SEC Filing – ALX Oncology

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

View:

Download DOC

Download PDF

Download XLS

Download XBRL

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 001-39386

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

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, 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 1, 2022, the Registrant had 40,755,452 shares of common stock outstanding, $0.001 par value per share.

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, 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 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;

▪

the impact of the ongoing COVID-19 pandemic, rising interest rates, or geopolitical risks 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, short-term and long-term investments, and the funds available from our term loan.

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, 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.

Table of Contents


		Page
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Comprehensive Loss	7
	Condensed Consolidated Statements of Stockholders’ Equity	8
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures about Market Risk	27
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	76
Item 3	Defaults Upon Senior Securities	76
Item 4	Mine Safety Disclosures	76
Item 5	Other Information	76
Item 6	Exhibits	77

	SIGNATURES	79

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

ALX ONCOLOGY HOLDINGS INC.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share and per share amounts)


	September 30,			December 31,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	49,054		$	363,667
Short-term investments		235,855			—
Prepaid expenses and other current assets		5,899			3,352
Total current assets		290,808			367,019
Property and equipment, net		2,336			897
Long-term investments		8,217			—
Other assets		16,328			12,267
Total assets	$	317,689		$	380,183

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,880		$	3,764
Payable and accrued liabilities due to related party		2,759			1,630
Accrued expenses and other current liabilities		16,604			9,901
Total current liabilities		25,243			15,295
Other non-current liabilities		5,483			1,839
Total liabilities		30,726			17,134
Commitments and contingencies (Note 10)
Stockholders’ equity
Common stock, $0.001 par value; 1,000,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 40,748,290 and 40,587,067 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		41			41
Additional paid-in capital		583,184			564,993
Accumulated other comprehensive loss		(1,504	)		—
Accumulated deficit		(294,758	)		(201,985	)
Total stockholders’ equity		286,963			363,049
Total liabilities and stockholders’ equity	$	317,689		$	380,183

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

ALX ONCOLOGY HOLDINGS INC.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except share and per share amounts)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Operating expenses:
Research and development	$	29,382		$	18,214		$	73,203		$	39,276
General and administrative		7,299			6,362			22,014			15,807
Total operating expenses		36,681			24,576			95,217			55,083
Loss from operations		(36,681	)		(24,576	)		(95,217	)		(55,083	)
Interest income		1,370			22			2,471			70
Other expense, net		(9	)		(12	)		(27	)		(12	)
Net loss	$	(35,320	)	$	(24,566	)	$	(92,773	)	$	(55,025	)
Net loss per share, basic and diluted	$	(0.87	)	$	(0.61	)	$	(2.28	)	$	(1.37	)
Weighted-average shares of common stock used to compute net loss per shares, basic and diluted		40,747,026			40,396,188			40,684,172			40,234,159

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

ALX ONCOLOGY HOLDINGS INC.

Condensed Consolidated Statements of Comprehensive Loss

(unaudited)

(in thousands)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Net loss	$	(35,320	)	$	(24,566	)	$	(92,773	)	$	(55,025	)
Other comprehensive loss, net of tax:
Unrealized loss on available-for-sale investments		(248	)		—			(1,504	)		—
Total comprehensive loss	$	(35,568	)	$	(24,566	)	$	(94,277	)	$	(55,025	)

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

ALX ONCOLOGY HOLDINGS INC.

Condensed Consolidated 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
Balance as of December 31, 2021		40,587,067	$	41	$	564,993	$	—		$	(201,985	)	$	363,049
Issuance of common stock under equity incentive plans		69,565		—		185		—			—			185
Stock-based compensation		—		—		5,501		—			—			5,501
Unrealized loss on available-for-sale investments		—		—		—		(606	)		—			(606	)
Net loss		—		—		—		—			(24,533	)		(24,533	)
Balance as of March 31, 2022		40,656,632		41		570,679		(606	)		(226,518	)		343,596
Issuance of common stock under equity incentive plans		44,618		—		155		—			—			155
Issuance of common stock under employee stock purchase plan		44,002		—		302		—			—			302
Stock-based compensation		—		—		5,836		—			—			5,836
Unrealized loss on available-for-sale investments		—		—		—		(650	)		—			(650	)
Net loss		—		—		—		—			(32,920	)		(32,920	)
Balance as of June 30, 2022		40,745,252		41		576,972		(1,256	)		(259,438	)		316,319
Issuance of common stock under equity incentive plans		3,038		—		5		—			—			5
Stock-based compensation		—		—		6,207		—			—			6,207
Unrealized loss on available-for-sale investments		—		—		—		(248	)		—			(248	)
Net loss		—		—		—		—			(35,320	)		(35,320	)
Balance as of September 30, 2022		40,748,290	$	41	$	583,184	$	(1,504	)	$	(294,758	)	$	286,963


	Common Stock				Additional Paid-In		Accumulated Other Comprehensive		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss		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 plans		364,047		—		1,024		—		—			1,024
Stock-based compensation		—		—		1,800		—		—			1,800
Net loss		—		—		—		—		(14,185	)		(14,185	)
Balance as of March 31, 2021		40,208,569		40		551,151		—		(132,707	)		418,484
Issuance of common stock under equity incentive plans		114,488		—		464		—		—			464
Issuance of common stock under employee stock purchase plan		2,213		—		103		—		—			103
Stock-based compensation		—		—		2,237		—		—			2,237
Net loss		—		—		—		—		(16,274	)		(16,274	)
Balance as of June 30, 2021		40,325,270		40		553,955		—		(148,981	)		405,014
Issuance of common stock under equity incentive plans		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

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,
	2022			2021
Operating activities
Net loss	$	(92,773	)	$	(55,025	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		237			17
Non-cash lease costs		816			460
Stock-based compensation		17,544			8,228
Net amortization of premiums and accretion of discounts on investments		(256	)		—
Changes in operating assets and liabilities
Prepaid expenses and other current assets		(2,613	)		(2,042	)
Other assets		(267	)		(10,653	)
Accounts payable		2,052			3,620
Payable and accrued liabilities due to related party		1,129			386
Accrued expenses and other current liabilities		6,412			2,333
Other non-current liabilities		(836	)		2,063
Net cash used in operating activities		(68,555	)		(50,613	)
Investing activities
Purchase of investments		(315,820	)		—
Maturities of investments		70,500			—
Purchase of property and equipment		(1,038	)		(405	)
Net cash used in investing activities		(246,358	)		(405	)
Financing activities
Proceeds from exercise of stock options under equity incentive plan		345			2,022
Proceeds from issuance of common stock under employee stock purchase plan		302			103
Principal payments on finance leases		(281	)		(177	)
Net cash provided by financing activities		366			1,948
Net decrease in cash, cash equivalents and restricted cash		(314,547	)		(49,070	)
Cash, cash equivalents and restricted cash at beginning of year		363,667			434,219
Cash, cash equivalents and restricted cash at end of period	$	49,120		$