

 

 

160

 

 

 —

 

 

 —

 

 

160

 

 

(112)

 

 

48

Stock-based compensation expense

 

 —

 

 

 —

 

 

995

 

 

 —

 

 

 —

 

 

995

 

 

 —

 

 

995

Foreign currency translation adjustment

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 1

 

 

 1

 

 

 —

 

 

 1

Net income (loss)

 

 —

 

 

 —

 

 

 —

 

 

(9,871)

 

 

 —

 

 

(9,871)

 

 

 —

 

 

(9,871)

Balance at June 30, 2019

 

13,412,058

 

$

13

 

$

237,136

 

$

(184,323)

 

$

140

 

$

52,966

 

$

2,059

 

$

55,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Six Months Ended June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

attributable

 

Total Equity

 

Total

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

to Millendo

 

Attributable to

 

Stockholders’

 

 

Common Stock

 

Paid-in

 

Accumulated

 

Comprehensive

 

Therapeutics,

 

Noncontrolling

 

(Deficit)

 

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income

    

Inc.

    

Interests

    

Equity

Balance at January 1, 2019

 

13,357,999

 

$

13

 

$

234,876

 

$

(164,086)

 

$

148

 

$

70,951

 

$

2,171

 

$

73,122

Exercise of stock options

 

45,947

 

 

 —

 

 

166

 

 

 —

 

 

 —

 

 

166

 

 

 —

 

 

166

Exercise of BSPCE warrants

 

8,112

 

 

 —

 

 

160

 

 

 —

 

 

 —

 

 

160

 

 

(112)

 

 

48

Stock-based compensation expense

 

 —

 

 

 —

 

 

1,934

 

 

 —

 

 

 —

 

 

1,934

 

 

 —

 

 

1,934

Foreign currency translation adjustment

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(8)

 

 

(8)

 

 

 —

 

 

(8)

Net income (loss)

 

 —

 

 

 —

 

 

 —

 

 

(20,237)

 

 

 —

 

 

(20,237)

 

 

 —

 

 

(20,237)

Balance at June 30, 2019

 

13,412,058

 

$

13

 

$

237,136

 

$

(184,323)

 

$

140

 

$

52,966

 

$

2,059

 

$

55,025

 

6

Table of Contents

MILLENDO THERAPEUTICS, INC.

Consolidated statements of convertible preferred stock, redeemable noncontrolling interests and stockholders’

(deficit) equity (continued)

(Unaudited)

(in thousands except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

attributable

 

Total Equity

 

Total

 

 

Convertible

 

Redeemable

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

to Millendo

 

Attributable to

 

Stockholders’

 

 

Preferred Stock

 

Noncontrolling

 

 

Common Stock

 

Common-1 Stock

 

Paid-in

 

Accumulated

 

Comprehensive

 

Therapeutics,

 

Noncontrolling

 

(Deficit)

 

  

Shares

   

Amount

   

Interests

  

  

Shares

   

Amount

   

Shares

   

Amount

   

Capital

   

Deficit

   

Income

   

Inc.

   

Interests

   

Equity

Balance at April 1, 2018

 

90,848,515

 

$

132,922

 

$

10,462

  

  

246,347

 

$

 —

 

464,043

 

$

 —

 

$

6,369

 

$

(141,155)

 

$

24

 

$

(134,762)

 

$

2,171

 

$

(132,591)

Stock-based compensation expense

 

 —

 

 

 —

 

 

 —

  

  

 —

 

 

 —

 

 —

 

 

 —

 

 

159

 

 

 —

 

 

 —

 

 

159

 

 

 —

 

 

159

Foreign currency translation adjustment

 

 —

 

 

 —

 

 

 4

  

  

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

24

 

 

24

 

 

 —

 

 

24

Net income (loss)

 

 —

 

 

 —

 

 

(196)

  

  

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

(4,846)

 

 

 —

 

 

(4,846)

 

 

 —

 

 

(4,846)

Balance at June 30, 2018

 

90,848,515

 

$

132,922

 

$

10,270

  

  

246,347

 

$

 —

 

464,043

 

$

 —

 

$

6,528

 

$

(146,001)

 

$

48

 

$

(139,425)

 

$

2,171

 

$

(137,254)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

attributable

 

Total Equity

 

Total

 

 

Convertible

 

Redeemable

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

to Millendo

 

Attributable to

 

Stockholders’

 

 

Preferred Stock

 

Noncontrolling

 

 

Common Stock

 

Common-1 Stock

 

Paid-in

 

Accumulated

 

Comprehensive

 

Therapeutics,

 

Noncontrolling

 

(Deficit)

 

  

Shares

   

Amount

   

Interests

  

  

Shares

   

Amount

   

Shares

   

Amount

   

Capital

   

Deficit

   

Income

   

Inc.

   

Interests

   

Equity

Balance at January 1, 2018

 

90,848,515

 

$

132,922

 

$

10,584

  

  

246,347

 

$

 —

 

464,043

 

$

 —

 

$

6,192

 

$

(136,894)

 

$

 8

 

$

(130,694)

 

$

2,171

 

$

(128,523)

Stock-based compensation expense

 

 —

 

 

 —

 

 

 —

  

  

 —

 

 

 —

 

 —

 

 

 —

 

 

336

 

 

 —

 

 

 —

 

 

336

 

 

 —

 

 

336

Foreign currency translation adjustment

 

 —

 

 

 —

 

 

 7

  

  

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

40

 

 

40

 

 

 —

 

 

40

Net income (loss)

 

 —

 

 

 —

 

 

(321)

  

  

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

(9,107)

 

 

 —

 

 

(9,107)

 

 

 —

 

 

(9,107)

Balance at June 30, 2018

 

90,848,515

 

$

132,922

 

$

10,270

  

  

246,347

 

$

 —

 

464,043

 

$

 —

 

$

6,528

 

$

(146,001)

 

$

48

 

$

(139,425)

 

$

2,171

 

$

(137,254)

 

See accompanying notes to unaudited interim consolidated financial statements

 

 

7

Table of Contents

MILLENDO THERAPEUTICS, INC.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

June 30, 

 

    

2019

    

2018

Operating activities:

 

 

  

 

 

  

Net loss

 

$

(20,237)

 

$

(9,428)

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

 

 

  

 

 

  

Depreciation