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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: 001-39247

 

IMARA INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

81-1523849

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

116 Huntington Avenue, 6th Floor

Boston, Massachusetts

02116

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (617) 206-2020

 

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

 

IMRA

 

The Nasdaq Stock Market LLC

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.

 

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 October 29, 2021, the registrant had 26,275,722 shares of common stock, $0.001 par value per share, outstanding.

 

 


 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things:

 

the impact of the ongoing COVID-19 pandemic and our response to it;

 

the initiation, timing, progress and results of our current and future preclinical studies and clinical trials, including our ongoing Ardent and Forte Phase 2b clinical trials of tovinontrine (IMR-687) in sickle cell disease, or SCD, and ß-thalassemia, our open label extension clinical trial of tovinontrine in SCD and our planned clinical development of tovinontrine in heart failure with preserved ejection fraction;

 

our planned research and development activities for any additional product candidates we may develop, including IMR-261;

 

our estimates regarding expenses, future revenue, timing of any future revenue, capital requirements and need for additional financing;

 

our plans to develop and, if approved, subsequently commercialize tovinontrine and any other product candidates, including in combination with other drugs and therapies;

 

the timing of and our ability to submit applications for, obtain and maintain regulatory approvals for tovinontrine and any other product candidates we may develop;

 

our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash, cash equivalents and investments;

 

the potential advantages or differentiating features of tovinontrine and any other product candidates we may develop;

 

the rate and degree of market acceptance and clinical utility of tovinontrine and any other product candidates we may develop;

 

our estimates regarding the potential market opportunity for tovinontrine and any other product candidates we may develop;

 

our commercialization, marketing and manufacturing capabilities and strategy;

 

our expectations regarding our ability to obtain and maintain intellectual property protection for tovinontrine and any other product candidates we may develop;

 

our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;

 

the impact of government laws and regulations;

 

our competitive position and expectations regarding developments and projections relating to our competitors and any competing therapies that are or become available;

 

our ability to maintain and establish collaborations or obtain additional funding; and

 

our expectations regarding the time during which we will be an emerging growth company under the JOBS Act.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.  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 on Form 10-Q, 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. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make.

We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the "Risk Factors" section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make.

 


 

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

RISK FACTOR SUMMARY

Our business is subject to a number of risks that if realized could materially affect our business, financial condition, results of operations, cash flows and access to liquidity. These risks are discussed more fully in Part I, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q. Our principal risks include the following:

 

We have incurred significant losses since our inception, and we expect to incur losses over the next several years.

 

We are heavily dependent on the success of tovinontrine, our only product candidate currently in clinical development. If we are unable to successfully complete clinical development, obtain regulatory approval for, and commercialize tovinontrine, or experience delays in doing so, our business will be materially harmed.

 

We will need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

 

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

 

Our business and operations have been and may continue to be adversely affected by the ongoing COVID-19 pandemic as may the operations of our suppliers and manufacturers and other third-party service providers.

 

Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of any product candidates.

 

Because we are developing tovinontrine using surrogate endpoints, the FDA or other regulatory authorities may not consider the endpoints of our clinical trials to predict or provide clinically meaningful results.

 

 

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

 

If we fail to comply with our obligations under our existing license agreement with H. Lundbeck A/S, or under any future intellectual property licenses, or otherwise experience disruptions to our business relationships with our current or any future licensors, we could lose intellectual property rights that are important to our business.

 

If we are unable to obtain, maintain, enforce and protect patent protection for our technology and product candidates or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully develop and commercialize our technology and product candidates may be adversely affected.

 

Our executive officers, directors and principal stockholders, if they choose to act together, have the ability to control all matters submitted to stockholders for approval.

 

 

 


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

1

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 Unaudited Condensed Consolidated Financial Statements

7

Item 2.

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

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

30

Item 4.

Controls and Procedures

30

PART II.

OTHER INFORMATION

31

Item 1A.

Risk Factors

31

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

74

Item 5.

Other Items

74

Item 6.

Exhibits

76

Signatures

77

 

 

 

i


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

IMARA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)
(Unaudited)

 

 

 

September 30,

2021

 

 

December 31,

2020

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

75,295

 

 

$

47,698

 

Short-term investments

 

 

27,544

 

 

 

40,524

 

Prepaid expenses and other current assets

 

 

3,158

 

 

 

2,183

 

Total current assets

 

 

105,997

 

 

 

90,405

 

Property and equipment, net

 

275

 

 

 

349

 

Right of use assets - operating leases

 

580

 

 

 

 

Other assets

 

175

 

 

 

88

 

Total assets

 

$

107,027

 

 

$

90,842

 

LIABILITIES & STOCKHOLDERS’

   EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,476

 

 

$

1,971

 

Accrued expenses and other current liabilities

 

 

4,462

 

 

 

4,276

 

Operating lease liability, current

 

 

250

 

 

 

 

Total current liabilities

 

 

7,188

 

 

 

6,247

 

Deferred rent

 

 

 

 

 

160

 

Operating lease liability, non-current

 

466

 

 

 

 

Total liabilities

 

 

7,654

 

 

 

6,407

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value per share; 10,000,000 shares authorized; no shares

   issued or outstanding as of September 30, 2021; no shares authorized, issued or

   outstanding as of December 31, 2020

 

 

 

 

 

 

Common stock, $0.001 par value per share; 200,000,000 shares

   authorized as of September 30, 2021 and December 31, 2020, respectively; 26,275,722

   and 17,548,263 shares issued and outstanding as of September 30, 2021 and

   December 31, 2020, respectively

 

27

 

 

 

18

 

Additional paid-in capital

 

 

232,526

 

 

 

180,526

 

Accumulated other comprehensive income

 

 

(2

)

 

 

4

 

Accumulated deficit

 

 

(133,178

)

 

 

(96,113

)

Total stockholders’ equity

 

 

99,373

 

 

 

84,435

 

Total liabilities and stockholders’ equity

 

$

107,027

 

 

$

90,842

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


IMARA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)
(Unaudited)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

10,397

 

 

$

9,533

 

 

$

27,586

 

 

$

23,195

 

General and administrative

 

 

3,262

 

 

 

2,961

 

 

 

9,522

 

 

 

6,953

 

Total operating expenses

 

 

13,659

 

 

 

12,494

 

 

 

37,108

 

 

 

30,148

 

Loss from operations

 

 

(13,659

)

 

 

(12,494

)

 

 

(37,108

)

 

 

(30,148

)

Total other income, (net):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

30

 

 

 

126

 

 

 

161

 

 

 

368

 

Other expense

 

 

(18

)

 

 

(55

)

 

 

(118

)

 

 

(62

)

Total other income, (net)

 

 

12

 

 

 

71

 

 

 

43

 

 

 

306

 

Net loss

 

$

(13,647

)

 

$

(12,423

)

 

$

(37,065

)

 

$

(29,842

)

Accretion of Series B convertible preferred stock

 

 

 

 

 

 

 

 

 

 

 

(7,858

)

Net loss attributable to common stockholders—basic and diluted

 

$

(13,647

)

 

$

(12,423

)

 

$

(37,065

)

 

$

(37,700

)

Weighted-average common shares outstanding—basic and diluted

 

 

24,898,346

 

 

 

17,349,813

 

 

 

20,099,976

 

 

 

12,696,368

 

Net loss per share attributable to common stockholders—basic and

   diluted

 

$

(0.55

)

 

$

(0.72

)

 

$

(1.84

)

 

$

(2.97

)

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(13,647

)

 

$

(12,423

)

 

$

(37,065

)

 

$

(29,842

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on investments

 

 

(2

)

 

 

(24

)

 

 

(6

)

 

 

(8

)

Comprehensive loss

 

$

(13,649

)

 

$

(12,447

)

 

$

(37,071

)

 

$

(29,850

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

2


 

 

IMARA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share and per share data)
(Unaudited)

 

 

 

CONVERTIBLE PREFERRED STOCK

 

 

 

COMMON

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SERIES SEED

$0.001 PAR

VALUE

 

 

SERIES A

$0.001 PAR

VALUE

 

 

SERIES B $0.001

PAR VALUE

 

 

 

STOCK

$0.001 PAR

VALUE

 

 

ADDITIONAL

PAID-IN

 

 

ACCUMULATED

OTHER

COMPREHENSIVE

 

 

ACCUMULATED

 

 

TOTAL

STOCKHOLDERS’

EQUITY

 

 

 

SHARES

 

 

AMOUNT

 

 

SHARES

 

 

AMOUNT

 

 

SHARES

 

 

AMOUNT

 

 

 

SHARES

 

 

AMOUNT

 

 

CAPITAL

 

 

INCOME (LOSS)

 

 

DEFICIT

 

 

(DEFICIT)

 

Balance at December 31, 2019

 

 

2,712,960

 

 

$

1,460

 

 

 

31,499,040

 

 

$

30,729

 

 

 

26,321,313

 

 

$

45,575

 

 

 

 

702,510

 

 

$

1

 

 

$

5,872

 

 

$

32

 

 

$

(54,753

)

 

$

(48,848

)

Issuance of Series B convertible

   preferred stock, net of issuance

   costs of $20 and beneficial

   conversion charge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,845,348

 

 

 

9,271

 

 

 

 

 

 

 

 

 

 

7,858

 

 

 

 

 

 

 

 

 

7,858

 

Accretion of Series B

   converted preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,858

 

 

 

 

 

 

 

 

 

 

(7,858

)

 

 

 

 

 

 

 

 

(7,858

)

Conversion of convertible

   preferred stock into

   common stock

 

 

(2,712,960

)

 

 

(1,460

)

 

 

(31,499,040

)

 

 

(30,729

)

 

 

(36,166,661

)

 

 

(62,704

)

 

 

 

11,172,955

 

 

 

11

 

 

 

94,882

 

 

 

 

 

 

 

 

 

94,893

 

Initial public offering, net of

   underwriting discounts,

   commissions and offering

   costs of $3,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,700,000

 

 

 

5

 

 

 

66,047

 

 

 

 

 

 

 

 

 

66,052

 

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

360

 

 

 

 

 

 

 

 

 

360

 

Unrealized loss on

   investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(48

)

 

 

 

 

 

(48

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,215

)

 

 

(7,215

)

Balance at March 31, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

16,575,465

 

 

$

17

 

 

$

167,161

 

 

$

(16

)

 

$

(61,968

)

 

$

105,194

 

Initial public offering, net of

   underwriting discounts,

   commissions and offering

   costs of $17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

705,000

 

 

 

1

 

 

 

10,473

 

 

 

 

 

 

 

 

 

10,474

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44,271

 

 

 

 

 

 

218

 

 

 

 

 

 

 

 

 

218

 

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

550

 

 

 

 

 

 

 

 

 

550

 

Unrealized gain on

   investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

64

 

 

 

 

 

 

64

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,204

)

 

 

(10,204

)

Balance at June 30, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

17,324,736

 

 

$

18

 

 

$

178,402

 

 

$

48

 

 

$

(72,172

)

 

$

106,296

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

52,331

 

 

 

 

 

 

207

 

 

 

 

 

 

 

 

 

207

 

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

642

 

 

 

 

 

 

 

 

 

642

 

Unrealized loss on

   investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24

)

 

 

 

 

 

(24

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,423

)

 

 

(12,423

)

Balance at September 30, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

17,377,067

 

 

$

18

 

 

$

179,251

 

 

$

24

 

 

$

(84,595

)

 

$

94,698

 

3


 

 

 

 

 

COMMON

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCK

$0.001 PAR

VALUE

 

 

ADDITIONAL

PAID-IN

 

 

ACCUMULATED

OTHER

COMPREHENSIVE

 

 

ACCUMULATED

 

 

TOTAL STOCKHOLDERS’

 

 

 

SHARES

 

 

AMOUNT

 

 

CAPITAL

 

 

INCOME (LOSS)

 

 

DEFICIT

 

 

EQUITY

 

Balance at December 31, 2020

 

 

17,548,263

 

 

$

18

 

 

$

180,526

 

 

$

4

 

 

$

(96,113

)

 

$

84,435

 

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

947

 

 

 

 

 

 

 

 

 

947

 

Exercise of stock options

 

 

68,279

 

 

 

 

 

 

472

 

 

 

 

 

 

 

 

 

472

 

Unrealized loss on

   investments

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

 

 

 

(3

)

Net loss