SEC Filing - Aileron

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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 September 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: 001-38130

Aileron Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware		13-4196017
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

285 Summer Street, Suite 101 Boston, MA		02210
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (617) 995-0900

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


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 par value per share	ALRN	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.

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 October 28, 2022, the registrant had 90,823,597 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION		3
Item 1.	Financial Statements (Unaudited)		3
	Condensed Balance Sheets		3
	Condensed Statements of Operations and Comprehensive Loss		4
	Condensed Statement of Stockholders’ Equity		5
	Condensed Statements of Cash Flows		6
	Notes to Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		27
Item 4.	Controls and Procedures		27
PART II.	OTHER INFORMATION		29
Item 1.	Legal Proceedings		29
Item 1A.	Risk Factors		29
Item 6.	Exhibits		31
	Signatures		32

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements include, among other things, statements about:

•

our plans to develop and commercialize ALRN-6924, including the potential benefits thereof;

•

our clinical trials for ALRN-6924, whether conducted by us or by any future collaborators, including with respect to the design of the trials or the timing of initiation of these trials and of the anticipated results;

•

our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash, cash equivalents and investments;

•

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

•

the timing of and our ability to obtain and maintain marketing approvals for ALRN-6924;

•

the rate and degree of market acceptance and clinical utility of any products for which we receive marketing approval;

•

our commercialization, marketing and manufacturing capabilities and strategy;

•

our intellectual property position and strategy;

•

our plans to enter into collaborations for the development and commercialization of ALRN-6924 and any additional product candidates;

•

potential benefits of any future collaboration;

•

developments relating to our competitors and our industry;

•

the impact of government laws and regulations;

•

the impact the coronavirus pandemic may have on the timing of our clinical development and on our operations; and

•

our ability to maintain our listing on the Nasdaq Capital Market.

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. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements in our Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that 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, collaborations, joint ventures or investments that we may make or enter into.

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed or incorporated by reference hereto completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

This Quarterly Report on Form 10-Q includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

AILERON THERAPEUTICS, INC.

CONDENSED BALANCE SHEETS (UNAUDITED)

(In thousands, except share and per share data)


	September 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	4,839		$	3,600
Investments		20,638			42,333
Prepaid expenses and other current assets		1,552			2,219
Restricted cash		25			25
Total current assets		27,054			48,177
Operating lease, right-of-use asset		70			152
Other non-current assets		24			24
Property and equipment, net		84			128
Total assets	$	27,232		$	48,481
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	945		$	1,210
Accrued expenses and other current liabilities		3,524			3,205
Operating lease liability, current portion		67			93
Total current liabilities		4,536			4,508
Operating lease liability, net of current portion		—			69
Total liabilities		4,536			4,577
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized and no shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		—			—
Common stock, $0.001 par value; 300,000,000 shares authorized at September 30, 2022 and December 31, 2021; 90,823,597 and 90,573,597 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		91			91
Additional paid-in capital		290,941			289,282
Accumulated other comprehensive loss		(98	)		(13	)
Accumulated deficit		(268,238	)		(245,456	)
Total stockholders’ equity		22,696			43,904
Total liabilities and stockholders’ equity	$	27,232		$	48,481

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

AILERON THERAPEUTICS, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

(In thousands, except share and per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Revenue	$	—		$	—		$	—		$	—
Operating expenses:
Research and development		4,239			4,278			15,565			12,447
General and administrative		2,243			2,513			7,379			7,342
Total operating expenses		6,482			6,791			22,944			19,789
Loss from operations		(6,482	)		(6,791	)		(22,944	)		(19,789	)
Interest income		110			21			180			54
Other income (expense), net		4			66			(18	)		370
Net loss		(6,368	)		(6,704	)		(22,782	)		(19,365	)
Net loss per share — basic and diluted	$	(0.07	)	$	(0.07	)	$	(0.25	)	$	(0.22	)
Weighted average common shares outstanding—basic and diluted		90,823,597			90,548,972			90,774,146			88,211,362
Comprehensive loss:
Net loss	$	(6,368	)	$	(6,704	)	$	(22,782	)	$	(19,365	)
Other comprehensive loss:
Unrealized gain (loss) on investments, net of tax of $0		3			(5	)		(85	)		3
Total other comprehensive income (loss)		3			(5	)		(85	)		3
Total comprehensive loss	$	(6,365	)	$	(6,709	)	$	(22,867	)	$	(19,362	)

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

AILERON THERAPEUTICS, INC.

CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(In thousands, except share and per share data)


	Common Stock				Additional			Accumulated Other						Total
	Shares		Par Value		Paid-in Capital			Comprehensive Loss			Accumulated Deficit			Stockholders' Equity
Balances at December 31, 2021		90,573,597	$	91	$	289,282		$	(13	)	$	(245,456	)	$	43,904
RSUs vested, net of shares repurchased for tax		250,000		—		—			—			—			0
Stock-based compensation expense		—		—		689			—			—			689
Unrealized loss on investments		—		—		—			(62	)		—			(62	)
Net loss		—		—		—			—			(8,422	)		(8,422	)
Balances at March 31, 2022		90,823,597	$	91	$	289,971		$	(75	)	$	(253,878	)	$	36,109
Stock-based compensation expense		—		—		528			—			—			528
Unrealized loss on investments		—		—		—			(26	)		—			(26	)
Net loss		—		—		—			—			(7,992	)		(7,992	)
Balances at June 30, 2022		90,823,597	$	91	$	290,499		$	(101	)	$	(261,870	)	$	28,619
Stock-based compensation expense		—		—		442			—			—			442
Unrealized gain on investments		—		—		—			3			—			3
Net loss		—		—		—			—			(6,368	)		(6,368	)
Balances at September 30, 2022		90,823,597	$	91	$	290,941		$	(98	)	$	(268,238	)	$	22,696


Balances at December 31, 2020		43,804,175	$	44	$	231,412		$	(2	)	$	(219,292	)	$	12,162
Issuance of common stock		46,406,382		46		59,042			—			—			59,088
Issuance costs		—		—		(3,482	)		—			—			(3,482	)
Stock-based compensation expense		—		—		631			—			—			631
Unrealized loss on investments		—		—		—			(5	)		—			(5	)
Net loss		—		—		—			—			(6,975	)		(6,975	)
Balances at March 31, 2021		90,210,557	$	90	$	287,603		$	(7	)	$	(226,267	)	$	61,419
Exercise of stock options		67,357		—		47			—			—			47
Issuance costs		—		—		(24	)		—			—			(24	)
RSU's vested, net of shares withheld		250,000		—		—			—			—			0
Stock-based compensation expense		—		—		361			—			—			361
Unrealized gain on investments		—		—		—			13			—			13
Net loss		—		—		—			—			(5,686	)		(5,686	)
Balances at June 30, 2021		90,527,914	$	90	$	287,987		$	6		$	(231,953	)	$	56,130
Exercise of stock options		44,641		1		26			—			—			27
Stock-based compensation expense		—		—		661			—			—			661
Unrealized gain on investments		—		—		—			(5	)		—			(5	)
Net loss		—		—		—			—			(6,704	)		(6,704	)
Balances at September 30, 2021		90,572,555	$	91	$	288,674		$	1		$	(238,657	)	$	50,109

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

AILERON THERAPEUTICS, INC.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)


	Nine Months Ended September 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(22,782	)	$	(19,365	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		126			81
Forgiveness of paycheck protection program loan		—			(387	)
Net amortization of premiums and discounts on investments		(85	)		212
Stock-based compensation expense		1,659			1,653
Gain on sale of property and equipment		—			(66	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		667			(238	)
Other assets		—			(24	)
Accounts payable		(265	)		(564	)
Operating lease liabilities		(95	)		(36	)
Accrued expenses and other current liabilities		319			1,235
Net cash used in operating activities