SEC Filing – ALX Oncology

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alxo-10q_20210930.htm

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

☐	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.

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).

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).

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).

	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).

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