10-Q
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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 September 30, 2022

OR

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

Commission File Number: 001-37783

 

Clearside Biomedical, Inc.

 

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

45-2437375

(State or other jurisdiction of

incorporation or organization)

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

900 North Point Parkway, Suite 200

Alpharetta, GA

30005

(Address of principal executive offices)

(Zip Code)

(678) 270-3631

Registrant’s telephone number, including area code

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

 

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 $0.001 per share

CLSD

The Nasdaq Stock Market LLC

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 November 7, 2022, the registrant had 60,190,731 shares of common stock, $0.001 par value per share, outstanding.

 

 

 

 


 

 

 

Page

 

PART I - FINANCIAL INFORMATION

 

Item 1.

Consolidated Financial Statements (unaudited)

 

 

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

3

 

Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021

4

 

Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022
and 2021

5

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021

6

 

Notes to the Consolidated Financial Statements

7

Item 2.

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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25

Item 4.

Controls and Procedures

25

 

PART II - OTHER INFORMATION

 

Item 1.

Legal Proceedings

27

Item 1A.

Risk Factors

27

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

27

Item 6.

Exhibits

28

Signatures

29

 

 

 

 


 

PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

 

CLEARSIDE BIOMEDICAL, INC.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

 

 

 

September 30,
2022

 

 

December 31,
2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

53,381

 

 

$

30,436

 

Accounts receivable

 

 

123

 

 

 

10,000

 

Prepaid expenses

 

 

1,047

 

 

 

921

 

Other current assets

 

 

311

 

 

 

779

 

Total current assets

 

 

54,862

 

 

 

42,136

 

Property and equipment, net

 

 

437

 

 

 

238

 

Operating lease right-of-use asset

 

 

226

 

 

 

369

 

Restricted cash

 

 

160

 

 

 

160

 

Total assets

 

$

55,685

 

 

$

42,903

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,739

 

 

$

941

 

Accrued liabilities

 

 

2,945

 

 

 

3,312

 

Current portion of operating lease liabilities

 

 

407

 

 

 

387

 

Deferred revenue

 

 

113

 

 

 

 

Total current liabilities

 

 

5,204

 

 

 

4,640

 

Liability related to the sales of future royalties, net

 

 

31,935

 

 

 

 

Operating lease liabilities

 

 

 

 

 

288

 

Total liabilities

 

 

37,139

 

 

 

4,928

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized and no
   shares issued at September 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.001 par value; 200,000,000 and 100,000,000 shares
   authorized at September 30, 2022 and December 31, 2021, respectively;
  
60,190,731 and 59,722,930 shares issued and outstanding at
  September 30, 2022 and December 31, 2021, respectively

 

 

60

 

 

 

60

 

Additional paid-in capital

 

 

297,261

 

 

 

293,406

 

Accumulated deficit

 

 

(278,775

)

 

 

(255,491

)

Total stockholders’ equity

 

 

18,546

 

 

 

37,975

 

Total liabilities and stockholders’ equity

 

$

55,685

 

 

$

42,903

 

 

See accompanying notes to the consolidated financial statements

3


 

CLEARSIDE BIOMEDICAL, INC.

Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

License and other revenue

 

$

266

 

 

$

3,074

 

 

$

997

 

 

$

3,888

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

4,637

 

 

 

5,147

 

 

 

14,603

 

 

 

14,697

 

General and administrative

 

 

2,353

 

 

 

2,816

 

 

 

8,601

 

 

 

8,525

 

Total operating expenses

 

 

6,990

 

 

 

7,963

 

 

 

23,204

 

 

 

23,222

 

Loss from operations

 

 

(6,724

)

 

 

(4,889

)

 

 

(22,207

)

 

 

(19,334

)

Other income

 

 

194

 

 

 

2

 

 

 

220

 

 

 

1,001

 

Non-cash interest expense on liability
   related to the sales of future royalties

 

 

(1,297

)

 

 

 

 

 

(1,297

)

 

 

 

Net loss

 

$

(7,827

)

 

$

(4,887

)

 

$

(23,284

)

 

$

(18,333

)

Net loss per share of common stock — basic and diluted

 

$

(0.13

)

 

$

(0.08

)

 

$

(0.39

)

 

$

(0.32

)

Weighted average shares outstanding — basic and diluted

 

 

60,188,541

 

 

 

59,474,346

 

 

 

60,134,821

 

 

 

58,095,080

 

 

See accompanying notes to the consolidated financial statements.

 

4


 

CLEARSIDE BIOMEDICAL, INC.

Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(unaudited)

 

 

Nine Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Paid-In-Capital

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2021

 

 

59,722,930

 

 

$

60

 

 

$

293,406

 

 

$

(255,491

)

 

$

37,975

 

Exercise of stock options

 

 

22,727

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

Vesting and settlement of restricted stock units

 

 

375,331

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common shares under employee stock
   purchase plan

 

 

26,630

 

 

 

 

 

 

62

 

 

 

 

 

 

62

 

Share-based compensation expense

 

 

 

 

 

 

 

 

1,307

 

 

 

 

 

 

1,307

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(7,644

)

 

 

(7,644

)

Balance at March 31, 2022

 

 

60,147,618

 

 

 

60

 

 

 

294,778

 

 

 

(263,135

)

 

 

31,703

 

Exercise of stock options

 

 

2,824

 

 

 

 

 

 

4

 

 

 

 

 

 

4

 

Share-based compensation expense

 

 

 

 

 

 

 

 

1,354

 

 

 

 

 

 

1,354

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(7,813

)

 

 

(7,813

)

Balance at June 30, 2022

 

 

60,150,442

 

 

 

60

 

 

 

296,136

 

 

 

(270,948

)

 

 

25,248

 

Issuance of common shares under employee stock
   purchase plan

 

 

40,289

 

 

 

 

 

 

51

 

 

 

 

 

 

51

 

Share-based compensation expense

 

 

 

 

 

 

 

 

1,074

 

 

 

 

 

 

1,074

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(7,827

)

 

 

(7,827

)

Balance at September 30, 2022

 

 

60,190,731

 

 

$

60

 

 

$

297,261

 

 

$

(278,775

)

 

$

18,546

 

 

 

 

Nine Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Paid-In-Capital

 

 

Deficit

 

 

Equity

 

Balance at December 31,2020

 

 

51,860,941

 

 

$

52

 

 

$

264,578

 

 

$

(255,867

)

 

$

8,763

 

Issuance of common shares under a direct
   registered offering

 

 

4,209,050

 

 

 

4

 

 

 

11,074

 

 

 

 

 

 

11,078

 

Issuance of common shares under at-the-market
   sales agreement

 

 

1,186,579

 

 

 

2

 

 

 

3,247

 

 

 

 

 

 

3,249

 

Exercise of stock options

 

 

62,493

 

 

 

 

 

 

38

 

 

 

 

 

 

38

 

Vesting and settlement of restricted stock units

 

 

227,754

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common shares under employee
   stock purchase plan

 

 

31,908

 

 

 

 

 

 

54

 

 

 

 

 

 

54

 

Share-based compensation expense

 

 

 

 

 

 

 

 

1,154

 

 

 

 

 

 

1,154

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(7,351

)

 

 

(7,351

)

Balance at March 31, 2021

 

 

57,578,725

 

 

 

58

 

 

 

280,145

 

 

 

(263,218

)

 

 

16,985

 

Issuance of common shares under at-the-market
   sales agreement

 

 

1,397,436

 

 

 

1

 

 

 

7,083

 

 

 

 

 

 

7,084

 

Exercise of stock options

 

 

21,673

 

 

 

 

 

 

33

 

 

 

 

 

 

33

 

Vesting and settlement of restricted stock units

 

 

93,757

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense

 

 

 

 

 

 

 

 

1,331

 

 

 

 

 

 

1,331

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(6,095

)

 

 

(6,095

)

Balance at June 30, 2021

 

 

59,091,591

 

 

 

59

 

 

 

288,592

 

 

 

(269,313

)

 

 

19,338

 

Issuance of common shares under at-the-market
   sales agreement

 

 

307,404

 

 

 

1

 

 

 

1,874

 

 

 

 

 

 

1,875

 

Exercise of stock options

 

 

100,194

 

 

 

 

 

 

149

 

 

 

 

 

 

149

 

Vesting and settlement of restricted stock units

 

 

93,757

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common shares under employee
   stock purchase plan

 

 

33,573

 

 

 

 

 

 

57

 

 

 

 

 

 

57

 

Share-based compensation expense

 

 

 

 

 

 

 

 

1,316

 

 

 

 

 

 

1,316

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,887

)

 

 

(4,887

)

Balance at September 30, 2021

 

 

59,626,519

 

 

$

60

 

 

$

291,988

 

 

$

(274,200

)

 

$

17,848

 

 

See accompanying notes to the consolidated financial statements.

 

5


 

CLEARSIDE BIOMEDICAL, INC.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Nine Months Ended
September 30,

 

 

 

2022

 

 

2021

 

Operating activities

 

 

 

 

 

 

Net loss

 

$

(23,284

)

 

$

(18,333

)

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

 

 

 

 

 

 

Non-cash interest expense on liability related to the sales of future royalties

 

 

1,297

 

 

 

 

Depreciation

 

 

123

 

 

 

133

 

Share-based compensation expense

 

 

3,735

 

 

 

3,801

 

Gain on extinguishment of debt

 

 

 

 

 

(998

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

9,952

 

 

 

(475

)

Other assets and liabilities

 

 

(125

)

 

 

(115

)

Accounts payable and accrued liabilities

 

 

431

 

 

 

200

 

Deferred revenue

 

 

113

 

 

 

 

Net cash used in operating activities

 

 

(7,758

)

 

 

(15,787

)

Investing activities

 

 

 

 

 

 

Acquisition of property and equipment

 

 

(155

)

 

 

 

Net cash used in investing activities

 

 

(155

)

 

 

 

Financing activities

 

 

 

 

 

 

Proceeds from royalty purchase and sale agreement, net of $1.9 million
   of issuance costs

 

 

30,638

 

 

 

 

Proceeds from registered direct offering, net of issuance costs

 

 

 

 

 

11,078

 

Proceeds from at-the-market sales agreement, net of issuance costs

 

 

 

 

 

12,208

 

Proceeds from exercise of stock options

 

 

7

 

 

 

220

 

Proceeds from shares issued under employee stock purchase plan

 

 

113

 

 

 

111

 

Net cash provided by financing activities

 

 

30,758

 

 

 

23,617

 

Net increase in cash, cash equivalents and restricted cash

 

 

22,845

 

 

 

7,830

 

Cash, cash equivalents and restricted cash, beginning of period

 

 

30,696

 

 

 

17,647

 

Cash, cash equivalents and restricted cash, end of period

 

$

53,541

 

 

$

25,477

 

Supplemental disclosure of noncash financing activities

 

 

 

 

 

 

Forgiveness of PPP Loan and accrued interest

 

$

 

 

$

998

 

 

Reconciliation of cash, cash equivalents and restricted cash:

 

 

September 30,

 

 

 

2022

 

 

2021

 

Cash and cash equivalents

 

$

53,381

 

 

$

25,217

 

Restricted cash (including $100 recorded in other current assets at September 30, 2021)

 

 

160

 

 

 

260

 

Cash, cash equivalents and restricted cash at end of period

 

$

53,541

 

 

$

25,477

 

 

See accompanying notes to the consolidated financial statements.

 

6


 

CLEARSIDE BIOMEDICAL, INC.

Notes to the Consolidated Financial Statements

(unaudited)

 

 

1. The Company

Clearside Biomedical, Inc. (the “Company”) is a biopharmaceutical company focused on revolutionizing the delivery of therapies to the back of the eye through the suprachoroidal space (SCS®). Incorporated in the State of Delaware on May 26, 2011, the Company has its corporate headquarters in Alpharetta, Georgia.

The Company’s activities since inception have primarily consisted of developing product and technology rights, raising capital and performing research and development activities. The Company is subject to a number of risks and uncertainties similar to those of other life science companies at a similar stage of development, including, among others, the need to obtain adequate additional financing, successful development efforts including regulatory approval of products, compliance with government regulations, successful commercialization of potential products, protection of proprietary technology and dependence on key individuals.

Liquidity

The Company had cash and cash equivalents of $53.4 million as of September 30, 2022.

Historically, the Company has funded its operations primarily through the sale of common stock and convertible preferred stock, the issuance of long-term debt, and license agreements. On October 25, 2021, the Company announced that the U.S. Food and Drug Administration (the "FDA") approved XIPERE® (triamcinolone acetonide injectable suspension) for the treatment of macular edema associated with uveitis, a form of eye inflammation. In January 2022, the Company received $10.0 million from Bausch + Lomb, a division of Bausch Health Companies, Inc. ("Bausch"), upon completion of pre-launch activities for XIPERE pursuant to the license agreement granting Bausch an exclusive license to develop and commercialize XIPERE in the United States and Canada. Bausch launched XIPERE in the United States in the first quarter of 2022.

As further described in Note 5 to the financial statements on August 8, 2022, the Company entered into a Purchase and Sale Agreement (the "Purchase and Sale Agreement") pursuant to which it sold its rights to receive royalty and milestone payments due to the Company from XIPERE and certain SCS Microinjector license agreements subject to a cap which may be increased under certain circumstances. The Company received a payment of $32.1 million in September 2022, representing the $