urov-10q_20191231.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended December 31, 2019

OR

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: 001-38667

 

Urovant Sciences Ltd.

(Exact Name of Registrant as Specified in its Charter)

 

 

Bermuda

98-1463899

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

Suite 1, 3rd Floor

11-12 St. James’s Square

London SW1Y 4LB, United Kingdom

Not Applicable

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: +44 (0)207 400-3347

 

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

(Title of each class)

(Trading Symbol)

(Name of each exchange on which registered)

Common Shares, $0.000037453 par value

UROV

Nasdaq Global Select 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      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.

 

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. 

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 February 12, 2020, the registrant had 30,519,955 common shares, $0.000037453 par value per share, outstanding.

 

 

 


Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

2

 

Condensed Consolidated Balance Sheets as of December 31, 2019 and March 31, 2019

2

 

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2019 and 2018

3

 

Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended December 31, 2019 and 2018

4

 

Condensed Consolidated Statements of Shareholders’ Equity (Deficit) for the Three and Nine Months Ended December 31, 2019 and 2018

5

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2019 and 2018

6

 

Notes to Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

33

Item 4.

Controls and Procedures

33

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

34

Item 1A.

Risk Factors

34

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

75

Item 3.

Defaults Upon Senior Securities

75

Item 4.

Mine Safety Disclosures

75

Item 5.

Other Information

75

Item 6.

Exhibits

76

Signatures

77

 

 

 

i


PART I—FINANCIAL INFORMATION

Item 1.Financial Statements (Unaudited)

UROVANT SCIENCES LTD.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

December 31, 2019

 

 

March 31, 2019

 

Assets

 

 

 

 

 

(Note 2)

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

131,921

 

 

$

85,353

 

Restricted cash

 

 

243

 

 

 

243

 

Prepaid expenses and other current assets

 

 

10,182

 

 

 

12,914

 

Due from Sumitovant Pharma Ltd.

 

 

111

 

 

 

 

Total current assets

 

 

142,457

 

 

 

98,510

 

Furniture and equipment, net

 

 

1,241

 

 

 

923

 

Operating lease right-of-use assets

 

 

3,219

 

 

 

 

Restricted cash, net of current portion

 

 

623

 

 

 

600

 

Other assets

 

 

11

 

 

 

88

 

Total assets

 

$

147,551

 

 

$

100,121

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' (Deficit) Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,388

 

 

$

1,925

 

Accrued expenses

 

 

14,701

 

 

 

9,877

 

Due to Roivant Sciences Ltd.

 

 

7

 

 

 

15

 

Interest payable

 

 

343

 

 

 

 

Current portion of long-term debt

 

 

43,760

 

 

 

 

Current portion of operating lease liabilities

 

 

335

 

 

 

 

Total current liabilities

 

 

61,534

 

 

 

11,817

 

Long-term debt, net of current portion

 

 

87,287

 

 

 

13,534

 

Operating lease liabilities, net of current portion

 

 

3,179

 

 

 

 

Total liabilities

 

 

152,000

 

 

 

25,351

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' (deficit) equity

 

 

 

 

 

 

 

 

Common shares, par value $0.000037453 per share, 267,001,308 shares

   authorized, 30,519,688 and 30,322,911 issued and outstanding at

   December 31, 2019 and March 31, 2019, respectively

 

 

1

 

 

 

1

 

Common shares subscribed

 

 

(1

)

 

 

(1

)

Accumulated other comprehensive income

 

 

394

 

 

 

269

 

Additional paid-in capital

 

 

266,173

 

 

 

250,032

 

Accumulated deficit

 

 

(271,016

)

 

 

(175,531

)

Total shareholders' (deficit) equity

 

 

(4,449

)

 

 

74,770

 

Total liabilities and shareholders' (deficit) equity

 

$

147,551

 

 

$

100,121

 

 

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

2


UROVANT SCIENCES LTD.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

 

 

 

Three Months Ended December 31,

 

 

Nine Months Ended December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development(1)

 

$

23,099

 

 

$

21,299

 

 

$

62,909

 

 

$

69,308

 

General and administrative(2)

 

 

16,687

 

 

 

4,862

 

 

 

29,587

 

 

 

12,650

 

Total operating expenses

 

 

39,786

 

 

 

26,161

 

 

 

92,496

 

 

 

81,958

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(1,401

)

 

 

 

 

 

(2,495

)

 

 

 

Loss on disposal of furniture and equipment

 

 

 

 

 

 

 

 

(236

)

 

 

 

Other income (expense), net

 

 

(34

)

 

 

(219

)

 

 

(145

)

 

 

(299

)

Loss before provision for income taxes

 

 

(41,221

)

 

 

(26,380

)

 

 

(95,372

)

 

 

(82,257

)

Provision for income taxes

 

 

38

 

 

 

61

 

 

 

113

 

 

 

121

 

Net loss

 

$

(41,259

)

 

$

(26,441

)

 

$

(95,485

)

 

$

(82,378

)

Net loss per common share—basic and diluted

 

$

(1.36

)

 

$

(0.87

)

 

$

(3.14

)

 

$

(3.51

)

Weighted average common shares outstanding—basic and diluted

 

 

30,413,946

 

 

 

30,264,643

 

 

 

30,365,142

 

 

 

23,450,692

 

 

(1)

Includes $0 and $0 and $0 and $2,230 of costs allocated from Roivant Sciences Ltd. during the three and nine months ended December 31, 2019 and 2018, respectively. Also includes share-based compensation expense (see Note 8).

(2)

Includes $80 and $213 and $21 and $1,700 of costs allocated from Roivant Sciences Ltd. during the three and nine months ended December 31, 2019 and 2018, respectively. Also includes share-based compensation expense (see Note 8).

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

3


UROVANT SCIENCES LTD.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

 

 

 

Three Months Ended December 31,

 

 

Nine Months Ended December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net loss

 

$

(41,259

)

 

$

(26,441

)

 

$

(95,485

)

 

$

(82,378

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

29

 

 

 

216

 

 

 

125

 

 

 

313

 

Total other comprehensive income

 

 

29

 

 

 

216

 

 

 

125

 

 

 

313

 

Comprehensive loss

 

$

(41,230

)

 

$

(26,225

)

 

$

(95,360

)

 

$

(82,065

)

 

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

4


UROVANT SCIENCES LTD.

Condensed Consolidated Statements of Shareholders’ Equity (Deficit)

(in thousands, except share data)

 

 

 

Common Shares

 

 

Common

Shares

 

 

Shareholder

 

 

Additional

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Shareholders'

 

 

 

Shares

 

 

Amount

 

 

Subscribed

 

 

Receivable

 

 

Paid-in Capital

 

 

Deficit

 

 

Income

 

 

Equity (Deficit)

 

Balance at March 31, 2019

 

 

30,322,911

 

 

$

1

 

 

$

(1

)

 

$

 

 

$

250,032

 

 

$

(175,531

)

 

$

269

 

 

$

74,770

 

Capital contributions from RSI and RSG

 

 

 

 

 

 

 

 

 

 

 

 

 

 

130

 

 

 

 

 

 

 

 

 

130

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,047

 

 

 

 

 

 

 

 

 

1,047

 

Exercise of stock options

 

 

17,521

 

 

 

 

 

 

 

 

 

 

 

 

70

 

 

 

 

 

 

 

 

 

70

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

188

 

 

 

188

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,485

)

 

 

 

 

 

(28,485

)

Balance at June 30, 2019

 

 

30,340,432

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

251,279

 

 

 

(204,016

)

 

 

457

 

 

 

47,720

 

Capital contributions from RSI and RSG

 

 

 

 

 

 

 

 

 

 

 

 

 

 

60

 

 

 

 

 

 

 

 

 

60

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,221

 

 

 

 

 

 

 

 

 

1,221

 

Exercise of stock options

 

 

41,001

 

 

 

 

 

 

 

 

 

 

 

 

150

 

 

 

 

 

 

 

 

 

150

 

Warrants issued with long-term debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

438

 

 

 

 

 

 

 

 

 

438

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(92

)

 

 

(92

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,741

)

 

 

 

 

 

(25,741

)

Balance at September 30, 2019

 

 

30,381,433

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

253,148

 

 

 

(229,757

)

 

 

365

 

 

 

23,756

 

Capital contributions from RSI and RSG

 

 

 

 

 

 

 

 

 

 

 

 

 

 

61

 

 

 

 

 

 

 

 

 

61

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,529

 

 

 

 

 

 

 

 

 

12,529

 

Exercise of stock options

 

 

128,434

 

 

 

 

 

 

 

 

 

 

 

 

498

 

 

 

 

 

 

 

 

 

498

 

Vesting of restricted stock units, net of

   tax withholding

 

 

9,821

 

 

 

 

 

 

 

 

 

 

 

 

(63

)

 

 

 

 

 

 

 

 

(63

)

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29

 

 

 

29

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(41,259

)

 

 

 

 

 

(41,259

)

Balance at December 31, 2019

 

 

30,519,688

 

 

$

1

 

 

$

(1

)

 

$

 

 

$

266,173

 

 

$

(271,016

)

 

$

394

 

 

$

(4,449

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares

 

 

Common

Shares

 

 

Shareholder

 

 

Additional

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Shareholders'

 

 

 

Shares

 

 

Amount

 

 

Subscribed

 

 

Receivable

 

 

Paid-in Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity (Deficit)

 

Balance at March 31, 2018

 

 

20,025,098

 

 

$

1

 

 

$

(1

)

 

$

(1,310

)

 

$

72,562

 

 

$

(64,185

)

 

$

7

 

 

$

7,074

 

Capital contributions from RSI and RSG

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,500

 

 

 

 

 

 

 

 

 

18,500

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

320

 

 

 

 

 

 

 

 

 

320

 

Capital contribution – share-based

   compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

486

 

 

 

 

 

 

 

 

 

486

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(220

)

 

 

(220

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,295

)

 

 

 

 

 

(31,295

)

Balance at June 30, 2018

 

 

20,025,098

 

 

 

1

 

 

 

(1

)

 

 

(1,310

)

 

 

91,868

 

 

 

(95,480

)

 

 

(213

)

 

 

(5,135

)

Capital contributions from RSI and RSG

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21,744

 

 

 

 

 

 

 

 

 

21,744

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

895

 

 

 

 

 

 

 

 

 

895

 

Capital contribution – share-based

   compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

94

 

 

 

 

 

 

 

 

 

94

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

317

 

 

 

317

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,642

)

 

 

 

 

 

(24,642

)

Balance at September 30, 2018

 

 

20,025,098

 

 

 

1

 

 

 

(1

)

 

 

(1,310

)

 

 

114,601

 

 

 

(120,122

)

 

 

104

 

 

 

(6,727

)

Capital contributions from RSI and RSG

 

 

 

 

 

 

 

 

 

 

 

1,310

 

 

 

36

 

 

 

 

 

 

 

 

 

1,346

 

Issuance of common shares in initial

   public offering, net of commissions

   and offering costs of $11.3 million

 

 

10,297,813

 

 

 

 

 

 

 

 

 

 

 

 

132,931

 

 

 

 

 

 

 

 

 

132,931

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

833

 

 

 

 

 

 

 

 

 

833

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

216

 

 

 

216

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,441

)

 

 

 

 

 

(26,441

)

Balance at December 31, 2018

 

 

30,322,911

 

 

$

1

 

 

$

(1

)

 

$

 

 

$

248,401

 

 

$

(146,563

)

 

$

320

 

 

$

102,158

 

 

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

 

5


UROVANT SCIENCES LTD.

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Nine Months Ended December 31,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(95,485

)

 

$

(82,378

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

178

 

 

 

132

 

Share-based compensation expense

 

 

14,797

 

 

 

2,628

 

Amortization of debt discount and issuance costs

 

 

664

 

 

 

 

Non-cash operating lease cost

 

 

448

 

 

 

 

Loss on disposal of furniture and equipment

 

 

236

 

 

 

 

Unrealized foreign currency translation adjustment

 

 

125

 

 

 

313

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

2,897

 

 

 

(9,944

)

Other assets

 

 

77

 

 

 

 

Due from Sumitovant Pharma Ltd.

 

 

(111

)

 

 

 

Due to Roivant Sciences Ltd.

 

 

(8

)

 

 

(1,449

)

Accounts payable

 

 

463

 

 

 

2,863

 

Accrued expenses

 

 

4,998

 

 

 

2,770

 

Operating lease liabilities

 

 

(153

)

 

 

 

Interest payable

 

 

343

 

 

 

 

Net cash used in operating activities

 

 

(70,531

)

 

 

(85,065

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of furniture and equipment

 

 

(732

)

 

 

(193

)

Net cash used in investing activities

 

 

(732

)

 

 

(193

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from capital contributions from Roivant Sciences Ltd.

 

 

251

 

 

 

41,590

 

Proceeds from exercise of stock options

 

 

718

 

 

 

 

Debt financing costs paid

 

 

(387

)

 

 

 

Deferred offering costs paid

 

 

(165

)

 

 

 

Cash proceeds from debt financing

 

 

117,500

 

 

 

 

Payment of restricted stock units tax withholding on net settlement

 

 

(63

)

 

 

 

Proceeds from issuance of common shares in initial public offering, net of offering costs

 

 

 

 

 

132,931

 

Net cash provided by financing activities

 

 

117,854

 

 

 

174,521

 

Net change in cash, cash equivalents and restricted cash

 

 

46,591

 

 

 

89,263

 

Cash, cash equivalents and restricted cash—beginning of period

 

 

86,196

 

 

 

7,194

 

Cash, cash equivalents and restricted cash—end of period

 

$

132,787

 

 

$

96,457

 

Non-cash financing activities:

 

 

 

 

 

 

 

 

Warrants issued with long-term debt

 

$