Galera Therapeutics - SEC Filing

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

View:

Download DOC

Download PDF

Download XLS

Download XBRL

10-Q

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 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: 001-39114

Galera Therapeutics, Inc.

(Exact name of registrant as specified in its charter)


Delaware	46-1454898
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2 W. Liberty Blvd #100 Malvern, Pennsylvania	19355
(Address of principal executive offices)	(Zip Code)

(610) 725-1500

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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, $0.001 par value per share	GRTX	The Nasdaq Stock Market LLC (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 ☒ 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.

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 5, 2021, the registrant had 26,438,767 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Comprehensive Loss	3
	Consolidated Statements of Changes in Stockholders’ Equity (Deficit)	4
	Consolidated Statements of Cash Flows	5
	Notes to Unaudited Interim Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
Signatures		29

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of 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 are 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, although not all forward-looking statements contain these words. All statements other than statements of historical fact contained in this Quarterly Report, including without limitation statements regarding our plans to develop and commercialize our product candidates, the timing of our ongoing or planned clinical trials, the timing of and our ability to obtain and maintain regulatory approvals, the clinical utility of our product candidates, our commercialization, manufacturing capabilities and strategy, our expectations about the willingness of healthcare professionals to use our product candidates, the sufficiency of our cash, cash equivalents and short-term investments and our ability to raise additional capital to fund our operations, the anticipated impact of the COVID-19 pandemic on our business, and the plans and objectives of management for future operations, capital needs, and capital expenditures are forward-looking statements.

The forward-looking statements in this Quarterly Report are only predictions and are based 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 known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those projected in the forward-looking statements, including, but not limited to, the following: our limited operating history; anticipating continued losses for the foreseeable future; needing substantial funding and the ability to raise capital; our dependence on avasopasem manganese (GC4419) and our other product candidates; uncertainties inherent in the conduct of clinical trials; difficulties or delays enrolling patients in clinical trials; the FDA’s acceptance of data from clinical trials outside the United States; undesirable side effects from our product candidates; risks relating to the regulatory approval process; failure to capitalize on more profitable product candidates or indications; ability to receive and/or maintain Breakthrough Therapy Designation or Fast Track Designation for product candidates; failure to obtain regulatory approval of product candidates in the United States or other jurisdictions; ongoing regulatory obligations and continued regulatory review; risks related to commercialization; risks related to competition; ability to retain key employees and manage growth; risks related to intellectual property; inability to maintain collaborations or the failure of these collaborations; our reliance on third parties; the possibility of system failures or security breaches; liability related to the privacy of health information obtained from clinical trials and product liability lawsuits; unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives; environmental, health and safety laws and regulations; the impact of the COVID-19 pandemic on our business and operations, including preclinical studies and clinical trials, and general economic conditions; risks related to ownership of our common stock; significant costs as a result of operating as a public company; and those described under the sections in our Annual Report on Form 10-K for the year ended December 31, 2020 and this Quarterly Report entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. 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.

GALERA THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS EXCEPT SHARE AND PER-SHARE AMOUNTS)

(unaudited)


	September 30, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	17,632		$	15,872
Short-term investments		71,073			56,904
Prepaid expenses and other current assets		3,983			5,153
Total current assets		92,688			77,929
Property and equipment, net		938			1,023
Acquired intangible asset		2,258			2,258
Goodwill		881			881
Right-of-use lease assets		374			530
Other assets		1,626			1,477
Total assets	$	98,765		$	84,098
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	7,181		$	5,146
Accrued expenses		8,272			8,584
Lease liabilities		271			238
Total current liabilities		15,724			13,968
Royalty purchase liability		125,751			63,369
Lease liabilities, net of current portion		110			296
Deferred tax liability		273			273
Other liabilities		74			74
Total liabilities		141,932			77,980
Stockholders’ equity (deficit):
Preferred stock, $0.001 par value: 10,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.001 par value: 200,000,000 shares authorized; 26,438,767 and 24,976,142 shares issued and outstanding at September 30, 2021 and December 31, 2020		26			25
Additional paid-in capital		256,104			241,649
Accumulated other comprehensive income (loss)		(2	)		12
Accumulated deficit		(299,295	)		(235,568	)
Total stockholders’ equity (deficit)		(43,167	)		6,118
Total liabilities and stockholders’ equity (deficit)	$	98,765		$	84,098

See accompanying notes to unaudited interim consolidated financial statements.

GALERA THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

(unaudited)


	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Operating expenses:
Research and development	$	14,813		$	12,133		$	43,203		$	40,225
General and administrative		5,487			3,945			15,667			11,384
Loss from operations		(20,300	)		(16,078	)		(58,870	)		(51,609	)
Other income (expenses):
Interest income		3			235			28			1,055
Interest expense		(2,327	)		(1,235	)		(4,882	)		(3,625	)
Foreign currency gain (loss)		(2	)		—			(3	)		27
Net loss	$	(22,626	)	$	(17,078	)	$	(63,727	)	$	(54,152	)
Net loss per share of common stock, basic and diluted	$	(0.86	)	$	(0.69	)	$	(2.49	)	$	(2.18	)
Weighted-average shares of common stock outstanding, basic and diluted		26,304,920			24,874,805			25,569,545			24,840,822

See accompanying notes to unaudited interim consolidated financial statements.

GALERA THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(IN THOUSANDS)

(unaudited)


	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Net loss	$	(22,626	)	$	(17,078	)	$	(63,727	)	$	(54,152	)
Unrealized gain (loss) on short-term investments		(5	)		(193	)		(14	)		85
Comprehensive loss	$	(22,631	)	$	(17,271	)	$	(63,741	)	$	(54,067	)

See accompanying notes to unaudited interim consolidated financial statements.

GALERA THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(IN THOUSANDS EXCEPT SHARE AMOUNTS)

(unaudited)


	Common stock				Additional paid-in		Accumulated other comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		capital		income (loss)			Deficit			Equity (Deficit)
Balance at January 1, 2021		24,976,142	$	25	$	241,649	$	12		$	(235,568	)	$	6,118
Share-based compensation expense		—		—		1,791		—			—			1,791
Exercise of stock options		217,015		—		235		—			—			235
Unrealized loss on short-term investments		—		—		—		(2	)		—			(2	)
Net loss		—		—		—		—			(18,715	)		(18,715	)
Balance at March 31, 2021		25,193,157		25		243,675		10			(254,283	)		(10,573	)
Share-based compensation expense		—		—		1,611		—			—			1,611
Exercise of stock options		60,975		—		120		—			—			120
Sale of shares under Open Market Sale Agreement, net		665,279		1		5,717		—			—			5,718
Unrealized loss on short-term investments		—		—		—		(7	)		—			(7	)
Net loss		—		—		—		—			(22,386	)		(22,386	)
Balance at June 30, 2021		25,919,411		26		251,123		3			(276,669	)		(25,517	)
Share-based compensation expense		—		—		1,870		—			—			1,870
Exercise of stock options		293,267		—		890		—			—			890
Sale of shares under Open Market Sale Agreement, net		226,089		—		2,221		—			—			2,221
Unrealized loss on short-term investments		—		—		—		(5	)		—			(5	)
Net loss		—		—		—		—			(22,626	)		(22,626	)
Balance at September 30, 2021		26,438,767	$	26	$	256,104	$	(2	)	$	(299,295	)	$	(43,167	)



	Common stock				Additional paid-in		Accumulated other comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		capital		income (loss)			Deficit			Equity
Balance at January 1, 2020		24,811,567	$	25	$	230,895	$	38		$	(161,350	)	$	69,608
Share-based compensation expense		—		—		1,210		—			—			1,210
Exercise of stock options		8,503		—		9		—			—			9
Unrealized gain on short-term investments		—		—		—		648			—			648
Net loss		—		—		—		—			(18,417	)		(18,417	)
Balance at March 31, 2020		24,820,070		25		232,114		686			(179,767	)		53,058
Issuance of common stock warrants		—		—		4,712		—			—			4,712
Share-based compensation expense		—		—		1,453		—			—			1,453
Exercise of stock options		25,728		—		41		—			—			41
Unrealized loss on short-term investments		—		—		—		(370	)		—			(370	)
Net loss		—		—		—		—			(18,657	)		(18,657	)
Balance at June 30, 2020		24,845,798		25		238,320		316			(198,424	)		40,237
Share-based compensation expense		—		—		1,505		—			—			1,505
Exercise of stock options		66,718		—		224		—			—			224
Unrealized loss on short-term investments		—		—		—		(193	)		—			(193	)
Net loss		—		—		—		—			(17,078	)		(17,078	)
Balance at September 30, 2020		24,912,516	$	25	$	240,049	$	123		$	(215,502	)	$	24,695

See accompanying notes to unaudited interim consolidated financial statements.

GALERA THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(unaudited)


	Nine months ended September 30,
	2021			2020
Operating activities:
Net loss	$	(63,727	)	$	(54,152	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		314			272
Noncash interest expense		4,882			3,625
Share-based compensation expense		5,272			4,168
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		1,171			2,089
Other assets		7			212
Accounts payable		2,035			68
Accrued expense and other liabilities		(466	)		631
Cash used in operating activities		(50,512	)		(43,087	)
Investing activities:
Purchases of short-term investments		(67,183	)		(53,650	)
Proceeds from sales of short-term investments		53,000			73,750
Purchase of property and equipment		(230	)		(411	)
Cash provided by (used in) investing activities		(14,413	)		19,689
Financing activities:
Proceeds from royalty purchase agreement		57,500			20,000
Proceeds from Open Market Sale Agreement, net		7,939			—
Proceeds from exercise of stock options		1,246			274
Cash provided by financing activities		66,685			20,274
Net increase (decrease) in cash and cash equivalents		1,760			(3,124	)
Cash and cash equivalents at beginning of period		15,872			18,356
Cash and cash equivalents at end of period	$	17,632		$	15,232
Supplemental schedule of non-cash financing activities:
Issuance of warrants in conjunction with amendment to the royalty purchase agreement	$	—		$	4,712
Purchase of property and equipment included in accounts payable and accrued expenses	$	7		$	—

See accompanying notes to unaudited interim consolidated financial statements.

GALERA THERAPEUTICS, INC.

NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Organization and description of business

Galera Therapeutics, Inc. was incorporated as a Delaware corporation on November 19, 2012 (inception) and together with its subsidiaries (the Company, or Galera) is a clinical stage biopharmaceutical company focused on developing and commercializing a pipeline of novel, proprietary therapeutics that have the potential to transform radiotherapy in cancer. Galera's technology consists of selective small molecule dismutase mimetics that are in late-stage development in patients with cancer. Avasopasem manganese (GC4419, also referred to as avasopasem) is in development for radiotherapy-induced toxicities, including severe oral mucositis (SOM) in patients with locally advanced head and neck cancer (HNC) and esophagitis in patients with lung cancer. In February 2018, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy Designation to avasopasem for the reduction of SOM induced by radiotherapy with or without systemic therapy. Galera’s second dismutase mimetic product candidate, rucosopasem manganese (GC4711, also referred to as rucosopasem), is in clinical-stage development to augment the anti-cancer efficacy of stereotactic body radiation therapy (SBRT) in patients with non-small cell lung cancer (NSCLC) and locally advanced pancreatic cancer (LAPC).

In October 2021, the Company announced topline results from a Phase 3 trial (referred to as the ROMAN trial) evaluating avasopasem for radiotherapy-induced SOM in patients with locally advanced HNC. The trial demonstrated relative reductions in the incidence, duration and severity of SOM but did not achieve statistical significance in the primary endpoint of reduction in incidence of SOM. In September 2021, the Company announced final results from its Phase 1/2 pilot trial of avasopasem versus placebo in patients with unresectable or borderline resectable LAPC, who are undergoing SBRT. In this proof-of-concept trial, survival and tumor outcome benefits were observed. Avasopasem is also being studied in a Phase 2a multi-center trial in Europe assessing the safety of avasopasem in patients with head and neck cancer undergoing standard of care radiotherapy and in a Phase 2a trial for its ability to reduce the incidence of radiotherapy-induced esophagitis in patients with lung cancer. The Company is continuing to analyze the results of the ROMAN trial and is evaluating next steps for its programs focused on the reduction of radiotherapy-induced toxicity.

In addition to developing avasopasem for the reduction of normal tissue toxicity from radiotherapy, the Company is developing its dismutase mimetics to increase the anti-cancer efficacy of higher daily doses of radiotherapy, including SBRT. The Company’s second dismutase mimetic product candidate, rucosopasem, is being developed to increase the anti-cancer efficacy of SBRT and has successfully completed Phase 1 trials of intravenous rucosopasem in healthy volunteers. The Company leveraged its observations from the pilot Phase 1/2 safety and anti-cancer efficacy trial of avasopasem in combination with SBRT in patients with LAPC to prepare rucosopasem clinical trials in combination with SBRT. The Company is currently evaluating rucosopasem in combination with SBRT in a Phase 1/2 safety and anti-cancer efficacy trial in NSCLC and a Phase 2b trial of rucosopasem in combination with SBRT in patients with LAPC.

Liquidity

The Company has incurred recurring losses and negative cash flows from operations since inception and has an accumulated deficit of $299.3 million as of September 30, 2021. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its product candidates currently in development. The Company expects its existing cash, cash equivalents and short-term investments as of September 30, 2021 will enable the Company to fund its operating expenses and capital expenditure requirements into 2023, assuming limited future development and commercial activities for avasopasem during this period. These assumptions may change as a result of many factors currently unknown to the Company, including without limitation the results of further analyses of data from the ROMAN trial and potential next steps for the Company’s radiotherapy-induced toxicity programs. In the future, if the Company is not able to continue to raise sufficient capital to fund its operations, the Company may decide to delay or discontinue certain activities, including planned research and development activities, hiring plans, manufacturing activities and commercial preparation efforts. In December 2020, the Company filed a registration statement with the Securities and Exchange Commission (SEC) which covers the offering, issuance and sale of up to $200.0 million of the Company’s securities, which includes an Open Market Sale Agreement with Jefferies LLC (the Sales Agreement) covering the offering, issuance and sale of up to a maximum aggregate offering price of $50.0 million of the Company’s common stock, which could be utilized to raise funding for future operating expenses and capital expenditure requirements. During the nine months ended September 30, 2021, we sold approximately 0.9 million shares of common stock and received net proceeds of approximately $7.9 million pursuant to the Sales Agreement. As of September 30, 2021, there remains approximately $41.7 million available under the Sales Agreement. See Note 8.

GALERA THERAPEUTICS, INC.

NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Basis of presentation and significant accounting policies

The summary of significant accounting policies disclosed in the Company’s annual consolidated financial statements for the years ended December 31, 2020 and 2019 included in the Company’s annual repo