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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Chiasma Inc | NASDAQ:CHMA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.76 | 3.76 | 3.80 | 0 | 01:00:00 |
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
76-0722250
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Common Stock, $0.01 par value
|
CHMA
|
NASDAQ Global Select Market
|
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☒ |
• |
our manufacturing supplement, or
CBE-30
supplement, to our approved NDA for our oral octreotide capsules product candidate, MYCAPSSA, for long-term maintenance treatment in acromegaly patients who have responded to and tolerated treatment with octreotide or lanreotide;
|
• |
our expectations regarding the FDA’s ongoing review our
CBE-30
supplement, to our approved NDA and the FDA’s acceptance and review of the second
CBE-30
supplement we plan to submit;
|
• |
our ability to obtain supply of sufficient amounts of octreotide capsules to support our commercial launch in the United States and clinical trials;
|
• |
our commercial launch of MYCAPSSA in the United States, including our plans with respect our customer-facing team, the nature and success of our ongoing and planned commercialization activities and strategy, our pricing of MYCAPSSA, and related assumptions;
|
• |
our views as to potential future results of our commercialization efforts in the United States with respect to MYCAPSSA, including our expectations with respect to the scope, level and availability of reimbursement by private and government payors;
|
• |
our development of octreotide capsules for the treatment of acromegaly;
|
• |
our efforts to potentially obtain regulatory approval of octreotide capsules in the European Union by conducting the MPOWERED Phase 3 clinical trial;
|
• |
the timing and receipt and announcement of
top-line
and other clinical data, including our ability to release
top-line
data from the MPOWERED trial in November 2020;
|
• |
the therapeutic benefits, effectiveness and safety of octreotide capsules;
|
• |
our estimates of the size and characteristics of the markets that may be addressed by octreotide capsules;
|
• |
the commercial success and market acceptance of octreotide capsules or any future product candidates that are approved for marketing in the United States or other countries;
|
• |
our ability to generate future revenue;
|
• |
the safety and efficacy of therapeutics marketed by our competitors that are targeted to indications which octreotide capsules have been developed to treat;
|
• |
our ability to leverage our Transient Permeability Enhancer, or TPE, platform to develop and commercialize novel oral product candidates incorporating peptides that are currently only available in injectable or other
non-absorbable
forms;
|
• |
the possibility that competing products or technologies may make MYCAPSSA, other product candidates we may develop and commercialize or our TPE technology obsolete;
|
• |
our ability to secure collaborators to license, manufacture, market and sell octreotide capsules or any products for which we receive regulatory approval in the future;
|
• |
our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;
|
• |
our product development and operational plans generally;
|
• |
the impact of the
COVID-19
pandemic on our commercialization efforts of MYCAPSSA, regulatory submission and potential approvals, and our business generally; and
|
• |
our estimates and expectations regarding our capital requirements, cash and expense levels and liquidity sources.
|
Item 1.
|
Financial Statements
|
|
September 30, 2020
|
|
December 31, 2019
|
|||||
(in thousands except share data)
|
||||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 72,840 | $ | 27,855 | ||||
Marketable securities
|
83,917 | 64,520 | ||||||
Accounts receivable
|
179 | — | ||||||
Inventory
|
8,942 | — | ||||||
Prepaid expenses and other current assets
|
5,383 | 3,881 | ||||||
|
|
|
|
|||||
Total current assets
|
171,261 | 96,256 | ||||||
Property and equipment, net
|
581 | 334 | ||||||
Other assets
|
2,419 | 2,236 | ||||||
Restricted cash
|
20,300 | — | ||||||
|
|
|
|
|||||
Total assets
|
$ | 194,561 | $ | 98,826 | ||||
|
|
|
|
|||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$ | 7,149 | $ | 3,253 | ||||
Accrued expenses
|
10,275 | 7,576 | ||||||
Other current liabilities
|
722 | 546 | ||||||
|
|
|
|
|||||
Total current liabilities
|
18,146 | 11,375 | ||||||
Deferred royalty obligation
|
63,529 | — | ||||||
Long-term liabilities
|
2,548 | 1,682 | ||||||
|
|
|
|
|||||
Total liabilities
|
84,223 | 13,057 | ||||||
|
|
|
|
|||||
Commitments and contingencies (Note 11)
|
||||||||
Stockholders’ equity:
|
||||||||
Common stock, $0.01 par value; authorized 125,000,000 shares at September 30, 2020 and December 31, 2019; issued and outstanding 57,804,095 shares at September 30, 2020 and 42,078,416 shares at December 31, 2019
|
578 | 421 | ||||||
Preferred stock, $0.01 par value;
shares; none outstanding |
—
|
— | ||||||
Additional
paid-in
capital
|
437,659 | 358,245 | ||||||
Accumulated other comprehensive income
|
6 | 37 | ||||||
Accumulated deficit
|
(327,905 | ) | (272,934 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity
|
110,338 | 85,769 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity
|
$ | 194,561 | $ | 98,826 | ||||
|
|
|
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands except share and per share data)
|
||||||||||||||||
Product revenue, net
|
$ | 142 | $ | — | $ | 142 | $ | — | ||||||||
Cost of goods sold
|
3 | — | 3 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit
|
139 | — | 139 | — | ||||||||||||
Operating expenses:
|
||||||||||||||||
Selling, general and administrative
|
13,048 | 4,116 | 31,295 | 9,210 | ||||||||||||
Research and development
|
4,523 | 4,110 | 22,320 | 16,103 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
17,571 | 8,226 | 53,615 | 25,313 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations
|
(17,432 | ) | (8,226 | ) | (53,476 | ) | (25,313 | ) | ||||||||
Interest and other income, net
|
1,122 | 549 | 1,648 | 1,074 | ||||||||||||
Interest expense
|
(2,126 | ) | — | (3,033 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes
|
(18,436 | ) | (7,677 | ) | (54,861 | ) | (24,239 | ) | ||||||||
Provision for income taxes
|
21 | 6 | 110 | 34 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
(18,457 | ) | (7,683 | ) | (54,971 | ) | (24,273 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings per share
|
||||||||||||||||
Basic
|
$ | (0.30 | ) | $ | (0.20 | ) | $ | (1.13 | ) | $ | (0.77 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Diluted
|
$ | (0.30 | ) | $ | (0.20 | ) | $ | (1.13 | ) | $ | (0.77 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average shares outstanding:
|
||||||||||||||||
Basic
|
61,459,491 | 38,490,768 | 48,685,024 | 31,569,731 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted
|
61,459,491 | 38,490,768 | 48,685,024 | 31,569,731 | ||||||||||||
|
|
|
|
|
|
|
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Net loss
|
$ | (18,457 | ) | $ | (7,683 | ) | $ | (54,971 | ) | $ | (24,273 | ) | ||||
Other comprehensive income (loss):
|
||||||||||||||||
Unrealized gain (loss) on available for sale securities, net
|
(20 | ) | (3 | ) | (31 | ) | 65 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other comprehensive income (loss):
|
(20 | ) | (3 | ) | (31 | ) | 65 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss
|
$ | (18,477 | ) | $ | (7,686 | ) | $ | (55,002 | ) | $ | (24,208 | ) | ||||
|
|
|
|
|
|
|
|
Common Stock
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Accumulated
Deficit
|
Total
Stockholders’
Equity
|
||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
(in thousands except share data)
|
||||||||||||||||||||||||
Balance, December 31, 2019
|
42,078,416 | $ | 421 | $ | 358,245 | $ | 37 | $ | (272,934 | ) | $ | 85,769 | ||||||||||||
Stock-based compensation
|
— | — | 1,162 | — | — | 1,162 | ||||||||||||||||||
Exercise of stock options
|
186,925 | 2 | 230 | — | — | 232 | ||||||||||||||||||
Other comprehensive loss
|
— | — | — | (34 | ) | — | (34 | ) | ||||||||||||||||
Net loss
|
— | — | — | — | (15,386 | ) | (15,386 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, March 31, 2020
|
42,265,341 | 423 | 359,637 | 3 | (288,320 | ) | 71,743 | |||||||||||||||||
Stock-based compensation
|
—
|
— | 1,335 | — | — | 1,335 | ||||||||||||||||||
Exercise of stock options
|
3,591 | — | 5 | — | — | 5 | ||||||||||||||||||
Other comprehensive income
|
—
|
— | — | 23 | — | 23 | ||||||||||||||||||
Net loss
|
—
|
— | — | — | (21,128 | ) | (21,128 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, June 30, 2020
|
42,268,932 | 423 | 360,977 | 26 | (309,448 | ) | 51,978 | |||||||||||||||||
Stock-based compensation
|
—
|
— | 1,345 | — | — | 1,345 | ||||||||||||||||||
Exercise of stock options
|
5,399 | — | 13 | — | — | 13 | ||||||||||||||||||
Issuance of common stock
and pre-funded warrants
in
follow-on
offering, net
|
15,125,000 | 151 | 75,328 | — | — | 75,479 | ||||||||||||||||||
Issuance of common stock from
cashless
warrant exercise
|
404,764 | 4 | (4 | ) | — | — | — | |||||||||||||||||
Other comprehensive
loss
|
—
|
— | — | (20 | ) | — | (20 | ) | ||||||||||||||||
Net loss
|
—
|
— | — | — | (18,457 | ) | (18,457 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, September 30, 2020
|
57,804,095 | $ | 578 | $ | 437,659 | $ | 6 | $ | (327,905 | ) | $ | 110,338 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Accumulated
Deficit
|
Total
Stockholders’
Equity
|
||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
(in thousands except share data)
|
||||||||||||||||||||||||
Balance, December 31, 2018
|
24,456,120 | $ | 245 | $ | 270,509 | $ | (16 | ) | $ | (236,614 | ) | $ | 34,124 | |||||||||||
Stock-based compensation
|
— | — | 622 | — | — | 622 | ||||||||||||||||||
Exercise of stock options
|
33,839 | — | 3 | — | — | 3 | ||||||||||||||||||
Additional paid in capital on account of vested portion of restricted stock
|
— | — | 16 | — | — | 16 | ||||||||||||||||||
Other comprehensive income
|
— | — | — | 18 | — | 18 | ||||||||||||||||||
Net loss
|
— | — | — | — | (8,750 | ) | (8,750 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, March 31, 2019
|
24,489,959 | 245 | 271,150 | 2 | (245,364 | ) | 26,033 | |||||||||||||||||
Stock-based compensation
|
— | — | 627 | — | — | 627 | ||||||||||||||||||
Exercise of stock options
|
24,110 | — | 26 | — | — | 26 | ||||||||||||||||||
Issuance of common stock in
follow-on
offering, net
|
7,263,158 | 73 | 32,160 | — | — | 32,233 | ||||||||||||||||||
Other comprehensive income
|
— | — | — | 50 | — | 50 | ||||||||||||||||||
Net loss
|
— | — | — | — | (7,840 | ) | (7,840 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, June 30, 2019
|
31,777,227 | 318 | 303,963 | 52 | (253,204 | ) | 51,129 | |||||||||||||||||
Stock-based compensation
|
— | — | 944 | — | — | 944 | ||||||||||||||||||
Exercise of stock options
|
61,811 | 1 | 9 | — | — | 10 | ||||||||||||||||||
Issuance of common stock in
follow-on
offering, net
|
10,166,427 | 101 | 52,242 | — | — | 52,343 | ||||||||||||||||||
Other comprehensive income
|
— | — | — | (3 | ) | — | (3 | ) | ||||||||||||||||
Net loss
|
— | — | — | — | (7,683 | ) | (7,683 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, September 30, 2019
|
42,005,465 | $ | 420 | $ | 357,158 | $ | 49 | $ | (260,887 | ) | $ | 96,740 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||||
2020
|
2019
|
|||||||
(in thousands)
|
||||||||
Operating Activities:
|
||||||||
Net loss
|
$ | (54,971 | ) | $ | (24,273 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||
Depreciation
|
122 | 42 | ||||||
Stock-based compensation
|
3,813 | 2,193 | ||||||
Accretion on marketable securities, net
|
(71 | ) | (414 | ) | ||||
Non-cash
lease expense
|
376 | 135 | ||||||
Amortization of debt discount and issuance costs
|
171 | — | ||||||
Change in fair value of embedded derivative liability
|
(1,060 | ) | — | |||||
Benefit for deferred income taxes
|
(8 | ) | (18 | ) | ||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(179 | ) | — | |||||
Inventory
|
(8,913 | ) | — | |||||
Prepaid expenses and other current assets
|
(1,500 | ) | (526 | ) | ||||
Insurance Recovery (Note 11)
|
—
|
18,288 | ||||||
Accounts payable and accrued expenses
|
7,690 | (1,924 | ) | |||||
Settlement Liability (Note 11)
|
—
|
(18,750 | ) | |||||
Other assets
|
(688 | ) | 53 | |||||
Other current and long-term liabilities
|
920 | (67 | ) | |||||
|
|
|
|
|||||
Net cash used in operating activities
|
(54,298 | ) | (25,261 | ) | ||||
Investing Activities:
|
||||||||
Purchases of marketable securities
|
(92,879 | ) | (97,000 | ) | ||||
Maturities of marketable securities
|
73,522 | 43,051 | ||||||
Purchases of property and equipment
|
(369 | ) | (140 | ) | ||||
|
|
|
|
|||||
Net cash used in
|
(19,726 | ) | (54,089 | ) | ||||
Financing Activities:
|
||||||||
Proceeds from the issuance of common stock and
pre-funded
warrants, net
|
75,479 | 84,576 | ||||||
Exercise of stock options
|
250 | 39 | ||||||
Proceeds from short-term borrowing
|
—
|
1,675 | ||||||
Payments of short-term borrowing
|
(838 | ) | (335 | ) | ||||
Proceeds from deferred royalty obligation, net
|
64,418 | — | ||||||
|
|
|
|
|||||
Net cash provided by financing activities
|
139,309 | 85,955 | ||||||
|
|
|
|
|||||
Net increase in cash, cash equivalents and restricted cash
|
65,285 | 6,605 | ||||||
Cash, cash equivalents and restricted cash, beginning of period
|
27,855 | 13,060 | ||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$ | 93,140 | $ | 19,665 | ||||
|
|
|
|
|||||
Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets
|
||||||||
Cash and cash equivalents
|
$ | 72,840 | $ | 19,665 | ||||
Restricted cash
|
20,300 | — | ||||||
|
|
|
|
|||||
Total cash, cash equivalents and restricted cash
|
$ | 93,140 | $ | 19,665 | ||||
|
|
|
|
Discounts and Fees
|
Rebates and Other
Incentives |
Returns
|
Total
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
Balance, January 1, 2020
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Provision
|
17 | 26 | 1 | 44 | ||||||||||||
Payments or credits
|
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance, September 30, 2020
|
$ | 17 | $ | 26 | $ | 1 | $ | 44 | ||||||||
|
|
|
|
|
|
|
|
As of September 30, 2020
|
||||||||||||||||
Amortized Cost
|
Gross Unrealized
Gains
|
Gross Unrealized
Losses
|
Estimated Fair
Value
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
Money market funds
|
$ | 32,697 | $ | — | $ | — | $ | 32,697 | ||||||||
Corporate notes
|
16,796 | 1 | (1 | ) | 16,796 | |||||||||||
Commercial paper
|
88,191 | 8 | (3 | ) | 88,196 | |||||||||||
U.S. treasury
securities
|
21,525 | 1 | — | 21,526 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 159,209 | $ | 10 | $ | (4 | ) | $ | 159,215 | |||||||
|
|
|
|
|
|
|
|
As of December 31, 2019
|
||||||||||||||||
Amortized Cost
|
Gross Unrealized
Gains
|
Gross Unrealized
Losses
|
Estimated Fair
Value
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
Money market funds
|
$ | 23,012 | $ | — | $ | — | $ | 23,012 | ||||||||
Corporate notes
|
45,584 | 20 | — | 45,604 | ||||||||||||
Commercial paper
|
20,899 | 17 | — | 20,916 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 89,495 | $ | 37 | $ | — | $ | 89,532 | ||||||||
|
|
|
|
|
|
|
|
September 30, 2020
|
December 31, 2019
|
|||||||
($ in thousands)
|
||||||||
Cash and cash equivalents
|
$ | 54,998 | $ | 25,012 | ||||
Marketable securities
|
83,917 | 64,520 | ||||||
Restricted cash
|
20,300 | — | ||||||
|
|
|
|
|||||
Total
|
$ | 159,215 | $ | 89,532 | ||||
|
|
|
|
|
•
|
|
Level 1
|
|
•
|
|
Level 2
|
|
•
|
|
Level 3
|
Fair Value Measurements at September 30, 2020
|
||||||||||||||||
Description
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Total
|
||||||||||||
Financial assets
|
($ in thousands)
|
|||||||||||||||
Cash equivalents:
|
||||||||||||||||
Money market funds
|
$ | 32,697 | $ | — | $ | — | $ | 32,697 | ||||||||
U.S. treasury s
ecuriti
es
|
— | 8,499 | — | 8,499 | ||||||||||||
Corporate notes
|
— | 3,605 | — | 3,605 | ||||||||||||
Commercial paper
|
— | 30,497 | — | 30,497 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cash equivalents
|
$ | 32,697 | $ | 42,601 | $ | — | $ | 75,298 | ||||||||
Marketable securities:
|
||||||||||||||||
U.S.
treasury
s
ecuriti
es
|
$ | 13,027 | $ | — | $ | — | $ | 13,027 | ||||||||
Corporate notes
|
— | 13,191 | — | 13,191 | ||||||||||||
Commercial paper
|
— | 57,699 | — | 57,699 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total marketable securities
|
13,027 | 70,890 | — | 83,917 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 45,724 | $ | 113,491 | $ | — | $ | 159,215 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial liabilities
|
||||||||||||||||
Derivative liabilities
|
$ | — | $ | — | $ | 2,040 | $ | 2,040 |
Fair Value Measurements at December 31, 2019
|
||||||||||||||||
Description
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Total
|
||||||||||||
Financial assets
|
($ in thousands)
|
|||||||||||||||
Cash equivalents:
|
||||||||||||||||
Money market funds
|
$ | 23,012 | $ | — | $ | — | $ | 23,012 | ||||||||
Corporate notes
|
— | 2,000 | — | 2,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cash equivalents
|
$ | 23,012 | $ | 2,000 | $ | — | $ | 25,012 | ||||||||
Marketable securities:
|
||||||||||||||||
Corporate notes
|
$ | — | $ | 43,604 | $ | — | $ | 43,604 | ||||||||
Commercial paper
|
— | 20,916 | — | 20,916 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total marketable securities
|
— | 64,520 | — | 64,520 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 23,012 | $ | 66,520 | $ | — | $ | 89,532 | ||||||||
|
|
|
|
|
|
|
|
($ in thousands)
|
Fair Value Measurement of
Embedded Derivative using Significant Unobservable Inputs (Level 3) |
|||
Balance, June 30, 2020
|
$ | 1,308 | ||
Additions during the period
|
1,792 | |||
Change in fair value during the period
|
(1,060 | ) | ||
|
|
|||
Balance, September 30, 2020
|
$ | 2,040 | ||
|
|
($ in thousands)
|
September 30, 2020
|
|||
Raw materials and supplies
|
$ | 6,745 | ||
Work in process
|
1,879 | |||
Finished goods
|
318 | |||
|
|
|||
Total inventory
|
$ | 8,942 | ||
|
|
September 30, 2020
|
December 31, 2019
|
|||||||
($ in thousands)
|
||||||||
Accrued research and development expenses
|
$ | 3,895 | $ | 4,219 | ||||
Accrued selling, general, administrative and other expenses
|
3,209 | 1,485 | ||||||
Accrued payroll and employee benefits
|
3,171 | 1,872 | ||||||
|
|
|
|
|||||
Total accrued expenses
|
$ | 10,275 | $ | 7,576 | ||||
|
|
|
|
Description
|
Exercise Price
|
Expiration Date
|
Balance,
December 31, 2019 |
Warrants
Issued |
Warrants
Exercised |
Balance,
September 30, 2020 |
||||||||||||||||||
October 2012 Warrants
|
$ | 0.0910 | 10/22/2022 | 829,686 | — | (205,321 | ) | 624,365 | ||||||||||||||||
March 2013 Warrants
|
$ | 0.0910 | 3/28/2022 | 829,686 | — | (205,321 | ) | 624,365 | ||||||||||||||||
December 2014 Warrants
|
$ | 9.1320 | 12/16/2024 | 923,527 | — | — | 923,527 | |||||||||||||||||
February 2015 Warrants
|
$ | 9.1320 | 12/16/2024 | 984,116 | — | — | 984,116 | |||||||||||||||||
July 2020
Pre-Funded
Warrants
|
$ | 0.0001 | No expiration |
|
— | 5,000,000 | — | 5,000,000 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
3,567,015 | 5,000,000 | (410,642 | ) | 8,156,373 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
Selling, general and administrative
|
$ | 1,079 | $ | 702 | $ | 3,092 | $ | 1,373 | ||||||||
Research and development
|
237 | 242 | 721 | 820 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 1,316 | $ | 944 | $ | 3,813 | $ | 2,193 | ||||||||
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||||
2020
|
2019
|
|||||||
Expected volatility
|
85 | % | 97 | % | ||||
Expected term (years)
|
6.2 | 6.0 | ||||||
Risk-free interest rate
|
0.97 | % | 2.03 | % | ||||
Expected dividend yield
|
0 | % | 0 | % |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
($ in thousands)
|
||||||||||||||||
The components of lease expense were as follows:
|
||||||||||||||||
Operating lease expense
|
$ | 170 | $ | 58 | $ | 505 | $ | 159 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Supplemental cash flow information related to leases was as follows:
|
||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||||||||||
Operating cash flows from operating leases
|
$ | 205 | $ | 54 | $ | 476 | $ | 154 | ||||||||
Right-of-use assets obtained in exchange for lease obligations:
|
||||||||||||||||
Operating leases
|
$ | 28 | $ | — | $ | 122 | $ | 113 |
($ in thousands)
|
||||
Remainder of 2020
|
$ | 186 | ||
2021
|
726 | |||
2022
|
497 | |||
2023
|
|
|
7
|
|
|
|
|||
Total future minimum lease payments
|
1,416 | |||
Less: imputed interest
|
(149 | ) | ||
|
|
|||
Total
|
$ | 1,267 | ||
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
$
Change |
%
Change |
2020
|
2019
|
$
Change |
%
Change |
|||||||||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||||||||||
Product revenue, net
|
$ | 142 | $ | — | $ | 142 | * | $ | 142 | $ | — | $ | 142 | * | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Not meaningful percentage relationship
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
$
Change |
%
Change |
2020
|
2019
|
$
Change |
%
Change |
|||||||||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||||||||||
Cost of goods sold
|
$ | 3 | $ | — | $ | 3 | * | $ | 3 | $ | — | $ | 3 | * |
* |
Not meaningful percentage relationship
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
$
Change |
%
Change |
2020
|
2019
|
$
Change |
%
Change |
|||||||||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||||||||||
Research and development
|
$ | 4,523 | $ | 4,110 | $ | 413 | 10 | % | $ | 22,320 | $ | 16,103 | $ | 6,217 | 39 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• |
the costs and timing of future commercialization activities, including product manufacturing, marketing, access and reimbursement, sales and distribution, for octreotide capsules and any other future product candidates for which we receive marketing approval;
|
• |
proceeds, if any, received from commercial sales of octreotide capsules and any future product candidates for which we receive marketing approval;
|
• |
the costs, timing and outcome of the development and regulatory review of octreotide capsules and our initial CBE-30 supplement and our planned second CBE-30 supplement;
|
• |
the progress and results of our clinical trials of octreotide capsules or any future clinical trials or studies we may conduct;
|
• |
the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and
|
• |
the extent to which we develop, acquire or
in-license
other product candidates and technologies or explore or consummate other strategic transactions.
|
Nine Months Ended September 30,
|
||||||||
2020
|
2019
|
|||||||
($ in thousands)
|
||||||||
Cash flows provided by (used in):
|
||||||||
Operating activities
|
$ | (54,298 | ) | $ | (25,261 | ) | ||
Investing activities
|
(19,726 | ) | (54,089 | ) | ||||
Financing activities
|
139,309 | 85,955 |
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
• |
updated our policies and procedures related to product revenue and inventory; and
|
• |
added internal controls over the accounting for product revenue and inventory.
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
• |
the efficacy and safety of MYCAPSSA in a larger number of patients in a
non-clinical
setting than those demonstrated in our clinical trials;
|
• |
our ability to manufacture sufficient commercial supplies of MYCAPSSA in compliance with regulatory requirements;
|
• |
the effectiveness of our sales, marketing and distribution efforts, particularly during the remote,
COVID-19
environment;
|
• |
the incidence and prevalence of acromegaly patients in the U.S. that respond to and tolerate treatment with octreotide or lanreotide;
|
• |
the timing of market introduction of MYCAPSSA;
|
• |
the ability of MYCAPSSA to successfully compete against other products; acceptance by the medical community and patients of MYCAPSSA as a safe and effective product;
|
• |
the potential and perceived advantages of MYCAPSSA over alternative products;
|
• |
the ability to distinguish safety and efficacy from existing alternatives;
|
• |
the willingness of medical professionals to prescribe and patients to use MYCAPSSA and continue to use MYCAPSSA instead of alternative products;
|
• |
the prevalence and severity of adverse side effects;
|
• |
the convenience of prescribing, administrating and initiating patients on MYCAPSSA;
|
• |
the potential and perceived value and relative cost of MYCAPSSA over alternative products, including generic products or treatments;
|
• |
the availability of coverage and adequate reimbursement and pricing by private and government payors;
|
• |
the successful completion of any clinical trials, regulatory approval and commercialization of MYCAPSSA for one or more label expansion indications; and
|
• |
our ability to enforce our intellectual property rights with respect to MYCAPSSA.
|
• |
the FDA could withdraw its approval of MYCAPSSA, impose restrictions on its distribution or require the addition of labeling warnings or restrictions;
|
• |
we could be required to change the way MYCAPSSA is promoted or administered or conduct additional clinical studies;
|
• |
we could be sued and held liable for any harm caused to patients; or
|
• |
our reputation may suffer.
|
• |
foreign regulatory authorities, institutional review boards, or IRBs, or ethics committees may disagree with the design or conduct of our clinical trials;
|
• |
the results of our clinical trials may not provide acceptable evidence of octreotide capsules’ safety and efficacy;
|
• |
the results of our clinical trials may not be sufficiently robust or meet the level of statistical or clinical significance required by the EMA or other regulatory agencies for marketing approval;
|
• |
the dosing of octreotide capsules in a particular clinical trial may not be at an optimal level;
|
• |
patients in our clinical trials may suffer adverse effects for reasons that may or may not be related to octreotide capsules;
|
• |
the data collected from our clinical trials may not be sufficient to obtain regulatory approval in the European Union or elsewhere; and
|
• |
even if we obtain marketing approval in one or more countries, future safety or other issues could result in the suspension or withdrawal of regulatory approval in such countries.
|
• |
the FDA, the EMA or any other relevant regulatory authority failing to grant permission to proceed and placing the clinical trial on hold;
|
• |
patient enrollment and variability in the number and types of patients available for clinical trials, which is particularly challenging for orphan indications, including due to other ongoing clinical trials in the same or similar disease state;
|
• |
a facility manufacturing octreotide acetate, octreotide capsules, placebo capsules or any other product candidate we may develop being found deficient in its processes, as the FDA noted in the CRL and as was observed in a recent regulatory inspection at the time of our NDA resubmission, or ordered by the FDA, EMA or other government or regulatory authorities to temporarily or permanently shut down due to violations of cGMP requirements or other applicable requirements, or cross-contaminations of product candidates in the manufacturing process;
|
• |
any changes to our manufacturing process that may be necessary or desired or a failure to successfully manufacture qualifying clinical trial supplies of oral octreotide capsules or placebo;
|
• |
patients choosing an alternative treatment for acromegaly or any of the indications for which we may develop octreotide capsules or potential product candidates, or participating in competing clinical trials;
|
• |
difficulty in maintaining contact with patients after treatment, resulting in incomplete or missing data;
|
• |
patients experiencing drug-related adverse effects;
|
• |
reports from clinical testing on similar technologies and products raising safety and/or efficacy concerns;
|
• |
third-party clinical investigators losing their licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or employing methods that are inconsistent with the clinical trial protocol, good clinical practice, or GCP, requirements, or other third parties not performing data collection and analysis in a timely or accurate manner;
|
• |
inspections of clinical trial sites by the FDA, EMA or other regulatory authorities finding regulatory violations that require us to undertake corrective action, result in suspension or termination of one or more sites or the imposition of a clinical hold on the entire trial, or that prohibit us from using some or all of the data in support of our marketing applications;
|
• |
third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or any of the data produced by such contractors in support of our marketing applications;
|
• |
one or more IRBs or ethics committees refusing to approve, suspending or terminating the study at an investigational site, precluding enrollment of additional patients, or withdrawing its approval of the trial;
|
• |
reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
|
• |
deviations of the clinical sites from trial protocols or dropping out of a trial;
|
• |
delays in adding new clinical trial sites;
|
• |
the inability of the CRO to execute any clinical trials for any reason;
|
• |
the inability to enroll patients who participated in prior clinical trials in our current or planned clinical trials; or
|
• |
government or regulatory delays or “clinical holds” requiring suspension or termination of a trial.
|
• |
severity of the disease under investigation;
|
• |
design of the clinical trial protocol;
|
• |
size and nature of the patient population;
|
• |
perceived risks and benefits of the product candidate under trial;
|
• |
possibility of receiving placebo rather than active drug in certain controlled trials, such as was the case in the CHIASMA OPTIMAL trial;
|
• |
eligibility criteria for the trial in question;
|
• |
possibility of being randomized back to current injectable therapies, such as in the MPOWERED trial, or rescued back to current injectable therapies following a loss of biochemical and symptom control, such as was the case in the CHIASMA OPTIMAL trial;
|
• |
proximity and availability of clinical trial sites for prospective patients;
|
• |
availability of competing therapies and clinical trials;
|
• |
perceptions of patients and healthcare providers as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating;
|
• |
efforts to facilitate timely enrollment of patients in clinical trials;
|
• |
patient referral practices of physicians; and
|
• |
ability to monitor patients adequately during and after treatment.
|
• |
difficulty in establishing or managing relationships with CROs and physicians;
|
• |
different requirements and standards for conducting clinical trials;
|
• |
inability to locate qualified local consultants, physicians and partners; and
|
• |
potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatments.
|
• |
issue warning letters or untitled letters;
|
• |
mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;
|
• |
require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;
|
• |
seek an injunction or impose civil or criminal penalties or monetary fines;
|
• |
suspend or withdraw regulatory approval;
|
• |
suspend any ongoing clinical trials;
|
• |
refuse to approve pending applications or supplements to applications filed by us;
|
• |
suspend or impose restrictions on operations, including costly new manufacturing requirements; or
|
• |
seize or detain products, refuse to permit the import or export of products, or request that we initiate a product recall.
|
• |
develop our product candidate and demonstrate that it is competitive with or superior to other products on the market;
|
• |
obtain required regulatory approvals;
|
• |
adequately communicate the benefits of octreotide capsules;
|
• |
attract and retain qualified personnel;
|
• |
obtain and maintain patent and/or other proprietary protection for octreotide capsules and any future product candidates we may develop; and
|
• |
in certain geographies, obtain collaboration arrangements to develop and commercialize octreotide capsules and any future product candidates we may develop.
|
• |
the clinical safety, efficacy, tolerability and other factors regarding octreotide capsules observed in our completed ongoing and potential future clinical trials, including relative to injectable somatostatin analogs such as the relative topline data from our MPOWERED trial expected in November 2020, and any other treatments available at the time;
|
• |
the relative convenience, number of capsules that need to be taken, requirement to fast before and after each dose of octreotide capsules, and other factors affecting the ease of administration;
|
• |
the prevalence and severity of any adverse effects;
|
• |
the incidence and prevalence of acromegaly patients in the United States that respond to and tolerate treatment with octreotide or lanreotide;
|
• |
the willingness of physicians to prescribe octreotide capsules and of the target patient population to try new therapies and adhere to them;
|
• |
the introduction of any new products that may in the future become available to treat indications for which octreotide capsules may be approved;
|
• |
changes in the clinical or economic profiles of alternative treatments;
|
• |
new procedures or methods of treatment that may reduce the incidences of any of the indications in which octreotide capsules may show utility;
|
• |
pricing and cost-effectiveness, particularly compared to alternative treatments;
|
• |
the effectiveness of our or any future collaborators’ sales and marketing, as well as disease education and awareness programs;
|
• |
the scope of the label approved by the FDA, which does not include efficacy data from our first Phase 3 clinical trial that demonstrated acromegaly symptom improvements in patients who completed the trial or comparable foreign regulatory authorities, and any future labels approved by the FDA or comparable foreign regulatory authorities;
|
• |
limitations or warnings contained in labeling approved by the FDA or comparable foreign regulatory authorities;
|
• |
our ability to obtain and maintain sufficient third-party coverage and adequate reimbursement from government health care programs, including Medicare and Medicaid, private health insurers and other third-party payors;
|
• |
the willingness of patients to pay
out-of-pocket
|
• |
competitor activities, including clinical trials in the United States for participants that are eligible for treatment with MYCAPSSA; and
|
• |
our ability to reliably manufacture and supply octreotide capsules.
|
• |
our inability to recruit and retain adequate numbers of effective sales, market access and marketing personnel;
|
• |
the inability of our relatively small sales force to obtain access to or inform adequate numbers of physicians, particularly the pituitary centers and the significantly larger number of community endocrinologists, about the potential benefits of octreotide capsules;
|
• |
our inability to effectively engage with key constituents in the acromegaly community, including physician, patients and payors due to the
COVID-19
pandemic;
|
• |
the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines;
|
• |
the inability to compete with larger, more established pharmaceutical sales and marketing organizations;
|
• |
the inability of market access personnel to obtain sufficient levels of pricing and reimbursement in each jurisdiction;
|
• |
our inability to establish and maintain agreements and arrangements with third parties to effectively distribute MYCAPSSA to patients, including specialty pharmacies; and
|
• |
unforeseen costs, expenses and delays associated with creating a commercial organization.
|
• |
our inability to successfully commercialize octreotide capsules in the United States;
|
• |
our inability to directly control commercial activities because we are relying on third parties, should we enter into third-party collaborations;
|
• |
varying pricing in different foreign markets, including significantly lower prices for existing somatostatin analog injectables in European and other markets as well as the recent entry of generic somatostatin analog injectables into European markets, which could adversely affect our pricing in the European Union and other countries;
|
• |
the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements;
|
• |
different medical practices and customs in foreign countries affecting acceptance in the marketplace;
|
• |
import or export licensing requirements;
|
• |
longer collection times for accounts receivable;
|
• |
longer lead times for shipping;
|
• |
language barriers for technical training;
|
• |
reduced protection of intellectual property rights in some foreign countries, and related prevalence of generic alternatives;
|
• |
foreign currency exchange rate fluctuations;
|
• |
our ability to obtain adequate reimbursement for octreotide capsules in foreign markets, either at all or at prices that exceed our costs; and
|
• |
the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
|
• |
our reputation among key physicians and scientists in acromegaly and other disease areas of interest to us may suffer;
|
• |
we may not be able to secure the advice and feedback of outside experts to help advance our knowledge and understanding of complex scientific and medical issues;
|
• |
our commercial and corporate functions may not receive adequate medical and scientific information in the creation of their external communications, which could lead to inaccurate information being disseminated about us, our product candidates, our disease areas of interest, or our other scientific endeavors;
|
• |
our promotional,
non-promotional,
grants, and medical events review processes may not provide an effective control to ensure compliance with applicable laws, regulations and standards; and
|
• |
we may not successfully interact with European or other
ex-U.S.
healthcare professionals and scientists who could help us execute plans for expansion into the European Union or other international markets.
|
• |
our available capital resources or capital constraints we experience;
|
• |
the rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling conflicts with participating clinicians and collaborators, and our ability to identify and enroll patients who meet clinical trial eligibility criteria;
|
• |
our strategic decisions on the design and conduct of our clinical trials;
|
• |
our receipt of approvals by the FDA and other regulatory agencies and the timing thereof;
|
• |
other actions, decisions or rules issued by regulators;
|
• |
our ability to access sufficient, reliable and affordable supplies of compounds used in the manufacture of octreotide capsules and any future product candidates we may develop;
|
• |
the efforts of our collaborators and the success of our own efforts with respect to the commercialization of our products; and
|
• |
the securing of, costs related to, and timing issues associated with product manufacturing as well as sales and marketing activities.
|
• |
not provide us accurate or timely information regarding their inventories, the number of patients who are using MYCAPSSA or serious adverse reactions, events and/or product complaints regarding MYCAPSSA;
|
• |
reduce their efforts or discontinue to sell or support or otherwise not effectively sell or support MYCAPSSA;
|
• |
not devote the resources necessary to sell MYCAPSSA in the volumes and within the time frames that we expect;
|
• |
be unable to satisfy financial obligations or other contractual obligations to us or others; or
|
• |
cease operations.
|
• |
we may be unable to license or acquire the relevant product candidate or technology on terms that would allow us to make an appropriate return, or the financial terms required by the owners of those product candidates or technologies may be unfavorable enough to preclude successful development and commercialization for such products;
|
• |
companies that perceive us to be their competitors may be unwilling to assign or license their product rights to us;
|
• |
we do not currently have dedicated research or business development personnel on staff;
|
• |
we may be unable to identify suitable products or product candidates within our areas of expertise; or
|
• |
if we are unable to successfully commercialize octreotide capsules in the United States in a timely manner or at all third-party confidence in our TPE platform could be reduced and potentially make us a less attractive partner.
|
• |
the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid;
|
• |
federal civil and criminal false claims laws and civil monetary penalty laws, which impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
|
• |
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also created federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services;
|
• |
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, which also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of certain individually identifiable health information;
|
• |
the ACA which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or Children’s Health Insurance Program to report annually to Centers for Medicare and Medicaid Services, or CMS, information related to payments and other transfers of value to physicians and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members;
|
• |
the federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the CMS information related to payments or transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as information regarding ownership and investment interests held by the physicians described above and their immediate family members; and
|
• |
analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by
non-governmental
third-party payors, including private insurers; some state laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws which govern the privacy and security of health information in specified circumstances, many of which differ from each other in significant ways and often are not preempted by federal law, thus complicating compliance efforts.
|
• |
mandatory rebates for drugs sold into the Medicaid program have been increased, and the rebate requirement has been extended to drugs used in risk-based Medicaid managed care plans;
|
• |
the definition of “average manufacturer price” was revised for reporting purposes, which could increase the amount of Medicaid drug rebates by state;
|
• |
the 340B Drug Pricing Program under the Public Health Service Act has been extended to require mandatory discounts for drug products sold to certain critical access hospitals, cancer hospitals and other covered entities;
|
• |
pharmaceutical companies are required to offer discounts on brand-name drugs to patients who fall within the Medicare Part D coverage gap, commonly referred to as the “donut hole”; and
|
• |
pharmaceutical companies are required to pay an annual
non-tax
deductible fee to the federal government based on each company’s market share of prior year total sales of branded products to certain federal healthcare programs. If octreotide capsules or any of our future potential product candidates are approved, we expect our branded pharmaceutical sales to constitute a small portion of the total federal health program pharmaceutical market, and therefore would not expect this annual assessment to have a material impact on our financial condition.
|
• |
decreased demand for any product candidates or drugs that we may develop;
|
• |
injury to our reputation and significant negative media attention;
|
• |
withdrawal of clinical trial participants;
|
• |
initiation of investigations by regulators;
|
• |
product recalls, withdrawals or labeling, marketing or promotional restrictions;
|
• |
significant costs to defend the related litigation;
|
• |
substantial monetary awards to trial participants or patients;
|
• |
loss of revenue;
|
• |
reduced resources of our management to pursue our business strategy;
|
• |
potential disputes, including litigation, with our insurance provider regarding coverage and
|
• |
the inability or significant limitations on the ability to commercialize any drugs that we may develop.
|
• |
increasing our vulnerability to adverse economic and industry conditions;
|
• |
limiting our ability to obtain additional financing or enter into MYCAPSSA partnership agreements;
|
• |
requiring the dedication of a portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes;
|
• |
limiting our flexibility to plan for, or react to, changes in our business;
|
• |
placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital; and
|
• |
if we fail to comply with the terms of the Revenue Interest Financing Agreement, resulting in an event of default that is not cured or waived, HCR could seek to enforce its security interest in our cash and cash equivalents and all assets relating to MYCAPSSA that secures such indebtedness.
|
• |
our efforts to obtain FDA approval of our
CBE-30
supplements for our commercial API manufacturing sources, and to conduct and complete our MPOWERED clinical trial;
|
• |
the amount of our future operating losses;
|
• |
the costs associated with establishing and maintaining the infrastructure to support our commercial launch of octreotide capsules;
|
• |
the timing of approvals, if any, of octreotide capsules in additional jurisdictions;
|
• |
the need and cost of conducting one or more additional clinical trials for octreotide capsules and any future product candidates;
|
• |
the amount of our research and development, marketing, selling and general and administrative expenses;
|
• |
the extent to which we enter into, maintain, and derive revenues from licensing agreements, including potential agreements to
out-license
octreotide capsules, research and other collaborations, joint ventures and other business arrangements;
|
• |
our success in integrating product candidates, technologies or companies that we may acquire; and
|
• |
regulatory changes and technological developments in our markets.
|
• |
result in costly litigation;
|
• |
divert the time and attention of our technical personnel and management;
|
• |
cause product development or commercialization delays;
|
• |
prevent us from commercializing a product until the asserted patent expires or is held finally invalid or not infringed in a court of law;
|
• |
require us to cease or modify our use of the technology and/or develop
non-infringing
technology; or
|
• |
require us to enter into royalty or licensing agreements.
|
• |
a classified board of directors;
|
• |
limitations on the removal of directors;
|
• |
advance notice requirements for stockholder proposals and nominations;
|
• |
the inability of stockholders to act by written consent or to call special meetings;
|
• |
the ability of our board of directors to make, alter or repeal our amended and restated bylaws; and
|
• |
the authority of our board of directors to issue preferred stock with such terms as our board of directors may determine.
|
• |
our efforts to secure FDA approval of our initial CBE-30 supplement or our planned second CBE-30 supplement for our planned commercial manufacturers of API for octreotide capsules;
|
• |
the timing and results of our MPOWERED Phase 3 clinical trial of octreotide capsules or any future clinical trials we may conduct, or changes in the development status of octreotide capsules or any other product candidates we may develop;
|
• |
any delay in our regulatory filings for octreotide capsules or any other future product candidate and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings;
|
• |
adverse results or delays in clinical trials;
|
• |
our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial;
|
• |
adverse regulatory decisions, including failure to receive additional regulatory approvals of octreotide capsules or failure to maintain our existing FDA approval of octreotide,;
|
• |
changes in laws or regulations applicable to octreotide capsules or any other future product candidates, including clinical trial requirements for approvals;
|
• |
adverse developments concerning our manufacturers;
|
• |
our inability to obtain adequate supply of clinical trial material or for any approved drug or inability to do so at acceptable prices;
|
• |
our inability to acquire products or technologies or establish strategic collaborations, if needed;
|
• |
failure to successfully commercialize octreotide capsules or any other future product candidates, if approved;
|
• |
our ability to obtain market adoptions and coverage and adequate reimbursement from third-party payors for octreotide capsules or any other future product candidates, if approved;
|
• |
unanticipated serious safety concerns related to the use of octreotide capsules or any other future product candidates;
|
• |
our ability to effectively manage our operations or changes in organizational structure;
|
• |
the size and growth of our initial target markets;
|
• |
actual or anticipated variations in our operating results;
|
• |
changes in financial estimates by us or by any securities analysts who might cover our stock;
|
• |
conditions or trends in our industry;
|
• |
changes in the market valuations of similar companies;
|
• |
stock market price and volume fluctuations of comparable companies and, in particular, those that operate in the biopharmaceutical industry;
|
• |
publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts;
|
• |
business disruptions due to natural disasters, epidemics or pandemics, such as the recent outbreak of the novel coronavirus
COVID-19,
military conflicts, acts of terrorism or other unanticipated catastrophes;
|
• |
announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures;
|
• |
announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;
|
• |
capital commitments;
|
• |
investors’ general perception of our company and our business;
|
• |
recruitment or departure of key personnel;
|
• |
sales of our common stock in the future, including sales by our directors and officers or specific stockholders;
|
• |
overall performance of the equity markets;
|
• |
trading volume of our common stock;
|
• |
changes in accounting practices;
|
• |
ineffectiveness of our internal controls;
|
• |
disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;
|
• |
significant lawsuits, including patent or stockholder litigation, and developments related thereto;
|
• |
general political and economic conditions; and
|
• |
other events or factors, many of which are beyond our control.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 6.
|
Exhibits
|
* |
Filed herewith.
|
+ |
The certification furnished in Exhibit 32.1 hereto is deemed to be furnished with this Quarterly Report on Form
10-Q
and will not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference.
|
CHIASMA, INC. | ||
By: |
/s/ Raj Kannan
|
|
Raj Kannan | ||
Chief Executive Officer and Director
|
||
(Principal Executive Officer)
|
||
By: |
/s/ Mark J. Fitzpatrick
|
|
Mark J. Fitzpatrick | ||
President
|
||
(Principal Financial Officer)
|
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