SEC Filing - 4D Molecular Therapeutics

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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended September 30, 2022


☐	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: 001-39782

4D Molecular Therapeutics, Inc.

(Exact name of registrant as specified in its charter)


Delaware	47-3506994
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5858 Horton Street #455 Emeryville, CA	94608
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (510) 505-2680

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

FDMT

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, 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.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 2, 2022, there were 32,392,378 shares of 4D Molecular Therapeutics, Inc.'s common stock outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	4
Item 1.	Condensed Unaudited Financial Statements	4
	Condensed Balance Sheets as of September 30, 2022 and December 31, 2021	4
	Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	5
	Condensed Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2022 and 2021	6
	Condensed Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021	7
	Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	9
	Notes to Unaudited Condensed Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42

PART II.	OTHER INFORMATION	43
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	106
Item 3.	Default Upon Senior Securities	106
Item 4.	Mine Safety Disclosures	106
Item 5.	Other Information	106
Item 6.	Exhibits	107
Signatures		108

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

•

the success, cost and timing of our development activities, preclinical studies and clinical trials, including our clinical trials for 4D-310, 4D-150, 4D-125, 4D-110 and 4D-710;

•

the timing of Investigational New Drug Application ("IND") enabling studies and results from such studies;

•

the timing and success of lead optimization for our product candidates in lead optimization;

•

the translation of our preclinical results and data into future clinical trials in humans;

•

the timing of any manufacturing runs for materials to be used in patient trials;

•

the number, size and design of our planned clinical trials, and what regulatory authorities may require to obtain marketing approval;

•

the potential effects of the COVID-19 pandemic on our preclinical and clinical programs and business;

•

the timing or likelihood of regulatory filings and approvals; our ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations and/or warnings in the label of any approved product candidate;

•

our ability to obtain funding for our operations, including funding necessary to develop and commercialize our product candidates;

•

the rate and degree of market acceptance of our product candidates, if approved;

•

the success of competing products or platform technologies that are or may become available;

•

our plans and ability to establish sales, marketing and distribution infrastructure to commercialize any product candidates for which we obtain approval;

•

future agreements with third parties in connection with the commercialization of our product candidates;

•

the size and growth potential of the markets for our product candidates, if approved for commercial use, and our ability to serve those markets;

•

existing regulations and regulatory developments in the United States and foreign countries;

•

the expected potential benefits of strategic collaboration agreements, including our relationships with uniQure and Cystic Fibrosis Foundation ("CFF"), and our ability to attract collaborators with development, regulatory and commercialization expertise;

•

the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;

•

potential claims relating to our intellectual property and third-party intellectual property;

•

our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•

the pricing and reimbursement of our product candidates, if approved;

•

our ability to attract and retain key managerial, scientific and medical personnel;

•

the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•

our financial performance; and

•

our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act.

These forward-looking statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and management’s beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Quarterly Report on Form 10-Q may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. These 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 any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this Quarterly Report on Form 10-Q.

4D Molecular Therapeutics, Inc.

Condensed Balance Sheets (Unaudited)

(In thousands, except share and per share amounts)



	September 30,			December 31,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	108,298		$	153,001
Marketable securities		119,417			94,776
Accounts receivable		—			47
Prepaid expenses and other current assets (includes $0 and $285 at September 30, 2022 and December 31, 2021, respectively, attributable to related parties)		4,763			8,456
Total current assets		232,478			256,280
Marketable securities, long-term		11,122			67,652
Property and equipment, net		22,052			14,391
Operating lease right-of-use assets, net		13,459			14,562
Other assets		1,053			602
Total assets	$	280,164		$	353,487
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	1,480		$	4,764
Accrued and other current liabilities		7,244			7,744
Deferred revenue		2,207			2,599
Operating lease liabilities, current portion		2,633			1,231
Total current liabilities		13,564			16,338
Deferred revenue, net of current portion		1,001			2,491
Derivative liability		213			214
Operating lease liabilities, long-term portion		13,919			15,217
Other liabilities		23			120
Total liabilities		28,720			34,380
Commitments and contingencies (Notes 7, 8 and 9)
Stockholders’ equity
Common stock, $0.0001 par value, 300,000,000 shares authorized at September 30, 2022 and December 31, 2021; 32,392,378 and 32,224,524 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		3			3
Additional paid-in-capital		540,403			526,523
Accumulated other comprehensive loss		(1,851	)		(423	)
Accumulated deficit		(287,111	)		(206,996	)
Total stockholders’ equity		251,444			319,107
Total liabilities and stockholders’ equity	$	280,164		$	353,487

The accompanying notes are an integral part of these unaudited condensed financial statements.

4D Molecular Therapeutics, Inc.

Condensed Statements of Operations (Unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Revenue:
Collaboration and license revenue	$	500		$	1,366		$	1,882		$	17,946
Total revenue		500			1,366			1,882			17,946
Operating expenses:
Research and development (includes $0 and $263 for the three months ended September 30, 2022 and 2021, respectively, and $134 and $672 for the nine months ended September 30, 2022 and 2021, respectively, attributable to related parties)		18,940			15,840			58,753			43,832
General and administrative		8,055			8,187			24,441			20,683
Total operating expenses		26,995			24,027			83,194			64,515
Loss from operations		(26,495	)		(22,661	)		(81,312	)		(46,569	)
Other income (expense):
Interest income		795			435			1,235			449
Other income (expense), net		9			(13	)		(38	)		(114	)
Total other income (expense), net		804			422			1,197			335
Net loss	$	(25,691	)	$	(22,239	)	$	(80,115	)	$	(46,234	)
Net loss per share, basic and diluted	$	(0.79	)	$	(0.82	)	$	(2.48	)	$	(1.72	)
Weighted-average shares outstanding used in computing net loss per share, basic and diluted		32,385,791			27,022,380			32,305,074			26,818,595

The accompanying notes are an integral part of these unaudited condensed financial statements.

4D Molecular Therapeutics, Inc.

Condensed Statements of Comprehensive Loss (Unaudited)

(In thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net loss	$	(25,691	)	$	(22,239	)	$	(80,115	)	$	(46,234	)
Other comprehensive loss:
Net unrealized loss on marketable securities		(24	)		(195	)		(1,428	)		(195	)
Total comprehensive loss	$	(25,715	)	$	(22,434	)	$	(81,543	)	$	(46,429	)

The accompanying notes are an integral part of these unaudited condensed financial statements.

4D Molecular Therapeutics, Inc.

Condensed Statements of Stockholders' Equity (Unaudited)

(In thousands, except share amounts)


	Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balances at December 31, 2021		32,224,524	$	3	$	526,523	$	(423	)	$	(206,996	)	$	319,107
Issuance of common stock upon exercise of stock options		39,541		—		330		—			—			330
Stock-based compensation expense		—		—		3,933		—			—			3,933
Vesting of common stock warrants issued for services		—		—		22		—			—			22
Net unrealized loss on marketable securities		—		—		—		(998	)		—			(998	)
Net loss		—		—		—		—			(26,338	)		(26,338	)
Balances at March 31, 2022		32,264,065	$	3	$	530,808	$	(1,421	)	$	(233,334	)	$	296,056
Issuance of common stock upon exercise of stock options		51,261		—		138		—			—			138
Stock-based compensation expense		—		—		4,322		—			—			4,322
Issuance of common stock - 2020 ESPP		61,552		—		471		—			—			471
Vesting of common stock warrants issued for services		—		—		22		—			—			22
Net unrealized loss on marketable securities		—		—		—		(406	)		—			(406	)
Net loss		—		—		—		—			(28,086	)		(28,086	)
Balances at June 30, 2022		32,376,878	$	3	$	535,761	$	(1,827	)	$	(261,420	)	$	272,517
Issuance of common stock upon exercise of stock options		15,500		—		100		—			—			100
Stock-based compensation expense		—		—		4,520		—			—			4,520
Vesting of common stock warrants issued for services		—		—		22		—			—			22
Net unrealized loss on marketable securities		—		—		—		(24	)		—			(24	)
Net loss		—		—		—					(25,691	)		(25,691	)
Balances at September 30, 2022		32,392,378	$	3	$	540,403	$	(1,851	)	$	(287,111	)	$	251,444


	Common Stock				Additional Paid-In		Accumulated Other Comprehensive		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss		Deficit			Equity
Balances at December 31, 2020		26,681,983	$	3	$	392,063	$	—	$	(135,679	)	$	256,387
Issuance of common stock upon exercise of stock options		12,396		—		99		—		—			99
Stock-based compensation expense		—		—		2,329		—		—			2,329
Vesting of common stock warrants issued for services		—		—		22		—		—			22
Net loss		—		—		—		—		(16,406	)		(16,406	)
Balances at March 31, 2021		26,694,379	$	3	$	394,513		—	$	(152,085	)	$	242,431
Issuance of common stock upon exercise of stock options and warrants		197,478		—		820		—		—			820
Stock-based compensation expense		—		—		3,816		—		—			3,816
Issuance of common stock warrant		—		—		1,146		—