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 June 30, 20222023
or
| | | | | |
☐ | 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: 001-39311
POINT BIOPHARMA GLOBAL INC.
(Exact name of registrant as specified in its charter)
| | | | | | | | |
Delaware | 85-0800493 |
(State or other jurisdiction of | (IRS Employer Identification No.) |
incorporation or organization) | |
| | |
4850 West 78th Street | |
Indianapolis, | IN | 46268 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (317) 543-9957
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 | PNT | The | Nasdaq | Capital 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 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 ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, par value $0.0001 per share – 90,124,962105,765,954 shares outstanding as of August 8, 2022.9, 2023.
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
POINT Biopharma Global Inc.
Interim Condensed Consolidated Balance Sheets
(In U.S. dollars)
| | | June 30, 2022 | | | June 30, 2023 | |
| | (Unaudited) | | December 31, 2021 | | (Unaudited) | | December 31, 2022 |
| | $ | | $ | | $ | | $ |
ASSETS | ASSETS | | | | ASSETS | | | |
Current assets | Current assets | | | | Current assets | | | |
Cash and cash equivalents | Cash and cash equivalents | 78,108,242 | | | 238,815,991 | | Cash and cash equivalents | 57,293,338 | | | 286,428,371 | |
Short-term investments | Short-term investments | 121,324,415 | | | — | | Short-term investments | 365,932,523 | | | 238,783,470 | |
Prepaid expenses and other current assets | Prepaid expenses and other current assets | 5,472,394 | | | 5,030,565 | | Prepaid expenses and other current assets | 5,750,433 | | | 5,610,889 | |
Income taxes receivable | | Income taxes receivable | 3,399,009 | | | — | |
Total current assets | Total current assets | 204,905,051 | | | 243,846,556 | | Total current assets | 432,375,303 | | | 530,822,730 | |
| Non-current assets | Non-current assets | | Non-current assets | |
Long-term investments | Long-term investments | 4,898,296 | | | — | | Long-term investments | 11,570,701 | | | 16,119,430 | |
Note receivable | | Note receivable | 5,028,767 | | | — | |
Property, plant and equipment, net | Property, plant and equipment, net | 24,441,275 | | | 19,412,086 | | Property, plant and equipment, net | 48,394,217 | | | 31,380,576 | |
Operating lease right-of-use asset | | Operating lease right-of-use asset | 405,784 | | | — | |
Total non-current assets | Total non-current assets | 29,339,571 | | | 19,412,086 | | Total non-current assets | 65,399,469 | | | 47,500,006 | |
| Total assets | Total assets | 234,244,622 | | | 263,258,642 | | Total assets | 497,774,772 | | | 578,322,736 | |
| LIABILITIES & STOCKHOLDERS' EQUITY | LIABILITIES & STOCKHOLDERS' EQUITY | | LIABILITIES & STOCKHOLDERS' EQUITY | |
Current liabilities | Current liabilities | | Current liabilities | |
Accounts payable | Accounts payable | 8,066,604 | | | 1,738,470 | | Accounts payable | 13,899,941 | | | 7,703,150 | |
Accrued liabilities | Accrued liabilities | 10,220,720 | | | 5,990,516 | | Accrued liabilities | 10,099,052 | | | 19,094,454 | |
Deferred revenue | | Deferred revenue | 15,899,770 | | | 23,242,290 | |
Income taxes payable | Income taxes payable | 509,403 | | | 250,978 | | Income taxes payable | — | | | 29,698,546 | |
Finance lease current liability | | Finance lease current liability | 1,011,217 | | | — | |
Operating lease current liability | | Operating lease current liability | 245,814 | | | — | |
Total current liabilities | Total current liabilities | 18,796,727 | | | 7,979,964 | | Total current liabilities | 41,155,794 | | | 79,738,440 | |
| Deferred tax liability | 65,592 | | | 65,592 | | |
Deferred revenue, net of current portion | | Deferred revenue, net of current portion | 3,197,547 | | | 10,178,147 | |
Long-term income taxes payable | | Long-term income taxes payable | 1,452,356 | | | 1,452,356 | |
Finance lease liability, net of current portion | | Finance lease liability, net of current portion | 4,348,112 | | | — | |
Operating lease liability, net of current portion | | Operating lease liability, net of current portion | 169,045 | | | — | |
Total liabilities | Total liabilities | 18,862,319 | | | 8,045,556 | | Total liabilities | 50,322,854 | | | 91,368,943 | |
| Commitments and contingencies (note 12) | 0 | | 0 | |
Commitments and contingencies (Note 12) | | Commitments and contingencies (Note 12) | |
| Stockholders’ equity | Stockholders’ equity | | Stockholders’ equity | |
Common Stock, par value $0.0001 per share, 430,000,000 authorized, 90,124,962 and 90,121,794 issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | 9,012 | | | 9,012 | | |
Common Stock, par value $0.0001 per share, 430,000,000 authorized, 105,765,954 and 105,649,741 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | | Common Stock, par value $0.0001 per share, 430,000,000 authorized, 105,765,954 and 105,649,741 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 10,576 | | | 10,565 | |
Additional paid-in capital | Additional paid-in capital | 315,961,198 | | | 314,488,782 | | Additional paid-in capital | 451,443,330 | | | 448,391,574 | |
Accumulated deficit | (100,245,529) | | | (59,284,708) | | |
Retained earnings | | Retained earnings | (2,933,005) | | | 39,008,505 | |
Accumulated other comprehensive loss | Accumulated other comprehensive loss | (342,378) | | | — | | Accumulated other comprehensive loss | (1,068,983) | | | (456,851) | |
Total stockholders’ equity | Total stockholders’ equity | 215,382,303 | | | 255,213,086 | | Total stockholders’ equity | 447,451,918 | | | 486,953,793 | |
| Total liabilities and stockholders’ equity | Total liabilities and stockholders’ equity | 234,244,622 | | | 263,258,642 | | Total liabilities and stockholders’ equity | 497,774,772 | | | 578,322,736 | |
See accompanying Notesnotes to the Unaudited Interim Condensed Consolidated Financial Statementsunaudited interim condensed consolidated financial statements
POINT Biopharma Global Inc.
Unaudited Interim Condensed Consolidated Statements of Operations
(In U.S. dollars)dollars, except share amounts)
| | | For the three months ended | | For the six months ended | | For the three months ended | | For the six months ended |
| | June 30, 2022 | | June 30, 2021 | | June 30, 2022 | | June 30, 2021 | | June 30, 2023 | | June 30, 2022 | | June 30, 2023 | | June 30, 2022 |
| | | $ | | $ | | $ | | $ |
Revenue | | Revenue | | | | | | | |
| Other revenue | | Other revenue | 4,865,856 | | | — | | | 14,323,120 | | | — | |
Total revenue | | Total revenue | 4,865,856 | | | — | | | 14,323,120 | | | — | |
| | $ | | $ | | $ | | $ | |
Operating expenses | Operating expenses | | | | | | | | Operating expenses | | | |
Research and development | Research and development | 20,813,882 | | | 6,700,862 | | | 33,314,730 | | | 10,970,160 | | Research and development | 31,276,573 | | | 20,813,882 | | | 58,187,045 | | | 33,314,730 | |
General and administrative | General and administrative | 4,080,401 | | | 1,949,552 | | | 7,888,343 | | | 3,414,244 | | General and administrative | 5,088,403 | | | 4,080,401 | | | 10,098,532 | | | 7,888,343 | |
Total operating expenses | Total operating expenses | 24,894,283 | | | 8,650,414 | | | 41,203,073 | | | 14,384,404 | | Total operating expenses | 36,364,976 | | | 24,894,283 | | | 68,285,577 | | | 41,203,073 | |
Loss from operations | Loss from operations | (24,894,283) | | | (8,650,414) | | | (41,203,073) | | | (14,384,404) | | Loss from operations | (31,499,120) | | | (24,894,283) | | | (53,962,457) | | | (41,203,073) | |
| Other income (expenses) | Other income (expenses) | | Other income (expenses) | |
Finance income (costs) | 509,700 | | | (2,863) | | | 557,673 | | | (5,662) | | |
Investment income | | Investment income | 5,335,753 | | | 509,700 | | | 11,099,967 | | | 557,673 | |
Foreign currency loss | Foreign currency loss | (12,259) | | | (27,599) | | | (43,900) | | | (34,806) | | Foreign currency loss | (168,770) | | | (12,259) | | | (238,960) | | | (43,900) | |
Total other income (expenses) | Total other income (expenses) | 497,441 | | | (30,462) | | | 513,773 | | | (40,468) | | Total other income (expenses) | 5,166,983 | | | 497,441 | | | 10,861,007 | | | 513,773 | |
| Loss before provision for income taxes | (24,396,842) | | | (8,680,876) | | | (40,689,300) | | | (14,424,872) | | |
Provision for income taxes | (183,405) | | | (123,782) | | | (271,521) | | | (164,207) | | |
Loss before income taxes | | Loss before income taxes | (26,332,137) | | | (24,396,842) | | | (43,101,450) | | | (40,689,300) | |
Income tax benefit (provision) | | Income tax benefit (provision) | 921,298 | | | (183,405) | | | 1,159,940 | | | (271,521) | |
Net loss | Net loss | (24,580,247) | | | (8,804,658) | | | (40,960,821) | | | (14,589,079) | | Net loss | (25,410,839) | | | (24,580,247) | | | (41,941,510) | | | (40,960,821) | |
| Net loss per basic and diluted common share: | Net loss per basic and diluted common share: | | Net loss per basic and diluted common share: | |
Basic and diluted net loss per common share | Basic and diluted net loss per common share | $ | (0.27) | | | $ | (0.15) | | | $ | (0.45) | | | $ | (0.26) | | Basic and diluted net loss per common share | $ | (0.24) | | | $ | (0.27) | | | $ | (0.40) | | | $ | (0.45) | |
Basic and diluted weighted average common shares outstanding | Basic and diluted weighted average common shares outstanding | 90,124,295 | | | 57,582,025 | | | 90,123,288 | | | 57,116,747 | | Basic and diluted weighted average common shares outstanding | 105,724,215 | | | 90,124,295 | | | 105,692,615 | | | 90,123,288 | |
|
See accompanying Notesnotes to the Unaudited Interim Condensed Consolidated Financial Statementsunaudited interim condensed consolidated financial statements
POINT Biopharma Global Inc.
Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss
(In U.S. dollars)
| | | For the three months ended | | For the six months ended | | For the three months ended | | For the six months ended |
| | June 30, 2022 | | June 30, 2021 | | June 30, 2022 | | June 30, 2021 | | June 30, 2023 | | June 30, 2022 | | June 30, 2023 | | June 30, 2022 |
| | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ |
Net loss | Net loss | $ | (24,580,247) | | | $ | (8,804,658) | | | $ | (40,960,821) | | | $ | (14,589,079) | | Net loss | (25,410,839) | | | (24,580,247) | | | (41,941,510) | | | (40,960,821) | |
Other comprehensive loss, net of tax | | | |
Other comprehensive income, net of tax | | Other comprehensive income, net of tax | |
Net unrealized loss on available-for-sale debt securities | Net unrealized loss on available-for-sale debt securities | (342,378) | | — | | | (342,378) | | | — | | Net unrealized loss on available-for-sale debt securities | (813,426) | | | (342,378) | | | (612,132) | | | (342,378) | |
Total comprehensive loss | Total comprehensive loss | $ | (24,922,625) | | | $ | (8,804,658) | | | $ | (41,303,199) | | | $ | (14,589,079) | | Total comprehensive loss | (26,224,265) | | | (24,922,625) | | | (42,553,642) | | | (41,303,199) | |
See accompanying Notesnotes to the Unaudited Interim Condensed Consolidated Financial Statementsunaudited interim condensed consolidated financial statements
POINT Biopharma Global Inc.
Unaudited Interim Condensed Consolidated Statements of Stockholders’ Equity
(In U.S. dollars, except share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | Additional Paid-in Capital | | Accumulated Deficit | | Accumulated Other Comprehensive Loss | | Total Equity |
| Number | | Amount | | | | |
| # | | $ | | $ | | $ | | $ | | $ |
Balance at December 31, 2022 | 105,649,741 | | | 10,565 | | | 448,391,574 | | | 39,008,505 | | | (456,851) | | | 486,953,793 | |
Issuance of shares of Common Stock in connection with stock option exercises | 32,936 | | | 3 | | | 145,861 | | | — | | | — | | | 145,864 | |
Stock-based compensation | — | | | — | | | 1,009,496 | | | — | | | — | | | 1,009,496 | |
Net loss | — | | | — | | | — | | | (16,530,671) | | | — | | | (16,530,671) | |
Other comprehensive income, net of tax | — | | | — | | | — | | | — | | | 201,294 | | | 201,294 | |
Balance at March 31, 2023 | 105,682,677 | | | 10,568 | | | 449,546,931 | | | 22,477,834 | | | (255,557) | | | 471,779,776 | |
Issuance of shares of Common Stock in connection with stock option exercises | 83,277 | | | 8 | | | 186,050 | | | — | | | — | | | 186,058 | |
Stock-based compensation | — | | | — | | | 1,710,349 | | | — | | | — | | | 1,710,349 | |
Net loss | — | | | — | | | — | | | (25,410,839) | | | — | | | (25,410,839) | |
Other comprehensive loss, net of tax | — | | | — | | | — | | | — | | | (813,426) | | | (813,426) | |
Balance at June 30, 2023 | 105,765,954 | | | 10,576 | | | 451,443,330 | | | (2,933,005) | | | (1,068,983) | | | 447,451,918 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| POINT Biopharma Inc. common shares | | | Common Stock | | Additional Paid-in Capital | | Accumulated Deficit | | Accumulated Other Comprehensive Loss | | Total Equity |
| Number | | Amount | | | Number | | Amount | | | | |
| # | | $ | | | # | | $ | | $ | | $ | | $ | | $ |
Balance at December 31, 2021 | — | | | — | | | | 90,121,794 | | | 9,012 | | | 314,488,782 | | | (59,284,708) | | | — | | | 255,213,086 | |
Issuance of shares of Common Stock in connection with stock option exercises | — | | | — | | | | 678 | | | — | | | 942 | | | — | | | — | | | 942 | |
Stock-based compensation | — | | | — | | | | — | | | — | | | 440,450 | | | — | | | — | | | 440,450 | |
Net loss | — | | | — | | | | — | | | — | | | — | | | (16,380,574) | | | — | | | (16,380,574) | |
Balance at March 31, 2022 | — | | | — | | | | 90,122,472 | | | 9,012 | | | 314,930,174 | | | (75,665,282) | | | — | | | 239,273,904 | |
Issuance of shares of Common Stock in connection with stock option exercises | — | | | — | | | | 2,490 | | | — | | | 3,461 | | | — | | | — | | | 3,461 | |
Stock-based compensation | — | | | — | | | | — | | | — | | | 1,027,563 | | | — | | | — | | | 1,027,563 | |
Net loss | — | | | — | | | | — | | | — | | | — | | | (24,580,247) | | | — | | | (24,580,247) | |
Other comprehensive loss, net of taxes | — | | | — | | | | — | | | — | | | — | | | — | | | (342,378) | | | (342,378) | |
Balance at June 30, 2022 | — | | | — | | | | 90,124,962 | | | 9,012 | | | 315,961,198 | | | (100,245,529) | | | (342,378) | | | 215,382,303 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| POINT Biopharma Inc. common shares | | | Common Stock | | Additional Paid-in Capital | | Accumulated Deficit | | Accumulated Other Comprehensive Loss | | Total Equity |
| Number | | Amount | | | Number | | Amount | | | | |
| # | | $ | | | # | | $ | | $ | | $ | | $ | | $ |
Balance at December 31, 2020 (as previously reported) | 15,233,884 | | | 15,234 | | | | — | | | — | | | 26,847,271 | | | (13,382,227) | | | — | | | 13,480,278 | |
Retroactive application of the recapitalization due to the Business Combination (refer to Note 3) | (15,233,884) | | | (15,234) | | | | 54,647,656 | | | 5,465 | | | 9,769 | | | — | | | — | | | — | |
Balance at December 31, 2020, effect of the Business Combination (refer to Note 3) | — | | | — | | | | 54,647,656 | | | 5,465 | | | 26,857,040 | | | (13,382,227) | | | — | | | 13,480,278 | |
Issuance of shares of Common Stock in connection with exercise of warrants | — | | | — | | | | 2,869,799 | | | 287 | | | 19,999,713 | | | — | | | — | | | 20,000,000 | |
Issuance of shares of Common Stock in connection with stock option exercises | — | | | — | | | | 64,570 | | | 6 | | | 449,994 | | | — | | | — | | | 450,000 | |
Stock-based compensation | — | | | — | | | | — | | | — | | | 477,245 | | | — | | | — | | | 477,245 | |
Net loss | — | | | — | | | | — | | | — | | | — | | | (5,784,421) | | | — | | | (5,784,421) | |
Balance at March 31, 2021, effect of the Business Combination (refer to Note 3) | — | | | — | | | | 57,582,025 | | | 5,758 | | | 47,783,992 | | | (19,166,648) | | | — | | | 28,623,102 | |
Issuance of shares of Common Stock, net of direct and incremental costs in connection with the Business Combination (refer to Note 3) | — | | | — | | | | 32,539,769 | | | 3,254 | | | 264,562,167 | | | — | | | — | | | 264,565,421 | |
Stock-based compensation | — | | | — | | | | — | | | — | | | 1,106,457 | | | — | | | — | | | 1,106,457 | |
Net loss | — | | | — | | | | — | | | — | | | — | | | (8,804,658) | | | — | | | (8,804,658) | |
Balance at June 30, 2021, effect of the Business Combination (refer to Note 3) | — | | | — | | | | 90,121,794 | | | 9,012 | | | 313,452,616 | | | (27,971,306) | | | — | | | 285,490,322 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | Additional Paid-in Capital | | Accumulated Deficit | | Accumulated Other Comprehensive Loss | | Total Equity |
| Number | | Amount | | | | |
| # | | $ | | $ | | $ | | $ | | $ |
Balance at December 31, 2021 | 90,121,794 | | | 9,012 | | | 314,488,782 | | | (59,284,708) | | | — | | | 255,213,086 | |
Issuance of shares of Common Stock in connection with stock option exercises | 678 | | | — | | | 942 | | | — | | | — | | | 942 | |
Stock-based compensation | — | | | — | | | 440,450 | | | — | | | — | | | 440,450 | |
Net loss | — | | | — | | | — | | | (16,380,574) | | | — | | | (16,380,574) | |
Balance at March 31, 2022 | 90,122,472 | | | 9,012 | | | 314,930,174 | | | (75,665,282) | | | — | | | 239,273,904 | |
Issuance of shares of Common Stock in connection with stock option exercises | 2,490 | | | — | | | 3,461 | | | — | | | — | | | 3,461 | |
Stock-based compensation | — | | | — | | | 1,027,563 | | | — | | | — | | | 1,027,563 | |
Net loss | — | | | — | | | — | | | (24,580,247) | | | — | | | (24,580,247) | |
Other comprehensive loss, net of tax | — | | | — | | | — | | | — | | | (342,378) | | | (342,378) | |
Balance at June 30, 2022 | 90,124,962 | | | 9,012 | | | 315,961,198 | | | (100,245,529) | | | (342,378) | | | 215,382,303 | |
See accompanying Notesnotes to the Unaudited Interim Condensed Consolidated Financial Statements
unaudited interim condensed consolidated financial statements
POINT Biopharma Global Inc.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(In U.S. dollars)
| | | For the six months ended | | For the six months ended |
| | June 30, 2022 | | June 30, 2021 | | June 30, 2023 | | June 30, 2022 |
| | $ | | $ | | $ | | $ |
Cash flows from operating activities | Cash flows from operating activities | | | | Cash flows from operating activities | | | |
Net loss: | Net loss: | (40,960,821) | | | (14,589,079) | | Net loss: | (41,941,510) | | | (40,960,821) | |
Adjustments to reconcile net loss to net cash used in operating activities: | Adjustments to reconcile net loss to net cash used in operating activities: | | Adjustments to reconcile net loss to net cash used in operating activities: | |
Depreciation on property, plant and equipment | Depreciation on property, plant and equipment | 584,076 | | | — | | Depreciation on property, plant and equipment | 1,322,329 | | | 584,076 | |
Stock-based compensation expense | Stock-based compensation expense | 1,468,013 | | | 1,583,702 | | Stock-based compensation expense | 2,719,845 | | | 1,468,013 | |
Amortization of debt issuance costs | — | | | 5,662 | | |
Operating lease expense | | Operating lease expense | 50,499 | | | — | |
Payments on operating lease | | Payments on operating lease | (49,321) | | | — | |
Amortization of premiums (accretion of discounts) on investments, net | Amortization of premiums (accretion of discounts) on investments, net | (128,150) | | | — | | Amortization of premiums (accretion of discounts) on investments, net | (7,066,456) | | | (128,150) | |
Changes in operating assets and liabilities | | |
Changes in operating assets and liabilities: | | Changes in operating assets and liabilities: | |
Prepaid expenses and other current assets | Prepaid expenses and other current assets | (441,829) | | | (6,221,240) | | Prepaid expenses and other current assets | (139,544) | | | (441,829) | |
Accounts payable | Accounts payable | 4,290,469 | | | (1,571,469) | | Accounts payable | 4,285,143 | | | 4,290,469 | |
Accrued liabilities | Accrued liabilities | 3,782,033 | | | 1,149,742 | | Accrued liabilities | (9,178,905) | | | 3,734,644 | |
Income taxes payable | 258,425 | | | 164,207 | | |
Amount due to related party within accrued liabilities | (47,389) | | | 33,910 | | |
Deferred revenue | | Deferred revenue | (14,323,120) | | | — | |
Income taxes receivable and payable | | Income taxes receivable and payable | (33,097,555) | | | 258,425 | |
Change in accrued interest and dividends within investments | Change in accrued interest and dividends within investments | 126,192 | | | — | | Change in accrued interest and dividends within investments | 691,359 | | | 126,192 | |
Net cash used in operating activities | Net cash used in operating activities | (31,068,981) | | | (19,444,565) | | Net cash used in operating activities | (96,727,236) | | | (31,068,981) | |
| Cash flows from investing activities | Cash flows from investing activities | | Cash flows from investing activities | |
Purchase of investments | (126,563,131) | | | — | | |
Purchase of investments, net of sales and maturities | | Purchase of investments, net of sales and maturities | (116,749,966) | | | (126,563,131) | |
Purchase of property, plant and equipment | Purchase of property, plant and equipment | (3,080,040) | | | (3,242,281) | | Purchase of property, plant and equipment | (10,856,112) | | | (3,080,040) | |
Purchase of note receivable | | Purchase of note receivable | (5,000,000) | | | — | |
Net cash used in investing activities | Net cash used in investing activities | (129,643,171) | | | (3,242,281) | | Net cash used in investing activities | (132,606,078) | | | (129,643,171) | |
| Cash flows from financing activities | Cash flows from financing activities | | Cash flows from financing activities | |
Issuance of shares of Common Stock in connection with exercise of warrants | — | | | 20,000,000 | | |
Issuance of shares of Common Stock in connection with stock option exercises | Issuance of shares of Common Stock in connection with stock option exercises | 4,403 | | | 450,000 | | Issuance of shares of Common Stock in connection with stock option exercises | 331,922 | | | 4,403 | |
Issuance of shares of Common Stock in connection with the Business Combination (see note 3), net of costs incurred by RACA and direct and incremental costs paid | — | | | 265,426,917 | | |
Payments on finance lease | | Payments on finance lease | (133,641) | | | — | |
Net cash provided by financing activities | Net cash provided by financing activities | 4,403 | | | 285,876,917 | | Net cash provided by financing activities | 198,281 | | | 4,403 | |
| Net (decrease) increase in cash and cash equivalents | (160,707,749) | | | 263,190,071 | | |
Net decrease in cash and cash equivalents | | Net decrease in cash and cash equivalents | (229,135,033) | | | (160,707,749) | |
Cash and cash equivalents, beginning of period | Cash and cash equivalents, beginning of period | 238,815,991 | | | 10,546,749 | | Cash and cash equivalents, beginning of period | 286,428,371 | | | 238,815,991 | |
Cash and cash equivalents, end of period | Cash and cash equivalents, end of period | 78,108,242 | | | 273,736,820 | | Cash and cash equivalents, end of period | 57,293,338 | | | 78,108,242 | |
| Supplemental disclosure of cash flow information: | Supplemental disclosure of cash flow information: | | Supplemental disclosure of cash flow information: | |
Cash paid for income taxes | Cash paid for income taxes | (3,022) | | | (4,185) | | Cash paid for income taxes | 31,913,750 | | | 3,022 | |
Cash paid for interest on mortgage payable | — | | | (55,832) | | |
Non-cash investment activities: | Non-cash investment activities: | | Non-cash investment activities: | |
Purchase of property, plant and equipment recorded in accounts payable and accrued liabilities | Purchase of property, plant and equipment recorded in accounts payable and accrued liabilities | 3,345,729 | | | 2,614,542 | | Purchase of property, plant and equipment recorded in accounts payable and accrued liabilities | 3,504,652 | | | 3,345,729 | |
See accompanying notes to the unaudited interim condensed consolidated financial statements
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
1. Nature of business
Formation and organization
POINT Biopharma Global Inc., together with its consolidated subsidiaries (the("POINT" or the “Company”), is a globally focused radiopharmaceutical company building a platform for the clinical development and commercialization of radioligands that fight cancer. On September 18, 2019, POINT Theranostics Inc. was incorporated under the General Corporation Law of the State of Delaware (the "DGCL") and amended its name to “POINT Biopharma Inc.” on November 22, 2019. On June 30, 2021, following the Business Combination (as defined in Note 3 below), POINT Biopharma Inc. became a wholly-owned subsidiary of POINT Biopharma Global Inc. Under the terms of the Business Combination Agreement (as defined in Note 3 below), stockholders of POINT Biopharma Inc. received approximately 3.59 shares of common stock, par value $0.0001 per share, of the Company (“Common Stock”) in exchange for each common share of POINT Biopharma Inc. Also in connection with the closing of the Business Combination, RACA (as defined in Note 3 below) consummated the sale of an aggregate of 16,500,000 shares of Class A common stock, par value $0.0001 per share, of RACA (“Class A Common Stock”) in a private placement at a price of $10.00 per share, for aggregate gross proceeds of $165,000,000 (“PIPE Financing”). In accordance with the terms of the Business Combination Agreement, upon the closing of the Business Combination, each share of Class A Common Stock and each share of Class B common stock, par value $0.0001 per share, of RACA (“Class B Common Stock”) was converted into one share of Common Stock of the Company. For additional information on the Business Combination, please see Note 3.
The Company was founded on a mission to make radioligand therapy applicable to more cancers and available to more people, thereby improving the lives of cancer patients and their families everywhere.
The Company has 4four wholly-owned subsidiaries, POINT Biopharma Inc., POINT Biopharma USA Inc. and West 78th Street, LLC, each located in the USA,U.S., and POINT Biopharma Corp., located in Canada.Canada (collectively the "Subsidiaries"). The Company’s headquarters is located at 4850 West 78th Street, Indianapolis, Indiana, 46268.
2. Summary of significant accounting policies
Basis of presentation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 270, Interim Reporting and include the accounts of the Company and its wholly-owned subsidiaries, POINT Biopharma Inc., POINT Biopharma Corp., POINT Biopharma USA, Inc. and West 78th Street, LLC,the Subsidiaries, for financial information and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the balances and results for the periods presented. Except as described below, the accounting policies and methods of computation applied in the unaudited interim condensed consolidated financial statements and related notes contained therein are consistent with those applied by the Company in its audited consolidated financial statements as of and for the year ended December 31, 20212022 contained in our 2021 Annual Report on Form 10-K for the year ended December 31, 2021,2022, as filed with the SEC on March 25, 202227, 2023 (the “2021“2022 Financial Statements”). These unaudited interim condensed consolidated financial statements should be read in conjunction with the 20212022 Financial Statements.
These unaudited interim condensed consolidated financial statements and accompanying notes have been prepared in accordance with the provisions of ASC Topic 205-40, Presentation of Financial Statements—Going Concern on the basis that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.
Impact of Covid-19COVID-19 Pandemic, macroeconomics and other geopolitical events
The COVID-19 coronavirus ("COVID-19") pandemic, which was declared byAlthough the World Health Organization asdeclared in early May of 2023 that COVID-19 no longer constitutes a pandemic in March 2020public health emergency, the Company continues to actively monitor the COVID-19 developments and has spread worldwide, has caused many governments to implement measures to slowpotential impact on the spread of the outbreak through quarantines, travel restrictions, heightened border securityCompany's employees, business and other measures.operations. The impact of this pandemic has been,from global economic conditions and will likely continue to be, extensive in many aspects of society, which has resulted,potential and will likely continue to result, in significantcontinuing disruptions to and volatility in the global economy as well as businessescredit and capitalequity markets aroundin the world.United States and worldwide are highly uncertain and cannot be predicted. The future progressionCompany is currently operating in a period of significant economic uncertainty, resulting from, among other things, the pandemic and its effects on the Company’s business and operations are uncertain.
In response to public health directives and orders and to help minimize the risk of the virus to employees, the Company has taken precautionary measures, including implementing work-from-home policies, mandatory vaccination, daily check-ins, masking and weekly testing for certain employees. The impact of the virus, including work-from-home policies, may negatively impact productivity, disruptCOVID-19 pandemic, geopolitical tensions, such as the Company’s business, and delay its preclinical research and clinical trial activities and its development program timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on the Company’s ability to conduct its business in the ordinary course. Specifically, the Company may not be able to enroll additional patient cohorts on its planned timeline due to disruptions at its clinical trial sites. Other impacts to the Company’s business may include temporary closures of its suppliers and disruptions or restrictions on its employees’ ability to travel. Any prolonged material disruption to the Company’s employees or suppliers could adversely impact the Company’s preclinical research and clinical trial activities, financial condition and results of operations, including its ability to obtain financing.
Additionally, financial markets may be adversely affected by the current or anticipated impact ofongoing military conflict including escalating military fighting between Russia and Ukraine terrorism or other geopolitical events. The U.S.and heightened tensions between China and Taiwan, trade uncertainty, including changes in tariffs, sanctions, international treaties, and other nations in response to the Russo-Ukrainian conflict have announced economic sanctions which may have an adverse effect on the global financial markets, which, in turn, could have an adverse effect on our business, financial conditiontrade restrictions, rising inflation and results of operations. The Company's SPLASH trial has vendor staff in Ukraine,interest rates, and any political instabilityuncertainty and liquidity concerns in the region may disrupt resourcing assigned to the trial and negatively impact our business.broader financial services industry, including those caused by certain recent banking failures.
The Company is monitoringcontinuing to monitor the continuing impact of the COVID-19 pandemicdevelopment and the potential impact of the Russo-Ukrainian conflictthese global economic and geopolitical events on its business and unaudited interim condensed consolidated financial statements. To date, the Company has not experienced any material business disruptions or incurred any impairment losses in the carrying values of its assets as a result of these events and it is not aware of any specific related event or circumstance that would require it to revise its estimates reflected in these unaudited interim condensed consolidated financial statements.
Cash However, estimates and Cash Equivalents
The Company considers all highly liquid instrumentsassumptions about future events and their effects cannot be determined with an original maturitycertainty and therefore require the exercise of three months or less as cash equivalents.
Investments
The Company determines the appropriate classification of its investments in debt securities at the time of purchase and re-evaluates such determination at each balance sheet date. The Company classifies its investments as current or non-current based on each instrument’s underlying maturity date. Investments with original maturities of greater than three months and less than one year are classified as current and are included in short-term investments in the condensed consolidated balance sheets. Investments with remaining maturities greater than one year from the balance sheet date are classified as non-current and are included in long-term investments in the condensed consolidated balance sheets. The Company’s investments are classified as available-for-sale and reported at fair value. Unrealized gains and losses are included in other comprehensive income (loss)judgment; as a component of shareholders’ equity until realized. Amortizationresult, the Company’s estimates may change as new events occur and accretion of premiums and discounts are recorded in finance income (expense). Realized gains and losses on debt securities are included in other income (expense), net.
The Company evaluates its investments with unrealized losses for other-than-temporary impairment. If any adjustment to fair value reflects a decline in the value of the investment, the Company considers all available evidence to evaluate the extent to which the declineadditional information is other-than-temporary in nature. For any adjustment the Company considers to be other-than-temporary, the Company reduces the investment to fair value through a charge to the statement of operations. No such adjustments were necessary during the periods presented.
obtained.
Risks and uncertainties
TheExcept for the upfront payment received pursuant to the Lantheus License Agreements (as defined in Note 3 below), the Company has incurred significant net losses since inception and prior to the Business Combination, hadhas funded operations primarily through equity financings. Operating losses and negative cash flows were incurred in the three and six months ended June 30, 2023 and are expected to continue for the foreseeable future. As losses continue
to be incurred thein future periods. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, successful discovery and development of its product candidates, regulatory approval of its product candidates, development by competitors of new technological innovations, dependence on key personnel, the ability to attract and retain qualified employees, protection of proprietary technology, compliance with governmental regulations, the impact of macroeconomic disruptions, such as those arising from public health crisis or military conflicts and adverse developments affecting the COVID-19 coronavirus and the Russo-Ukrainian conflict,financial services industry, the ability to secure additional capital to fund operations and commercial success of its product candidates. Product candidates currently under development will require extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities. Even
if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.
Use of estimates
The preparation of the unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, related disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements, and the reported amounts of expenses for the periods presented. Significant estimates and assumptions reflected in these unaudited interim condensed consolidated financial statements include, but are not limited to, the allocation of consideration and the recognition of revenues in respect of the performance obligations under the Lantheus License Agreements, the accrual of research and development expenses, incremental borrowing rates determined in connection with finance and operating lease obligations and the valuations of stock options and warrants.options. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions.
Recently adopted accounting standards
Debt with Conversion and Other OptionsLeases
The FASBCompany accounts for leases in accordance with ASC Topic 842, Leases ("ASC 842"). At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. The Company has issued ASU 2020-06, Debt—Debtelected not to recognize leases with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contractsan original term of one year or less in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible instruments, such as convertible debt or convertible preferred stock, by eliminating two potential methods in accountingunaudited interim condensed consolidated balance sheets. The Company has also elected to account for the embedded conversion feature. The standard also removes certain conditions previously usedlease and non-lease components as a combined lease component for its current lease portfolio. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Options to evaluate whetherrenew or early terminate a freestanding financial instrument, or certain types of embedded features,lease are considered to be settledincluded in the issuer’s own equity. Finally, ASU 2020-06initial lease term of a lease when there is reasonable certainty that the option will be applied.
ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that an entity use the if-converted method in calculating the effects of convertible instruments on diluted earnings per share, with one limited exception.rate cannot be readily determined, its incremental borrowing rate. The amendments in this ASU are effectiveCompany's incremental borrowing rate is determined using a secured borrowing rate for the Companysame currency and term as the associated lease in a similar economic environment.
Lease expense for fiscal years beginning after December 15, 2023. operating leases is recognized on a straight-line basis over the lease term and included in operating expenses in the unaudited interim condensed consolidated statements of operations and comprehensive loss.
Recent accounting pronouncements
The Company earlyhas evaluated accounting pronouncements recently issued but not yet adopted and believes that the provisions of ASU 2020-06 on January 1, 2022current accounting pronouncements currently do not apply to the Company’s operations and there was noare not expected to have a material impact to itson the Company’s unaudited interim condensed consolidated financial statements.
Issuer’s Accounting for Certain Modificationsstatements or Exchanges of Freestanding Equity-Classified Written Call Options
The FASB has issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2021-04 provides guidance that an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. The standard also provides guidance on how an entity should measure and recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified. The amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2021. The Company adopted the provisions of ASU 2021-04 on January 1, 2022 and there was no material impact to its interim condensed consolidated financial statements.disclosures.
3. Business CombinationRevenue
On March 15, 2021,In November 2022, POINT Biopharmaannounced strategic collaboration and exclusive license agreements with Lantheus Holdings Inc. entered into a definitive business combination agreement("Lantheus") for exclusive worldwide rights for POINT's programs in prostate cancer (PNT2002) and neuroendocrine tumors (PNT2003), excluding certain territories (Japan, South Korea, Singapore, Indonesia, and China including Hong Kong, Macau and Taiwan) (the “Business Combination Agreement”"PNT2002 Agreement" and the "PNT2003 Agreement", respectively, and collectively the "Lantheus License Agreements"). The collaboration pairs POINT's expertise in next generation radioligand development and manufacturing with Lantheus’ commercial leadership in Prostate-Specific Membrane Antigen ("PSMA") with Therapeutics Acquisition Corp. (NASDAQ:RACA), d/b/a Research Alliance Corp. I (“RACA”), a special purpose acquisition company sponsored by RA Capital Management L.P., that was createdPET and radiopharmaceuticals.
In December 2022, closing conditions for the purposetransaction, including Hart-Scott-Rodino antitrust clearance, were satisfied. POINT received a $250.0 million upfront payment under the PNT2002 Agreement and will receive an additional payment of effectingup to $250.0 million upon U.S. regulatory approval. In addition, once certain return on investment financial thresholds have been achieved and other conditions satisfied, POINT will be eligible to receive royalties of 20% on all net sales (prior to which there is a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combinationperiod of sales in which the royalty may be based on only a portion of the gross profit), and contingent upon the satisfaction of certain net sales milestones, additional payments of up to $1.3 billion. POINT received a $10.0 million upfront payment under the PNT2003 Agreement, and will receive up to an additional $30.0 million upon U.S. regulatory approval. The PNT2003 Agreement also provides that POINT will receive royalties of 15% on net sales and, contingent upon the satisfaction of certain net sales milestones, an additional payment of up to $275.0 million.
In connection with one or more businesses. On June 30, 2021, (the “Closing Date”the PNT2002 Agreement, the Company is responsible for completing the Company's multi-center, randomized, open label phase 3 Study evaluating metastatic castration-resistant Prostate cancer using 177Lu-PNT2002 PSMA therapy After Second-line Hormonal treatment (“SPLASH"), Bodhi Merger Sub, Inc., a wholly-owned subsidiary of RACA, merged with trial and into POINT Biopharma Inc. (the “Business Combination”the parties will work together to file the New Drug Application (“NDA”), with POINT Biopharma Inc. as the surviving companycosts incurred in connection with the U.S. Food and Drug Administration ("FDA") submission being borne by Lantheus. Thereafter, Lantheus will be responsible for all additional clinical and regulatory costs in the Business CombinationU.S., as well as all costs for development, clinical trials and after giving effectregulatory approval in the rest of its territories outside the U.S., except Asia.
To determine the appropriate amount of revenue to such Business Combination, POINT Biopharma Inc. became a wholly-owned subsidiarybe recognized under ASC Topic 606, Revenue from Contracts with Customers, the Company performs the following steps: (i) identify the promised goods or services in the contract, (ii) determine whether the promised goods or services are performance obligations, including whether they are distinct in the context of RACA. RACA was then renamed “POINT Biopharma Global Inc.”the contract, (iii) measure the transaction price, including the constraint on variable consideration, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when (or as) the Company satisfies each performance obligation.
In accordanceconnection with the termsPNT2002 Agreement, the Company identified the following performance conditions: (i) the license it conveyed to Lantheus with respect to certain intellectual property, (ii) service provided to complete the SPLASH trial, support the NDA submission and participate in joint steering activities and (iii) manufacturing activities. The Company determined the transaction price under ASC Topic 606 at the inception of the Business CombinationPNT2002 Agreement to be the $250.0 million upfront payment and has allocated this to the first two performance obligations based on a relative standalone selling price basis. The standalone selling prices for the first two performance obligations were determined using the adjusted market assessment approach and the expected cost plus a margin assessment approach, respectively. The Company concluded that variable consideration associated with the product manufacturing relates solely to the manufacturing activities performance obligation on the basis that it believes that the expected margin associated with this consideration is in line with market standards and specifically relates to the Company's efforts to satisfy its manufacturing obligations.
In connection with the PNT2003 Agreement, the Company identified the following performance conditions: (i) the license it conveyed to Lantheus with respect to certain intellectual property, (ii) service provided to complete the necessary submissions for regulatory approval and participate in joint steering activities and (iii) manufacturing activities. The Company determined the transaction price under ASC Topic 606 at the inception of the PNT2003 Agreement to be the $10.0 million upfront payment and has allocated this to the first two performance obligations based on a relative standalone selling price basis. The standalone selling prices for the first two performance obligations were determined using the adjusted market assessment approach and the expected cost plus a margin assessment approach, respectively. The Company concluded that variable consideration associated with the product manufacturing relates solely to the manufacturing activities performance obligation on the basis that it believes that the expected margin associated with this consideration is in line with market standards and specifically relates to the Company's efforts to satisfy its manufacturing obligations.
The Company does not include variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will occur. Variable consideration in the PNT2002 Agreement and PNT2003 Agreement consists of:
•Potential future regulatory milestone payments. The Company concluded that this variable consideration is constrained considering that achievement of the milestones is outside its control and contingent upon the closingfuture success of clinical trials and regulatory approval by the FDA and in respect of other territories outside the U.S.
•Potential future milestone payments in connection with certain sales targets as well as any future royalties. The Company concluded that these payments qualify for the royalty exception. Under the royalty exception, sales-based royalties are recognized at the later of when (1) the subsequent sale or usage occurs or (2) the performance obligation to which some or all of the Business Combination:
(i)each share and vested equity awardsales- or usage-based royalty has been allocated is satisfied (in whole or in part). That is, an entity does not estimate the amount of POINT Biopharma Inc. outstanding as of immediately prior toa sales-based royalty at contract inception; rather, revenue would be recognized when the Closing Date was converted into shares of Common Stock ofsubsequent sales occur (under the Companyassumption that the associated performance obligation has been satisfied or comparable vested equity awards that arepartially satisfied).
exercisable•Potential payments for sharesthe manufacturing and supply of Common Stockcommercial product. The Company concluded that this variable consideration is constrained as it is contingent upon future regulatory approvals and the execution of a manufacturing and supply agreement.
The estimate of the Company’s variable consideration to be included in the transaction price is updated at each reporting date as a change in estimate. For the potential future regulatory milestone payments, the Company based on an implied vested equityutilizes the most likely amount approach to determine the amounts recognized and timing of recognition. For the potential payments for manufacturing and supply of commercial product, the Company utilizes the expected value approach to determine the amounts recognized and timing of $585,000,000 (whichrecognition. Once the constraint is equalremoved, the milestone payments will be accounted for and allocated to a conversion ratio of approximately 3.59-for-1);the performance obligations.
For the licenses conveyed to Lantheus, the Company recognized revenue upon execution and
(ii)all unvested equity awards of POINT Biopharma Inc. were converted into comparable equity awards that are exercisable for shares of Common Stock regulatory approval of the Lantheus License Agreements. The Company determined based on the same conversion ratio at which the vested equity awards are converted into shares of Common Stock of the Company; and
(iii)each share of RACA Class A Common Stock and each share of RACA Class B Common Stock that was issued and outstanding immediately prior to the Closing Date became 1 share of Common Stock of the Company.
In connection with the Business Combination, the Company consummated the PIPE Financing, pursuant to which it received $165.0 million in exchange for 16,500,000 shares of Common Stock of the Company.
After giving effect to the Business Combination, there were 90,121,794 shares of Common Stock issued and outstanding.
We accounted for the Business Combination as a reverse recapitalization, in accordance with U.S. GAAP. POINT Biopharma Inc. is treated as the accounting acquirer (legal acquiree), while RACA is the accounting acquiree (legal acquirer) for financial reporting purposes. This determination is primarily based on the factconcluded that the former POINT Biopharma Inc. stockholders retainedlicenses represent that of functional intellectual property as each has significant standalone functionality and derives a majoritysubstantial portion of their utility from that standalone functionality.
For the voting power ofobligations to complete the CompanySPLASH trial, support the NDA submission and comprise a majority of the governing body of the Company, and the former POINT Biopharma Inc. senior management comprise substantially all of the senior management of the Company. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of POINT Biopharma Inc. issuing shares for the net assets of RACA, accompanied by a recapitalization. The net assets of RACA are stated at historical costs. No goodwill or other intangible assets is recorded.
In connection with the Business Combination, the Company incurred underwriting fees and other costs considered to be direct or incremental to the proceeds raisedparticipate in joint steering activities in connection with the Business Combination and PIPE Financing totaling approximately $21.9 million, consisting of costs incurred by RACA prior to the completion of the Business CombinationPNT2002 Agreement as well as investment banker, legal, audit, tax, accountingthe obligations to complete the necessary submissions for regulatory approval and listing fees. These amounts are reflected within additional paid-in capitalparticipate in joint steering activities for the interim condensed consolidated balance sheetsPNT2003 Agreement, the Company recognizes revenue using the cost-to-cost method, which it concluded best depicts the transfer of control to the customer. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation. Under this method, revenue is recorded as a percentage of the estimated transaction price based on the extent of progress towards completion.
The following table presents the Company’s contract liabilities as of June 30, 20222023 and December 31, 2021.2022:
Summary of net proceeds | | | | | | | | | | | |
| June 30, 2023 | | December 31, 2022 |
Deferred revenue | | | |
Deferred revenue, current | $ | 15,899,770 | | | $ | 23,242,290 | |
Deferred revenue, net of current portion | 3,197,547 | | | 10,178,147 | |
Total | $ | 19,097,317 | | | $ | 33,420,437 | |
The following table summarizes the elementsAt inception of the net proceeds fromLantheus License Agreements, deferred revenue of $34.8 million was recognized in connection with future performance. During the Business Combination:
| | | | | |
| Recapitalizationthree and six months ended June |
Cash - RACA Trust and cash (net of redemptions) | 121,770,367 | |
Cash - PIPE Financing | 165,000,000 | |
Less: Underwriting fees, costs incurred by RACA and other direct and incremental costs | (21,887,685) | |
Net proceeds from the Business Combination, net of costs incurred by RACA and direct and incremental costs paid per the statement of cash flows | 264,882,682 | |
30, 2023
The net proceeds noted above exclude approximately $4.7, the Company recognized $4.9 million and $14.3 million in transactionrevenue for services performed (three and six months ended June 30, 2022 — $nil and $nil, respectively). The current portion of deferred revenue reflects the Company’s estimate of the revenue it expects to recognize within the next 12 months. The Company expects to recognize the remainder of the deferred revenue in subsequent periods through the year ending December 31, 2028. No contract assets were recognized in connection with the Lantheus License Agreements, including costs that were not considered direct and incremental to the raising of capital. These costs consist of corporate expenses in the normal course of business comprised of accounting, consulting, insurance and board retainer fees. These costs were recorded as incurred in accordance withobtaining the nature of the services received.
agreements.
Summary of shares of Common Stock issued
The following table summarizes the number of shares of Common Stock outstanding immediately following the consummation of the Business Combination:
| | | | | |
| Number of Shares |
RACA Class A and Class B shares outstanding prior to the Business Combination | 16,039,769 | |
Class A shares issued pursuant to the PIPE Financing | 16,500,000 | |
Business Combination and PIPE Financing shares as converted into Common Stock | 32,539,769 | |
Conversion of POINT Biopharma Inc. common shares into Common Stock | 57,582,025 | |
Total shares of POINT Biopharma Global Inc. Common Stock outstanding immediately following the Business Combination | 90,121,794 | |
4. Cash, cash equivalents and investments
Cash, cash equivalents and investments consisted of the following:
| | | As of June 30, 2022 | | As of December 31, 2021 | | As of June 30, 2023 | | As of December 31, 2022 |
Cash | Cash | $ | 24,197,537 | | | $ | 238,815,991 | | Cash | $ | 5,540,926 | | | $ | 12,429,627 | |
Cash equivalents: | Cash equivalents: | | Cash equivalents: | |
Money market funds | Money market funds | 48,912,011 | | | — | | Money market funds | 47,656,269 | | | 273,998,744 | |
Commercial paper | Commercial paper | 4,998,694 | | | — | | Commercial paper | 4,096,143 | | | — | |
Total cash and cash equivalents | Total cash and cash equivalents | 78,108,242 | | | 238,815,991 | | Total cash and cash equivalents | 57,293,338 | | | 286,428,371 | |
Short-term investments | Short-term investments | | Short-term investments | |
U.S. Treasury securities | 34,687,436 | | | — | | |
Commercial paper | | Commercial paper | 131,797,284 | | | 115,156,455 | |
Corporate bonds | Corporate bonds | 31,870,066 | | | — | | Corporate bonds | 102,294,737 | | | 45,219,042 | |
Commercial paper | 29,738,419 | | | — | | |
U.S. Government agency debt securities | | U.S. Government agency debt securities | 56,130,624 | | | 42,577,762 | |
Asset backed securities | Asset backed securities | 25,028,494 | | | — | | Asset backed securities | 75,709,878 | | | 35,830,211 | |
Total short-term investments | Total short-term investments | 121,324,415 | | | — | | Total short-term investments | 365,932,523 | | | 238,783,470 | |
Long-term investments | Long-term investments | | Long-term investments | |
Asset backed securities | | Asset backed securities | 750,129 | | | 16,119,430 | |
Corporate bonds | Corporate bonds | 4,898,296 | | | — | | Corporate bonds | 10,820,572 | | | — | |
Total long-term investments | Total long-term investments | 4,898,296 | | | — | | Total long-term investments | 11,570,701 | | | 16,119,430 | |
Total cash, cash equivalents and investments | Total cash, cash equivalents and investments | $ | 204,330,953 | | | $ | 238,815,991 | | Total cash, cash equivalents and investments | $ | 434,796,562 | | | $ | 541,331,271 | |
Available-for-sale investments
The amortized cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale investments by type of security as atof June 30, 20222023 were as follows:
| | | Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Fair Value | | Current | | Non-current | | Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Fair Value | | Current | | Non-current |
Commercial paper | | Commercial paper | $ | 131,908,748 | | | $ | 15 | | | $ | (111,479) | | | $ | 131,797,284 | | | $ | 131,797,284 | | | $ | — | |
Corporate bonds | Corporate bonds | $ | 36,915,656 | | | $ | 1,356 | | | $ | (145,938) | | | $ | 36,768,362 | | | $ | 31,870,066 | | | $ | 4,898,296 | | Corporate bonds | 113,657,153 | | 705 | | $ | (542,549) | | | 113,115,309 | | 102,294,737 | | 10,820,572 | |
U.S. Treasury securities | 34,829,827 | | | — | | | (142,391) | | | 34,687,436 | | | 34,687,436 | | | — | | |
Commercial paper | 29,738,419 | | | — | | | — | | | 29,738,419 | | | 29,738,419 | | | — | | |
Asset backed securities | Asset backed securities | 25,094,991 | | | 5,546 | | | (60,951) | | | 25,028,494 | | | 25,028,494 | | | — | | Asset backed securities | 76,699,026 | | — | | | (239,019) | | | 76,460,007 | | 75,709,878 | | 750,129 | |
U.S. Government agency debt securities | | U.S. Government agency debt securities | 56,306,438 | | — | | | (175,814) | | | 56,130,624 | | 56,130,624 | | — | |
Total available-for-sale securities | Total available-for-sale securities | $ | 126,578,893 | | | $ | 6,902 | | | $ | (349,280) | | | $ | 126,222,711 | | | $ | 121,324,415 | | | $ | 4,898,296 | | Total available-for-sale securities | $ | 378,571,365 | | | $ | 720 | | | $ | (1,068,861) | | | $ | 377,503,224 | | | $ | 365,932,523 | | | $ | 11,570,701 | |
The following table summarizes the fair value of available-for-sale investments based on stated contractual maturities as of June 30, 2022:
| | | Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value |
Due within one year | Due within one year | $ | 121,652,391 | | | $ | 121,324,415 | | Due within one year | $ | 366,912,175 | | | $ | 365,932,523 | |
Due between one and five years | Due between one and five years | 4,926,502 | | | 4,898,296 | | Due between one and five years | 11,659,190 | | | 11,570,701 | |
Total | Total | $ | 126,578,893 | | | $ | 126,222,711 | | Total | $ | 378,571,365 | | | $ | 377,503,224 | |
The primary objective of our investment portfolio is to maintain safety of principal balances, provide sufficient levels of liquidity and enhance overall returns in an efficient manner with acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer.
During the three and six months ended June 30, 2022,2023, we had $nilno realized gains or losses respectively, on available-for-sale investments.
5. Fair value measurements
We measure fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include the following:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. These inputs include quoted prices for similar assets or liabilities; quoted market prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
The following tables presenttable presents information about the Company’s financial assets and liabilities as of June 30, 20222023 that are measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values (in thousands):values:
| | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
June 30, 2022 | | | | | | | | |
June 30, 2023 | | June 30, 2023 | | | | | | | |
Cash equivalents: | Cash equivalents: | | Cash equivalents: | |
Money market mutual fund | Money market mutual fund | $ | 48,912,011 | | | $ | — | | | $ | — | | | $ | 48,912,011 | | Money market mutual fund | $ | 47,656,269 | | | $ | — | | | $ | — | | | $ | 47,656,269 | |
Commercial paper | Commercial paper | — | | | 4,998,694 | | | — | | | 4,998,694 | | Commercial paper | — | | | 4,096,143 | | | — | | | 4,096,143 | |
Available-for-sale debt securities: | Available-for-sale debt securities: | | Available-for-sale debt securities: | |
Commercial paper | | Commercial paper | — | | | 131,797,284 | | | — | | | 131,797,284 | |
Corporate bonds | Corporate bonds | — | | | 36,768,362 | | | — | | | 36,768,362 | | Corporate bonds | — | | | 113,115,309 | | | — | | | 113,115,309 | |
U.S. Treasury securities | 34,687,436 | | | — | | | — | | | 34,687,436 | | |
Commercial paper | — | | | 29,738,419 | | | — | | | 29,738,419 | | |
Asset backed securities | Asset backed securities | — | | | 25,028,494 | | | — | | | 25,028,494 | | Asset backed securities | — | | | 76,460,007 | | | — | | | 76,460,007 | |
U.S. Government agency debt securities | | U.S. Government agency debt securities | 56,130,624 | | | — | | | — | | | 56,130,624 | |
Total | Total | $ | 83,599,447 | | | $ | 96,533,969 | | | $ | — | | | $ | 180,133,416 | | Total | $ | 103,786,893 | | | $ | 325,468,743 | | | $ | — | | | $ | 429,255,636 | |
Certain of our available-for-sale debt securities, including U.S. Government agency debt securities, are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within the fair value hierarchy.
On May 7, 2023, POINT Biopharma Inc. entered into a Convertible Note Purchase Agreement (the "Convertible Note Agreement") with Ionetix Alpha Corporation ("Ionetix-α"), a subsidiary of IONETIX Corporation. On June 1, 2023, the Company purchased $5.0 million in unsecured promissory notes (the "Note Receivable") convertible into common stock of Ionetix-α at a conversion price that is subject to certain conditions as defined in the Convertible Note Agreement. Pursuant to the Convertible Note Agreement, the Company will purchase an additional $5.0 million of the Note Receivable six months following the initial purchase. Management assessed all features in the Convertible Note Agreement to determine embedded derivatives requiring bifurcation. In accordance with the Convertible Note Agreement, Ionetix-α has a voluntary redemption option, subject to certain terms and conditions, and may provide notice to the Company upon which the Company can elect to either redeem the Note Receivable at 150% of principal and interest outstanding or convert it into common stock of Ionetix-α. Management concluded that this put option meets the definition of a derivative and it is not clearly and closely related to the Note Receivable, thus requiring bifurcation from the host instrument and recognition at fair value. Further, management concluded the Note Receivable host instrument is to be classified as a loan receivable and therefore is measured at amortized cost but disclosure of fair value is required. Management determined the fair values of both the Note Receivable and embedded derivative under Level 3 in the fair value hierarchy. Management concluded that the fair value of the Note Receivable as at June 30, 2023 was equal to its amortized cost and that the fair value of the embedded derivative was nil both at inception of the arrangement and at June 30, 2023.
We did not have any financial liabilities measured at fair value on a recurring basis as of June 30, 2022.2023.
There have been no transfers of assets or liabilities between the fair value measurement levels.levels as of June 30, 2023.
6. Prepaid expenses and other current assets
Prepaid expenses and other current assets consisted of the following:
| | | As of June 30, 2022 | | As of December 31, 2021 | | As of June 30, 2023 | | As of December 31, 2022 |
| | $ | | $ | | $ | | $ |
Insurance | 2,345,799 | | | 2,175,379 | | |
Clinical trial expenses | 1,920,195 | | | 1,973,609 | | |
Deposit on production equipment | 872,295 | | | 703,461 | | |
Prepaid clinical trial expenses | | Prepaid clinical trial expenses | 3,418,491 | | | 4,011,419 | |
Prepaid insurance | | Prepaid insurance | 1,781,969 | | | 1,310,314 | |
Canadian harmonized sales tax receivable | Canadian harmonized sales tax receivable | 143,105 | | | 72,666 | | Canadian harmonized sales tax receivable | 332,654 | | | 60,222 | |
Other | Other | 191,000 | | | 105,450 | | Other | 217,319 | | | 228,934 | |
Total | Total | 5,472,394 | | | 5,030,565 | | Total | 5,750,433 | | | 5,610,889 | |
7. Property, plant and equipment, net
Property, plant and equipment, net consisted of the following:
| | | As of June 30, 2022 | | As of December 31, 2021 | | As of June 30, 2023 | | As of December 31, 2022 |
| | $ | | $ | | $ | | $ |
Land and building | Land and building | 17,641,459 | | | — | | Land and building | 18,976,410 | | | 18,163,962 | |
Property in development | 2,601,016 | | | 16,561,032 | | |
Machinery and equipment | Machinery and equipment | 4,018,332 | | | 2,132,768 | | Machinery and equipment | 10,415,742 | | | 5,328,639 | |
Property, plant and equipment, in development | | Property, plant and equipment, in development | 15,459,230 | | | 8,434,384 | |
Facility lease | | Facility lease | 5,384,707 | | | — | |
Furniture and fixtures | Furniture and fixtures | 614,653 | | | 590,545 | | Furniture and fixtures | 721,595 | | | 698,728 | |
Computer equipment | Computer equipment | 149,891 | | | 127,741 | | Computer equipment | 153,891 | | | 149,892 | |
| | 25,025,351 | | | 19,412,086 | | | 51,111,575 | | | 32,775,605 | |
Less: Accumulated depreciation | Less: Accumulated depreciation | (584,076) | | | — | | Less: Accumulated depreciation | (2,717,358) | | | (1,395,029) | |
Total | Total | 24,441,275 | | | 19,412,086 | | Total | 48,394,217 | | | 31,380,576 | |
OnIn July 2020, the Company purchased land and a building in Indianapolis, Indiana (which has been expanded to approximately 81,000 square feet) for the purpose of retrofitting the existing building into a state-of-the-art, Good Manufacturing Practices ("GMP") compliant facility that will support the Company’s drug manufacturing operations. The purchase of the property was financed by a mortgage that was repaid on July 29, 2021 (see Note 9).
The Company commenced the manufacture of clinical supply in the Indianapolis manufacturing facility in January 2022, however, construction2022. Construction continues on the facility to expand capacity.
On February 2, 2023, POINT Biopharma Corp., entered into a Facility Agreement (the "UHN Agreement") with University Health Network (“UHN”), a not-for-profit corporation incorporated under the laws of Canada. Pursuant to the UHN Agreement, the Company was provided access to utilize a 7,700 square foot, licensed research and development space with cGMP manufacturing suites (the “Facility”) under a lease effective April 1, 2023, which the Company will use to develop and expand its pipeline of next-generation radioligands. The Companylease is accounted for as a finance lease in accordance with ASC 842 and the right-of-use asset has determined this to be the date upon which itsbeen included within property, plant and equipment was availableequipment. See Note 9 for its intended use. additional details.
Property, plant and equipment that have finite lives are recorded at cost less accumulated depreciation and impairment losses. Depreciation is expensed from the month the particular asset is available for its intended use, using the straight-line method over the estimated useful life of such asset at the following rates, which in each case are intended to reduce the carrying value of the asset to the estimated residual value:
| | | | | |
Asset Category | Estimated Useful Life |
Computer equipment | 5 years |
Machinery and equipment | 7 years |
Furniture and fixtures | 7 years |
Facility lease | 7 years |
Building | 20 years |
8. Accrued liabilities
8. Accrued expenses
Accrued liabilities consisted of the following:
| | | As of June 30, 2022 | | As of December 31, 2021 | | As of June 30, 2023 | | As of December 31, 2022 |
| | $ | | $ | | $ | | $ |
Accrued personnel costs | | Accrued personnel costs | 3,772,849 | | | 7,116,382 | |
Accrued research and development costs | Accrued research and development costs | 6,047,693 | | | 1,142,056 | | Accrued research and development costs | 5,233,075 | | | 9,645,594 | |
Accrued personnel costs | 2,398,926 | | | 3,440,558 | | |
Accrued corporate legal fees and other professional services | | Accrued corporate legal fees and other professional services | 666,995 | | | 2,068,793 | |
Accrued costs for purchases of property, plant and equipment | Accrued costs for purchases of property, plant and equipment | 1,143,756 | | | 648,196 | | Accrued costs for purchases of property, plant and equipment | 289,244 | | | 105,741 | |
Accrued corporate legal fees and other professional services | 509,513 | | | 654,945 | | |
Other accrued costs | Other accrued costs | 120,832 | | | 104,761 | | Other accrued costs | 136,889 | | | 157,944 | |
Total | Total | 10,220,720 | | | 5,990,516 | | Total | 10,099,052 | | | 19,094,454 | |
9. Mortgage payableLeases
Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate was not readily determinable in the Company’s current portfolio of leases, the incremental borrowing rate was used based on the information available at the commencement date in determining the present value of lease payments.
On July 10, 2020,February 2, 2023, POINT Biopharma Corp. entered into the UHN Agreement. The lease commencement date was determined to be April 1, 2023, the date upon which the Company obtainedwas provided access to the Facility. The lease is accounted for as a mortgage loanfinance lease in accordance with ASC 842 and the right-of-use asset has been included within property, plant and equipment. Management concluded that the lease represents a finance lease on the basis that management believes that the lease term covers a substantial portion of the economic life of the primary lease component. See Note 7 for additional details. The initial term of the UHN Agreement will run for five years from the lease commencement date, with an option to renew for additional two-year terms thereafter, subject to certain conditions described in the amount of $3,562,500 (the “Mortgage”)UHN Agreement. Management included the first option to renew for the purpose of purchasing its manufacturing facility and related land located in Indianapolis, Indiana (the “Property”) (see Note 7). The Mortgage was collateralized by a first charge over the Property. Astwo years as part of the financinglease term in determining the right-of-use asset and lease liability. The agreement does not transfer any title in the Facility to the Company. During the term, the Company incurred $17,194 of costsshall be responsible for day-to-day management, activities and fees fromdecision-making regarding the lender that were capitalized and recorded as finance costs over the lifeFacility. General governance of the Mortgage. Facility will be exercised by the Company and UHN through a joint committee. The joint committee, which will meet quarterly, will have a minimum of six people and will be comprised of an equal number of members from each of the Company and UHN.
On July 29, 2021,April 12, 2023, the MortgageCompany entered into an operating lease for laboratory space with a lease term of two years. The lease is recorded separately on the manufacturing facilityinterim condensed consolidated balance sheet as an operating lease right-of-use asset with a related operating lease liability as of June 30, 2023. The agreement does not transfer any title in Indianapolis, Indianathe laboratory space to the Company.
The components of lease expense are as follows:
| | | | | | | | | | | |
| For the six months ended June 30, 2023 | | For the six months ended June 30, 2022 |
Operating lease expense | $ | 50,499 | | | $ | — | |
| | | |
Finance lease cost | | | |
Amortization of right-of-use asset | 192,311 | | | — | |
Interest on lease liability | 99,199 | | | — | |
Total finance lease cost | $ | 291,510 | | | $ | — | |
Supplemental cash flow information related to leases are as follows:
| | | | | | | | | | | |
| For the six months ended June 30, 2023 | | For the six months ended June 30, 2022 |
Cash flow information: | | | |
Cash paid for amounts included in the measurement of lease liabilities: | | | |
Operating cash flow use from operating leases | $ | 49,321 | | | $ | — | |
Operating cash flow use from finance leases | $ | 99,199 | | | $ | — | |
Financing cash flow use from finance leases | $ | 133,641 | | | $ | — | |
| | | |
Non-cash activity: | | | |
Right-of-use assets obtained in exchange for lease obligations: | | | |
Operating lease | $ | 453,490 | | | $ | — | |
Finance lease | $ | 5,384,707 | | | $ | — | |
The following table summarizes the weighted average remaining lease terms for the Company’s leases:
| | | | | |
| As of June 30, 2023 |
Weighted-average remaining lease term (in years): | |
Operating lease | 1.8 |
Finance lease | 6.8 |
As the interest rate implicit in the leases was repaid andnot readily determinable at the related mortgagetime that the leases were evaluated, the Company used its incremental borrowing rate based on the information available in determining the present value of lease payments. The Company’s incremental borrowing rate was based on the term of the lease, the economic environment of the lease and reflect the rate the Company would have had to pay to borrow on a secured basis. Below is information on the weighted average discount rates used at the time that the leases were evaluated:
| | | | | |
| As of June 30, 2023 |
Weighted-average discount rates: | |
Operating lease | 7.6 | % |
Finance lease | 7.7 | % |
The following table summarizes the future maturities of the Company's facility in Indianapolis, Indiana was released.
Prior to its repayment, the Mortgage bore interest at 2.85% plus a minimum ratelease liabilities as of 1-month LIBOR, subject to a LIBOR floor of 0.25%. The Mortgage required quarterly interest payments, which commenced on October 1, 2020, with the principal amount originally due at maturity on January 10, 2022.
For the three and six months ended June 30, 2021, the Company recorded $27,916 and $54,605, respectively, of interest costs which were capitalized within property, in development, and recorded amortization of debt issuance costs of $2,863 and $5,662, respectively, through finance costs.2023:
| | | | | | | | | | | |
| Operating Lease | | Finance Lease |
2023 | $ | 121,091 | | | $ | 505,608 | |
2024 | 249,446 | | | 1,011,217 | |
2025 | 74,938 | | | 1,011,217 | |
2026 | — | | | 1,011,217 | |
2027 | — | | | 1,011,217 | |
Thereafter | — | | | 2,275,237 | |
Total lease payments | $ | 445,475 | | | $ | 6,825,713 | |
Less: imputed interest | (30,616) | | | (1,466,384) | |
Present value of lease liabilities | $ | 414,859 | | | $ | 5,359,329 | |
10. Stockholders’ equity
The Company is authorized to issue 430,000,000 shares of Common Stock,common stock, with a par value of $0.0001 per share ("Common Stock"), as well as 20,000,000 of shares of preferred stock, with a par value of $0.0001 per share (“Preferred Stock”). The figures below are presented giving effect to a retroactive application of
During the Business Combination which resulted in a conversion ofthree months ended June 30, 2023, the previous POINT Biopharma Inc. common shares toCompany issued (a) 71,585 shares of Common Stock in connection with the exercise of stock options granted to non-employee consultants, resulting in total cash proceeds of $99,503 and (b)
11,692 shares of Common Stock in connection with the Company at a conversion ratioexercise of approximately 3.59:1. The par valuestock options granted to employees, resulting in total cash proceeds of previous POINT Biopharma Inc. common shares was $0.001. See Note 3 for additional details.
$86,555. During the three and six months ended June 30, 2022, there were 2,490 and 3,1682023, the Company issued (i) 86,585 shares of Common Stock in connection with the exercise of stock options granted to non-employee consultants, resulting in total cash proceeds of $120,353 and (ii) 29,628 shares of Common Stock in connection with the exercise of stock options granted to employees and directors, resulting in total cash proceeds of $211,569.
During the three months ended June 30, 2022, the Company issued respectively, each2,490 shares of Common Stock in connection with the exercise of stock options issued to non-employee consultants, and resulting in total cash proceeds of $3,461 and $4,403, respectively. During the three months ended June 30, 2021, the Company issued 32,539,769 shares of Common Stock in connection with the Business Combination and PIPE Financing (see Note 3).$3,461. During the six months ended June 30, 2021,2022, the Company (a) issued the above mentioned3,168 shares of Common Stock in connection with the Business Combination and PIPE Financing and (b) issued 800,000 shares of common stock of POINT Biopharma Inc. (exchanged for 2,869,799 shares of Common Stock) in connection with the exercise of warrants and 18,000 shares of common stock of POINT Biopharma Inc. (exchanged for 64,570 shares of Common Stock) in connection with the exercise of stock options issued to a non-employee consultant,consultants, resulting in total cash proceeds of $20,450,000.$4,403.
As of June 30, 2022,2023, the total number of total issued and outstanding shares of Common Stock was 90,124,962105,765,954 (December 31, 2021 – 90,121,794)2022 — 105,649,741). As of June 30, 2022,2023, there were no issued and outstanding shares of Preferred Stock (December 31, 20212022 — nil).
Each share of Common Stock entitles the holder to 1one vote on all matters submitted to a vote of the Company’s stockholders. Holders of Common stockholdersStock are entitled to receive dividends, if any, as may be declared by the Company’s board of directors.directors (the “Board”). During the three and six months ended June 30, 2022,2023, no cash dividends were declared or paid by the Company (June 30, 20212022 — $nil).
The Company’s board of directorsBoard has the authority to issue shares of Preferred Stock from time to time on terms it may determine, to divide shares of Preferred Stock into one or more series and to fix the designations, preferences, privileges, and restrictions of Preferred Stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL.Delaware General Corporation Law ("DGCL"). During the six months ended June 30, 2022,2023, no shares of Preferred Stock were issued by the Company (June 30, 2021 — nil).Company.
11. Stock-based compensation
In March 2020, the board of directors of POINT Biopharma Inc. approved the 2020 Equity Incentive Plan (the “2020 EIP”). The 2020 EIP provided for the granting of incentive and non-qualified stock options, stock appreciation rights, restricted stock units, performance awards and other stock-based awards to employees, directors, and consultants of POINT Biopharma Inc. Effective as of June 30, 2021, in connection with the Business Combination, the Company’s board of directorsBoard adopted the POINT Biopharma Global Inc. 2021 Equity Incentive Plan (the “2021 EIP”) to replace the 2020 EIP and allow the Company to grant equity and equity-based incentive awards to officers, employees, non-employee directors and consultants of the Company. Upon the closing of the Business Combination, theThe Company assumed the outstanding equity awards under the 2020 EIP, and each outstanding option to acquire common shares of POINT Biopharma Inc. (whether vested or unvested) under the 2020 EIP was substituted with a substantially equivalent option to acquire shares of Common Stock of the Company based on the conversion ratio for the POINT Biopharma Inc. common shares in the Business Combination and remains outstanding under the 2020 EIP. Nobut no further grants may be made under the 2020 EIP. The 2021 EIP provides that the number of shares reserved and available for issuance under the 2021 EIP will automatically increase each January 1, beginning on January 1, 2022, by 4% of the number of outstanding shares of Common Stock on the immediately preceding December 31, or such lesser amount as determined by the Company's board of directors.Board. As of January 1, 2022,2023, the number of shares of Common Stock available under the 2021 EIP increased by 3,604,8714,225,990 for a total of 7,975,3179,129,858 shares of Common Stock authorized for issuance under the 2021 EIP as of June 30, 2022.2023.
The Company concluded that the replacement stockStock options issued in connection with the Business Combination did not require accounting for effects of the modification under the ASC 718 – Compensation – Stock Compensation (“ASC 718”) as it was concluded that (a) the fair value of the modified award is the same as the fair value of the original award immediately before the original award was modified, (b) there are no changes to the vesting conditions of the award, and (c) there is no change to the classification of the award.
The Company recorded $458,633$685,263 and $743,945$1,131,391 to research and development expenseexpenses and $568,930$1,025,086 and $724,068$1,588,454 to general and administrative expenses for stock-based compensation for the three and six months ended June 30, 2022,2023, respectively (June 30, 20212022 — $1,028,512$458,634 and $1,428,669$743,945 to research and development expenseexpenses and $77,945$568,929 and $155,033$724,068 to general and administrative expenses for the three and six months ended, respectively). The Company did not recognize a tax benefit related to stock-based compensation expense during the three and six months ended June 30, 2023 as well as during the three and six months ended June 30, 2022, as the Company had net operating lossesloss carryforwards and recorded a valuation allowance against the deferred tax asset.
The following table summarizes the activity relating to the Company’s stock options. The below stock option figures are presented giving effect to a retroactive application
| | | | | | | | | | | | | | | | | |
| Number of Shares | | Weighted Average Exercise Price Per Share ($) | | Weighted- Average Remaining Contractual Term (in years) |
Outstanding as of December 31, 2022 | 5,592,173 | | 5.85 | | |
Granted | 3,144,071 | | 7.03 | | |
Exercised | (116,213) | | 2.86 | | |
Forfeited | (122,887) | | 7.37 | | |
Expired | (13,551) | | 8.47 | | |
Outstanding as of June 30, 2023 | 8,483,593 | | 6.30 | | 4.7 |
Vested and expected to vest as of June 30, 2023 | 8,483,593 | | 6.30 | | 4.7 |
Options exercisable as of June 30, 2023 | 2,705,429 | | 4.89 | | 4.0 |
During the Business Combination which resulted in a replacement of the previous POINT Biopharma Inc.three months ended June 30, 2023, 304,248 stock options with stock optionswere granted to directors of the Company, with a weighted average grant date fair value of $4.75 per share. The vesting terms of these options are such that they vest on the one-year anniversary of the date of grant. During the six months ended June 30, 2023, 3,144,071 stock options were granted, including the 304,248 stock options discussed above as described above, atwell as 2,839,823 stock options granted to employees of the Company, with a conversion ratioweighted average grant date fair value of approximately 3.59:1. In addition,$3.76 per share. The vesting terms of the exercise price for each replacementoptions granted to employees of the Company are such that 25% of the options vest on the one-year anniversary of the date of grant and the remaining 75% of such stock option is also adjusted using the ratio of approximately 3.59:1. See Note 3 for additional details:options vest in three equal annual installments thereafter.
| | | | | | | | | | | | | | | | | |
| Number of Shares | | Weighted Average Exercise Price | | Weighted- Average Remaining Contractual Term (in years) |
Outstanding as of December 31, 2021 | 3,825,751 | | 4.78 | | |
Granted | 1,948,614 | | 8.01 | | |
Exercised | (3,168) | | 1.39 | | |
Forfeited | (48,120) | | 7.70 | | |
Outstanding as of June 30, 2022 | 5,723,077 | | 5.85 | | 5.00 |
Vested and expected to vest as of June 30, 2022 | 5,723,077 | | 5.85 | | 5.00 |
Options exercisable as of June 30, 2022 | 1,501,125 | | 3.78 | | 5.00 |
During the three months ended June 30, 2022, 243,417 stock options were granted to employees and directors of the Company, with a weighted average grant date fair value of $4.66.$4.66 per share. During the six months ended June 30, 2022, 1,948,614
stock options were granted to employees and directors of the Company, with a weighted average grant date fair value of $4.59. The$4.59 per share. Except as provided below with respect to options granted to directors, the vesting terms of these options are such that 25% of the options vest on the one-year anniversary of the date of grant and the remaining 75% of such stock options vest ratably over the remaining in three years. equal annual installments thereafter. On June 6, 2022, the terms of 128,070 stock options granted to directors of the Company during the quarter were amended to reduce the vesting period to one year. This amendment was accounted for as a modification and there was no material impact to stock-based compensation recorded.
During the three months ended June 30, 2021, no stock options were granted. During the six months ended June 30, 2021, 358,724 stock options were granted to a non-employee consultant of the Company, with a weighted average grant date fair value of $3.89. The vesting terms of the grant to the non-employee consultant were such that 25% of the options vested immediately upon grant, 10% of the options were initially to vest in a year following the grant and the remaining options were initially to vest based on certain performance milestones. Upon completion of the Business Combination, the remaining 269,043 unvested stock options immediately vested and all remaining unrecognized stock-based compensation expense associated with these stock options was recorded.
The following table presents the assumptions used in the Black-Scholes-Merton option-pricing model to determine the grant date fair value of stock options granted:
| | | Three months ended June 30, 2022 | | Three months ended June 30, 2021 | | Six months ended June 30, 2022 | | Six months ended June 30, 2021 | | Three months ended June 30, 2023 | | Three months ended June 30, 2022 | | Six months ended June 30, 2023 | | Six months ended June 30, 2022 |
Risk-free interest rate | Risk-free interest rate | 2.57% - 3.13% | | — | | 1.24% - 3.13% | | 0.72% | Risk-free interest rate | 3.91% - 4.23% | | 2.57% - 3.13% | | 3.71% - 4.23% | | 1.24% - 3.13% |
Expected term (in years) | Expected term (in years) | 4.25 | | — | | 4.25 | | 5.38 | Expected term (in years) | 3.50 | | 4.25 | | 3.50 - 4.25 | | 4.25 - 5.38 |
Expected volatility | Expected volatility | 74% - 75% | | — | | 72% - 75% | | 65% | Expected volatility | 67% | | 74% - 75% | | 67% - 68% | | 72% - 75% |
Expected dividend yield | Expected dividend yield | —% | | — | | —% | | —% | Expected dividend yield | —% | | —% | | —% | | —% |
During the three months ended June 30, 2023, non-employee consultants of the Company exercised 71,585 stock options with an intrinsic value of $604,767 and employees of the Company exercised 11,692 stock options with an intrinsic value of $32,740, for total cash proceeds to the Company of $186,058.
During the six months ended June 30, 2023, non-employee consultants of the Company exercised 86,585 stock options with an intrinsic value of $700,217, and employees and directors of the Company exercised 29,628 stock options with an intrinsic value of $38,300, for total cash proceeds to the Company of $331,922.
During the three and six months ended June 30, 2022, non-employee consultants of the Company exercised 2,490 and 3,168 stock options with intrinsic values of $16,060 and $19,301, respectively. The exercises resulted in cash proceeds to the companyCompany of $3,461 and $4,403, respectively.
As of June 30, 2022,2023, the unrecognized stock-based compensation expense related to unvested stock options was $12,895,130$19,343,654 and the estimated weighted average remaining vesting period was 2.82.3 years.
Performance Share Units
During the year ended December 31, 2022, 146,044 performance share units ("PSUs") were granted to employees of the Company, with a grant date fair value of $6.61 per unit based on the closing share price of the Company's Common Stock
on the date of grant. The vesting terms of these PSUs are such that 100% vest upon the regulatory approval of PNT2002 by the FDA. During the three and six months ended June 30, 2023, the Company did not record any stock-based compensation expense related to these PSUs on the basis that they cannot be considered probable to vest as the regulatory approval requirement is outside the control of the Company and the clinical trial remains ongoing.
12. Commitments and contingencies
Indianapolis facility commitments
The Company is party to certain agreements for the continuing expansion of the manufacturing capabilities of the Indianapolis facility. Effective in the second quarter of 2022, the Company entered into an agreement for the design and build of a commercial manufacturing line. As of June 30, 2022,2023, the Company is committed to aggregate future payments of approximately $18.1$20.0 million in connection with these agreements. During the three and six months ended June 30, 2022,2023, approximately $3.4$7.4 million and $4.0$10.3 million, respectively, has been recorded within property, plant and equipment in connection with these agreements (three and six months ended June 30, 2021 – $2.22022 — approximately $3.4 million and $4.9$4.0 million, respectively).
Clinical trial and commercial commitments
The Company in the normal course of business enters into various services and supply agreements in connection with its clinical trials to ensure the supply of certain productproducts and product lines during the Company’s clinical phase. These agreements often have minimalminimum purchase commitments and generally terminate upon the termination of the clinical trial. Minimum purchase commitments under these agreements include individual commitments up to $2.3$1.7 million. Aggregate remaining minimum commitments amount to approximately $4.7$6.2 million with payments ranging from three to eight years or upon completion of the clinical trial, if earlier. The Company recorded research and development expenses in connection with its supplythese agreements of approximately $2.6$4.8 million and $4.3$11.3 million during the three and six months ended June 30, 2022,2023, respectively (three and six months ended June 30, 2021 - $0.82022 — $2.6 million and $1.3$4.3 million, respectively).
The Company also has supply agreements with third parties to purchase certain products for use in the Company’s full scale production process. The Company is committed to purchase a minimum quantity of product in the amount of approximately $48.7$111.9 million ($62.9148.3 million CAD) over the contract term. The purchase commitments are contingent upon the completion of certain milestones by the third-party suppliers. The Company recorded $nil and $nil in connection with this agreementthese agreements during the three and six months ended June 30, 2022,2023, respectively (three and six months ended June 30, 2021 -2022 — $nil and $nil, respectively).
The Company also has an agreement with a third party to provide certain services in connection with the Company’s SPLASH clinical phase study. The agreement expires on the date of the completion or termination of the clinical trial. The remaining minimum purchase commitment under this agreement is approximately $41.6$24.0 million with payments that range from one to sixfive years. The Company recorded research and development expenses in connection with this agreement of approximately $2.5$6.2 million and $5.6$11.1 million during the three and six months ended June 30, 2022,2023, respectively (three and six months ended June 30, 2021 – $1.82022 — $2.5 million and $3.0$5.6 million, respectively).
License agreements
The Company in the normal course of business enters into license and sublicense agreements in connection with its clinical trials and product development. For additional details of the Company’s license agreements, see Note 13 in15 to the 20212022 Financial Statements.
On May 6, 2022,April 17, 2023, POINT Biopharma Inc. entered into a fourth amendmentfirst and second amendments (the “Fourth Amendment”"Amendments") to that certain Exclusive Sublicense Agreement, dated April 2, 2020,November 14, 2019, between POINT Biopharma Inc. and Bach Biosciences, LLC, (“Bach Biosciences”Scintomics GmbH ("Scintomics"). Pursuant to the Fourth Amendment,Amendments, the exclusive, sublicensable, license is expanded to include all geographies worldwide and the Company and Bach Biosciences agreed to remove all regulatory and sales milestones which wouldwill have been payable from the Company to Bach Biosciences, as well as to reduce the royalty rate payable by Company to Bach Biosciences by 50 percent (one-half). In signing the Fourth Amendment, the Company agreed to pay a one-time amendment fee to Bach Biosciencesincreased flexibility in connection with sublicense arrangements.
The Company recorded research and development expenses in connection to its license agreements of approximately $3.8$3.0 million and $4.6$3.5 million during the three and six months ended June 30, 2022,2023, respectively (three and six months ended June 30, 2021 – $0.52022 — $3.8 million and $1.0$4.6 million, respectively).
13. Net loss per share
Basic loss earnings per share is computed by dividing the loss available to common stockholders by the weighted-average number of shares of Common Stock outstanding during the period. Diluted loss per share is computed by dividing loss available to common stockholders by the weighted-average number of shares of Common Stock outstanding during the period increased to include the number of additional shares of Common Stock that would have been outstanding if the potentially dilutive securities had been issued, using the treasury stock method. The below figures are presented giving effect to a retroactive application of the Business Combination which resulted in a conversion of the previous POINT Biopharma Inc. common shares to shares of Common Stock of the Company at a conversion ratio of approximately 3.59:1. See Note 3.
| | | Three months ended June 30, 2022 | | Three months ended June 30, 2021 | | Six months ended June 30, 2022 | | Six months ended June 30, 2021 | | Three months ended June 30, 2023 | | Three months ended June 30, 2022 | | Six months ended June 30, 2023 | | Six months ended June 30, 2022 |
Net loss attributable to common stockholders | Net loss attributable to common stockholders | $ | 24,580,247 | | | $ | 8,804,658 | | | $ | 40,960,821 | | | $ | 14,589,079 | | Net loss attributable to common stockholders | $ | 25,410,839 | | | $ | 24,580,247 | | | $ | 41,941,510 | | | $ | 40,960,821 | |
Weighted-average common shares outstanding-basic and diluted | Weighted-average common shares outstanding-basic and diluted | 90,124,295 | | | 57,582,025 | | | 90,123,288 | | | 57,116,747 | | Weighted-average common shares outstanding-basic and diluted | 105,724,215 | | | 90,124,295 | | | 105,692,615 | | | 90,123,288 | |
Net loss per share attributable to common stockholders-basic and diluted | Net loss per share attributable to common stockholders-basic and diluted | $ | 0.27 | | | $ | 0.15 | | | $ | 0.45 | | | $ | 0.26 | | Net loss per share attributable to common stockholders-basic and diluted | $ | 0.24 | | | $ | 0.27 | | | $ | 0.40 | | | $ | 0.45 | |
The Company’s potentially dilutive securities, which include stock options, and warrants, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. The Company's PSU's are considered contingently issuable shares for the purpose of the computation of loss per share and have been excluded on the basis that as of June 30, 2023, the performance condition for vesting had not been achieved. Therefore, the weighted-average number of shares of Common Stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholdersthe holders of Common Stock is the same.
14. Income Taxes
The Company calculates its interim tax provision at the end of each interim period and estimates the annual effective tax rate which is applied to its ordinary quarterly earnings. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent and temporary differences between book and tax amounts, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes.
The Company has operations in both the United States and Canada, and as such it is subject to tax in both countries. The income tax benefit and expense for the three months ended June 30, 20222023 and June 30, 20212022 was $183,405$921,298 and $123,782$183,405, respectively and the income tax benefit and expense for the six months ended June 30, 20222023 and June 30, 20212022 was $1,159,940 and $271,521, respectively. The income tax benefit for the three and $164,207 respectively, eachsix months ended June 30, 2023, consists primarily of tax benefits related to research and development tax credits partially offset by current taxes in respectCanada. The income tax expense for the three and six months ended June 30, 2022, consists of current taxes in Canada. As of June 30, 2022, the Company had no uncertain tax positions (December 31, 2021 — $nil).
The Company files income tax returns in the U.S. federal, certain state,states, and Canada with varying statutes of limitations. The Company is not currently subject to tax examinations by any taxing jurisdiction. However, in the event of any such
examination, of its tax years 2020 and 2021, there may or may not be an impact on the Company’s net operating loss carryforwards and credits. The Company does not anticipate that any potential tax adjustments resulting from such examinations would have a significant impact on its financial position or results of operations.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was passed into law. The CARES Act includes several significant business tax provisions including modification to the taxable income limitation for utilizationAs of net operating losses incurred in 2020 and 2021, an increase to the limitation on deductibility of certain business interest expense, bonus depreciation for purchases of qualified improvement property and special deductions on certain corporate charitable contributions. The Company analyzed the provisions of the CARES Act and determined there was no impact to its income tax provision for the three and six months ended June 30, 2022 and 2021.2023, the Company believes no significant changes in the unrecognized tax benefits will occur within the next 12 months.
15. Related party transactions
The Company recognized expenses in connection with related party transactions in the unaudited interim condensed consolidated statements of operations as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, 2022 | | Three months ended June 30, 2021 | | Six months ended June 30, 2022 | | Six months ended June 30, 2021 |
| $ | | $ | | $ | | $ |
Consulting fees on business activities to Board member | 102,396 | | | 53,892 | | | 169,092 | | | 83,878 | |
Reimbursement to Board member for occupancy costs | 17,898 | | | 19,584 | | | 35,676 | | | 36,819 | |
Total | 120,294 | | | 73,476 | | | 204,768 | | | 120,697 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended June 30, 2023 | | Three months ended June 30, 2022 | | Six months ended June 30, 2023 | | Six months ended June 30, 2022 |
Consulting fees on business activities to Board member | $ | 31,496 | | | $ | 102,396 | | | $ | 205,911 | | | $ | 169,092 | |
Reimbursement to Board member for occupancy costs | 17,894 | | | 17,898 | | | 35,313 | | | 35,676 | |
Total | $ | 49,390 | | | $ | 120,294 | | | $ | 241,224 | | | $ | 204,768 | |
Transactions with related parties are in the normal course of operations and have been measured at their agreed upon exchange amount.
During the three and six-month periods ended June 30, 20222023 and 2021,2022, the Company received consulting services for research and development from a Board member. As of June 30, 2022, $47,3892023, $33,471 is recorded within accrued liabilities in relation to this consulting arrangement.
The Company currently has a lease arrangement in place with a Board member for the use of office space. The arrangement does not have a defined contractual lease term and is payable monthly. The Company has applied the short-term lease exemption under ASC Topic 842Leases to this arrangement and is recording the lease payments of approximately $6,000 monthly as rent expense.
16. Subsequent event
On July 11, 2022 the SEC declared effective our shelf registration statement on Form S-3 (the “S-3”) that allows the Company to offer and sell to the public up to $400,000,000 of our Common Stock, preferred stock, debt securities, warrants to purchase our Common Stock, preferred stock or debt securities, subscription rights to purchase our Common Stock, preferred stock or debt securities and/or units consisting of some or all of these securities, from time to time in one or more offerings. The details of any future offerings, along with the use of proceeds from any securities offered, will be described in a prospectus supplement or other offering materials, at the time of offering. Also covered under the S-3 as part of the $400,000,000 total amount is an at-the-market offering (“ATM”) of up to $150,000,000 of our Common Stock pursuant to a distribution agreement with Piper Sandler & Co. To date, we have not sold any Common Stock under the ATM or any equity under the S-3 and have no current plans to issue additional equity, but have the S-3 and the ATM available if needed.
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited interim condensed consolidated financial statements and notes thereto for the three and six months ended June 30, 2022 and 20212023 (the “Q2 20222023 Financial Statements”) appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto for the periods ended December 31, 2022 and 2021 and 2020 (the “2021“2022 Financial Statements”) contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021,2022, as filed with the Securities and Exchange Commission ("SEC") on March 25, 202227, 2023 (the "2021"2022 Form 10-K"). Please also see the section entitled “Cautionary Note Regarding Forward-Looking Statements.”
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions (including the negative of any of the foregoing) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These factors include, but are not limited to, the following:
•the success, cost and timing of our product development activities and clinical trials, our plans for clinical development of our product candidates and the initiation and completion of any other clinical trials and related preparatory work and the expected timing of the availability of results of the clinical trials;
•our ability to recruit and enroll suitable patients in our clinical trials;
•the potential attributes and benefits of our product candidates;
•our ability to obtain and maintain regulatory approval for our product candidates, and any related restrictions, limitations or warnings in the label of an approved product candidate;
•our ability to obtain funding for our operations, including funding necessary to complete further development, approval and, if approved, commercialization of our product candidates;
•the period over which we anticipate our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements;
•the potential for our business development efforts to maximize the potential value of our portfolio;
•our ability to identify, in-license or acquire additional product candidates;
•our ability to maintain the license agreements underlying our product candidates;
•our ability to compete with other companies currently marketing or engaged in the development of treatments for the indications that we are pursuing for our product candidates;
•our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates and the duration of such protection;
•our ability to contract with and rely on third parties to assist in conducting our clinical trials and manufacture our product candidates;
•the development and expansion of our own manufacturing facility in Indianapolis, Indiana and the ability of this facility to provide adequate production capacity to meet future clinical and commercial demands for our product candidates;
•the size and growth potential of the markets for our product candidates, and our ability to serve those markets, either alone or in partnership with others;
•the rate and degree of market acceptance of our product candidates, if approved;
•the pricing and reimbursement of our product candidates, if approved;
•regulatory developments in the United States and foreign countries;
•the impact of laws and regulations;
•our ability to attract and retain key scientific, medical, commercial or management personnel;
•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
•our financial performance;
•the ability to recognize the anticipated benefits of the Business Combination, as defined below, which may be affected by, among other things, competition and our ability to grow and manage growth profitably;
•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
•the level of activity in the trading market for our common stock, par value $0.0001 per share ("Common StockStock") and the volatility of the market price of our Common Stock;
•the effect of the COVID-19 coronavirus (“COVID-19”) pandemic, andthe Russo-Ukrainian conflict and/or bank failures on the foregoing; and
•other factors detailed under the section entitled “Risk Factors” in the 20212022 Form 10-K.
These forward-looking statements are based on current expectations and beliefs concerning future developments and their potential effects. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in the 20212022 Form 10-K. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by the COVID-19 outbreak, the Russo-Ukrainian conflict and/or adverse developments affecting the financial services industry and there may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors. We do not undertake any obligation to update or revise any forward-looking statements, which speak only as of the date made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Overview
Introduction
We are a globally focused radiopharmaceuticalradioligand company building a platform for the clinical development and commercialization of radioligands that fight cancer. We have a pipeline of product candidates and early-stage development programs, in-house manufacturing capabilities, and a secured supply for rare medical isotopes like Actinium-225actinium-225 ("225Ac") and Lutetium-177lutetium-177 ("177Lu").
Our team brings decades of combined experience in radiopharmaceuticalradioligand clinical development and manufacturing. In a space where supply chainmanufacturing is often overlooked, the Company has carved outunique capabilities. In addition to our Center of Radioligand Excellence (CORE), a unique advantage for itself: a 100% company-owned facility, locatedcommercial-scale radioligand production campus in Indianapolis, Indiana, which includes an office space occupying 10,500 square feet andwe also operate the POINT Institute for Radioligand Innovation (PIRI) in Toronto, Ontario, a manufacturing facility occupying 70,200 square feet, and which we believe hasstate of the capacity for expansionart GMP R&D center focused on bringing novel programs from discovery to commercially supply both North America and Europe with large volumes.the clinic. Furthermore, management has leveraged their prior relationships to assemble resilient radioisotope supply chains, for the Company, which even includes manufacturing the Company'sprocessing our own n.c.a.no-carrier-added ("n.c.a") 177Lu isotope in-house.
Our predecessor was incorporated on September 18, 2019 (“Inception”) as POINT Theranostics Inc. under the DGCL and subsequently amended its name to “POINT Biopharma Inc.” on November 22, 2019. Subsequent to the Business Combination, POINT Biopharma Inc. became a wholly-owned subsidiary of POINT Biopharma Global Inc. (together with its consolidated subsidiaries, “POINT” or the “Company”) pursuant to a merger on June 30, 2021.
Business Combination
On June 30, 2021, we consummated the Business Combination with POINT Biopharma Inc., pursuant to the terms of the Business Combination Agreement, dated as of March 15, 2021, by and among Therapeutics Acquisition Corp. ("RACA"), Bodhi Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of RACA ("Merger Sub"), and POINT Biopharma Inc. Pursuant to the Business Combination Agreement, on the closing date, (i) Merger Sub merged with and into POINT Biopharma Inc., with POINT Biopharma Inc. as the surviving company in the Business Combination as a wholly-owned subsidiary of RACA and (ii) RACA changed its name to “POINT Biopharma Global Inc.”
In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Business Combination, (i) each share and vested equity award of POINT Biopharma Inc. outstanding as of immediately prior to the effective time was exchanged for shares of the Common Stock of POINT or comparable vested equity awards that are exercisable for shares of Common Stock, as applicable, based on an implied POINT Biopharma Inc. vested equity value of $585,000,000 (which results in a conversion ratio of approximately 3.59:1); (ii) all unvested equity awards of
POINT Biopharma Inc. were exchanged for comparable unvested equity awards that are exercisable for shares of Common Stock, determined based on the same exchange ratio at which the vested equity awards were exchanged for shares of Common Stock; and (iii) each share of Class A Common Stock of RACA and each share of Class B common stock, par value $0.0001 per share, of RACA that was issued and outstanding immediately prior to the effective time became one share of Common Stock following the consummation of the Business Combination.
In addition, concurrently with the execution of the Business Combination Agreement, on March 15, 2021, RACA entered into Subscription Agreements with certain investors (the "PIPE Investors"), pursuant to which the PIPE Investors agreed to subscribe for and purchase, and RACA agreed to issue and sell to the PIPE Investors, an aggregate of 16,500,000 shares of Class A Common Stock at a price of $10.00 per share, for aggregate gross proceeds of $165,000,000 (the "PIPE Financing"). The PIPE Financing was consummated concurrently with the closing of the Business Combination. We received net proceeds of approximately $260.0 million consisting of proceeds of the PIPE Financing and the proceeds remaining in RACA’s trust account. Transaction costs of approximately $27.0 million consisted of investment banker, legal, audit, tax, accounting, consulting, insurance, board retainer fees and listing fees.
Recent Developments
PNT2002: 177Lu-based PSMA-targeted radiopharmaceutical
In April 2022, the Company dosed its first European Union patientEnrollment in the SPLASH trial. The SPLASHPNT2002's phase 3 Study evaluating metastatic castration-resistant Prostate cancer using 177Lu-PNT2002 PSMA therapy After Second-line Hormonal treatment (“SPLASH") trial (NCT04647526) is currently enrolling patients across 53 sites in North America, Europe,complete and UK, and site activations remain ongoing to expedite accrual. The Company continues to expect to report top line data from SPLASH mid-2023.is expected in the fourth quarter of 2023. Six trial sites remain open for recruitment to complete a separate pharmacokinetic sub-study. POINT is not experiencing any supply constraints or shortages related to its lutetium-177-labeled programs.
PNT2004: fibroblast activation protein-alpha (FAP-alpha) inhibitor
In May 2023, enrollment in cohort 3 of the phase 1 FAPi Radioligand OpeN-Label, phase 1 study to evaluate safety, Tolerability and dosImetry of 177Lu-PNT6555; a dose Escalation study for tReatment of patients with select solid tumors, ("FRONTIER") trial (NCT05432193) began, and a total of seven participants have been dosed with 177Lu-PNT6555 to date. We continue to anticipate data from the full FRONTIER study to be available in the first half of 2024.
In June 2023, a Trial-in-Progress poster for FRONTIER was presented at the 2023 American Society of Clinical Oncology (ASCO) Annual Meeting, which included trial background information, study design considerations, and a cohort enrollment status update.
Later in June 2023, we published and presented preclinical data at the 2023 Annual Meeting of the Society of Nuclear Medicine & Molecular Imaging (SNMMI). The Company filed aauger electron and beta emitting isotope terbium-161 was paired with POINT’s FAP-targeted PNT6555 ligand and showed robust anti-tumor efficacy, similar to 225Ac-PNT6555 and 177Lu-
PNT6555. Also, preclinical proof-of-concept was established for synergistic interaction of immuno- and radioligand therapies with 177Lu-PNT6555.
PNT2001: 225Ac-labelled next-generation PSMA-targeted radiopharmaceutical
At our virtual Investor Day in June 2023, we unveiled the trial design for the phase 1 portion of ACCEL, the first-in-human phase 1/2 clinical trial application (CTA) with Health Canada atfor PNT2001's actinium-225 program. The trial was designed to enable the endparallel exploration of PNT2001 in two patient populations: later-stage mCRPC patients and earlier-stage BCR or Prostate-Specific Membrane Antigen ("PSMA")-positive oligorecurrent patients. We anticipate a health authority submission in the fourth quarter of 2023, and expect the first patient dosed in this trial to be in the first quarter of 2022 for PNT6555, the lead of the pan-cancer PNT2004 fibroblast activation protein-alpha (FAP-alpha) targeted program, and a No Objection Letter was received from Health Canada in May 2022. The first patient was dosed in FRONTIER in July 2022.2024.
The Company also presented posters on PNT6555 at two recent academic conferences including the American Association for Cancer Research (AACR) 2022 Annual Meeting in April 2022, and the Society for Nuclear Medicine and Molecular Imaging (SNMMI) 2022 Annual Meeting in June 2022.
ManagementManufacturing & Supply Chain Updates
In June 2022,April 2023, we announced an agreement for the Company appointed Chris Horvath as Executive Vice President, Commercial. Mr. Horvath brings almost twenty yearssupply of experienceactinium-225 with Eckert & Ziegler. Eckert & Ziegler will provide predetermined amounts of GMP grade actinium-225 to POINT for use in the pharmaceutical industry, having led or worked on the launchdevelopment of a numberPOINT’s pipeline of key oncology products, including Pluvicto (lutetium 177Lu vipivotide tetraxetan), Locametz (gallium 68Ga gozetotide), Nubeqa (darolutamide), and Zytiga (abiraterone acetate). In his new role at POINT, Mr. Horvath will lead the commercial strategy for POINT’s pipeline.next generation actinium-225-based radioligands.
Mr. Horvath began his careerIn May 2023, we announced a collaboration to create Ionetix Alpha Corp. (Ionetix-α). Ionetix-α, a new subsidiary of IONETIX Corp., is focused on near-term, commercial-scale production of GMP grade therapeutic isotopes, such as actinium-225. IONETIX has transferred its alpha therapy isotope business assets into Ionetix-α. POINT will invest $10 million into Ionetix-α.
In June 2023, we announced the intent to collaborate with AdvanCell, an Australian clinical stage radiopharmaceutical company, for the development of a scientist, working at both DuPontglobal lead-212 radioisotope and Novartis Institutes for BioMedical Research. He then transitionedradioligand supply chain and drug manufacturing network to commercial rolesspecifically support the clinical development and commercialization of increasing responsibility at Janssen, Dendreon, Merck, Bayer, and most recently Advanced Accelerator Applications (Novartis). Mr. Horvath holds a BSc in Chemistry & Biology from Wilfrid Laurier University, a MSc in Analytical Science from the University of Guelph, and an MBA from Rutgers Business School.lead-212-labeled radioligands by each company.
Risks & Liquidity
Drug research and development is very expensive and involves a high degree of risk. Only a small number of research and development programs result in the commercialization of a product. We will not generate revenue from product sales unless and until we successfully complete clinical development andof, are able to obtain regulatory approval for and successfully commercialize, the product candidates we are currently developing or may develop. We currently do not have any product candidates approved for commercial sale.
Our product candidates, currently under development or that we may develop, will require significant additional research and development efforts, including extensive clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting capabilities. There can be no assurance that our research and development activities will be successfully completed, that adequate protection for our licensed or developed technology will be obtained and maintained, that products developed will obtain necessary regulatory approval or that any approved products will be commercially viable.
If we obtain regulatory approval for one or more of our product candidates, we expect to incur significant expenses related to developing our commercialization capabilities to support product sales, marketing, and distribution activities, either alone or in collaboration with others. Further, as a public company followingPrior to the Business Combination, we have incurred and expect to continue incurring additional costs associated with operating as a public company. As a result, we will require substantial additional funding to support our continuing operations and pursue our growth strategy.
We haveLantheus License Agreements, the Company had incurred significant net losses since our Inception and have relied on the ability to fundhad funded operations primarily through equity financings. We expect to continue to incur significant operatingOperating losses and net losses, as well as negative cash flows were incurred during the three and six months ended June 30, 2023 and are expected to be incurred in the future.
In September 2022, POINT closed a previously announced underwritten public offering of approximately 15,500,000 shares of Common Stock at a public offering price of $9.00 per share (the "2022 Public Offering"). The gross proceeds to the Company from operations, for the foreseeable future as we continue to complete clinical trials for our products2022 Public Offering, before deducting underwriting discounts and prepare for potential future regulatory approvalscommissions and commercialization of our products, if approved. We have not generated any revenue to date and do not expect to generate product revenue unless and until we successfully complete development and obtain regulatory approval for at least one of our product candidates.
other estimated offering expenses, were approximately $140.0 million. We believe that the net proceeds from the Business Combination2022 Public Offering and PIPE Financing,the Lantheus License Agreements, together with our available resources and existing cash, cash equivalents and investments, are sufficient to fund our operating expenses and capital expenditure requirements into the first quarter of 2024.2026.
As losses continue to be incurred, weWe are subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, successful discovery and development of our product candidates, development by competitors of new technological innovations, dependence on key personnel, the ability to attract and retain qualified employees, protection of proprietary technology, compliance with governmental regulations, the impact of macroeconomic disruptions, such as those arising from the COVID-19, pandemic and the Russo-Ukrainian conflict, the ability to secure additional capital to fund operations and commercial success of our product candidates. Product candidates currently under
development will require extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities. Even if our drug development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales.
We anticipate that our expenses will increase significantly in connection with our ongoing activities, as we:
•advance our clinical-stage product candidates:candidates 177Lu-PNT2003Lu-PNT2002 and 177Lu-PNT2002Lu-PNT6555 through clinical development;
•advance our preclinical stagepreclinical-stage product candidates:candidate 177225Lu-PNT2004, 177Lu-PNT2001,Ac-PSMA-62, along with candidates developed with our CanSEEKTM Prodrug Platform, into clinical development;
•seek to identify, acquire, and develop additional product candidates, including through business development efforts to invest in or in-license other technologies or product candidates;
•hire additional clinical, quality control, medical, scientific, and other technical personnel to support our clinical operations;
•expand our operational, financial and management systems and increase personnel to support our operations;
•meet the requirements and demands of being a public company;
•maintain, expand, and protect our intellectual property portfolio;
•make milestone, royalty, or other payments due under various in-license or collaboration agreements;
•seek regulatory approvals for any product candidates that successfully complete clinical trials; and
•undertake any pre-commercialization activities to establish sales, marketing, and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own or jointly with third parties.
COVID-19 Pandemic, macroeconomic and other geopolitical events
The COVID-19 pandemic, which was declared byAlthough the World Health Organization asdeclared in early May of 2023 that COVID-19 no longer constitutes a pandemic in March 2020public health emergency, the Company continues to actively monitor the COVID-19 developments and has since spread worldwide, has caused many governments to implement measures to slowpotential impact on the spread of the outbreak through quarantines, travel restrictions, heightened border securityCompany's employees, business and other measures.operations. The impact of this pandemic has been,from global economic conditions and will likely continue to be, extensive in many aspects of society, which has resulted,potential and will likely continue to result, in significantcontinuing disruptions to the global economy as well as businesses and capital markets around the world. The future progression of the pandemic and its effects on our business and operations are uncertain.
In response to public health directives and orders and to help minimize the risk of the virus to employees, we have taken precautionary measures, including implementing work-from-home policies, mandatory vaccination, masking and weekly testing for certain employees. The impact of the virus, including work-from-home policies, may negatively impact
productivity, disrupt our business, and delay our preclinical research and clinical trial activities and our development program timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our businessvolatility in the ordinary course. Specifically, we may notcredit and equity markets in the United States and worldwide are highly uncertain and cannot be able to fulfill enrollment expectations on our planned timeline or visit clinics to conduct on-site monitoring due to disruptions at our clinical trial sites. We arepredicted. The Company is currently unable to predict when potential disruptions to our clinical programsoperating in a period of significant economic uncertainty, resulting from, the pandemic will resolve. Other impacts to our business may include temporary closures of our suppliers and disruptions or restrictions on our employees’ ability to travel. Any prolonged material disruption to our employees or suppliers could adversely impact our preclinical research and clinical trial activities, financial condition and results of operations, including our ability to obtain financing.
Additionally, financial markets may be adversely affected by the current or anticipated impact of military conflict, including escalating military fighting between Russia and Ukraine, terrorism oramong other geopolitical events. The U.S. and other nations in response tothings, the Russo-Ukrainian conflict have announced economic sanctions which may have an adverse effect on the global financial markets, which, in turn, could have an adverse effect on our business, financial condition and results of operations.
We are monitoring the continuing impact of the COVID-19 pandemic, geopolitical tensions, such as the ongoing military conflict between Russia and Ukraine and heightened tensions between China and Taiwan, trade uncertainty, including changes in tariffs, sanctions, international treaties, and other trade restrictions, rising inflation and interest rates, and uncertainty and liquidity concerns in the broader financial services industry, including those caused by certain recent banking failures.
We are continuing to monitor the development and potential impact of the Russo-Ukrainian conflictthese global economic and geopolitical events on our business and consolidated financial statements.results. To date, we have not experienced any material business disruptions or incurred any impairment losses in the carrying values of our assets as a result of these events and we are not aware of any specific related event or circumstance that would require us to revise our estimates reflected in the Q2 20222023 Financial Statements. However, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment; as a result, the Company’s estimates may change as new events occur and additional information is obtained.
Components of Operating Results
See Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations - Components of Operating Results” in our 20212022 Form 10-K, for a discussion of the nature of our operating expense line items within our accompanying Condensed Consolidated Statementsunaudited interim condensed consolidated statements of Operations.operations.
Results of Operations - Three Months Ended June 30
The following table summarizes our results of operations for the three months ended June 30, 20222023 and 2021:2022:
| | | For the three months ended June 30, 2022 | | For the three months ended June 30, 2021 | | Change | | For the three months ended June 30, 2023 | | For the three months ended June 30, 2022 | | Change |
(In U.S. dollars) | (In U.S. dollars) | $ | | $ | | $ | | % | (In U.S. dollars) | $ | | $ | | $ | | % |
Revenue | | Revenue | | | | | |
Other revenue | | Other revenue | 4,865,856 | | | — | | | 4,865,856 | | | 100.0 | % |
Total revenue | | Total revenue | 4,865,856 | | | — | | | 4,865,856 | | | 100.0 | % |
Operating expenses: | Operating expenses: | | | | | | | | Operating expenses: | | | | | | | |
Research and development | Research and development | 20,813,882 | | | 6,700,862 | | | 14,113,020 | | | 210.6 | % | Research and development | 31,276,573 | | | 20,813,882 | | | 10,462,691 | | | 50.3 | % |
General and administrative | General and administrative | 4,080,401 | | | 1,949,552 | | | 2,130,849 | | | 109.3 | % | General and administrative | 5,088,403 | | | 4,080,401 | | | 1,008,002 | | | 24.7 | % |
Total operating expenses | Total operating expenses | 24,894,283 | | | 8,650,414 | | | 16,243,869 | | | 187.8 | % | Total operating expenses | 36,364,976 | | | 24,894,283 | | | 11,470,693 | | | 46.1 | % |
Loss from operations | Loss from operations | (24,894,283) | | | (8,650,414) | | | (16,243,869) | | | 187.8 | % | Loss from operations | (31,499,120) | | | (24,894,283) | | | (6,604,837) | | | 26.5 | % |
Other income (expenses): | Other income (expenses): | | Other income (expenses): | |
Finance income (costs) | 509,700 | | | (2,863) | | | 512,563 | | | (17,903.0) | % | |
Investment income | | Investment income | 5,335,753 | | | 509,700 | | | 4,826,053 | | | 946.8 | % |
Foreign currency loss | Foreign currency loss | (12,259) | | | (27,599) | | | 15,340 | | | (55.6) | % | Foreign currency loss | (168,770) | | | (12,259) | | | (156,511) | | | 1,276.7 | % |
Total other income (expenses) | Total other income (expenses) | 497,441 | | | (30,462) | | | 527,903 | | | (1733.0) | % | Total other income (expenses) | 5,166,983 | | | 497,441 | | | 4,669,542 | | | 938.7 | % |
Loss before provision for income taxes | (24,396,842) | | | (8,680,876) | | | (15,715,966) | | | 181.0 | % | |
Provision for income taxes | (183,405) | | | (123,782) | | | (59,623) | | | 48.2 | % | |
Loss before income taxes | | Loss before income taxes | (26,332,137) | | | (24,396,842) | | | (1,935,295) | | | 7.9 | % |
Income tax benefit (provision) | | Income tax benefit (provision) | 921,298 | | | (183,405) | | | 1,104,703 | | | 602.3 | % |
Net loss | Net loss | (24,580,247) | | | (8,804,658) | | | (15,775,589) | | | 179.2 | % | Net loss | (25,410,839) | | | (24,580,247) | | | (830,592) | | | 3.4 | % |
Research and Development
The following table summarizes the components of research and development expenseexpenses for the three months ended June 30, 20222023 and 2021:2022:
| | | For the three months Ended June 30, 2022 | | For the three months Ended June 30, 2021 | | Change | | For the three months ended June 30, 2023 | | For the three months ended June 30, 2022 | | Change |
(In U.S. dollars) | (In U.S. dollars) | $ | | $ | | $ | | % | (In U.S. dollars) | $ | | $ | | $ | | % |
Clinical trials | Clinical trials | 8,286,606 | | | 2,419,972 | | | 5,866,634 | | | 242.4 | % | Clinical trials | 9,284,858 | | | 8,286,606 | | | 998,252 | | | 12.0 | % |
Salaries and benefits | Salaries and benefits | 4,312,716 | | | 1,568,283 | | | 2,744,433 | | | 175.0 | % | Salaries and benefits | 7,847,232 | | | 4,312,716 | | | 3,534,516 | | | 82.0 | % |
Sponsored research & product licenses | 3,805,325 | | | 1,460,982 | | | 2,344,343 | | | 160.5 | % | |
Contract manufacturing | Contract manufacturing | 3,374,158 | | | 1,170,677 | | | 2,203,481 | | | 188.2 | % | Contract manufacturing | 7,189,671 | | | 3,374,158 | | | 3,815,513 | | | 113.1 | % |
Depreciation and overhead | Depreciation and overhead | 975,241 | | | — | | | 975,241 | | | 100.0 | % | Depreciation and overhead | 3,548,091 | | | 975,241 | | | 2,572,850 | | | 263.8 | % |
Sponsored research & product licenses | | Sponsored research & product licenses | 3,036,390 | | | 3,805,325 | | | (768,935) | | | (20.2) | % |
Regulatory consulting | Regulatory consulting | 59,836 | | | 80,948 | | | (21,112) | | | (26.1) | % | Regulatory consulting | 370,331 | | | 59,836 | | | 310,495 | | | 518.9 | % |
Total | Total | 20,813,882 | | | 6,700,862 | | | 14,113,020 | | | 210.6 | % | Total | 31,276,573 | | | 20,813,882 | | | 10,462,691 | | | 50.3 | % |
For the three months ended June 30, 20222023, as compared to the three months ended June 30, 2021,2022, the increase in research and development expenseexpenses was primarily due to increases in (a) costs incurred in clinical trials and contract manufacturing as we continue to increase the scale of our trials and operations, (b) personnel costs as the Company continues to expand its research and development headcount, most notably in our Indianapolis manufacturing facility and the PIRI, and (c) depreciation and overhead primarily related to our Indianapolis manufacturing facility. This was partially offset by decreased costs associated with our licensing agreements and related sponsored research in connection with our product candidates both preclinical and clinical, including a $2,000,000 expense related to the amendment fee in connection with the exclusive global licensing agreement with Bach Biosciences and (d) depreciation and overhead related to our manufacturing facility. Although the Company does not currently track its research and development expenditures by product, it intends to begin tracking such expenditures by product in the near future.
General and administrative
clinical. For the three months ended June 30, 20222023, the Company incurred approximately $11.2 million and $1.4 million of direct costs associated with its PNT2002 and PNT2003 programs, respectively. These figures exclude amounts for salaries and benefits, depreciation and overhead costs which are not allocated by program.
General and administrative
General and administrative expenses increased for the three months ended June 30, 2023, as compared to the three months ended June 30, 2021,2022, primarily in connection with increased headcount compared to the increase in general and administrative expenses was primarily due to increased (a) personnel costsprior year period as the Company continues to expand its finance, information technology, human resources and other administrative headcount, and (b) insurance, legal, professional and consulting services, as the Company continues to increase the scale of its operations.our operations continues to increase.
Other Income (Expenses)
For the three months ended June 30, 2023 and 2022, other income (expenses) consist mainly of (a) interest and other income earned on the Company's cash, cash equivalents and investments, partially offset by (b) a foreign exchange loss primarily associated with foreign currency transactions occurring within the Company’s Canadian subsidiary. ForThe increase in the three months ended June 30, 2021, other expenses mainly consisted of (i) a foreign exchange loss associated with foreign currency transactionscurrent period reflects the increase in investments primarily occurring within the Company’s Canadian subsidiary, and (ii) accretion expense related to the amortization of capitalized transaction costs in connection with our previous mortgage payable.cash received in connection with equity financings and the Lantheus License Agreements.
Income Tax ExpenseBenefit (Provision)
For the three months ended June 30, 20222023, income tax benefit consists primarily of estimated research and 2021,development tax credits available for carryback. This is partially offset by taxes owing in Canada in relation to taxable income generated through management and research and development services performed by the Canadian subsidiary of the Company. For the three months ended June 30, 2022, income tax expense consisted primarily of taxes owing in Canada in relation to taxable income generated through management and research and development services performed by the Canadian subsidiary of the Company.
Results of Operations - Six Months Ended June 30
The following table summarizes our results of operations for the six months ended June 30, 20222023 and 2021:2022:
| | | For the six months Ended June 30, 2022 | | For the six months Ended June 30, 2021 | | Change | | For the six months ended June 30, 2023 | | For the six months ended June 30, 2022 | | Change |
(In U.S. dollars) | (In U.S. dollars) | $ | | $ | | $ | | % | (In U.S. dollars) | $ | | $ | | $ | | % |
Revenue | | Revenue | | | | | |
Other revenue | | Other revenue | 14,323,120 | | | — | | | 14,323,120 | | | 100.0 | % |
Total revenue | | Total revenue | 14,323,120 | | | — | | | 14,323,120 | | | 100.0 | % |
Operating expenses: | Operating expenses: | | | | | | | | Operating expenses: | | | | | | | |
Research and development | Research and development | 33,314,730 | | | 10,970,160 | | | 22,344,570 | | | 203.7 | % | Research and development | 58,187,045 | | | 33,314,730 | | | 24,872,315 | | | 74.7 | % |
General and administrative | General and administrative | 7,888,343 | | | 3,414,244 | | | 4,474,099 | | | 131.0 | % | General and administrative | 10,098,532 | | | 7,888,343 | | | 2,210,189 | | | 28.0 | % |
Total operating expenses | Total operating expenses | 41,203,073 | | | 14,384,404 | | | 26,818,669 | | | 186.4 | % | Total operating expenses | 68,285,577 | | | 41,203,073 | | | 27,082,504 | | | 65.7 | % |
Loss from operations | Loss from operations | (41,203,073) | | | (14,384,404) | | | (26,818,669) | | | 186.4 | % | Loss from operations | (53,962,457) | | | (41,203,073) | | | (12,759,384) | | | 31.0 | % |
Other income (expenses): | Other income (expenses): | | | | | Other income (expenses): | |
Finance income (costs) | 557,673 | | | (5,662) | | | 563,335 | | | (9,949.4) | % | |
Investment income | | Investment income | 11,099,967 | | | 557,673 | | | 10,542,294 | | | 1,890.4 | % |
Foreign currency loss | Foreign currency loss | (43,900) | | | (34,806) | | | (9,094) | | | 26.1 | % | Foreign currency loss | (238,960) | | | (43,900) | | | (195,060) | | | 444.3 | % |
Total other income (expenses) | Total other income (expenses) | 513,773 | | | (40,468) | | | 554,241 | | | (1369.6) | % | Total other income (expenses) | 10,861,007 | | | 513,773 | | | 10,347,234 | | | 2,014.0 | % |
Loss before provision for income taxes | (40,689,300) | | | (14,424,872) | | | (26,264,428) | | | 182.1 | % | |
Provision for income taxes | (271,521) | | | (164,207) | | | (107,314) | | | 65.4 | % | |
Loss before income taxes | | Loss before income taxes | (43,101,450) | | | (40,689,300) | | | (2,412,150) | | | 5.9 | % |
Income tax benefit (provision) | | Income tax benefit (provision) | 1,159,940 | | | (271,521) | | | 1,431,461 | | | 527.2 | % |
Net loss | Net loss | (40,960,821) | | | (14,589,079) | | | (26,371,742) | | | 180.8 | % | Net loss | (41,941,510) | | | (40,960,821) | | | (980,689) | | | 2.4 | % |
Research and Development
The following table summarizes the components of research and development expenseexpenses for the six months ended June 30, 20222023 and 2021:2022:
| | | | | | | | | | | | | | | | | | | | | | | |
| For the six months Ended June 30, 2022 | | For the six months Ended June 30, 2021 | | Change |
(In U.S. dollars) | $ | | $ | | $ | | % |
Clinical trials | 13,015,747 | | | 4,213,751 | | | 8,801,996 | | | 208.9 | % |
Salaries and benefits | 8,051,246 | | | 2,586,653 | | | 5,464,593 | | | 211.3 | % |
Contract manufacturing | 6,083,741 | | | 1,533,770 | | | 4,549,971 | | | 296.7 | % |
Sponsored research & product licenses | 4,555,325 | | | 2,383,269 | | | 2,172,056 | | | 91.1 | % |
Depreciation and overhead | 1,483,462 | | | — | | | 1,483,462 | | | 100.0 | % |
Regulatory consulting | 125,209 | | | 252,717 | | | (127,508) | | | (50.5) | % |
Total | 33,314,730 | | | 10,970,160 | | | 22,344,570 | | | 203.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| For the six months ended June 30, 2023 | | For the six months ended June 30, 2022 | | Change |
(In U.S. dollars) | $ | | $ | | $ | | % |
Clinical trials | 18,173,278 | | | 13,015,747 | | | 5,157,531 | | | 39.6 | % |
Salaries and benefits | 14,491,043 | | | 8,051,246 | | | 6,439,797 | | | 80.0 | % |
Contract manufacturing | 15,422,020 | | | 6,083,741 | | | 9,338,279 | | | 153.5 | % |
Depreciation and overhead | 5,897,604 | | | 1,483,462 | | | 4,414,142 | | | 297.6 | % |
Sponsored research & product licenses | 3,536,390 | | | 4,555,325 | | | (1,018,935) | | | (22.4) | % |
Regulatory consulting | 666,710 | | | 125,209 | | | 541,501 | | | 432.5 | % |
Total | 58,187,045 | | | 33,314,730 | | | 24,872,315 | | | 74.7 | % |
For the six months ended June 30, 20222023, as compared to the six months ended June 30, 2021,2022, the increase in research and development expenseexpenses was primarily due to increases in (a) costs incurred in clinical trials and contract manufacturingthe same or substantially same factors as we continue to increasenoted above for the scale of our trials and operations, (b) increased personnel costs asthree months ended June 30, 2023. For the six months ended June 30, 2023, the Company continues to expand its researchincurred approximately $22.7 million and development headcount, (c)$2.6 million of direct costs associated with our licensing agreementsits PNT2002 and related sponsored research in connection with our product candidates both preclinicalPNT2003 programs, respectively. These figures exclude amounts for salaries and clinical, including a $2,000,000 expense related to the amendment fee in connection with the exclusive global licensing agreement with Bach Biosciences and (d)benefits, depreciation and overhead related to our manufacturing facility. Although the Company doescosts which are not currently track its research and development expendituresallocated by product, it intends to begin tracking such expenditures by product in the near future.program.
General and administrative
ForGeneral and administrative expenses increased for the six months ended June 30, 20222023, as compared to the six months ended June 30, 2021, the increase in general and administrative expenses was primarily2022, due to increased (a) personnel coststhe same or substantially same factors as noted above for the Company continues to expand its finance, information technology, human resources and other administrative headcount, and (b) insurance, legal, professional and consulting services, as the Company continues to increase the scale of its operations.
three months ended June 30, 2023. Other Income (Expenses)
For the six months ended June 30, 2023 and 2022, other income (expenses) consist mainly of (a) interest and other income earned on the Company's cash, cash equivalents and investments, partially offset by (b) a foreign exchange loss primarily associated with foreign currency transactions occurring within the Company’s Canadian subsidiary. ForThe increase in the sixcurrent period reflects the same or substantially same factors as noted above for the three months ended June 30, 2021, other expenses mainly consisted of (i) a foreign exchange loss associated with foreign currency transactions primarily occurring within the Company’s Canadian subsidiary, and (ii) accretion expense related to the amortization of capitalized transaction costs in connection with our previous mortgage payable.2023.
Income Tax ExpenseBenefit (Provision)
For the six months ended June 30, 20222023, income tax benefit consists primarily of estimated research and 2021,development tax credits available for carryback. This is partially offset by taxes owing in Canada in relation to taxable income generated through management and research and development services performed by the Canadian subsidiary of the Company. For the six months ended June 30, 2022, income tax expense consisted primarily of taxes owing in Canada in relation to taxable income generated through management and research and development services performed by the Canadian subsidiary of the Company.
Liquidity and Capital Resources
Sources of Liquidity and Capital
We haveExcept for the upfront payment received pursuant to the Lantheus License Agreements, the Company has incurred significant net losses since the Company’s inception and currently rely on the proceeds for the Business Combination to fund our operations.funded operations primarily through equity financings. Operating losses and negative cash flows from operationswere incurred in the three and investing activitiessix months ended June 30, 2023 and are expected to continue for the foreseeable future. As losses continue to be incurred wein future periods. We are subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, successful discovery and development of our product candidates, development by competitors of new technological innovations, dependence on key personnel, the ability to attract and retain qualified employees, protection of proprietary technology, compliance with governmental regulations, the impact of COVID-19, the ability to secure additional capital to fund operations and commercial success of our product candidates.industry. Product candidates currently under development will require extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities. Even if our drug development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales.
Net losses totaled $24.6$25.4 million and $8.8$24.6 million for the three months ended June 30, 2023 and 2022 and 2021, respectively$41.9 million and $41.0 million and $14.6 million for the six months ended June 30, 20222023 and 2021,2022, respectively.
On January 28, 2021, warrants forIn connection with the purchase of common2022 Public Offering, on September 16, 2022, we issued 13,900,000 shares of POINT Biopharma Inc. were exercisedCommon Stock resulting in net proceeds of $20.0 million.approximately $117.3 million, excluding certain transaction costs incurred in connection with filing the S-3 (defined below) and on October 3, 2022, we issued an additional 1,589,779 shares of Common Stock for net
proceeds to the Company of approximately $13.4 million as a result of underwriters exercising their option to purchase additional shares pursuant to the underwriting agreement. On March 8, 2021,December 22, 2022, we received cash proceeds of $0.5 million for a non-employee consultant’s exercise of stock options. On June 30, 2021, we received net proceeds of approximately $260.0 million in connection with the Business Combination consisting of proceeds of the PIPE Financing and the proceeds remaining in RACA’s trust account.Lantheus License Agreements. We intend to use the net proceeds from these transactions to fulfill our obligations under the Lantheus License Agreements, for general corporate purposes, funding of development programs, payment of milestones pursuant to our license agreements, general and administrative expenses, licensing of additional product candidates, and to supportsupporting our working capital needs.
Future Funding Requirements
Our primary use of cash is to fund operating expenses, primarily related to our research and development activities. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.
We expectOperating losses and negative cash flows are expected to continue to incur significant and increasing expenses and operating losses forbe incurred in the foreseeable future. We willmay require additional capital to meet operational needs and capital requirements for clinical trials, for other research and development expenditures, and for business development activities. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials and preclinical studies.
Our future funding requirements will depend on many factors, including, but not limited to:
•the scope, progress, results and costs of researching and developing our current product candidates, as well as other additional product candidates we may develop and pursue in the future;
•the timing of, and the costs involved in, obtaining regulatory and marketing approvals for our product candidates and any other additional product candidates we may develop and pursue in the future;
•the number of future product candidates that we may pursue and their development requirements;
•subject to receipt of regulatory approval, if any, the costs of commercialization activities for our product candidates, to the extent such costs are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing, distribution, and manufacturing capabilities;
•subject to receipt of regulatory approval, revenue, if any, received from commercial sales of our product candidates or any other additional product candidates we may develop and pursue in the future;
•the achievement of milestones that trigger payments under our various license agreements;
•the extent to which we in-license or acquire rights to other products, product candidates or technologies;
•our ability to establish collaboration arrangements for the development of our product candidates on favorable terms, if at all;
•our headcount growth and associated costs as we expand our research and development and establish a commercial infrastructure;
•the costs of preparing, filing and prosecuting patent applications, and maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims; and
•the costs of operating as a public company.
As of June 30, 2022,2023, we had cash, cash equivalents and investments of approximately $204.3 million. We expect that our cash and equivalents are sufficient$434.8 million, which is anticipated to fund our operating expenses and capital expenditure requirementsoperations into the first quarter of 2024.2026. We have based this estimate on current assumptions that may change or prove to be wrong, and we couldwhich would cause us to utilize our available capital resources sooner than we expect. In addition, our cash, cash equivalents and investments are subject to the economic pressures or uncertainties associated with local or global economic recessions, and ongoing geopolitical events. The failure of one or more of the financial institutions in which our cash, cash equivalents or investments are held, any resulting inability for us to obtain the return of our funds from any of those financial institutions, or any other adverse condition suffered by those financial institutions, could impact access to our cash, cash equivalents or investments and could adversely impact our operating liquidity and financial performance.
On July 11, 2022 the SEC declared effective our shelf registration statement on Form S-3 (the “S-3”) that allows the Company to offer and sell to the public up to $400,000,000$400.0 million of our Common Stock, preferred stock, debt securities, warrants to purchase our Common Stock, preferred stock or debt securities, subscription rights to purchase our Common Stock, preferred stock or debt securities and/or units consisting of some or all of these securities, from time to time in one or more offerings. The details of any future offerings, along with the use of proceeds from any securities offered, will be described in a prospectus supplement or other offering materials, at the time of offering. Also covered under the S-3 as part of the $400,000,000$400.0 million total amount is an at-the-market offering (“ATM”) of up to $150,000,000$150.0 million of our Common Stock
pursuant to a distribution agreement with Piper Sandler & Co. To date, we have not sold anyNo shares of Common Stock underwere issued in connection with the ATM or any equity underas of June 30, 2023. Pursuant to the S-3 and have no current plans to issue additional equity, but havein connection with the 2022 Public Offering, on September 16, 2022 we issued 13,900,000 shares of Common Stock at the price of $9.00 per share, or an aggregate of $125.1 million, resulting in net proceeds of approximately $117.3 million, excluding certain transaction costs incurred in connection with filing the S-3, and on October 3, 2022, we issued an additional 1,589,779 shares of Common Stock at a public offering price of $9.00 per share for net proceeds to the ATM available if needed.Company of approximately $13.4 million as a result of an underwriters exercising their option to purchase additional shares pursuant to the underwriting agreement.
Until such time as we can generate substantial product revenue, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders' ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect rights of our stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Going Concern
We assess and determine our ability to continue as a going concern in accordance with the provisions of ASC Topic 205-40, Presentation of Financial Statements—Going Concern. We have determined that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.
Working Capital
Working capital is defined as current assets less current liabilities.
The following table summarizes our total working capital and current assets and liabilities as of June 30, 20222023 and December 31, 2021:2022:
| | | As of June 30, 2022 | | As of December 31, 2021 | | Change | | As of June 30, 2023 | | As of December 31, 2022 | | Change |
(In U.S. dollars) | (In U.S. dollars) | $ | | $ | | $ | | % | (In U.S. dollars) | $ | | $ | | $ | | % |
Current assets | Current assets | 204,905,051 | | | 243,846,556 | | | (38,941,505) | | | (16.0) | % | Current assets | 432,375,303 | | | 530,822,730 | | | (98,447,427) | | | (18.5) | % |
Current liabilities | Current liabilities | 18,796,727 | | | 7,979,964 | | | 10,816,763 | | | 135.5 | % | Current liabilities | 41,155,794 | | | 79,738,440 | | | (38,582,646) | | | (48.4) | % |
Total working capital | Total working capital | 186,108,324 | | | 235,866,592 | | | (49,758,268) | | | (21.1) | % | Total working capital | 391,219,509 | | | 451,084,290 | | | (59,864,781) | | | (13.3) | % |
The decrease in working capital as of June 30, 2022,2023, primarily reflects cash used for (a) operating expenses, including, personnel costs and research and development costs as we advance our clinical trials and continue to expand our pipeline, and (b) capital expenditures for equipment and machinery used in our manufacturing facility in Indiana,Indiana. This was partially offset by interest and (c)other income earned on the acquisitionCompany's cash, cash equivalents and investments. The decrease in current liabilities primarily reflects the payment of long-term investments.income taxes during the six months ended June 30, 2023 of approximately $31.9 million, which had an equal and offsetting impact to current assets.
Cash Flows
The following table summarizes our sources and uses of cash for the threesix months ended June 30, 20222023 and 2021:2022:
| | | | | | | | | | | | | | | | | | | | | | | |
| For the six months Ended June 30, 2022 | | For the six months Ended June 30, 2021 | | Change |
(In U.S. dollars) | $ | | $ | | $ | | % |
Net cash flows used in operating activities | (31,068,981) | | | (19,444,565) | | | (11,624,416) | | | 59.8 | % |
Net cash flows used in investing activities | (129,643,171) | | | (3,242,281) | | | (126,400,890) | | | 3,898.5 | % |
Net cash flows provided by financing activities | 4,403 | | | 285,876,917 | | | (285,872,514) | | | (100.0) | % |
Net (decrease)/increase in cash and cash equivalents | (160,707,749) | | | 263,190,071 | | | (423,897,820) | | | (161.1) | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| For the six months ended June 30, 2023 | | For the six months ended June 30, 2022 | | Change |
(In U.S. dollars) | $ | | $ | | $ | | % |
Net cash flows used in operating activities | (96,727,236) | | | (31,068,981) | | | (65,658,255) | | | 211.3 | % |
Net cash flows used in investing activities | (132,606,078) | | | (129,643,171) | | | (2,962,907) | | | 2.3 | % |
Net cash flows provided by financing activities | 198,281 | | | 4,403 | | | 193,878 | | | 4403.3 | % |
Net decrease in cash and cash equivalents | (229,135,033) | | | (160,707,749) | | | (68,427,284) | | | 42.6 | % |
Cash flows used in operating activitiesOperating Activities
Net cash flows used in operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities. We expect cash provided by financing activities, including cash provided in connection with the ATM discussed above, will continue to be our primary source of funds to finance operating needs and capital expenditures for the foreseeable future.
Cash used in operating activities increased for the six months ended June 30, 20222023 compared to the six months ended June 30, 2021 as we advance2022 primarily due to a) continued advancement of our clinical trials and continue to expandexpansion of our pipeline, as described above.above and b) income taxes paid of approximately $31.9 million.
We believe that the net proceeds from the Lantheus License Agreements and the 2022 Public Offering, together with our available resources and existing cash and cash equivalents, are sufficient to fund our operating expenses and capital expenditure requirements into 2026.
Cash flows used in Investing Activities
For the six months ended June 30, 2023 and 2022, and 2021,net cash used in investing activities reflected $129.6totaled $132.6 million and $3.2$129.6 million, respectively. The increase in cash used in investing activities relates to (a) the Company's investment of its available cash resources into shortfixed income investments, (b) purchase of the Note Receivable from Ionetix-α and long-term investments and (b)(c) increased capital expenditures for purchases in connection with our IndianaIndianapolis manufacturing facility.
Cash flows provided by Financing Activities
For the six months ended June 30, 2023 and 2022, net cash provided by financing activities totaled $4,403,$198.3 thousand and $4 thousand, respectively, which consisted of the net proceeds received from the exercise of stock options issuedand solely related to non-employee consultants. For the six months ended June 30, 2021, net cash provided2023, was partially offset by financing activities totaled $285.9 million, which consisted of (a) the net proceedspayments made in connection with
the Business Combination and related PIPE Financing and (b) the proceeds from the exercise of warrants and stock options, each as discussed above.Company's finance lease obligation.
Contractual Obligations and Other Commitments
The Company in the normal course of business enters into various services and supply agreements in connection with its clinical trials to ensure the supply of certain product and product lines during the Company’s clinical phase. These agreements often have minimum purchase commitments and generally terminate upon the termination of the clinical trial. For additional information, see Note 12 to the Q2 20222023 Financial Statements.
For additional information related to our license agreements, please also see Note 12 to the Q2 20222023 Financial Statements and Notes 1214 and 1315 to the 20212022 Financial Statements.
Off-balance sheet arrangements
We do not have any off-balance sheet arrangements or holdings in any variable interest entities.
Critical Accounting Policies and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our Q2 20222023 Financial Statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries, POINT Biopharma Inc., POINT Biopharma Corp., POINT Biopharma USA, Inc. and West 78th Street, LLC, for financial information and pursuant to the rules and regulations of the SEC.
The preparation of the Q2 20222023 Financial Statements in conformity with GAAP requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities atas of the date of the Q2 20222023 Financial Statements and the reported amounts of expenses during the reporting
periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no significant changes to our critical accounting policies and estimates from the information provided in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 20212022 Form 10-K.10-K except as below:
Leases
The Company accounts for leases in accordance with ASC Topic 842, Leases ("ASC 842"). At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances present. The Company has elected not to recognize leases with an original term of one year or less on the consolidated balance sheets. We have also elected to account for the lease and non-lease components as a combined lease component for our current lease portfolio. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Options to renew or early terminate a lease are included in the initial lease term of a lease when there is reasonable certainty that the option will be applied.
ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. The Company's incremental borrowing rate is determined using a secured borrowing rate for the same currency and term as the associated lease in a similar economic environment.
Lease expense for operating leases is recognized on a straight-line basis over the lease term and included in operating expenses in the unaudited interim condensed consolidated statements of operations and comprehensive loss.
ITEM 3. – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risks relating to our operations result primarily from interest rate risk and foreign exchange risk. As of June 30, 2022,2023, there were no material changes to our market risks from the information provided in Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our 20212022 Form 10-K.
Inflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three and six months ended June 30, 2023 and 2022.
ITEM 4. – CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Such disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
As of June 30, 2022,2023, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our Chief Executive Officer and Chief Financial Officer have concluded that, based on the evaluation described above, as of June 30, 2022,2023, our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
During the fiscal quarter ended June 30, 2022 we continued to (i) adopt, improve and maintain policies, processes and documentation procedures to improve the overall efficiency and accuracy of our financial reporting; and (ii) we continued to work with third-party consultants to review the design of our systems of internal control over financial reporting and to recommend improvements. As part of this process, during the fiscal quarter ended June 30, 2022, we continued to refine our processes in respect of our new general ledger system to improve our internal control framework.
Except as disclosed above, thereThere was no change in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 20222023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. – LEGAL PROCEEDINGS
From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not currently aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations.
ITEM 1A. – RISK FACTORS
Factors that could cause our actual results to differ materially from those described in this Quarterly Report on Form 10-Q are any of the risks and uncertainties described in our 20212022 Form 10-K. If any of these risks are realized, our business, financial condition, operating results and prospects could be materially and adversely affected. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operation.
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risks and uncertainties disclosed in the 20212022 Form 10-K. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
ITEM 2. – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.PROCEEDS
Unregistered Sales of Equity Securities
We did not have any unregistered sales of equity securities during the quarter ended June 30, 2022.2023.
Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the quarter ended June 30, 2022.2023.
ITEM 3. – DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. – MINE SAFETY DISCLOSURES.DISCLOSURES
Not applicable.
ITEM 5. – OTHER INFORMATION.INFORMATION
None.None of the Company’s directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended June 30, 2023.
ITEM 6. – EXHIBITS.EXHIBITS
The following exhibits are filed as part of this Quarterly Report on Form 10-Q.
Exhibit Index
| | | | | | | | |
Exhibit Number | | Description |
3.1 | | |
3.2 | | |
10.1† | | |
10.2* | | |
10.3*# | | |
10.4*‡ | | |
31.1* | | |
31.2* | | |
32* | | |
101.INS* | | XBRL Instance Document |
101.SCH* | | XBRL Taxonomy Extension Schema Document |
101.CAL* | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* | | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* | | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | | XBRL Taxonomy Extension Presentation Linkbase Document |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
† Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(a)(5). The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
# Certain confidential portions (indicated by brackets and asterisks) have been omitted from this exhibit.
‡ Indicates a management contract or any compensatory plan, contract or arrangement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | | | | | | | |
| | | POINT BIOPHARMA GLOBAL INC. |
| | |
Date: August 12, 202214, 2023 | | |
| | |
| | By: | /s/Joe McCann.McCann |
| | | Dr. Joe McCann, Ph.D. |
| | | Chief Executive Officer |
| | | (Principal Executive Officer) |
| | |
| | By: | /s/Bill Demers |
| | | Bill Demers |
| | | Chief Financial Officer |
| | | (Principal Financial Officer) |