10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

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

For the quarterly period ended June 30, 2023

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

For the transition period from

Commission File Number:

001-37798

Selecta Biosciences, Inc.

(Exact name of registrant as specified in its charter)


Delaware		26-1622110
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

65 Grove Street, Watertown, MA		02472
(Address of principal executive offices)		(Zip Code)

(617)

923-1400

(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 per share	SELB	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 ☒ No ☐

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 ☒ No ☐

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.

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in

Rule 12b-2

of the Exchange Act). Yes ☐ No ☒

As of August 4, 2023, the registrant had 153,427,571 shares of common stock, par value $0.0001 per share, outstanding.

TABLE OF CONTENTS



	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	4

	Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	4

	Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months ended June 30, 2023 and 2022	5

	Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three Months ended March 31, and June 30, 2023 and 2022	6

	Consolidated Statements of Cash Flows for the Six Months ended June 30, 2023 and 2022	8

	Notes to Consolidated Financial Statements	9

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

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42

Item 4.	Controls and Procedures	42

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3.	Defaults Upon Senior Securities	43

Item 4.	Mine Safety Disclosures	43

Item 5.	Other Information	43

Item 6.	Exhibits	44

	Signatures	45

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or the Quarterly Report, contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, timing and likelihood of success, the plans and objectives of management for future operations and future results of anticipated products, the impact of the COVID-19 pandemic on our business and operations and our future financial results, and the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements are forward-looking statements. These 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.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential”, or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described under the sections in this Quarterly Report titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as the following:

•

our ability to execute our strategic initiative plans and manage operating expenses;

•

our status as a development-stage company and our expectation to incur losses in the future;

•

our future capital needs and our need to raise additional funds;

•

our ability to maximize the value of our pipeline of product candidates;

•

our unproven approach to therapeutic intervention;

•

our ability to enroll patients in clinical trials, timely and successfully complete those trials and receive necessary regulatory approvals;

•

our ability to access manufacturing facilities and to receive or manufacture sufficient quantities of our product candidates;

•

our ability to maintain our existing or future collaborations or licenses and to seek new collaborations, licenses or partnerships;

•

the continuing impact of the COVID-19 pandemic on our operations, the continuity of our business, including our preclinical studies and clinical trials, and general economic conditions;

•

our ability to protect and enforce our intellectual property rights;

•

federal, state, and foreign regulatory requirements, including U.S. Food and Drug Administration, or FDA, regulation of our product candidates;

•

our ability to obtain and retain key executives and attract and retain qualified personnel; and

•

developments relating to our competitors and our industry, including the impact of government regulation.

Moreover, we operate in an evolving environment. New risks and uncertainties may emerge from time to time, and it is not possible for management to predict all risk and uncertainties.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Selecta Biosciences, Inc. and Subsidiaries

Consolidated Balance Sheets

(Amounts in thousands, except share data and par value)


	June 30,			December 31,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	112,027		$	106,438
Marketable securities		—			28,164
Accounts receivable		5,385			6,596
Unbilled receivables		1,055			3,162
Prepaid expenses and other current assets		4,258			3,778

Total current assets		122,725			148,138
Non-current assets:
Property and equipment, net		2,593			2,794
Right-of-use asset, net		10,775			11,617
Long-term restricted cash		1,377			1,311
Investments		2,000			2,000
Other assets		36			26

Total assets	$	139,506		$	165,886

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	267		$	316
Accrued expenses		12,902			14,084
Loan payable		10,235			8,476
Lease liability		1,729			1,608
Deferred revenue		4,234			593

Total current liabilities		29,367			25,077
Non-current liabilities:
Loan payable, net of current portion		13,787			17,786
Lease liability		9,163			10,055
Deferred revenue		4,863			—
Warrant liabilities		16,878			19,140

Total liabilities		74,058			72,058

Commitments and contingencies (Note 17)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value; 350,000,000 shares authorized; 153,427,571 and 153,042,435 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		15			15
Additional paid-in capital		498,016			493,308
Accumulated deficit		(427,987	)		(394,937	)
Accumulated other comprehensive loss		(4,596	)		(4,558	)

Total stockholders’ equity		65,448			93,828

Total liabilities and stockholders’ equity	$	139,506		$	165,886

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

Selecta Biosciences, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Amounts in thousands, except share and per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Collaboration and license revenue	$	5,249		$	39,273		$	11,187		$	73,272
Operating expenses:
Research and development		17,782			19,182			36,406			36,871
General and administrative		6,105			6,231			11,800			11,768

Total operating expenses		23,887			25,413			48,206			48,639

Operating (loss) income		(18,638	)		13,860			(37,019	)		24,633
Investment income		1,394			207			2,725			222
Foreign currency transaction, net		23			(104	)		42			(76	)
Interest expense		(752	)		(715	)		(1,560	)		(1,422	)
Change in fair value of warrant liabilities		6,341			(4,647	)		2,262			13,868
Other income, net		245			—			500			154

Net (loss) income	$	(11,387	)	$	8,601		$	(33,050	)	$	37,379

Other comprehensive income (loss):
Foreign currency translation adjustment		(27	)		118			(49	)		86
Unrealized gain on marketable securities		—			—			11			—

Total comprehensive income (loss)	$	(11,414	)	$	8,719		$	(33,088	)	$	37,465

Net (loss) income per share:
Basic	$	(0.07	)	$	0.06		$	(0.22	)	$	0.27

Diluted	$	(0.07	)	$	0.06		$	(0.22	)	$	0.17

Weighted average common shares outstanding:
Basic		153,442,413			148,505,729			153,396,380			136,436,316

Diluted		153,442,413			148,505,729			153,396,380			136,966,312

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

Selecta Biosciences, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(Amounts in thousands, except share data)


										Accumulated
					Additional					other
	Common stock				paid-in		Accumulated			comprehensive			Stockholders’
	Shares		Amount		capital		deficit			loss			equity
Balance at December 31, 2022		153,042,435	$	15	$	493,308	$	(394,937	)	$	(4,558	)	$	93,828

Issuance of common stock under Employee Stock Purchase Plan		108,068		—		149		—			—			149
Issuance of vested restricted stock units		276,480		—		—		—			—			—
Stock-based compensation expense		—		—		2,276		—			—			2,276
Currency translation adjustment		—		—		—		—			(22	)		(22	)
Unrealized gain on marketable securities		—		—		—		—			11			11
Net loss		—		—		—		(21,663	)		—			(21,663	)

Balance at March 31, 2023		153,426,983	$	15	$	495,733	$	(416,600	)	$	(4,569	)	$	74,579

Issuance of vested restricted stock units		588		—		—		—			—			—
Stock-based compensation expense		—		—		2,283		—			—			2,283
Currency translation adjustment		—		—		—		—			(27	)		(27	)
Net loss		—		—		—		(11,387	)		—			(11,387	)

Balance at June 30, 2023		153,427,571	$	15	$	498,016	$	(427,987	)	$	(4,596	)	$	65,448

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

Selecta Biosciences, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(Amounts in thousands, except share data)

Accumulated

Additional

other

Common stock

paid-in

Accumulated

comprehensive

Stockholders’

SEC Form 10-Q filed by Selecta Biosciences Inc.