10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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, 2022

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: 001-37620

 

 

KURA ONCOLOGY, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

61-1547851

(State or other jurisdiction of incorporation or organization)

 

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

 

 

 

12730 High Bluff Drive, Suite 400, San Diego, CA

 

92130

(Address of principal executive offices)

 

(Zip Code)

(858) 500-8800

(Registrant’s telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

 

KURA

 

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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of the close of business on October 27, 2022, the registrant had 66,896,972 shares of Common Stock, $0.0001 par value, outstanding.

 

 

 

 


KURA ONCOLOGY, INC.

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

 

 

 

 

 

Item 1. Condensed Financial Statements (unaudited)

 

 

 

 

 

Condensed Balance Sheets − As of September 30, 2022 (unaudited) and December 31, 2021

1

 

 

 

 

Condensed Statements of Operations and Comprehensive Loss – Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)

2

 

 

 

 

Condensed Statements of Stockholders’ Equity – Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)

3

 

 

 

 

Condensed Statements of Cash Flows – Nine Months Ended September 30, 2022 and 2021 (unaudited)

5

 

 

 

 

Notes to Condensed Financial Statements (unaudited)

6

 

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

13

 

 

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

22

 

 

 

 

Item 4. Controls and Procedures

23

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

Item 1. Legal Proceedings

24

 

 

 

 

Item 1A. Risk Factors

24

 

 

 

 

Item 6. Exhibits

71

 

 

Signatures

 

 

 

 

 


PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

KURA ONCOLOGY, INC.

Condensed Balance Sheets

(In thousands, except par value data)

 

 

 

 

September 30,
2022

 

 

December 31,
2021

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

90,937

 

 

$

90,672

 

Short-term investments

 

 

336,838

 

 

 

427,288

 

Prepaid expenses and other current assets

 

 

8,616

 

 

 

4,329

 

Total current assets

 

 

436,391

 

 

 

522,289

 

Property and equipment, net

 

 

2,734

 

 

 

2,673

 

Restricted cash

 

 

210

 

 

 

210

 

Operating lease right-of-use assets

 

 

4,284

 

 

 

5,573

 

Other long-term assets

 

 

4,369

 

 

 

3,306

 

Total assets

 

$

447,988

 

 

$

534,051

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

22,441

 

 

$

20,192

 

Current operating lease liabilities

 

 

2,304

 

 

 

2,263

 

Total current liabilities

 

 

24,745

 

 

 

22,455

 

Long-term operating lease liabilities

 

 

3,080

 

 

 

4,612

 

Other long-term liabilities

 

 

542

 

 

 

375

 

Total liabilities

 

 

28,367

 

 

 

27,442

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 10,000 shares authorized; no shares
     issued and outstanding

 

 

 

 

 

 

Common stock, $0.0001 par value; 200,000 shares authorized;
     
66,894 and 66,572 shares issued and outstanding as of
     September 30, 2022 and December 31, 2021, respectively

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

964,724

 

 

 

941,359

 

Accumulated other comprehensive loss

 

 

(9,416

)

 

 

(1,789

)

Accumulated deficit

 

 

(535,694

)

 

 

(432,968

)

Total stockholders' equity

 

 

419,621

 

 

 

506,609

 

Total liabilities and stockholders' equity

 

$

447,988

 

 

$

534,051

 

 

See accompanying notes to unaudited condensed financial statements.

1


KURA ONCOLOGY, INC.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

24,973

 

 

$

22,367

 

 

$

70,144

 

 

$

63,765

 

General and administrative

 

 

11,621

 

 

 

11,310

 

 

 

34,565

 

 

 

34,455

 

Total operating expenses

 

 

36,594

 

 

 

33,677

 

 

 

104,709

 

 

 

98,220

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income, net

 

 

1,090

 

 

 

311

 

 

 

1,983

 

 

 

911

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

(414

)

Total other income (expense), net

 

 

1,090

 

 

 

311

 

 

 

1,983

 

 

 

497

 

Net Loss

 

$

(35,504

)

 

$

(33,366

)

 

$

(102,726

)

 

$

(97,723

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.53

)

 

$

(0.50

)

 

$

(1.54

)

 

$

(1.47

)

Weighted average number of shares used in computing
     net loss per share, basic and diluted

 

 

66,889

 

 

 

66,353

 

 

 

66,723

 

 

 

66,285

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive Loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(35,504

)

 

$

(33,366

)

 

$

(102,726

)

 

$

(97,723

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable securities and
     foreign currency

 

 

(1,601

)

 

 

199

 

 

 

(7,627

)

 

 

(240

)

Comprehensive Loss

 

$

(37,105

)

 

$

(33,167

)

 

$

(110,353

)

 

$

(97,963

)

 

See accompanying notes to unaudited condensed financial statements.

 

2


KURA ONCOLOGY, INC.

Condensed Statements of Stockholders’ Equity

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2021

 

66,572

 

 

$

7

 

 

$

941,359

 

 

$

(1,789

)

 

$

(432,968

)

 

$

506,609

 

Share-based compensation expense

 

 

 

 

 

 

 

19,513

 

 

 

 

 

 

 

 

 

19,513

 

Issuance of common stock under equity plans

 

322

 

 

 

 

 

 

3,852

 

 

 

 

 

 

 

 

 

3,852

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

(7,627

)

 

 

 

 

 

(7,627

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(102,726

)

 

 

(102,726

)

Balance at September 30, 2022

 

66,894

 

 

$

7

 

 

$

964,724

 

 

$

(9,416

)

 

$

(535,694

)

 

$

419,621

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance at June 30, 2022

 

66,838

 

 

$

7

 

 

$

957,489

 

 

$

(7,815

)

 

$

(500,190

)

 

$

449,491

 

Share-based compensation expense

 

 

 

 

 

 

 

6,355

 

 

 

 

 

 

 

 

 

6,355

 

Issuance of common stock under equity plans

 

56

 

 

 

 

 

 

880

 

 

 

 

 

 

 

 

 

880

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

(1,601

)

 

 

 

 

 

(1,601

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(35,504

)

 

 

(35,504

)

Balance at September 30, 2022

 

66,894

 

 

$

7

 

 

$

964,724

 

 

$

(9,416

)

 

$

(535,694

)

 

$

419,621

 

See accompanying notes to unaudited condensed financial statements.

 

 

3


KURA ONCOLOGY, INC.

Condensed Statements of Stockholders’ Equity

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2020

 

66,194

 

 

$

7

 

 

$

913,354

 

 

$

46

 

 

$

(302,502

)

 

$

610,905

 

Share-based compensation expense

 

 

 

 

 

 

 

17,182

 

 

 

 

 

 

 

 

 

17,182

 

Issuance of common stock under equity plans

 

310

 

 

 

 

 

 

3,632

 

 

 

 

 

 

 

 

 

3,632

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

(240

)

 

 

 

 

 

(240

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(97,723

)

 

 

(97,723

)

Balance at September 30, 2021

 

66,504

 

 

$

7

 

 

$

934,168

 

 

$

(194

)

 

$

(400,225

)

 

$

533,756

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance at June 30, 2021

 

66,296

 

 

$

7

 

 

$

925,796

 

 

$

(393

)

 

$

(366,859

)

 

$

558,551

 

Share-based compensation expense

 

 

 

 

 

 

 

6,114

 

 

 

 

 

 

 

 

 

6,114

 

Issuance of common stock under equity plans

 

208

 

 

 

 

 

 

2,258

 

 

 

 

 

 

 

 

 

2,258

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

199

 

 

 

 

 

 

199

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(33,366

)

 

 

(33,366

)

Balance at September 30, 2021

 

66,504

 

 

$

7

 

 

$

934,168

 

 

$

(194

)

 

$

(400,225

)

 

$

533,756

 

See accompanying notes to unaudited condensed financial statements.

 

4


KURA ONCOLOGY, INC.

Condensed Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2022

 

 

2021

 

Operating Activities

 

 

 

 

 

 

Net loss

 

$

(102,726

)

 

$

(97,723

)

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

 

 

 

 

 

 

Share-based compensation expense

 

 

19,513

 

 

 

17,182

 

Amortization of premium and accretion of discounts on
     marketable securities, net

 

 

2,264

 

 

 

3,175

 

Depreciation expense

 

 

553

 

 

 

392

 

Non-cash interest expense

 

 

 

 

 

399

 

Loss on extinguishment of debt

 

 

 

 

 

212

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(4,287

)

 

 

(1,488

)

Other long-term assets

 

 

226

 

 

 

(746

)

Accounts payable and accrued expenses

 

 

758

 

 

 

(2,549

)

Other long-term liabilities

 

 

167

 

 

 

(39

)

Net cash used in operating activities

 

 

(83,532

)

 

 

(81,185

)

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

 

Maturities of marketable securities

 

 

245,091

 

 

 

229,469

 

Purchases of marketable securities

 

 

(164,532

)

 

 

(429,320

)

Purchases of property and equipment

 

 

(614

)

 

 

(1,045

)

Net cash provided by (used in) investing activities

 

 

79,945

 

 

 

(200,896

)

 

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

 

Proceeds from issuance of stock under equity plans

 

 

3,852

 

 

 

3,632

 

Repayment of long-term debt