pmvp-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

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: 001-39539

 

PMV PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

46-3218129

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

8 Clarke Drive, Suite 3

Cranbury, NJ

08512

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (609) 642-6670

 

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 $0.00001

 

PMVP

 

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  

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 November 1, 2020, the registrant had 44,773,748 shares of common stock, $0.00001 par value per share, outstanding.

 

 

 


Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Condensed Financial Statements (Unaudited)

1

 

Condensed Balance Sheets (Unaudited)

1

 

Condensed Statements of Operations and Comprehensive Loss (Unaudited)

2

 

Condensed Statements of Convertible Preferred Stock and Stockholders’ (Deficit) Equity (Unaudited)

2

 

Condensed Statements of Cash Flows (Unaudited)

4

 

Notes to Unaudited Condensed Financial Statements

5

Item 2.

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

13

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

21

Item 4.

Controls and Procedures

21

PART II.

OTHER INFORMATION

22

Item 1.

Legal Proceedings

22

Item 1A.

Risk Factors

22

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

79

Item 3.

Defaults Upon Senior Securities

80

Item 4.

Mine Safety Disclosures

80

Item 5.

Other Information

80

Item 6.

Exhibits

81

Signatures

83

 


i


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:

 

 

our financial performance;

 

the sufficiency of our existing cash, cash equivalents and short-term marketable securities to fund our future operating expenses and capital expenditure requirements;

 

our need to raise additional funding before we can expect to generate any revenues from product sales;

 

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

 

our anticipated use of our existing cash, cash equivalents and short-term marketable securities and the proceeds from this offering;

 

the implementation of our strategic plans for our business and product candidates;

 

the size of the market opportunity for our product candidates and our ability to maximize those opportunities;

 

the initiation, timing, progress and results of our research and development programs, preclinical studies, any clinical trials and, investigational new drug application (“IND”) and other regulatory submissions;

 

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

 

our estimates of the number of patients expected to have certain p53 mutants and the number of patients that will enroll in our clinical trials;

 

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

 

our plans relating to the clinical development of our product candidates, including the disease areas to be evaluated;

 

the timing, progress and focus of our clinical trials, and the reporting of data from those trials;

 

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

 

our plans relating to commercializing our product candidates, if approved;

 

the expected benefits of potential future strategic collaborations with third parties and our ability to attract collaborators with development, regulatory and commercialization expertise;

 

the success of competing therapies that are or may become available;

 

the timing or likelihood of regulatory filings and approvals, including our expectation to seek special designations, such as orphan drug designation, for our product candidates;

 

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

 

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

 

our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available;

 

our plan to rely on third parties to conduct and support preclinical and clinical development;

 

our ability to retain the continued service of our key personnel and to identify, hire and then retain additional qualified personnel;

 

the impact of the ongoing COVID-19 pandemic or other related disruptions on our business; and

 

our expectations regarding the period during which we will qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012, as amended.

 

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

i


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.

 

ii


PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements (Unaudited).

PMV Pharmaceuticals, Inc.

Condensed Balance Sheets

(unaudited)

(in thousands, except share and per share amounts)

 

 

 

September 30,

2020

(unaudited)

 

 

December 31,

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

373,150

 

 

$

73,278

 

Short-term marketable securities

 

 

 

 

 

28,208

 

Prepaid expenses and other current assets

 

 

522

 

 

 

607

 

Total current assets

 

 

373,672

 

 

 

102,093

 

Property and equipment, net

 

 

573

 

 

 

739

 

Other assets

 

 

201

 

 

 

201

 

Total assets

 

$

374,446

 

 

$

103,033

 

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

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

548

 

 

$

2,837

 

Accrued expenses

 

 

4,928

 

 

 

1,686

 

Total current liabilities

 

 

5,476

 

 

 

4,523

 

Other liabilities

 

 

 

 

 

51

 

Total liabilities

 

 

5,476

 

 

 

4,574

 

Convertible preferred stock, accumulated liquidation value of $0 and $169,385 at

   September 30, 2020 (unaudited) and December 31, 2019, respectively

 

 

 

 

 

168,933

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value, 5,000,000 and no shares authorized at September

30, 2020 (unaudited) and December 31, 2019, respectively, no shares issued or

outstanding at September 30, 2020 (unaudited) and December 31, 2019, respectively.

 

 

 

 

 

 

Common stock, $0.00001 par value, 1,000,000,000 and 33,250,829

   shares authorized; 44,773,748 and 3,046,200 shares issued and outstanding

   at September 30, 2020 (unaudited) and December 31, 2019, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

468,396

 

 

 

4,969

 

Accumulated deficit

 

 

(99,426

)

 

 

(75,440

)

Accumulated other comprehensive loss

 

 

 

 

 

(3

)

Total stockholders’ equity (deficit)

 

 

368,970

 

 

 

(70,474

)

Total liabilities, convertible preferred stock, and stockholders’ equity (deficit)

 

$

374,446

 

 

$

103,033

 

 

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

1


PMV Pharmaceuticals, Inc.

Condensed 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

 

$

5,992

 

 

$

4,895

 

 

$

17,752

 

 

$

15,060

 

General and administrative

 

 

2,709

 

 

 

1,545

 

 

 

6,689

 

 

 

4,222

 

Total operating expenses

 

 

8,701

 

 

 

6,440

 

 

 

24,441

 

 

 

19,282

 

Loss from operations

 

 

(8,701

)

 

 

(6,440

)

 

 

(24,441

)

 

 

(19,282

)

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

40

 

 

 

272

 

 

 

603

 

 

 

985

 

Other expense

 

 

(100

)

 

 

 

 

 

(143

)

 

 

 

Total other (expense) income

 

 

(60

)

 

 

272

 

 

 

460

 

 

 

985

 

Loss before provision for income taxes

 

 

(8,761

)

 

 

(6,168

)

 

 

(23,981

)

 

 

(18,297

)

Provision for income taxes

 

 

3

 

 

 

7

 

 

 

5

 

 

 

8

 

Net loss

 

 

(8,764

)

 

 

(6,175

)

 

 

(23,986

)

 

 

(18,305

)

Unrealized (loss) gains on marketable securities, net of tax

 

 

(5

)

 

 

(2

)

 

 

3

 

 

 

14

 

Comprehensive loss

 

$

(8,769

)

 

$

(6,177

)

 

$

(23,983

)

 

$

(18,291

)

Net loss per share -- basic and diluted

 

$

(1.46

)

 

$

(2.03

)

 

$

(5.93

)

 

$

(6.04

)

Weighted-average common shares outstanding

 

 

6,022,457

 

 

 

3,046,200

 

 

 

4,045,527

 

 

 

3,031,416

 

 

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

 

2


PMV Pharmaceuticals, Inc.

Condensed Statements of Convertible Preferred Stock and Stockholders’ (Deficit) Equity

(unaudited)

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Total

 

 

 

Convertible

Preferred Stock

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Other

Comprehensive

 

 

Accumulated

 

 

Stockholders'

(Deficit)

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2018

 

 

17,396,640

 

 

$

107,228

 

 

 

 

3,012,284

 

 

$

 

 

 

3,961

 

 

$

(13

)

 

$

(50,088

)

 

$

(46,140

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

207

 

 

 

 

 

 

 

 

 

207

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,003

)

 

 

(6,003

)

Unrealized gain on available for sale investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16

 

 

 

 

 

 

16

 

Balance at March 31, 2019

 

 

17,396,640

 

 

$

107,228

 

 

 

 

3,012,284

 

 

$

 

 

 

4,168

 

 

$

3

 

 

$

(56,091

)

 

$

(51,920

)

Exercise of stock options

 

 

 

 

 

 

 

 

 

33,916

 

 

 

 

 

 

100

 

 

 

 

 

 

 

 

 

100

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

223

 

 

 

 

 

 

 

 

 

223

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,127

)

 

 

(6,127

)

Balance at June 30, 2019

 

 

17,396,640

 

 

$

107,228

 

 

 

 

3,046,200

 

 

$

 

 

 

4,491

 

 

$

3

 

 

$

(62,218

)

 

$

(57,724

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

239

 

 

 

 

 

 

 

 

 

239

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,175

)

 

 

(6,175

)

Unrealized loss on available for sale investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

(2

)

Balance at September 30, 2019

 

 

17,396,640

 

 

$

107,228

 

 

 

 

3,046,200

 

 

$

 

 

 

4,730

 

 

$

1

 

 

$

(68,393

)

 

$

(63,662

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Total

 

 

 

Convertible

Preferred Stock

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Other

Comprehensive

 

 

Accumulated

 

 

Stockholders'

(Deficit)

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2019

 

 

22,866,246

 

 

$

168,933

 

 

 

 

3,046,200

 

 

$

 

 

 

4,969

 

 

$

(3

)

 

$

(75,440

)

 

$

(70,474

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

296

 

 

 

 

 

 

 

 

 

296

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,255

)

 

 

(7,255

)

Unrealized loss on available for sale investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(80

)

 

 

 

 

 

(80

)

Balance at March 31, 2020

 

 

22,866,246

 

 

$

168,933

 

 

 

 

3,046,200

 

 

$

 

 

 

5,265

 

 

$

(83

)

 

$

(82,695

)

 

$

(77,513

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

383

 

 

 

 

 

 

 

 

 

383

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,967

)

 

 

(7,967

)

Unrealized gain on available for sale investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

88

 

 

 

 

 

 

88

 

Balance at June 30, 2020

 

 

22,866,246

 

 

$

168,933

 

 

 

 

3,046,200

 

 

$

 

 

 

5,648

 

 

$

5

 

 

$

(90,662

)

 

$

(85,009

)

Issuance of Series D convertible preferred stock,

   net of issuance costs of $210

 

 

5,321,864

 

 

 

69,790

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of convertible preferred stock to common stock

 

 

(28,188,110

)

 

 

(238,723

)

 

 

 

28,188,110

 

 

 

 

 

 

238,723

 

 

 

 

 

 

 

 

 

238,723

 

Exercise of warrants

 

 

 

 

 

 

 

 

 

9,688

 

 

 

 

 

 

194

 

 

 

 

 

 

 

 

 

194

 

Issuance of common stock, net of issuance costs of $20,374

 

 

 

 

 

 

 

 

 

13,529,750

 

 

 

 

 

 

223,161

 

 

 

 

 

 

 

 

 

223,161

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

670

 

 

 

 

 

 

 

 

 

670

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,764

)

 

 

(8,764

)

Unrealized loss on available for sale investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

Balance at September 30, 2020

 

 

 

 

$

 

 

 

 

44,773,748

 

 

$

 

 

 

468,396

 

 

$

 

 

$

(99,426

)

 

$

368,970

 

 

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

 

3


PMV Pharmaceuticals, Inc.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(23,986

)

 

$

(18,305

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock based compensation

 

 

1,349

 

 

 

669

 

Depreciation

 

 

257

 

 

 

293

 

Amortization of premiums on marketable securities

 

 

152

 

 

 

22

 

Other

 

 

144

 

 

 

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

85

 

 

 

(53

)

Accounts payable

 

 

(2,825

)

 

 

(284

)

Accrued expenses

 

 

2,397

 

 

 

720

 

Net cash used in operating activities

 

 

(22,427

)

 

 

(16,938

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(91

)

 

 

(109

)

Purchase of marketable securities

 

 

(14,512

)

 

 

(18,330

)

Maturities of marketable securities

 

 

42,571

 

 

 

40,224

 

Net cash provided by investing activities

 

 

27,968

 

 

 

21,785

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of convertible preferred stock, net

 

 

69,790

 

 

 

 

Proceeds from the issuance of common stock, net

 

 

224,541

 

 

 

 

Proceeds from exercise of stock options

 

 

 

 

 

100

 

Net cash provided by financing activities

 

 

294,331

 

 

 

100

 

Net increase in cash and cash equivalents

 

 

299,872

 

 

 

4,947

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Cash and cash equivalents - beginning of period

 

 

73,278

 

 

 

30,307

 

Cash and cash equivalents - end of period

 

$

373,150

 

 

$

35,254

 

Supplemental disclosures of noncash financing activities

 

 

 

 

 

 

 

 

Conversion of convertible preferred stock to common stock

 

$

238,723

 

 

$

 

Conversion of warrant liability to common stock

 

$

194

 

 

$

 

Unpaid offering costs

 

$

1,380

 

 

$

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

 

 

Cash paid for income tax

 

$

5

 

 

$

8

 

 

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

 

4


 

PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

1. Formation and Business of the Company

Organization

PMV Pharmaceuticals, Inc. (the “Company”) was incorporated in the state of Delaware in March 2013. Since inception, the Company has devoted substantially all of its time and efforts to performing research and development activities and raising capital. The Company is a precision oncology company pioneering the discovery and development of small molecule, tumor-agnostic therapies targeting p53 mutations. The Company’s headquarters are located in Cranbury, New Jersey.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, technical risks associated with the successful research, development and manufacturing of product candidates, 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. Current and future programs will require significant 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. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

On September 25, 2020, the Company completed an initial public offering (the “IPO”) of 13,529,750 shares of common stock, at a public offering price of $18.00 per share including the exercise in full by the underwriters of their option to purchase up to 1,764,750 additional shares of commons stock, for aggregate gross proceeds of $243,536 and its shares started trading on The Nasdaq Global Select Market under the ticker symbol “PMVP.”  The Company received $223,161 in net proceeds after deducting underwriting discounts and commissions and other offering expenses payable by the Company.  In connection with the closing of the IPO, all of the Company’s outstanding shares of convertible preferred stock outstanding at the time of the IPO automatically converted into 28,188,110 shares of common stock. On September 18, 2020, the Company amended its certificate of incorporation to effect a 5.2651-for-1 reverse stock split of its issued and outstanding common and convertible preferred stock. The accompanying condensed financial statements and related notes give retroactive effect to the reverse stock split for all periods presented.

The Company has incurred net losses and negative cash flows from operations since its inception. During the nine months ended September 30, 2020, the Company incurred a net loss of $23,986 and used $22,427 of cash for operations. At September 30, 2020, the Company had an accumulated deficit of $99,426. Cash and cash equivalents at September 30, 2020 were $373,150. Management expects to incur substantial additional operating losses for the next several years and will need to obtain additional debt or equity financings in order to complete development of its products, obtain regulatory approvals, launch and commercialize its products and continue research and development programs. The Company believes it has adequate cash and cash equivalents to operate for at least the next twelve months from the date of issuance of these unaudited condensed financial statements.

2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2019, included in the Company’s final prospectus that forms part of the Company’s Registration Statement on Form S-1 (Reg. No. 333-248627), dated September 24, 2020 and filed with the SEC pursuant to Rule 424(b)(4) on September 25, 2020. Since the date of those financial statements, there have been no changes to its significant accounting policies except as noted below.

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the interim period reporting requirements of Form 10-Q and Article 10 of Regulation S-X. The condensed balance sheet as of September 30, 2020, the condensed statements of operations and comprehensive loss, and condensed statements of convertible preferred stock and stockholders’ (deficit) equity for the three and nine months ended September 30, 2020 and 2019, and the condensed statements of cash flows for the nine months ended September 30, 2020 and 2019 are unaudited, but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.  The results for any interim

5


PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

 

period are not necessarily indicative of results for the year ending December 31, 2020 or for any other subsequent interim period.  The condensed balance sheet at December 31, 2019 has been derived from our audited financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, the fair values of common stock, convertible preferred stock and stock-based compensation. Actual results could differ materially from those estimates.

Reverse Stock Split

In September 2020, the Company’s board of directors and stockholders approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 5.2651-for-1 reverse stock split of the Company’s common stock and convertible preferred stock, which was effected on September 18, 2020. The par value of the common stock and convertible preferred stock were not adjusted as a result of the reverse stock split. Accordingly, all common stock, convertible preferred stock, stock options, and related per share amounts in these condensed financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock split.

Cash, Cash Equivalents and Marketable Securities

Management considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

The Company’s marketable debt securities have been classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Marketable debt securities with maturities of 12 months or less are classified as short-term and marketable debt securities with maturities greater than 12 months are classified as long-term. The Company’s marketable debt securities are carried at fair value, with unrealized gains and losses, net of taxes, reported as a component of accumulated other comprehensive loss in stockholders’ deficit. Premiums and discounts on marketable debt securities are amortized into earnings over the life of the security. For the three months ended September 30, 2020 and 2019, the Company recorded $6 and $13 of amortization, respectively.  For the nine months ended September 30, 2020 and 2019, the Company recorded $152 and $22 of amortization, respectively.

Comprehensive Loss

The Company presents comprehensive loss in a single statement within its financial statements.  Other comprehensive loss consists of unrealized gains and losses on marketable securities, net of tax.

Recently Issued and Adopted Accounting Pronouncements

In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation – Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. The pronouncement is effective for the Company in the annual period beginning after December 15, 2019, and early adoption is permitted. The Company adopted this guidance on January 1, 2020. The adoption of this standard did not have a material impact on the Company’s financial statements.

6


PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

 

Recently Issued Accounting Standards Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”) requiring lessees to recognize operating and financing lease liabilities on the balance sheet, as well as corresponding right-of-use assets. The new lease standard also makes some changes to lessor accounting and aligns key aspects of the lessor accounting model with the revenue recognition standard. In addition, disclosures will be required to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

The Company has elected, as an emerging growth company (“EGC”), to employ extended transition provisions provided to EGC’s by using nonpublic business entity adoption dates for new or revised accounting standards, so long as the issuer maintains its status as an EGC. The Company expects to retain its status as an EGC through December 31, 2022, and therefore expects to adopt ASU 2016-02 for the annual period ended December 31, 2022, with the provisions of the new standard reflected in quarterly periods thereafter. The Company is currently evaluating the impact of this accounting standard update on its financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The new guidance simplifies the accounting for income taxes by removing several exceptions in the current standard and adding guidance to reduce complexity in certain areas, such as requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The new standard is effective for interim and annual reporting periods beginning after December 15, 2020 for all public entities, with early adoption permitted. The Company is currently assessing the impact that adopting this standard will have on its financial statements.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash and cash equivalents and marketable securities. Cash and cash equivalents includes a checking account held at one financial institution. At times, such deposits may be in excess of insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents. The Company’s marketable debt securities are carried at fair value with unrealized gains and losses. Any investments with unrealized losses are considered to be temporarily impaired.

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, uncertainty of market acceptance of the product, competition from substitute products and larger companies, protection of proprietary technology, any future strategic relationships and dependence on key individuals.

Products developed by the Company require clearances from the U.S. Food and Drug Administration or other international regulatory agencies prior to commercial sales. There can be no assurance the Company’s product candidates will receive the necessary clearances. If the Company is denied clearance, clearance is delayed or it is unable to maintain clearance, it could have a materially adverse impact on the Company.

In January 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a “Public Health Emergency of International Concern,” which continues to spread throughout the world and has adversely impacted global commercial activity and contributed to significant declines and volatility in financial markets. The COVID-19 outbreak and government responses are creating disruption in global supply chains and adversely impacting many industries. The outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The Company continues to monitor the impact of the COVID-19 outbreak closely. The extent to which the COVID-19 outbreak will impact its operations or financial results is uncertain.

7


PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

 

3. Financial Instruments and Fair Value Measurements

The Company’s financial instruments consist of money market funds, U.S. government debt securities and corporate debt securities. The following tables show the Company’s cash equivalents and available-for-sale securities’ carrying amounts and fair values at September 30, 2020 and December 31, 2019:

 

 

 

As of September 30, 2020 (unaudited)

 

 

 

Carrying

Amount

 

 

Fair Value

 

 

Quoted

priced in

active

markets

(level 1)

 

 

Significant

other

observable

inputs

(level 2)

 

 

Significant

unobservable

inputs

(level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

46,159

 

 

$

46,159

 

 

$

46,159

 

 

$

 

 

$

 

Corporate debt securities

 

 

95,004

 

 

 

95,004

 

 

 

 

 

 

95,004

 

 

 

 

Total assets

 

$

141,163

 

 

$

141,163

 

 

$

46,159

 

 

$

95,004

 

 

$

 

 

 

 

As of December 31, 2019

 

 

 

Carrying

Amount

 

 

Fair

Value

 

 

Quoted

Priced in

Active

Markets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

1,680

 

 

$

1,680

 

 

$

1,680

 

 

$

 

 

$

 

Corporate debt securities

 

 

97,819

 

 

 

97,816

 

 

 

 

 

 

97,816

 

 

 

 

Total assets

 

$

99,499

 

 

$

99,496

 

 

$

1,680

 

 

$

97,816

 

 

$

 

 

Cash Equivalents — Cash equivalents of $141.2 million as of September 30, 2020 consisted of money market funds of $46.2 million and corporate debt securities of $95.0 million. Cash equivalents of $71.3 million as of December 31, 2019 consisted of money market funds of $1.7 million and corporate debt securities of $69.6 million. Money market funds are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets, whereas corporate debt securities are classified within level 2 of the fair value hierarchy because they are valued using inputs other than quoted prices that are observable for the asset or liability either directly or indirectly.

Marketable Securities — Marketable securities of $28.2 million as December 31, 2019 consisted of corporate debt securities classified within level 2 of the fair value hierarchy because they are valued using inputs other than quoted prices that are observable for the asset or liability either directly or indirectly. There were no marketable securities as of September 30, 2020.

 

4. Property and Equipment, Net

 

 

 

September 30,

2020

(unaudited)

 

 

December 31,

2019

 

Machinery & equipment

 

$

1,989

 

 

$

1,898

 

Computers

 

 

8

 

 

 

8

 

Furniture & fixtures

 

 

9

 

 

 

9

 

Leasehold improvements

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