SEC Filing – Erasca Inc

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10-Q

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, 2022


☐	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.

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 November 2, 2022, the registrant had 122,361,616 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 September 30, 2022 and December 31, 2021	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021	2
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2022 and 2021	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 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	36
Item 4.	Controls and Procedures	36
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		40

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Erasca, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and par value amounts)

(Unaudited)


	September 30,			December 31,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	219,260		$	360,487
Short-term marketable securities		136,668			53,988
Prepaid expenses and other current assets		9,823			5,542
Total current assets		365,751			420,017
Long-term marketable securities		9,569			44,770
Property and equipment, net		24,875			15,954
Operating lease assets		41,051			17,356
Restricted cash		408			408
Other assets		4,775			2,910
Total assets	$	446,429		$	501,415
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	4,319		$	4,677
Accrued expenses and other current liabilities		22,332			21,419
Operating lease liabilities		1,028			285
Total current liabilities		27,679			26,381
Operating lease liabilities, net of current portion		53,431			18,506
Total liabilities		81,110			44,887
Commitments and contingencies (Note 12)
Stockholders' equity:
Preferred stock, $0.0001 par value; 80,000,000 shares authorized as of September 30, 2022 and December 31, 2021; no shares issued and outstanding as of September 30, 2022 and December 31, 2021		—			—
Common stock, $0.0001 par value; 800,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 122,306,969 and 121,382,547 shares issued at September 30, 2022 and December 31, 2021, respectively; 121,024,938 and 119,102,505 shares outstanding at September 30, 2022 and December 31, 2021, respectively		12			12
Additional paid-in capital		712,407			694,844
Accumulated other comprehensive loss		(1,379	)		(162	)
Accumulated deficit		(345,721	)		(238,166	)
Total stockholders' equity		365,319			456,528
Total liabilities and stockholders' equity	$	446,429		$	501,415

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

Erasca, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Operating expenses:
Research and development	$	28,184		$	19,951		$	83,101		$	49,794
In-process research and development		—			1,680			2,000			10,848
General and administrative		8,778			6,916			24,271			15,696
Contribution of common stock to Erasca Foundation		—			17,497			—			17,497
Total operating expenses		36,962			46,044			109,372			93,835
Loss from operations		(36,962	)		(46,044	)		(109,372	)		(93,835	)
Other income (expense)
Interest income		1,522			49			2,024			110
Other expense		(49	)		(74	)		(207	)		(190	)
Change in fair value of preferred stock purchase right liability		—			—			—			1,615
Total other income (expense), net		1,473			(25	)		1,817			1,535
Net loss	$	(35,489	)	$	(46,069	)	$	(107,555	)	$	(92,300	)
Net loss per share, basic and diluted	$	(0.29	)	$	(0.46	)	$	(0.90	)	$	(1.90	)
Weighted-average shares of common stock used in computing net loss per share, basic and diluted		120,798,322			99,127,286			120,166,023			48,584,029
Other comprehensive income (loss):
Unrealized (loss) gain on marketable securities, net		(156	)		1			(1,217	)		(2	)
Comprehensive loss	$	(35,645	)	$	(46,068	)	$	(108,772	)	$	(92,302	)

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

Erasca, Inc.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (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		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
Exercise of stock options		—		—		243,496			—		427		—			—			427
Vesting of early exercised stock options		—		—		—			—		238		—			—			238
Stock-based compensation expense		—		—		—			—		5,232		—			—			5,232
Net loss		—		—		—			—		—		—			(35,489	)		(35,489	)
Unrealized loss on marketable securities, net		—		—		—			—		—		(156	)		—			(156	)
Balance at September 30, 2022		—	$	—		122,306,969		$	12	$	712,407	$	(1,379	)	$	(345,721	)	$	365,319


											Accumulated
	Convertible								Additional		Other					Total
	Preferred Stock				Common Stock				Paid-in		Comprehensive		Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Income (Loss)		Deficit			Equity (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		—		—		—		—		—