rna-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________________________

FORM 10-Q

_____________________________________________________


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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024


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

Commission File Number 001-39321

_____________________________________________________

Avidity Biosciences, Inc.

(Exact name of registrant as specified in its charter)

_____________________________________________________


Delaware						46-1336960
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

10578 Science Center Drive, Suite 125 San Diego, California						92121
(Address of principal executive offices)						(Zip Code)

(858) 401-7900

(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, $0.0001 par value	RNA	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 x 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 x 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	x	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 o No x

As of April 22, 2024, the registrant had 95,636,748 shares of common stock outstanding.


PART I – FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements (unaudited)	3
	Condensed Balance Sheets (unaudited)	3
	Condensed Statements of Operations and Comprehensive Loss (unaudited)	4
	Condensed Statements of Stockholders' Equity (unaudited)	5
	Condensed Statements of Cash Flows (unaudited)	6
	Notes to Condensed Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27

SIGNATURES		28


	March 31, 2024		December 31, 2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	471,400	$	185,082
Marketable securities	444,473		410,269
Prepaid and other assets	18,601		15,956
Total current assets	934,474		611,307
Property and equipment, net	8,655		8,381
Restricted cash	295		295
Right-of-use assets	7,625		8,271
Other assets	425		301
Total assets	$	951,474	$	628,555
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	37,330	$	34,341
Accrued compensation	7,796		14,335
Lease liabilities, current portion	3,726		3,639
Deferred revenue, current portion	26,103		28,365
Total current liabilities	74,955		80,680
Lease liabilities, net of current portion	5,421		6,213
Deferred revenue, net of current portion	40,199		40,898
Total liabilities	120,575		127,791
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock, $0.0001 par value; authorized shares – 400,000; issued and outstanding shares – 95,594 and 79,275 at March 31, 2024 and December 31, 2023, respectively	10		8
Additional paid-in capital	1,470,972		1,071,395
Accumulated other comprehensive income (loss)	(464)		125
Accumulated deficit	(639,619)		(570,764)
Total stockholders’ equity	830,899		500,764
Total liabilities and stockholders’ equity	$	951,474	$	628,555


	Three Months Ended March 31,
	2024		2023
Collaboration revenue	$	3,543	$	2,233
Operating expenses:
Research and development	66,832		47,765
General and administrative	13,898		12,064
Total operating expenses	80,730		59,829
Loss from operations	(77,187)		(57,596)
Other income (expense):
Interest income	8,433		5,516
Other expense	(101)		(314)
Total other income	8,332		5,202
Net loss	$	(68,855)	$	(52,394)
Net loss per share, basic and diluted	$	(0.79)	$	(0.74)
Weighted-average shares outstanding, basic and diluted	87,212		70,433
Other comprehensive income (loss):
Net unrealized gains (losses) on marketable securities	(589)		1,169
Comprehensive loss	$	(69,444)	$	(51,225)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2023	79,275	$	8	$	1,071,395	$	125	$	(570,764)	$	500,764
Issuance of common stock upon exercise of stock options	541	—		3,896		—		—		3,896
Issuance of common stock in public offering, net of issuance costs of $143	418	—		5,594		—		—		5,594
Issuance of common stock in a private placement, net of issuance costs of $12,821	15,225	2		238,386		—		—		238,388
Issuance of pre-funded warrants in a private placement, net of issuance costs of $7,605	—	—		141,395		—		—		141,395
Issuance of common stock in connection with vesting of restricted stock units	135	—		—		—		—		—
Stock-based compensation	—	—		10,306		—		—		10,306
Net loss	—	—		—		—		(68,855)		(68,855)
Other comprehensive loss	—	—		—		(589)		—		(589)
Balance at March 31, 2024	95,594	$	10	$	1,470,972	$	(464)	$	(639,619)	$	830,899















Balance at December 31, 2022	69,768	$	7	$	939,310	$	(2,698)	$	(358,544)	$	578,075
Issuance of common stock upon exercise of stock options	102	—		520		—		—		520
Issuance of common stock in public offerings, net of issuance costs of $408	943	—		22,441		—		—		22,441
Stock-based compensation	—	—		9,104		—		—		9,104
Net loss	—	—		—		—		(52,394)		(52,394)
Other comprehensive income	—	—		—		1,169		—		1,169
Balance at March 31, 2023	70,813	$	7	$	971,375	$	(1,529)	$	(410,938)	$	558,915


	March 31,
	2024	2023
Common stock options	13,485	10,973
Restricted stock units	1,415	607
Performance stock units	750	—
Employee Stock Purchase Plan shares pending issuance	85	44
Total	15,735	11,624


			Fair Value Measurements Using
As of March 31, 2024	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)


Marketable securities:
U.S. Treasury securities	$	440,315	$	440,315	$	—	$	—

Negotiable certificates of deposit	4,158		—		4,158		—

Total	$	444,473	$	440,315	$	4,158	$	—


			Fair Value Measurements Using
As of December 31, 2023	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)


Marketable securities:
U.S. Treasury securities	$	399,890	$	399,890	$	—	$	—
U.S. Government agency securities	4,998		—		4,998		—
Negotiable certificates of deposit	5,381		—		5,381		—

Total	$	410,269	$	399,890	$	10,379	$	—


As of March 31, 2024	Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. Treasury securities	1 or less	$	389,180	$	26	$	(518)	$	388,688

Negotiable certificates of deposit	1 or less	4,165		—		(7)		4,158

U.S. Treasury securities	1 - 2	51,592		69		(34)		51,627


Total		$	444,937	$	95	$	(559)	$	444,473


	Less Than 12 Months				12 Months or Greater				Total
As of March 31, 2024	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities	$	332,907	$	552	$	—	$	—	$	332,907	$	552

Negotiable certificates of deposit	2,204		1		1,955		6		4,159		7
Total	$	335,111	$	553	$	1,955	$	6	$	337,066	$	559


Balance at December 31, 2023	$	69,263
Revenue recognized that was included in the balance at the beginning of the period	(2,961)
Balance at March 31, 2024	$	66,302


	March 31, 2024		December 31, 2023
Laboratory equipment	$	12,008	$	11,208
Computers and software	242		127
Office furniture and equipment	1,979		1,979
Leasehold improvements	288		288
Property and equipment, gross	14,517		13,602
Less accumulated depreciation	(5,862)		(5,221)
Total property and equipment, net	$	8,655	$	8,381


	Number of Options	Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2023	12,495	$	14.91
Granted	1,767	10.37
Exercised	(541)	7.21
Forfeited/expired	(236)	16.83
Outstanding at March 31, 2024	13,485	$	14.59


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested at December 31, 2023	758	$	18.73
Granted	845	10.53
Vested	(135)	22.42
Forfeited	(53)	15.69
Unvested at March 31, 2024	1,415	$	13.60


	Options
	Three Months Ended March 31,
	2024	2023
Risk-free interest rate	3.9% - 4.3%	3.5% - 4.0%
Expected volatility	79% - 80%	81% - 82%
Expected term (in years)	6.0 - 6.1	6.0 - 6.1
Expected dividend yield	—%	—%


Balance at December 31, 2022	$	6,276
Revenue recognized that was included in the balance at the beginning of the period	(1,219)
Balance at March 31, 2023	$	5,057


	March 31, 2024		December 31, 2023
Accounts receivable	$	1,575	$	1,105
Prepaid assets	9,561		7,333
Interest receivable and other assets	7,465		7,518
Total prepaid and other assets	$	18,601	$	15,956


	March 31, 2024		December 31, 2023
Accounts payable	$	2,349	$	8,809
Accrued non-clinical liabilities	28,921		19,535
Accrued clinical liabilities	6,060		5,997
Total accounts payable and accrued liabilities	$	37,330	$	34,341


	Three Months Ended March 31,				Change
	2024		2023
Revenue	$	3,543	$	2,233	$	1,310
Research and development expenses	66,832		47,765		19,067
General and administrative expenses	13,898		12,064		1,834
Other income	8,332		5,202		3,130


	Avidity Biosciences, Inc.

Date: May 9, 2024	By:	/s/ Sarah Boyce
		Sarah Boyce President, Chief Executive Officer and Director (Principal Executive Officer)

Date: May 9, 2024	By:	/s/ Michael F. MacLean
		Michael F. MacLean Chief Financial and Chief Business Officer (Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Avidity Biosciences Inc.