arvn-20240331

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 March 31, 2024


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 May 3, 2024, the registrant had 68,431,891 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	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	31

PART II.	OTHER INFORMATION	32

Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 5.	Other Information	33
Item 6.	Exhibits	34

Signatures		35


(dollars and shares in millions, except per share amounts)	March 31, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	88.0	$	311.7
Restricted cash	5.5		5.5
Marketable securities	1,081.3		949.3

Other receivables	7.1		7.2
Prepaid expenses and other current assets	8.4		6.5
Total current assets	1,190.3		1,280.2
Property, equipment and leasehold improvements, net	10.4		11.5
Operating lease right of use assets	2.0		2.5
Collaboration contract asset and other assets	9.9		10.4
Total assets	$	1,212.6	$	1,304.6
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities	$	76.4	$	92.2
Deferred revenue	162.9		163.0

Current portion of operating lease liabilities	1.5		1.9
Total current liabilities	240.8		257.1
Deferred revenue	361.0		386.2
Long term debt	0.7		0.8
Operating lease liabilities	0.4		0.5
Total liabilities	602.9		644.6
Commitments and Contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.001 par value, zero shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	—		—
Common stock, $0.001 par value; 68.3 and 68.0 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	0.1		0.1
Accumulated deficit	(1,402.1)		(1,332.7)
Additional paid-in capital	2,016.1		1,995.7
Accumulated other comprehensive loss	(4.4)		(3.1)
Total stockholders’ equity	609.7		660.0
Total liabilities and stockholders’ equity	$	1,212.6	$	1,304.6


(dollars and shares in millions, except per share amounts)	For the Three Months Ended March 31,
Consolidated Statements of Operations	2024		2023
Revenue	$	25.3	$	32.5
Operating expenses:
Research and development	84.3		95.3
General and administrative	24.3		24.9
Total operating expenses	108.6		120.2
Loss from operations	(83.3)		(87.7)
Other income (expense)
Other expense, net	—		(1.1)
Interest income, net	14.0		7.6

Total other income	14.0		6.5
Net loss before income taxes and loss from equity method investment	(69.3)		(81.2)
Income tax (expense) benefit	(0.1)		0.4
Loss from equity method investment	—		(1.1)
Net loss	$	(69.4)	$	(81.9)
Net loss per common share, basic and diluted	$	(0.97)	$	(1.54)
Weighted average common shares outstanding, basic and diluted	71.7		53.3


(dollars in millions)	For the Three Months Ended March 31,
Consolidated Statements of Comprehensive Loss	2024		2023
Net loss	$	(69.4)	$	(81.9)
Other comprehensive loss:
Unrealized (loss) gain on available-for-sale securities	(1.3)		6.6
Comprehensive loss	$	(70.7)	$	(75.3)


(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 March 31, 2024 and 2023	Shares	Amount
Balance as of December 31, 2023	68.0	$	0.1	$	(1,332.7)	$	1,995.7	$	(3.1)	$	660.0
Stock-based compensation	—	—		—		18.6		—		18.6
Net loss	—	—		(69.4)		—		—		(69.4)

Issuance of common stock under equity incentive plans	0.3	—		—		1.8		—		1.8
Unrealized loss on available-for-sale securities	—	—		—		—		(1.3)		(1.3)
Balance as of March 31, 2024	68.3	$	0.1	$	(1,402.1)	$	2,016.1	$	(4.4)	$	609.7
Balance as of December 31, 2022	53.2	$	0.1	$	(965.4)	$	1,549.4	$	(19.2)	$	564.9
Stock-based compensation	—	—		—		19.9		—		19.9
Net loss	—	—		(81.9)		—		—		(81.9)

Issuance of common stock under equity incentive plans	0.2	—		—		1.5		—		1.5
Unrealized gain on available-for-sale securities	—	—		—		—		6.6		6.6
Balance as of March 31, 2023	53.4	$	0.1	$	(1,047.3)	$	1,570.8	$	(12.6)	$	511.0


(dollars in millions)	March 31, 2024		March 31, 2023
Cash and cash equivalents	$	88.0	$	130.2
Restricted cash	5.5		5.5
Cash, cash equivalents and restricted cash	$	93.5	$	135.7


(dollars in millions)
Remainder of 2024	$	124.6
2025	153.4
2026	105.0
2027	57.6
2028	59.8
2029	23.5

Total	$	523.9


	March 31, 2024
(dollars in millions)	Valuation Hierarchy	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate bonds	Level 2	$	1,074.5	$	0.3	$	(4.7)	$	1,070.1
Government securities	Level 2	11.2		—		—		11.2
Total		$	1,085.7	$	0.3	$	(4.7)	$	1,081.3


	December 31, 2023
(dollars in millions)	Valuation Hierarchy	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate bonds	Level 2	$	934.4	$	1.5	$	(4.6)	$	931.3
Government securities	Level 2	18.0		—		—		18.0
Total		$	952.4	$	1.5	$	(4.6)	$	949.3


	Three Months Ended March 31,
(dollars in millions)	2024		2023
Operating lease cost	$	0.5	$	0.5


(dollars in millions)	March 31, 2024		March 31, 2023
Accounts receivable related to collaborations
Beginning balance	$	—	$	1.0
Additions	—		1.5
Payments received	—		(2.5)
Ending balance	$	—	$	—
Accounts payable related to collaborations
Beginning balance	$	13.1	$	5.0
Additions	14.1		1.7
Payments made	(13.1)		(5.0)
Ending balance	$	14.1	$	1.7
Contract assets: Collaboration contract asset
Beginning balance	$	9.4	$	10.7
Additions	—		—
Amortization	(0.4)		(0.6)
Ending balance	$	9.0	$	10.1
Contract liabilities: Deferred revenue
Beginning balance	$	549.2	$	623.7
Revenue recognized from balances held at the beginning of the period	(25.3)		(31.4)
Additions to collaboration agreements	—		1.5
Ending balance	$	523.9	$	593.8


(dollars in millions)	Maturity Date	Interest Rate	March 31, 2024		December 31, 2023
2018 Assistance Agreement Debt	09/28	3.25%	$	0.9	$	1.0
Less: current installments			(0.2)		(0.2)
Total long-term debt			$	0.7	$	0.8


	March 31, 2024		March 31, 2023
Expected volatility (1)	75.1 - 75.6%		72.6 - 74.2%
Expected term (years) (2)	5.4 - 5.5		5.6 - 7.0
Risk free interest rate (3)	3.9% - 4.3%		3.4% - 4.2%
Expected dividend yield	0	%	0	%
Exercise price	$38.10 - $47.00		$30.40 - $36.27


(dollars in millions, except weighted average exercise price)	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2023	7,933,794	$	45.22	7.2	$	62.6
Granted	866,983	$	45.82
Exercised	(43,363)	$	24.19
Forfeited	(154,857)	$	54.89

Outstanding as of March 31, 2024	8,602,557	$	45.23	7.3	$	61.8
Vested and exercisable as of March 31, 2024	5,266,294	$	44.06	6.3	$	49.0
Vested and expected to vest as of March 31, 2024	8,297,923	$	45.29	7.2	$	60.5


	Shares	Weighted Average Grant Date Fair Value Per Share
Unvested RSUs as of December 31, 2023	1,151,856	$	38.16
Granted	1,538,792	$	46.55
Vested	(202,578)	$	40.19
Forfeited	(25,820)	$	32.87
Unvested RSUs as of March 31, 2024	2,462,250	$	43.29


	For the Three and Three Months Ended March 31,
(shares in millions)	2024	2023
Stock options	8.6	8.2

RSUs	2.5	1.1
	11.1	9.3


	For the Three Months Ended March 31,
(in millions)	2024		2023
AR program development costs	$	11.4	$	19.6
ER program development costs	22.0		24.3
Other research and development costs	50.9		51.4
Total research and development costs	$	84.3	$	95.3


Exhibit Number						Description


3.1						Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-38672) filed with the SEC on October 1, 2018).

3.2						Second Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-38672) filed with the SEC on June 21, 2023).

10.1*						Employment Agreement between the Registrant and Noah Berkowitz, M.D., Ph.D. dated March 18, 2024.

10.2*						Promotion Letter for Randy Teel, Ph.D., dated April 21, 2024.

10.3*†						Second Amendment to Lease between 101 College Street, LLC and Arvinas Operations, Inc., dated December 20, 2023.

31.1*						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*						Inline XBRL Taxonomy Extension Schema Document.

101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104.00						Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101).

SEC Form 10-Q filed by Arvinas Inc.