10-Q
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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

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

 

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. YesNo

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.

 

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). YesNo

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).

5


 

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).

 

6


 

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).

7


 

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).

8


 

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