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 September 30, 2020
| 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 001-31791
.
| (State or other jurisdiction of incorporation) |
(I.R.S. Employer Identification No.) | |
| |
||
(Address of Principal Executive Offices) |
(Zip Code) | |
(678 ) 620-3186
(Registrant’s Telephone Number, Including Area Code)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
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 Yes ☐ No
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, or 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 | ☐ | ☒ | ||||
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 No
12b-2
of the Exchange Act). ☐ Yes ☒ The number of shares outstanding of the registrant’s common stock as of November 5, 2020 was 57,077,055 .
GALECTIN THERAPEUTICS INC.
INDEX TO FORM
10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2020
PAGE |
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PART I — FINANCIAL INFORMATION |
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| ITEM 1. |
Unaudited Condensed Consolidated Financial Statements (unaudited) |
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3 |
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| ITEM 2. |
15 |
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| ITEM 3. |
24 |
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| ITEM 4. |
24 |
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| ITEM 1. |
25 |
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| ITEM 1A. |
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| ITEM 2. |
25 |
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| ITEM 3. |
25 |
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| ITEM 4. |
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| ITEM 5. |
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| ITEM 6. |
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GALECTIN THERAPEUTICS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 30, 2020 |
December 31, 2019 |
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(in thousands) |
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| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | $ | ||||||
| Prepaid expenses and other current assets |
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| Total current assets |
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| Other assets |
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| Total assets |
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| LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | $ | ||||||
| Accrued expenses and other |
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| Accrued dividends pay a ble |
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— |
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| Total current liabilities |
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| Other liabilities |
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| Total liabilities |
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| Commitments and contingencies (Note 10) |
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| Series C super dividend redeemable convertible preferred stock; |
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| Stockholders’ equity: |
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| Undesignated stock, $ September 30, 2020 and December 31, 2019, respectively |
— | |||||||
| Series A 12% convertible preferred stock; and outstanding at September 30, 2020 and December 31, 2019, respectively, liquidation value $ |
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| Common stock, $ December 31, 2019, December 31, 2019, respectively |
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| Additional paid-in capital |
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| Retained deficit |
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| Total stockholders’ equity |
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| Total liabilities, redeemable convertible preferred stock and stockholders’ equity |
$ | $ | ||||||
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See notes to unaudited condensed consolidated financial statements.
3
GALECTIN THERAPEUTICS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2020 |
2019 |
2020 |
2019 |
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(in thousands, except per share data) |
(in thousands, except per share data) |
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| Operating expenses: |
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| Research and development |
$ | $ | $ | $ | ||||||||||||
| General and administrative |
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| Total operating expenses |
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| Total operating loss |
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| Other income (expense): |
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| Interest income |
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| Interest expense |
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| Total other income (expense) |
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| Net loss |
$ | ( |
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| Preferred stock dividends |
( |
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| Warrant modification (Note 9) |
— | ( |
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| Net loss applicable to common stockholders |
$ | ( |
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| Net loss per common share — basic and diluted |
$ | ( |
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| Weighted average common shares outstanding — basic and diluted |
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See notes to unaudited condensed consolidated financial statements.
4
GALECTIN THERAPEUTICS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30, |
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2020 |
2019 |
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(in thousands) |
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| CASH FLOWS FROM OPERATING ACTIVITIES: |
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| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash flows from operating activities: |
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| Stock-based compensation expense |
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| Amortization of right to use lease asset |
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| Non-cash interest expense |
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| Changes in operating assets and liabilities: |
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| Prepaid expenses and other assets |
( |
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| Accounts payable and accrued expenses |
( |
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| Net cash from operating activities |
( |
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| CASH FLOWS FROM FINANCING ACTIVITIES: |
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| Net proceeds from issuance of common stock and warrants |
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| Payment of preferred stock dividends |
— | ( |
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| Net cash flows from financing activities |
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| NET DECREASE IN CASH AND CASH EQUIVALENTS |
( |
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| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
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| CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ | $ | ||||||
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| NONCASH FINANCING ACTIVITIES: |
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| Payment of preferred stock dividends in common stock |
$ | $ | ||||||
See notes to unaudited condensed consolidated financial statements.
5
GALECTIN THERAPEUTICS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (UNAUDITED)
(amounts in thousands except share data)
Series C Super Dividend Redeemable Convertible Preferred Stock |
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Number of Shares |
Amount |
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| Balance at December 31, 2018 |
$ |
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| Balance at September 30, 2019 |
$ |
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| Balance at December 31, 2019 |
$ |
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| Balance at September 30, 2020 |
$ |
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6
GALECTIN THERAPEUTICS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) — (Continued)
For the Three Months Ended September 30, 2020 and 2019
(amounts in thousands except share data)
Series A 12% Convertible Preferred Stock |
Series B-1 12%Convertible Preferred Stock |
Series B-2 12%Convertible Preferred Stock |
Series B-3 8%Convertible Preferred Stock |
Common Stock |
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Number of Shares |
Amount |
Number of Shares |
Amount |
Number of Shares |
Amount |
Number of Shares |
Amount |
Number of Shares |
Amount |
Additional Paid-In Capital |
Retained Deficit |
Total Stockholders’ Equity (Deficit) |
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Balance at |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
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Series A % convertible preferred stock dividend |
( |
) |
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Series C super dividend redeemable convertible preferred stock dividend |
( |
) |
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Issuance of common stock |
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Stock-based compensation expense |
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Net loss |
( |
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( |
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Balance at September 30, 2019 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
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Balance at June 30, 2020 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
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Series A % convertible preferred stock dividend |
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Series C super dividend redeemable convertible preferred stock dividend |
( |
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Issuance of common stock |
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Issuance of common stock for conversion of Series A 12% Convertible Preferred Stock |
( |
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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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Balance at September 30, 2020 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
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7
GALECTIN THERAPEUTICS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) — (Continued)
For the Nine Months Ended September 30, 2020 and 2019
(amounts in thousands except share data)
Series A 12% Convertible Preferred St o ck |
Series B-1 12%Convertible Preferred Stock |
Series B-2 12%Convertible Preferred Stock |
Series B-3 8%Convertible Preferred Stock |
Common Stock |
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Number of Shares |
Amount |
Number of Shares |
Amount |
Number of Shares |
Amount |
Number of Shares |
Amount |
Number of Shares |
Amount |
Additional Paid-In Capital |
Retained Deficit |
Total Stockholders’ Equity (Deficit) |
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| Balance at December 31, 2018 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
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| Series A % convertible preferred stock dividend |
( |
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( |
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| Series B-1 |
( |
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| Series B-2 |
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| Series B-3 |
( |
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| Series C super dividend redeemable convertible preferred stock dividend |
( |
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( |
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| Issuance of common stock |
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| Conversion of Series B Convertible Preferred to common |
( |
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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 exercise of warrants and options |
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| Warrant modification (Note 9) |
( |
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| Stock-based compensation expense |
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| Net loss |
( |
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( |
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| Balance at September 30, 2019 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
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| Balance at December 31, 2019 |
$ |
$ |
$ |
$ |
( |
) |
$ |
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| Series A % convertible preferred stock dividend |
( |
) |
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| Series C super dividend redeemable convertible preferred stock dividend |
( |
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| Issuance of common stock |
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| Issuance of common stock for conversion of Series A 12% Convertible Preferred Stock |
( |
) |
( |
) |
( |
) |
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| Issuance of common stock for exercise of warrants and options |
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| Stock-based compensation expense |
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| Net loss |
( |
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| Balance at September 30, 2020 |
$ |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
$ |
$ |
$ |
( |
) |
$ |
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See notes to consolidated financial statements.
8
GALECTIN THERAPEUTICS INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation and Liquidity
Galectin Therapeutics Inc. and subsidiaries (the “Company”) is a clinical stage biopharmaceutical company that is applying its leadership in galectin science and drug development to create new therapies for fibrotic disease and cancer. These candidates are based on the Company’s targeting of galectin proteins which are key mediators of biologic and pathologic function. These compounds also may have application for drugs to treat other diseases and chronic health conditions.
The unaudited condensed consolidated financial statements as reported in this Quarterly Report on Form
10-Q
reflect all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Company as of September 30, 2020 and the results of its operations for the three and nine months ended September 30, 2020 and 2019 and its cash flows for the nine months ended September 30, 2020 and 2019. All adjustments made to the interim financial statements include all those of a normal and recurring nature. Amounts presented in the condensed consolidated balance sheet as of December 31, 2019 are derived from the Company’s audited consolidated financial statements as of that date, but do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date these financial statements are available to be issued. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. The unaudited condensed consolidated financial statements of the Company should be read in conjunction with its Annual Report on Form 10-K
for the year ended December 31, 2019.The Company has operated at a loss since its inception and has had no revenues. The Company anticipates that losses will continue for the foreseeable future. At September 30, 2020, the Company had $32,556,000 of unrestricted cash and cash equivalents available to fund future operations.
The Company believes there is sufficient cash, including availability of the $10 million line of credit (see Note 3), to fund currently planned operations at least through December 31, 2021. We will require more cash to fund our operations after December 31, 2021 and believe we will be able to obtain additional financing. The currently planned operations include costs related to our adaptively designed 40 million to cover costs of the trial to reach the planned interim analysis estimated to occur in the second quarter of 2023 along with drug manufacturing and other scientific support activities and general and administrative costs. However, there can be no assurance that we will be successful in obtaining such new financing or, if available, that such financing will be on terms favorable to us. If we are unsuccessful in raising additional capital to fund operations before December 31, 2021, we may be required to cease operations. Accordingly, based on the forecasts and estimates underlying our current operating plan, the financial statements do not currently include any adjustments that might be necessary if we are unable to continue as a going concern.
NASH-RX
Phase 2b/3 clinical trial. Currently, we expect to require an additional approximately $The Company was founded in July 2000, was incorporated in the State of Nevada in January 2001 under the name
“Pro-Pharmaceuticals,
Inc.,” and changed its name to “Galectin Therapeutics Inc.” on May 26, 2011.2. Accrued Expenses and Other
Accrued expenses consist of the following:
| September 30, 2020 |
December 31, 2019 |
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| (in thousands) | ||||||||
| Legal and accounting fees |
$ | $ | ||||||
| Acc r ued clinical tr ial costs |
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— |
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| Accrued compensation |
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| Lease liability |
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| Accrued research and development costs and other |
— | |||||||
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| Total |
$ | |||||||