reta-10q_20210331.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 March 31, 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: 001-37785

Reata Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware		11-3651945
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

5320 Legacy Drive Plano, Texas		75024
(Address of principal executive offices)		(Zip Code)

(972) 865-2219

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Class A Common Stock, Par Value $0.001 Per Share

RETA

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, an emerging growth company, or a smaller reporting 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 April 30, 2021, the registrant had 31,368,320 shares of Class A common stock, $0.001 par value per share, and 4,909,492 shares of Class B common stock, $0.001 par value per share, outstanding.

TABLE OF CONTENTS


		Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		1
DEFINED TERMS		3
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations	5
	Consolidated Statements of Stockholders’ Equity (Deficit)	6
	Consolidated Statements of Cash Flows	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	35
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
Signatures		38

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. In this Quarterly Report on Form 10-Q, all statements, other than statements of historical or present facts, including statements regarding our future financial condition, future revenues, projected costs, prospects, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “believe,” “will,” “may,” “might,” “estimate,” “continue,” “anticipate,” “intend,” “target,” “project,” “model,” “should,” “would,” “plan,” “expect,” “predict,” “could,” “seek,” “goals,” “potential,” and similar terms or expressions that concern our expectations, strategy, plans, or intentions. These forward-looking statements include, but are not limited to, statements about:

•

our expectations regarding the timing, costs, conduct, and outcome of our clinical trials, including statements regarding the timing of the initiation and availability of data from such trials;

•

the timing and likelihood of regulatory filings and approvals for our product candidates;

•

whether regulatory authorities determine that additional trials or data are necessary in order to accept a new drug application for review and/or approval;

•

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

•

our plans to research, develop, and commercialize our product candidates;

•

the commercialization of our product candidates, if approved;

•

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

•

our expectations regarding the potential market size and the size of the patient populations for our product candidates, if approved for commercial use, and the potential market opportunities for commercializing our product candidates;

•

the success of competing therapies that are or may become available;

•

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

•

the ability to license additional intellectual property relating to our product candidates and to comply with our existing license agreements;

•

our ability to maintain and establish relationships with third parties, such as contract research organizations (CROs), contract manufacturing organizations, suppliers, and distributors;

•

our ability to maintain and establish collaborators with development, regulatory, and commercialization expertise;

•

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

•

our ability to grow our organization and increase the size of our facilities to meet our anticipated growth;

•

the accuracy of our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing;

•

our expectations related to the use of our available cash;

•

our ability to develop, acquire, and advance product candidates into, and successfully complete, clinical trials;

•

the initiation, timing, progress, and results of future preclinical studies and clinical trials, and our research and development programs;

•

the impact of governmental laws and regulations and regulatory developments in the United States and foreign countries;

•

developments and projections relating to our competitors and our industry;

•

the impact of the coronavirus disease (COVID-19) on our clinical trials, our supply chain, and our operations; and

•

other risks and uncertainties, including those described under the heading “Risk Factors” included in our most recent Annual Report on Form 10-K for the year ended December 31, 2020, filed with the U.S. Securities and Exchange Commission (SEC) on March 1, 2021.

Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties, and other 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 these forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

DEFINED TERMS

Unless the context requires otherwise, references to “Reata,” “the Company,” “we,” “us,” or “our” in this Quarterly Report on Form 10-Q refer to Reata Pharmaceuticals, Inc. and its subsidiaries. We also have used several other terms in this Quarterly Report on Form 10-Q, most of which are explained or defined below.

Abbreviated Term		Defined Term
AbbVie		AbbVie Inc.
ADPKD		Autosomal dominant polycystic kidney disease
AE		Adverse event
ASC		Accounting Standards Codification
ASU		Accounting Standards Update
ATP		Adenosine triphosphate production
Bardoxolone		Bardoxolone methyl
BXLS		Blackstone Life Sciences, LLC
CARES Act		Coronavirus Aid, Relief, and Economic Security Act
CKD		Chronic kidney disease
COVID-19		Coronavirus disease
CRO		Contract research organization
DPNP		Diabetic peripheral neuropathic pain
eGFR		Estimated glomerular filtration rate
EMA		European Medicines Agency
ESKD		End stage kidney disease
Exchange Act		Securities Exchange Act of 1934
FA		Friedreich’s ataxia
FASB		Financial Accounting Standards Board
FDA		United States Food and Drug Administration
FSGS		Focal segmental glomerulosclerosis
GFR		Glomerular filtration rate
IgAN		IgA nephropathy
ITT		Intent to treat
KKC		Kyowa Kirin Co., Ltd.
MAA		Marketing Authorization Application
mFARS		Modified Friedreich’s Ataxia Rating Scale
mITT		Modified ITT
NDA		New Drug Application
PAH		Pulmonary arterial hypertension
PDUFA		Prescription Drug User Fee Act
PK		Pharmacokinetic
Registrational trial		An adequate and well-controlled trial designed to be sufficient to apply for regulatory approval of a drug candidate, although notwithstanding the Company’s design a regulatory agency may determine that further clinical studies or data are required
RSU		Restricted Stock Unit
SAE		Serious adverse event
SEC		U.S. Securities and Exchange Commission
T1D CKD		Type 1 diabetic CKD
T2D CKD		Type 2 diabetic CKD
UACR		Urinary albumin-to-creatinine ratio

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Reata Pharmaceuticals, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

	March 31, 2021			December 31, 2020
	(unaudited)
Assets
Cash and cash equivalents	$	777,624		$	818,150
Prepaid expenses and other current assets		5,646			6,960
Income tax receivable		22,250			22,228
Total current assets		805,520			847,338
Property and equipment, net		4,922			4,912
Other assets		4,642			5,348
Total assets	$	815,084		$	857,598
Liabilities and stockholders’ equity
Accounts payable		8,255			4,790
Accrued direct research liabilities		12,618			14,023
Other current liabilities		14,443			22,264
Payable to collaborators		75,150			73,437
Deferred revenue		3,893			4,688
Total current liabilities		114,359			119,202
Other long-term liabilities		5,013			5,511
Liability related to sale of future royalties, net		326,379			315,454
Total noncurrent liabilities		331,392			320,965
Commitments and contingencies
Stockholders’ equity:
Common stock A, $0.001 par value: 500,000,000 shares authorized; issued and outstanding – 31,360,256 and 31,109,154 at March 31, 2021 and December 31, 2020, respectively		31			31
Common stock B, $0.001 par value: 150,000,000 shares authorized; issued and outstanding – 4,909,554 and 5,044,931 at March 31, 2021 and December 31, 2020, respectively		5			5
Additional paid-in capital		1,394,997			1,375,640
Accumulated deficit		(1,025,700	)		(958,245	)
Total stockholders’ equity		369,333			417,431
Total liabilities and stockholders’ equity	$	815,084		$	857,598

SEC Form 10-Q filed by Reata Pharmaceuticals, Inc.