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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 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: 001-40602

 

ERASCA, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

83-1217027

(State or other jurisdiction of

incorporation or organization)

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

3115 Merryfield Row, Suite 300

San Diego, CA

92121

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (858) 465-6511

 

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

ERAS

 

Nasdaq Global Select Market

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

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

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

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

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

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

As of August 4, 2022, the registrant had 122,147,003 shares of common stock outstanding.

 

 

 


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021

1

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2022 and 2021

2

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2022 and 2021

3

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021

5

 

Notes to Condensed Consolidated Financial Statements

6

Item 2.

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

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35

Item 4.

Controls and Procedures

35

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

36

Item 1A.

Risk Factors

36

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

36

Item 3.

Defaults Upon Senior Securities

36

Item 4.

Mine Safety Disclosures

36

Item 5.

Other Information

36

Item 6.

Exhibits

38

Signatures

39

 

 

i


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Erasca, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and par value amounts)

(Unaudited)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

 

$

298,007

 

 

$

360,487

 

Short-term marketable securities

 

 

73,469

 

 

 

53,988

 

Prepaid expenses and other current assets

 

 

9,945

 

 

 

5,542

 

Total current assets

 

 

381,421

 

 

 

420,017

 

Long-term marketable securities

 

 

19,313

 

 

 

44,770

 

Property and equipment, net

 

 

24,191

 

 

 

15,954

 

Operating lease assets

 

 

14,778

 

 

 

17,356

 

Restricted cash

 

 

408

 

 

 

408

 

Other assets

 

 

4,712

 

 

 

2,910

 

Total assets

 

$

444,823

 

 

$

501,415

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,291

 

 

$

4,677

 

Accrued expenses and other current liabilities

 

 

19,827

 

 

 

21,419

 

Operating lease liabilities

 

 

201

 

 

 

285

 

Total current liabilities

 

 

22,319

 

 

 

26,381

 

Operating lease liabilities, net of current portion

 

 

27,437

 

 

 

18,506

 

Total liabilities

 

 

49,756

 

 

 

44,887

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 80,000,000 shares authorized as of June 30, 2022 and December 31, 2021; no shares issued and outstanding as of June 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.0001 par value; 800,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 122,063,473 and 121,382,547 shares issued at June 30, 2022 and December 31, 2021, respectively; 120,545,318 and 119,102,505 shares outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

12

 

 

 

12

 

Additional paid-in capital

 

 

706,510

 

 

 

694,844

 

Accumulated other comprehensive loss

 

 

(1,223

)

 

 

(162

)

Accumulated deficit

 

 

(310,232

)

 

 

(238,166

)

Total stockholders' equity

 

 

395,067

 

 

 

456,528

 

Total liabilities and stockholders' equity

 

$

444,823

 

 

$

501,415

 

 

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

 

1


 

Erasca, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

$

27,488

 

 

$

17,598

 

 

$

54,917

 

 

$

29,843

 

In-process research and development

 

 

 

 

 

5,488

 

 

 

2,000

 

 

 

9,168

 

General and administrative

 

 

8,417

 

 

 

5,098

 

 

 

15,493

 

 

 

8,780

 

Total operating expenses

 

 

35,905

 

 

 

28,184

 

 

 

72,410

 

 

 

47,791

 

Loss from operations

 

 

(35,905

)

 

 

(28,184

)

 

 

(72,410

)

 

 

(47,791

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

388

 

 

 

31

 

 

 

502

 

 

 

61

 

Other expense

 

 

(91

)

 

 

(61

)

 

 

(158

)

 

 

(116

)

Change in fair value of preferred stock purchase right liability

 

 

 

 

 

 

 

 

 

 

 

1,615

 

Total other income (expense), net

 

 

297

 

 

 

(30

)

 

 

344

 

 

 

1,560

 

Net loss

 

$

(35,608

)

 

$

(28,214

)

 

$

(72,066

)

 

$

(46,231

)

Net loss per share, basic and diluted

 

$

(0.30

)

 

$

(1.20

)

 

$

(0.60

)

 

$

(2.02

)

Weighted-average shares of common stock used in computing net loss per share, basic and diluted

 

 

120,193,973

 

 

 

23,546,390

 

 

 

119,844,633

 

 

 

22,893,533

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable securities, net

 

 

(272

)

 

 

(2

)

 

 

(1,061

)

 

 

(3

)

Comprehensive loss

 

$

(35,880

)

 

$

(28,216

)

 

$

(73,127

)

 

$

(46,234

)

 

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

 

2


 

Erasca, Inc.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity

(In thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Convertible

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

 

 

 

 

$

 

 

 

121,382,547

 

 

$

12

 

 

$

694,844

 

 

$

(162

)

 

$

(238,166

)

 

$

456,528

 

Exercise of stock options

 

 

 

 

 

 

 

 

357,244

 

 

 

 

 

 

460

 

 

 

 

 

 

 

 

 

460

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

479

 

 

 

 

 

 

 

 

 

479

 

Repurchases of early exercised stock options and restricted stock

 

 

 

 

 

 

 

 

(6,945

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,442

 

 

 

 

 

 

 

 

 

4,442

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(36,458

)

 

 

(36,458

)

Unrealized loss on marketable securities, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(789

)

 

 

 

 

 

(789

)

Balance at March 31, 2022

 

 

 

 

$

 

 

 

121,732,846

 

 

$

12

 

 

$

700,225

 

 

$

(951

)

 

$

(274,624

)

 

$

424,662

 

Exercise of stock options

 

 

 

 

 

 

 

 

179,985

 

 

 

 

 

 

375

 

 

 

 

 

 

 

 

 

375

 

Issuance of common stock under the Employee Stock Purchase Plan

 

 

 

 

 

 

 

 

150,642

 

 

 

 

 

 

617

 

 

 

 

 

 

 

 

 

617

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

238

 

 

 

 

 

 

 

 

 

238

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,055

 

 

 

 

 

 

 

 

 

5,055

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(35,608

)

 

 

(35,608

)

Unrealized loss on marketable securities, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(272

)

 

 

 

 

 

(272

)

Balance at June 30, 2022

 

 

 

 

$

 

 

 

122,063,473

 

 

$

12

 

 

$

706,510

 

 

$

(1,223

)

 

$

(310,232

)

 

$

395,067

 

 

 

3


 

 

Erasca, Inc.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit

(In thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Convertible

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2020

 

 

69,584,682

 

 

$

221,405

 

 

 

25,189,673

 

 

$

3

 

 

$

1,413

 

 

$

2

 

 

$

(115,402

)

 

$

(113,984

)

Issuance of Series B-2 convertible preferred stock for cash, net of $95 in issuance costs

 

 

15,931,772

 

 

 

119,393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock in connection with asset acquisition

 

 

 

 

 

 

 

 

500,000

 

 

 

 

 

 

1,680

 

 

 

 

 

 

 

 

 

1,680

 

Exercise of stock options

 

 

 

 

 

 

 

 

439,610

 

 

 

 

 

 

94

 

 

 

 

 

 

 

 

 

94

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

174

 

 

 

 

 

 

 

 

 

174

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

795

 

 

 

 

 

 

 

 

 

795

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,017

)

 

 

(18,017

)

Unrealized loss on marketable securities, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Balance at March 31, 2021

 

 

85,516,454

 

 

$

340,798

 

 

 

26,129,283

 

 

$

3

 

 

$

4,156

 

 

$

1

 

 

$

(133,419

)

 

$

(129,259

)

Issuance of common stock in connection with license agreement

 

 

 

 

 

 

 

 

944,945

 

 

 

 

 

 

5,488

 

 

 

 

 

 

 

 

 

5,488

 

Exercise of stock options

 

 

 

 

 

 

 

 

225,895

 

 

 

 

 

 

180

 

 

 

 

 

 

 

 

 

180

 

Vesting of early exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

174

 

 

 

 

 

 

 

 

 

174

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,636

 

 

 

 

 

 

 

 

 

1,636

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,214

)

 

 

(