adr-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_________________

FORM 10-Q

_________________

(Mark One)


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

For the quarterly period ended March 31, 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: 001-40947

_________________

LianBio

(Exact Name of Registrant as Specified in its Charter)

_________________


Cayman Islands			98-1594670
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

103 Carnegie Center Drive, Suite 309 Princeton, NJ			08540
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (609) 486-2308

_________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange
on which registered

American depositary shares, each representing 1 ordinary share, $0.000017100448 par value per share

LIAN

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, 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. x

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 May 10, 2022, 108,275,458 ordinary shares of the registrant, par value $0.000017100448 per share, were outstanding, of which 28,853,178 ordinary shares were held in the form of American Depositary Shares.

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		Page
PART I.	FINANCIAL INFORMATION	5
ITEM 1.	Financial Statements (Unaudited)	5
	Consolidated Balance Sheets	5
	Consolidated Statements of Operations and Comprehensive Loss	6
	Consolidated Statements of Redeemable Convertible Preferred Shares and Shareholders’ Equity (Deficit)	7
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements	9
ITEM 2 .	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	27
ITEM 4.	Controls and Procedures	27
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	30
ITEM 3.	Defaults Upon Senior Securities	30
ITEM 4.	Mine Safety Disclosures	30
ITEM 5.	Other Information	31
ITEM 6 .	Exhibits	31
Signatures		32

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, about us and our industry that involve substantial risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. 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, prospects, plans, objectives of management and expected growth, are forward-looking statements. These statements are based on our current beliefs, expectations and assumptions regarding our intentions, beliefs or current expectations concerning, among other things, the future of our business, future plans and strategies, our operational results and other future conditions. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Forward-looking statements can be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “seek,” “target,” “will,” “would,” “could,” “should,” “continue,” “contemplate” and other similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:

•our ability to successfully develop, gain regulatory approval for and launch commercial products in Greater China and other Asian markets;

•our ability to deliver innovative therapeutic solutions to patients and become a leading biopharmaceutical company in Greater China, including Mainland China, Hong Kong, Taiwan and Macau, and other Asian markets;

•our plans and ability to leverage data generated in our partners’ global registrational trials and clinical development programs to obtain regulatory approval for and bring our current product candidates to market in our licensed territories, and our plans to maximize patient reach for each of our product candidates;

•our partners’ announced plans and expectations with respect to the success, cost and timing of their product development activities, preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the timing of expected review from regulatory authorities and the period during which the results of the trials are expected to become available;

•our ability to expand our pipeline through the continued strategic in-licensing of innovative and complementary product candidates with the potential to become the new standard of care in Greater China and other Asian markets;

•our ability to successfully establish an international infrastructure, including by building a focused salesforce in China and leveraging the commercial infrastructure we create to benefit our other assets;

•our ability to establish and maintain relationships and collaborations with investors and our current and any future licensing partners that will contribute to our success in sourcing value and creating partnerships to enable us to build out a broad and clinically validated pipeline;

•our ability to design, initiate and complete any clinical trials to advance our current product candidates, including mavacamten, TP-03, NBTXR3, infigratinib, BBP-398, LYR-210, omilancor, NX-13 and sisunatovir, as well as any future product candidates, towards regulatory approval in China and our other licensed territories;

•our ability to conduct, and the timing of and costs related to, our product development activities, including any preclinical studies and related clinical trials in Greater China and other Asian markets of our current and any future product candidates, and our ability to obtain, and the timing of and costs related to, potential regulatory approval of such product candidates in Greater China and other Asian markets;

•our plans to pursue the development of certain product candidates for additional treatment indications;

•our ability to successfully utilize the data we may generate from any clinical trials we conduct in Greater China or other territories, including in conjunction with data from clinical trials conducted by our partners, to seek regulatory approval in Greater China and other Asian markets;

•our plans and ability to join our current and future partners’ clinical and registrational trials and our plans and ability to initiate and complete our standalone clinical and registrational trials;

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•our ability to design and implement the development strategies for our product candidates in each of our licensed territories and, where applicable, our ability to design and implement global development strategies for our product candidates in new indications in connection with our local development strategies;

•the potential for certain of our current and future product candidates to have more benign safety profiles or result in differentiated safety profiles than currently available therapeutic options;

•the size, composition and growth potential of the patient populations and markets we intend to target with our product candidates and our ability to develop and commercialize product candidates to address those patient populations and markets;

•our ability to successfully procure from our partners or other third parties, as applicable, sufficient supply of our product candidates for any preclinical studies, clinical trials or commercial use, if approved;

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

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

•our ability to attract and retain key scientific or management personnel;

•the impact of laws and regulations and of any legal and regulatory developments in our licensed territories or internationally;

•our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates;

•our ability to license intellectual property relating to our product candidates and to comply with our existing license and collaboration agreements;

•our reliance on third parties to conduct product development, manufacturing and other services, and any agreements we have or into which we may enter with such parties in connection with the commercialization of our product candidates and any other approved product;

•our expectations regarding the time during which we will be an emerging growth company or smaller reporting company;

•the direct and indirect impact of the COVID-19 pandemic on our business, operations (including clinical trials) and the markets and communities in which we and our partners, collaborators and vendors operate;

•our estimates of our expenses, capital requirements and needs for additional financing; and

•other risks and uncertainties, including those listed under the caption “Risk Factors”.

Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution investors that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods.

Given these risks and uncertainties, investors are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this Quarterly Report on Form 10-Q speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data. Investors should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Unless the context requires otherwise, references in this report to the “Company,” “LianBio,” “we,” “us” and “our” refer to LianBio and its consolidated subsidiaries.

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PART I-FINANCIAL INFORMATION

Item 1. Financial Statements

LianBio

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)


	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	139,857	$	228,182
Marketable securities	229,278		155,067
Related party receivable	2,062		—
Prepaid expenses and other current assets	8,973		10,354
Other receivable	5,966		6,044
Total current assets	386,136		399,647
Restricted cash, non-current	20,000		20,000
Property and equipment, net	2,923		1,882
Operating lease right-of-use assets	4,370		4,763
Other non-current assets	50		51
Total assets	$	413,479	$	426,343
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	7,927	$	3,231
Accrued expenses	14,874		9,976
Current portion of operating lease liabilities	1,374		1,125

Other current liabilities	979		760
Total current liabilities	25,154		15,092
Operating lease liabilities	3,345		3,709
Other liabilities	207		206
Nonrefundable research deposit	20,000		20,000
Total liabilities	48,706		39,007
Commitments and contingencies (Note 8)
Shareholders’ equity (deficit):
Ordinary shares, $0.000017100448 par value. Authorized 2,923,900,005 shares as of March 31, 2022; 107,275,458 shares issued and outstanding at March 31, 2022; Authorized 2,923,900,005 shares as of December 31, 2021; 107,275,458 shares issued and outstanding at December 31, 2021	2		2
Additional paid-in capital	719,648		713,269
Accumulated other comprehensive (loss) income	(690)		526
Accumulated deficit	(387,961)		(360,235)
Total LianBio shareholders’ equity	330,999		353,562
Non-controlling interest	33,774		33,774
Total shareholders’ equity	364,773		387,336
Total liabilities and shareholders’ equity	$	413,479	$	426,343

See accompanying notes to the consolidated financial statements

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LianBio

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended March 31, 2022		Three Months Ended March 31, 2021



Operating expenses:

Research and development	$	12,329	$	53,353
General and administrative	16,088		7,146
Total operating expenses	28,417		60,499
Loss from operations	(28,417)		(60,499)
Other income (expense):
Interest income	280		33
Other income (expense), net	417		(124)
Net loss before income taxes	(27,720)		(60,590)
Income taxes	6		975
Net loss	(27,726)		(61,565)
Other comprehensive (loss) income:
Foreign currency translation (loss) income, net of tax	(393)		8
Unrealized loss on marketable securities, net of tax	(823)		—
Comprehensive loss	$	(28,942)	$	(61,557)
Net loss per share attributable to ordinary shareholders, basic and diluted	$	(0.26)	$	(3.01)
Weighted-average shares outstanding used in computing net loss per share attributable to ordinary shareholders, basic and diluted	107,275,458		20,477,338

See accompanying notes to the consolidated financial statements

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LianBio

Consolidated Statements of Redeemable Convertible Preferred Shares and Shareholders’ Equity (Deficit)

(In thousands, except share amounts)

(Unaudited)


	Redeemable Convertible Preferred Shares			Ordinary Shares			Additional Paid in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total LianBio Shareholders’ Equity		Non- Controlling Interest		Total Shareholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount
Balance, December 31, 2021	—	$	—	107,275,458	$	2	$	713,269	$	526	$	(360,235)	$	353,562	$	33,774	$	387,336
Share-based compensation expense	—	—		—	—		4,669		—		—		4,669		—		4,669
Receivable from related party	—	—		—	—		1,710		—		—		1,710		—		1,710
Net Loss	—	—		—	—		—		—		(27,726)		(27,726)		—		(27,726)
Comprehensive Loss	—	—		—	—		—		(1,216)		—		(1,216)		—		(1,216)
Balance, March 31, 2022	—	$	—	107,275,458	$	2	$	719,648	$	(690)	$	(387,961)	$	330,999	$	33,774	$	364,773


	Redeemable Convertible Preferred Shares			Ordinary Shares			Additional Paid in Capital		Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Total LianBio Shareholders’ Equity (Deficit)		Non- Controlling Interest		Total Shareholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount
Balance, December 31, 2020	10,971,231	$	349,789	20,477,338	$	—	$	31,132	$	(40)	$	(163,935)	$	(132,843)	$	34,773	$	(98,070)
Share-based compensation expense	—	—		—	—		1,674		—		—		1,674		—		1,674
Issuance of Series A Preferred Shares at $56.66, net of issuance costs	52,947	2,940		—	—		—		—		—		—		—		—
Warrants issued in license agreement	—	—		—	—		—		—		—		—		9,415		9,415
Net Loss	—	—		—	—		—		—		(61,565)		(61,565)		—		(61,565)
Comprehensive Income	—	—		—	—		—		8		—		8		—		8
Balance, March 31, 2021	11,024,178	$	352,729	20,477,338	$	—	$	32,806	$	(32)	$	(225,500)	$	(192,726)	$	44,188	$	(148,538)

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LianBio

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Three Months Ended March 31, 2022		Three Months Ended March 31, 2021
Net loss	$	(27,726)	$	(61,565)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash share consideration, issued in acquisition of IPR&D	—		9,415
Non-cash operating lease expense (benefit)	277		(20)
Depreciation expense	271		66
Share based compensation expense	4,669		1,674
Amortization of discounts on investments, net	(44)		—
Unrealized foreign currency transaction gain, net	(294)		(66)
Changes in operating assets and liabilities:


Increase in prepaid expenses and other current assets	1,460		173
Decrease in other receivable	—		20,000
Increase in related party receivable	(352)		—

Increase (decrease) in accounts payable	3,783		(1,171)
Increase in accrued expenses	4,739		28,654
Increase in other current liabilities	116		929

Net cash used in operating activities	(13,101)		(1,911)
Cash flows from investing activities:
Purchase of property and equipment	(344)		(29)
Purchase of marketable securities	(93,364)		—
Sales and redemption of marketable securities	18,375		—
Net cash used for investing activities	(75,333)		(29)
Cash flows from financing activities:

Proceeds from issuance of redeemable convertible preferred shares	—		3,000
Issuance costs related to redeemable convertible preferred shares	—		(60)
Net cash provided by financing activities	—		2,940
Effect of exchange rate changes on cash and cash equivalents	109		(82)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(88,325)	$	918
Cash and cash equivalents, and restricted cash—beginning of period	248,182		254,350
Cash and cash equivalents, and restricted cash—ending of period	$	159,857	$	255,268
Cash and cash equivalents—end of period	$	139,857	$	235,268
Restricted cash—end of period	$	20,000	$	20,000
Cash and cash equivalents, and restricted cash—ending of period	$	159,857	$	255,268
Supplemental disclosure of non-cash operating activities:
Related party receivable	$	1,710	$	—
Issuance costs in accounts payable and other accrued liabilities	$	630	$	314
Purchase of property and equipment in accounts payable	$	963	$	—

See accompanying notes to the consolidated financial statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular Dollars in Thousands, Except Share and per Share Data)

(Unaudited)

1. Nature of Business

LianBio (“LianBio” or the “Company”) is a global, science-driven biopharmaceutical company dedicated to developing and commercializing innovative medicines for patients with unmet medical needs, with an initial focus on in-licensing assets for Greater China and other Asian markets.

The Company was incorporated in the Cayman Islands in July 2019 and maintains its Chinese headquarters in Shanghai, China. The

SEC Form 10-Q filed by LianBio