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 March 31, 2022


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

For the transition period from to

Commission File No. 001-38535

Aptinyx Inc.

(Exact name of registrant as specified in its charter)


Delaware		47-4626057
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

909 Davis Street, Suite 600

Evanston, IL 60201

(847) 871-0377

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

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 $0.01 per share	APTX	The Nasdaq Global Select 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, 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 May 4, 2022 the registrant had 67,715,718 shares of common stock, $0.01 par value per share, outstanding.

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		Page
PART I.	FINANCIAL INFORMATION	5
Item 1.	Condensed Financial Statements (unaudited)	5
	Balance Sheets	5
	Statements of Operations	6
	Statements of Cash Flows	7
	Statements of Stockholders’ Equity	8
	Notes to Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
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	28
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
Signatures		31

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. 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 and objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” 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 NYX-2925, NYX-783, NYX-458, and any future product candidates we may develop, including statements regarding the timing of initiation, commencement, and completion of studies or trials and related preparatory work, and costs associated therewith, the period during which the results of the studies will become available, our research and development programs, and our ability to demonstrate safety and efficacy of our product candidates to the satisfaction of applicable regulatory authorities;

●

the impacts of the current COVID-19 pandemic on our continuing operations, clinical development plans, including the timing of initiation, recommencement and completion of studies or trials, financial forecasts and expectations, and other matters related to our business and operations;

●

the existence or absence of side effects or other properties relating to our product candidates that could delay or prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences following any potential marketing approval;

●

the potential for our identified research priorities to advance our technologies;

●

our ability to establish or maintain future collaborations or strategic relationships or obtain additional funding in connection with these relationships;

●

our ability to obtain and maintain regulatory approval of our product candidates, NYX-2925, NYX-783, NYX-458, and any other future product candidates, and any statements regarding the label of an approved product candidate, including any restrictions, limitations, and/or warnings therein;

●

our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering NYX-2925, NYX-783, NYX-458, and any additional product candidates we may develop, and any statements as to whether we do or do not infringe, misappropriate, or otherwise violate any third-party intellectual property rights;

●

our ability and the potential to successfully manufacture our product candidates for clinical studies and for commercial use, if approved;

●

our ability to commercialize our products in light of the intellectual property rights of others;

●

our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates;

●

our plans to research, develop, and commercialize our product candidates;

●

our ability to retain and attract collaborators with research, development, regulatory, and commercialization expertise;

●

the size and growth potential of the markets for our product candidates and our ability to serve those markets;

●

the rate and degree of market acceptance and clinical utility of NYX-2925, NYX-783, NYX-458, and any future product candidates we may develop, if approved;

●

the pricing and reimbursement of NYX-2925, NYX-783, NYX-458, and any future product candidates we may develop, if approved;

●

regulatory developments in the United States and foreign countries;

●

our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

●

the success of competing therapies that are or may become available;

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●

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

●

the accuracy of our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing;

●

our financial performance;

●

our expectations related to the use of our cash reserves;

●

the impact of laws and regulations, including, without limitation, recently enacted tax reform legislation;

●

our expectations regarding the time during which we will be an “emerging growth company” under the Jumpstart Our Business Startups Act;

●

our use of proceeds from our debt financing and our initial and follow-on public offerings; and

●

other risks and uncertainties, including those listed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, or Annual Report.

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. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q and our Annual Report filed with the Securities and Exchange Commission, or the SEC, on March 23, 2022, particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or into which we may enter.

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed or incorporated by reference as exhibits hereto completely and with the understanding that our actual future results may be materially different from what we expect. 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 law.

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PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

Aptinyx Inc.

Condensed Balance Sheets

(unaudited)

(in thousands, except per share data)


	March 31,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	100,160	$	106,124
Restricted cash		197		197
Prepaid expenses and other current assets		6,169		8,422
Total current assets		106,526		114,743
Property and equipment, net		128		185
Total assets	$	106,654	$	114,928
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,752	$	622
Accrued expenses and other current liabilities		2,985		5,064
Total current liabilities		4,737		5,686
Term loan, non-current		24,292		14,155
Other long-term liabilities		140		331
Total liabilities	$	29,169	$	20,172
Commitments and contingencies (see Note 12)
Stockholders’ equity:
Preferred stock, $0.01 par value, 10,000 shares authorized and no shares issued and outstanding as of March 31, 2022 and December 31, 2021		—		—
Common stock, $0.01 par value, 150,000 shares authorized as of March 31, 2022 and December 31, 2021, 67,716 issued and outstanding as of March 31, 2022 and December 31, 2021		677		677
Additional paid-in capital		384,522		381,966
Accumulated deficit		(307,714)		(287,887)
Total stockholders’ equity	$	77,485	$	94,756
Total liabilities and stockholders’ equity	$	106,654	$	114,928

See accompanying notes to these unaudited condensed financial statements.

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Aptinyx Inc.

Condensed Statements of Operations

(unaudited)

(in thousands, except per share data)


	March 31,
	2022		2021
Revenues:
Collaboration revenue	$	—	$	1,000
Operating expenses:
Research and development		13,602		10,314
General and administrative		5,777		4,976
Total operating expenses		19,379		15,290
Loss from operations		(19,379)		(14,290)
Other (income) expense, net		(29)		(64)
Interest expense		477		—
Net loss and comprehensive loss	$	(19,827)	$	(14,226)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.29)	$	(0.22)
Weighted-average number of common shares outstanding, basic and diluted		67,716		66,043

See accompanying notes to these unaudited condensed financial statements.

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Aptinyx Inc.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)


	Three Months Ended
	March 31,
	2022		2021
Cash flows from operating activities:
Net loss	$	(19,827)	$	(14,226)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		38		412
Change in fair value of derivative liability associated with contingently issuable warrants		15		—
Non-cash interest expense related to term loan		139		—
Stock-based compensation expense		2,350		2,655
Changes in operating assets and liabilities:
Prepaid expenses and other assets		2,375		2,703
Accounts receivable		—		257
Accounts payable		1,075		405
Accrued expenses and other liabilities		(2,089)		(1,190)
Net cash used in operating activities		(15,924)		(8,984)
Cash flows from investing activities:
Proceeds from sale of property and equipment		—		90
Net cash provided by investing activities		—		90
Cash flows from financing activities:
Proceeds from stock options exercised		—		72
Repurchase of shares for tax withholdings		—		(7)
Proceeds from issuance of term loan, net of issuance costs paid to lender		10,000		—
Payment of debt issuance costs		(13)		—
Proceeds from at the market offering, net of sales commission		—		14,615
Payment of offering costs		(27)		(4)
Net cash provided by financing activities		9,960		14,676
Net (decrease) increase in cash, cash equivalents and restricted cash		(5,964)		5,782
Cash, cash equivalents and restricted cash, at beginning of period		106,321		141,299
Cash, cash equivalents and restricted cash, at end of period	$	100,357	$	147,081
Supplemental disclosure of cash flow information:
Cash paid for interest	$	298	$	—
Supplemental disclosure of non-cash investing and financing activities:
Deferred offering costs not yet paid	$	95	$	60
Debt issuance costs not yet paid		2		—
Issuance of warrants in connection with term loan financing		206		—

See accompanying notes to these unaudited condensed financial statements.

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Aptinyx Inc.

Condensed Statements of Stockholders’ Equity

(unaudited)

(in thousands)


				Additional				Total
	Common stock			paid-in		Accumulated		stockholders’
	Shares	Amount		capital		deficit		equity
Balance at December 31, 2020	63,257	$	633	$	358,277	$	(213,001)	$	145,909
Issuance of common stock upon vesting of restricted stock	5		—		—		—		—
Repurchase of shares for tax withholdings	(2)		—		(7)		—		(7)
Stock-based compensation	—		—		2,655		—		2,655
Issuance of common stock upon at the market offering , net of sales commissions and other offering costs of $529	3,630		36		14,502		—		14,538
Issuance of common stock upon exercise of stock options	40		—		72		—		72
Net loss	—		—		—		(14,226)		(14,226)
Balance at March 31, 2021	66,930	$	669	$	375,499	$	(227,227)	$	148,941

Balance at December 31, 2021	67,716	$	677	$	381,966	$	(287,887)	$	94,756
Stock-based compensation	—		—		2,350		—		2,350
Issuance of warrants in connection with term loan financing	—		—		206		—		206
Net loss	—		—		—		(19,827)		(19,827)
Balance at March 31, 2022	67,716	$	677	$	384,522	$	(307,714)	$	77,485

See accompanying notes to the unaudited condensed financial statements.

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Aptinyx Inc.

Notes to Condensed Financial Statements

(unaudited)

1. Organization

Description of business

Aptinyx Inc. (the “Company” or “Aptinyx”) was incorporated in Delaware on June 24, 2015, and maintains its headquarters in Evanston, Illinois.

Aptinyx is a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel, proprietary, synthetic small molecules for the treatment of brain and nervous system disorders. Aptinyx has a platform for discovering proprietary compounds that work through a novel mechanism: modulation of N-methyl-D-aspartate receptors (“NMDAr”), which are vital to normal and effective brain and nervous system functions. This mechanism has applicability across numerous nervous system disorders.

Liquidity and capital resources

On July 1, 2019, the Company entered into a Sales Agreement (the “2019 Sales Agreement”) with Cowen and Company, LLC (“Cowen”) pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $24.0 million under an “at the market” offering program (the “2019 ATM Offering”). The 2019 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2019 ATM Offering. To date, the Company has sold an aggregate of 5,120,940 shares under the 2019 ATM Offering at a weighted-average price of $3.99 per share for net proceeds of $20.4 million after deducting sales commission and other offering expenses, including 3,629,458 shares for net proceeds of $14.5 million during the three months ended March 31, 2021.

On September 15, 2021, the Company entered into a Loan and Security agreement (the “Loan Agreement”) with K2 HealthVentures LLC (“Lender”). The Loan Agreement provides up to $50.0 million principal in term loans, $15.0 million of which was funded at the time the Company entered into the agreement and $10.0 million of which was funded on March 14, 2022. See Note 7 for additional details regarding the Loan Agreement.

On September 16, 2021, the Company entered into a Sales Agreement (the “2021 Sales Agreement”) with Cowen pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $50.0 million under an “at the market” offering program (the “2021 ATM Offering”) and which supersedes the 2019 Sales Agreement and 2019 ATM Offering. The 2021 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2021 ATM Offering. As of the date of these financial statements, no shares of common stock have been issued and sold pursuant to the 2021 Sales Agreement.

On March 24, 2022, the Company entered into an amendment to the 2021 Sales Agreement (the “2022 Sales Agreement”) pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $75.0 million under an “at the market” offering program (the “2022 ATM Offering”) and which supersedes the 2021 Sales Agreement and 2021 ATM Offering. The 2022 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2022 ATM Offering. As of the date of these financial statements, no shares of common stock have been issued and sold pursuant to the 2022 Sales Agreement.

As of March 31, 2022, the Company had cash and cash equivalents of $100.2 million, which the Company believes will be sufficient to funds its planned operations for a period of at least twelve months from the date of issuance of these condensed financial statements.

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2.Summary of significant accounting policies

Basis of presentation

The condensed financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. The accompanying condensed financial statements reflect all adjustments consisting of normal, recurring adjustments that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Accordingly, these condensed financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”) filed with the SEC on March 23, 2022.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

Use of estimates

The condensed financial statements are prepared in conformity with GAAP. This process requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Risk and uncertainties

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of: the impact of COVID-19 on future clinical study results, the scope, timing, rate of progress, and expense of the Company’s ongoing as well as any additional preclinical studies, clinical studies, and other research and development activities, clinical study enrollment rate or design, the manufacturing of the Company’s product candidates, significant and changing government regulation, and the timing and receipt of any regulatory approvals.

Significant accounting policies

The Company’s significant accounting policies are described herein and in Note 3, “Summary of significant accounting policies,” in the Annual Report. There have been no material changes to the significant accounting policies during the three months ended March 31, 2022.

Recently issued accounting pronouncement

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), as amended, which requires a lessee to recognize assets and liabilities on the balance sheet for operating leases and changes many key definitions, including the definition of a lease. The new standard includes a short-term lease exception for leases with a term of 12 months or less, as part of which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous guidance. The new standard became effective for the Company for annual reporting periods beginning after December 15, 2021, and interim periods within

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fiscal years beginning after December 15, 2022, and early adoption is permitted. The Company anticipates that the adoption of this standard will have an impact on its balance sheet due to the recognition of right-of-use assets and lease liabilities; however, the Company is currently evaluating the impact that the adoption of ASU 2016-02 may have on its condensed financial statements.

3. Supplemental financial information

Cash, cash equivalents and restricted cash

Cash and cash equivalents consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the condensed statements of cash flows (in thousands).

SEC Form 10-Q filed by Aptinyx Inc.