adr-20230630

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 June 30, 2023


			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, par value $0.000017100448 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 August 7, 2023, 107,167,609 ordinary shares of the registrant, par value $0.000017100448 per share, were outstanding, of which 42,312,215 ordinary shares were held in the form of American Depositary Shares. This total number of ordinary shares and total number of ordinary shares held in the form of American Depositary Shares excludes 2,051,410 ordinary shares that are held by the depositary on reserve to satisfy obligations of the registrant under the registrant’s equity plans.


		Page
PART I.	FINANCIAL INFORMATION	6
ITEM 1.	Financial Statements (Unaudited)	6
	Consolidated Balance Sheets	6
	Consolidated Statements of Operations and Comprehensive Loss	7
	Consolidated Statements of Shareholders’ Equity	8
	Consolidated Statements of Cash Flows	9
	Notes to Consolidated Financial Statements	10
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	31
ITEM 4.	Controls and Procedures	31
PART II	OTHER INFORMATION	33
ITEM 1.	Legal Proceedings	33
ITEM 1A.	Risk Factors	33
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
ITEM 3.	Defaults upon Senior Securities	38
ITEM 4.	Mine Safety Disclosures	38
ITEM 5.	Other Information	38
ITEM 6.	Exhibits	40
Signatures		41


	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	104,059	$	79,221
Marketable securities	163,209		223,142

Prepaid expenses and other current assets	4,805		8,640
Other receivable	1,025		1,770
Total current assets	273,098		312,773
Restricted cash, non-current	69		73
Property and equipment, net	2,562		3,116
Operating lease right-of-use assets	3,049		3,978
Other non-current assets	20		20
Total assets	$	278,798	$	319,960
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,908	$	1,453
Accrued expenses	16,879		19,826
Current portion of operating lease liabilities	1,859		1,851

Other current liabilities	996		485
Total current liabilities	21,642		23,615
Operating lease liabilities	1,441		2,488
Other liabilities	210		210

Total liabilities	23,293		26,313
Commitments and contingencies (Note 8)
Shareholders’ equity:
Ordinary shares, $0.000017100448 par value. 2,923,900,005 shares authorized as of June 30, 2023; 107,167,609 shares issued and outstanding as of June 30, 2023; 2,923,900,005 shares authorized as of December 31, 2022; 107,043,924 shares issued and outstanding as of December 31, 2022	2		2
Additional paid-in capital	741,246		732,476
Accumulated other comprehensive loss	(3,326)		(2,080)
Accumulated deficit	(516,191)		(470,525)
Total LianBio shareholders’ equity	221,731		259,873
Non-controlling interest	33,774		33,774
Total shareholders’ equity	255,505		293,647
Total liabilities and shareholders’ equity	$	278,798	$	319,960


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022



Operating expenses:

Research and development	$	9,454	$	28,591	$	20,285	$	40,920
General and administrative	15,590		14,551		30,728		30,639
Total operating expenses	25,044		43,142		51,013		71,559
Loss from operations	(25,044)		(43,142)		(51,013)		(71,559)
Other income:
Interest income, net	2,754		553		5,160		833
Other income, net	869		203		825		620
Net loss before income taxes	(21,421)		(42,386)		(45,028)		(70,106)
Income taxes	200		5		638		11
Net loss	(21,621)		(42,391)		(45,666)		(70,117)
Other comprehensive income (loss):
Foreign currency translation loss, net of tax	(1,641)		(421)		(1,537)		(814)
Unrealized gain (loss) on marketable securities, net of tax	(154)		(291)		291		(1,114)
Comprehensive loss	$	(23,416)	$	(43,103)	$	(46,912)	$	(72,045)
Net loss per share attributable to ordinary shareholders, basic and diluted	$	(0.20)	$	(0.39)	$	(0.43)	$	(0.65)
Weighted-average shares outstanding used in computing net loss per share attributable to ordinary shareholders, basic and diluted	107,164,401		107,922,501		107,163,220		107,600,767


	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
Balance, December 31, 2022		107,043,924	$	2		$	732,476	$	(2,080)	$	(470,525)	$	259,873	$	33,774	$	293,647
Share-based compensation expense		—	—			4,276		—		—		4,276		—		4,276
Issuance of restricted stock units		120,251	—			—		—		—		—		—		—
Net loss		—	—			—		—		(24,045)		(24,045)		—		(24,045)
Comprehensive income		—	—			—		549		—		549		—		549
Balance, March 31, 2023		107,164,175	$	2		$	736,752	$	(1,531)	$	(494,570)	$	240,653	$	33,774	$	274,427
Share-based compensation expense		—	—			4,494		—		—		4,494		—		4,494
Issuance of restricted stock units		3,434	—			—		—		—		—		—		—
Net loss		—	—			—		—		(21,621)		(21,621)		—		(21,621)
Comprehensive loss		—	—			—		(1,795)		—		(1,795)		—		(1,795)
Balance, June 30, 2023		107,167,609	$	2		$	741,246	$	(3,326)	$	(516,191)	$	221,731	$	33,774	$	255,505


	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
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 Income		—	—			—		(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
Share-based compensation expense		—	—			4,528		—		—		4,528		—		4,528
Exercise of options		1,000,000	—			—		—		—		—		—		—
Exercise of warrants		78,373	—			—		—		—		—		—		—
Net loss		—	—			—		—		(42,391)		(42,391)		—		(42,391)
Comprehensive loss		—	—			—		(712)		—		(712)		—		(712)
Balance, June 30, 2022		108,353,831	$	2		$	724,176	$	(1,402)	$	(430,352)	$	292,424	$	33,774	$	326,198


	Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Net loss	$	(45,666)	$	(70,117)
Adjustments to reconcile net loss to net cash used in operating activities:

Non-cash operating lease expense (benefit)	—		430
Depreciation expense	658		409
Share based compensation expense	8,770		9,197
Amortization of discounts on investments, net	(2,360)		1
Unrealized foreign currency transaction (gain) loss, net	(1,261)		240
Changes in operating assets and liabilities:


Prepaid expenses and other current assets	3,710		3,130
Other receivable	745		(1,281)

Other non-current assets	—		8
Accounts payable	476		(1,957)
Accrued expenses	(2,198)		7,414
Other current liabilities	273		50
Operating lease assets and liabilities, net	(97)		(32)

Net cash used in operating activities	(36,950)		(52,508)
Cash flows from investing activities:
Purchase of property and equipment	(69)		(673)
Purchase of marketable securities	(87,806)		(126,138)
Sales and redemption of marketable securities	150,391		85,125
Net cash provided by (used for) investing activities	62,516		(41,686)
Cash flows from financing activities:

Proceeds from exercise of share options	—		1,710


Net cash provided by financing activities	—		1,710
Effect of exchange rate changes on cash and cash equivalents	(732)		(1,289)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	24,834	$	(93,773)
Cash and cash equivalents, and restricted cash—beginning of period	79,294		248,182
Cash and cash equivalents, and restricted cash—ending of period	$	104,128	$	154,409
Cash and cash equivalents—end of period	$	104,059	$	134,334
Restricted cash—end of period	$	69	$	20,075
Cash and cash equivalents, and restricted cash—ending of period	$	104,128	$	154,409
Supplemental disclosure of cash information
Cash paid for income taxes	$	3	$	343
Supplemental disclosure of non-cash operating activities:


Purchase of property and equipment in accounts payable	$	150	$	938


As of June 30, 2023 (in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Commercial paper	$	59,879	$	2	$	(55)	$	59,826

Government obligations & agency securities	103,878		—		(495)		103,383
Total	$	163,757	$	2	$	(550)	$	163,209


As of December 31, 2022 (in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Commercial paper	$	120,570	$	5	$	(313)	$	120,262
Corporate debt securities	14,146		—		(16)		14,130
Government obligations	89,265		4		(519)		88,750
Total	$	223,981	$	9	$	(848)	$	223,142


As of June 30, 2023 (in thousands)	Securities in an unrealized loss position less than 12 months				Securities in an unrealized loss position greater than 12 months				Total
	Unrealized losses		Fair Value		Unrealized losses		Fair Value		Unrealized losses		Fair Value
Commercial paper	$	(55)	$	45,394	$	—	$	—	$	(55)	$	45,394

Government obligations & agency securities	(424)		96,641		(71)		7,236		(495)		103,877
Total	$	(479)	$	142,035	$	(71)	$	7,236	$	(550)	$

SEC Form 10-Q filed by LianBio