arvn-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________

FORM 10-Q

__________________________________________

(Mark One)


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

For the quarterly period ended June 30, 2023


o			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: 001-38672

__________________________________________

ARVINAS, INC.

(Exact name of registrant as specified in its Charter)

__________________________________________


Delaware			47-2566120
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
5 Science Park 395 Winchester Ave. New Haven, Connecticut			06511
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (203) 535-1456

__________________________________________

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

ARVN

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 ý No o

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 ý No o

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	ý	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

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. o

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

As of August 4, 2023, the registrant had 53,485,023 shares of common stock, $0.001 par value per share, outstanding.


		Page
PART I.	FINANCIAL INFORMATION	2

Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

PART II.	OTHER INFORMATION	34

Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 5.	Other Information	34
Item 6.	Exhibits	35

Signatures		36


(dollars and shares in millions)	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	90.6	$	81.3
Restricted cash	5.5		5.5
Marketable securities	948.2		1,124.0
Accounts receivable	0.1		1.0
Other receivables	4.7		7.0
Prepaid expenses and other current assets	7.6		21.4
Total current assets	1,056.7		1,240.2
Property, equipment and leasehold improvements, net	13.2		13.4
Operating lease right of use assets	3.5		4.4
Collaboration contract asset and other assets	10.1		10.8
Total assets	$	1,083.5	$	1,268.8
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities	$	74.8	$	74.7
Deferred revenue	230.1		218.6
Current portion of long term debt	0.1		—
Current portion of operating lease liability	1.9		1.8
Total current liabilities	306.9		295.1
Deferred revenue	310.5		405.1
Long term debt	0.9		1.0
Operating lease liability	1.6		2.7
Total liabilities	619.9		703.9
Commitments and Contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 53.4 and 53.2 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	0.1		0.1
Accumulated deficit	(1,113.9)		(965.4)
Additional paid-in capital	1,589.6		1,549.4
Accumulated other comprehensive loss	(12.2)		(19.2)
Total stockholders’ equity	463.6		564.9
Total liabilities and stockholders’ equity	$	1,083.5	$	1,268.8


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(dollars and shares in millions, except per share amounts)	2023		2022		2023		2022
Revenue	$	54.5	$	33.8	$	87.0	$	60.3
Operating expenses:
Research and development	103.4		75.3		198.6		139.2
General and administrative	25.7		24.3		50.7		44.5
Total operating expenses	129.1		99.6		249.3		183.7
Loss from operations	(74.6)		(65.8)		(162.3)		(123.4)
Other income (expenses)
Other expense, net	—		(0.1)		(1.1)		(0.2)
Interest income, net	9.0		1.8		16.6		2.9

Total other income	9.0		1.7		15.5		2.7
Net loss before income taxes and loss from equity method investment	(65.6)		(64.1)		(146.8)		(120.7)
Income tax benefit (expense)	0.3		(3.4)		0.7		(7.9)
Loss from equity method investment	(1.3)		(2.5)		(2.4)		(4.8)
Net loss	$	(66.6)	$	(70.0)	$	(148.5)	$	(133.4)
Net loss per common share, basic and diluted	$	(1.25)	$	(1.32)	$	(2.78)	$	(2.51)
Weighted average common shares outstanding, basic and diluted	53.4		53.2		53.4		53.1


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(dollars in millions)	2023		2022		2023		2022
Net loss	$	(66.6)	$	(70.0)	$	(148.5)	$	(133.4)
Other comprehensive loss:
Unrealized gain (loss) on available-for-sale securities	0.4		(3.3)		7.0		(17.4)
Comprehensive loss	$	(66.2)	$	(73.3)	$	(141.5)	$	(150.8)


(dollars and shares in millions)	Common				Accumulated Deficit		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss) Income		Total Stockholders' Equity
For the Three Months Ended June 30, 2023 and 2022	Shares	Amount
Balance as of March 31, 2023	53.4	$	0.1	0.1	$	(1,047.3)	$	1,570.8	$	(12.6)	$	511.0
Stock-based compensation	—	—			—		18.3		—		18.3
Net loss	—	—			(66.6)		—		—		(66.6)

Issuance of common stock under equity incentive plans	—	—			—		0.5		—		0.5
Unrealized gain (loss) on available-for-sale securities	—	—			—		—		0.4		0.4
Balance as of June 30, 2023	53.4	$	0.1		$	(1,113.9)	$	1,589.6	$	(12.2)	$	463.6
Balance as of March 31, 2022	53.1	$	—		$	(746.3)	$	1,488.3	$	(18.7)	$	723.3
Stock-based compensation	—	—			—		20.0		—		20.0
Net loss	—	—			(70.0)		—		—		(70.0)

Issuance of common stock under equity incentive plans	0.1	0.1			—		0.5		—		0.6
Unrealized loss on available-for-sale securities	—	—			—		—		(3.3)		(3.3)
Balance as of June 30, 2022	53.2	$	0.1		$	(816.3)	$	1,508.8	$	(22.0)	$	670.6


(dollars in millions)	June 30, 2023		June 30, 2022
Cash and cash equivalents	$	90.6	$	93.2
Restricted cash	5.5		4.5
Cash, cash equivalents and restricted cash	$	96.1	$	97.7


(dollars in millions)
Remainder of 2023	$	110.2
2024	200.9
2025	90.2
2026	55.3
2027	34.7
2028	10.8
Thereafter	38.5
Total	$	540.6


	June 30, 2023
(dollars in millions)	Valuation Hierarchy	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate bonds	Level 2	$	888.8	$	—	$	(12.1)	$	876.7
Government securities	Level 2	71.6		—		(0.1)		71.5
Total		$	960.4	$	—	$	(12.2)	$	948.2


	December 31, 2022
(dollars in millions)	Valuation Hierarchy	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate bonds	Level 2	$	1,008.0	$	—	$	(18.5)	$	989.5
Government securities	Level 2	135.2		—		(0.7)		134.5
Total		$	1,143.2	$	—	$	(19.2)	$	1,124.0


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in millions)	2023		2022		2023		2022
Operating lease cost	$	0.5	$	0.5	$	1.0	$	1.1


(dollars in millions)	June 30, 2023		June 30, 2022
Accounts receivable related to collaborations
Beginning balance	$	1.0	$	15.0
Additions	1.6		1.4
Payments received	(2.5)		(15.0)
Ending balance	$	0.1	$	1.4
Accounts payable related to collaborations
Beginning balance	$	5.0	$	—
Additions	1.7		—
Payments made	(6.7)		—
Ending balance	$	—	$	—
Contract assets: Collaboration contract asset
Beginning balance	$	10.7	$	12.5
Additions	—		—
Amortization	(1.5)		(0.8)
Ending balance	$	9.2	$	11.7
Contract liabilities: Deferred revenue
Beginning balance	$	623.7	$	740.5
Revenue recognized from balances held at the beginning of the period	(84.6)		(55.5)
Additions to collaboration agreements	1.5		3.0
Ending balance	$	540.6	$	688.0


(dollars in millions)	Maturity Date	Interest Rate	June 30, 2023		December 31, 2022
2018 Assistance Agreement Debt	09/28	3.25%	$	1.0	$	1.0
Less: current installments			(0.1)		—
Total long-term debt			$	0.9	$	1.0

SEC Form 10-Q filed by Arvinas Inc.