SEC Filing | Allena Pharmaceuticals

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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2022

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

For the transition period from __________________ to __________________

Commission File Number: 001-38268

ALLENA PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

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


Delaware	45-2729920
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
142-F North Road, Suite 150 Sudbury, MA	01776
(Address of principal executive offices)	(Zip Code)

(617) 467-4577

(Registrant’s telephone number, including area code)

One Newton Executive Park, Suite 202, Newton, Massachusetts 02462

(Former name or former address, if changed since last report)

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


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	ALNA	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Small reporting company	☒
		Emerging growth Company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

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

As of August 12, 2022, the registrant had 122,083,226 shares of common stock, $0.001 par value per share, outstanding.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. These statements include all matters that are not related to present facts or current conditions or that are not historical facts, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth. The words “anticipate,” “believe,” “could,” “continue,” “should,” “predict,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “will,” “may,” “would,” or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. on our management’s belief and assumptions and on information currently available to our management. These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

•

our estimates and expectations regarding our capital requirements, cash and expense levels, liquidity sources and our need for additional financing and our ability to continue as a going concern;

•

our ability to fund our operating expenses and capital requirements beyond a matter of days;

•

our ability to consummate a strategic or financing transaction, including a possible partnership for ALLN-346;

•

in the event we are unable to obtain sufficient funds to continue our operations, our ability to obtain an in-court or out-of-court restructuring of our liabilities;

•

our ability to enroll a sufficient number of patients (including as a result of any delays arising from the global outbreak of the coronavirus, or the COVID-19 coronavirus) and the ability of subjects in our clinical trials to adhere to the protocol, including capsule and dietary regimen and urinary collection requirements;

•

the therapeutic benefits, effectiveness and safety of ALLN-346 and our future product candidates;

•

our ability to receive regulatory approval for our product candidates in the United States, Europe and other geographies;

•

our expected regulatory approval pathway, and our ability to obtain, on satisfactory terms or at all, the financing required to support operations, development, clinical trials, and commercialization of products;

•

our reliance on third parties for the planning, conduct and monitoring of clinical trials and for the manufacture of clinical drug supplies and drug product;

•

potential changes in regulatory requirements, and delays or negative outcomes from the regulatory approval process;

•

our estimates of the size and characteristics of the markets that may be addressed by ALLN-346;

•

the market acceptance of ALLN-346 or any future product candidates that are approved for marketing in the United States or other countries;

•

our ability to successfully commercialize ALLN-346 and any future product candidates with a targeted sales force;

•

the safety and efficacy of therapeutics marketed by our competitors that are targeted to indications which our product candidates have been developed to treat;

•

the impact of natural disasters, global pandemics (including the recent outbreak of a novel strain of the COVID-19 coronavirus), labor disputes, political unrest in the U.S. and abroad, lack of raw material supply, issues with facilities and equipment or other forms of disruption to business operations at our manufacturing facilities;

•

our ability to utilize our proprietary technological approach to develop and commercialize ALLN-346 and future product candidates;

•

potential collaborators to license and commercialize ALLN-346 and any future product candidates, if approved, or any products for which we receive regulatory approval in the future outside of the United States;

•

our heavy dependence on licensed intellectual property, including our ability to source and maintain licenses from third-party owners;

•

our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;

•

our ability to attract, retain and motivate key personnel; and

•

our ability to generate revenue and become profitable.

These risks are not exhaustive. Other sections of this Quarterly Report on Form 10-Q may include additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. No forward-looking statement is a guarantee of future performance.

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed as exhibits hereto and to the registration statement of which this Quarterly Report on Form 10-Q is a part completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II.	OTHER INFORMATION	32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75
Item 3.	Defaults Upon Senior Securities	75
Item 4.	Mine Safety Disclosures	75
Item 5.	Other Information	75
Item 6.	Exhibits	76
Signatures		78

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Allena Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share and per share data)


	June 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	6,589		$	29,988
Prepaid expenses and other current assets		9,897			3,018
Total current assets		16,486			33,006
Property and equipment, net		930			1,173
Operating lease assets		272			455
Other assets		123			123
Total assets	$	17,811		$	34,757
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,271		$	1,030
Loan payable, net of discount		4,904			9,852
Accrued expenses and other current liabilities		2,870			4,480
Operating lease liabilities, net of discount		380			317
Total current liabilities		10,425			15,679
Warrant liability		3,645			—
Operating lease liabilities, net of current portion and discount		—			210
Total liabilities		14,070			15,889
Commitments and contingencies (Note 6)
Stockholders’ equity:
Undesignated preferred stock, $0.001 par value; 5,000,000 shares authorized; 2,872 shares issued and no shares outstanding at June 30, 2022; no shares issued and outstanding at December 31, 2021		—			—
Common stock, $0.001 par value; 200,000,000 shares authorized; 107,725,169 and 82,969,421 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		108			83
Additional paid-in capital		270,333			265,237
Accumulated deficit		(266,700	)		(246,452	)
Total stockholders’ equity		3,741			18,868
Total liabilities and stockholders’ equity	$	17,811		$	34,757

See accompanying notes.

Allena Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share data)

See accompanying notes.


	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Operating expenses:
Research and development	$	3,981		$	10,090		$	11,739		$	17,942
General and administrative		2,943			3,597			6,742			7,155
Total operating expenses		6,924			13,687			18,481			25,097
Loss from operations		(6,924	)		(13,687	)		(18,481	)		(25,097	)
Other income (expense):
Loss on issuance of securities		(371	)		—			(371	)		—
Change in valuation of warrant liability		(1,023	)		—			(1,023	)		—
Interest expense, net		(118	)		(253	)		(367	)		(488	)
Other income (expense), net		1			(32	)		(6	)		(23	)
Other expense, net		(1,511	)		(285	)		(1,767	)		(511	)
Net loss	$	(8,435	)	$	(13,972	)	$	(20,248	)	$	(25,608	)
Net loss per share attributable to common stockholders— basic and diluted	$	(0.08	)	$	(0.24	)	$	(0.21	)	$	(0.45	)
Weighted-average common shares outstanding— basic and diluted		100,623,730			57,932,389			95,034,212			56,484,811
Comprehensive loss	$	(8,435	)	$	(13,972	)	$	(20,248	)	$	(25,608	)

Allena Pharmaceuticals, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share amounts)


	Series D Convertible					Series E Convertible									Additional						Total
	Preferred Stock					Preferred Stock					Common stock				paid-in			Accumulated			stockholders’
	Shares			Amount		Shares			Amount		Shares		Amount		capital			deficit			equity
Balance at March 31, 2021		—		$	—		—		$	—		56,879,679	$	57	$	232,871		$	(209,425	)	$	23,503
Issuance of stock, net of issuance costs		—			—		—			—		1,650,988		2		1,769			—			1,771
Issuance of common stock through employee stock purchase plan ("ESPP")		—			—		—			—		4,206		—		5			—			5
Issuance of common stock through release of restricted stock units ("RSUs")		—			—		—			—		248,111		—		—			—			—
Stock-based compensation		—			—		—			—		—		—		960			—			960
Net loss		—			—		—			—		—		—		—			(13,972	)		(13,972	)
Balance at June 30, 2021		—		$	—		—		$	—		58,782,984	$	59	$	235,605		$	(223,397	)	$	12,267

Balance at March 31, 2022		—		$	—		—		$	—		89,774,309	$	90	$	269,791		$	(258,265	)	$	11,616
Issuance of convertible preferred stock and warrants, net of issuance costs		1,436			—		1,436			—		—		—		—			—			—
Conversion of preferred stock into common stock		(1,436	)		—		(1,436	)		—		17,950,860	$	18	$	(18	)		—			—
Stock-based compensation		—			—		—			—		—		—		560			—			560
Net loss		—			—		—			—		—		—		—			(8,435	)		(8,435	)
Balance at June 30, 2022		—		$	—		—		$	—		107,725,169	$	108	$	270,333		$	(266,700	)	$	3,741

See accompanying notes.

Allena Pharmaceuticals, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share amounts)


	Series D Convertible					Series E Convertible									Additional						Total
	Preferred Stock					Preferred Stock					Common stock				paid-in			Accumulated			stockholders’
	Shares			Amount		Shares			Amount		Shares		Amount		capital			deficit			equity
Balance at December 31, 2020		—		$	—		—		$	—		50,821,361	$	51	$	220,307		$	(197,789	)	$	22,569
Issuance of stock, net of issuance costs		—			—		—			—		7,709,306		8		13,466			—			13,474
Issuance of common stock through employee stock purchase plan ("ESPP")		—			—		—			—		4,206		—		5			—			5
Issuance of common stock through release of restricted stock units ("RSUs")		—			—		—			—		248,111		—		—			—			—
Stock-based compensation		—			—		—			—		—		—		1,827			—			1,827
Net loss		—			—		—			—		—		—		—			(25,608	)		(25,608	)
Balance at June 30, 2021		—		$	—		—		$	—		58,782,984	$	59	$	235,605		$	(223,397	)	$	12,267

Balance at December 31, 2021		—		$	—		—		$	—		82,969,421	$	83	$	265,237		$	(246,452	)	$	18,868
Issuance of convertible preferred stock and warrants, net of issuance costs		1,436			—		1,436			—		—		—		—			—			—
Conversion of preferred stock into common stock		(1,436	)		—		(1,436	)		—		17,950,860	$	18	$	(18	)		—			—
Issuance of stock, net of issuance costs		—			—		—			—		6,804,888		7		3,937			—			3,944
Stock-based compensation		—			—		—			—		—		—		1,177			—			1,177
Net loss		—			—		—			—		—		—		—			(20,248	)		(20,248	)
Balance at June 30, 2022		—		$	—		—		$	—		107,725,169	$	108	$	270,333		$	(266,700	)	$	3,741

See accompanying notes.

Allena Pharmaceuticals, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	Six Months Ended June 30,
	2022	2021
Cash flows from operating activities: