jnce-20210630

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 June 30, 2021

☐ 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 001-37998

________________________________________________________________________________________________________

JOUNCE THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________________________


Delaware		45-4870634
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

780 Memorial Drive
Cambridge,	Massachusetts	02139
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (857) 259-3840

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, $0.001 par value per share	JNCE	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 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 July 30, 2021, there were 51,232,029 shares of common stock, $0.001 par value per share, outstanding.

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		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 202 1 and December 31, 20 20	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2021 and 2020	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 202 1 and 20 20	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26
Item 4.	Controls and Procedures	26

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	28
Item 6.	Exhibits	29

SIGNATURES

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References to Jounce

Throughout this Quarterly Report on Form 10-Q, the “Company,” “Jounce,” “Jounce Therapeutics,” “we,” “us,” and “our,” except where the context requires otherwise, refers to Jounce Therapeutics, Inc. and its consolidated subsidiary, and “board of directors” refers to the board of directors of Jounce Therapeutics, Inc.

Cautionary Note Regarding Forward-Looking Statements and Industry Data

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important 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 the forward-looking statements.

The words “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “target,” “will” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:

•the timing, progress, and results of preclinical studies and clinical trials for our current and future product candidates, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs;

•our plans and expectations in light of the COVID-19 pandemic and its impacts on our operations and global healthcare systems;

•the timing, scope, or likelihood of regulatory filings and approvals, including, as applicable, timing of our investigational new drug applications for, biologics license application filing for, and final Food and Drug Administration approval of our current and future product candidates;

•our ability to use our Translational Science Platform to identify targets for future product candidates and to match immunotherapies to select patient subsets;

•our ability to identify, develop and advance future product candidates into, and successfully complete, clinical studies;

•our ability to develop combination therapies, whether on our own or in collaboration with third parties, for our current and future product candidates;

•our expectations regarding the size of the patient populations for our product candidates, if approved for commercial use, and any product candidates we may develop;

•our commercialization and marketing capabilities and strategy;

•the pricing and reimbursement of our current and future product candidates, if approved;

•the implementation of our business model and our strategic plans for our business, our current and future product candidates, and our technology;

•our ability to develop and commercialize a companion diagnostic or complementary diagnostic for our current and future product candidates;

•the rate and degree of market acceptance and clinical utility of our current and future product candidates;

•the potential benefits of our exclusive license of JTX-1811 to Gilead Sciences, Inc.;

•our ability to establish or maintain future collaborations or strategic relationships or obtain additional funding;

•our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals;

•our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering our current and future product candidates, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;

•our competitive position, and developments and projections relating to our competitors and our industry;

•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and

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•the impact of laws and regulations.

There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. You should also read carefully the factors described in the sections “Summary of Risks Factors” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

This Quarterly Report on Form 10-Q may include industry and market data, which we may obtain from our own internal estimates and research, as well as from industry and general publications and research, surveys, and studies conducted by third parties. Industry publications, studies, and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third‑party sources.

Website and Social Media Disclosure

From time to time, we may use our website (www.jouncetx.com), investor and media relations website (http://ir.jouncetx.com), Facebook page (https://www.facebook.com/jouncetx), LinkedIn page (https://www.linkedin.com/company/3494537/) and Twitter feed (https://twitter.com/JounceTx) as channels for the distribution of information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, Securities and Exchange Commission filings and public conference calls and webcasts. The contents of our website and social media channels are not, however, a part of this report.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Jounce Therapeutics, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(amounts in thousands, except par value amounts)


	June 30,		December 31,
	2021		2020
Assets:
Current assets:
Cash and cash equivalents	$	140,814	$	147,493
Short-term investments	79,319		58,985
Accounts receivable — related party	24,976		31
Prepaid expenses and other current assets	12,010		4,882
Total current assets	257,119		211,391
Property and equipment, net	6,026		7,336
Long-term investments	26,015		6,710
Operating lease right-of-use asset	13,403		14,856
Other non-current assets	3,597		3,943
Total assets	$	306,160	$	244,236
Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable	$	2,476	$	2,036
Accrued expenses	9,853		12,044
Deferred revenue, current — related party	—		1,931
Operating lease liability, current	3,478		3,271
Other current liabilities	34		42
Total current liabilities	15,841		19,324
Operating lease liability, net of current portion	11,857		13,618

Total liabilities	27,698		32,942
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value: 5,000 shares authorized at June 30, 2021 and December 31, 2020; no shares issued or outstanding at June 30, 2021 or December 31, 2020	—		—
Common stock, $0.001 par value: 160,000 shares authorized at June 30, 2021 and December 31, 2020; 51,221 and 41,729 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	51		42
Additional paid-in capital	459,982		362,270
Accumulated other comprehensive income	(24)		(17)
Accumulated deficit	(181,547)		(151,001)
Total stockholders’ equity	278,462		211,294
Total liabilities and stockholders’ equity	$	306,160	$	244,236

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

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Jounce Therapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)

(amounts in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue:
License and collaboration revenue — related party	$	25,368	$	—	$	26,907	$	—
Operating expenses:
Research and development	22,100		21,023		42,607		40,669
General and administrative	7,317		7,226		14,932		14,765
Total operating expenses	29,417		28,249		57,539		55,434
Operating loss	(4,049)		(28,249)		(30,632)		(55,434)
Other income, net	40		285		89		1,035
Loss before provision for income taxes	(4,009)		(27,964)		(30,543)		(54,399)
Provision for income taxes	2		4		3		12
Net loss	$	(4,011)	$	(27,968)	$	(30,546)	$	(54,411)
Net loss per share, basic and diluted	$	(0.08)	$	(0.82)	$	(0.63)	$	(1.60)

Weighted-average common shares outstanding, basic and diluted	51,212		34,053		48,601		34,041

Comprehensive loss:
Net loss	$	(4,011)	$	(27,968)	$	(30,546)	$	(54,411)
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale securities	1		(11)		(7)		79
Comprehensive loss	$	(4,010)	$	(27,979)	$	(30,553)	$	(54,332)

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

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Jounce Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (unaudited)

(amounts in thousands)


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2020	41,729	$	42	$	362,270	$	(17)	$	(151,001)	$	211,294
Issuance of common stock from at the market offering, net of issuance costs	3,156	3		30,218		—		—		30,221
Issuance of common stock from follow-on public offering, net of issuance costs	5,750	6		60,632		—		—		60,638
Exercises of common stock options	342	—		1,019		—		—		1,019
Vesting of restricted stock units	223	—		—		—		—		—
Stock-based compensation expense	—	—		2,825		—		—		2,825
Other comprehensive loss	—	—		—		(8)		—		(8)
Net loss	—	—		—		—		(26,535)		(26,535)
Balance at March 31, 2021	51,200	51		456,964		(25)		(177,536)		279,454
Exercises of common stock options	21	—		83		—		—		83

Stock-based compensation expense	—	—		2,935		—		—		2,935
Other comprehensive income	—	—		—		1		—		1
Net loss	—	—		—		—		(4,011)		(4,011)
Balance at June 30, 2021	51,221	$	51	$	459,982	$	(24)	$	(181,547)	$	278,462







	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2019	33,738	$	34	$	281,664	$	54	$	(107,159)	$	174,593
Issuance of common stock from at the market offering, net of issuance cost	201	—		1,648		—		—		1,648
Exercise of common stock options	9	—		38		—		—		38
Vesting of restricted stock units	101	—		—		—		—		—
Stock-based compensation expense	—	—		2,618		—		—		2,618
Other comprehensive income	—	—		—		90		—		90
Net loss	—	—		—		—		(26,443)		(26,443)
Balance at March 31, 2020	34,049	34		285,968		144		(133,602)		152,544
Exercises of common stock options	16	—		61		—		—		61
Stock-based compensation expense	—	—		2,643		—		—		2,643
Other comprehensive loss	—	—		—		(11)		—		(11)
Net loss	—	—		—		—		(27,968)		(27,968)<

SEC Form 10-Q filed by Jounce Therapeutics, Inc.