美国
证券交易委员会
华盛顿特区20549
表格
(标记一个)
根据1934年证券交易法第13或15(d)条款的季度报告 |
截至2024年6月30日季度结束
或
根据1934年证券交易所法第13条或第15(d)条，为从 到 期间的过渡报告 |
委员会档案编号
(按其公司章程所规定，公司的正式名称)
(依据所在地或其他管辖区) 的注册地或组织地点) | (国税局雇主识别号码) 识别号码) |
(总部办公地址) | (邮递区号) |
注册人的电话号码，包括区号：(
根据法案第12(b)条规定注册的证券：
每种类别的名称 |
| 交易 标的 |
| 每个注册交易所的名称 |
The （纳斯达克资本市场） |
请以勾选方式表明公司已依据1934年证券交易所法第13条或第15(d)条的规定在过去12个月内（或在公司被要求提交该等报告的较短期间内）提交了所有的报告，并在过去90天内受到该等提交要求的约束。
请在勾选符号上注明，是否在过去的12个月内（或更短的时间内，如果注册人需提交此类文件），根据Regulation S-t第405条规定向本章第232.405条提交所需提交的每个交互式资料档案。
勾选表示登记人是大型加速申报人、加速申报人、非加速申报人、较小型申报公司或新兴成长公司。详细定义请参阅《交易所法》第1202条中“大型加速申报人”、“加速申报人”、“较小型申报公司”和“新兴成长公司”的定义。
大型加速归档人 | ☐ | 加速归档人 | ☐ |
☒ | 小型报告公司 | ||
新兴成长型企业 |
如果是新兴成长公司，请勾选指示，如果登记人已选择不遵守根据《交易所法》第13(a)条规定提供的任何新的或修订后的财务会计标准的扩展过渡期。
在核准书上打勾表示公司是否为壳公司（如交易所法规定的第1202条所定义）。 是
截至2024年11月4日，申报人持有
2
关于前瞻性声明的注意事项
本季度10-Q表格（本“季度报告”）包含根据1995年《私人证券诉讼改革法》安全港条款含义的前瞻性陈述。我们的前瞻性陈述包括但不限于，关于我们和我们管理团队对未来的期望，希望，信念，意图或策略的陈述。此外，涉及对未来事件或环境的预测，预测或其他描述，包括任何基本假设的任何陈述均属于前瞻性陈述。 “预计”，“相信”，“继续”，“可能”，“评估”，“期望”，“打算”，“可能”，“计划”，“可能”，“潜在”，“预测”，“项目”，“应该”，“将”以及类似表达可能标志著前瞻性陈述，但缺乏这些词不意味著该陈述不是前瞻性的。
这些前瞻性陈述基于Zura Bio Limited（“公司”或“Zura”）及其管理层目前的期望，并天生受到不确定性和情况的变化及其潜在影响的影响，并仅于该陈述日期作出。前瞻性陈述并不是绩效的保证。您不应对我们的前瞻性陈述抱有过度依赖。这些前瞻性陈述涉及一系列风险，不确定性或其他假设，这些风险，不确定性或其他假设可能导致实际结果或绩效与这些前瞻性陈述所表达或暗示的大相迳庭。这些风险和不确定性包括但不限于：
| ● | 我们对我们产品候选者及其相关好处的期望，以及我们对正在开发和已获批的竞争产品候选者和产品的信念，可能无法实现； |
| ● | 我们的愿景和策略可能不成功； |
| ● | 主要事件的时间安排、我们研究的开始以及临床数据的发布可能比预期时间更长，或根本无法实现； |
| ● | 对于监管机构、支付方、医生和患者对我们产品候选者的潜在普遍接受和使用维持的期望可能无法实现； |
| ● | 我们可能无法吸引和留住关键人才； |
| ● | 对于未来营业费用、资本需求和额外筹措资金需求的预期可能无法实现； |
| ● | 我们尚未完成任何临床试验，也没有任何产品获得商业销售批准； |
| ● | 自成立以来，我们已经亏损巨额，预计在可预见的未来将持续亏损，可能无法实现或维持未来的盈利能力； |
| ● | 我们需要大量额外资本来资助我们的运营，如果我们无法在需要时或以可接受的条件筹集到这些资本，我们可能被迫延迟、减少和/或取消其中一个或多个发展项目或未来的商业化努力； |
| ● | 我们可能无法续约现有合同或签订新合同； |
| ● | 我们依赖第三方医药外包概念进行临床材料的制造； |
| ● | 我们依赖医药外包概念、临床试验机构和其他第三方进行我们的前临床研究和临床试验； |
| ● | 我们可能无法获得产品候选药的监管批准，且任何已批准产品可能受到相关的限制或限制； |
| ● | 我们可能无法成功应对一般经济和地缘政治条件； |
| ● | 我们可能无法有效管理增长； |
3
| ● | 我们面临来自全球其他公司的竞争压力； |
| ● | 我们可能无法充分保护我们的知识产权；以及 |
| ● | 在向证券交易委员会（“SEC”）提交的文件中列出的其他因素，或将要提交的文件中的因素。 |
关于上述风险、不确定性和其他因素的额外讨论，以及对公司业务重要的其他风险，可以在截止至2023年12月31日的年度报告的第I部分，第1A项的“风险因素”中找到。公司实际上可能无法实现我们在前瞻性陈述中披露的计划、意图或期望。新的风险因素不时出现，无法预测所有这些风险因素，公司也无法评估所有这些风险因素对公司业务的影响，或任何因素或因素组合可能使实际结果与任何前瞻性陈述中的内容有实质性差异的程度。我们的前瞻性陈述未能反映我们可能执行的任何未来收购、合并、处置、合资企业、投资或其他交易的潜在影响。
基于上述原因，公司提醒您不要依赖任何前瞻性声明，同时应与本季度报告及本季度报告中引用的文件以及在本季度报告其他地方包含的其他警示声明一起阅读。前瞻性声明反映了公司对于相关主题的信念和意见。这些声明基于截至本季度报告日期公司可获取的信息，尽管公司认为这些信息为此类声明提供了合理的基础，但这些信息可能有限或不完整，且声明不应被解读为表明公司对所有潜在可用相关信息进行了彻底调查或审查。归因于公司的所有前瞻性声明或代表其行为的人所做的声明，均完全受到上述警告声明的限制。除法律要求外，公司无义务公开更新或修订任何前瞻性声明，无论是由于新信息、未来事件还是其他原因。
4
第一部分——财务信息
项目1.基本报表。
Zura Bio有限公司
简明合并资产负债表
（以千为单位，除股票数据外）
| 2023年9月30日， |
| 12月31日 | |||
2024 | 2023 | |||||
(未经审计) | ||||||
资产 | ||||||
流动资产： |
|
| ||||
现金及现金等价物 | $ | | $ | | ||
预付款项及其他流动资产 | | | ||||
总流动资产 | | | ||||
物业及设备（净额） | | — | ||||
其他资产 | | — | ||||
总资产 | $ | | $ | | ||
负债、可赎回非控制性权益和股东权益 | ||||||
流动负债： | ||||||
应付账款和预提费用 | $ | | $ | | ||
总流动负债 | | | ||||
定向增发Warrants | — | | ||||
总负债 | | | ||||
承诺和或有事项（注释9） | ||||||
可赎回非控制性权益 | | | ||||
股东权益： | ||||||
优先股，$ | ||||||
A类普通股，$ | | | ||||
额外实收资本 | | | ||||
累计亏损 | ( | ( | ||||
Zura Bio Limited的股东权益总额 | | | ||||
非控制性权益 | | | ||||
总股东权益 | | | ||||
总负债、可赎回非控股权益和股东权益 | $ | | $ | | ||
请参阅审计未完的简明合并基本报表附注。
5
Zura Bio有限公司
浓缩合并经营报表
(未经审计)
(单位为千，除股份和每股数据外)
截至三个月 | 截至九个月 | |||||||||||
九月三十日 | 九月三十日 | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
营业费用： |
|
|
| |||||||||
研究和开发 | $ | | $ | | $ | | $ | | ||||
一般管理费用 | | |
| |
| | ||||||
总营业费用 | | |
| |
| | ||||||
运营损失 | ( | ( |
| ( |
| ( | ||||||
其他（收入）/费用，净： |
| |||||||||||
其他收入/费用，净额 | ( | | ( | | ||||||||
利息收入 | ( | ( | ( | ( | ||||||||
股息收入 | — | ( | — | ( | ||||||||
定向增发Warrants公允价值的变化 | | ( | | | ||||||||
应付票据公允价值变动 | — | — | — | | ||||||||
其他（收入）/费用，净额 | | ( | ( | | ||||||||
税前亏损 | ( | ( | ( | ( | ||||||||
所得税优惠 | ||||||||||||
可赎回非控制性权益之前的净损失 | ( | ( | ( | ( | ||||||||
可赎回非控制性权益的净亏损 | — | — | — | | ||||||||
净损失 | ( | ( | ( | ( | ||||||||
可赎回非控股权益增值至赎回价值 | ( | — | ( | ( | ||||||||
视为对可赎回非控制性权益的股息 | — | — | — | ( | ||||||||
可赎回非控股权益从赎回价值调整为账面价值 | — | — | | — | ||||||||
归属于Zura的A类普通股股东的净亏损 | $ | ( | $ | ( | $ | ( | $ | ( | ||||
归属于Zura的A类普通股股东的每股净亏损，基本和稀释后 | $ | ( | $ | ( | $ | ( | $ | ( | ||||
计算归属于Zura的A类普通股股东每股净亏损时使用的加权平均A类普通股数量，基本和稀释后 | | |
| |
| | ||||||
请参阅审计未完的简明合并基本报表附注。
6
Zura Bio Limited
Condensed Consolidated Statements of Changes in Redeemable Noncontrolling Interest, Convertible Preferred Shares and Shareholders’ Equity (Deficit)
(Unaudited)
(In thousands, except share data)
For the Three Months Ended September 30, 2024
Redeemable | Convertible | Class A | Additional | Total | ||||||||||||||||||||||
Noncontrolling | Preferred Shares | Ordinary Shares | Paid-in | Accumulated | Noncontrolling | Shareholders’ | ||||||||||||||||||||
| Interest |
| Shares |
| Amount |
|
| Shares |
| Amount |
| Capital |
| Deficit |
| Interest |
| Equity | ||||||||
Balance as of June 30, 2024 |
| $ | | — | $ | — |
| | $ | | $ | | $ | ( | $ | | $ | | ||||||||
Issuance of Pre-Funded Warrants in exchange for Class A Ordinary Shares | — | — | — | ( | — | — | — | — | — | |||||||||||||||||
Issuance of Class A Ordinary Shares in exchange for Private Placement Warrants |
| — | — |
| — |
| |
| — | |
| — | — |
| | |||||||||||
Issuance of Class A Ordinary Shares in exchange for Public Warrants |
| — | — |
| — |
| |
| — | — |
| — | — |
| — | |||||||||||
Issuance of Class A Ordinary Shares in connection with a sale under the ATM, net of $ |
| — | — |
| — |
| |
| | |
| — | — |
| | |||||||||||
ATM transaction costs | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||
Issuance of Class A Ordinary Shares for restricted stock units, net of shares withheld for taxes | — | — | — | | — | ( | — | — | ( | |||||||||||||||||
Share-based compensation | — | — | — | — | — | | — | — | | |||||||||||||||||
Accretion of redeemable noncontrolling interest to redemption value | | — | — | — | — | ( | — | — | ( | |||||||||||||||||
Net loss | — | — | — | — | ( | — | ( | |||||||||||||||||||
Balance as of September 30, 2024 | $ | | — | $ | — | | $ | | $ | | $ | ( | $ | | $ | | ||||||||||
For the Three Months Ended September 30, 2023
Redeemable | Convertible | Class A | Additional | Total | ||||||||||||||||||||||
Noncontrolling | Preferred Shares | Ordinary Shares | Paid-in | Accumulated | Noncontrolling | Shareholders’ | ||||||||||||||||||||
| Interest |
| Shares |
| Amount | Shares |
| Amount | Capital |
| Deficit |
| Interest |
| Equity | |||||||||||
Balance as of June 30, 2023 | $ | | — | $ | — | | $ | | $ | | $ | ( | $ | | $ | | ||||||||||
Share-based compensation | — | — | — | — | — | | — | — | | |||||||||||||||||
Net loss |
| — | — |
| — |
| — |
| — | — |
| ( | — |
| ( | |||||||||||
Balance as of September 30, 2023 |
| $ | | — | $ | — |
| | $ | | $ | | $ | ( | $ | | $ | | ||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
7
Zura Bio Limited
Condensed Consolidated Statements of Changes in Redeemable Noncontrolling Interest, Convertible Preferred Shares and Shareholders’ Equity (Deficit)
(Unaudited)
(In thousands, except share data)
For the Nine Months Ended September 30, 2024
| Redeemable |
| Convertible Preferred |
|
| Class A |
| Additional |
|
| Total | |||||||||||||||
Noncontrolling | Shares | Ordinary Shares | Paid-in | Accumulated | Noncontrolling | Shareholders’ | ||||||||||||||||||||
| Interest |
| Shares |
| Amount |
|
| Shares |
| Amount |
| Capital |
| Deficit |
| Interest |
| Equity | ||||||||
Balance as of December 31, 2023 | $ | |
| — | $ | — |
| | $ | | $ | | $ | ( | $ | | $ | | ||||||||
Issuance of Class A Ordinary Shares in connection with April 2024 Private Placement, net of $ |
| — |
| — |
| — |
| |
| |
| |
| — | — |
| | |||||||||
Issuance of Pre-Funded Warrants in connection with April 2024 Private Placement | — | — | — | — | — | | — | — | | |||||||||||||||||
Issuance of Pre-Funded Warrants in exchange for Class A Ordinary Shares | — | — | — | ( | — | — | — | — | — | |||||||||||||||||
Issuance of Class A Ordinary Shares in exchange for Private Placement Warrants | — | — | — | | — | | — | — | | |||||||||||||||||
Issuance of Class A Ordinary Shares in exchange for Public Warrants | — | — | — | | — | — | — | — | — | |||||||||||||||||
Issuance of Class A Ordinary Shares in connection with a sale under the ATM, net of $ | — | — | — | | | | — | — | | |||||||||||||||||
ATM transaction costs | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||
Issuance of Class A Ordinary Shares for restricted stock units, net of shares withheld for taxes | — | — | — | | — | ( | — | — | ( | |||||||||||||||||
Share-based compensation | — | — | — | — | — | | — | — | | |||||||||||||||||
Adjustment of redeemable noncontrolling interest from redemption value to carrying value | ( | — | — | — | — | | — | — | | |||||||||||||||||
Accretion of redeemable noncontrolling interest to redemption value | | — | — | — | — | ( | — | — | ( | |||||||||||||||||
Net loss |
| — |
| — |
| — |
| — |
| — |
| — |
| ( | — |
| ( | |||||||||
Balance as of September 30, 2024 | $ | |
| — | $ | — |
| | $ | | $ | | $ | ( | $ | | $ | | ||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
8
Zura Bio有限公司
简明合并可赎回非控股权益、可转换优先股和股东权益（赤字）变动报表
(未经审计)
（以千为单位，除股票数据外）
截至2023年9月30日的九个月
| 可赎回 |
| 可转换优先股 |
|
| A类 |
| 额外 |
|
| 总计 | |||||||||||||||
非控股 | 股份(1) | 普通股(1) | 实收资本 | 累计 | 非控股 | 股东的 | ||||||||||||||||||||
| 利息 |
| 股份 |
| 金额 |
|
| 股份 |
| 金额 |
| 资本 |
| 赤字 |
| 利息 |
| 股权（赤字） | ||||||||
截至2022年12月31日的余额 | $ | |
| | $ | |
| | $ | — | $ | — | $ | ( | $ | — | $ | ( | ||||||||
发行A-1系列可转换优先股作为许可补偿 |
| — |
| |
| |
| — |
| — |
| — |
| — | — |
| — | |||||||||
与业务合并相关的A-1系列可转换优先股转换为A类普通股 |
| — |
| ( |
| ( |
| |
| |
| |
| — | — |
| | |||||||||
与业务合并相关的A类普通股的发行，包括定向增发、前期购买投资和后备股份，扣除$ | — | — | — | | | | — | — | | |||||||||||||||||
发行A类普通股以结清研发许可费用负债 | — | — | — | | — | | — | — | | |||||||||||||||||
将公共Warrants责任重新分类为权益 | — | — | — | — | — | | — | — | | |||||||||||||||||
与2023年4月的定向增发相关的A类普通股发行，净额为$ | — | — | — | | | | — | — | | |||||||||||||||||
与2023年4月定向增发相关的预融资Warrants的发行 | — | — | — | — | — | | — | — | | |||||||||||||||||
向Lilly发行A类普通股，以配合2023年Lilly许可。 | — | — | — | | — | | — | — | | |||||||||||||||||
限制性股票奖励的发行 | — | — | — | | — | — | — | — | — | |||||||||||||||||
基于股份的薪酬 | — | — | — | — | — | | — | — | | |||||||||||||||||
净损失 | ( | — | — | — | — | — | ( | — | ( | |||||||||||||||||
可赎回非控股权益的增值至赎回价值 | | — | — | — | — | — | ( | — | ( | |||||||||||||||||
向非控股权益发行的石材桃子看涨权利 | — | — | — | — | — | — | — | | | |||||||||||||||||
视为可赎回非控股权益的红利 | | — | — | — | — | — | ( | — | ( | |||||||||||||||||
截至2023年9月30日的余额 | $ | | — | $ | — | | $ | | $ | | $ | ( | $ | | $ | | ||||||||||
(1)
请参阅审计未完的简明合并基本报表附注。
9
Zura Bio有限公司
简明合并现金流量表
(未经审计)
(以千计)
截至九个月 | ||||||
截至月份 | ||||||
九月三十日 | ||||||
| 2024 |
| 2023 | |||
经营活动产生的现金流 |
|
| ||||
可赎回非控股权益之前的净亏损 | $ | ( | $ | ( | ||
调整可赎回非控股权益之前的净亏损与用于经营活动的净现金的对账： |
| |||||
研究与开发获得许可 | — |
| | |||
反稀释股份发行补偿 | — | | ||||
股份-based薪酬费用 | |
| | |||
应付票据公允价值变动 | — |
| | |||
研发许可对价负债公允价值变动 | — |
| | |||
定向增发Warrants的公允价值变动 | |
| | |||
折旧和摊销 | |
| — | |||
汇率期货交易（收益）/损失 | ( |
| | |||
经营资产和负债的变动： |
| |||||
预付款项及其他流动资产 | |
| ( | |||
应付账款和预提费用 | |
| | |||
净现金流出活动 | ( |
| ( | |||
投资活动产生的现金流量 |
| |||||
固定资产的购买 | ( | — | ||||
购买研发许可证 | ( | ( | ||||
投资活动中使用的净现金 | ( |
| ( | |||
融资活动产生的现金流 | ||||||
与2024年4月定向增发相关的A类普通股发行所得，扣除 $ | | — | ||||
与2024年4月定向增发相关的预付Warrants的发行所得 | |
| — | |||
与ATm下的出售相关的A类普通股的发行所得，扣除 $ | | — | ||||
ATM交易费用 | ( | — | ||||
2023年4月定向增发发行A类普通股的收益，扣除 $ | — | | ||||
业务合并完成时发行A类普通股的收益 | — | | ||||
与2023年4月的定向增发有关的预先融资Warrants发行收益 | — | | ||||
应付票据的结算 | — | ( | ||||
延期交易成本的支付 | ( | ( | ||||
融资活动提供的净现金 | | | ||||
现金及现金等价物净增加额 | | | ||||
期初现金及现金等价物 | | | ||||
期末现金及现金等价物 | $ | | $ | | ||
补充披露 | ||||||
支付的税款 | $ | — | $ | — | ||
支付的利息 | $ | — | $ | — | ||
非现金投资和融资活动的补充披露 | ||||||
以定向增发Warrants的方式发行A类普通股 | $ | | $ | — | ||
将可赎回非控股权益从赎回价值调整至账面价值 | $ | | $ | — | ||
将可赎回非控股权益增值至赎回价值 | $ | | $ | — | ||
未支付的ATM交易费用包括在应付账款和应计费用中 | $ | | $ | — | ||
为支付员工预扣税而扣留的限制性股票单位，这些税款已计入应付账款和应计费用 | $ | | $ | — | ||
计入应付账款和应计费用的资产和设备采购 | $ | | $ | — | ||
应计2023年利利许可费用 | $ | — | $ | | ||
视作红利的可赎回非控股权益 | $ | — | $ | | ||
2023年莉莉许可的A类普通股发行 | $ | — | $ | | ||
A-1系列可转换优先股转换为A类普通股 | $ | — | $ | | ||
以股票为基础的股权发行成本 | $ | — | $ | | ||
研发许可费用负债的结算 | $ | — | $ | | ||
与业务合并相关的公共和定向增发Warrants的假设 | $ | — | $ | | ||
将递延发行成本重新分类到额外实收资本 | $ | — | $ | | ||
将公共Warrant负债重新分类为权益 | $ | — | $ | | ||
向非控制性权益发行看涨权利 | $ | — | $ | | ||
请参阅审计未完的简明合并基本报表附注。
10
Zura Bio Limited
Notes to Unaudited Condensed Consolidated Financial Statements
(In thousands, except share and per share data)
1. | Organization and Description of Business |
Zura Bio Limited, a Cayman Islands exempted company, formerly known as JATT Acquisition Corp (“JATT”), together with its subsidiaries (collectively, the “Company” or “Zura” or “Zura Bio”), is a clinical-stage biotechnology company advancing immunology assets into Phase 2 development programs, including crebankitug (ZB-168), a high affinity, fully human monoclonal antibody that neutralizes the anti-IL7Ra chain, which it has licensed from Pfizer, Inc. (“Pfizer”), as well as torudokimab (ZB-880), a high affinity monoclonal antibody that neutralizes IL-33, and tibulizumab (ZB-106), a tetravalent bispecific antibody relating to IL-17 and BAFF, which it has licensed from Eli Lilly and Company (“Lilly”). The Company’s accounting predecessor, Zura Bio Limited (herein referred to as “Legacy Zura”), was formed in the United Kingdom (“UK”) on January 18, 2022 (“Inception”).
Business Combination
On March 20, 2023 (the “Closing Date”), the Company consummated the previously announced business combination (the “Business Combination”), pursuant to the terms of a business combination agreement (the “Business Combination Agreement”), dated as of June 16, 2022 (as amended on September 20, 2022, November 14, 2022, and January 13, 2023), by and among JATT, JATT Merger Sub, JATT Merger Sub 2, Zura Bio Holdings Ltd. (“Holdco”), and Legacy Zura. Pursuant to the Business Combination Agreement, (a) before the closing of the Business Combination, Holdco was established as a new holding company of Legacy Zura and became a party to the Business Combination Agreement; and (b) on the Closing, in sequential order: (i) Merger Sub merged with and into Holdco, with Holdco continuing as the surviving company and a wholly owned subsidiary of JATT; (ii) immediately following the Merger, Holdco merged with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving company and a wholly owned subsidiary of JATT; and (iii) JATT changed its name to “Zura Bio Limited”.
The Business Combination has been accounted for as a reverse recapitalization, with Legacy Zura being the accounting acquirer and JATT as the acquired company for accounting purposes. Accordingly, all historical financial information presented in the unaudited condensed consolidated financial statements represent the accounts of Legacy Zura. The shares and net loss per share attributable to ordinary shareholders of Legacy Zura prior to the Closing Date have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination Agreement.
Prior to the Business Combination, JATT’s public shares, public warrants, and public units were listed on the New York Stock Exchange (“NYSE”) under the symbols “JATT,” “JATT.WS,” and “JATT.U,” respectively. On March 20, 2023, the Company’s Class A ordinary shares (“Class A Ordinary Shares”) and public warrants began trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “ZURA” and “ZURAW,” respectively. On August 27, 2024, the Public Warrants (as defined herein) were no longer listed on the Nasdaq in connection with the completion of the Warrant Exchange (as defined herein). See Note 7.
Emerging Growth Company Status
The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use the extended transition period for complying with new or revised accounting standards, and as a result of this election, the consolidated financial statements may not be comparable to companies that comply with public company Financial Accounting Standards Board (“FASB”) standards’ effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of an offering or such earlier time that it is no longer an emerging growth company. The Company expects to no longer be an emerging growth company effective December 31, 2026.
11
2. | Summary of Significant Accounting Policies |
Basis of Presentation and Principles of Consolidation
The Company’s unaudited condensed consolidated financial statements (the “condensed consolidated financial statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of its consolidated subsidiaries. Other shareholders’ interests in the Company’s subsidiaries, Z33 Bio, Inc. (“Z33”) and ZB17 LLC (“ZB17”), are shown in the condensed consolidated financial statements as redeemable noncontrolling interest and noncontrolling interest, respectively. All intercompany balances and transactions have been eliminated in consolidation. If necessary, reclassification of amounts previously reported have been made in the accompanying condensed consolidated financial statements in order to conform to current presentation.
These condensed consolidated financial statements have been prepared in accordance with U.S. GAAP applicable to interim financial statements. These condensed consolidated financial statements are presented in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with U.S. GAAP. As such, the information included herein should be read in conjunction with the Company’s consolidated financial statements and accompanying notes as of and for the year ended December 31, 2023 (the “audited consolidated financial statements”) that were included in the Company’s Form 10-K filed with the SEC on March 28, 2024. In management’s opinion, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2024 and the results of operations for the three months ended September 30, 2024 and 2023 and for the nine months ended September 30, 2024 and 2023. The results of operations for the nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year ending December 31, 2024 or any other future interim or annual period.
Significant Accounting Policies
Except for the addition of property and equipment and the update for the Warrant Exchange, there have been no significant changes in the Company’s significant accounting policies from those that were disclosed in Note 2, Summary of Significant Accounting Policies, included in the Company’s consolidated financial statements in Form 10-K filed with the SEC on March 28, 2024.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the condensed consolidated financial statements relate to and include, but are not limited to, the fair value of Class A Ordinary Shares and other assumptions used to measure share-based compensation, the fair value of redeemable noncontrolling interest, and the fair value of public and private placement warrants.
Risks and Uncertainties
The Company is subject to risks common to early-stage companies in the biotechnology industry, including, but not limited to, development by the Company or its competitors of technological innovations, risks of failure of clinical studies, dependence on key personnel, protection of proprietary technology, compliance with government regulations, and ability to transition from preclinical manufacturing to commercial production of products.
The Company’s future product candidates will require approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company was denied approval, approval was delayed or the Company was unable to maintain approval for any product candidate, it could have a material adverse impact on the Company.
The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.
12
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the estimated useful life of each asset. Computer and office equipment are depreciated over
Warrants
In connection with the Business Combination, the Company assumed JATT’s public warrant and private placement warrant liabilities. As a result of the recapitalization, the settlement provisions of the Public Warrants no longer preclude equity classification and the Public Warrants were reclassified to equity following the Business Combination. The Public Warrants and Private Placement Warrants (as defined herein) were exchanged for Class A Ordinary Shares during the three months ended September 30, 2024 (the “Warrant Exchange”). See Note 7.
In connection with each of the April 2024 Private Placement and April 2023 Private Placement (each as defined herein), the Company issued pre-funded warrants instruments.
Classification of the Public Warrants and Pre-Funded Warrants (as defined herein) as equity instruments and the Private Placement Warrants as liability instruments is based on management’s analysis of the guidance in ASC 815. The Company measured the private placement warrant liability at fair value each reporting period and at settlement value, based on the fair value of the Class A Ordinary Shares exchanged, upon the Warrant Exchange, with the change in fair value recorded as other (expense) income in the consolidated statements of operations. Upon completion of the Warrant Exchange, the warrant liability was extinguished and the Class A Ordinary Shares were recorded at fair value in stockholders’ equity. The Company measured the Public Warrants at the fair value of the equity instruments as of the Closing Date of the Business Combination. The Company measured the Pre-Funded Warrants at the fair value of the equity instruments as of the date of the April 2023 Private Placement, the April 2024 Private Placement or the Share Exchange (as defined herein), as applicable. See Note 7.
Net Loss Per Share
Basic net loss per share is computed by dividing net loss attributable to Class A Ordinary Shareholders by the weighted-average number of Class A Ordinary Shares outstanding during the period. Diluted net loss per share excludes the potential impact of the Company’s convertible preferred shares and options to purchase Class A Ordinary Shares because their effect would be anti-dilutive due to the Company’s net loss for the period presented. Since the Company had a net loss in the periods presented, basic and diluted net loss per share are the same.
The table below provides potentially dilutive securities not included in the calculation of the diluted net loss per share as of the periods presented because to do so would be anti-dilutive:
September 30, | September 30, | |||
| 2024 |
| 2023 | |
Shares issuable upon exercise of options to purchase Class A Ordinary Shares | | | ||
Shares issuable upon exercise of Z33 Put Right | | | ||
Shares issuable upon vesting of restricted share units | | | ||
Restricted share awards | | | ||
Shares issuable upon exercise of warrants to purchase Class A Ordinary Shares | — | | ||
Total |
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations, or cash flows upon adoption.
13
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within the segment measure of profit or loss. This guidance will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal years beginning after December 31, 2024. The Company does not expect implementation of the new guidance to have a material impact on its consolidated financial statements and disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires annual disclosures of specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold and a disaggregation of income taxes paid, net of refunds. ASU 2023-09 also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. ASU 2023-09 is effective for the Company beginning with the 2025 Annual Report on Form 10-K. Early adoption is permitted. ASU 2023-09 should be applied prospectively. Retrospective adoption is permitted. The Company is currently assessing the impact this standard will have on the Company’s consolidated financial statements.
3. | Fair Value Measurements |
The Company measures certain financial assets and liabilities at fair value on a recurring basis. The Company determines fair value based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy. These levels are:
Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;
Level 2: Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities 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 related assets or liabilities; and
Level 3: Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.
Financial instruments consist of cash and cash equivalents, prepaid and other current assets, accounts payable and accrued expenses, and private placement warrants. The carrying values of the Company’s cash, prepaid and other current assets, and accounts payable and accrued expenses approximate their fair value due to the short-term maturity of these instruments.
The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, and the fair value hierarchy of the valuation techniques utilized.
| September 30, 2024 | |||||||||||
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Financial assets: | ||||||||||||
Cash equivalents | $ | | $ | — | $ | — | $ | | ||||
December 31, 2023 | ||||||||||||
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Financial assets: | ||||||||||||
Cash equivalents | $ | | $ | — | $ | — | $ | | ||||
Financial liabilities: | ||||||||||||
Private placement warrants | $ | — | $ | | $ | — | $ | | ||||
There were
14
应付票据
在2022年12月8日，公司从向Hydra, LLC（"Hydra"）发行的面值为$的承兑票据（"票据"）中获得了$百万的净收益。
研发许可证对价。
作为2022年利莉许可证的对价（见注释5），利莉同意接受以下任一选择：
在业务合并的成交日期，负债重新计量为其清算价值，并通过发行
私募认股权证
在2024年8月，根据Warrant Exchange，公司将所有未偿还的定向增发Warrants交换为A类普通股。详见注释7。定向增发Warrants的公允价值是定期测量的。由于向非允许的转让人转让定向增发Warrants会导致定向增发Warrants的条款与公共Warrants基本相同，因此公司确定每个定向增发Warrant的公允价值与公共Warrant一致。因此，定向增发Warrants被分类为2级金融工具。在完成Warrant Exchange后，定向增发Warrants被重新测量为结算价值，该价值是根据换取定向增发Warrants所发行的A类普通股的公允价值确定的。下表提供了定向增发Warrants估计公允价值变化的总结：
截至九个月 | |||
结束的月份 | |||
| 2024年9月30日 | ||
截至2023年12月31日的余额 | $ | | |
公允价值变动 |
| | |
定向增发Warrants与A类普通股的交换 | ( | ||
截至2024年9月30日的余额 | $ | — | |
4. | 应付账款及应计费用 |
应付账款和应计费用截至2024年9月30日和2023年12月31日包括以下内容：
| 2024年9月30日 |
| 2023年12月31日1 | |||
累计的研发费用 | $ | | $ | | ||
2023年累积的Lilly许可费用 | | | ||||
应付账款 |
| |
| | ||
应计奖金 |
| | | |||
累计专业费用 | |
| | |||
应付的累积预扣税款 | |
| — | |||
其他应计费用 | |
| | |||
应付账款和应计费用总额 | $ | | $ | | ||
(1) | 比较数据已被重新分类，以符合当前期间的展示。 |
15
5. | 许可协议 |
辉瑞公司
2022年3月22日，公司与辉瑞签订了许可协议和A-1系列订阅和股东协议（统称为 “辉瑞协议”）。公司有义务做到
公司认可了第一美元
隆扎
2022年7月，公司与Lonza Sales AG（“Lonza”）签订了许可协议（“Lonza License”），为Lonza的基因表达系统提供全球非独家许可，以换取不同的考虑因素，例如公司是否与Lonza还是与第三方签订了进一步的生产协议，以及公司是否与第三方签订了分许可协议（包括每年最高六位数的年付款）。分许可开始后再许可，以及最高可达的特许权使用费在商业标准的两位数多年期内，某些产品净销售额的低个位数百分比）。Lonza 许可证将一直有效，直到终止。无论有无理由，公司均可在提前60天通知后随时终止Lonza许可证。Lonza 可能会因公司违规行为或其他商业标准原因而终止 Lonza 许可证。
2023 年 10 月，该公司开始与第三方合作生产药物。由于使用Lonza以外的第三方进行制造, 根据Lonza许可证的条款，该公司的许可费为 $
2022 年礼来牌照
2022年12月8日，该公司的合并子公司Z33 Bio Inc.（“Z33”）与礼来公司签订了许可协议（“2022年礼来许可”），根据该协议，礼来公司授予Z33独家（甚至包括礼来）、具有特许权使用费的全球许可，以开发、制造和商业化礼来拥有的与其 IL-33 化合物有关的某些知识产权。
作为与安排收购相关的发现费，Z33向Stone Peach Properties, LLC（“Stone Peach”）发行了Z33
16
The Company is obligated to pay $
2023 Lilly License
On April 26, 2023, the Company’s newly-formed subsidiary ZB17 LLC (“ZB17”) entered into a license agreement (the “2023 Lilly License” and, together with the 2022 Lilly License, the “Lilly Licenses”) with Lilly, for an exclusive license to develop, manufacture and commercialize a certain bispecific antibody relating to IL-17 and BAFF (“ZB-106”). ZB17 made a payment of $
As a finder’s fee for arranging the acquisition of the 2023 Lilly License, ZB17 granted to Stone Peach the right, but not the obligation, to purchase
As additional consideration, Stone Peach receives annual payments first of $
As a finder’s fee for arranging the acquisition of the 2023 Lilly License, the Company agreed to make a one-time milestone payment of $
The Company is obligated to make
17
WuXi Biologics License
In July 2023, the Company entered into a cell line license agreement (the “Cell Line License Agreement”) with WuXi Biologics and its Affiliates (“WuXi Biologics”) for certain of WuXi Biologics’ know – how, cell line, and biological materials (the “WuXi Biologics Licensed Technology”) to manufacture, have manufactured, use, sell and import certain products produced through the use of the cell line licensed by WuXi Biologics under the Cell Line License Agreement (the “WuXi Biologics Licensed Products”). If the Company manufactures all of its commercial supplies of bulk drug product for WuXi Biologics Licensed Products with a manufacturer other than WuXi Biologics or its affiliates, the Company is required to make royalty payments to WuXi Biologics in an amount equal to a fraction of a single digit percentage of global net sales of WuXi Biologics Licensed Products manufactured by a third-party manufacturer (the “Royalty”). If the Company manufactures part of its commercial supplies of the WuXi Biologics Licensed Products with WuXi Biologics or its affiliates, then the Royalty will be reduced accordingly on a pro rata basis. The Cell Line License Agreement will continue indefinitely unless terminated (i) by the Company upon three months’ prior written notice and its payment of all undisputed amounts due to WuXi Biologics through the effective date of termination, (ii) by WuXi Biologics for a material breach by the Company that remains uncured for 30 days after written notice, or (iii) by WuXi Biologics if the Company fails to make a payment and such failure continues for 30 days after receiving notice of such failure. As of September 30, 2024, there are
6. | Shareholders’ Equity |
Business Combination
Immediately prior to the Closing Date of the Business Combination, Pfizer was issued additional Series A-1 convertible preferred shares upon the closing of the Business Combination that were immediately converted to
On the Closing Date and in accordance with the terms and subject to the conditions of the Business Combination, each Class A Ordinary Share of Legacy Zura, par value $
On March 16, 2023, in connection with the closing of the Business Combination and effective upon the Closing Date, the Company authorized
Shelf Registration and ATM Program
The Company filed a shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which was declared effective on September 17, 2024. Pursuant to the Shelf Registration Statement, the Company may offer and sell ordinary shares, preference shares, debt securities, warrants and or units having an aggregate public offering price of up to $
On September 18, 2024, the Company sold
Warrant Exchange
In connection with the Warrant Exchange, the Company issued
18
Exchange of Class A Ordinary Shares
On August 15, 2024, the Company entered into a share surrender and warrant agreement (the “Share Exchange Agreement”) with certain affiliated shareholders (the “Shareholders”), pursuant to which (i) the Shareholders surrendered an aggregate of
April 2024 Private Placement
On April 18, 2024, the Company entered into subscription agreements (the “Investor Agreements”) with certain institutional and other accredited investors (the “Investors”), whereby the Company agreed to issue
On April 18, 2024, the Company also entered into subscription agreements (the “Insider Agreements” and together with the Investor Agreements, the “April 2024 Private Placement”) with certain officers, directors and affiliates of the Company (“Insiders” and together with the Investors, the “Subscribers”), whereby the Company issued
The April 2024 Private Placement closed on April 22, 2024, from which the Company received total gross proceeds of approximately $
Ordinary Shares Reserved for Issuance
A summary of shares reserved for issuance as of September 30, 2024 is summarized below:
| September 30, 2024 | |
Shares issuable upon exercise of warrants to purchase Class A Ordinary Shares |
| |
Shares issuable upon exercise of options to purchase Class A Ordinary Shares |
| |
Shares available for grant under 2023 Equity Incentive Plan and 2023 Employee Share Purchase Plan |
| |
Shares issuable upon exercise of Z33 Series Seed Preferred Shares Put Right |
| |
Shares issuable upon release of restricted share units |
| |
Total shares reserved for issuance |
| |
7.Warrants
Warrant Exchange
On July 12, 2024, the Company commenced an exchange offer (the “Exchange Offer”) and consent solicitation (the “Consent Solicitation”) relating to its outstanding warrants that it assumed in connection with the business combination, including (i) public warrants to purchase
19
在2024年8月12日，公司完成了交易所要约和同意征求，并发行了
公司产生了大约$
公开warrants
公共Warrants自开始之后可转换为A类普通股
公众Warrants可在30天书面通知后，以现金赎回，价格为$
公共Warrants在2024年9月30日之后不再有效。请见 “—Warrant交易所” 以上。
私募认股权证
定向增发Warrants与公开Warrants完全相同，除了定向增发Warrants在完成业务组合后的30天内不可转让、委托或出售，但有某些有限例外。此外，初始购买者或其允许的受让人持有的定向增发Warrants可以以无现金方式行使，且不可赎回。
截至2024年9月30日，定向增发Warrants不再存在。见 “—Warrant 交易所” 以上。
预先拟定的认股权证。
在2024年8月15日，作为分享交换协议的一部分，公司发行了
与2023年4月的定向增发相关，公司向合格投资者出售了预资助Warrants，允许其购买高达
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与2024年4月的定向增发相关（见第6条），公司向认可投资者出售了2024年预先融资的Warrants，购买最高
下表列出了截至2024年9月30日的2023年预先融资Warrants、2024年预先融资Warrants和分享交换Warrants（统称为“预先融资Warrants”）的总数、行使价格和到期日期：
发行认股权证 |
| 行使价格 |
| 到期日 | |
$ | |
| 不适用 | ||
8. | 股份报酬 |
并在
根据股权激励计划可发行的类A普通股将在每年的1月1日进行年度增加，首次增加时间为2024年1月1日，截止日期为2029年1月1日，包括在内，增加的数量等于以下三者中的最小值：（i）
2023年3月16日，JATT的董事会批准了Zura Bio Limited 2023年员工股票购买计划（“ESPP”），该计划于业务合并的成交日前生效。根据ESPP可发行的最大类A普通股数量为
截至2024年9月30日，最多可发行的
股权激励计划
股票期权
股权激励计划的期权的公允价值是在授予日期使用布莱克-斯科尔斯期权定价模型进行估计的。公司缺乏重要的公司特定历史和隐含波动率信息。因此，它基于一组公开交易的同行公司的历史波动率来估计其预期的股票波动率。由于缺乏历史行权记录，公司期权的预期期限已采用“简化”方法确定。无风险利率是以授予时美国国债收益率曲线为参考，时间段大约等于奖励的预期期限。根据公司从未支付现金分红且在可预见的未来不打算支付任何现金分红这一事实，预期分红收益率为零。
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以下加权平均假设用于估算截至2024年和2023年9月30日的九个月内发行的股权激励计划期权的公允价值：
截至九个月 | |||||||
| 九月三十日 | ||||||
| 2024 |
| 2023 |
| |||
股价 | $ | | $ | | |||
预期波动率 | | % | | % | |||
无风险利率 | | % | | % | |||
预期寿命 | |||||||
预期股息收益率 | — | % | — | % | |||
以下表格总结了截止到2024年9月30日的九个月内公司的期权活动：
|
|
| 加权 |
| ||||||
加权 | 平均 | 合计 | ||||||||
平均 | 剩余 | 内在 | ||||||||
数量 | 行使价格 | 合同的 | 价值 | |||||||
| 选项 |
| (每股) |
| 寿命（年） |
| (以千计) | |||
截至2023年12月31日未行权的期权 |
| | $ | |
| $ | | |||
授予 | | | — | — | ||||||
被注销 |
| ( |
| |
| — |
| — | ||
2024年9月30日尚未行使的期权 |
| | $ | |
| $ | | |||
2024年9月30日前已授予并可行权的期权1 |
| | $ | |
| $ | | |||
1截至2024年9月30日已归属的期权中，
上表中的包括
截至2024年和2023年9月30日的九个月中授予的期权的加权平均授予日期公允价值为$
基于市场的分享期权
在2023年3月20日，公司授予
| 针对 |
| ||
截至九个月 |
| |||
9月30日 |
| |||
2023 |
| |||
预期波动率 |
| | % | |
无风险利率 |
| | % | |
预期寿命 |
| |||
预期股息收益率 |
| — | % | |
基于市场的期权的公平价值 | $ | | ||
与市场基础分享期权相关的费用确认金额为$
22
受限股份单位
公司根据股权激励计划向某些员工、管理人员和董事发放了限制性股票单位（RSU）。根据授予日的股票收盘价估算公允价值。
|
| 加权 | |||
平均 | |||||
数量 | 授予日期 | ||||
| RSUs |
| 公允价值 | ||
截至2023年12月31日的未归属限制性股票单位 |
| | $ | | |
授予 |
| | | ||
被注销 | ( | | |||
Vested | ( | | |||
已归属和未发行 |
| ( | | ||
截至2024年9月30日的未归属限制性股票单位 |
| | $ | | |
截至2024年9月30日的三个月和九个月期间确认的RSU相关费用约为$
限制性股票奖励
公司在截至2023年12月31日的年度内，将根据股权激励计划授予某位董事的限制性股票单位（RSU）转换为限制性股票（RSA）。公允价值是根据原授予日期的收盘价估算的。
|
| 加权 | |||
平均 | |||||
数量 | 授予日期 | ||||
| RSA |
| 公允价值 | ||
截至2023年12月31日的未归属限制性股票 |
| | $ | | |
授予 |
| — |
| — | |
Vested |
| ( |
| | |
截至2024年9月30日的未归属限制性股票 |
| | $ | | |
截至2024年9月30日的三个月和九个月期间，与RSA相关的费用为$
股权奖励修改
在2024年7月24日， 公司与Someit Sidhu（“和解协议”）签署了一项和解协议，涉及首席执行官（“CEO”）过渡。根据和解协议，
在2024年1月10日，公司与其首席医疗官（“CMO”）签订了一份关于CMO离职的协议（“离职协议”）。作为离职协议的一部分，
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基于股份的补偿费用
截至2024年和2023年9月30日的三个月和九个月的所有股权安排的基于股份的补偿费用如下：
截至三个月 | 截至九个月 | |||||||||||
九月三十日 | 九月三十日 | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
研究和开发 | $ | | $ | — | $ | | $ | | ||||
一般管理费用 |
| |
| |
| |
| | ||||
总股票薪酬费用 | $ | | $ | | $ | | $ | | ||||
截至2024年9月30日，大约有$
9. | 承诺和或然事项 |
诉讼
公司没有参与任何重大法律诉讼，也不知道有任何待处理或威胁的索赔。公司可能会不时面临在其业务活动中产生的各种法律诉讼和索赔。
10. | 可赎回非控制性权益 |
作为2022年Lilly许可证的介绍费用，公司全资子公司Z33发行了
在2023年4月，公司同意在
在2023年11月，公司与石材桃修改了协议的条款，取消了公司的行使看涨期权的义务，而是将公司在看涨期权下的权利和义务恢复到原协议的状态。石材桃在现有的看跌期权基础上，被授予了权利，但没有义务将最多 % 的系列SEED优先股出售给Zura，以换取
截至2024年9月30日和2023年12月31日，赎回非控股权益余额为$
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第 2 项。管理层对财务状况和经营业绩的讨论和分析。
以下讨论和分析提供了管理层认为与评估和理解我们的合并经营业绩和财务状况相关的信息。您应阅读以下对我们财务状况和经营业绩的讨论和分析，以及截至2023年12月31日的已审计财务报表，这些报表包含在2024年3月28日向美国证券交易委员会提交的10-k表中，以及本季度报告其他地方包含的未经审计的简明合并财务报表及其附注。
除历史信息外，本讨论和分析还包含前瞻性陈述。这些前瞻性陈述受风险和不确定性的影响，包括我们在2024年3月28日向美国证券交易委员会提交的10-k表格中标题为 “风险因素” 的部分中讨论的风险和不确定性，这些风险和不确定性可能导致实际业绩与历史业绩或预期结果存在重大差异。您应仔细阅读本季度报告中 “关于前瞻性陈述的警示说明” 下的信息。除非上下文另有要求，否则本 “管理层对财务状况和经营业绩的讨论和分析” 中提及的 “Zura”、“我们” 和 “我们的” 是指Zura Bio Limited（一家开曼群岛豁免公司，前身为Jatt Acquisition Corp.）及其合并子公司。提及的Jatt Acquisition Corp. 或 “JATT” 是指业务合并完成之前的公司。
概述
Zura Bio Limited，前身为Jatt Acquisition Corp.，是一家处于临床阶段的多资产生物技术公司，专注于开发用于免疫和炎症性疾病的新药物。经验丰富的领导团队旨在成为自身免疫和炎症领域的领导者。
我们于2021年3月10日注册为开曼群岛豁免公司。我们的全资子公司Zura Bio Limited（“Zura Bio UK”）于2022年1月18日在英国或英国成立。在 2023 年 3 月 20 日之前，我们的运营是通过 Zura Bio Uk 进行的。
我们的运营历史有限。自成立以来，我们的业务一直侧重于组织和人员配备、业务规划、筹集资金和签订合作协议以开展制造和研发活动。我们的主要候选产品正处于临床试验规划阶段；但是，我们自己没有进行过任何临床试验，自成立以来的这段时间内也没有进行过任何临床试验。我们没有任何候选产品获准销售，也没有从产品销售中产生任何收入。我们通过以下方式为2024年9月30日之前的业务提供资金：（i）出售股权，在2023年3月31日之前出售Zura Bio Uk可转换优先股的总收益共计1,000万美元；（ii）发行期票，2022年12月获得760万美元的净收益；（iii）2023年3月5,670万美元业务合并的收益；（iv）2023年4月私募配售，从出售A类普通股和预融资认股权证中共筹集了8000万美元的总收益在截至2023年12月31日的年度中；（v）2024年4月的私募配售，通过出售A类普通股和预融资认股权证共筹集了1.125亿美元的总收益；以及（vi）在自动柜员机下以每股3.80美元的价格出售150万股A类普通股（定义见下文），扣除佣金后的净收益为550万美元，减去与之相关的60万美元发行成本建立 aTm。
自成立以来，我们已经蒙受了巨大的营业损失。截至2024年9月30日的三个月和九个月中，我们的净亏损分别为2,070万美元和3,880万美元。截至2024年9月30日，我们的累计赤字为1.423亿美元。我们预计，与正在进行的活动相关的支出将大幅增加，因为我们：
| ● | 继续推进我们候选产品的临床前和临床开发； |
| ● | 对我们的候选产品进行我们计划的临床前研究和临床试验，并为我们的候选产品和未来的潜在候选产品启动和完成其他试验； |
| ● | 扩大我们的临床和监管能力； |
| ● | 制造用于临床试验或潜在商业销售的当前良好生产规范或 cGMP 材料； |
| ● | 雇用额外的临床、质量、监管、制造、科学和管理人员； |
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| ● | 建立商业化制造行业并扩大生产和分销能力，以商业化我们可能获得监管批准的任何产品候选。 |
| ● | 调整我们的监管合规工作，以纳入适用于上市产品的要求。 |
| ● | 寻求对成功完成临床试验的任何产品候选的监管批准。 |
| ● | 维护、拓展和保护我们的知识产权组合； |
| ● | 增加运营、财务和管理信息系统及人员，包括支持我们产品开发和计划未来商业化工作的人员；以及 |
| ● | 在作为上市公司运营的过程中产生额外的法律、会计和其他费用。 |
业务合并
在2023年3月20日（“交割日”），我们完成了根据2022年6月16日签署的商业合并协议所述的先前公告的交易，协议于2022年9月20日、2022年11月14日和2023年1月13日进行过修改，该协议由根据英格兰和威尔士法律注册的有限公司Zura Bio Limited（“Zura Bio UK”）、开曼群岛豁免公司JATt Acquisition Corp（“JATT”）、开曼群岛豁免公司及JATt的全资子公司JATt Merger Sub（“Merger Sub”）、开曼群岛豁免公司及JATt的全资子公司JATt Merger Sub 2（“Merger Sub 2”）以及开曼群岛豁免公司Zura Bio Holdings Ltd（“Holdco”）共同签署，经过2023年3月16日JATT股东召开的特别股东大会的批准。
此次商业合并产生了约5670万美元的净收益。2023年3月21日，我们的A类普通股和公众Warrants开始在纳斯达克以“ZURA”和“ZURAW”为交易符号进行交易。2024年8月27日，公众Warrants（如下面定义）因完成Warrant Exchange（如下面定义）而不再在纳斯达克上市。
最近的进展
架构注册与ATM计划
我们提交了一份S-3表格的架构注册声明（“架构注册声明”），于2024年9月17日生效。根据架构注册声明，我们可以提供和出售普通股、优先股、债务证券、Warrants和/或总公共发行价高达30,000万美元的单位。与提交架构注册声明相关，我们还与Leerink Partners LLC（“Leerink Partners”）签订了一份销售协议（“销售协议”），涉及我们A类普通股的销售，总销售价格高达12,500万美元，随时通过Leerink Partners作为销售代理（“ATM”）进行。我们在建立ATM的过程中产生了60万美元的发行费用，减少了截至2024年9月30日的额外实收资本。2024年9月18日，我们以每股3.80美元的价格在ATM下出售了1,500,000股A类普通股，净收益为550万美元，扣除承销佣金后。
认股权交换
2024年7月12日，我们开始了一项交换要约（“交换要约”）和征求同意（“同意征求”），涉及我们在业务合并中假定的未偿还Warrants，包括（i）由JATt持有的、可购买5,910,000股A类普通股的公共Warrants（“公共Warrants”），以及（ii）由JATt股东持有的、可购买6,899,996股A类普通股的定向增发Warrants（“定向增发Warrants”）（连同公共Warrants，统称为“IPO Warrants”）。我们向所有IPO Warrants的持有者提供了机会，以每个未偿还的IPO Warrant在交换要约中换取0.30股A类普通股。同时，我们还向IPO Warrants的持有者征求同意，修改与Zura和大陆股票转移&信托公司（“CST”）于2021年7月16日签订的Warrant协议（“Warrant协议”），以允许我们要求每个在交换要约结束时尚未到期的IPO Warrant兑换为0.27股A类普通股，该比例比适用于交换要约的交换比例低10%。根据Warrant协议的条款，除了某些指定的修改或修正外，所有修改或修正都需要至少大多数未偿公共Warrants和大多数未偿定向增发Warrants的持有者的投票或书面同意。
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在2024年8月12日，我们完成了交易所要约及同意征求，并以10,784,008个IPO Warrants换发3,235,184个A类普通股，同时进入了Warrant协议的修订（“Warrant修订”）。根据Warrant修订，我们有权强制将剩余的IPO Warrants按0.27个A类普通股换发给每个IPO Warrant进行兑换。到2024年8月27日，我们为剩余的196,568个公共Warrants和1,829,420个定向增发Warrants换发了547,006个A类普通股。因此截至2024年9月30日，没有任何未赎回的IPO Warrants。
2024年4月的定向增发
在2024年4月18日，我们与某些机构和其他合格投资者（“投资者”）签署了认购协议（“2024年4月投资者协议”），因此我们发行了18,732,301个A类普通股，每股面值为0.0001美元，以及预先资金Warrants（“2024年预先资金Warrants”），可购买最多16,102,348个A类普通股。每个A类普通股的售价为3.108美元，每个2024年预先资金Warrant的售价为3.107美元，合计购买价格为10830万。
在2024年4月18日，我们还与我们的某些高管、董事及关联方（“内部人”以及与投资者一起称为“2024年订阅用户数”）签署了认购协议（“2024年4月内部人协议”，与2024年4月投资者协议一起称为“2024年4月定向增发”），因此我们发行了1,357,827个A类普通股，每股面值为0.0001美元，以每个A类普通股3.13美元的购买价格产生了420万的总购买价格。
2024年4月定向增发于2024年4月22日结束，我们获得了约11250万的毛收益。
2023年4月定向增发
在2023年4月26日，我们与某些合格投资者（“订阅用户数”）签署了第二个PIPE认购协议（“2023年4月定向增发”），因此我们发行了15,041,530个A类普通股，每股面值为0.0001美元，以及预先资金Warrants（“2023年预先资金Warrants”），可购买最多3,782,000个A类普通股。每个A类普通股的售价为4.25美元，每个预先资金Warrant的售价为4.249美元，合计购买价格为8000万。
2023年Lilly许可协议
2023年4月26日，我们新成立的子公司ZB17 LLC（“ZB17”）与Lilly签署了一份许可协议（“2023年Lilly许可协议”，与2022年Lilly许可协议合称为“Lilly许可”），获得了一项独家许可，用于开发、生产和商业化一种与IL-17和BAFF相关的双特异性抗体（“Zb-106”）。ZB17在截至2024年9月30日的九个月内，向Lilly支付了500万美元的费用，以获得Lilly根据许可协议需要提供的某些专有技术、数据、信息和材料。
作为安排获取2023年Lilly许可协议的介绍费用，ZB17授予Stone Peach以100万美元的价格购买ZB17 4.99%完全摊薄股权的权利，但并无义务（“Stone Peach看涨权”）。Stone Peach看涨权在Zb-106的任何下一个临床试验中最后一位患者用药后才能行使，并在FDA或欧洲药品管理局（“EMA”）首次批准Zb-106的指示日期后的一年内到期。Stone Peach看涨权代表了我们子公司ZB17的非控股权益。
作为额外的报酬，Stone Peach每年收到的首笔付款为60万美元，并且每年递增10%，只要我们在5月1日保持对Zb-106的许可。日 在截至2024年6月30日的三个月内，一笔70万美元的年度付款到期并已支付。
作为安排获取2023年Lilly许可协议的介绍费用，我们同意在以下任一情况下向BAFFX17，Ltd（“BAFFX17”）支付一次性里程碑付款500万美元：(i) 控制权变更交易，(ii) 我们完成至少10000万美元的股权或股权挂钩证券的发行，(iii) 资产销售实现净收益超过10000万美元，或者(iv) 我们的完全摊薄股份数超过52,500,000股（按拆股调整基准）。由于我们在2023年12月31日之前的完全摊薄股份数已超过52,500,000股，因此500万美元的费用已记录在截至2024年9月30日的浓缩合并资产负债表中的应付账款和应计费用中。
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We are obligated to make 4 development milestone payments to Lilly up to an aggregate of $155.0 million, and sales milestone payments up to an aggregate of $440 million based on respective thresholds of net sales of products developed from ZB-106. We are also obligated to pay Lilly over a multi-year period (twelve years, or upon the later expiration of regulatory exclusivity of ZB-106 in a country) an annual earned royalty at a marginal royalty rate in the mid-single digits to low-double digits, with increasing rates depending on net sales in the respective calendar year, based on a percentage of sales within varying thresholds for a certain period of years. We are also obligated to pay BAFFX17 a fee equal to 3% of any milestone or royalty payments due to Lilly pursuant to the terms of either the 2022 Lilly License and the 2023 Lilly License with Lilly. Upon receiving written approval from the FDA, EMA, or similar regulatory authority of the Investigational New Drug (“IND”) and commencement and the commencement of a clinical trial in the applicable jurisdiction for ZB-106, Stone Peach will also receive a one-time payment of $4.5 million. Stone Peach will also receive a one-time milestone payment of $25 million upon either (i) certain equity-related transactions, or (ii) the receipt of regulatory approval from the applicable regulatory authority for any new indication in the applicable jurisdiction. Furthermore, Stone Peach was granted a royalty of 2% of the aggregate net sales of any products developed from the Compound. As of September 30, 2024, none of the contingent development milestone payments were due.
2022 Lilly License
On December 8, 2022, our consolidated subsidiary, Z33 Bio Inc. (“Z33”), entered into a license agreement (the “2022 Lilly License”) with Lilly pursuant to which Lilly granted Z33 an exclusive (even as to Lilly), royalty-bearing global license to develop, manufacture, and commercialize certain intellectual property owned by Lilly relating to its IL-33 compound.
As a finder’s fee in connection with arranging the acquisition, Z33 issued to Stone Peach Properties, LLC (“Stone Peach”) 4,900,222 shares of Z33 Series Seed Preferred Shares, which was included in the measurement of the cost of the acquired asset. We have the right, but not the obligation to purchase up to 50% of the Series Seed Preferred Shares issued to Stone Peach at a price per share of $2.448869 for a period of two years from the date of the agreement (the “Call Option”). Stone Peach has the right, but not the obligation to sell up to 50% of the Series Seed Preferred Shares issued to Stone Peach to Zura for a price per share of $2.040724 (the “Put Option”). In April 2023, we agreed to exercise our Call Option and we amended the settlement terms to settle the Call Option by issuing 2,000,000 Class A Ordinary Shares (the “Amended Terms”). In November 2023, the Amended Terms were voided and our rights and obligations under the Call Option reverted to those in the original agreement (the “Second Amended Terms”). In connection with the Second Amended Terms, we also provided Stone Peach with the right, but not the obligation to sell up to 50% of the Series Seed Preferred Shares issued to Stone Peach to Zura in exchange for 2,000,000 Class A Ordinary Shares (the “Put Right”). Stone Peach may exercise its Put Option and Put Right at any time between April 24, 2024 and April 24, 2028. Each of the Amended Terms and the Second Amended Terms were considered an extinguishment and reissuance of the Z33 Series Seed Preferred Shares. The Z33 Series Seed Preferred Shares represent redeemable noncontrolling interest in our subsidiary, Z33.
We are obligated to pay $3.0 million to Lilly under the 2022 Lilly License upon the completion of a financing by Zura with gross proceeds exceeding $100 million, in cash or in services, paid to Z33. If the $3.0 million milestone payment is not made by December 7, 2025, Lilly may terminate the 2022 Lilly License and reclaim the asset. We are further obligated to make 10 commercial, development and regulatory milestone payments up to an aggregate of $155.0 million and sales milestone payments up to an aggregate of $440.0 million based on respective thresholds of net sales of products developed from the licensed compound. We will also pay an annual earned royalty to Lilly at a marginal royalty rate between in the mid-single to low-double digits (less than 20%), with increasing rates based on net sales in the respective calendar year, based on a percentage of sales within varying thresholds for a certain period of the year. We will account for these contingent milestone payments when they become due. As of September 30, 2024, none of the contingent milestone payments were due.
Pfizer Agreement
On March 22, 2022, we entered into a license agreement and a Series A-1 Subscription and Shareholder’s Agreement (collectively, the “Pfizer Agreement”) with Pfizer. We are obligated to make 11 future development and regulatory milestone payments aggregating up to $70.0 million and sales milestone payments up to an aggregate of $525.0 million based on respective thresholds of net sales of products (developed from the licensed compound) (the “Products”). We will also pay an annual earned royalty at a marginal royalty rate in the mid-single digits to low double digits (less than 20%), based on thresholds of net sales of Products. Royalties are payable on a country-by-country basis for a certain period of years or upon the later expiration of regulatory exclusivity of our Products in a country.
We do not owe any other amounts under the Pfizer Agreement as of September 30, 2024.
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Chief Executive Officer Transition
On March 24, 2024, the Board of Directors approved a CEO transition from Someit Sidhu, our Founder, Chief Executive Officer and Director, to Robert Lisicki, effective April 8, 2024. Dr. Sidhu remains on the Board as a Director and Mr. Lisicki joined the Board as a Director.
Impact of Global Economic Trends
Macroeconomic conditions, including uncertainties associated with the upcoming U.S. presidential election, Israel-Hamas war, the ongoing conflict between Ukraine and Russia, economic slowdowns, public health crises, labor shortages, recessions or market corrections, supply chain disruptions, inflation and monetary policy shifts, liquidity concerns at, and failures of, banks and other financial institutions or other disruptions in the banking system or financing markets, rising interest rates and financial and credit market fluctuations, volatility in the capital markets or other evolving macroeconomic developments, continue to have direct and indirect impacts on our business and could in the future materially impact our results of operations and financial condition. We continue to actively monitor the impact of these macroeconomic factors on our results of operations, financial condition and cash flows. The extent of the impact of these factors on our operational performance and financial condition, including our ability to execute our business strategies and initiatives in the expected timeframe, will depend on future developments, which are uncertain and cannot be predicted; however, any continued or renewed disruption resulting from these factors could negatively impact our business.
Components of Operating Results
Operating Expenses
Research and Development Expenses
Research and development (“R&D”) expenses consist of all direct and indirect operating expenses supporting the processes in development, including consulting fees for medical and manufacturing advisory services, costs related to manufacturing material for clinical studies, payroll and benefits, which includes share-based compensation, for research and development employees, licensing fees, and study acquisition costs. Expenses are recognized as the related goods are delivered or the services are performed.
R&D expenses include the cost of in-process research and development (“IPR&D”) assets purchased in an asset acquisition transaction. IPR&D assets are expensed unless the assets acquired are deemed to have an alternative future use, provided that the acquired asset did not also include processes or activities that would constitute a “business” as defined under U.S. GAAP, the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, has no established alternative future use. Acquired IPR&D payments are immediately expensed in the period in which they are incurred and include upfront payments, as well as transaction fees and subsequent pre-commercial milestone payments. Research and development costs incurred after the acquisition are expensed as incurred. R&D expenses also include the remeasurement of the research and development license consideration liability. The research and development license consideration liability represented an obligation to issue either preferred shares of our subsidiary or Class A Ordinary Shares to Lilly as consideration for the 2022 Lilly License, which was ultimately settled through the issuance of Class A Ordinary Shares upon the closing of the Business Combination.
Research and development expenses could include:
| ● | employee-related expenses, including salaries, bonuses, benefits, share-based compensation and other related costs for those employees involved in research and development efforts; |
| ● | external research and development expenses incurred under agreements with clinical research organizations, investigative sites and consultants to conduct our studies; |
| ● | costs related to manufacturing material for preclinical studies and clinical trials, including fees paid to contract manufacturing organizations; |
| ● | milestone payments under our licensing agreements; |
| ● | laboratory supplies and research materials; |
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| ● | costs related to compliance with regulatory requirements; and |
| ● | facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, maintenance of facilities, insurance and equipment. |
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We plan to substantially increase our research and development expenses for the foreseeable future as we develop our product candidates and manufacturing processes and conduct discovery and research activities for our clinical programs. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future clinical studies of our product candidates due to the inherently unpredictable nature of clinical development. Clinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to how we pursue our product candidates and how much funding to direct to each program on an ongoing basis in response to the results of future clinical trials, regulatory developments and our ongoing assessments as to commercial potential. We will need to raise substantial additional capital in the future. Our clinical development costs are expected to increase as we commence, continue and expand our clinical trials. Our future expenses may vary significantly each period based on factors such as:
| ● | expenses incurred to conduct preclinical studies required to advance our product candidates into clinical trials; |
| ● | per patient clinical trial costs, including based on the number of doses that patients receive; |
| ● | the number of patients who enroll in each clinical trial; |
| ● | the number of clinical trials required for approval; |
| ● | the number of sites included in the clinical trials; |
| ● | the countries in which the clinical trials are conducted; |
| ● | the length of time required to enroll eligible patients; |
| ● | the drop-out or discontinuation rates of patients; |
| ● | potential additional safety monitoring requested by regulatory agencies; |
| ● | the duration of patient participation in clinical trials and follow-up; |
| ● | the phase of development of the product candidate; |
| ● | third party contractors failing to comply with regulatory requirements or meet their contractual obligations in a timely manner, or at all; |
| ● | the cost of insurance, including product liability insurance, in connection with clinical trials; |
| ● | regulators or institutional review boards requiring that we or our investigators suspend or terminate clinical development for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; and |
| ● | the efficacy and safety profile of our product candidates. |
General and Administrative Expenses
General and administrative (“G&A”) expenses primarily consist of professional fees for legal, accounting, and consulting costs relating to corporate matters, as well as salaries and related costs for personnel in executive and administrative functions, including share-based compensation.
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We anticipate that our general and administrative expenses will increase in the future as we continue to support research and development activities and incur increased costs of operating as a public company. These costs include increased headcount to support expanded operations and infrastructure.
Additionally, we anticipate increased costs associated with maintaining compliance with Nasdaq rules and SEC requirements such as accounting, audit, legal and consulting services, as well as director and officer liability insurance, investor and public relations activities.
Results of Operations
Comparison of the Three Months Ended September 30, 2024 and 2023
The following table summarizes our results of operations for the periods presented (in thousands):
For the Three Months Ended | ||||||||||||
September 30, |
| $ |
| % | ||||||||
| 2024 |
| 2023 |
| Change |
| Change |
| ||||
Operating expenses: |
| |||||||||||
Research and development | $ | 6,029 | $ | 3,965 | $ | 2,064 | 52 | % | ||||
General and administrative | 13,290 | 6,222 | 7,068 | 114 | % | |||||||
Total operating expenses | 19,319 | 10,187 | 9,132 | 90 | % | |||||||
Loss from operations | (19,319) | (10,187) | (9,132) | 90 | % | |||||||
Other (income)/expense, net: |
|
|
| |||||||||
Other (income)/expense, net |
| (22) |
| 4 |
| (26) |
| (650) | % | |||
Interest income | (2,461) | (815) | (1,646) | 202 | % | |||||||
Dividend income | — |
| (987) |
| 987 |
| (100) | % | ||||
Change in fair value of private placement warrants | 3,866 |
| (119) |
| 3,985 |
| * | % | ||||
Total other (income)/expense, net |
| 1,383 |
| (1,917) |
| 3,300 |
| (172) | % | |||
Loss before income taxes |
| (20,702) |
| (8,270) |
| (12,432) |
| 150 | % | |||
Income tax benefit |
| — |
| — |
| — |
| 0 | % | |||
Net loss before redeemable noncontrolling interest |
| (20,702) |
| (8,270) |
| (12,432) |
| 150 | % | |||
Net loss |
| (20,702) |
| (8,270) |
| (12,432) |
| 150 | % | |||
Accretion of redeemable noncontrolling interest to redemption value |
| (2,240) | — | (2,240) | 100 | % | ||||||
Net loss attributable to Class A Ordinary Shareholders of Zura | $ | (22,942) | $ | (8,270) | $ | (14,672) |
| 177 | % | |||
*Percentage change not meaningful
Operating Expenses
Research and development expenses (in thousands):
For the Three Months Ended | ||||||||||||
September 30, |
| $ |
| % | ||||||||
| 2024 |
| 2023 | Change | Change | |||||||
Research and development | $ | 6,029 | $ | 3,965 | $ | 2,064 | 52 | % | ||||
Research and development expenses increased by $2.1 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This was primarily due to an increase of $1.7 million in expenses related to personnel compensation for research and development functions including share-based compensation and an increase of $0.9 million for consulting costs for preparation of clinical trials, partially offset by a decrease of $0.7 million in our manufacturing costs.
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General and administrative expenses (in thousands):
For the Three Months Ended | ||||||||||||
September 30, |
| $ |
| % | ||||||||
| 2024 |
| 2023 |
| Change |
| Change | |||||
General and administrative | $ | 13,290 | $ | 6,222 | $ | 7,068 | 114 | % | ||||
General and administrative expenses increased by $7.1 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily due to a $5.9 million non-cash share-based compensation expense charge for the modification of awards for the former CEO, an increase of $2.1 million in professional fees for legal and accounting costs, including $1.6 million related to the Warrant Exchange and $0.5 million related to ongoing operations as a public company, partially offset by a decrease of $0.7 million in expenses related to compensation for personnel in executive and administrative functions including share-based compensation.
Other (Income)/Expense, net
Other (income)/expense, net
Other income increased by a nominal amount for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This increase was primarily due to foreign exchange transaction gains for the three months ended September 30, 2024.
Interest income
Interest income increased by $1.6 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. This is due to an increase in cash and cash equivalents balance during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to the proceeds generated from the April 2024 Private Placement.
Dividend income
Dividend income decreased by $1.0 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. We held no dividend-generating cash equivalents during the three months ended September 30, 2024.
Change in fair value of Private Placement Warrants
Revaluation loss on the liability-classified Private Placement Warrants assumed in the Business Combination was $3.9 million for the three months ended September 30, 2024 as compared to a $0.1 million gain for the three months ended September 30, 2023. During the three months ended September 30, 2024, the Private Placement Warrants were recorded at their settlement value upon completion of the Warrant Exchange, which was the fair value of the Class A Ordinary Shares exchanged for the Private Placement Warrants.
Accretion of Redeemable Noncontrolling Interest to Redemption Value
Accretion of redeemable noncontrolling interest to redemption value increased by $2.2 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. This increase is due to modifications of the terms of the Z33 Series Seed Preferred Shares issued to Stone Peach and the resulting remeasurements to redemption value.
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Comparison of the Nine Months Ended September 30, 2024 and 2023
The following table summarize our results of operations for the periods presented (in thousands):
| For the Nine |
|
|
| ||||||||
Months Ended | ||||||||||||
September 30, | $ | % | ||||||||||
2024 |
| 2023 | Change | Change | ||||||||
Operating expenses: |
|
|
|
|
|
|
| |||||
Research and development | $ | 15,161 | $ | 37,079 | $ | (21,918) | (59) | % | ||||
General and administrative |
| 24,296 |
| 14,732 |
| 9,564 | 65 | % | ||||
Total operating expenses |
| 39,457 |
| 51,811 |
| (12,354) | (24) | % | ||||
Loss from operations |
| (39,457) |
| (51,811) |
| 12,354 | (24) | % | ||||
Other (income)/expense, net: |
|
|
| |||||||||
Other (income)/expense, net |
| (47) |
| 7 |
| (54) | (771) | % | ||||
Interest income |
| (5,872) |
| (816) |
| (5,056) | 620 | % | ||||
Dividend income |
| — |
| (1,392) |
| 1,392 | (100) | % | ||||
Change in fair value of private placement warrants |
| 5,240 |
| 236 |
| 5,004 | * | % | ||||
Change in fair value of note payable |
| — |
| 2,244 |
| (2,244) | (100) | % | ||||
Total other (income)/expense, net |
| (679) |
| 279 |
| (958) | (343) | % | ||||
Loss before income taxes |
| (38,778) |
| (52,090) |
| 13,312 | (26) | % | ||||
Income tax benefit |
| — |
| — |
| — | 0 | % | ||||
Net loss before redeemable noncontrolling interest |
| (38,778) |
| (52,090) |
| 13,312 | (26) | % | ||||
Net loss attributable to redeemable noncontrolling interest |
| — |
| 203 |
| (203) | (100) | % | ||||
Net loss |
| (38,778) |
| (51,887) |
| 13,109 | (25) | % | ||||
Accretion of redeemable noncontrolling interest to redemption value |
| (4,577) |
| (203) |
| (4,374) | * | % | ||||
Deemed dividend to redeemable noncontrolling interest |
| — |
| (10,875) |
| 10,875 | (100) | % | ||||
Adjustment of redeemable noncontrolling interest from redemption value |
| 7,017 |
| — |
| 7,017 | 100 | % | ||||
Net loss attributable to Class A Ordinary Shareholders of Zura | $ | (36,338) | $ | (62,965) | $ | 26,627 | (42) | % | ||||
*Percentage change not meaningful
Operating Expenses
Research and development expenses (in thousands):
| For the Nine |
|
|
| ||||||||
Months Ended |
| |||||||||||
September 30, | $ | % |
| |||||||||
| 2024 |
| 2023 | Change | Change | |||||||
Research and development | $ | 15,161 | $ | 37,079 | $ | (21,918) | (59) | % | ||||
Research and development expenses decreased by $21.9 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This was primarily due to $27.4 million related to the acquisition of an IPR&D license from Lilly during the nine months ended September 30, 2023 and a decrease of $1.9 million related to the change in fair value of the research and development license consideration liability during the three months ended September 30, 2023. This decrease was partially offset by an increase of $2.8 million in manufacturing costs for our product candidates, $2.3 million in expenses related to personnel compensation for research and development functions excluding share-based compensation and an increase of $1.2 million of costs incurred for consulting services for our product candidates, in addition to an increase of $0.7 million for an annual milestone payment related to the 2023 Lilly License incurred during the nine months ended September 30, 2024.
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General and administrative expenses (in thousands):
| For the Nine |
|
|
|
| |||||||
Months Ended |
|
| ||||||||||
September 30, | $ | % |
| |||||||||
2024 | 2023 | Change | Change |
| ||||||||
General and administrative | $ | 24,296 | $ | 14,732 | $ | 9,564 | 65 | % | ||||
General and administrative expenses increased by $9.6 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The increase was primarily due to a $5.9 million non-cash share-based compensation expense charge for the modification of awards for the former CEO, an increase of $2.4 million in professional fees for legal and accounting costs, including $1.6 million related to the Warrant Exchange and $0.8 million related to our ongoing operations as a public company and an increase of $1.2 million in expenses related to compensation for personnel in executive and administrative functions including share-based compensation.
Other (Income)/Expense, Net
Other (income)/expense, net
Other (income)/expense, net increased by $0.1 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to net foreign exchange transaction gains.
Interest income
Interest income increased by $5.1 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. This is due to an increase in cash and cash equivalents balance during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Dividend income
Dividend income decreased by $1.4 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. We held no dividend-generating cash equivalents during the nine months ended September 30, 2024.
Change in fair value of Private Placement Warrants
Revaluation loss on the liability-classified Private Placement Warrants assumed in the Business Combination was $5.2 million during the nine months ended September 30, 2024 compared to a revaluation loss of $0.2 million for the nine months ended September 30, 2023. During the nine months ended September 30, 2024, the Private Placement Warrants were recorded at their settlement value upon completion of the Warrant Exchange, which was the fair value of the Class A Ordinary Shares exchanged for the Private Placement Warrants.
Change in fair value of note payable
Revaluation loss on the note payable was $2.2 million for the nine months ended September 30, 2023, as the note was remeasured to its settlement value and settled at the closing of the Business Combination.
Net Loss Attributable to Redeemable Noncontrolling Interest
Net loss attributable to redeemable noncontrolling interest was $0.2 million for the nine months ended September 30, 2023, representing the noncontrolling shareholder’s interest in the net loss of our consolidated subsidiary, Z33. Z33 had an immaterial amount of net loss for the nine months ended September 30, 2024.
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Accretion of Redeemable Noncontrolling Interest to Redemption Value
Accretion of redeemable noncontrolling interest to redemption value increased by $4.4 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. This increase is due to remeasurement of the Z33 Series Seed Preferred Shares to redemption value. After the modification of the terms of the Z33 Series Seed Preferred Shares issued to Stone Peach (see “—2022 Lilly License” above), the Z33 Series Seed Preferred Shares are recorded at the greater of the redemption value or the initial fair value, less noncontrolling shareholder’s interest in net loss of Z33.
Deemed Dividend to Redeemable Noncontrolling Interest
Deemed dividend to the redeemable noncontrolling interest was $10.9 million for the nine months ended September 30, 2023, due to the modification of the terms of the Z33 Series Seed Preferred Shares issued to Stone Peach (see “—2022 Lilly License” above). The Z33 Series Seed Preferred Shares were not modified during the nine months ended September 30, 2024.
Adjustment of Redeemable Noncontrolling Interest
During the nine months ended September 30, 2024, redeemable noncontrolling interest of the Z33 Series Seed Preferred Shares are recorded at the greater of the redemption value or the initial fair value, less noncontrolling shareholder’s interest in net loss of Z33. For the nine months ended September 30, 2024, the adjustment of redeemable noncontrolling interest from redemption value of $7.0 million resulted from a decrease in the redemption value of the Z33 Series Seed Preferred Shares below its initial fair value, less the noncontrolling shareholder’s interest in net loss of Z33, as of March 31, 2024. Subsequent to March 31, 2024, there was an accretion of the redeemable noncontrolling interest when remeasuring the Z33 Series Seed Preferred Shares to its redemption value, which was greater than its initial fair value, less noncontrolling shareholder’s interest in the net loss of Z33. Accordingly, the accretion is included in accretion of redeemable noncontrolling interest to redemption value (see above).
Liquidity and Capital Resources
Overview
Since our inception, we have not generated any revenue and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable. As of September 30, 2024, we had cash and cash equivalents of $188.2 million. As of September 30, 2024, we have funded our operations through (i) the sale of equity, raising an aggregate of $10.0 million of gross proceeds from the sale of our convertible preferred shares; (ii) the issuance of a promissory note, receiving net proceeds of $7.6 million; (iii) proceeds from the Business Combination of $56.7 million in March 2023; (iv) the April 2023 Private Placement, raising an aggregate of $80.0 million of gross proceeds from the sale of Class A Ordinary Shares and pre-funded warrants in May and June 2023; (v) the April 2024 Private Placement, raising an additional $112.5 million of gross proceeds from the sale of Class A Ordinary Shares and pre-funded warrants; and (vi) the sale under the ATM of 1,500,000 Class A Ordinary Shares at a price of $3.80 per share for net proceeds of $5.5 million, after commissions, less $0.6 million of offering costs incurred in connection with establishing the ATM.
We have experienced operating losses and cash outflows from operations since inception and will require ongoing financing in order to continue our research and development activities. We have not earned any revenue or reached successful commercialization of our products. Our future operations are dependent upon our ability to finance our cash requirements which will allow us to continue our research and development activities and the commercialization of our products. There can be no assurance that we will be successful in continuing to finance our operations.
Capital Requirements
To date, we have not generated revenue from any source, including the commercial sale of approved drug products, and we do not expect to generate revenue for at least the next few years. If we fail to complete the development of our product candidates in a timely manner or fail to obtain their regulatory approval, our ability to generate future revenue will be adversely affected. We do not know when, or if, we will generate any revenue from our product candidates, and we do not expect to generate revenue unless and until we obtain regulatory approval of, and commercialize, our product candidates.
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We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we continue the research and development, and seek marketing approval for our product candidates, as well as administrative costs associated with supporting our operations. In addition, if we obtain approval for any of our product candidates, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution. Furthermore, we expect to incur additional costs associated with operating as a public company.
We will also be responsible to Pfizer and Lilly for significant future contingent payments under the Pfizer Agreement, the 2022 Lilly License, and the 2023 Lilly License (collectively with the 2022 Lilly License, the “Lilly Licenses”) upon the achievement of certain development, regulatory, and sales milestones, as well as ongoing royalties on net commercial sales. The size and timing of these milestone payments will vary greatly depending upon a number of factors, and it is therefore difficult to estimate the total payments that could become payable to Pfizer and Lilly and when those payments would be due. If we achieve all of the milestones, we would be obligated to pay multimillion dollar development and regulatory milestone payments and sales milestone payments. We will be required to pay certain of these milestone payments prior to the time at which we are able to generate sufficient revenue, if any, from commercial sales of any of our product candidates. We intend to fund these milestone payments using a portion of the proceeds from the Business Combination, the April 2023 Private Placement, the April 2024 Private Placement and sales under the ATM. In addition to milestone payments, we are also required to pay Pfizer and Lilly under the Pfizer Agreement and Lilly Licenses, respectively, ongoing royalties in the mid-single digits to low double-digits (less than 20%) percentage range based upon thresholds of net sales of products.
We intend to devote most of the net proceeds from the Business Combination, the April 2023 Private Placement, the April 2024 Private Placement and sales under the ATM to the preclinical and clinical development of our product candidates, our public company compliance costs and certain milestone payments. Based on our current business plans, we believe that our existing cash, cash equivalents and investments should be sufficient to fund our operating expenses and capital requirements through at least the next twelve months. Our estimate as to how long we expect our existing cash, cash equivalents and investments to be able to fund our operating expenses and capital requirements is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Changing circumstances, some of which may be beyond our control, could result in less cash available to us or cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical drug products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:
| ● | the extent to which we develop, in-license or acquire other product candidates and technologies in our product candidates pipeline; |
| ● | the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs as we advance them through preclinical and clinical development; |
| ● | the number and development requirements of product candidates that we may pursue; |
| ● | the costs, timing and outcome of regulatory review of our product candidates; |
| ● | the timing and amount of our milestone payments to Pfizer under the Pfizer Agreement and to Lilly under the Lilly Licenses; |
| ● | our headcount growth and associated costs as we expand our research and development capabilities and establish and expand our commercial infrastructure and operations; |
| ● | the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distributions, for any of our product candidates for which we receive marketing approval; |
| ● | royalty payments to Pfizer under the Pfizer Agreement and Lilly under the Lilly Licenses; |
| ● | the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; |
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| ● | the revenue, if any, received from sales of our product candidates for which we receive marketing approval; and |
| ● | the costs of operating as a public company. |
Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of our product candidates that we do not expect to be commercially available in the near term, if at all and are subject to successful clinical development and regulatory approval. Accordingly, we may need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through securities or debt financing, the terms of these securities or this debt may restrict our ability to operate. Any financing, if available, may involve covenants limiting and restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, entering into profit-sharing or other arrangements or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise capital when needed or on acceptable terms, we could be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.
Cash Flows
| For the | |||||
Nine Months | ||||||
Ended | ||||||
September 30, | ||||||
| 2024 |
| 2023 | |||
Net cash used in operating activities | $ | (17,252) | $ | (11,001) | ||
Net cash used in investing activities |
| (5,030) |
| (8,000) | ||
Net cash provided by financing activities |
| 110,697 |
| 121,293 | ||
Net increase in cash and cash equivalents | $ | 88,415 | $ | 102,292 | ||
Cash flows from operating activities
Net cash used in operating activities increased by $6.3 million to $17.3 million for the nine months ended September 30, 2024 from $11.0 million for the nine months ended September 30, 2023. When adjusting the decrease in the net loss before redeemable noncontrolling interest of $13.3 million with the decrease in non-cash expenses of $19.8 million, our cash net loss is responsible for an increase in net cash used in operations of $6.5 million for the nine months ended September 30, 2024. The increase in non-cash charges was due to of an expense incurred in connection with the 2023 Lilly License of 27.4 million, a change in fair value of our promissory note of $2.2 million, a share-based payment expense of $2.2 million related to the anti-dilution shares issued to Pfizer, and a change in fair value of our research and development license consideration liability of $1.9 million for the nine months ended September 30, 2023, partially offset by an increase in share-based compensation expense of $8.9 million, of which $5.9 million related to the modification of our former CEOs awards, and an increase in the change in fair value on the Private Placement Warrants of $5.0 million for the nine months ended September 30, 2024. Working capital changes offset the adjusted net loss, providing $0.2 million of cash for operating activities, resulting from an increase in cash provided by prepaid expenses and other current assets, partially offset by a decreased use of cash for accounts payable and accrued expenses for the nine months ended September 30, 2024.
Cash flows from investing activities
Cash used in investing activities for the nine months ended September 30, 2024 was $5.0 million, which was primarily related to the cash consideration paid to acquire the 2023 Lilly License as well as a nominal amount of equipment purchased during the period.
Cash used in investing activities for the nine months ended September 30, 2023 was $8.0 million, which was entirely related to cash consideration paid to acquire the 2023 Lilly License.
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Cash flows from financing activities
Cash provided by financing activities for the nine months ended September 30, 2024 was $110.7 million, which consisted of $62.5 million of proceeds from the issuance of Class A Ordinary Shares in connection with the April 2024 Private Placement, $50.0 million of proceeds from the issuance of Pre-Funded Warrants in connection with the April 2024 Private Placement and net proceeds of $5.5 million, after commissions, for the sale of Class A Ordinary Shares under our ATM, partially offset by transaction costs of $7.2 million incurred in connection with the 2024 Private Placement.
Cash provided by financing activities for the nine months ended September 30, 2023 was $121.3 million, which consisted of $56.7 million of proceeds from the issuance of shares upon the closing of the Business Combination, and $59.7 million of proceeds from the issuance of Class A Ordinary Shares in connection with the April 2023 Private Placement, $16.1 million of proceeds from the issuance of Pre-Funded Warrants in connection with the April 2023 Private Placement, partially offset by a $10.0 million repayment of our promissory note and $1.2 million of payments of deferred transaction costs.
Contractual Obligations and Other Commitments
We have or will enter into agreements in the normal course of business with contract research organizations, contract manufacturing organizations and other vendors for research and development services for operating purposes, which are generally cancelable upon written notice. Some third party CMOs have intellectual property, such as patents and/or know-how with an annual fee and royalty bearing license to its customers that forms part of the manufacturing agreement.
Lonza
We have entered into the Lonza License for a worldwide non-exclusive license for Lonza’s gene expression system in exchange for varying considerations depending on a number of factors such as whether we enter further into manufacturing agreements with Lonza or with a third party, and whether we enter into sublicense agreements with third parties (including up to middle six-figure annual payments per sublicense upon commencement of a sublicense, as well as royalties of up to low-single digit percentages of net sales of certain products over a commercially standard double-digit multi-year term). The Lonza License will remain in effect until terminated. We are free to terminate the Lonza License at any time upon 60 days’ notice, with or without cause. Lonza may terminate the Lonza License for cause upon a breach by Zura or for other commercially standard reasons. During October 2023, we began drug substance manufacturing with a third party. As a result of manufacturing with a third party other than Lonza, under the terms of the Lonza License the first license fee $0.4 million was due in the fourth quarter of 2023 and annually thereafter. This fee was recorded in our condensed consolidated statement of operations in the fourth quarter of 2023 and was paid during the nine months ended September 30, 2024. We did not owe any other amounts under the Lonza License as of September 30, 2024.
WuXi Biologics
In July 2023, we entered into a master services agreement with WuXi Biologics (the “WuXi Biologics MSA”). Under the WuXi Biologics MSA, we are obligated to pay WuXi Biologics a service fee and all non-cancellable obligations in the amount specified in each work order associated with the agreement for the provision of services. The People’s Republic of China (“PRC”), and WuXi Biologics specifically, have faced increased scrutiny by the U.S. government, which could impact our ability to supply torudokimab to meet future demand or cause us to incur additional cost to transfer services to another contract manufacturing organization.
The WuXi Biologics MSA terminates on the completion of services under all work orders executed by the parties, unless terminated earlier. The term of each work order terminates upon completion of the services under such work order, unless terminated earlier. We can terminate the WuXi Biologics MSA or any work order at any time upon 30 days’ prior written notice and immediately upon written notice if WuXi Biologics fails to obtain or maintain required material governmental licenses or approvals. Either party may terminate a work order at any time upon three months’ prior notice with reasonable cause, provided however that if WuXi Biologics terminates a work order in such manner, no termination or cancellation fees shall be paid by us and immediately for cause upon the other party’s material breach that remains uncured for 30 days after notice of such breach.
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In July 2023, we entered into a cell line license agreement (the “Cell Line License Agreement”) with WuXi Biologics for torudokimab. The Cell Line License Agreement provides us with a non-exclusive, worldwide, sublicensable license to certain of WuXi Biologics’ know-how, cell line, and biological materials (the “WuXi Biologics Licensed Technology”) to manufacture, have manufactured, use, sell and import certain products produced through the use of the cell line licensed by WuXi Biologics under the Cell Line License Agreement (the “WuXi Biologics Licensed Products”). In consideration for the license, we agreed to pay WuXi Biologics a non-refundable license fee of $150,000. Additionally, if we manufacture all of our commercial supplies of bulk drug product with a manufacturer other than WuXi Biologics or its affiliates, we are required to make royalty payments to WuXi Biologics in an amount equal to a fraction of a single digit percentage of global net sales of WuXi Biologics Licensed Products manufactured by a third-party manufacturer (the “Royalty”). If we manufacture part of our commercial supplies of the WuXi Biologics Licensed Products with WuXi Biologics or its affiliates, then the Royalty will be reduced accordingly on a pro rata basis.
The Cell Line License Agreement will continue indefinitely unless terminated (i) by us upon three months’ prior written notice and its payment of all undisputed amounts due to WuXi Biologics through the effective date of termination, (ii) by WuXi Biologics for a material breach by us that remains uncured for 30 days after written notice, or (iii) by WuXi Biologics if we fail to make a payment and such failure continues for 30 days after receiving notice of such failure.
In October 2024 and July 2024, we entered into two separate start-up agreements with third-party CROs, including total costs of approximately $3.5 million and $4.1 million, to manage and conduct our two planned Phase 2 clinical trials for tibulizumab in (i) hidradenitis suppurativa and (ii) systemic sclerosis, respectively.
We have not included future milestone or royalty payments or other contractual payment obligations as the timing and amount of such obligations are unknown or uncertain and are contingent upon the initiation, continuation, and/or successful completion of future activities.
Critical Accounting Estimates
Management’s discussion and analysis of our financial condition and results of operations is based on our unaudited interim condensed consolidated financial statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles, and on a basis consistent with those accounting principles followed by us and disclosed in Note 2 to our most recent annual audited consolidated financial statements in the 2023 Annual Report. The preparation of these unaudited interim condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported expenses incurred 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 and any such differences may be material.
Other than as described under Note 2 of our unaudited interim condensed consolidated financial statements, there have been no material changes to our critical accounting policies from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2023 Annual Report.
Recent Accounting Pronouncements
See Note 2 to our unaudited condensed consolidated financial statements located in “Part I – Financial Information, Item 1. Financial Statements” in this Quarterly Report for a description of recent accounting pronouncements applicable to our financial statements.
Emerging Growth Company and Smaller Reporting Company Status
In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (“Securities Act”) for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Upon closing of the Business Combination, we remained an emerging growth company and may elect to extend the transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
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In addition, as an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
| ● | being permitted to present only two years of audited financial statements in addition to any required unaudited interim financial statements, with correspondingly reduced disclosure in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; |
| ● | an exception from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended; |
| ● | reduced disclosure about our executive compensation arrangements in our periodic reports, proxy statements and registrations statements; and |
| ● | exemptions from the requirements of holding non-binding advisory votes on executive compensation or golden parachute arrangements; and an exemption from compliance with the requirements of the Public Company Accounting Oversight Board regarding the communication of critical audit matters in the auditor’s report on financial statements. |
We would cease to qualify as an emerging growth company on the date that is the earliest of: (i) December 31, 2026, (ii) the last day of the fiscal year in which we have more than $1.07 billion in total annual gross revenues, (iii) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our Class A Ordinary Shares that is held by non-affiliates exceeds $700.0 million as of the prior September 30th, or (iv) the date on which we have issued more than $1.0 billion of non-convertible debt over the prior three-year period. We may choose to take advantage of some but not all of these reduced reporting burdens. We have taken advantage of certain reduced reporting requirements in this Quarterly Report. Accordingly, the information contained herein may be different than you might obtain from other public companies in which you hold equity interests.
We are also a “smaller reporting company” as defined under the Securities Act and Exchange Act. We may continue to be a smaller reporting company so long as either (i) the market value of Class A Ordinary Shares held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of Class A Ordinary Shares held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and have reduced disclosure obligations regarding executive compensation, and, similar to emerging growth companies, if we are a smaller reporting company under the requirements of (ii) above, we would not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company,” as defined by Item 10 of Regulation S-K, we are not required to provide the information otherwise required by this Item 3.
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 in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management including our Chief Executive Officer, Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of September 30, 2024, our Chief Executive Officer and Chief Financial Officer carried out an evaluation with the participation of management of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2024.
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Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Securities Exchange Act of 1934 that occurred during the quarter ended September 30, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Internal Controls
A control system, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. In addition, the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II —OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in litigation or other legal proceedings arising in the ordinary course of our business. We are not currently a party to any material litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors.
Item 1A. Risk Factors.
Please refer to the risk factors set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. We may disclose changes to risk factors or additional risk factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On August 15, 2024, we entered into a share surrender and warrant agreement (the “Share Exchange Agreement”) with entities affiliated with Venrock Healthcare Capital Partners (the “Shareholders”), pursuant to which (i) the Shareholders surrendered an aggregate of 4,000,000 Class A Ordinary Shares, owned by the Shareholders, for no consideration, which were immediately cancelled and retired, upon surrender; and (2) we issued pre-funded warrants (the “Share Exchange Warrants”) to purchase an aggregate of 4,000,000 Ordinary Shares, with an exercise price of $0.001 per share and no expiration date. The Share Exchange Warrants will be exercisable immediately and have substantially identical terms to the form of 2024 Pre-Funded Warrant. A holder of the Share Exchange Warrants (together with its affiliates and other attribution parties) may not exercise any portion of a Share Exchange Warrant to the extent that immediately prior to or after giving effect to such exercise the holder would beneficially own more than 9.99% of our outstanding common shares immediately after exercise, which percentage may be increased or decreased to any other percentage specified not in excess of 9.99% at the holder’s election upon 61 days’ notice to us subject to the terms of the Share Exchange Warrants. The Share Exchange Warrants are exempt from registration pursuant to Section 3(a)(9) of the Securities Act as an exchange with an existing security holder where no commission or other remuneration is paid or given for soliciting such exchange.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
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Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q:
Exhibit |
| Description |
2.1 | ||
3.1 | ||
4.1 | ||
4.2 | ||
4.3 | ||
4.4 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
31.1* | ||
31.2* | ||
32.1** | ||
32.2** | ||
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* |
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ZURA BIO LIMITED | ||
Date: November 7, 2024 | By: | /s/ Robert Lisicki |
Name: | Robert Lisicki | |
Title: | Chief Executive Officer | |
(Principal Executive Officer) | ||
Date: November 7, 2024 | By: | /s/ Verender Badial |
Name: | Verender Badial | |
Title: | Chief Financial Officer | |
(Principal Financial Officer and Principal Accounting Officer) | ||
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