10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

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

For the quarterly period ended March 31, 2021

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

For the transition period from

Commission File Number:

001-38541

Magenta Therapeutics, Inc.

(Exact name of registrant as specified in its charter)


Delaware		81-0724163
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

100 Technology Square Cambridge, Massachusetts		02139
(Address of principal executive offices)		(Zip Code)

(857)

242-0170

(Registrant’s telephone number, including area code)

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	MGTA	The Nasdaq Global Market

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.

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 April 30, 2021, there were 48,610,659 shares of Common Stock, $0.001 par value per share, outstanding.

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Magenta Therapeutics, Inc.

INDEX


	Page
PART I – FINANCIAL INFORMATION		5
Item 1. Financial Statements (unaudited)		5
Consolidated Balance Sheets		5
Consolidated Statements of Operations and Comprehensive Loss		6
Consolidated Statements of Stockholders’ Equity		7
Consolidated Statements of Cash Flows		8
Notes to Consolidated Financial Statements		9
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		26
Item 1. Legal Proceedings		26
Item 1A. Risk Factors		27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		76
Item 6. Exhibits		77
Signatures		78

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RISK FACTOR SUMMARY

The risk factors detailed in “Item 1A. Risk Factors” in this Quarterly Report on Form

10-Q

are the risks that we believe are material to our investors and a reader should carefully consider them. Those risks are not all of the risks we face and other factors not presently known to us or that we currently believe are immaterial may also affect our business if they occur. The following is a summary of the risk factors detailed in Item 1A:

•

The novel coronavirus, or

COVID-19,

pandemic has caused, and could continue to cause, severe disruption in the U.S., regional and global economies and could seriously harm our development efforts, increase our costs and expenses and have a material adverse effect on our employees, business, financial condition and results of operations.

•

We are a clinical stage company with a limited operating history, have incurred significant losses since our inception, and anticipate that we will continue to incur significant losses for the foreseeable future.

•

We have no products approved for commercial sale and have not generated any revenue from product sales. If we are unable to raise additional capital when needed or on terms acceptable to us, we could be forced to significantly delay, scale back or discontinue our development or commercialization efforts.

•

Although we have initiated and conducted clinical trials for some of our product candidates, including

MGTA-145,

we have not yet demonstrated the ability to successfully advance our clinical trials for our product candidates through the final regulatory processes and obtain marketing approvals for such products. Similarly, we have not yet demonstrated an ability to manufacture a commercial-scale drug product or conduct sales and marketing activities necessary for successful commercialization. If we are unable to obtain regulatory approval for

MGTA-145

or any other product candidates that we may identify or develop, our business will be substantially harmed.

•

The results of earlier studies may not be predictive of future clinical trial results, and we may fail to establish an adequate safety or efficacy profile to conduct advanced clinical trials or obtain regulatory approval for

MGTA-145

or any other product candidates that we may pursue.

•

Stem cell transplant is a high-risk procedure that may result in complications or adverse events for patients in our clinical trials or for patients that use any of our product candidates, if approved. If serious adverse events, undesirable side effects, or unexpected characteristics are identified during the development of any of our product candidates, we may need to limit, delay or abandon our further clinical development of those product candidates, even if such events, effects or characteristics were the result of stem cell transplant or related procedures generally, and not directly or specifically caused or exacerbated by our product candidates.

•

If we are not able to identify a safe and effective dose for any of our antibody-drug conjugates, or ADCs, we may need to delay, abandon or limit our development of any potential product candidates.

•

If we are unable to successfully develop our current programs into a comprehensive portfolio of product candidates, or experience significant delays in doing so, we may not realize the full commercial potential of our current and future product candidates.

•

We are developing E478 specifically to partner with gene therapy and genome editing companies, and if we are unable to find willing collaborators, this may adversely affect the development of E478 and our business.

•

The commercial success of any of our product candidates will depend upon the degree of market acceptance by physicians, patients, third-party payors and others in the medical community.

•

We face substantial competition, including from companies with greater financial, technical, research, manufacturing, marketing, distribution and other resources than us, which may result in others discovering, developing or commercializing products before or more successfully than we do.

•

We expect to continue to rely on third parties to manufacture our clinical product supplies, and we intend to rely on third parties to produce and process our product candidates, if approved.

•

We have entered into collaborations and may enter into additional collaborations, strategic alliances or additional licensing arrangements in the future, and we may not realize the benefits of such collaborations, alliances or licensing arrangements.

•

We are highly dependent on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business.

•

It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection. If we are unable to obtain and maintain sufficient intellectual property protection for MGTA- 145, any of our other current or any future product candidates, or our technologies, we may not be able to compete effectively in our markets.

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•

Our future success depends in part upon our ability to attract and retain highly skilled personnel, including the members of our executive team and key scientific and medical personnel employees.

•

Changes in tax law could adversely affect our business and financial condition.

This section contains forward-looking statements. You should refer to the explanation of the qualifications and limitations on forward-looking statements in this Quarterly Report on Form

10-Q.

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PART I—FINANCIAL INFORMATION

Item 1.

Financial Statements.

Magenta Therapeutics, Inc.

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)


	March 31, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	49,289		$	58,152
Marketable securities		82,999			90,683
Prepaid expenses and other current assets		2,808			2,692

Total current assets		135,096			151,527
Restricted cash		1,780			1,780
Property and equipment, net		7,744			8,312

Total assets	$	144,620		$	161,619

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,114		$	3,760
Accrued expenses and other current liabilities		7,092			7,670

Total current liabilities		9,206			11,430
Deferred rent		6,355			6,283

Total liabilities		15,561			17,713

Commitments and contingencies (Note 6)
Stockholders’ Equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding		—			—
Common stock, $0.001 par value; 150,000,000 shares authorized; 48,603,205 shares issued and outstanding as of March 31, 2021 and 48,541,601 shares issued and 48,533,135 shares outstanding as of December 31, 2020		49			49
Additional paid-in capital		400,921			398,311
Accumulated other comprehensive income (loss)		9			(23	)
Accumulated deficit		(271,920	)		(254,431	)

Total stockholders’ equity		129,059			143,906

Total liabilities and stockholders’ equity	$	144,620		$	161,619

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

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Magenta Therapeutics, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

(Unaudited)


	Three Months Ended March 31,
	2021			2020
Operating expenses:
Research and development	$	11,728		$	13,963
General and administrative		6,969			7,281

Total operating expenses		18,697			21,244

Loss from operations		(18,697	)		(21,244	)
Interest and other income, net		1,208			1,233

Net loss	$	(17,489	)	$	(20,011	)

Net loss per share, basic and diluted	$	(0.36	)	$	(0.51	)

Weighted average common shares outstanding, basic and diluted		48,567,106			39,364,437

Comprehensive loss:
Net loss	$	(17,489	)	$	(20,011	)
Other comprehensive income:
Unrealized gains on marketable securities		32			355

Total other comprehensive income		32			355

Total comprehensive loss	$	(17,457	)	$	(19,656	)

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

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Magenta Therapeutics, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

(Unaudited)


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Income (Loss)			Deficit			Equity
	Three Months Ended March 31, 2021
Balances at December 31, 2020		48,533,135	$	49	$	398,311	$	(23	)	$	(254,431	)	$	143,906
Vesting of restricted stock		8,466		—		—		—			—			—
Issuance of common stock upon exercise of stock options		61,604		—		418		—			—			418
Stock-based compensation expense		—		—		2,192		—			—			2,192
Unrealized gains on marketable securities		—		—		—		32			—			32
Net loss		—		—		—		—			(17,489	)		(17,489	)

Balances at March 31, 2021		48,603,205	$	49	$	400,921	$	9		$	(271,920	)	$	129,059


	Three Months Ended March 31, 2020
Balances at December 31, 2019		39,260,532	$	39	$	320,641	$	8		$	(179,495	)	$	141,193
Vesting of restricted stock		64,626		—		—		—			—			—
Issuance of common stock upon exercise of stock options		129,477		—		1,124		—			—			1,124
Stock-based compensation expense		—		—		2,740		—			—			2,740
Unrealized gains on marketable securities		—		—		—		355			—			355
Net loss		—		—		—		—			(20,011	)		(20,011	)

Balances at March 31, 2020		39,454,635	$	39	$	324,505	$	363		$	(199,506	)	$	125,401

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

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Magenta Therapeutics, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Three months ended March 31,
	2021			2020
Cash flows from operating activities:
Net loss	$	(17,489	)	$	(20,011	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		2,192			2,740
Depreciation and amortization expense		474			493
Loss on disposal of property and equipment		90			—
Net amortization of premiums on marketable securities		216			14
Changes in operating assets and liabilities:

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