prtk-20230331

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, 2023 or


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: 001-36066

____________________________________________________

PARATEK PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

____________________________________________________


Delaware			33-0960223
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

____________________________________________________

75 Park Plaza

Boston, MA 02116

(617) 807-6600

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

____________________________________________________

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	PRTK	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

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. o

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

As of April 30, 2023, there were 57,282,239 shares of the registrant's common stock, par value $0.001 per share, outstanding.

Table of Contents

TABLE OF CONTENTS


		Page
PART I FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	2

	Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 20 2 2	2

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2023 and 20 2 2	3

	Condensed Consolidated Statements of Cash Flows for the Th ree Months Ended March 31 , 202 3 and 20 2 2	4

	Condensed Consolidated Statements of Shareholders’ Equity (Deficit) for the Three Months Ended March 31, 2023 and 20 2 2	5

	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39

Item 4.	Controls and Procedures	39

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	41

Item 1A.	Risk Factors	41

Item 6.	Exhibits	42

SIGNATURES		44

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Paratek Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except for share and par value amounts)

(unaudited)


	March 31, 2023		December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	45,026	$	34,248
Restricted cash	125		125
Accounts receivable, net	36,891		74,657
Inventories, net	13,989		16,565
Other receivables	275		3,381
Prepaid and other current assets	14,708		7,866
Total current assets	111,014		136,842
Fixed assets, net	601		616
Goodwill	829		829
Right-of-use assets	1,639		1,782
Long-term inventories, net	35,590		31,314
Other long-term assets	1,155		1,155
Total assets	$	150,828	$	172,538
Liabilities and Stockholders’ Deficit
Current liabilities
Accounts payable	$	5,318	$	5,308
Accrued expenses	26,633		31,210
Other current liabilities	794		870
Total current liabilities	32,745		37,388
Long-term debt	257,695		256,946
Long-term lease liabilities	1,375		1,468
Accrued long-term compensation	45,636		45,325
Other liabilities	2,415		2,453
Total liabilities	$	339,866	$	343,580
Stockholders’ deficit
Preferred stock:
Undesignated preferred stock: $0.001 par value, 5,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock, $0.001 par value; 200,000,000 shares authorized; 57,282,239 shares issued and outstanding as of March 31, 2023; and 200,000,000 shares authorized; 56,651,559 shares issued and outstanding as of December 31, 2022	57		56
Additional paid-in capital	761,497		759,351

Accumulated deficit	(950,592)		(930,449)
Total stockholders’ deficit	(189,038)		(171,042)
Total liabilities and stockholders’ deficit	$	150,828	$	172,538

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

Paratek Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended March 31,
	2023		2022
Product revenue, net	$	26,213	$	19,918
Government contract service revenue	1,806		2,172
Government contract grant revenue	2,028		2,099
Collaboration and royalty revenue	1,189		672
Net revenue	$	31,236	$	24,861
Expenses:
Cost of product revenue	6,244		3,494
Research and development	7,308		7,478
Selling, general and administrative	33,489		27,602
Total operating expenses	47,041		38,574
Loss from operations	(15,805)		(13,713)
Other income and expenses:
Interest income	221		107
Interest expense	(4,476)		(4,479)
Other (losses) gains, net	(22)		175
Net loss before provision for income taxes	$	(20,082)	$	(17,910)
Provision for income taxes	(61)		—
Net loss	(20,143)		(17,910)
Other comprehensive (loss)
Unrealized (loss) on available-for-sale securities, net of tax	—		(171)
Comprehensive loss	$	(20,143)	$	(18,081)
Basic and diluted net loss per common share	$	(0.35)	$	(0.35)
Weighted average common stock outstanding
Basic	56,903,420		52,149,538
Diluted	56,903,420		52,149,538

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

Paratek Pharmaceuticals, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2023		2022
Operating activities
Net loss	$	(20,143)	$	(17,910)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion	47		144
Stock-based compensation expense	2,146		2,469
Noncash interest expense	1,029		1,521
Changes in operating assets and liabilities
Accounts receivable, other receivables, prepaid, and other current assets	34,030		4,234
Inventories	(1,699)		(6,900)
Operating lease right-of-use asset	143		221
Accounts payable and accrued expenses	(4,568)		(2,010)
Operating lease liability	(94)		(245)
Accrued long-term compensation	311		—
Other liabilities and other assets	(112)		(634)
Net cash provided (used) by operating activities	11,090		(19,110)
Investing activities
Purchase of fixed assets	(32)		(36)
Purchase of marketable securities	—		(15,160)
Net cash used in investing activities	(32)		(15,196)
Financing activities
Proceeds from sale of common stock, net of costs	—		3,091

Proceeds from the employee stock purchase plan and stock options	—		6
Principal payments on long-term debt	(280)		—
Net cash (used) provided by financing activities	(280)		3,097
Net increase (decrease) in cash, cash equivalents and restricted cash	10,778		(31,209)
Cash, cash equivalents and restricted cash at beginning of period	34,373		80,617
Cash, cash equivalents and restricted cash at end of period	$	45,151	$	49,408
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	1,934	$	1,181

SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING ACTIVITIES

Paid in-kind interest included in accrued expenses	$	653	$	1,161

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

Paratek Pharmaceuticals, Inc.

Condensed Consolidated Statements of Stockholders’ Deficit

(in thousands, except share amounts)

(unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Deficit
	Shares	Amount
Balances at December 31, 2022	56,651,559	$	56	$	759,351	$	—	$	(930,449)	$	(171,042)
Exercise of stock options	—	—		—		—		—		—
Issuance of common stock, net of expenses	—	—		—		—		—		—
Vesting of restricted stock unit awards	630,680	1		—		—		—		1
Employee stock purchase plan expense	—	—		—		—		—		—
Unrealized (loss) on available-for-sale securities, net of tax	—	—		—		—		—		—
Stock-based compensation expense	—	—		2,146		—		—		2,146
Net loss	—	—		—		—		(20,143)		(20,143)
Balances at March 31, 2023	57,282,239	$	57	$	761,497	$	—	$	(950,592)	$	(189,038)

	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Deficit
	Shares	Amount
Balances at December 31, 2021	51,711,809	$	52	$	739,053	$	(9)	$	(866,883)	$	(127,787)
Exercise of stock options	729	—		6		—		—		6
Issuance of common stock, net of expenses	884,230	1		3,090		—		—		3,091
Vesting of restricted stock unit awards	426,582	—		—		—		—		—
Employee stock purchase plan expense	—	—		36		—		—		36
Unrealized (loss) on available-for-sale securities, net of tax	—	—		—		(171)		—		(171)
Stock-based compensation expense	—	—		2,433		—		—		2,433
Net loss	—	—

SEC Form 10-Q filed by Paratek Pharmaceuticals Inc.