morf-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 March 31, 2022


☐			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: 001-38940

MORPHIC HOLDING, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of Incorporation or Organization)			47-3878772 (I.R.S. Employer Identification No.)
35 Gatehouse Drive, A2 Waltham, MA (Address of Principal Executive Offices)			02451 (Zip Code)

Registrant’s telephone number, including area code: (781) 996-0955

Not Applicable

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

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


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	MORF	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 ☒ 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 (Section 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 Exchange Act Rule 12b-2). Yes ☐ No ☒

The number of shares outstanding of the registrant’s Common Stock as of May 2, 2022 was 38,269,371.

Table of Contents

TABLE OF CONTENTS


			Page

Part I—Financial Information			2
Item 1—Condensed Consolidated Financial Statements (unaudited)			2
Condensed Consolidated Balance Sheets as of M arch 31 , 202 2 and December 31, 202 1			2
Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended M arch 31 , 202 2 and 202 1			3
Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31 , 202 2 and 20 21			4
Condensed Consolidated Statements of Cash Flows for the three months ended March 31 , 202 2 and 202 1			5
Notes to Unaudited Condensed 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			24
Item 4—Controls and Procedures			24

Part II—Other Information			25
Item 1—Legal Proceedings			25
Item 1A—Risk Factors			26
Item 2—Unregistered Sales of Equity Securities and Use of Proceeds			74
Item 3—Defaults Upon Senior Securities			74
Item 4—Mine Safety Disclosures			74
Item 5—Other Information			74
Item 6—Exhibits			74
Signatures			75

Table of Contents

PART I—FINANCIAL INFORMATION


Item 1. Condensed Consolidated Financial Statements (unaudited)

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except share and per share data)


	March 31,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	119,842	$	171,434
Short-term marketable securities	260,810		236,701
Accounts receivable	2,039		2,307
Prepaid expenses and other current assets	6,803		7,892
Total current assets	389,494		418,334
Operating lease right-of-use assets	4,490		4,806
Property and equipment, net	2,368		2,583
Restricted cash	560		560
Other assets	161		7
Total assets	$	397,073	$	426,290

Liabilities
Current liabilities:
Accounts payable	$	3,496	$	4,798
Accrued expenses	9,988		12,838
Deferred revenue, current portion	30,308		20,628
Total current liabilities	43,792		38,264

Long-term liabilities:
Operating lease liability, net of current portion	3,478		3,838
Deferred revenue, net of current portion	36,435		47,489
Total liabilities	83,705		89,591

Commitments and contingencies (Note 9)

Stockholders’ Equity
Preferred shares, $0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2022 and December 31, 2021	—		—
Common shares, $0.0001 par value, 400,000,000 shares authorized, 37,250,469 shares issued and outstanding as of March 31, 2022 and 37,085,397 shares issued and outstanding as of December 31, 2021	4		4
Additional paid‑in capital	584,694		575,231
Accumulated deficit	(269,538)		(238,054)
Accumulated other comprehensive loss	(1,792)		(482)
Total stockholders’ equity	313,368		336,699
Total liabilities and stockholders’ equity	$	397,073	$	426,290

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

Table of Contents


MORPHIC HOLDING, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (In thousands, except share and per share data)


	Three Months Ended March 31,
	2022		2021
Collaboration revenue	$	2,382	$	3,265
Operating expenses:
Research and development	26,463		18,613
General and administrative	7,591		5,953
Total operating expenses	34,054		24,566
Loss from operations	(31,672)		(21,301)
Other income:
Interest income, net	187		29
Other income (expense), net	1		(12)
Total other income, net	188		17
Loss before provision for income taxes	(31,484)		(21,284)
Provision for income taxes	—		—
Net loss	$	(31,484)	$	(21,284)

Net loss per share, basic and diluted	$	(0.85)	$	(0.63)

Weighted average common shares outstanding, basic and diluted	37,133,412		33,532,405

Comprehensive loss:
Net loss	$	(31,484)	$	(21,284)
Other comprehensive (loss) income:
Unrealized holding (losses) gains on marketable securities, net of tax	(1,310)		5
Total other comprehensive (loss) income	(1,310)		5
Comprehensive loss	$	(32,794)	$	(21,279)

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

Table of Contents


MORPHIC HOLDING, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (In thousands, except share data)

SEC Form 10-Q filed by Morphic Holding Inc.