SEC Filing — Icosavax, Inc.

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10-Q

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 September 30, 2021

 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: 001-40655

ICOSAVAX, INC.

(Exact name of Registrant as specified in its charter)


Delaware		82-3640549
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1616 Eastlake Avenue E., Suite 208 Seattle, Washington		98102
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (206) 737-0085

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

ICVX

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, 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. ☑

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 November 12, 2021, the registrant had 39,041,805 shares of common stock ($0.0001 par value) outstanding.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

Item 1	Financial Statements (Unaudited)	3
	Condensed Balance Sheets	3
	Condensed Statements of Operations	4
	Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)	5
	Condensed Statements of Cash Flows	6
	Notes to Unaudited Condensed Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4	Controls and Procedures	27

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	28
Item 1A	Risk Factors	28
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 3	Defaults Upon Senior Securities	75
Item 4	Mine Safety Disclosures	75
Item 5	Other Information	75
Item 6	Exhibits	75
	Exhibit Index	75
	Signatures	77

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

ICOSAVAX, INC.

Condensed Balance Sheets

(in thousands, except share and par value data)


	September 30,			December 31,
	2021			2020
	(Unaudited)			(Note 2)
Assets
Current assets:
Cash	$	291,271		$	13,114
Restricted cash		2,652			2,384
Prepaid expenses and other current assets		6,353			662
Total current assets		300,276			16,160
Property and equipment, net		548			10
Total assets	$	300,824		$	16,170
Liabilities, convertible preferred stock, and stockholders' equity (deficit)
Current liabilities:
Accounts payable	$	3,049		$	1,918
Accrued and other current liabilities		2,487			1,532
Deferred revenue		2,652			2,384
Total current liabilities		8,188			5,834
Long-term convertible promissory note		—			4,947
Embedded derivative liability		—			1,604
Other noncurrent liabilities		197			426
Total liabilities		8,385			12,811
Commitments and contingencies (Note 2)
Convertible preferred stock, $0.0001 par value; no shares authorized at September 30, 2021 and 54,039,749 shares authorized at December 31, 2020; no shares issued and outstanding at September 30, 2021 and 32,198,879 shares issued and outstanding at December 31, 2020; $0 and $30,007 aggregate liquidation preference at September 30, 2021 and December 31, 2020, respectively		—			30,062
Stockholders' equity (deficit):
Preferred stock, $0.0001 par value; 50,000,000 and no shares authorized at September 30, 2021 and December 31, 2020, respectively; no shares issued and outstanding at September 30, 2021 and December 31, 2020		—			—
Common stock, $0.0001 par value; 500,000,000 and 78,000,000 shares authorized at September 30, 2021 and December 31, 2020, respectively; 39,387,389 and 3,596,936 shares issued at September 30, 2021 and December 31, 2020, respectively; 38,991,403 and 2,639,026 shares outstanding at September 30, 2021 and December 31, 2020, respectively		5			2
Additional paid-in capital		368,321			393
Accumulated deficit		(75,887	)		(27,098	)
Total stockholders' equity (deficit)		292,439			(26,703	)
Total liabilities, convertible preferred stock and stockholders' equity (deficit)	$	300,824		$	16,170

See accompanying notes to financial statements

ICOSAVAX, INC.

Condensed Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Grant revenue	$	1,827		$	—		$	5,732		$	—
Operating expenses:
Research and development		10,883			4,752			24,713			12,338
General and administrative		25,357			704			28,669			1,857
Total operating expenses		36,240			5,456			53,382			14,195
Loss from operations		(34,413	)		(5,456	)		(47,650	)		(14,195	)
Other income (expense):
Change in fair value of embedded derivative liability		-			-			(205	)		-
Loss on extinguishment of convertible promissory note		-			-			(754	)		-
Interest and other income (expense)		27			(121	)		(180	)		(51	)
Total other income (expense)		27			(121	)		(1,139	)		(51	)
Net loss and comprehensive loss	$	(34,386	)	$	(5,577	)	$	(48,789	)	$	(14,246	)
Net loss per share, basic and diluted	$	(1.30	)	$	(2.40	)	$	(4.50	)	$	(6.66	)
Weighted-average common shares outstanding, basic and diluted		26,494,914			2,321,765			10,836,894			2,139,768

See accompanying notes to financial statements

ICOSAVAX, INC.

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(Unaudited)

(in thousands, except share amounts)


																Total
											Additional					Stockholders'
	Convertible Preferred Stock						Common Stock				Paid-in		Accumulated			Equity
	Shares			Amount			Shares		Amount		Capital		Deficit			(Deficit)
Balance at December 31, 2020		32,198,879		$	30,062			2,639,026	$	2	$	393	$	(27,098	)	$	(26,703	)
Issuance of Series A-1 convertible preferred stock for cash of $0.9615 per share net of $0.1 million of issuance costs		21,944,874			21,005			—		—		—		—			—
Issuance of Series B-1 convertible preferred stock for cash of $2.82172 per share net of $0.3 million in issuance costs		32,958,612			92,654			—		—		—		—			—
Issuance of Series B-2 convertible preferred stock from convertible note		2,805,850			7,917			—		—		—		—			—
Shares released from restriction upon vesting of early-exercised stock options		—			—			100,238		—		63		—			63
Exercise of common stock options		—			—			35,143		—		29		—			29
Vesting of shares of restricted common stock		—			—			117,369		—		—		—			—
Stock-based compensation		—			—			—		—		276		—			276
Net loss and comprehensive loss		—			—			—		—		—		(5,851	)		(5,851	)
Balance at March 31, 2021		89,908,215			151,638			2,891,776		2		761		(32,949	)		(32,186	)
Issuance costs incurred related to Series A-1 convertible preferred stock		—			(1	)		—		—		—		—			—
Issuance costs incurred related to Series B-1 convertible preferred stock		—			(24	)		—		—		—		—			—
Shares released from restriction upon vesting of early-exercised stock options		—			—			63,257		—		32		—			32
Vesting of shares of restricted common stock		—			—			117,369		—		—		—			—
Stock-based compensation		—			—			—		—		1,408		—			1,408
Net loss and comprehensive loss		—			—			—		—		—		(8,552	)		(8,552	)
Balance at June 30, 2021		89,908,215			151,613			3,072,402		2		2,201		(41,501	)		(39,298	)
Initial public offering, net of issuance costs of $18.6 million		—			—			13,953,332		1		190,709		—			190,710
Conversion of convertible preferred stock into common stock		(89,908,215	)		(151,613	)		21,634,898		2		151,611		—			151,613
Stock- based compensation		—			—			—		—		23,670		—			23,670
Vesting of shares of restricted common stock		—			—			148,743		—		—		—			—
Shares released from restriction upon vesting of early-exercised stock options		—			—			124,536		—		82		—			82
Exercise of stock options		—			—			57,492		—		48		—			48
Net loss and comprehensive loss		—			—			—		—		—		(34,386	)		(34,386	)
Balance at September 30, 2021		-		$	-			38,991,403	$	5	$	368,321	$	(75,887	)	$	292,439



									Additional					Total
	Convertible Preferred Stock				Common Stock				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balance at December 31, 2019		32,198,879	$	30,062		1,901,656	$	1	$	—	$	(8,244	)	$	(8,243	)

Shares released from restriction upon vesting of early-exercised stock options		—		—		25,641		—		1		—			1
Vesting of shares of restricted common stock		—		—		117,369		—		—		—			—
Stock-based compensation		—		—		—		—		54		—			54
Net loss and comprehensive loss		—		—		—		—		—		(3,471	)		(3,471	)
Balance at March 31, 2020		32,198,879		30,062		2,044,666		1		55		(11,715	)		(11,659	)
Stock-based compensation		—		—		—		—		63		—			63
Net loss and comprehensive loss		—		—		—		—		—		(5,198	)		(5,198	)
Balance at June 30, 2020		32,198,879		30,062		2,044,666		1		118		(16,913	)		(16,794	)
Stock-based compensation		—		—		—		—		70		—			70
Shares released from restriction upon vesting of early-exercised stock options		—		—		117,381		1		108		—			109
Vesting of shares of restricted common stock		—		—		125,728		—		—		—			—
Net loss and comprehensive loss		—		—		—		—		—		(5,577	)		(5,577	)
Balance at September 30, 2020		32,198,879	$	30,062		2,287,775	$	2	$	296	$	(22,490	)	$	(22,192	)

See accompanying notes to financial statements

ICOSAVAX, INC.

Condensed Statements of Cash Flows

(Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2021			2020

Operating activities:
Net loss	$	(48,789	)	$	(14,246	)
Adjustments to reconcile net loss to cash used in operating activities:
Stock-based compensation		25,354			187
Depreciation