10-Q
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`

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 September 30, 2022

OR

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: 001-41201

 

CinCor Pharma, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

36-4931245

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

230 Third Avenue, Waltham, MA 02451

02451

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (844) 531-1834

 

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, $0.00001 par value per share

 

CINC

 

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.

 

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 November 3, 2022, the registrant had 43,764,323 shares of common stock, $0.00001 par value per share, outstanding.

 

 


 

 

 


 


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

3

 

Condensed Consolidated Balance Sheets – September 30, 2022 (Unaudited) and December 31, 2021

3

 

Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)

4

 

Condensed Consolidated Statements of Comprehensive Loss - Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)

5

 

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) – Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)

6

 

Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2022 and 2021 (Unaudited)

7

 

Notes to Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

28

 

 

 

PART II.

OTHER INFORMATION

28

 

 

 

Item 1.

Legal Proceedings

28

Item 1A.

Risk Factors

28

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

29

Item 3.

Defaults Upon Senior Securities

29

Item 4.

Mine Safety Disclosures

29

Item 5.

Other Information

29

Item 6.

Exhibits

30

Signatures

31

 

 


 

SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

 

 

This Quarterly Report on Form 10-Q of CinCor Pharma, Inc., or CinCor or the Company, contains or incorporates statements that constitute forward-looking statements within the meaning of the federal securities laws. Any express or implied statements that do not relate to historical or current facts or matters are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “seeks,” “endeavor,” “potential,” “continue” or the negative of these terms or other comparable terminology.

 

Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These forward-looking statements include, without limitation, statements about the following:

 

the timing, progress and results of our preclinical studies and clinical trials of baxdrostat (CIN-107) and any future product candidates, including statements regarding the timing of our planned IND submissions, 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 estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
the timing of any submission of filings for regulatory approval of, and our ability to obtain and maintain regulatory approvals for, baxdrostat and any future product candidates;
our ability to identify patients with the diseases treated by our product candidate and to enroll these patients in our clinical trials;
our expectations regarding the size of the patient populations, market acceptance and opportunity for and clinical utility of baxdrostat and any future product candidates, if approved for commercial use;
business disruptions affecting the initiation, patient enrollment, development and operation of our clinical trials, including a public health emergency, such as the COVID-19 pandemic, or geopolitical events, including the ongoing military conflict between Russia and Ukraine, and related sanctions against Russia;
macroeconomic events, including uncertain market conditions, higher inflation and supply chain disruptions;
our expectations regarding the scope of any approved indication for baxdrostat or any future product candidate;
our ability to successfully commercialize baxdrostat or any future product candidate, if approved;
our expectations regarding the potential market size and the rate and degree of market acceptance for baxdrostat or any future product candidates that we develop;
the effects of competition with respect to baxdrostat or any future product candidates, as well as innovations by current and future competitors in our industry;
our ability to fund our working capital requirements;
our intellectual property position, including the scope of protection we are able to establish, maintain and enforce for intellectual property rights covering baxdrostat;
our financial performance and our ability to effectively manage our anticipated growth; and
our ability to obtain additional funding for our operations.

 

You are urged to carefully review the disclosures we make concerning these risks and other factors that may affect our business and operating results under “Item 1A. Risk Factors” in the Annual Report on Form 10-K, as well as our other reports filed with the U.S. Securities and Exchange Commission ("SEC"). We may announce material business and financial

i


 

information to our investors using our investor relations website (www.cincor.com/investor-relations). We therefore encourage investors and others interested in CinCor to review the information that we make available from time to time on our website, in addition to following our filings with the SEC, webcasts, press releases and conference calls. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. The Company does not intend, and undertakes no obligation, to update any forward-looking information to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, unless required by law to do so.

 

TRADEMARKS, TRADENAMES AND SERVICE MARKS

This Quarterly Report on Form 10-Q includes trademarks, tradenames and service marks, certain of which belong to us and others that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this Quarterly Report on Form 10-Q appear without the ®, ™ and SM symbols, but the absence of those symbols is not intended to indicate, in any way, that we will not assert our rights or that the applicable owner will not assert its rights to these trademarks, tradenames and service marks to the fullest extent under applicable law.


 

ii


 

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

CinCor Pharma, Inc.

Condensed Consolidated Balance Sheets

 

3


 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

292,556,851

 

 

$

136,605,613

 

Marketable securities

 

 

229,939,796

 

 

 

 

Prepaid research and development contracts

 

 

5,925,991

 

 

 

1,769,074

 

Prepaid expense and other current assets

 

 

596,728

 

 

 

2,731,953

 

Total current assets

 

 

529,019,366

 

 

 

141,106,640

 

 

 

 

 

 

 

 

Long term assets:

 

 

 

 

 

 

Property and equipment, net

 

 

99,722

 

 

 

 

Total long term assets

 

 

99,722

 

 

 

 

Total assets

 

$

529,119,088

 

 

$

141,106,640

 

 

 

 

 

 

 

 

Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,588,400

 

 

$

642,143

 

Related-party accounts payable

 

 

 

 

 

7,323

 

Warrant derivative liabilities

 

 

 

 

 

10,636,921

 

Accrued legal expense

 

 

430,131

 

 

 

2,104,766

 

Accrued research and development contracts

 

 

4,681,756

 

 

 

1,751,530

 

Accrued expenses and other liabilities

 

 

2,481,232

 

 

 

1,406,506

 

Total current liabilities

 

 

10,181,519

 

 

 

16,549,189

 

 

 

 

 

 

 

 

Redeemable convertible preferred stock:

 

 

 

 

 

 

Series A redeemable convertible preferred stock,
   $
0.00001 par value, 0 and 35,714,282 shares authorized and
   outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

 

 

 

47,173,259

 

Series B redeemable convertible preferred stock,
   $
0.00001 par value, 0 and 35,716,249 shares authorized and
   outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

 

 

 

141,101,202

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

Common stock, $0.00001 par value per share; 95,000,000 and 13,731,721 shares
   authorized, and
43,764,323 and 2,557,341 outstanding at September 30, 2022 and
   December 31, 2021, respectively

 

 

438

 

 

 

26

 

Additional paid-in capital

 

 

656,273,482

 

 

 

13,986,033

 

Accumulated deficit

 

 

(136,452,934

)

 

 

(77,703,069

)

Accumulated other comprehensive loss

 

 

(883,417

)

 

 

 

Total stockholders’ equity (deficit)

 

 

518,937,569

 

 

 

(63,717,010

)

Total liabilities, redeemable convertible preferred stock, and
   stockholders’ equity (deficit)

 

$

529,119,088

 

 

$

141,106,640

 

 

4


 

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

 

CinCor Pharma, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

17,725,092

 

 

$

4,647,620

 

 

$

44,576,704

 

 

$

12,135,441

 

General and administrative

 

 

4,519,288

 

 

 

3,042,278

 

 

 

12,724,801

 

 

 

5,141,861

 

Total operating expenses

 

 

22,244,380

 

 

 

7,689,898

 

 

 

57,301,504

 

 

 

17,277,302

 

Loss from operations

 

 

(22,244,380

)

 

 

(7,689,898

)

 

 

(57,301,504

)

 

 

(17,277,302

)

Other (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(1,266,821

)

 

 

(1,947

)

 

 

(1,595,646

)

 

 

(7,899

)

Change in fair value of warrant derivative liabilities

 

 

 

 

 

1,335,852

 

 

 

3,044,006

 

 

 

3,755,509

 

Total other (income) expense, net

 

 

(1,266,821

)

 

 

1,333,905

 

 

 

1,448,360

 

 

 

3,747,610

 

Net loss

 

$

(20,977,559

)

 

$

(9,023,803

)

 

$

(58,749,865

)

 

$

(21,024,912

)

 

 

 

 

 

 

 

 

$

-

 

 

 

 

Net loss per share attributable to common
   stockholders, basic and diluted

 

$

(0.51

)

 

$

(5.19

)

 

$

(1.57

)

 

$

(14.59

)

Weighted average number of common stock used in
   computing net loss per share attributable to common
   stockholders, basic and diluted

 

 

40,806,123

 

 

 

1,739,516

 

 

 

37,343,549

 

 

 

1,440,916

 

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

 

CinCor Pharma, Inc.

Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

Net loss

 

$

(20,977,559

)

 

$

(9,023,803

)

 

$

(58,749,865

)

 

$

(21,024,912

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized losses on available-for-sale securities

 

 

(171,651

)

 

 

 

 

 

(883,417

)

 

 

 

Comprehensive loss

 

$

(21,149,210

)

 

$

(9,023,803

)

 

$

(59,633,282

)

 

$

(21,024,912

)

 

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


 

CinCor Pharma, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) (unaudited)

 

 

Redeemable Convertible

 

 

 

 

 

 

Preferred Stock

 

 

Stockholders' Equity (Deficit)

 

 

5


 

 

 

Series A Redeemable Convertible Preferred Stock

 

 

Series B Redeemable Convertible Preferred Stock

 

 

Common Stock

 

 

Additional Paid-In

 

 

Accumulated

 

 

Accumulated Other Comprehensive

 

Total Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Deficit

 

 

Loss

 

(Deficit)

 

Balance at January 1, 2022

 

 

35,714,282

 

 

$

47,173,259

 

 

 

35,716,249

 

 

$

141,101,202

 

 

 

2,557,341

 

 

$

26

 

 

$

13,986,033

 

 

$

(77,703,069

)

 

$

 

$

(63,717,010

)

Issuance of common stock initial public offering, net of discounts and issuance costs of $19,420,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,290,813

 

 

 

133

 

 

 

193,550,593

 

 

 

 

 

 

 

 

193,550,726

 

Conversion of redeemable convertible preferred stock into common stock upon initial public offering

 

 

(35,714,282

)

 

 

(47,173,259

)

 

 

(35,716,249

)

 

 

(141,101,202

)

 

 

21,008,970

 

 

 

210

 

 

 

188,274,133

 

 

 

 

 

 

 

 

188,274,343

 

Automatic conversion of the Roche warrants into common stock upon initial public offering

 

 

 

 

 

 

 

 

 

 

 

 

 

 

852,788

 

 

 

9

 

 

 

13,644,599

 

 

 

 

 

 

 

 

13,644,608

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,224,208

 

 

 

 

 

 

 

 

1,224,208

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(317,611

)

 

(317,611

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,696,903

)

 

 

 

 

(16,696,903

)

Balance at March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37,709,912

 

 

 

378

 

 

 

410,679,566

 

 

 

(94,399,972

)

 

 

(317,611

)

 

315,962,361

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,241,157

 

 

 

 

 

 

 

 

1,241,157

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(394,155

)

 

(394,155

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21,075,404

)

 

 

 

 

(21,075,404

)

Balance at June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37,709,912

 

 

 

378

 

 

 

411,920,723

 

 

 

(115,475,376

)

 

 

(711,766

)

 

295,733,959

 

Issuance of common stock and sale of pre-funded warrants, net of discounts and issuance costs of $574,818

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,054,411

 

 

 

60

 

 

 

242,650,096

 

 

 

 

 

 

 

 

242,650,156

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,302,663

 

 

 

 

 

 

 

 

1,302,663

 

Proceeds from exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29,411

 

 

 

 

 

 

400,000

 

 

 

 

 

 

 

 

400,000

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(171,651

)

 

(171,651

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,977,559

)

 

 

 

 

(20,977,559

)

Balance at September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

43,793,734

 

 

 

438

 

 

 

656,273,482

 

 

 

(136,452,934

)

 

 

(883,417

)

 

518,937,569

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Convertible

 

 

 

 

 

 

Preferred Stock

 

 

Stockholders' Deficit

 

 

 

Series A Redeemable Convertible Preferred Stock

 

 

Series B Redeemable Convertible Preferred Stock

 

 

Common Stock

 

 

Additional Paid-In

 

 

Accumulated

 

 

Accumulated Other Comprehensive

 

Total Stockholders'

 

 

6


 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Deficit

 

 

Loss

 

(Deficit)

 

Balance at January 1, 2021

 

 

35,714,282

 

 

$

47,173,259

 

 

 

 

 

$

 

 

 

1,250,000

 

 

$

13

 

 

$

69,330