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

(Mark One)

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

For the quarterly period ended March 31, 2022

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

For the transition period from

Commission file number

001-39244

Vincerx Pharma, Inc.

(Exact name of Registrant as Specified in Its Charter)


Delaware		83-3197402
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

260 Sheridan Avenue, Suite 400 Palo Alto, CA		94306
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (650)

800-6676

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, $0.0001 par value per share	VINC	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 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, 2022, there were 21,057,560 shares of the registrant’s common stock outstanding.

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TABLE OF CONTENTS


Forward-Looking Statements			1
Frequently Used Terms			2
Summary Risk Factors			3
Part I			6
ITEM 1. Financial Statements.			6
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.			17
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.			23
ITEM 4. Controls and Procedures.			23
Part II			25
ITEM 1. Legal Proceedings.			25
ITEM 1A. Risk Factors.			25
ITEM 6. Exhibits.			63

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Forward-Looking Statements

This report contains forward-looking statements that involve risks and uncertainties. These statements relate to future periods, future events or our future operating or financial plans or performance. When used in this report, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “forecast,” “goal,” “may,” “might,”

“on-target,”

“plan,” “possible,” “potential,” “predict,” “project,” “should,” “seeks,” “suggests,” “scheduled,” or “will,” and similar expressions are intended to identify forward-looking statements, and include but are not limited to:

•

our future financial and business performance;

•

strategic plans for our business and product candidates;

•

our ability to develop or commercialize products;

•

the expected results and timing of clinical trials and nonclinical studies;

•

our ability to comply with the terms of the Bayer License Agreement;

•

developments and projections relating to our competitors and industry;

•

our expectations regarding our ability to obtain, develop and maintain intellectual property protection and not infringe on the rights of others;

•

our ability to retain key scientific or management personnel;

•

our expectations regarding the time during which we will be an emerging growth company under the JOBS Act;

•

our future capital requirements and sufficiency of available cash and the timing of those requirements and sources and uses of cash;

•

our ability to obtain funding for our operations;

•

the outcome of any known and unknown litigation and regulatory proceedings;

•

our business, expansion plans and opportunities; and

•

changes in applicable laws or regulations.

These statements are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those projected or otherwise implied by the forward-looking statements, including the following:

•

risks associated with preclinical or clinical development and trials, including those conducted prior to our

in-licensing;

•

risks related to the rollout of our business and the timing of expected business milestones;

•

changes in the assumptions underlying our expectations regarding our future business or business model;

•

our ability to develop, manufacture and commercialize product candidates;

•

general economic, financial, legal, political and business conditions and changes in domestic and foreign markets;

•

changes in applicable laws or regulations;

•

the impact of natural disasters, including climate change, and the impact of health epidemics, including the

COVID-19

pandemic, on our business;

•

the size and growth potential of the markets for our products, and our ability to serve those markets;

•

market acceptance of our planned products;

•

risks related to our plans and assumptions regarding the availability, use and sufficiency of our cash resources;

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•

our ability to raise capital;

•

the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and

•

other risks and uncertainties set forth in this report in the section entitled “Risk Factors.”

Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements.

Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expected. These risks and uncertainties include, but are not limited to, those risks discussed in Item 1A of this report. These forward-looking statements made by us in this report speak only as of the date of this report. Except as required under the federal securities laws and rules and regulations of the Securities and Exchange Commission (the “SEC”), we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. You should, however, review additional disclosures we make in our definitive proxy statement for the 2022 Annual Meeting of Stockholders, Annual Report on Form

10-K

for the year ended December 31, 2021, Quarterly Reports on Form

10-Q,

and Current Reports on Form

8-K

filed with the SEC.

You should read this report completely and with the understanding that our actual future results, levels of activity and performance as well as other events and circumstances may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Frequently Used Terms

Unless the context indicates otherwise, references in this report to the “Company,” “Vincerx,” “we,” “us,” “our” and similar terms refer to Vincerx Pharma, Inc. (f/k/a Vincera Pharma, Inc. f/k/a LifeSci Acquisition Corp.) and its consolidated subsidiaries. References to “LSAC” refer to LifeSci Acquisition Corp., our predecessor company prior to the consummation of the Business Combination (as defined below). Additional terms frequently used in this report include the following:

•

“ADC” means antibody-drug conjugate.

•

“Affordable Care Act” means the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act.

•

“AML” means acute myeloid leukemia.

•

“ANDA” means an abbreviated new drug application.

•

“Bayer License Agreement” means that certain License Agreement, dated October 7, 2020, by and among Legacy Vincera Pharma, Bayer Aktiengesellschaft and Bayer Intellectual Property GmbH.

•

“BLA” means a biologics license application.

•

“BPCIA” means the Biologics Price Competition and Innovation Act of 2009.

•

“Business Combination” means the Merger and the other transactions described in the Merger Agreement.

•

“Bylaws” means our amended and restated bylaws.

•

“Certificate of Incorporation” means our second amended and restated certificate of incorporation, as amended.

•

“cGMP” means current Good Manufacturing Practice.

•

“common stock” means our common stock, $0.0001 par value per share.

•

“DLBCL” means diffuse large

B-cell

lymphoma.

•

“Earnout Shares” means certain rights to common stock after the closing of the Business Combination that Legacy Holders may be entitled to receive pursuant to the Merger Agreement.

•

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

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•

“FDA” means the U.S. Food and Drug Administration.

•

“IND” means an investigational new drug application.

•

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012.

•

“KSPi” means kinesin spindle protein inhibitor.

•

“Legacy Holders” means the stockholders of Legacy Vincera Pharma immediately prior to the Business Combination.

•

“Legacy Vincera Pharma” means Vincera Pharma, Inc. prior to the consummation of the Business Combination, which changed its name to VNRX Corp. following the Business Combination.

•

“Merger” means the merger of Merger Sub with and into Legacy Vincera Pharma, with Legacy Vincera Pharma surviving as the surviving company and as a wholly-owned subsidiary of LSAC, which occurred on December 23, 2020.

•

“Merger Agreement” means that certain Merger Agreement, dated September 25, 2020, by and among LSAC, Merger Sub, Legacy Vincera Pharma and Raquel E. Izumi, as the representative of the Legacy Holders.

•

“Merger Sub” means LifeSci Acquisition Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of LSAC at the time of the Business Combination.

•

“mRNA” means messenger RNA.

•

“NDA” means a new drug application.

•

“public warrants” means warrants originally issued in the initial public offering of LSAC, which were redeemed in April 2021.

•

“private warrants” means the warrants issued simultaneously with the closing of the initial public offering of LSAC in a private placement to LifeSci Holdings LLC and Rosedale Park, LLC and the warrants issued pursuant to Section 8.6 of the Merger Agreement.

•

“PTEFb/CDK9” means positive transcription elongation factor beta/cyclin-dependent kinase 9.

•

“Securities Act” means the Securities Act of 1933, as amended.

•

“SMDC” means small molecule drug conjugate.

•

“USPTO” means the United States Patent and Trademark Office.

•

“Warrant Agreement” means that certain Warrant Agreement, dated March 5, 2020, between LSAC and the Continental Stock Transfer & Trust Company.

Vincerx

™

, Vincerx Pharma

™

, the Vincerx Wings logo design and CellTrapper

™

are our trademarks or registered trademarks. This report may also contain trademarks and trade names that are the property of their respective owners.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties that could affect our ability to successfully implement our business strategy and affect our financial results. You should carefully consider all of the information in this report and, in particular, the following principal risks and all of the other specific factors described in Item 1A of this report, “Risk Factors,” before deciding whether to invest in our company.

•

We rely on the Bayer License Agreement to provide rights to the core intellectual property relating to all of our current product candidates, which agreement imposes significant payment and other obligations on us. Any failure by us to perform our obligations under the Bayer License Agreement could give Bayer AG (“Bayer”) the right to terminate or seek other remedies under the agreement, and any termination or loss of important rights under the Bayer License Agreement would significantly and adversely affect our ability to develop and commercialize VIP152, VIP943, VIP924, VIP236 and our other current product candidates, raise capital or continue our operations.

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•

We rely to a significant extent on the preclinical and clinical trial data provided by Bayer in assessing the viability of our product candidates, and such preclinical and clinical trial data has not been verified by us or any independent third parties.

•

Our preclinical development, clinical trials, manufacturing, supply chains and other operations and business activities, and the operations and business activities of third parties with whom we conduct business, including our contract manufacturers, contract research organizations, shippers, clinical trial sites and others, have been, and continue to be, adversely affected by the effects of epidemics, including the ongoing COVID-19 pandemic.

•

We are substantially dependent on the success of our lead product candidate, VIP152, which is currently in clinical trials. If we are unable to complete development of, obtain approval for and commercialize VIP152 in a timely manner, our business will be harmed.

•

We are at an early stage in development efforts for our product candidates, and we may not be able to successfully develop, manufacture and commercialize our product candidates on a timely basis or at all.

•

There is currently no CDK9 inhibitor, ADC delivering a KSPi warhead or small molecule drug conjugate delivering an optimized CPT payload that has to date been approved by the FDA, and the development of our product candidates may never lead to a marketable product.

•

Our long-term prospects depend in part upon discovering, developing, manufacturing and commercializing additional product candidates, which may fail in development or suffer delays that adversely affect their commercial viability.

•

Results from early-stage clinical trials may not be predictive of results from late-stage or other clinical trials.

•

Interim, “topline” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

•

Even if approved, our product candidates may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community necessary for commercial success.

•

If the market opportunity for any product candidate that we or our strategic partners develop is smaller than we believe, our revenue may be adversely affected and our business may suffer.

•

We face significant competition, and if our competitors develop and market technologies or products more rapidly than we do or that are more effective, safer or less expensive than the product candidates we develop, our commercial opportunities will be negatively impacted.

•

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

•

Our business entails a significant risk of product liability and if we are unable to obtain sufficient insurance coverage such inability could have an adverse effect on our business and financial condition.

•

Any product candidates we develop may become subject to unfavorable third party coverage and reimbursement practices, as well as pricing regulations.

•

Clinical trials are expensive, time consuming, subject to delay and may be required to continue beyond our available funding, and we cannot be certain that we will be able to raise sufficient funds to complete the development and commercialize any of our product candidates currently in preclinical and clinical development, should they succeed.

•

We are at an early stage of development as a company and our limited operating history may make it difficult to evaluate our ability to succeed.

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•

We have incurred net losses since inception, and we expect to continue to incur significant net losses for the foreseeable future.

•

We require substantial capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs or future commercialization efforts.

•

The Bayer License Agreement obligates us to make significant milestone and royalty payments, some of which will be triggered prior to the commercialization of any of our other product candidates.

•

We may be unable to obtain U.S. or foreign regulatory approvals and, as a result, may be unable to commercialize our product candidates.

•

Our current or future product candidates may cause adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs that may result in a safety profile that could inhibit regulatory approval, prevent market acceptance, limit their commercial potential or result in significant negative consequences.

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PART I

ITEM 1.

Financial Statements.

VINCERX PHARMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)


	March 31, 2022			December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash	$	96,486		$	111,459
Restricted cash		67			105
Prepaid expenses		1,268			182
Other current assets		243			95

Total current assets		98,064			111,841
Right-of-use assets		3,733			3,949
Property, plant and equipment, net		217			233
Other assets		1,867			1,653

Total assets	$	103,881		$	117,676


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	3,386		$	2,019
Accrued expenses		6,051			4,715
Lease liability		852			738
Common stock warrant liabilities		1,236			6,447

Total current liabilities		11,525			13,919
Lease liability, net of current portion		3,186			3,436

Total liabilities		14,711			17,355


Commitments and contingencies - Note 5

Stockholders’ equity
Preferred stock, $0.0001 par value; 30,000,000 shares authorized, none issued and outstanding as of March 31, 2022 and December 31, 2021		—			—
Common stock, $0.0001 par value; 120,000,000 shares authorized, 21,057,560 shares issued and outstanding as of March 31, 2022 and December 31, 2021		2			2
Additional paid-in capital		161,569			156,311
Accumulated other comprehensive loss		(6	)		(21	)
Accumulated deficit		(72,395	)		(55,971	)

Total stockholders’ equity		89,170			100,321

Total liabilities and stockholders’ equity	$	103,881		$	117,676

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

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VINCERX PHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except per share amounts)


	For the three months ended March 31,
	2022			2021
Operating expenses:
General and administrative	$	5,656		$	4,791
Research and development		15,971			4,834

Total operating expenses		21,627			9,625

Loss from operations		(21,627	)		(9,625	)

Other income (expense)
Change in fair value of warrant liabilities		5,211			3,349
Other expense		(8	)		—

Total other income		5,203			3,349

Net loss		(16,424	)		(6,276	)
Other comprehensive income:
Net foreign currency translation gain		15			—

Comprehensive loss	$	(16,409	)	$	(6,276	)

Net loss per common share, basic and diluted	$	(0.79	)	$	(0.46	)

Weighted average common shares outstanding, basic and diluted		20,896			13,735

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

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VINCERX PHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

(Unaudited)

(

in thousands

)


	For the Three Months Ended March 31, 2022
	Common Stock				Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Equity
Balance as of January 1, 2022		21,057	$	2	$	156,311		$	(21	)	$	(55,971	)	$	100,321
Stock-based compensation		—		—		5,258			—			—			5,258
Cumulative translation adjustment		—		—		—			15			—			15
Net loss		—		—		—			—			(16,424	)		(16,424	)

Balance as of March 31, 2022		21,057	$	2	$	161,569		$	(6	)	$	(72,395	)	$	89,170



	For the Three Months Ended March 31, 2021
	Common Stock				Subscription Receivable			Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount		Subscription Receivable			Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ Equity
Balance as of January 1, 2021		13,984	$	1	$	—		$	42,043		$	(16,665	)	$	25,379
Issuance of common stock from warrant exercises		712		—		(8,182	)		8,182			—			—
Reclassification of warrant liabilities to equity due to warrant exercises		—		—		—			1,735			—			1,735
Stock-based compensation		—		—		—			4,715			—			4,715
Net loss		—		—		—			—			(6,276	)		(6,276	)

Balance as of March 31, 2021		14,696	$	1	$	(8,182	)	$	56,675		$	(22,941	)	$	25,553

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

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VINCERX PHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(

in thousands

)


	For the three months ended March 31,
	2022			2021
Cash flows from operating activities
Net loss	$	(16,424	)	$	(6,276	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		14			—
Stock-based compensation		5,258			4,715
Amortization of right-of-use assets		216			(25	)
Change in fair value of warrant liabilities		(5,211	)		(3,349	)
Changes in operating assets and liabilities:
Prepaid and other current assets		(1,234	)		265
Other assets		(214	)		(138	)
Accounts payable		1,367			(30	)
Accrued expenses		1,336			1,390
Due to related parties		—			(14	)
Lease liabilities		(136	)		25

Net cash used in operating activities		(15,028	)		(3,437	)


Cash Flows from Investing Activities:
Research and development-acquired license		—			(5,000	)

Net cash used in investing activities		—			(5,000	)


Effect of exchange rate changes on cash and restricted cash		17			—

Net decrease in cash and restricted cash		(15,011	)		(8,437	)
Cash and restricted cash at beginning of period		111,564			61,792

Cash and restricted cash at end of period	$	96,553		$	53,355

Supplemental disclosure of cash flow information:

SEC Form 10-Q filed by Vincerx Pharma Inc.