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, 2023


☐	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, 2023, the registrant had 151,087,038 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, 2023 and December 31, 2022	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022	2
	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		37

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,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	112,862		$	284,217
Short-term marketable securities		183,806			151,403
Prepaid expenses and other current assets		9,298			8,876
Total current assets		305,966			444,496
Long-term marketable securities		46,891			—
Property and equipment, net		23,229			24,815
Operating lease assets		38,524			40,418
Restricted cash		408			408
Other assets		4,388			4,772
Total assets	$	419,406		$	514,909
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	3,701		$	23,049
Accrued expenses and other current liabilities		19,211			24,336
Operating lease liabilities		3,818			1,305
Total current liabilities		26,730			48,690
Operating lease liabilities, net of current portion		52,940			53,793
Other liabilities		761			573
Total liabilities		80,431			103,056
Commitments and contingencies (Note 11)
Stockholders' equity:
Preferred stock, $0.0001 par value; 80,000,000 shares authorized at September 30, 2023 and December 31, 2022; no shares issued and outstanding at September 30, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value; 800,000,000 shares authorized at September 30, 2023 and December 31, 2022; 151,053,118 and 150,448,363 shares issued at September 30, 2023 and December 31, 2022, respectively; 150,537,752 and 149,333,258 shares outstanding at September 30, 2023 and December 31, 2022, respectively		15			15
Additional paid-in capital		915,847			893,850
Accumulated other comprehensive loss		(575	)		(1,041	)
Accumulated deficit		(576,312	)		(480,971	)
Total stockholders' equity		338,975			411,853
Total liabilities and stockholders' equity	$	419,406		$	514,909

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,
	2023			2022			2023			2022
Operating expenses:
Research and development	$	25,213		$	28,184		$	79,016		$	83,101
In-process research and development		—			—			—			2,000
General and administrative		9,445			8,778			28,637			24,271
Total operating expenses		34,658			36,962			107,653			109,372
Loss from operations		(34,658	)		(36,962	)		(107,653	)		(109,372	)
Other income (expense)
Interest income		4,346			1,522			12,474			2,024
Other expense		(49	)		(49	)		(162	)		(207	)
Total other income (expense), net		4,297			1,473			12,312			1,817
Net loss	$	(30,361	)	$	(35,489	)	$	(95,341	)	$	(107,555	)
Net loss per share, basic and diluted	$	(0.20	)	$	(0.29	)	$	(0.64	)	$	(0.90	)
Weighted-average shares of common stock used in computing net loss per share, basic and diluted		150,450,201			120,798,322			150,000,613			120,166,023
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities, net		218			(156	)		466			(1,217	)
Comprehensive loss	$	(30,143	)	$	(35,645	)	$	(94,875	)	$	(108,772	)

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

Erasca, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

(Unaudited)


							Accumulated
					Additional		Other						Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders'
	Shares		Amount		Capital		Income (Loss)			Deficit			Equity
Balance at December 31, 2022		150,448,363	$	15	$	893,850	$	(1,041	)	$	(480,971	)	$	411,853
Exercise of stock options		199,344		—		183		—			—			183
Vesting of early exercised stock options		—		—		243		—			—			243
Stock-based compensation expense		—		—		6,845		—			—			6,845
Net loss		—		—		—		—			(33,199	)		(33,199	)
Unrealized gain on marketable securities, net		—		—		—		527			—			527
Balance at March 31, 2023		150,647,707	$	15	$	901,121	$	(514	)	$	(514,170	)	$	386,452
Exercise of stock options		170,715		—		122		—			—			122
Issuance of common stock under the Employee Stock Purchase Plan		223,696		—		527		—			—			527
Vesting of early exercised stock options		—		—		652		—			—			652
Stock-based compensation expense		—		—		7,012		—			—			7,012
Net loss		—		—		—		—			(31,781	)		(31,781	)
Unrealized loss on marketable securities, net		—		—		—		(279	)		—			(279	)
Balance at June 30, 2023		151,042,118	$	15	$	909,434	$	(793	)	$	(545,951	)	$	362,705
Exercise of stock options		11,000		—		7		—			—			7
Vesting of early exercised stock options		—		—		168		—			—			168
Stock-based compensation expense		—		—		6,238		—			—			6,238
Net loss		—		—		—		—			(30,361	)		(30,361	)
Unrealized gain on marketable securities, net		—		—		—		218			—			218
Balance at September 30, 2023		151,053,118	$	15	$	915,847	$	(575	)	$	(576,312	)	$	338,975

Erasca, Inc.

Condensed Consolidated Statements of Stockholders’ Equity - Continued

(In thousands, except share data)

(Unaudited)


								Accumulated
						Additional		Other						Total
	Common Stock					Paid-in		Comprehensive			Accumulated			Stockholders'
	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 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

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

Erasca, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(95,341	)	$	(107,555	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,790			1,708
Stock-based compensation expense		20,095			14,729
In-process research and development expenses		—			2,000
Accretion on marketable securities, net		(4,756	)		(169	)
Changes in operating assets and liabilities:
Prepaid expenses and other current and long-term assets		(38	)		(4,512	)
Accounts payable		777			1,540
Accrued expenses and other current and long-term liabilities		(3,253	)		2,936
Operating lease assets and liabilities, net		3,297			12,431
Net cash used in operating activities		(76,429	)		(76,892	)

Cash flows from investing activities:
Purchases of marketable securities		(253,272	)		(94,427	)
Maturities of marketable securities		179,200			45,900
In-process research and development		(20,000	)		(2,000	)
Payment made for investment in equity securities		—			(2,000	)
Purchases of property and equipment		(1,693	)		(13,687	)
Net cash used in investing activities		(95,765	)		(66,214	)

Cash flows from financing activities:
Proceeds from the exercise of stock options		312			1,262
Proceeds from issuance of common stock under the Employee Stock Purchase Plan		527