adr-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_________________

FORM 10-Q

_________________

(Mark One)


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

For the quarterly period ended September 30, 2023


			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: 001-40947

_________________

LianBio

(Exact Name of Registrant as Specified in its Charter)

_________________


Cayman Islands			98-1594670
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

103 Carnegie Center Drive, Suite 309 Princeton, NJ			08540
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (609) 486-2308

_________________

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

Title of each class

Trading

Symbol(s)

Name of each exchange
on which registered

American Depositary Shares, each representing 1 ordinary share, par value $0.000017100448 per share

LIAN

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, 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. x

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

As of November 9, 2023, 108,062,638 ordinary shares of the registrant, par value $0.000017100448 per share, were outstanding, of which 43,207,244 ordinary shares were held in the form of American Depositary Shares. This total number of ordinary shares and total number of ordinary shares held in the form of American Depositary Shares excludes 1,156,381 ordinary shares that are held by the depositary on reserve to satisfy obligations of the registrant under the registrant’s equity plans.

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		Page
PART I.	FINANCIAL INFORMATION	6
ITEM 1.	Financial Statements (Unaudited)	6
	Consolidated Balance Sheets	6
	Consolidated Statements of Operations and Comprehensive Loss	7
	Consolidated Statements of Shareholders’ Equity	8
	Consolidated Statements of Cash Flows	10
	Notes to Consolidated Financial Statements	11
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	33
ITEM 4.	Controls and Procedures	33
PART II	OTHER INFORMATION	34
ITEM 1.	Legal Proceedings	34
ITEM 1A.	Risk Factors	34
ITEM 2.	Unregistered Sales of Equity Securities , Use of Proceed s and Issuer Purchases of Equity Securities	39
ITEM 3.	Defaults upon Senior Securities	40
ITEM 4.	Mine Safety Disclosures	40
ITEM 5.	Other Information	40
ITEM 6.	Exhibits	41
Signatures		42

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, about us and our industry that involve substantial risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, prospects, plans, objectives of management and expected growth, are forward-looking statements. These statements are based on our current beliefs, expectations and assumptions regarding our intentions, beliefs or current expectations concerning, among other things, the future of our business, future plans and strategies, our operational results and other future conditions. Forward-looking 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.

Forward-looking statements can be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “seek,” “target,” “will,” “would,” “could,” “should,” “continue,” “contemplate” and other similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:

•our ability to successfully develop, gain regulatory approval for and launch commercial products in Greater China and other Asian markets;

•our ability to deliver innovative therapeutic solutions to patients and become a leading biopharmaceutical company in Greater China, including Mainland China, Hong Kong, Taiwan and Macau, and other Asian markets;

•our plans and ability to leverage data generated in our partners’ global registrational trials and clinical development programs to obtain regulatory approval for and bring our current product candidates to market in our licensed territories, and our plans to maximize patient reach for each of our product candidates;

•our partners’ announced plans and expectations with respect to the success, cost and timing of their product development activities, preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the timing of expected review from regulatory authorities and the period during which the results of the trials are expected to become available;

•our ability to expand our pipeline through the continued strategic in-licensing of innovative and complementary product candidates with the potential to become the new standard of care in Greater China and other Asian markets;

•our ability to successfully establish an international infrastructure, including by building a focused salesforce in China and leveraging the commercial infrastructure we create to benefit our other assets;

•our ability to establish and maintain relationships and collaborations with investors and our current and any future licensing partners that will contribute to our success in sourcing value and creating partnerships to enable us to build out a broad and clinically validated pipeline;

•our ability to design, initiate and complete any clinical trials to advance our current product candidates, including TP-03, NBTXR3, infigratinib, BBP-398, LYR-210, omilancor, NX-13 and sisunatovir, as well as any future product candidates, towards regulatory approval in China and our other licensed territories;

•our ability to conduct, and the timing of and costs related to, our product development activities, including any preclinical studies and related clinical trials in Greater China and other Asian markets of our current and any future product candidates, and our ability to obtain, and the timing of and costs related to, potential regulatory approval of such product candidates in Greater China and other Asian markets;

•our plans to pursue the development of certain product candidates for additional treatment indications;

•our ability to successfully utilize the data we may generate from any clinical trials we conduct in Greater China or other territories, including in conjunction with data from clinical trials conducted by our partners, to seek regulatory approval in Greater China and other Asian markets;

•our plans and ability to join our current and future partners’ clinical and registrational trials and our plans and ability to initiate and complete our standalone clinical and registrational trials;

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•our ability to design and implement the development strategies for our product candidates in each of our licensed territories and, where applicable, our ability to design and implement global development strategies for our product candidates in new indications in connection with our local development strategies;

•the potential for certain of our current and future product candidates to have more benign safety profiles or result in differentiated safety profiles than currently available therapeutic options;

•the size, composition and growth potential of the patient populations and markets we intend to target with our product candidates and our ability to develop and commercialize product candidates to address those patient populations and markets;

•our ability to successfully procure from our partners or other third parties, as applicable, sufficient supply of our product candidates for any preclinical studies, clinical trials or commercial use, if approved;

•our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates and our general and administrative expenses;

•the rate and degree of market acceptance of our product candidates;

•our ability to attract and retain key scientific or management personnel;

•the impact of laws and regulations and of any legal and regulatory developments in our licensed territories or internationally;

•our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates;

•our ability to license intellectual property relating to our product candidates and to comply with our existing license and collaboration agreements;

•our reliance on third parties to conduct product development, manufacturing and other services, and any agreements we have or into which we may enter with such parties in connection with the commercialization of our product candidates and any other approved product;

•our expectations regarding the time during which we will be an emerging growth company or smaller reporting company;

•the direct and indirect impact of the COVID-19 pandemic on our business, operations (including clinical trials) and the markets and communities in which we and our partners, collaborators and vendors operate;

•our estimates of our expenses, capital requirements and needs for additional financing;

•our Board of Directors’ comprehensive strategic review of the Company; and

•other risks and uncertainties, including those listed under the caption “Risk Factors.”

Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution investors that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods.

Given these risks and uncertainties, investors are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this Quarterly Report on Form 10-Q speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data. Investors should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

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In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Unless the context requires otherwise, references in this report to the “Company,” “LianBio,” “we,” “us” and “our” refer to LianBio and its consolidated subsidiaries. We are not a Chinese operating company but are a Cayman Islands holding company with operations conducted by our subsidiaries. For more information on risks relating to our organizational structure, see “Risks Related to Doing Business in China and Our International Operations” and “Risks Related to Ownership of our Ordinary Shares or ADSs and our Status as a Public Company” in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2022.

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PART I-FINANCIAL INFORMATION

Item 1. Financial Statements

LianBio

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)


	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	103,457	$	79,221
Marketable securities	148,765		223,142

Prepaid expenses and other current assets	4,673		8,640
Other receivable	910		1,770
Total current assets	257,805		312,773
Restricted cash, non-current	69		73
Property and equipment, net	2,364		3,116
Operating lease right-of-use assets	2,644		3,978
Other non-current assets	20		20
Total assets	$	262,902	$	319,960
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	6,229	$	1,453
Accrued expenses	15,882		19,826
Current portion of operating lease liabilities	1,893		1,851

Other current liabilities	1,623		485
Total current liabilities	25,627		23,615
Operating lease liabilities	950		2,488
Other liabilities	213		210

Total liabilities	$	26,790	$	26,313
Commitments and contingencies (Note 8)
Shareholders’ equity:
Ordinary shares, $0.000017100448 par value. 2,923,900,005 shares authorized as of September 30, 2023; 107,168,686 shares issued and outstanding as of September 30, 2023; 2,923,900,005 shares authorized as of December 31, 2022; 107,043,924 shares issued and outstanding as of December 31, 2022	2		2
Additional paid-in capital	745,786		732,476
Accumulated other comprehensive loss	(3,220)		(2,080)
Accumulated deficit	(540,230)		(470,525)
Total LianBio shareholders’ equity	202,338		259,873
Non-controlling interest	33,774		33,774
Total shareholders’ equity	236,112		293,647
Total liabilities and shareholders’ equity	$	262,902	$	319,960

See accompanying notes to the consolidated financial statements

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LianBio

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022



Operating expenses:

Research and development	$	9,018	$	8,258	$	29,303	$49,178
General and administrative	17,283		16,291		48,011		46,930
Total operating expenses	26,301		24,549		77,314		96,108
Loss from operations	(26,301)		(24,549)		(77,314)		(96,108)
Other income:
Interest income, net	2,707		1,405		7,867		2,238
Other income, net	141		1,253		966		1,873
Net loss before income taxes	(23,453)		(21,891)		(68,481)		(91,997)
Income taxes	586		6		1,224		17
Net loss	(24,039)		(21,897)		(69,705)		(92,014)
Other comprehensive income (loss):
Foreign currency translation loss, net of tax	(130)		(2,282)		(1,667)		(3,096)
Unrealized gain (loss) on marketable securities, net of tax	236		(160)		527		(1,274)
Comprehensive loss	$	(23,933)	$	(24,339)	$	(70,845)	$	(96,384)
Net loss per share attributable to ordinary shareholders, basic and diluted	$	(0.22)	$	(0.20)	$	(0.65)	$	(0.85)
Weighted-average shares outstanding used in computing net loss per share attributable to ordinary shareholders, basic and diluted	107,167,691		108,353,831		107,164,699		107,854,547

See accompanying notes to the consolidated financial statements

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LianBio

Consolidated Statements of Shareholders’ Equity

(In thousands, except share amounts)

(Unaudited)


	Ordinary Shares		Additional Paid in Capital			Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Total LianBio Shareholders’ Equity (Deficit)		Non- Controlling Interest		Total Shareholders’ Equity (Deficit)
		Shares			Amount
Balance, December 31, 2022		107,043,924	$	2		$	732,476	$	(2,080)	$	(470,525)	$	259,873	$	33,774	$	293,647
Share-based compensation expense		—	—			4,276		—		—		4,276		—		4,276
Issuance of restricted stock units		120,251	—			—		—		—		—		—		—
Net loss		—	—			—		—		(24,045)		(24,045)		—		(24,045)
Comprehensive income		—	—			—		549		—		549		—		549
Balance, March 31, 2023		107,164,175	$	2		$	736,752	$	(1,531)	$	(494,570)	$	240,653	$	33,774	$	274,427
Share-based compensation expense		—	—			4,494		—		—		4,494		—		4,494
Issuance of restricted stock units		3,434	—			—		—		—		—		—		—
Net loss		—	—			—		—		(21,621)		(21,621)		—		(21,621)
Comprehensive loss		—	—			—		(1,795)		—		(1,795)		—		(1,795)
Balance, June 30, 2023		107,167,609	$	2		$	741,246	$	(3,326)	$	(516,191)	$	221,731	$	33,774	$	255,505
Share-based compensation expense		—	—			4,540		—		—		4,540		—		4,540
Issuance of restricted stock units		1,077	—			—		—		—		—		—		—
Net loss		—	—			—		—		(24,039)		(24,039)		—		(24,039)
Comprehensive loss		—	—			—		106		—		106		—		106
Balance, September 30, 2023		107,168,686	$	2		$	745,786	$	(3,220)	$	(540,230)	$	202,338	$	33,774	$	236,112

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LianBio

Consolidated Statements of Shareholders’ Equity

(In thousands, except share amounts)

(Unaudited)


	Ordinary Shares		Additional Paid in Capital			Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Total LianBio Shareholders’ Equity (Deficit)		Non- Controlling Interest		Total Shareholders’ Equity (Deficit)
		Shares			Amount
Balance, December 31, 2021		107,275,458	$	2		$	713,269	$	526	$	(360,235)	$	353,562	$	33,774	$	387,336
Share-based compensation expense		—	—			4,669		—		—		4,669		—		4,669
Receivable from related party		—	—			1,710		—		—		1,710		—		1,710
Net loss		—	—			—		—		(27,726)		(27,726)		—		(27,726)
Comprehensive Income		—	—			—		(1,216)		—		(1,216)		—		(1,216)
Balance, March 31, 2022		107,275,458	$	2		$	719,648	$	(690)	$	(387,961)	$	330,999	$	33,774	$	364,773
Share-based compensation expense		—	—			4,528		—		—		4,528		—		4,528
Exercise of options		1,000,000	—			—		—		—		—		—		—
Exercise of warrants		78,373	—			—		—		—		—		—		—
Net loss		—	—			—		—		(42,391)		(42,391)		—		(42,391)
Comprehensive loss		—	—			—		(712)		—		(712)		—		(712)
Balance, June 30, 2022		108,353,831	$	2		$	724,176	$	(1,402)	$	(430,352)	$	292,424	$	33,774	$	326,198
Share-based compensation expense		—	—			4,739		—		—		4,739		—		4,739

Net Loss		—	—			—		—		(21,897)		(21,897)		—		(21,897)
Comprehensive Loss		—	—			—		(2,442)		—		(2,442)		—		(2,442)
Balance, September 30, 2022		108,353,831	$	2		$	728,915	$	(3,844)	$	(452,249)	$	272,824	$	33,774	$	306,598

See accompanying notes to the consolidated financial statements

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LianBio

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended September 30, 2023		Nine Months Ended September 30, 2022
Net loss	$	(69,705)	$	(92,014)
Adjustments to reconcile net loss to net cash used in operating activities:

Non-cash operating lease expense	—		354
Depreciation expense	983		689
Share based compensation expense	13,310		13,936
Amortization of discounts on investments, net	(3,368)		(481)
Unrealized foreign currency transaction gain, net	(1,206)		(1,375)
Changes in operating assets and liabilities:


Prepaid expenses and other current assets	3,663		4,794
Other receivable	860		(1,244)

Other non-current assets	—		11
Accounts payable	4,949

SEC Form 10-Q filed by LianBio