arvn-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________

FORM 10-Q

__________________________________________

(Mark One)


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

For the quarterly period ended June 30, 2022


o			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: 001-38672

__________________________________________

ARVINAS, INC.

(Exact name of registrant as specified in its Charter)

__________________________________________


Delaware			47-2566120
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
5 Science Park 395 Winchester Ave. New Haven, Connecticut			06511
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (203) 535-1456

__________________________________________

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 $0.001 per share

ARVN

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 ý No o

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 ý No o

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	ý	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

As of July 29, 2022, the registrant had 53,205,299 shares of common stock, $0.001 par value per share, outstanding.

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		Page
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated 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	30
Item 4.	Controls and Procedures	30
PART II.	OTHER INFORMATION	32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 6.	Exhibits	33
Signatures		34

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FORWARD-LOOKING STATEMENTS

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 revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “target,” “potential,” “goals,” “will,” “would,” “could,” “should,” “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:

•the initiation, timing, progress and results of our current and future clinical trials of bavdegalutamide, ARV-471 and ARV-766, including statements regarding the period during which the results of the clinical trials will become available;

•the timing of, and our ability to obtain, marketing approval of bavdegalutamide, ARV-471 and ARV-766, and the ability of bavdegalutamide, ARV-471, ARV-766 and our other product candidates to meet existing or future regulatory standards;

•the potential achievement of milestones and receipt of payments under our collaborations, including our collaboration with Pfizer Inc., or Pfizer, entered into in July 2021, or the ARV-471 Collaboration;

•our plans to pursue research and development of other product candidates;

•the potential advantages of our platform technology and our product candidates;

•the extent to which our scientific approach and platform technology may potentially address a broad range of diseases and disease targets;

•the potential receipt of revenue from future sales of our product candidates;

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

•our estimates regarding the potential market opportunity for our product candidates;

•our sales, marketing and distribution capabilities and strategy;

•our ability to establish and maintain arrangements for manufacture of our product candidates;

•our ability to enter into additional collaborations with third parties;

•our intellectual property position;

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

•the impact of COVID-19 on our business and operations;

•the impact of government laws and regulations; and

•our competitive position.

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 our Annual Report on Form 10-K for the year ended December 31, 2021, filed on February 28, 2022, and this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” sections, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do

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not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments 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. We do not assume any obligation to update any forward-looking statements except as required by applicable law.

In this Quarterly Report on Form 10-Q, unless otherwise stated or the context otherwise requires, references to the “Company,” “Arvinas,” “we,” “us,” and “our,” except where the context requires otherwise, refer to Arvinas, Inc. and its consolidated subsidiaries, or any one or more of them as the context may require, and “our board of directors” refers to the board of directors of Arvinas, Inc.

We use Arvinas, the Arvinas logo, and other marks as trademarks in the United States and other countries. This Quarterly Report on Form 10-Q contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report on Form 10-Q, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity.

iii

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

ARVINAS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (unaudited)


(dollars and shares in millions)	June 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	93.2	$	108.3
Restricted cash	4.5		4.5
Marketable securities	1,250.0		1,394.3
Accounts receivable	1.4		15.0
Other receivables	6.7		10.7
Prepaid expenses and other current assets	20.6		19.7
Total current assets	1,376.4		1,552.5
Property, equipment and leasehold improvements, net	13.6		12.7
Operating lease right of use assets	5.3		3.9
Collaboration contract asset and other assets	11.7		12.5
Total assets	$	1,407.0	$	1,581.6
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities	$	42.1	$	54.4
Deferred revenue	194.4		206.2
Current portion of operating lease liability	1.7		1.1
Total current liabilities	238.2		261.7
Deferred revenue	493.6		534.3
Long term debt	1.0		1.0
Operating lease liability	3.6		2.9
Total liabilities	736.4		799.9
Commitments and Contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 53.2 and 53.0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	0.1		—
Accumulated deficit	(816.3)		(682.9)
Additional paid-in capital	1,508.8		1,469.2
Accumulated other comprehensive loss	(22.0)		(4.6)
Total stockholders’ equity	670.6		781.7
Total liabilities and stockholders’ equity	$	1,407.0	$	1,581.6

See accompanying notes to the condensed consolidated financial statements

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ARVINAS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)


(dollars and shares in millions, except per share amounts)	For the Three Months Ended June 30,				For the Six Months Ended June 30,
Condensed Consolidated Statements of Operations	2022		2021		2022		2021
Revenue	$	31.3	$	5.5	$	55.5	$	11.1
Operating expenses:
Research and development	75.3		43.0		139.2		77.9
General and administrative	24.3		14.4		44.5		26.7
Total operating expenses	99.6		57.4		183.7		104.6
Loss from operations	(68.3)		(51.9)		(128.2)		(93.5)
Other income (expenses)
Other (expense) income, net	(0.1)		1.2		(0.2)		1.4
Interest income, net	1.8		0.4		2.9		0.8

Total other income	1.7		1.6		2.7		2.2
Net loss before income taxes	(66.6)		(50.3)		(125.5)		(91.3)
Income tax expense	(3.4)		—		(7.9)		—
Net loss	$	(70.0)	$	(50.3)	$	(133.4)	$	(91.3)
Net loss per common share, basic and diluted	$	(1.32)	$	(1.03)	$	(2.51)	$	(1.87)
Weighted average common shares outstanding, basic and diluted	53.2		48.9		53.1		48.7


(dollars in millions)	For the Three Months Ended June 30,				For the Six Months Ended June 30,
Condensed Consolidated Statements of Comprehensive Loss	2022		2021		2022		2021
Net loss	$	(70.0)	$	(50.3)	$	(133.4)	$	(91.3)
Other comprehensive loss:
Unrealized loss on available-for-sale securities	(3.3)		(0.2)		(17.4)		(1.0)
Comprehensive loss	$	(73.3)	$	(50.5)	$	(150.8)	$	(92.3)

See accompanying notes to the condensed consolidated financial statements

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ARVINAS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)


(dollars and shares in millions)	Common			Accumulated Deficit		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss) Income		Total Stockholders' Equity
For the Three Months Ended June 30, 2022 and 2021	Shares	Amount
Balance at March 31, 2022	53.1	$	—	$	(746.3)	$	1,488.3	$	(18.7)	$	723.3
Stock-based compensation	—	—		—		20.0		—		20.0
Net loss	—	—		(70.0)		—		—		(70.0)

Proceeds from exercise of stock options	0.1	0.1		—		0.5		—		0.6
Unrealized loss on available-for-sale securities	—	—		—		—		(3.3)		(3.3)
Balance at June 30, 2022	53.2	$	0.1	$	(816.3)	$	1,508.8	$	(22.0)	$	670.6
Balance at March 31, 2021	48.8	$	—	$	(532.9)	$	1,148.3	$	(0.2)	$	615.2
Stock-based compensation	—	—		—		14.6		—		14.6
Net loss	—	—		(50.3)		—		—		(50.3)
Restricted stock vesting	0.1	—		—		—		—		—
Proceeds from exercise of stock options	0.1	—		—		3.6		—		3.6
Unrealized loss on available-for-sale securities	—	—		—		—		(0.2)		(0.2)
Balance at June 30, 2021	49.0	$	—	$	(583.2)	$	1,166.5	$	(0.4)	$	582.9


(dollars and shares in millions)	Common			Accumulated Deficit		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
For the Six Months Ended June 30, 2022 and 2021	Shares	Amount
Balance at December 31, 2021	53.0	$	—	$	(682.9)	$	1,469.2	$	(4.6)	$	781.7
Stock-based compensation	—	—		—		36.6		—		36.6
Net loss	—	—		(133.4)		—		—		(133.4)

Proceeds from exercise of stock options	0.2	0.1		—		3.0		—		3.1
Unrealized loss on available-for -sale securities	—	—		—		—		(17.4)		(17.4)
Balance at June 30, 2022	53.2	$	0.1	$	(816.3)	$	1,508.8	$	(22.0)	$	670.6
Balance at December 31, 2020	48.5	$	—	$	(491.9)	$	1,133.5	$	0.6	$	642.2
Stock-based compensation	—	—		—		24.9		—		24.9
Net loss	—	—		(91.3)		—		—		(91.3)
Restricted stock vesting	0.1	—		—		—		—		—
Proceeds from exercise of stock options	0.4	—		—		8.1		—		8.1
Unrealized loss on available-for -sale securities	—	—		—		—		(1.0)		(1.0)
Balance at June 30, 2021	49.0	$	—	$	(583.2)	$	1,166.5	$	(0.4)	$	582.9

See accompanying notes to the condensed consolidated financial statements

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ARVINAS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (unaudited)


	For the Six Months Ended June 30,
(dollars in millions)	2022		2021
Cash flows from operating activities:
Net loss	$	(133.4)	$	(91.3)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	3.0		2.3
Net accretion of bond discounts/premiums	5.8		2.7
Forgiveness of debt income	—		(1.0)
Loss on sale of marketable securities	0.1		—
Amortization of right-of-use assets	1.0		0.6
Amortization of collaboration contract asset	0.8		—
Stock-based compensation	36.6		24.9
Changes in operating assets and liabilities:
Accounts receivable	13.6		1.0
Other receivables	4.0		—
Prepaid expenses and other current assets	(1.0)		(9.1)

Accounts payable and accrued liabilities	(12.7)		(7.8)
Operating lease liability	(1.0)		(0.6)
Deferred revenue	(52.5)		(8.1)
Net cash used in operating activities	(135.7)		(86.4)
Cash flows from investing activities:
Purchases of marketable securities	(469.1)		(538.0)
Maturities of marketable securities	555.9		82.6
Sales of marketable securities	34.3		—
Purchases of property, equipment and leasehold improvements	(3.5)		(1.5)
Net cash provided by (used in) investing activities	117.6		(456.9)
Cash flows from financing activities:


Proceeds from exercise of stock options	3.0		8.1
Net cash provided by financing activities	3.0		8.1
Net decrease in cash, cash equivalents and restricted cash	(15.1)		(535.2)
Cash, cash equivalents and restricted cash, beginning of the period	112.8		588.4
Cash, cash equivalents and restricted cash, end of the period	$	97.7

SEC Form 10-Q filed by Arvinas Inc.