SEC Filing | ORIC Pharmaceuticals, Inc.

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oric-10q_20200930.htm

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, 2020

☐	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: 001-39269

ORIC PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	47-1787157
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
240 E. Grand Ave, 2^nd Floor South San Francisco, CA	94080
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 388-5600

Not applicable

(Former name, former address, and former fiscal year, if changed since last report)

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, $0.0001 par value per share

ORIC

The Nasdaq Stock Market LLC

(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.

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 ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of October 30, 2020, the registrant had 30,837,807 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Balance Sheets	1
	Statements of Operations and Comprehensive Loss	2
	Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)	3
	Statements of Cash Flows	5
	Notes to Unaudited Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71
Item 3.	Defaults Upon Senior Securities	72
Item 4.	Mine Safety Disclosures	72
Item 5.	Other Information	72
Item 6.	Exhibits	73
SIGNATURES		74

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 quarterly report on Form10-Q, including statements regarding our future results of operations and financial position, business strategy, development plans, planned preclinical studies and clinical trials, future results of clinical trials, expected research and development costs, regulatory strategy, timing and likelihood of success, as well as plans and objectives of management for future operations, are 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,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this quarterly report on Form 10-Q include, but are not limited to, statements about:

•

the ability of our clinical trials to demonstrate safety and efficacy of our product candidates, and other positive results;

•

the timing, progress and results of preclinical studies and clinical trials for ORIC-101, ORIC-533, ORIC-944, ORIC-114 and other product candidates we may develop, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs;

•

the timing, scope and likelihood of regulatory filings and approvals, including timing of Investigational New Drug, or IND, applications and final Food and Drug Administration, or FDA, approval of ORIC-101, ORIC-533, ORIC-944, ORIC-114 and any other future product candidates;

•

the timing, scope or likelihood of foreign regulatory filings and approvals;

•

our ability to develop and advance our current product candidates and programs into, and successfully complete, clinical studies;

•

our manufacturing, commercialization, and marketing capabilities and strategy;

•

our plans relating to commercializing our product candidates, if approved, including the geographic areas of focus and sales strategy;

•

the need to hire additional personnel and our ability to attract and retain such personnel;

•

our expectations regarding the impact of the COVID-19 pandemic on our business;

•

the size of the market opportunity for our product candidates, including our estimates of the number of patients who suffer from the diseases we are targeting;

•

our expectations regarding the approval and use of our product candidates in combination with other drugs;

•

our competitive position and the success of competing therapies that are or may become available;

•

our estimates of the number of patients that we will enroll in our clinical trials;

•

the beneficial characteristics, safety, efficacy and therapeutic effects of our product candidates;

•

our ability to obtain and maintain regulatory approval of our product candidates;

•

our plans relating to the further development of our product candidates, including additional indications we may pursue;

•

existing regulations and regulatory developments in the United States, Europe and other jurisdictions;

•

our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering ORIC-101, ORIC-533, ORIC-944, ORIC-114 and other product candidates we may develop, including the extensions of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;

•

our continued reliance on third parties to conduct additional clinical trials of our product candidates, and for the manufacture of our product candidates for preclinical studies and clinical trials;

•

our ability to obtain, and negotiate favorable terms of, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates;

•

the pricing and reimbursement of ORIC-101, ORIC-533, ORIC-944, ORIC-114 and other product candidates we may develop, if approved;

•

the rate and degree of market acceptance and clinical utility of ORIC-101, ORIC-533, ORIC-944, ORIC-114 and other product candidates we may develop;

•

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

iii

•

our financial performance;

•

the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements;

•

the impact of laws and regulations;

•

our expectations regarding the period during which we will qualify as an emerging growth company under the JOBS Act; and

•

our anticipated use of our existing resources.

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 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. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

ORIC PHARMACEUTICALS, INC.

BALANCE SHEETS

(in thousands, except share and per share amounts)

	September 30, 2020			December 31, 2019
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	62,031		$	89,159
Marketable securities		124,579			—
Prepaid expenses and other current assets		2,448			840
Total current assets		189,058			89,999

Property and equipment, net		1,893			2,241
Other assets		711			1,853
Total assets	$	191,662		$	94,093

Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit)

Current liabilities:
Accounts payable	$	1,598		$	152
Accrued liabilities		5,330			5,202
Total current liabilities		6,928			5,354

Deferred rent - long term		359			765
Total liabilities		7,287			6,119

Commitments and contingencies (Note 10)
Convertible preferred stock:
Series A convertible preferred stock, $0.0001 par value; no shares and 3,862,500 authorized, issued and outstanding at September 30, 2020 and December 31, 2019, respectively; $0 and $15,450 aggregate liquidation preference at September 30, 2020 and December 31, 2019, respectively		—			15,431
Series B convertible preferred stock, $0.0001 par value; no shares and 6,750,000 authorized at September 30, 2020 and December 31, 2019, respectively; no shares and 6,749,999 outstanding at September 30, 2020 and December 31, 2019, respectively; $0 and $54,000 aggregate liquidation preference at September 30, 2020 and December 31, 2019, respectively		—			53,906
Series C convertible preferred stock, $0.0001 par value; no shares and 4,448,788 authorized at September 30, 2020 and December 31, 2019, respectively; no shares and 4,448,780 outstanding at September 30, 2020 and December 31, 2019, respectively; $0 and $53,385 aggregate liquidation preference at September 30, 2020 and December 31, 2019, respectively		—			53,172
Series D convertible preferred stock, $0.0001 par value; no shares and 5,287,500 authorized at September 30, 2020 and December 31, 2019, respectively; no shares and 4,217,327 outstanding at September 30, 2020 and December 31, 2019, respectively; $0 and $55,669 aggregate liquidation preference at September 30, 2020 and December 31, 2019, respectively		—			55,549
Stockholders' equity (deficit):
Common stock, $0.0001 par value; 1,000,000,000 shares and 26,750,000 shares authorized at September 30, 2020 and December 31, 2019, respectively; 30,545,165 shares and 1,984,222 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		3			—
Additional paid-in capital		322,535			2,606
Accumulated deficit		(138,134	)		(92,690	)
Accumulated other comprehensive loss		(29	)		—
Total stockholders' equity (deficit)		184,375			(90,084	)
Total liabilities, convertible preferred stock and stockholders' equity (deficit)	$	191,662		$	94,093

See accompanying notes to unaudited financial statements.

ORIC PHARMACEUTICALS, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(in thousands, except share and per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Operating expenses:
Research and development	$	8,831		$	5,632		$	23,808		$	15,884
Acquired in-process research and development		12,971			—			12,971			—
General and administrative		3,800			1,465			9,125			3,914
Total operating expenses		25,602			7,097			45,904			19,798
Loss from operations		(25,602	)		(7,097	)		(45,904	)		(19,798	)

Other income:
Interest income, net		10			476			276			1,054
Other income		44			72			184			215
Total other income		54			548			460			1,269
Net loss	$	(25,548	)	$	(6,549	)	$	(45,444	)	$	(18,529	)
Other comprehensive loss:
Unrealized loss on available-for-sale securities		(29	)		—			(29	)		—
Comprehensive loss	$	(25,577	)	$	(6,549	)	$	(45,473	)	$	(18,529	)
Net loss per share, basic and diluted	$	(0.84	)	$	(3.36	)	$	(2.52	)	$	(9.87	)
Weighted-average shares outstanding, basic and diluted		30,314,904			1,946,439			18,022,068			1,876,687

See accompanying notes to unaudited financial statements.

ORIC PHARMACEUTICALS, INC.

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

(Unaudited)

(in thousands, except share amounts)

	Series A Convertible Preferred Stock				Series B Convertible Preferred Stock				Series C Convertible Preferred Stock				Series D Convertible Preferred Stock				Common Stock				Additional Paid-in		Accumulated			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balance at December 31, 2018		3,862,500	$	15,431		6,749,999	$	53,906		3,177,271	$	37,929		—	$	—		1,802,134	$	—	$	1,381	$	(65,807	)	$	(64,426	)
Issuance of Series C Preferred Stock, net of issuance costs of $213		—		—		—		—		1,271,509		15,243		—		—		—		—		—		—			—
Exercise of common stock options and vesting of early exercised common stock options		—		—		—		—		—		—		—		—		26,159		—		21		—			21
Stock-based compensation expense		—		—		—		—		—		—		—		—		—		—		191		—			191
Net loss		—		—		—		—		—		—		—		—		—		—		—		(6,015	)		(6,015	)
Balance at March 31, 2019		3,862,500	$	15,431		6,749,999	$	53,906		4,448,780	$	53,172		—	$	—		1,828,293	$	—	$	1,593	$	(71,822	)	$	(70,229	)
Issuance of Series D Preferred Stock		—		—		—		—		—		—		3,777,564		49,864		—		—		—		—			—
Exercise of common stock options and vesting of early exercised common stock options		—		—		—		—		—		—		—		—		111,884		—		59		—			59
Stock-based compensation expense		—		—		—		—		—		—		—		—		—		—		190		—			190
Net loss		—		—		—		—		—		—		—		—		—		—		—		(5,965	)		(5,965	)
Balance at June 30, 2019		3,862,500	$	15,431		6,749,999	$	53,906		4,448,780	$	53,172		3,777,564	$	49,864		1,940,177	$	—	$	1,842	$	(77,787	)	$	(75,945	)
Issuance of Series D Preferred Stock, net of issuance costs of $121		—		—		—		—		—		—		439,763		5,685		—		—		—		—			—
Exercise of common stock options and vesting of early exercised common stock options		—		—		—		—		—		—		—		—		15,789		—		14		—			14
Stock-based compensation expense		—		—		—		—		—		—		—		—		—		—		271		—			271
Net loss		—		—		—		—		—		—		—		—		—		—		—		(6,549	)		(6,549	)
Balance at September 30, 2019		3,862,500	$	15,431		6,749,999	$	53,906		4,448,780	$	53,172		4,217,327	$	55,549		1,955,966	$	—	$	2,127	$	(84,336	)	$	(82,209	)

See accompanying notes to unaudited financial statements.

ORIC PHARMACEUTICALS, INC.

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

(Unaudited)

(in thousands, except share amounts)

	Series A Convertible Preferred Stock				Series B Convertible Preferred Stock				Series C Convertible Preferred Stock				Series D Convertible Preferred Stock				Common Stock				Additional Paid-in		Accumulated			Accumulated Other		Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Comprehensive Loss		Equity (Deficit)
Balance at December 31, 2019		3,862,500	$	15,431		6,749,999	$	53,906		4,448,780	$	53,172		4,217,327	$	55,549		1,984,222	$	—	$	2,606	$	(92,690	)	$	—	$	(90,084	)
Exercise of common stock options and vesting of early exercised common stock options		—		—		—		—		—		—		—		—		13,433		—		12		—			—		12
Stock-based compensation expense		—		—		—		—		—		—		—		—		—		—		527		—			—		527
Net loss		—		—		—		—		—		—		—		—		—		—		—		(8,872	)		—		(8,872	)
Balance at March 31, 2020		3,862,500	$	15,431		6,749,999		53,906		4,448,780	$	53,172		4,217,327	$	55,549		1,997,655	$	—	$	3,145	$	(101,562	)	$	—	$	(98,417	)
Exercise of common stock options and vesting of early exercised common stock options		—		—		—		—		—		—		—