UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities 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.
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).
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.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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 August 1, 2022, the registrant had
Table of Contents
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Page |
PART I. |
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Item 1. |
3 |
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3 |
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4 |
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5 |
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6 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 |
Item 3. |
30 |
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Item 4. |
30 |
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PART II. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
79 |
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Item 4. |
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Item 5. |
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Item 6. |
80 |
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2
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Turning Point Therapeutics, Inc.
Condensed Balance Sheets
(In thousands, except share and par value amounts)
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June 30, |
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December 31, |
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2022 |
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2021 |
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Assets |
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Unaudited |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Prepaid and other current assets |
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Total current assets |
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Property and equipment, net |
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Right-of-use lease assets |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders' equity |
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Liabilities: |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Accrued compensation |
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Current portion of operating lease liabilities |
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Total current liabilities |
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Operating lease liabilities, long-term |
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(Note 8) |
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Stockholders' equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
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( |
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Accumulated deficit |
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( |
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Total stockholders' equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes.
3
Turning Point Therapeutics, Inc.
Condensed Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
(Unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Operating expenses: |
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Research and development |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
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( |
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( |
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( |
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Other income, net |
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Net loss |
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( |
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( |
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( |
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Unrealized loss on marketable securities, net of tax |
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( |
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( |
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( |
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Comprehensive loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Net loss per share, basic and diluted |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Weighted-average common shares outstanding, basic and diluted |
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See accompanying notes.
4
Turning Point Therapeutics, Inc.
Condensed Statements of Stockholders’ Equity
(In thousands, except share amounts)
(Unaudited)
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Income (Loss) |
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Deficit |
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Equity |
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Balance at December 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Issuance of common stock under equity incentive plans |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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( |
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Other comprehensive loss |
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— |
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— |
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— |
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( |
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— |
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( |
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Balance at March 31, 2022 |
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( |
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( |
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Issuance of common stock under equity incentive plans |
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— |
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— |
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— |
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Issuance of common stock under employee stock purchase plan |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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( |
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Other comprehensive loss |
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— |
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— |
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— |
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( |
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— |
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( |
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Balance at June 30, 2022 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Income (Loss) |
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Deficit |
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Equity |
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Balance at December 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Issuance of common stock under equity incentive plans |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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( |
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Other comprehensive loss |
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— |
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— |
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— |
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( |
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— |
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( |
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Balance at March 31, 2021 |
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( |
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Issuance of common stock under equity incentive plans |
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— |
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— |
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— |
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Issuance of common stock under employee stock purchase plan |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Other comprehensive loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Balance at June 30, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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See accompanying notes.
5
Turning Point Therapeutics, Inc.
Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
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Six Months Ended June 30, |
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2022 |
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2021 |
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Operating activities |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock-based compensation expense |
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Depreciation |
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Accretion of premium on marketable securities |
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Amortization of right-of-use operating lease asset |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other current assets |
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( |
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( |
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Other assets |
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( |
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Accounts payable |
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Accrued expenses and other liabilities |
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( |
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Accrued compensation |
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( |
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( |
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Net cash used in operating activities |
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( |
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( |
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Investing activities |
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Purchases of marketable securities |
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( |
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( |
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Sales and maturities of marketable securities |
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Purchases of property and equipment |
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( |
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( |
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Net cash provided by (used in) investing activities |
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( |
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Financing activities |
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Proceeds from issuance of common stock under equity incentive plans |
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Net cash provided by financing activities |
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Net decrease in cash, cash equivalents and restricted cash |
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( |
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( |
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Cash, cash equivalents and restricted cash at the beginning of period |
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Cash, cash equivalents and restricted cash at the end of period |
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$ |
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$ |
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Supplemental disclosure of cash flow information: |
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Cash paid for income taxes |
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$ |
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$ |
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Supplemental disclosure of non-cash investing and financing information: |
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Purchases of property and equipment in accounts payable |
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$ |
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$ |
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Operating lease liabilities arising from obtaining right-of-use assets |
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$ |
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$ |
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See accompanying notes.
6
Turning Point Therapeutics, Inc.
Notes to Unaudited Condensed Financial Statements
1. Organization
Description of Business
Turning Point Therapeutics, Inc. (the Company) was organized in October 2013 and commenced operations in 2014. The Company is a clinical-stage precision oncology company designing and developing novel targeted therapies for cancer treatment. The Company’s principal operations are in the United States and the Company operates in
The Company’s primary activities since inception have been to build infrastructure, conduct research and development, including clinical trials, perform business and financial planning, and raise capital.
Pending Acquisition by Bristol-Myers Squibb
On June 2, 2022, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Bristol-Myers Squibb Company, a Delaware corporation (Bristol-Myers Squibb), and Rhumba Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Bristol-Myers Squibb (Purchaser). Under the terms of the Merger Agreement, and upon the terms and subject to the conditions thereof, on June 17, 2022, Purchaser commenced a cash tender offer (the Offer) to purchase all of the outstanding shares of the Company’s common stock for $
For each of the three and six months ended June 30, 2022, the Company recorded transaction costs of approximately $
Liquidity
The Company’s activities are subject to significant risks and uncertainties, including concentration on the Company’s lead development program, which has significant competition from cancer therapies in development by other companies or already approved for sale by the U.S. Food and Drug Administration.
The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Drug candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.
The COVID-19 pandemic and ongoing geopolitical events continue to evolve and have already resulted in a significant disruption of global financial markets. The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and further disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the pandemic or geopolitical actions. If such further disruption occurs, the Company could experience an inability to access additional capital.
The Company determined that there are no conditions or events that raise substantial doubt about its ability to continue as a going concern for a period of at least twelve months from the date of issuance of these financial statements.
2. Summary of Significant Accounting Policies
Basis of Presentation
7
The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) for interim financial information and pursuant to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, since they are interim statements, the accompanying condensed financial statements do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC. In the opinion of management, the unaudited condensed financial statements and notes thereto include all adjustments (consisting only of normal recurring adjustments) that are necessary for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented. The operating results presented in these unaudited condensed financial statements are not necessarily indicative of the results that may be expected for any future periods.
Use of Estimates
The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The most significant estimates in the Company’s financial statements relate to determining the standalone selling prices of performance obligations associated with license and collaboration arrangements, accrued research and development expenses and stock-based compensation expenses. The Company bases these estimates on historical experience, knowledge of current events and actions it may undertake in the future, and on various other assumptions that are believed to be reasonable. Actual results may differ materially from these estimates and assumptions. Although the impact of the COVID-19 pandemic to the Company’s business and operating results presents additional uncertainty, the Company continues to use the best information available to update its critical accounting estimates.
Cash, Cash Equivalents and Restricted Cash
The following table presents a reconciliation of cash, cash equivalents and restricted cash to the amounts shown in the unaudited condensed statements of cash flows (in thousands):
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June 30, 2022 |
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June 30, 2021 |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash included in other assets |
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Total cash, cash equivalents and restricted cash |
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$ |
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$ |
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Concentration of Credit Risk
Substantially all of the Company’s cash, cash equivalent and marketable securities are held at two financial institutions. Due to the financial strength of the depository institutions, the Company believes these financial institutions represent minimal credit risk. Cash amounts held at financial institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $
Net Loss Per Share
Basic net loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share assumes the conversion, exercise or issuance of all potential common stock equivalents, unless the effect of inclusion would be anti-dilutive. For purposes of this calculation, common stock equivalents include the Company’s stock options, restricted stock units (RSUs) and performance stock units (PSUs). The Company excluded stock options to purchase common stock, RSUs and PSUs from the number of shares used to calculate diluted shares outstanding because the inclusion of these potentially dilutive securities would have been antidilutive.
8
Historical outstanding anti-dilutive securities not included in the diluted net loss per share calculation include the following:
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Six Months Ended June 30, |
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2022 |
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2021 |
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Common stock options |
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RSUs |
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PSUs |
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Total |
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3. Marketable Securities
The Company invests its excess cash in marketable securities, including debt instruments of financial institutions, corporations with investment grade credit ratings, commercial paper and government agencies.
At June 30, 2022, marketable securities consisted of the following (in thousands):
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Maturity |
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Amortized |
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Unrealized |
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in Years |
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Cost |
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Gains |
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Losses |
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Fair Value |
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U.S. Treasuries |
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$ |
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$ |
— |
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$ |
( |
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$ |
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U.S. Government agency securities |
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— |
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( |
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|
|||
Non-U.S. Government agency securities |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|||
Corporate debt securities |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|||
Commercial paper |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Total marketable securities |
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
||
At December 31, 2021, marketable securities consisted of the following (in thousands):
|
|
Maturity |
|
Amortized |
|
|
Unrealized |
|
|
|
|
|||||||
|
|
in Years |
|
Cost |
|
|
||||||||||||