10-Q
0001671858Q3--12-31false0001671858us-gaap:AdditionalPaidInCapitalMember2020-06-300001671858sbtx:EsppWithholdingsMember2020-01-012020-09-300001671858us-gaap:RetainedEarningsMember2021-01-012021-03-310001671858us-gaap:RedeemableConvertiblePreferredStockMembersbtx:SeriesCMember2020-09-3000016718582021-11-080001671858us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001671858us-gaap:RedeemableConvertiblePreferredStockMemberus-gaap:SeriesBMember2020-09-012020-09-3000016718582019-12-310001671858us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001671858us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001671858us-gaap:CommonStockMember2020-04-012020-06-300001671858us-gaap:WarrantMember2021-01-012021-09-3000016718582020-07-012020-09-300001671858us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-300001671858us-gaap:RedeemableConvertiblePreferredStockMember2020-09-300001671858us-gaap:RetainedEarningsMember2020-03-3100016718582021-01-012021-03-310001671858sbtx:SharesAvailableForFutureEquityAwardGrantsMember2020-12-310001671858us-gaap:SubsequentEventMember2021-11-052021-11-050001671858us-gaap:RedeemableConvertiblePreferredStockMemberus-gaap:SeriesBMember2020-09-300001671858sbtx:SiliconValleyBankMembersbtx:AmendedLoanAndSecurityAgreementMembersbtx:TermLoanMember2020-04-012020-04-300001671858us-gaap:AdditionalPaidInCapitalMember2020-09-300001671858sbtx:EsppWithholdingsMember2021-01-012021-09-300001671858us-gaap:RetainedEarningsMember2021-09-300001671858us-gaap:AdditionalPaidInCapitalMember2021-03-3100016718582021-07-012021-09-300001671858us-gaap:RetainedEarningsMember2020-06-300001671858us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-09-300001671858sbtx:SharesAvailableForFutureEquityAwardGrantsMember2021-09-300001671858us-gaap:RedeemableConvertiblePreferredStockMember2020-06-300001671858us-gaap:IPOMember2020-12-030001671858us-gaap:CashMember2020-12-310001671858us-gaap:FairValueMeasurementsRecurringMember2021-01-012021-09-300001671858us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-3000016718582021-06-300001671858us-gaap:RedeemableConvertiblePreferredStockMember2020-01-012020-09-300001671858us-gaap:RedeemableConvertiblePreferredStockMember2020-01-012020-09-300001671858sbtx:SharesUnderlyingEsppWithholdingsMember2020-12-310001671858us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-3000016718582020-04-012020-06-300001671858us-gaap:RetainedEarningsMember2020-04-012020-06-300001671858us-gaap:RedeemableConvertiblePreferredStockMemberus-gaap:SeriesBMember2020-03-012020-03-310001671858sbtx:RedeemableStockExcersibleOnAgreedUponMilestonesMemberus-gaap:SeriesBMember2020-03-012020-03-310001671858sbtx:SeriesBRedeemableConvertiblePreferredStockMember2020-04-012020-06-300001671858sbtx:SharesUnderlyingOutstandingEquityAwardsMember2020-12-310001671858us-gaap:RetainedEarningsMember2020-01-012020-03-310001671858us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001671858us-gaap:RetainedEarningsMember2020-09-3000016718582020-01-012020-12-310001671858us-gaap:RedeemableConvertiblePreferredStockMember2021-01-012021-09-300001671858us-gaap:AdditionalPaidInCapitalMember2019-12-3100016718582021-01-012021-09-300001671858us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300001671858us-gaap:RetainedEarningsMember2021-06-300001671858sbtx:LoanAndSecurityAgreementMembersbtx:SiliconValleyBankMembersbtx:TermLoanMember2016-11-012016-11-300001671858us-gaap:RetainedEarningsMember2020-07-012020-09-300001671858us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001671858us-gaap:WarrantMember2020-01-012020-09-300001671858us-gaap:CommonStockMember2020-01-012020-03-310001671858us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001671858us-gaap:CommonStockMember2019-12-3100016718582020-01-012020-09-3000016718582020-12-310001671858sbtx:SharesUnderlyingEsppWithholdingsMember2021-09-300001671858us-gaap:RetainedEarningsMember2021-03-310001671858sbtx:SharesUnderlyingEarlyExercisedEquityAwardsMember2020-12-310001671858sbtx:WuxiBioMemberus-gaap:ResearchAndDevelopmentExpenseMember2019-10-312019-10-310001671858us-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300001671858us-gaap:CommonStockMember2021-01-012021-03-3100016718582021-07-010001671858us-gaap:RetainedEarningsMember2021-07-012021-09-300001671858us-gaap:CommonStockMember2021-09-300001671858us-gaap:CommonStockMember2020-07-012020-09-300001671858us-gaap:RetainedEarningsMember2019-12-310001671858sbtx:SeriesBRedeemableConvertiblePreferredStockMember2020-01-012020-03-3100016718582021-07-012021-07-010001671858us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001671858us-gaap:RedeemableConvertiblePreferredStockMembersbtx:RedeemableStockExcersibleOnAgreedUponMilestonesMember2020-03-012020-03-310001671858us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001671858us-gaap:RedeemableConvertiblePreferredStockMemberus-gaap:SeriesBMember2020-03-310001671858sbtx:SeriesBRedeemableConvertiblePreferredStockMember2020-07-012020-09-300001671858us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001671858us-gaap:AdditionalPaidInCapitalMember2021-09-300001671858us-gaap:RedeemableConvertiblePreferredStockMemberus-gaap:SeriesBMember2020-07-012020-07-0100016718582020-01-012020-03-310001671858us-gaap:GeneralAndAdministrativeExpenseMember2020-07-012020-09-300001671858us-gaap:CashMember2021-09-3000016718582020-09-300001671858us-gaap:RedeemableConvertiblePreferredStockMemberus-gaap:SeriesBMember2020-07-010001671858us-gaap:FairValueMeasurementsRecurringMember2021-09-300001671858us-gaap:IPOMember2020-12-032020-12-030001671858us-gaap:AdditionalPaidInCapitalMember2020-12-310001671858sbtx:UnvestedCommonStockMember2020-01-012020-09-300001671858us-gaap:CommonStockMember2021-04-012021-06-300001671858us-gaap:CommonStockMember2020-06-300001671858us-gaap:AdditionalPaidInCapitalMember2020-03-310001671858us-gaap:RetainedEarningsMember2021-04-012021-06-300001671858us-gaap:RedeemableConvertiblePreferredStockMember2020-03-3100016718582020-06-3000016718582021-03-310001671858us-gaap:CommonStockMember2021-03-310001671858sbtx:SeriesCRedeemableConvertiblePreferredStockMember2020-07-012020-09-300001671858sbtx:LiquidityAndCapitalResourcesMember2021-09-300001671858us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001671858us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001671858us-gaap:CommonStockMember2021-06-300001671858us-gaap:CommonStockMember2020-09-300001671858sbtx:LoanAndSecurityAgreementMembersbtx:SiliconValleyBankMembersbtx:TermLoanMember2021-01-012021-09-300001671858us-gaap:RedeemableConvertiblePreferredStockMemberus-gaap:IPOMember2020-12-030001671858us-gaap:CommonStockMember2020-03-310001671858sbtx:SharesUnderlyingOutstandingEquityAwardsMember2021-09-3000016718582021-04-012021-06-300001671858us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001671858us-gaap:RetainedEarningsMember2020-12-310001671858us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-09-300001671858us-gaap:RedeemableConvertiblePreferredStockMember2019-12-310001671858sbtx:WuxiBioMember2021-01-012021-09-300001671858sbtx:LoanAndSecurityAgreementMembersbtx:SiliconValleyBankMembersbtx:TermLoanMember2016-11-300001671858us-gaap:CommonStockMember2021-07-012021-09-300001671858us-gaap:AdditionalPaidInCapitalMember2021-06-300001671858sbtx:UnvestedCommonStockMember2021-01-012021-09-300001671858us-gaap:CommonStockMemberus-gaap:IPOMember2020-12-032020-12-0300016718582021-09-300001671858us-gaap:StockOptionMember2021-09-300001671858sbtx:SharesUnderlyingEarlyExercisedEquityAwardsMember2021-09-300001671858us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001671858us-gaap:CommonStockMember2020-12-3100016718582020-03-310001671858us-gaap:RedeemableConvertiblePreferredStockMembersbtx:SeriesCMember2020-09-012020-09-30iso4217:USDxbrli:sharesxbrli:purexbrli:sharesiso4217:USD

 

 

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, 2021

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 001-39756

 

Silverback Therapeutics, Inc.

(Exact name of Registrant as specified in its Charter)

 

 

 

 

Delaware

81-1489190

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

500 Fairview Ave N, Suite 600

Seattle, Washington

98109

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (206) 456-2900

 

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

SBTX

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 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 8, 2021 there were 35,076,083 shares of registrant’s common stock, $0.0001 par value per share, outstanding.

 

 

 


 

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS

 

 

 

 

 

 

Page

 

PART I

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

6

 

Condensed Balance Sheets

6

 

Condensed Statements of Operations and Comprehensive Loss

7

 

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

8

 

Condensed Statements of Cash Flows

10

 

Notes to Unaudited Condensed Financial Statements

11

Item 2.

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

22

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

31

Item 4.

Controls and Procedures

32

 

 

 

PART II

OTHER INFORMATION

 

Item 1.

Legal Proceedings

33

Item 1A.

Risk Factors

33

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

81

Item 3.

Defaults Upon Senior Securities

82

Item 4.

Mine Safety Disclosures

82

Item 5.

Other Information

82

Item 6.

Exhibits

83

 

 

2


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

our plans to research, develop, and commercialize SBT6050 and any future product candidates;
our ability to obtain and maintain regulatory approval of product candidates arising from our ImmunoTAC technology platform, including SBT6050, in any of the indications for which we plan to develop them;
our ability to obtain funding for our operations, including funding necessary to commence and complete the clinical trials, conduct additional manufacturing, and conduct preclinical studies of any of our product candidates, including SBT6050;
the success, cost, and timing of our research and development activities, including our ongoing and planned clinical trials and preclinical studies;
the size of the markets for our product candidates, and our ability to serve those markets;
our ability to successfully commercialize our product candidates;
the rate and degree of market acceptance of our product candidates;
our ability to develop and maintain sales and marketing capabilities, whether alone or with potential future collaborators;
regulatory developments in the United States and foreign countries;
the performance of our third-party service providers, including our contract research organizations, suppliers, and manufacturers;
the safety, efficacy, and market success of competing therapies that are or become available;
our ability to attract and retain key scientific and management personnel;
our ability to attract and retain collaborators with development, regulatory and commercialization expertise;
our expectations regarding the period during which we qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012;
the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing;
our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates and our ability to operate our business without infringing upon the intellectual property rights of others;
the impact of the COVID-19 pandemic on our business and operations; and
other risks and uncertainties, including those described under Part II, Item 1A, “Risk Factors” of this Quarterly Report.

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A, “Risk Factors” of this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

Unless the context otherwise indicates, references in this Quarterly Report to the terms “Silverback”, “the Company”, “we”, “our” and “us” refer to Silverback Therapeutics, Inc., and references to our “common stock” refers to our voting common stock.

 

3


 

SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS

An investment in shares of our common stock involves a high degree of risk. Below is a list of the more significant risks associated with our business. This summary does not address all of the risks that we face. Additional discussion of the risks listed in this summary, as well as other risks that we face, are set forth under Part II, Item 1A, “Risk Factors” in this Quarterly Report. Some of the material risks associated with our business include the following:

We have a limited operating history, have incurred net losses since our inception, and anticipate that we will continue to incur significant losses for the foreseeable future. We may never generate any revenue or become profitable or, if we achieve profitability, may not be able to sustain it.
The COVID-19 pandemic could continue to adversely impact our business, including our ongoing and planned clinical trials, supply chain, and business development activities.
Preclinical and clinical development is a lengthy, expensive, and uncertain process. The results of preclinical studies and early clinical trials are not always predictive of future results. Any product candidate that we advance into clinical trials, including SBT6050, may not achieve favorable results in later clinical trials, if any, or receive marketing approval.
Serious adverse events of our product candidates have been observed in our clinical trials, and other serious adverse events, undesirable side effects, or unexpected properties may be observed during development or after approval, which could lead to the discontinuation of our clinical development programs, refusal by regulatory authorities to approve our product candidates or, if discovered following marketing approval, revocation of marketing authorizations or limitations on the use of our product candidates thereby limiting the commercial potential of such product candidate.
The market opportunities for our product candidates may be relatively small as it will be limited to those patients who are ineligible for or have failed prior treatments and our estimates of the prevalence of our target patient populations may be inaccurate.
Our product candidates are based on novel technologies, which make it difficult to predict the timing, results and cost of product candidate development and likelihood of obtaining regulatory approval.
If we are required by the U.S. Food and Drug Administration (FDA) to obtain approval of a companion diagnostic in connection with approval of any of our product candidates, and we do not obtain or face delays in obtaining FDA approval of a diagnostic device or test, we will not be able to commercialize such product candidate and our ability to generate revenue will be materially impaired.
Even if we obtain regulatory approval for our product candidates, they will remain subject to ongoing regulatory oversight. Additionally, our product candidates, if approved, could be subject to labeling and other restrictions on marketing or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, when and if any of them are approved.
We contract with third parties for the manufacture and supply of certain of our product candidates for use in preclinical testing and clinical trials and will rely on third parties for commercial supply, which supply may become limited or interrupted at any time or may not be of satisfactory quality and quantity.
Any approved products may fail to achieve the degree of market acceptance by physicians, patients, hospitals, cancer treatment centers, healthcare payors, and others in the medical community necessary for commercial success.
If the market opportunities for any of our product candidates are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer.
If we are unable to obtain and maintain sufficient intellectual property protection for our platform technologies and product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be adversely affected.
We may not realize the benefits of any acquisitions, in-license, or strategic alliances that we enter into.
We may rely on trade secret and proprietary know-how, which can be difficult to trace and enforce, and if we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
If any of our product candidates are approved for marketing and commercialization and we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market our product candidates, we will be unable to successfully commercialize our product candidates if and when they are approved.

4


 

We face substantial competition, which may result in others discovering, developing, or commercializing products more quickly or marketing them more successfully than us.
We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
The price of our common stock is subject to volatility related or unrelated to our operations.
We are currently party to an in-license agreement under which we were granted rights to manufacture certain components of our product candidates. If we breach our obligations under these agreements, we may be required to pay damages, lose our rights to these technologies or both, which would adversely affect our business and prospects.

 

 

5


 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Silverback Therapeutics, Inc.

Condensed Balance Sheets

(in thousands, except share and par value data)

 

 

 

 

September 30,

 

 

December 31,

 

 

 

 

2021

 

 

2020

 

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

300,660

 

 

$

386,569

 

Prepaid expenses and other current assets

 

 

 

4,695

 

 

 

4,087

 

Total current assets

 

 

 

305,355

 

 

 

390,656

 

Investments

 

 

 

39,938

 

 

 

 

Restricted cash

 

 

 

350

 

 

 

350

 

Right-of-use asset

 

 

 

5,011

 

 

 

2,180

 

Property and equipment, net

 

 

 

1,907

 

 

 

1,618

 

Total assets

 

 

$

352,561

 

 

$

394,804

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

 

$

1,720

 

 

$

2,583

 

Accrued expenses

 

 

 

12,537

 

 

 

5,278

 

Term loan payable, net

 

 

 

 

 

 

844

 

Current portion of lease liability

 

 

 

1,090

 

 

 

896

 

Total current liabilities

 

 

 

15,347

 

 

 

9,601

 

Lease liability, net of current portion

 

 

 

5,080

 

 

 

2,326

 

Total liabilities

 

 

 

20,427

 

 

 

11,927

 

Commitments and contingencies (Note 10)

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Preferred Stock, $0.0001 par value per share; 10,000,000 shares authorized at
   September 30, 2021 and December 31, 2020;
no shares issued and outstanding at
   September 30, 2021 and December 31, 2020

 

 

 

 

 

 

 

Common stock, $0.0001 par value per share; 200,000,000 shares authorized
   at September 30, 2021 and December 31, 2020,
35,067,751 and 34,801,537 shares
   issued and
35,037,136 and 34,701,274 shares outstanding at September 30, 2021 and
   December 31, 2020, respectively

 

 

 

4

 

 

 

3

 

Additional paid-in capital

 

 

 

494,916

 

 

 

479,608

 

Accumulated other comprehensive loss

 

 

 

(34

)

 

 

 

Accumulated deficit

 

 

 

(162,752

)

 

 

(96,734

)

Total stockholders’ equity

 

 

 

332,134

 

 

 

382,877

 

Total liabilities, and stockholders’ equity

 

 

$

352,561

 

 

$

394,804

 

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

 

 

6


 

Silverback Therapeutics, Inc.

Condensed Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

15,641

 

 

$

6,200

 

 

 

45,630

 

 

$

15,740

 

General and administrative

 

 

7,040

 

 

 

1,912

 

 

 

20,447

 

 

 

4,077

 

Total operating expenses

 

 

22,681

 

 

 

8,112

 

 

 

66,077

 

 

 

19,817

 

Loss from operations

 

 

(22,681

)

 

 

(8,112

)

 

 

(66,077

)

 

 

(19,817

)

Interest income (expense), net

 

 

26

 

 

 

(4

)

 

 

59

 

 

 

(45

)

Net loss

 

$

(22,655

)

 

$

(8,116

)

 

 

(66,018

)

 

$

(19,862

)

Unrealized loss on available-for-sale securities

 

 

(34

)

 

 

 

 

 

(34

)

 

 

 

Comprehensive loss attributable to common stockholders

 

$

(22,689

)

 

$

(8,116

)

 

 

(66,052

)

 

$

(19,862

)

Net loss per share applicable to common stockholders,
   basic and diluted

 

$

(0.65

)

 

$

(11.97

)

 

$

(1.89

)

 

$

(29.53

)

Weighted-average shares used in computing net loss per share
   attributable to common stockholders, basic and diluted

 

 

35,001,466

 

 

 

678,048

 

 

 

34,884,656

 

 

 

672,531

 

 

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

7


 

Silverback Therapeutics, Inc.

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands, except share data)

(unaudited)

 

 

 

Redeemable Convertible
Preferred Stock

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated Other

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Comprehensive Income

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2020

 

 

 

 

$

 

 

 

34,701,274

 

 

$

3

 

 

$

479,608

 

 

$

 

 

$

(96,734

)

 

$

382,877

 

Exercise of common stock options and vesting of early
   exercised common stock options

 

 

 

 

 

 

 

 

125,930

 

 

 

 

 

 

254

 

 

 

 

 

 

 

 

 

254

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,285

 

 

 

 

 

 

 

 

 

4,285

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,867

)

 

 

(18,867

)

Balance as of March 31, 2021

 

 

 

 

$

 

 

 

34,827,204

 

 

$

3

 

 

$

484,147

 

 

$

 

 

$

(115,601

)

 

$

368,549

 

Exercise of common stock options, shares issued
   under the employee stock purchase plan, and
   vesting of early exercised common stock
   options

 

 

 

 

 

 

 

 

135,881

 

 

 

1

 

 

 

866

 

 

 

 

 

 

 

 

 

867

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,730

 

 

 

 

 

 

 

 

 

4,730

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,496

)

 

 

(24,496

)

Balance as of June 30, 2021

 

 

 

 

$

 

 

 

34,963,085

 

 

$

4

 

 

$

489,743

 

 

$

 

 

$

(140,097

)

 

$

349,650

 

Exercise of common stock options and
   vesting of early exercised common stock
   options

 

 

 

 

 

 

 

 

74,051

 

 

 

 

 

 

154

 

 

 

 

 

 

 

 

 

154

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,019

 

 

 

 

 

 

 

 

 

5,019

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34

)

 

 

(22,655

)

 

 

(22,689

)

Balance as of September 30, 2021

 

 

 

 

$

 

 

 

35,037,136

 

 

$

4

 

 

$

494,916

 

 

$

(34

)

 

$

(162,752

)

 

$

332,134

 

 

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

8


 

Silverback Therapeutics, Inc.

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands, except share data)

(unaudited)

 

 

 

Redeemable Convertible
Preferred Stock

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated Other

 

 

Accumulated

 

 

Total
Stockholders’
'Equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Comprehensive Income

 

 

Deficit

 

 

(Deficit)

 

Balance as of December 31, 2019

 

 

15,714,283

 

 

$

53,174

 

 

 

664,431

 

 

$

 

 

$

5,010

 

 

$

 

 

$

(63,787

)

 

$

(58,777

)

Issuance of Series B redeemable convertible preferred
   stock for cash, net of $
76 in issuance costs (Note 7)

 

 

10,027,666

 

 

 

21,458

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series B redeemable convertible preferred
   stock upon conversion of convertible notes

 

 

4,673,388

 

 

 

10,095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of common stock options and vesting of early
   exercised common stock options

 

 

 

 

 

 

 

 

5,350

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

6

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

47

 

 

 

 

 

 

 

 

 

47

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,279

)

 

 

(5,279

)

Balance as of March 31, 2020

 

 

30,415,337

 

 

$

84,727

 

 

 

669,781

 

 

$

 

 

$

5,063

 

 

$

 

 

$

(69,066

)

 

$

(64,003

)

Proceeds received in advance of issuance of Series B
   redeemable convertible preferred stock (Note 7)

 

 

 

 

 

12,048

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of common stock options and vesting of early
   exercised common stock options

 

 

 

 

 

 

 

 

1,843

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

2

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

128

 

 

 

 

 

 

 

 

 

128

 

Net Loss and comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,467

)

 

 

(6,467

)

Balance as of June 30, 2020

 

 

30,415,337

 

 

$

96,775

 

 

 

671,624

 

 

$

 

 

$

5,193

 

 

$

 

 

$

(75,533

)

 

$

(70,340

)

Issuance of Series B convertible preferred stock for cash (Note 7)

 

 

21,732,862

 

 

 

34,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series C convertible preferred stock for cash, net of $53 in issuance cost (Note 7)

 

 

24,926,685

 

 

 

84,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of common stock options and vesting of early exercised common stock options

 

 

 

 

 

 

 

 

12,754

 

 

 

 

 

 

16

 

 

 

 

 

 

 

 

 

16

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

191

 

 

 

 

 

 

 

 

 

191

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,116

)

 

 

(8,116

)

Balance as of September 30, 2020

 

 

77,074,884

 

 

$

216,567

 

 

 

684,378

 

 

$

 

 

$

5,400

 

 

$

 

 

$

(83,649

)

 

$

(78,249

)

 

 

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

9


 

Silverback Therapeutics, Inc.

Condensed Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

For the Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(66,018

)

 

$

(19,862

)

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

 

 

 

 

 

 

Depreciation expense

 

 

596

 

 

 

448

 

Stock-based compensation

 

 

14,034

 

 

 

366

 

Non-cash lease expense

 

 

903

 

 

 

797

 

Amortization of debt issuance costs

 

 

2

 

 

 

28

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(608

)

 

 

(313

)

Accounts payable and accrued expenses

 

 

6,422

 

 

 

(914

)

Lease liability

 

 

(786

)

 

 

(650

)

Net cash used in operating activities

 

 

(45,455

)

 

 

(20,100

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of available-for-sale securities

 

 

(39,971

)

 

 

 

Purchase of property and equipment

 

 

(822

)

 

 

(670

)

Net cash used in investing activities

 

 

(40,793

)

 

 

(670

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs

 

 

 

 

 

153,401

 

Principal payments on term loan payable

 

 

(846

)

 

 

(467

)

Proceeds from exercise of common stock options and employee stock purchase plan

 

 

1,185

 

 

 

177

 

Net cash provided by financing activities

 

 

339

 

 

 

153,111

 

Change in cash, cash equivalents, and restricted cash

 

 

(85,909

)

 

 

132,341

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

386,919

 

 

 

10,526

 

Cash, cash equivalents, and restricted cash at end of period

 

$

301,010

 

 

$

142,867

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Right-of-use assets and lease liabilities recognized

 

$

3,733

 

 

$

 

Deferred offering costs included in accounts payable and accrued liabilities

 

$

 

 

$

1,020

 

Issuance of Series B redeemable convertible preferred stock upon conversion of
   convertible notes

 

$

 

 

$

10,095

 

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

 

 

10


 

Silverback Therapeutics, Inc.

Notes to Unaudited Condensed Financial Statements

1. Nature of Business

Silverback Therapeutics, Inc. (“Silverback” or “the Company”) is a clinical-stage biopharmaceutical company focused on leveraging its proprietary ImmunoTAC technology platform to develop systemically delivered and tissue targeted therapeutics for the treatment of cancer, chronic viral infections, and other serious diseases. The Company’s platform enables it to strategically pair proprietary linker-payloads that modulate key disease-modifying pathways with monoclonal antibodies directed at specific disease sites. The Company was formed in Seattle, Washington and incorporated in the state of Delaware on January 4, 2016.

Initial Public Offering and Related Transaction

On December 3, 2020, the Company’s registration statement on Form S-1 (File No. 333-250009) for its initial public offering of common stock (“IPO”) was declared effective by the Securities and Exchange Commission (“SEC”). On December 8, 2020, the Company issued and sold 13,225,000 shares of common stock in the IPO at a public offering price of $21.00 per share, resulting in net proceeds of $255.3 million after deducting underwriting discounts and commissions and offering expenses paid by the Company.

In connection with the IPO, all 77,074,884 shares of redeemable convertible preferred stock outstanding at the time of the IPO converted into 20,758,098 shares of the Company’s common stock.

Risks and Uncertainties

The Company is subject to a number of inherent risks which include, but are not limited to, the need to obtain adequate additional funding, possible failure of clinical trials or other events demonstrating a lack of clinical safety or efficacy of its product candidates, dependence on key personnel, reliance on third-party service providers for manufacturing drug product and conducting clinical trials, the ability to successfully secure its proprietary technology, and risks related to the regulatory approval and commercialization of a product candidate. Additionally, the development and commercialization of new drug products is highly competitive. Products or technologies developed by compe