GLUE Monte Rosa Therapeutics Inc

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 June 30, 2024

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: 001-40522

 

Monte Rosa Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware	84-3766197
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
321 Harrison Avenue, Suite 900 Boston, Massachusetts	02118
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 949-2643

 

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 $0.0001 per share		GLUE		The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

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 August 5, 2024 the registrant had 61,372,824 shares of common stock, $0.0001 per share, outstanding.

 

 

 

---

Special note regarding forward-looking statements

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, or the or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, “continue” or the negative of these terms or other comparable terminology. These statements are not guarantees of future results or performance and involve substantial risks and uncertainties. Forward-looking statements in this Quarterly Report include, but are not limited to, statements about:

---

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events and with respect to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those described under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

All of our forward-looking statements are as of the date of this Quarterly Report only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the SEC could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report, even if new information becomes available in the future or if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report that modify or impact any of the forward-looking statements contained in this Quarterly Report will be deemed to modify or supersede such statements in this Quarterly Report.

We may from time to time provide estimates, projections and other information concerning our industry, the general business environment, and the markets for certain diseases, including estimates regarding the potential size of those markets and the estimated incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events, circumstances or numbers, including actual disease prevalence rates and market size, may differ materially from the information reflected in this Quarterly Report. Unless otherwise expressly stated, we obtained this industry, business information, market data, prevalence information and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources, in some cases applying our own assumptions and analysis that may, in the future, prove not to have been accurate.

TRADEMARKS

Solely for convenience, our trademarks and trade names in this report are sometimes referred to without the ® and ™ symbols, but such references should not be construed as any indicator that we will not assert, to the fullest extent under applicable law, our rights thereto.

 

---

Table of Contents

 

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets (Unaudited)	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	2
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows (Unaudited)	4
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II.	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5	Other Information	27
Item 6.	Exhibits	28
Signatures		29

 

 

 

---

Part I ─ Financial Information

Item 1. Financial Statements

Monte Rosa Therapeutics, Inc.

Condensed consolidated balance sheets (unaudited)

 

 

(in thousands, except share and per share amounts)		June 30,				December 31,
(unaudited)		2024				2023
Assets
Current assets:
Cash and cash equivalents		$	108,847			$	128,101
Marketable securities			153,358				104,312
Accounts receivable			9,000				—
Other receivables			842				505
Prepaid expenses and other current assets			5,849				3,294
Total current assets			277,896				236,212
Property and equipment, net			33,250				33,803
Operating lease right-of-use assets			27,893				28,808
Restricted cash			4,866				4,580
Other long-term assets			209				352
Total assets		$	344,114			$	303,755
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	6,473			$	11,152
Accrued expenses and other current liabilities			12,759				14,600
Current deferred revenue			19,645				17,678
Current portion of operating lease liability			3,471				3,162
Total current liabilities			42,348				46,592
Deferred revenue, net of current			33,596				32,323
Defined benefit plan liability			2,614				2,713
Operating lease liability			40,885				42,877
Total liabilities			119,443				124,505
Commitments and contingencies (Note 8)
Stockholders’ equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized			—				—
Common stock, $0.0001 par value; 500,000,000 shares authorized, 61,333,597 shares issued and 61,328,282 shares outstanding as of June 30, 2024; and 50,154,929 shares issued and 50,140,233 shares outstanding as of December 31, 2023			6				5
Additional paid-in capital			655,501				547,857
Accumulated other comprehensive loss			(2,670	)			(2,724	)
Accumulated deficit			(428,166	)			(365,888	)
Total stockholders’ equity			224,671				179,250
Total liabilities and stockholders’ equity		$	344,114			$	303,755

 

See accompanying notes to the condensed consolidated financial statements.

---

Monte Rosa Therapeutics, Inc.

Condensed consolidated statements of operations and comprehensive loss (unaudited)

(in thousands, except share and per share amounts)		Three months ended June 30,								Six months ended June 30,
(unaudited)		2024				2023				2024				2023
Collaboration revenue		$	4,695			$	—			$	5,759			$	—
Operating expenses:
Research and development			28,055				29,076				55,081				55,831
General and administrative			9,282				8,145				18,267				15,649
Total operating expenses			37,337				37,221				73,348				71,480
Loss from operations			(32,642	)			(37,221	)			(67,589	)			(71,480	)
Other income (expense):
Interest income			2,637				2,302				5,079				4,739
Foreign currency exchange gain (loss), net			(53	)			(93	)			567				(178	)
Gain on disposal of fixed assets			—				24				—				24
Loss on sale of marketable securities			—				—				—				(131	)
Total other income			2,584				2,233				5,646				4,454
Net loss before income taxes			(30,058	)			(34,988	)			(61,943	)			(67,026	)
Provision for income taxes			(252	)			(190	)			(335	)			(190	)
Net loss		$	(30,310	)		$	(35,178	)		$	(62,278	)		$	(67,216	)
Net loss per share—basic and diluted		$	(0.43	)		$	(0.71	)		$	(0.95	)		$	(1.36	)
Weighted-average number of shares outstanding used in computing    net loss per common share—basic and diluted			71,233,992				49,431,922				65,695,095				49,389,931
Comprehensive loss:
Net loss		$	(30,310	)		$	(35,178	)		$	(62,278	)		$	(67,216	)
Other comprehensive income (loss):
Provision for pension benefit obligation			35				14				70				28
Unrealized gain (loss) on available-for-sale securities			(12	)			(261	)			(16	)			84
Comprehensive loss		$	(30,287	)		$	(35,425	)		$	(62,224	)		$	(67,104	)

 

See accompanying notes to the condensed consolidated financial statements.

 

 

 

---

Monte Rosa Therapeutics, Inc.

Condensed consolidated statements of stockholders’ equity (unaudited)

		Common stock
(in thousands, except share amounts) (unaudited)		Shares				Amount				Additional paid-in capital				Accumulated other comprehensive loss				Accumulated deficit				Total Stockholders’ equity
Balance—January 1, 2023			49,323,531			$	5			$	503,696			$	(1,752	)		$	(230,536	)		$	271,413
Restricted common stock vesting			33,192				—				—				—				—				—
Exercise of common stock options			4,261				—				18				—				—				18
Provision for pension benefit obligation			—				—				—				14				—				14
Stock-based compensation expense			—				—				3,974				—				—				3,974
Unrealized gain on available-for-sale securities			—				—				—				345				—				345
Net Loss			—				—				—				—				(32,038	)			(32,038	)
Balance—March 31, 2023			49,360,984			$	5			$	507,688			$	(1,393	)		$	(262,574	)		$	243,726
Restricted common stock vesting			32,185				—				—				—				—				—
Exercise of common stock options			147,333				—				897				—				—				897
Provision for pension benefit obligation			—				—				—				14				—				14
Stock-based compensation expense			—				—				4,153				—				—				4,153
Unrealized loss on available-for-sale securities			—				—				—				(261	)			—				(261	)
Issuance of shares under employee stock purchase plan			51,977				—				303				—				—				303
Net Loss			—				—				—				—				(35,178	)			(35,178	)
Balance—June 30, 2023			49,592,479			$	5			$	513,041			$	(1,640	)		$	(297,752	)		$	213,654
Balance—January 1, 2024			50,140,233			$	5			$	547,857			$	(2,724	)		$	(365,888	)		$	179,250
Restricted common stock vesting			4,691				—				—				—				—				—
Exercise of common stock options			45,108				—				246				—				—				246
Provision for pension benefit obligation			—				—				—				35				—				35
Stock-based compensation expense			—				—				4,873				—				—				4,873
Unrealized loss on available-for-sale securities			—				—				—				(4	)			—				(4	)
Issuance of common stock pursuant to the at-the-market sales agreement			10,272				—				87				—				—				87
Net Loss			—				—				—				—				(31,968	)			(31,968	)
Balance—March 31, 2024			50,200,304			$	5			$	553,063			$	(2,693	)		$	(397,856	)		$	152,519
Restricted common stock vesting			85,249				—				—				—				—				—
Exercise of common stock options			190,160				—				422				—				—				422
Provision for pension benefit obligation			—				—				—				35				—				35
Stock-based compensation expense			—				—				4,502				—				—				4,502
Unrealized loss on available-for-sale securities			—				—				—				(12	)			—				(12	)
Issuance of shares under employee stock purchase plan			93,859				—				298				—				—				298
Issuance of common stock pursuant to the at-the-market sales agreement, net of issuance costs of $89			120,234				—				797				—				—				797
Issuance of common stock pursuant to the Underwritten Public Offering, net of issuance cost of $3,290			10,638,476				1				46,709				—				—				46,710
Issuance of pre-funded warrant, net of issuance costs of $290			—				—				49,710				—				—				49,710
Net Loss			—				—				—				—				(30,310	)			(30,310	)
Balance—June 30, 2024			61,328,282			$	6			$	655,501			$	(2,670	)		$	(428,166	)		$	224,671

See accompanying notes to the condensed consolidated financial statements

---

Monte Rosa Therapeutics, Inc.

Condensed consolidated statements of cash flows (unaudited)

(in thousands)		Six months ended June 30,
(unaudited)		2024				2023
Cash flows from operating activities:
Net loss		$	(62,278	)		$	(67,216	)
Adjustments to reconcile net loss to net cash used in operating activities
Stock-based compensation expense			9,375				8,127
Depreciation			3,957				2,542
Net accretion of discounts/premiums on marketable securities			(1,163	)			(2,680	)
Loss on sale of marketable securities			—				131
Gain on disposal of property and equipment			—				(24	)
Changes in operating assets and liabilities
Accounts receivable			(9,000	)			—
Other receivables			(337	)			1,858
Prepaid expenses and other current assets			(2,412	)			547
Accounts payable			(4,676	)			(696	)
Accrued expenses and other current liabilities			(1,842	)			(520	)
Defined benefit plan liability			(29	)			—
Right-of-use assets and operating lease liabilities			(768	)			9,201
Deferred revenue			3,241				—
Net cash used in operating activities		$	(65,932	)		$	(48,730	)
Cash flows from investing activities:
Purchases of property and equipment			(3,406	)			(15,693	)
Proceeds from the sale of property and equipment			—				62
Purchases of marketable securities			(130,027	)			(67,824	)
Proceeds from sale of marketable securities			—				45,631
Proceeds from maturities of marketable securities			82,128				76,700
Net cash provided by (used in) investing activities		$	(51,305	)		$	38,876
Cash flows from financing activities:
Proceeds from sale of common stock pursuant to the at-the-market sales agreement, net of underwriter's discount of $29			944				—
Proceeds from underwritten public offering cost, net of underwriter's discount of $3,000			47,001				—
Proceeds from the issuance of pre-funded warrants			50,000				—
Payment of common stock and pre-funded warrant issuance costs			(641	)			—
Proceeds from exercise of employee stock options			667				915
Proceeds from employee stock purchase plan			298				303
Net cash provided by financing activities		$	98,269			$	1,218
Net decrease in cash, cash equivalents and restricted cash		$	(18,968	)		$	(8,636	)
Cash, cash equivalents and restricted cash—beginning of period			132,681				60,190
Cash, cash equivalents and restricted cash—end of period		$	113,713			$	51,554
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents		$	108,847			$	47,027
Restricted cash			4,866				4,527
Total cash, cash equivalents and restricted cash		$	113,713			$	51,554
Supplemental disclosure of noncash items
Reduction of right-of-use assets for lease incentives receivable		$	—			$	4,644
Purchases of property and equipment in accounts payable and accrued expenses		$	235			$	1,438

 

See accompanying notes to the condensed consolidated financial statements.

 

 

 

---

Monte Rosa Therapeutics, Inc.

Notes to the condensed consolidated financial statements

(unaudited)

---