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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 September 30, 2021

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: 001-39386

 

ALX ONCOLOGY HOLDINGS INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

85-0642577

(State or other jurisdiction of

incorporation or organization)

 

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

 323 Allerton Avenue,  

South San Francisco, California

 

94080

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: 650-466-7125

Former name, former address, and former fiscal year, if changed since last report:

866 Malcolm Road, Suite 100

Burlingame, California 94010

 

 

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 $0.001 per share

 

ALXO

 

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, 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 November 8, 2021, the registrant had 40,499,538 shares of common stock, $0.001 par value per share, outstanding.

 

 

 

 


 

Table of Contents

 

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020

1

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2021 and 2020

2

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2021 and 2020

3

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020

5

 

Notes to Condensed Consolidated Financial Statements

6

Item 2.

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

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

26

Item 4.

Controls and Procedures

27

 

 

 

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

28

Item 1A.

Risk Factors

28

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

74

 

 


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy, product candidates, planned preclinical studies and clinical trials, results of clinical trials, research and development costs, regulatory approvals, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that are in some cases beyond our control and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:

 

 

our financial performance;

 

the sufficiency of our existing cash to fund our future operating expenses and capital expenditure requirements;

 

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

 

our plans relating to commercializing our product candidates, if approved, including the geographic areas of focus and our ability to grow a sales team;

 

the implementation of our strategic plans for our business and product candidates;

 

our ability to obtain and maintain regulatory approval of our product candidates and the timing or likelihood of regulatory filings and approvals, including our expectation to seek special designations, such as orphan drug designation, for our product candidates for various diseases;

 

our reliance on third parties to conduct preclinical research activities, clinical trials, and for the manufacture of our product candidates;

 

the beneficial characteristics, safety, efficacy and therapeutic effects of our product candidates;

 

the progress and focus of our current and future clinical trials, and the reporting of data from those trials;

 

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

 

the ability of our clinical trials to demonstrate the safety and efficacy of our product candidates, and other positive results;

 

the success of competing therapies that are or may become available;

 

developments relating to our competitors and our industry, including competing product candidates and therapies;

 

our plans relating to the further development and manufacturing of our product candidates, including additional indications that we may pursue;

 

existing regulations and regulatory developments in the United States and other jurisdictions;

 

our potential and ability to successfully manufacture and supply our product candidates for clinical trials and for commercial use, if approved;

 

our continued reliance on third parties to conduct additional clinical trials of our product candidates, and for the manufacture of our product candidates;

 

our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available;

 

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

 

our ability to retain the continued service of our key personnel and to identify, hire, and then retain additional qualified personnel;

 

our expectations regarding the impact of the COVID-19 pandemic on our business;

 

our plans for and prospects of our acquisitions and other business development activities, and our ability to successfully capitalize on these opportunities; and

 

our anticipated use of our existing cash and cash equivalents.

 

 


 

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein until after we distribute this Quarterly Report, whether as a result of any new information, future events or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

 

 

 

 


 

PART I—FINANCIAL INFORMATION

Item 1 – Financial Statements

ALX Oncology Holdings Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share and per share data)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

385,149

 

 

$

434,219

 

Prepaid expenses and other current assets

 

 

3,814

 

 

 

1,773

 

Total current assets

 

 

388,963

 

 

 

435,992

 

Property and equipment, net

 

 

562

 

 

 

52

 

Other assets

 

 

10,203

 

 

 

10

 

Total assets

 

$

399,728

 

 

$

436,054

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,683

 

 

$

4

 

Payable and accrued liabilities due to related party

 

 

1,595

 

 

 

72

 

Accrued expenses and other current liabilities

 

 

7,210

 

 

 

6,128

 

Total current liabilities

 

 

12,488

 

 

 

6,204

 

Other non-current liabilities

 

 

2,068

 

 

 

5

 

Total liabilities

 

 

14,556

 

 

 

6,209

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Common stock, $0.001 par value; 1,000,000,000 shares authorized as of September 30,

   2021 and December 31, 2020, respectively; 40,486,287 and 39,844,522 shares issued

   and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

 

40

 

 

 

40

 

Additional paid-in capital

 

 

558,679

 

 

 

548,327

 

Accumulated deficit

 

 

(173,547

)

 

 

(118,522

)

Total stockholders’ equity

 

 

385,172

 

 

 

429,845

 

Total liabilities and stockholders’ equity

 

$

399,728

 

 

$

436,054

 

 

See accompanying notes to these condensed consolidated financial statements (unaudited).

1


ALX ONCOLOGY HOLDINGS INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

 

2021

 

 

2020

 

Related-party revenue

 

$

 

 

$

 

 

 

$

 

 

$

1,182

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

18,214

 

 

 

5,328

 

 

 

 

39,276

 

 

 

16,819

 

General and administrative

 

 

6,362

 

 

 

4,481

 

 

 

 

15,807

 

 

 

9,126

 

Cost of services for related-party revenue

 

 

 

 

 

 

 

 

 

 

 

 

1,075

 

Total operating expenses

 

 

24,576

 

 

 

9,809

 

 

 

 

55,083

 

 

 

27,020

 

Loss from operations

 

 

(24,576

)

 

 

(9,809

)

 

 

 

(55,083

)

 

 

(25,838

)

Interest expense

 

 

(4

)

 

 

(226

)

 

 

 

(10

)

 

 

(660

)

Other income (expense), net

 

 

14

 

 

 

(111

)

 

 

 

68

 

 

 

(409

)

Loss before income taxes

 

 

(24,566

)

 

 

(10,146

)

 

 

 

(55,025

)

 

 

(26,907

)

Income tax provision

 

 

 

 

 

(35

)

 

 

 

 

 

 

(59

)

Net loss and comprehensive loss

 

 

(24,566

)

 

 

(10,181

)

 

 

 

(55,025

)

 

 

(26,966

)

Cumulative dividends allocated to preferred stockholders

 

 

 

 

 

(578

)

 

 

 

 

 

 

(5,202

)

Net loss attributable to common stockholders

 

$

(24,566

)

 

$

(10,759

)

 

 

$

(55,025

)

 

$

(32,168

)

Net loss per share attributable to common stockholders, basic and

   diluted

 

$

(0.61

)

 

$

(0.36

)

 

 

$

(1.37

)

 

$

(2.67

)

Weighted-average shares of common stock used to compute net

   loss per share attributable to common stockholders, basic and

   diluted

 

 

40,396,188

 

 

 

29,664,122

 

 

 

 

40,234,159

 

 

 

12,052,876

 

 

See accompanying notes to these condensed consolidated financial statements (unaudited).

 

2


 

ALX ONCOLOGY HOLDINGS INC.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(unaudited)

(in thousands, except share amounts)

 

 

 

Three Months Ended September 30, 2021

 

 

 

Convertible Preferred

Stock

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance as of June 30, 2021

 

 

 

 

$

 

 

 

 

40,325,270

 

 

$

40

 

 

$

553,955

 

 

$

(148,981

)

 

$

405,014

 

Issuance of common stock under equity

   incentive plan

 

 

 

 

 

 

 

 

 

161,017

 

 

 

 

 

 

533

 

 

 

 

 

 

533

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,191

 

 

 

 

 

 

4,191

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,566

)

 

 

(24,566

)

Balance as of September 30, 2021

 

 

 

 

$

 

 

 

 

40,486,287

 

 

$

40

 

 

$

558,679

 

 

$

(173,547

)

 

$

385,172

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2020

 

 

 

Convertible Preferred

Stock

 

 

 

Stockholders' Equity (Deficit)

 

 

 

 

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Total

Stockholders'

Equity

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

(Deficit)

 

Balance as of June 30, 2020

 

 

21,369,774

 

 

$

175,043

 

 

 

 

3,166,946

 

 

$

3

 

 

$

5,166

 

 

$

(89,567

)

 

$

(84,398

)

Vesting of early exercised stock

   options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

4

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

689

 

 

 

 

 

 

689

 

Reclassification of warrants from liability to

   equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,019

 

 

 

 

 

 

1,019

 

Conversion of convertible preferred stock into

   common stock

 

 

(21,369,774

)

 

 

(175,043

)

 

 

 

21,369,774

 

 

 

21

 

 

 

175,022

 

 

 

 

 

 

175,043

 

Cumulative dividends

 

 

 

 

 

 

 

 

 

 

 

2,564,759

 

 

 

3

 

 

 

(3

)

 

 

 

 

 

 

Issuance of common stock in connection with

   initial public offering, net of underwriter

   discounts and issuance costs

 

 

 

 

 

 

 

 

 

9,775,000

 

 

 

10

 

 

 

169,531

 

 

 

 

 

169,541

 

Issuance of common stock under equity

   incentive plans

 

 

 

 

 

 

 

 

 

182,111

 

 

 

 

 

 

 

299

 

 

 

 

 

 

 

299

 

Issuance of common stock upon net exercise of

   warrants

 

 

 

 

 

 

 

 

 

48,932

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,181

)

 

 

(10,181

)

Balance as of September 30, 2020

 

 

 

 

$

 

 

 

 

37,107,522

 

 

$

37

 

 

$

351,727

 

 

$

(99,748

)

 

$

252,016

 

 

See accompanying notes to these condensed consolidated financial statements (unaudited).


3


 

 

 

 

Nine Months Ended September 30, 2021

 

 

 

Convertible Preferred

Stock

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2020

 

 

 

 

$

 

 

 

 

39,844,522

 

 

$

40

 

 

$

548,327

 

 

$

(118,522

)

 

$

429,845

 

Issuance of common stock under

   equity incentive plan

 

 

 

 

 

 

 

 

 

639,552

 

 

 

 

 

 

2,021

 

 

 

 

 

 

2,021

 

Issuance of common stock under

   employee stock purchase plan

 

 

 

 

 

 

 

 

 

2,213

 

 

 

 

 

 

103

 

 

 

 

 

 

103

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,228

 

 

 

 

 

 

8,228

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(55,025

)

 

 

(55,025

)

Balance as of September 30, 2021

 

 

 

 

$

 

 

 

 

40,486,287

 

 

$

40

 

 

$

558,679

 

 

$

(173,547

)

 

$

385,172

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2020

 

 

 

Convertible Preferred

Stock

 

 

 

Stockholders' Equity (Deficit)

 

 

 

 

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Total

Stockholders'

Equity

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

(Deficit)

 

Balance as of December 31, 2019

 

 

10,313,808

 

 

$

70,363

 

 

 

 

3,166,946

 

 

$

3

 

 

$

2,140

 

 

$

(72,782

)

 

$

(70,639

)

Issuance of convertible preferred

   stock, net of issuance costs

 

 

11,055,966

 

 

$

104,680

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early exercised stock

   options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26

 

 

 

 

 

 

26

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,693

 

 

 

 

 

 

3,693

 

Reclassification of warrants

   from liability to equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,019

 

 

 

 

 

 

1,019

 

Conversion of convertible preferred

   stock into common stock

 

 

(21,369,774

)

 

 

(175,043

)

 

 

 

21,369,774

 

 

 

21

 

 

 

175,022

 

 

 

 

 

 

175,043

 

Cumulative dividends

 

 

 

 

 

 

 

 

 

 

 

2,564,759

 

 

 

3

 

 

 

(3

)

 

 

 

 

 

 

Issuance of common stock in

   connection with initial public

   offering, net of underwriter

   discounts and issuance costs

 

 

 

 

 

 

 

 

 

9,775,000

 

 

 

10

 

 

 

169,531

 

 

 

 

 

169,541

 

Issuance of common stock under

   equity incentive plans

 

 

 

 

 

 

 

 

 

182,111

 

 

 

 

 

 

299

 

 

 

 

 

 

299

 

Issuance of common stock upon net

   exercise of warrants

 

 

 

 

 

 

 

 

 

48,932

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,966

)

 

 

(26,966

)

Balance as of September 30, 2020

 

 

 

 

$

 

 

 

$

37,107,522

 

 

$

37

 

 

$

351,727

 

 

$

(99,748

)

 

$

252,016

 

 

See accompanying notes to these condensed consolidated financial statements (unaudited).

4


ALX ONCOLOGY HOLDINGS INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(55,025

)

 

$

(26,966

)

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

17

 

 

 

197

 

Non-cash lease costs

 

 

460

 

 

 

 

Stock-based compensation

 

 

8,228

 

 

 

3,693

 

Amortization of term loan discount and issuance costs

 

 

 

 

 

339