Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-35342 | |
Entity Registrant Name | LUMOS PHARMA, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 42-1491350 | |
Entity Address, Address Line One | 4200 Marathon Blvd #200 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78756 | |
City Area Code | 512 | |
Local Phone Number | 215-2630 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | LUMO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,344,707 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001126234 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 114,101 | $ 98,679 |
Prepaid expenses and other current assets | 5,306 | 3,506 |
Income tax receivable | 115 | 115 |
Other receivables | 79 | 26,149 |
Total current assets | 119,601 | 128,449 |
Non-current assets: | ||
Property and equipment, net | 100 | 335 |
Right-of-use asset | 361 | 249 |
Total non-current assets | 461 | 584 |
Total assets | 120,062 | 129,033 |
Current liabilities: | ||
Accounts payable | 357 | 244 |
Accrued expenses | 4,366 | 5,898 |
Current portion of lease liability | 261 | 319 |
Total current liabilities | 4,984 | 6,461 |
Long-term liabilities: | ||
Royalty obligation payable to Iowa Economic Development Authority | 6,000 | 6,000 |
Lease liability | 106 | 0 |
Total long-term liabilities | 6,106 | 6,000 |
Total liabilities | 11,090 | 12,461 |
Stockholders' equity: | ||
Undesignated preferred stock, $— par value: Authorized shares - 5,000,000 at March 31, 2021 and December 31, 2020; issued and outstanding shares - 0 at March 31, 2021 and December 31, 2020 | 0 | 0 |
Common stock, $0.01 par value: Authorized shares - 75,000,000 at March 31, 2021 and December 31, 2020; issued 8,335,570 and 8,305,269 at March 31, 2021 and December 31, 2020, respectively and outstanding 8,332,193 and 8,305,269 at March 31, 2021 and December 31, 2020, respectively | 83 | 83 |
Treasury stock, at cost, 3,377 and 0 at March 31, 2021 and December 31, 2020, respectively | (44) | 0 |
Additional paid-in capital | 183,555 | 182,480 |
Accumulated deficit | (74,622) | (65,991) |
Total stockholders' equity | 108,972 | 116,572 |
Total liabilities and stockholders' equity | $ 120,062 | $ 129,033 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Blank check preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Blank check preferred stock, authorized shares | 5,000,000 | 5,000,000 |
Blank check preferred stock, issued shares | 0 | 0 |
Blank check preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 75,000,000 | 75,000,000 |
Common stock, issued shares | 8,335,570 | 8,305,269 |
Common stock, outstanding shares | 8,332,193 | 8,305,269 |
Treasury stock, shares | 3,377 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Total revenues | $ 0 | $ 21 |
Operating expenses: | ||
Research and development | 4,660 | 1,905 |
General and administrative | 3,957 | 3,331 |
Total operating expenses | 8,617 | 5,236 |
Loss from operations | (8,617) | (5,215) |
Other income and expense: | ||
Other income, net | 20 | 136 |
Interest income | 3 | 4 |
Interest expense | (37) | (48) |
Other (expense) income, net | (14) | 92 |
Net loss before taxes | (8,631) | (5,123) |
Income tax benefit | 0 | 5,463 |
Net (loss) income | (8,631) | 340 |
Accretion of preferred stock to current redemption value | 0 | (651) |
Net loss attributable to common shareholders | $ (8,631) | $ (311) |
Net loss per share of common stock | ||
Basic and diluted loss per share (in dollars per share) | $ (1.04) | $ (0.14) |
Weighted average number of common shares outstanding | ||
Basic and diluted (in shares) | 8,316,888 | 2,189,758 |
Revenue, Product and Service [Extensible List] | License and collaboration revenue |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Redeemable Convertible Preferred Stock and Stockholders' Equity - USD ($) | Total | Preferred StockSeries A Redeemable Convertible Preferred Stock | Preferred StockSeries B Redeemable Convertible Preferred Stock | Common Stock | Treasury Stock, at cost | Additional Paid-in Capital | Accumulated Deficit |
Balance at beginning of period (in shares) at Dec. 31, 2019 | 978,849 | 1,989,616 | 1,177,933 | ||||
Balance at beginning of period at Dec. 31, 2019 | $ (59,463,000) | $ 21,904,000 | $ 41,631,000 | $ 12,000 | $ 0 | $ 202,000 | $ (59,677,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Accretion of preferred stock to current redemption value (pre-merger) | (651,000) | $ 216,000 | $ 435,000 | (651,000) | |||
Issuance of common stock to former stockholders of NewLink upon merger (in shares) | 4,146,405 | ||||||
Issuance of common stock to former stockholders of NewLink upon merger | 116,949,000 | $ 41,000 | 116,908,000 | ||||
Conversion of preferred stock into common stock upon merger (in shares) | (978,849) | (1,989,616) | 2,968,465 | ||||
Conversion of preferred stock into common stock upon merger | 64,186,000 | $ (22,120,000) | $ (42,066,000) | $ 30,000 | 64,156,000 | ||
Share-based compensation | 177,000 | 177,000 | |||||
Net (loss) income | 340,000 | 340,000 | |||||
Balance at end of period (in shares) at Mar. 31, 2020 | 0 | 0 | 8,292,803 | ||||
Balance at end of period at Mar. 31, 2020 | 121,538,000 | $ 0 | $ 0 | $ 83,000 | 0 | 181,443,000 | (59,988,000) |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 0 | 0 | 8,305,269 | ||||
Balance at beginning of period at Dec. 31, 2020 | 116,572,000 | $ 0 | $ 0 | $ 83,000 | 0 | 182,480,000 | (65,991,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 1,049,000 | 1,049,000 | |||||
Exercise of stock options (in shares) | 20,362 | ||||||
Exercise of stock options | 26,000 | 26,000 | |||||
Restricted stock vested (in shares) | 9,939 | ||||||
Shares surrendered for tax withholding on vested (in shares) | (3,377) | ||||||
Shares surrendered for tax withholding on vested awards | (44,000) | (44,000) | |||||
Net (loss) income | (8,631,000) | (8,631,000) | |||||
Balance at end of period (in shares) at Mar. 31, 2021 | 0 | 0 | 8,332,193 | ||||
Balance at end of period at Mar. 31, 2021 | $ 108,972,000 | $ 0 | $ 0 | $ 83,000 | $ (44,000) | $ 183,555,000 | $ (74,622,000) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows From Operating Activities | ||
Net (loss) income | $ (8,631) | $ 340 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Share-based compensation | 1,049 | 177 |
Depreciation and amortization | 170 | 9 |
In-process research and development charge | 0 | 426 |
Benefit for deferred taxes | 0 | (990) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (1,651) | 382 |
Other receivables | 70 | 61 |
Accounts payable and accrued expenses | (1,419) | 758 |
Income taxes receivable | 0 | (4,473) |
Net cash used in operating activities | (10,412) | (3,310) |
Cash Flows From Investing Activities | ||
Cash acquired in connection with merger | 0 | 84,179 |
Final installment from sale of priority review voucher | 26,000 | 0 |
Net cash provided by investing activities | 26,000 | 84,179 |
Cash Flows From Financing Activities | ||
Exercise of stock options | 26 | 0 |
Payment for tax withholding on vested awards | (44) | 0 |
Costs of common stock offering under Controlled Equity OfferingSM | (148) | 0 |
Net cash used in financing activities | (166) | 0 |
Net increase in cash and cash equivalents | 15,422 | 80,869 |
Cash and cash equivalents at beginning of period | 98,679 | 4,952 |
Cash and cash equivalents at end of period | $ 114,101 | $ 85,821 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Organization and Nature of operations Lumos Pharma, Inc. is a clinical-stage biopharmaceutical company. References in this Quarterly Report to “us,” “we,” “our,” “the Company,” or “Lumos” are to Lumos Pharma, Inc. and its wholly-owned subsidiaries. With our principal executive offices located in Austin, Texas and additional executive and administrative offices located in Ames, Iowa, we are engaged in advancing our clinical program and focused on identifying, acquiring, developing, and commercialization of novel products and new therapies for people with rare diseases on a global level , for which there is currently a significant unmet need for safe and effective therapies . Our common stock is listed on the NASDAQ Global Market (“Nasdaq”) and trades under the ticker symbol “LUMO.” The Company entered into a business combination (the “Merger”) between the Company, formerly known as NewLink Genetics Corporation (“NewLink”), Cyclone Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of NewLink, and Lumos Pharma, Inc., which has since been renamed “Lumos Pharma Sub, Inc.” (“Private Lumos”). The Merger closed on March 18, 2020, and Merger Sub merged with and into Private Lumos, with Private Lumos surviving as a wholly-owned subsidiary of the Company. Immediately prior to the closing of the Merger, the shares of NewLink common stock were adjusted with a reverse split ratio of 1‑for‑9. Under the terms of the Merger, Private Lumos stockholders received an aggregate of 4,146,398 shares of NewLink common stock (after giving effect to the reverse split) for each share of outstanding common stock, Series A Preferred Stock and Series B Preferred Stock of Private Lumos converted at an exchange ratio of 0.1308319305, 0.0873621142 and 0.1996348626 , respectively . Immediately following the reverse stock split and the completion of the Merger, there were 8,292,803 shares of the Company’s common stock outstanding , of which approximately 50% was held by each of Private Lumos and NewLink security holders. The Merger was accounted for as a reverse asset acquisition. After the consummation of the Merger, the combined company has focused its efforts on the development of Private Lumos’ sole product candidate, secretagogue ibutamoren (“LUM-201”), a potential oral therapy for pediatric growth hormone deficiency (“PGHD”) and other rare endocrine disorders. Liquidity and Risks The Company has historically devoted substantially all of its efforts toward research and development and has never earned revenue from commercial sales of its products. Management expects to continue to incur additional substantial losses in the foreseeable future as a result of the Company’s research and development activities. However, t he Company believes that its existing cash and cash equivalents of approximately $114.1 million as of March 31, 2021 will be sufficient to allow the Company to fund its operations through read out of the Phase 2b clinical trial for a subset of patients with PGHD indication under its LUM-201 product candidate and for at least 12 months from the filing date of this Quarterly Report. In addition, the Company may offer and sell from time to time through Cantor Fitzgerald & Co., as agent (the “Agent”) up to $50.0 million of shares of its common stock under the Controlled Equity Offering SM sales agreement entered into with the Agent on December 30, 2020. If available liquidity becomes insufficient to meet the Company’s obligations as they come due, our f uture operations will be reliant on additional equity or financing arrangements. There can be no assurances that, in the event that the Company requires additional financing, such financing will be available on terms which are favorable to the Company, or at all. If the Company is unable to raise additional funding to meet its working capital needs in the future, it will be forced to delay or reduce the scope of its research programs and/or limit or cease its operations. The pandemic caused by an outbreak of a novel strain of coronavirus, SARS-CoV-2, which causes COVID-19 (“COVID-19”), has resulted, and is likely to continue to result, in significant national and global economic disruption and may adversely affect the Company’s operations. The Company is actively monitoring the potential impact of COVID-19, if any, on the carrying value of certain assets and its continued operations. To date, we have experienced limited delays related to clinical trials as clinical sites adapt their procedures to caring for patients during a pandemic, however, we have not incurred impairment of any assets as a result of COVID-19. The extent to which these events may impact the Company’s business, clinical development, regulatory efforts, and the value of its common stock, will depend on future developments, which are highly uncertain and cannot be predicted at this time. The duration and intensity of these impacts and resulting disruption to the Company’s operations is uncertain, and the Company will continue to evaluate the impact that these events could have on the operations, financial position, and the results of operations and cash flows during fiscal year 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Recent Accounting Pronouncements | Summary of Significant Accounting Policies and Recent Accounting Pronouncements Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Lumos and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). All significant intercompany accounts and transactions are eliminated in consolidation . Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal and recurring nature considered necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements. The results of operations for the interim period are not necessarily indicative of the results that will be realized for the entire fiscal year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and accompanying notes thereto included in the Company’s 2020 Annual Report filed on Form 10-K with the SEC on March 9, 2021. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company ’s financial statements and accompanying notes. Significant management estimates that affect the reported amounts of assets and liabilities include useful lives of property and equipment, stock-based compensation, accruals for clinical trials and deferred tax assets. While we believe that the estimates and assumptions used in preparation of our condensed consolidated financial statements based on our knowledge of current events and actions that we may undertake in the future are appropriate, actual results could differ from those estimates, and any such differences may be material. As of March 31, 2021, the Company’s significant accounting policies are consistent with those discussed in Note 2 - “ Summary of Significant Accounting Policies and Recent Accounting Pronouncements ” of its consolidated financial statements included in the Company’s 2020 Annual Report filed on Form 10-K with the SEC on March 9, 2021. Recently Issued Accounting Standards From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by us as of a specified effective date, if applicable to us. In December 2019, the FASB issued ASU 2019-12, Income Taxes (“ASC 740”) , which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for calendar-year public business entities in 2021 and interim periods within that year. The Company adopted ASU 2019-12 as of January 1, 2021. The adoption of this new guidance did not have any impact on the Company's financial position or results of operations. |
NewLink Merger
NewLink Merger | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
NewLink Merger | NewLink Merger The Company completed the Merger on March 18, 2020. The Merger was accounted for as a reverse asset acquisition as NewLink did not meet the definition of a business pursuant to Topic 805 , Business Combinations, because NewLink did not have the ability to generate outputs. Private Lumos was deemed to be the accounting acquirer because immediately following the Merger: (i) Lumos stockholders owned approximately 50% of outstanding common stock of the Company, (ii) the board of directors of the Company (the “Board”) consisted of three members designated by Private Lumos, three members designated by NewLink and a seventh independent member unanimously appointed by the Board and (iii) the Company is led by Private Lumos’ current chief executive officer and chief scientific officer, with other current members of senior management from both Private Lumos and NewLink. For acc ounting purposes: (i) the assets acquired and liabilities assumed were recorded based on their estimated fair values on the Merger date, (ii) the reported historical operating results of the combined company prior to the Merger were those of Private Lumos and not of NewLink after retroactively giving effect to the common stock exchange ratio, reverse stock split and change in par value for all periods presented, and (iii) for periods prior to the transaction, shareholders’ authorized capital of the combined company is presented based on the historical authorized capital of NewLink. As the fair value of the NewLink net assets acquired, including the intangible assets of the priority review voucher (“PRV”) and in-process research and development (“IPR&D”) not previously reflected on NewLink’s balance sheet, were more clearly evident, fair valuing the net assets was determined to be a more reliable approach in determining the cost of net assets acquired. Except for the items noted herein, the fair value of the net assets acquired were determined to be the carrying value due to their short-term nature and ability to convert to cash. Based on most current observable inputs and trends in the market of the PRVs, we determined an estimated transaction price of the acquired PRV under the precedent transaction method to be $95.0 million, which was the observed median guideline in the range of publicly disclosed transactions of $80.0 million to $111.0 million from 2018 and through 2020. We applied a present value factor and estimated selling costs to the estimated transaction price to arrive at a fair value of the PR V . The PRV was recorded at an asset value of $87.9 million along with a corresponding liability due to Merck Sharp & Dohme Corp. (“Merck”) of $35.7 million. In addition, the Company recorded a deferred tax liability of $9.5 million on March 18, 2020 for the step up in book basis over tax basis for the net value of the PRV. The PRV was sold on July 27, 2020. T he Company recorded $9.5 million tax benefit for tax losses for the year ended December 31, 2020, and certain historical tax attributes realized as of the date of the Merger, both of which benefited from the deferred tax liability recorded for the step up in book basis over tax basis for the net value of the PRV. The fair value assigned to the acquired IPR&D was estimated based on the estimated expected net proceeds from the sales of these assets as intellectual property. As these assets were no longer being actively pursued in further clinical development by the Company, the IPR&D fair value of $426,000 were expensed to research and development expenses in the Statement of Operations for the three months ended March 31, 2020. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed on March 18, 2020, the date of the Merger (in thousands): Assets acquired: Cash and cash equivalents $ 84,179 Prepaid and other current assets 2,999 Income tax receivable 192 Property and equipment 1,020 Economic interest in PRV 87,920 Other intangible assets 426 Other non-current assets 517 Total Assets Acquired 177,253 Liabilities assumed: Accounts payable 285 Accrued expenses and other current liabilities 8,788 PRV-related liability owed to Merck 35,720 Royalty obligation payable to Iowa Economics Development Authority 6,000 Deferred tax liability 9,500 Other long-term liabilities 12 Total liabilities assumed 60,305 Total net assets acquired $ 116,948 |
License and Asset Purchase Agre
License and Asset Purchase Agreements | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
License and Asset Purchase Agreements | License and Asset Purchase Agreements License and LUM-201 Asset Purchase Agreements In July 2018, the Company entered into an asset purchase agreement (the “APA”) with Ammonett and acquired substantially all of the assets related to LUM-201, which Ammonett licensed from Merck in October 2013 (the “Lumos Merck Agreement”). The Lumos Merck Agreement, which grants Lumos (as successor in interest to Ammonett) worldwide, exclusive, sublicensable (subject to Merck’s consent in the United States, major European countries and Japan, such consent not to be unreasonably withheld) rights under specified patents and know-how to develop, manufacture and commercialize LUM-201 for any and all indications, excluding Autism Spectrum Disorders as defined in the Fifth Edition of the Diagnostic and Statistical Manual of Mental Disorders. On August 12, 2020, Lumos entered into Amendment No. 1 to the Lumos Merck Agreement with Merck (the “Lumos Merck Agreement Amendment”). Pursuant to the Lumos Merck Agreement Amendment, Lumos obtained from Merck a worldwide, non-exclusive, sublicensable (subject to Merck’s consent in the United States, specified major European countries and Japan, such consent not to be unreasonably withheld) license under the specified patents and know-how that are the subject of Lumos’ exclusive license to develop, manufacture and commercialize LUM-201 for diagnostic purposes, excluding Autism Spectrum Disorders. Under the APA, the Company paid Ammonett an upfront fee of $3.5 million which was recorded as research and development expense in 2018. The Company may also incur development milestone payments totaling up to $17.0 million for achievement of specified milestones on the first indication that Lumos pursues, up to $14.0 million for achievements of specified milestones on the second indication that Lumos pursues, sales milestone payments totaling up to $55.0 million on worldwide product sales, and royalty payments based on worldwide product sales, as discussed below. Under the Lumos Merck Agreement, Lumos will be required to pay Merck substantial development milestone payments for achievement of specified milestones relating to each of the first and second indications. Total potential development milestone payments are required up to $14.0 million for the first indication that Lumos pursues and up to $8.5 million for the second indication that Lumos pursues. Tiered sales milestone payments totaling up to $80.0 million are required on worldwide net product sales up to $1.0 billion, and substantial royalty payments based on product sales are required if product sales are achieved. If product sales are ever achieved, Lumos is required to make royalty payments under both the APA and the Lumos Merck Agreement collectively of 10% to 12% of total annual product net sales, subject to standard reductions for generic erosion. The royalty obligations under the Lumos Merck Agreement are on a product-by-product and country-by-country basis and will last until the later of expiration of the last licensed patent covering the product in such country and expiration of regulatory exclusivity for such product in such country. The royalty obligations under the APA are on a product-by-product and country-by-country basis for the duration of the royalty obligations under the Merck License and thereafter until the expiration of the last patent assigned to Lumos under the APA covering such product in such country. The Lumos Merck Agreement shall continue in force until the expiration of royalty obligations on a country-by-country and product-by-product basis, or unless terminated by Lumos at will by submitting 180 days’ advance written notice to Merck or by either party for the other party’s uncured material breach or specified bankruptcy events. Upon expiry of the royalty obligations the Lumos Merck Agreement converts to a fully paid, perpetual non-exclusive license. If the Lumos Merck Agreement is terminated, and upon Merck’s written request, Lumos is obligated to use reasonable and diligent efforts to assign to Merck any sublicenses previously granted by Lumos. License and PRV Asset Purchase Agreements In November 2014, NewLink entered into a worldwide license and collaboration agreement (the “NewLink Merck Agreement”), with Merck, to develop and potentially commercialize its Ebola vaccine rVSV∆G-ZEBOV that it licensed from the Public Health Agency of Canada (“ PHAC ”). rVSV∆G-ZEBOV was also eligible to receive a PRV if approval was granted by the U.S. Food and Drug Administration (the “FDA”), with the Company entitled to 60% and Merck entitled to the remaining 40% of the PRV value obtained through sale, transfer or other disposition of the PRV. On December 20, 2019, Merck announced that the FDA approved its application for ERVEBO® (Ebola Zaire Vaccine, Live) for the prevention of disease caused by Zaire Ebola virus in individuals 18 years of age and older. On July 27, 2020, Lumos and Merck entered into the asset purchase agreement (the “PRV Asset Purchase Agreement”), whereby Lumos and Merck each agreed that Merck would purchase the PRV from the Company for $100.0 million. Merck agreed to pay the Company $60 million, representing its share of the purchase price in two installments. The $35.7 million liability, representing the portion of the PRV value to which Merck was entitled, was also extinguished through the PRV Asset Purchase Agreement. The first installment of $34.0 million was received by the Company at the closing on July 27, 2020 and the final installment of $26.0 million was received on January 11, 2021. The Company recognized a gain of $6.3 million, net of $1.5 million in costs incurred, from the sale of the PRV and such gain was recorded within other income, net on the condensed consolidated statements of operations for the three months ended September 30, 2020. Under the NewLink Merck Agreement, as amended , the Company has the potential to earn royalties on sales of the vaccine in certain countries, if the vaccine is successfully commercialized by Merck. However, we believe that the market for the vaccine will be limited primarily to areas in the developing world that are excluded from royalty payment or where the vaccine is donated or sold at low or no margin, and therefore we do not expect to receive material royalty payments from Merck in the foreseeable future. For the three months ended March 31, 2021 and 2020, the Company recognized revenues of $0 and $21,000, respectively, for work the Company performed in relation to ERVEBO®, as a subcontractor of Merck . |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company has certain facility leases with non-cancellable terms ranging up-to two years, with certain renewal options. The Company records lease liabilities based on the present value of lease payments over the lease term using an incremental borrowing rate to discount its lease liabilities, as the rate implicit in the lease is typically not readily determinable. To compute the present value of the lease liability, the Company used a weighted-average discount rate of 4%. Certain lease agreements include renewal options that are under the Company’s control. The Company includes optional renewal periods in the lease term only when it is reasonably certain that the Company will exercise its option. The weighted-average remaining lease term as of March 31, 2021 is 1.5 years. The Company does not separate lease components from non-lease components. Variable lease payments include payments to lessors for taxes, maintenance, insurance and other operating costs as well as payments that are adjusted based on an index or rate. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants. Future minimum lease payments under the non-cancellable operating leases (with initial or remaining lease terms in excess of one year) as of March 31, 2021 are as follows (in thousands), excluding option renewals: For the Period Ended March 31: 2021 $ 230 2022 117 2023 29 Total future minimum lease payments 376 Less: Imputed interest (9) Total $ 367 |
Stock-Based Compensation and Em
Stock-Based Compensation and Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation and Employee Benefit Plans | Stock-Based Compensation and Employee Benefit Plans Stock Options and Performance Stock Options In 2012, Private Lumos adopted the 2012 Equity Incentive Plan (“2012 Plan”), and in 2016 it adopted the 2016 Stock Plan (“2016 Plan” and together with the 2012 Plan, the “Plans”). In connection with the Merger, all outstanding options under the Plans were assumed and such assumed options may be exercised to purchase common stock of the Company after the Merger. Subsequent to the Merger, the Plans were terminated as to future awards . In connection with the Merger, the Company assumed NewLink’s 2009 Equity Incentive Plan which was effective since July 2009 and was subsequently amended on May 9 , 2019 (the “2019 Plan”) . The 2019 Plan has a 10 year term from the Board adoption date of March 22, 2019 and on January 1 of each year through January 1, 2029, in accordance with an “evergreen provision”, a number of shares of common stock in an amount equal to 3% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year or such lesser amount of shares (or no shares) approved by the Board, will be added to the shares reserved under the 2019 Plan. The 2019 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and stock appreciation rights to officers, employees, members of the Board, advisors, and consultants to the Company . As of March 31, 2021, we had 535,641 shares available for grant under the 2019 Plan. In connection with the Merger , the Company re-valued the assumed stock options, and it did not result in a material incremental expense for the three months ended March 31, 2020. The table below summarizes the stock option activity, including options with market and performance conditions , during the three months ended March 31, 2021 : Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at beginning of period 958,945 $ 9.59 7.5 Options granted 225,829 17.36 Options exercised (20,362) 1.34 Options forfeited (5,684) 7.78 Options expired (142) 3.60 Outstanding at end of period 1,158,586 $ 11.26 7.2 Options exercisable at end of period 484,082 $ 10.76 5.3 The weighted-average assumptions used to value the stock options using the Black-Scholes option-pricing were as follows : Risk-free interest rate 0.28% to 0.78% Expected dividend yield —% Expected volatility 77.2% to 89.8% Expected term (in years) 3.0 to 7.7 Weighted-average grant-date fair value per share $12.66 2010 Non-Employee Directors' Stock Award Plan In connection with the Merger , the Company assumed NewLink’s 2010 Non-Employee Directors’ Stock Award Plan (the "Directors’ Plan") which was effective on November 10, 2011. As of March 31, 2021, 7,826 shares remain available for grant under the Directors' Plan. 2010 Employee Stock Purchase Plan In connection with the Merger , the Company assumed NewLink’s 2010 Employee Stock Purchase Plan (the "2010 Purchase Plan"), which was effective on November 10, 2011. As of March 31, 2021, 695 shares remain available for issuance under the 2010 Purchase Plan. Restricted Stock Units The table below summarizes the restricted stock units activity during the three months ended March 31, 2021 : Number of restricted shares Weighted average grant date fair value Unvested at beginning of period 73,754 $ 7.86 Granted 8,451 17.39 Vested (9,939) 8.77 Forfeited/cancelled (709) 7.78 Unvested at end of period 71,557 $ 8.86 Share-Based Compensation Expense Stock-based compensation expenses included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020 were (in thousands): Three Months Ended March 31, 2021 2020 Research and development $ 455 $ — General and administrative 594 177 Total $ 1,049 $ 177 As of March 31, 2021, we had unrecognized compensation cost of $5.1 million and the weighted-average period over which it is expected to be recognized is 3.5 years. |
Long-Term Debt and Conversion t
Long-Term Debt and Conversion to Royalty Obligation | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Conversion to Royalty Obligation | Long-Term Debt and Conversion to Royalty ObligationIn March 2005, NewLink entered into a $6.0 million forgivable loan agreement with the Iowa Department of Economic Development (the “IDED”). Under the agreement, in the absence of default, there were no principal or interest payments due until the completion date for the project. This loan was converted into a royalty obligation under the terms of a settlement agreement entered into on March 26, 2012 (the “IEDA Agreement”), with the Iowa Economic Development Authority (the “IEDA”), as successor in interest to the IDED. Under the terms of the IEDA Agreement the Company agreed to pay a 0.5% royalty on future product sales up to a cap of $6.8 million. As no payments are expected in the next 12 months, the entire royalty obligation of $6.0 million, which we assumed in connection with the Merger, is considered as long-term liability as of March 31, 2021. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended March 31, 2021, the Company recorded no income tax benefit. For the three months ended March 31, 2020, the Company recorded an income tax benefit of $5.5 million. The income tax benefit is as follows (in thousands): Three Months Ended March 31, 2021 2020 Current tax benefit $ — $ 4,473 Deferred tax benefit — 990 Total income tax benefit $ — $ 5,463 On March 25, 2020, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law to provide emergency assistance to affected individuals, families, and businesses. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses. The CARES Act amends the net operating losses ("NOLs") provisions of the Tax Cut and Jobs Act of 2017 (the "Tax Act"), providing for a five year carryback for NOLs generated in tax years beginning after December 31, 2017 and before January 1, 2021. A tax benefit of $4.5 million related to pre-tax NOLs was carried back to each of the five taxable years to fully offset taxable income with a receivable recorded for this amount as of March 31, 2020. The Company received the full refund in July 2020. The income tax amount for the three months ended March 31, 2021 differs from the amount that would be expected after applying the statutory U.S. federal income tax rate primarily due to an increase in the valuation allowance. The income tax amount for the three months ended March 31, 2020 differs from the amount that would be expected after applying the statutory U.S. federal income tax rate primarily due to the benefit of $4.5 million recorded as a result of the CARES Act. Additionally, the income tax benefit for the three months ended March 31, 2020 includes $1.0 million for the release of the valuation allowance related to Private Lumos NOLs and a current period benefit for losses the Company anticipated will be offset by future income. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Due to the uncertainty of the Company’s ability to realize the benefit of the deferred tax assets, the net deferred tax assets are fully offset by a valuation allowance at March 31, 2021. Based on Section 382 ownership change analyses through March 18, 2020, as a result of the Merger, both historical NewLink and Private Lumos experienced Section 382 ownership changes on March 18, 2020. |
Net Income (Loss) per Share of
Net Income (Loss) per Share of Common Stock | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Share of Common Stock | Net Income (Loss) per Share of Common Stock Basic loss per share is based upon the weighted-average number of shares of common stock outstanding during the period, without consideration of common stock equivalents. Diluted loss per share is based upon the weighted-average number of common shares outstanding during the period plus additional weighted-average potentially dilutive common stock equivalents during the period when the effect is dilutive. The following table presents the computation of basic and diluted income (loss) per share of common stock (in thousands, except share and per share data) and the number of unexercised stock options and restricted stock units, which are common stock equivalents, that have been excluded from the diluted net loss calculation as their effect would have been anti-dilutive for all periods presented: Three Months Ended 2021 2020 Net (loss) income $ (8,631) $ 340 Accretion of preferred stock to current redemption value — (651) Net loss attributable to common shareholders $ (8,631) $ (311) Weighted-average shares outstanding - Basic and diluted 8,316,888 2,189,758 Net loss per share - Basic and diluted $ (1.04) $ (0.14) Anti-dilutive stock options 1,158,586 578,264 Anti-dilutive restricted stock units 71,557 — Total anti-dilutive common stock equivalents excluded 1,230,143 578,264 |
Restructuring and Severance Cha
Restructuring and Severance Charges | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Severance Charges | Restructuring and Severance Charges On February 4, 2021, Eugene P. Kennedy, M.D., notified the Company that he would be resigning from his position as the Company's Chief Medical Officer effective March 6, 2021. As per the terms of Dr. Kennedy's employment agreement relating to change in control benefits, the Company will pay approximately $0.7 million, accelerate vesting of all non-vested equity awards and allow for a twenty four month extension of the exercise period after the separation date to exercise any vested equity awards. For the three months ended March 31, 2021, we recognized additional stock compensation expense of approximately $0.7 million due to accelerated vesting of all non-vested equity awards held by Dr. Kennedy. On September 30, 2019, prior to the Merger, NewLink adopted a restructuring plan to reduce its headcount by approximately 60%, which consisted primarily of clinical and research and development staff, and made several changes to senior leadership in order to conserve resources. In conjunction with the restructuring and departure of former NewLink executives, NewLink recorded restructuring and severance charges of $5.6 million during the year ended December 31, 2019. The following table shows the amount accrued for restructuring activities which is recorded within accrued expenses in the condensed consolidated balance sheets (in thousands): Total Employee Severance Cost NewLink's accrued balance as of December 31, 2020 $ 59 Expensed — Cash payments 51 Balance as of March 31, 2021 $ 8 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, claims are asserted against the Company arising in the ordinary course of business. In the opinion of management, liabilities, if any, arising from existing claims are not expected to have a material effect on the Company’s earnings, financial position, or liquidity. On or about May 12, 2016, Trevor Abramson filed a putative securities class action lawsuit in the United States District Court for the Southern District of New York (the “Court for the Southern District of NY”), captioned Abramson v. NewLink Genetics Corp., et al., Case 1:16-cv-3545 (the “Securities Action”). Subsequently, the Court for the Southern District of NY appointed Michael and Kelly Nguyen as lead plaintiffs and approved their selection of Kahn, Swick & Foti, LLC as lead counsel in the Securities Action. On October 31, 2016, the lead plaintiffs filed an amended complaint asserting claims under the federal securities laws against the Company, the Company’s former Chief Executive Officer Charles J. Link, Jr., and the Company’s former Chief Medical Officer and President Nicholas Vahanian, (collectively, the “Defendants”). The amended complaint alleges the Defendants made material false and/or misleading statements that caused losses to the Company’s investors. The Defendants filed a motion to dismiss the amended complaint on July 14, 2017. On March 29, 2018, the Court for the Southern District of NY dismissed the amended complaint for failure to state a claim, without prejudice, and gave the lead plaintiffs until May 4, 2018 to file any amended complaint attempting to remedy the defects in their claims. On May 4, 2018, the lead plaintiffs filed a second amended complaint asserting claims under the federal securities laws against the Defendants. Like the first amended complaint, the second amended complaint alleges that the Defendants made material false and/or misleading statements or omissions relating to the Phase 2 and 3 trials and efficacy of the product candidate algenpantucel-L that caused losses to the Company’s investors. The lead plaintiffs do not quantify any alleged damages in the second amended complaint but, in addition to attorneys’ fees and costs, they sought to recover damages on behalf of themselves and other persons who purchased or otherwise acquired the Company’s stock during the putative class period of September 17, 2013 through May 9, 2016, inclusive, at allegedly inflated prices and purportedly suffered financial harm as a result. The Defendants filed a motion to dismiss the second amended complaint on July 31, 2018. On February 13, 2019, the Court for the Southern District of NY dismissed the second amended complaint for failure to state a claim, with prejudice, and closed the case. On March 14, 2019, lead plaintiffs filed a notice of appeal. The briefing on lead plaintiffs' appeal was completed in early July 2019 and oral argument before the Second Circuit Court of Appeals was held on October 21, 2019. In an opinion dated July 13, 2020, the Second Circuit Court of Appeals affirmed the district court’s dismissal of the second amended complaint in part, vacated the district court’s dismissal of the second amended complaint in part, and remanded the matter to the district court for further proceedings. On August 6, 2020, the Defendants filed a Petition for Rehearing en banc requesting reconsideration of portions of the opinion from the Second Circuit Court of Appeals. The Second Circuit Court of Appeals denied the Petition on September 8, 2020 and issued a mandate to the Court for the Southern District of NY on September 15, 2020. On December 16, 2020, the Company reached a settlement in principle to fully resolve the Securities Action, and on February 1, 2021, a motion for preliminary approval of the settlement was filed in the Court for the Southern District of NY. On February 25, 2021 the Court for the Southern District of NY denied the motion for preliminary approval and directed the parties to re-submit the motion with certain revisions. On March 24, 2021 the parties re-submitted the motion for preliminary approval, which the Court for the Southern District of NY granted on April 2, 2021. The parties’ agreement, which remains subject to final court approval and certain other conditions, provides in part for a $13.5 million settlement payment in exchange for the dismissal and a release of all claims against the Defendants in connection with the Securities Action. The full amount of the settlement payment is expected to be paid by the Company’s insurance provider under its insurance policy. The final settlement approval hearing before the Court for the Southern District of NY is currently set for September 22, 2021. On or about April 26, 2017, Ronald Morrow filed a shareholder derivative lawsuit on behalf of the Company in the Court for the Southern District of NY, against the Company’s former Chief Executive Officer Charles J. Link, Jr., the Company’s |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 16, 2021, Carl W. Langren, notified the Company that he would be retiring from his position as the Company's Chief Financial Officer effective July 4, 2021. As per the terms of Carl W. Langren's employment agreement relating to change in control benefits, the Company will pay approximately $1.0 million, accelerate vesting of all non-vested equity awards and allow for a twenty four month extension of the exercise period after the separation date to exercise any vested equity awards. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Lumos and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). All significant intercompany accounts and transactions are eliminated in consolidation . |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal and recurring nature considered necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements. The results of operations for the interim period are not necessarily indicative of the results that will be realized for the entire fiscal year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and accompanying notes thereto included in the Company’s 2020 Annual Report filed on Form 10-K with the SEC on March 9, 2021. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company ’s financial statements and accompanying notes. Significant management estimates that affect the reported amounts of assets and liabilities include useful lives of property and equipment, stock-based compensation, accruals for clinical trials and deferred tax assets. While we believe that the estimates and assumptions used in preparation of our condensed consolidated financial statements based on our knowledge of current events and actions that we may undertake in the future are appropriate, actual results could differ from those estimates, and any such differences may be material. As of March 31, 2021, the Company’s significant accounting policies are consistent with those discussed in Note 2 - “ Summary of Significant Accounting Policies and Recent Accounting Pronouncements ” |
Recently Issued Accounting Standards | Recently Issued Accounting Standards From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by us as of a specified effective date, if applicable to us. In December 2019, the FASB issued ASU 2019-12, Income Taxes (“ASC 740”) , which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for calendar-year public business entities in 2021 and interim periods within that year. The Company adopted ASU 2019-12 as of January 1, 2021. The adoption of this new guidance did not have any impact on the Company's financial position or results of operations. |
NewLink Merger (Tables)
NewLink Merger (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Reverse Recapitalization | The following table summarizes the estimated fair value of the assets acquired and liabilities assumed on March 18, 2020, the date of the Merger (in thousands): Assets acquired: Cash and cash equivalents $ 84,179 Prepaid and other current assets 2,999 Income tax receivable 192 Property and equipment 1,020 Economic interest in PRV 87,920 Other intangible assets 426 Other non-current assets 517 Total Assets Acquired 177,253 Liabilities assumed: Accounts payable 285 Accrued expenses and other current liabilities 8,788 PRV-related liability owed to Merck 35,720 Royalty obligation payable to Iowa Economics Development Authority 6,000 Deferred tax liability 9,500 Other long-term liabilities 12 Total liabilities assumed 60,305 Total net assets acquired $ 116,948 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Maturity of Operating Lease Liabilities | Future minimum lease payments under the non-cancellable operating leases (with initial or remaining lease terms in excess of one year) as of March 31, 2021 are as follows (in thousands), excluding option renewals: For the Period Ended March 31: 2021 $ 230 2022 117 2023 29 Total future minimum lease payments 376 Less: Imputed interest (9) Total $ 367 |
Stock-Based Compensation and _2
Stock-Based Compensation and Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Option Activity | The table below summarizes the stock option activity, including options with market and performance conditions , during the three months ended March 31, 2021 : Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at beginning of period 958,945 $ 9.59 7.5 Options granted 225,829 17.36 Options exercised (20,362) 1.34 Options forfeited (5,684) 7.78 Options expired (142) 3.60 Outstanding at end of period 1,158,586 $ 11.26 7.2 Options exercisable at end of period 484,082 $ 10.76 5.3 |
Assumptions Used in Black-Scholes Pricing Model for New Grants | The weighted-average assumptions used to value the stock options using the Black-Scholes option-pricing were as follows : Risk-free interest rate 0.28% to 0.78% Expected dividend yield —% Expected volatility 77.2% to 89.8% Expected term (in years) 3.0 to 7.7 Weighted-average grant-date fair value per share $12.66 |
Restricted Stock Activity | The table below summarizes the restricted stock units activity during the three months ended March 31, 2021 : Number of restricted shares Weighted average grant date fair value Unvested at beginning of period 73,754 $ 7.86 Granted 8,451 17.39 Vested (9,939) 8.77 Forfeited/cancelled (709) 7.78 Unvested at end of period 71,557 $ 8.86 |
Share-based Compensation Expense | Stock-based compensation expenses included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020 were (in thousands): Three Months Ended March 31, 2021 2020 Research and development $ 455 $ — General and administrative 594 177 Total $ 1,049 $ 177 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The income tax benefit is as follows (in thousands): Three Months Ended March 31, 2021 2020 Current tax benefit $ — $ 4,473 Deferred tax benefit — 990 Total income tax benefit $ — $ 5,463 |
Net Income (Loss) per Share o_2
Net Income (Loss) per Share of Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss per Common Share | The following table presents the computation of basic and diluted income (loss) per share of common stock (in thousands, except share and per share data) and the number of unexercised stock options and restricted stock units, which are common stock equivalents, that have been excluded from the diluted net loss calculation as their effect would have been anti-dilutive for all periods presented: Three Months Ended 2021 2020 Net (loss) income $ (8,631) $ 340 Accretion of preferred stock to current redemption value — (651) Net loss attributable to common shareholders $ (8,631) $ (311) Weighted-average shares outstanding - Basic and diluted 8,316,888 2,189,758 Net loss per share - Basic and diluted $ (1.04) $ (0.14) Anti-dilutive stock options 1,158,586 578,264 Anti-dilutive restricted stock units 71,557 — Total anti-dilutive common stock equivalents excluded 1,230,143 578,264 |
Restructuring and Severance C_2
Restructuring and Severance Charges (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table shows the amount accrued for restructuring activities which is recorded within accrued expenses in the condensed consolidated balance sheets (in thousands): Total Employee Severance Cost NewLink's accrued balance as of December 31, 2020 $ 59 Expensed — Cash payments 51 Balance as of March 31, 2021 $ 8 |
Description of Business (Detail
Description of Business (Details) $ in Thousands | Dec. 30, 2020USD ($) | Mar. 19, 2020 | Mar. 18, 2020shares | Mar. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Conversion of Stock [Line Items] | |||||||
Stock conversion ratio | 0.1111 | ||||||
Common stock, outstanding shares | shares | 8,292,803 | 8,332,193 | 8,305,269 | ||||
Cash and cash equivalents | $ | $ 114,101 | $ 98,679 | $ 85,821 | $ 4,952 | |||
Controlled Equity Offering | |||||||
Conversion of Stock [Line Items] | |||||||
Stock issued during period | $ | $ 50,000 | ||||||
Private Lumos Stockholders | NewLink Genetics | |||||||
Conversion of Stock [Line Items] | |||||||
Ownership percentage after transaction | 0.50 | ||||||
Former Stockholders | |||||||
Conversion of Stock [Line Items] | |||||||
Ownership percentage after transaction | 0.50 | ||||||
Common Stock | |||||||
Conversion of Stock [Line Items] | |||||||
Stock conversion ratio | 0.1308319305 | ||||||
Common Stock | Private Lumos Stockholders | |||||||
Conversion of Stock [Line Items] | |||||||
Aggregate shares received (in shares) | shares | 4,146,398 | ||||||
Series A Redeemable Convertible Preferred Stock | |||||||
Conversion of Stock [Line Items] | |||||||
Stock conversion ratio | 0.0873621142 | ||||||
Series B Redeemable Convertible Preferred Stock | |||||||
Conversion of Stock [Line Items] | |||||||
Stock conversion ratio | 0.1996348626 |
NewLink Merger (Details)
NewLink Merger (Details) | Mar. 19, 2020 | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Mar. 18, 2020USD ($)director |
Business Acquisition [Line Items] | |||||
Number of directors | director | 3 | ||||
In-process research and development charge | $ 0 | $ 426,000 | |||
Private Lumos Stockholders | |||||
Business Acquisition [Line Items] | |||||
Number of directors | director | 3 | ||||
Private Lumos Stockholders | NewLink Genetics | |||||
Business Acquisition [Line Items] | |||||
Ownership percentage after transaction | 0.50 | ||||
Merck | License and Collaborative Arrangement | |||||
Business Acquisition [Line Items] | |||||
Estimated transaction price | $ 95,000,000 | ||||
Step up in basis in the PRV | $ 9,500,000 | ||||
Economic interest in PRV | 87,900,000 | ||||
PRV-related liability owed to Merck | 35,700,000 | ||||
Deferred tax liability | 9,500,000 | ||||
Merck | License and Collaborative Arrangement | Minimum | |||||
Business Acquisition [Line Items] | |||||
Observed transaction price | 80,000,000 | ||||
Merck | License and Collaborative Arrangement | Maximum | |||||
Business Acquisition [Line Items] | |||||
Observed transaction price | 111,000,000 | ||||
NewLink Genetics | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 84,179,000 | ||||
Prepaid and other current assets | 2,999,000 | ||||
Income tax receivable | 192,000 | ||||
Property and equipment | 1,020,000 | ||||
Economic interest in PRV | 87,920,000 | ||||
Other intangible assets | 426,000 | ||||
Other non-current assets | 517,000 | ||||
Total Assets Acquired | 177,253,000 | ||||
Accounts payable | 285,000 | ||||
Accrued expenses and other current liabilities | 8,788,000 | ||||
PRV-related liability owed to Merck | 35,720,000 | ||||
Royalty obligation payable to Iowa Economics Development Authority | 6,000,000 | ||||
Deferred tax liability | 9,500,000 | ||||
Other long-term liabilities | 12,000 | ||||
Total liabilities assumed | 60,305,000 | ||||
Total net assets acquired | $ 116,948,000 |
License and Asset Purchase Ag_2
License and Asset Purchase Agreements (Details) | Jul. 27, 2020USD ($)installment | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2018USD ($) | Jan. 11, 2021USD ($) | Mar. 18, 2020 | Nov. 30, 2014 |
Ammonett | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Upfront payments | $ 3,500,000 | |||||||
Acquisition development milestone payments | 17,000,000 | |||||||
Acquisition specific milestone payments | 14,000,000 | |||||||
Acquisition sales milestone payments | $ 55,000,000 | |||||||
Merck | License and collaboration revenue | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Grant revenue | $ 0 | $ 21,000 | ||||||
License and Collaborative Arrangement | Merck | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Collaborative arrangement development milestone payments | 14,000,000 | |||||||
Collaborative arrangement tiered sales milestone payments | 80,000,000 | |||||||
Collaborative arrangement second indication development milestone payments | 8,500,000 | |||||||
Net product sales milestone | $ 1,000,000,000 | |||||||
Value of PRV company is entitled to | 60.00% | |||||||
Value of PRV liability | 40.00% | |||||||
Value of PRV | $ 35,700,000 | |||||||
License and Collaborative Arrangement | Merck | Minimum | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Royalty obligation percent of annual product net sales | 10.00% | |||||||
License and Collaborative Arrangement | Merck | Maximum | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Royalty obligation percent of annual product net sales | 12.00% | |||||||
License and Collaborative Arrangement | Merck | Held-for-sale or Disposed of by Sale | PRV Transfer Agreement | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Value of PRV | 100,000,000 | |||||||
Gross proceeds from sale | $ 60,000,000 | |||||||
Number of installments | installment | 2 | |||||||
Cash from sale | $ 34,000,000 | |||||||
Consideration receivable | $ 26,000,000 | |||||||
Gain on sale of priority review voucher | $ 6,300,000 | |||||||
Costs incurred from sale | $ 1,500,000 |
Leases (Details)
Leases (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Lessee, Lease, Description [Line Items] | |
Operating lease weighted average discount rate | 4.00% |
Operating lease weighted average remaining lease term | 1 year 6 months |
Operating Lease Liabilities Payments Due | |
2021 | $ 230 |
2022 | 117 |
2023 | 29 |
Total future minimum lease payments | 376 |
Less: Imputed interest | (9) |
Total | $ 367 |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of operating lease contract | 2 years |
Stock-Based Compensation and _3
Stock-Based Compensation and Employee Benefit Plans (Narrative) (Details) - USD ($) $ in Millions | May 09, 2019 | Mar. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Unrecognized compensation cost | $ 5.1 | |
Weighted average vesting period for non-vested option awards, in years | 3 years 6 months | |
2009 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Plan term | 10 years | |
Evergreen increase (percent) | 3.00% | |
Number of shares remained available for issuance | 535,641 | |
2010 Non-Employee Directors' Stock Option Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of shares remained available for issuance | 7,826 | |
2010 Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of shares remained available for issuance | 695 |
Stock-Based Compensation and _4
Stock-Based Compensation and Employee Benefit Plans (Stock Option Activity) (Details) - Stock Option - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Number of options | ||
Outstanding at beginning of period (in shares) | 958,945 | |
Options granted (in shares) | 225,829 | |
Options exercised (in shares) | (20,362) | |
Options forfeited (in shares) | (5,684) | |
Options expired (in shares) | (142) | |
Outstanding at end of period (in shares) | 1,158,586 | 958,945 |
Weighted average exercise price | ||
Outstanding, weighted average exercise price at beginning of period (in dollars per share) | $ 9.59 | |
Granted, weighted average exercise price (in dollars per share) | 17.36 | |
Exercised, weighted average exercise price (in dollars per share) | 1.34 | |
Forfeited, weighted average exercise price (in dollars per share) | 7.78 | |
Expired, weighted average exercise price (in dollars per share) | 3.60 | |
Outstanding, weighted average exercise price at end of period (in dollars per share) | $ 11.26 | $ 9.59 |
Options exercisable at end of period (in shares) | 484,082 | |
Exercisable, weighted average exercise price (in dollars per share) | $ 10.76 | |
Outstanding, weighted average remaining contractual term, in years | 7 years 2 months 12 days | 7 years 6 months |
Exercisable, weighted average remaining contractual term, in years | 5 years 3 months 18 days |
Stock-Based Compensation and _5
Stock-Based Compensation and Employee Benefit Plans (Range of Assumptions Used) (Details) - Stock Option | 3 Months Ended |
Mar. 31, 2021$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Expected dividend rate (percent) | 0.00% |
Weighted-average grant-date fair value per share (in dollars per share) | $ 12.66 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Risk-free interest rate | 0.28% |
Expected volatility | 77.20% |
Expected term (in years) | 3 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Risk-free interest rate | 0.78% |
Expected volatility | 89.80% |
Expected term (in years) | 7 years 8 months 12 days |
Stock-Based Compensation and _6
Stock-Based Compensation and Employee Benefit Plans (Restricted Stock Activity) (Details) - Restricted Stock | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Unvested at beginning of period (in shares) | shares | 73,754 |
Granted (in shares) | shares | 8,451 |
Vested (in shares) | shares | (9,939) |
Forfeited / cancelled (in shares) | shares | (709) |
Unvested at end of period (in shares) | shares | 71,557 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Weighted average grant date fair value at beginning of period (in dollars per share) | $ / shares | $ 7.86 |
Weighted average grant-date fair value per share (in dollars per share) | $ / shares | 17.39 |
Vested, weighted average grant date fair value (in dollars per share) | $ / shares | 8.77 |
Forfeited/cancelled, weighted average grant date fair value (in dollars per share) | $ / shares | 7.78 |
Weighted average grant date fair value at end of period (in dollars per share) | $ / shares | $ 8.86 |
Stock-Based Compensation and _7
Stock-Based Compensation and Employee Benefit Plans (Allocated Share-based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 1,049 | $ 177 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 455 | 0 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 594 | $ 177 |
Long-Term Debt and Conversion_2
Long-Term Debt and Conversion to Royalty Obligation (Details) - Loans payable - USD ($) $ in Millions | Mar. 31, 2021 | Mar. 31, 2015 |
IDED | ||
Debt Instrument [Line Items] | ||
Loan available balance | $ 6 | |
Royalty rate | 0.50% | |
Outstanding balance | $ 6 | |
IEDA | ||
Debt Instrument [Line Items] | ||
Royalty sales cap | $ 6.8 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Current tax benefit | $ 0 | $ 4,473 |
Deferred tax benefit | 0 | 990 |
Total income tax benefit | 0 | 5,463 |
Pre-tax NOL to be carried back | 4,500 | |
Release of valuation allowance | $ 1,000 | |
Reserve for uncertain tax positions | $ 1,200 |
Net Income (Loss) per Share o_3
Net Income (Loss) per Share of Common Stock (Net Income Per Share Computation) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net (loss) income | $ (8,631) | $ 340 |
Accretion of preferred stock to current redemption value | 0 | (651) |
Net loss attributable to common shareholders | $ (8,631) | $ (311) |
Weighted-average shares outstanding - basic and diluted (in shares) | 8,316,888 | 2,189,758 |
Net income (loss) per share - Basic and diluted (in dollars per share) | $ (1.04) | $ (0.14) |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,230,143 | 578,264 |
Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,158,586 | 578,264 |
Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 71,557 | 0 |
Restructuring and Severance C_3
Restructuring and Severance Charges - Narrative (Details) - USD ($) $ in Thousands | Feb. 04, 2021 | Sep. 30, 2019 | Mar. 31, 2021 | Jun. 30, 2020 |
Restructuring Charges | ||||
Accelerated vesting expense | $ 700 | |||
Percentage reduction in force | 60.00% | |||
Expensed | $ 0 | $ 5,600 | ||
Chief Medical Officer | ||||
Restructuring Charges | ||||
Accelerated vesting expense | $ 700 | |||
Extension of exercise period | 24 months |
Restructuring and Severance C_4
Restructuring and Severance Charges - Restructuring Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2021 | Jun. 30, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | $ 59 | |
Expensed | 0 | $ 5,600 |
Cash payments | 51 | |
Balance at end of period | $ 8 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Apr. 02, 2021USD ($) |
Abramson v NewLink Genetics Corp | Settled Litigation | Subsequent Event | |
Loss Contingencies [Line Items] | |
Litigation settlement payment | $ 13.5 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Apr. 16, 2021 | Mar. 31, 2021 |
Subsequent Event [Line Items] | ||
Accelerated vesting expense | $ 0.7 | |
Subsequent Event | Chief Financial Officer | ||
Subsequent Event [Line Items] | ||
Accelerated vesting expense | $ 1 | |
Extension of exercise period | 24 months |