kdny-10q_20200930.htm
false Q3 Yes 0001435049 --12-31 Yes 0.20 true true us-gaap:AccountingStandardsUpdate201813Member P5Y 0.20 0.20 2029-12-31 0.20 P7Y3M18D P9Y2M12D P9Y10M24D P6M P6M P6Y2M12D P6Y P9Y8M12D 0.750 0.694 0.797 0.708 0.0045 0.0152 0.0134 0.0319 0001435049 2020-01-01 2020-09-30 xbrli:shares 0001435049 2020-11-02 iso4217:USD 0001435049 2020-09-30 0001435049 2019-12-31 iso4217:USD xbrli:shares 0001435049 us-gaap:LicenseAndServiceMember 2020-07-01 2020-09-30 0001435049 us-gaap:LicenseAndServiceMember 2019-07-01 2019-09-30 0001435049 us-gaap:LicenseAndServiceMember 2020-01-01 2020-09-30 0001435049 us-gaap:LicenseAndServiceMember 2019-01-01 2019-09-30 0001435049 2020-07-01 2020-09-30 0001435049 2019-07-01 2019-09-30 0001435049 2019-01-01 2019-09-30 0001435049 us-gaap:CommonStockMember 2019-12-31 0001435049 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001435049 us-gaap:RetainedEarningsMember 2019-12-31 0001435049 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001435049 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001435049 2020-01-01 2020-03-31 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001435049 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001435049 us-gaap:CommonStockMember 2020-03-31 0001435049 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001435049 us-gaap:RetainedEarningsMember 2020-03-31 0001435049 2020-03-31 0001435049 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001435049 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001435049 2020-04-01 2020-06-30 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001435049 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001435049 us-gaap:CommonStockMember 2020-06-30 0001435049 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001435049 us-gaap:RetainedEarningsMember 2020-06-30 0001435049 2020-06-30 0001435049 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001435049 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-07-01 2020-09-30 0001435049 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001435049 us-gaap:CommonStockMember 2020-09-30 0001435049 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-09-30 0001435049 us-gaap:RetainedEarningsMember 2020-09-30 0001435049 us-gaap:CommonStockMember 2018-12-31 0001435049 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001435049 us-gaap:RetainedEarningsMember 2018-12-31 0001435049 2018-12-31 0001435049 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001435049 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001435049 2019-01-01 2019-03-31 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001435049 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001435049 us-gaap:CommonStockMember 2019-03-31 0001435049 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001435049 us-gaap:RetainedEarningsMember 2019-03-31 0001435049 2019-03-31 0001435049 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001435049 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001435049 2019-04-01 2019-06-30 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001435049 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001435049 us-gaap:CommonStockMember 2019-06-30 0001435049 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001435049 us-gaap:RetainedEarningsMember 2019-06-30 0001435049 2019-06-30 0001435049 us-gaap:CommonStockMember 2019-07-01 2019-09-30 0001435049 us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2019-09-30 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-07-01 2019-09-30 0001435049 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0001435049 us-gaap:CommonStockMember 2019-09-30 0001435049 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0001435049 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-30 0001435049 us-gaap:RetainedEarningsMember 2019-09-30 0001435049 2019-09-30 0001435049 kdny:TwoZeroOneFiveESPPMember 2020-01-01 2020-09-30 kdny:Segment xbrli:pure 0001435049 us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:FairValueInputsLevel2Member us-gaap:USGovernmentAgenciesDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:USGovernmentAgenciesDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:FairValueInputsLevel2Member us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:FairValueInputsLevel3Member kdny:ContingentConsiderationRelatedToAcquisitionMember us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 kdny:ContingentConsiderationRelatedToAcquisitionMember us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001435049 us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:FairValueInputsLevel2Member us-gaap:USGovernmentAgenciesDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:USGovernmentAgenciesDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:FairValueInputsLevel2Member us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:FairValueInputsLevel3Member kdny:ContingentConsiderationRelatedToAcquisitionMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 kdny:ContingentConsiderationRelatedToAcquisitionMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001435049 kdny:MeasurementInputMilestoneMember 2020-09-30 0001435049 us-gaap:MeasurementInputExpectedTermMember 2020-01-01 2020-09-30 0001435049 us-gaap:MeasurementInputDiscountRateMember 2020-09-30 0001435049 us-gaap:FairValueMeasurementsNonrecurringMember 2020-09-30 0001435049 us-gaap:FairValueMeasurementsNonrecurringMember 2019-12-31 0001435049 kdny:ContingentConsiderationRelatedToAcquisitionMember 2019-12-31 0001435049 kdny:ContingentConsiderationRelatedToAcquisitionMember 2020-01-01 2020-09-30 0001435049 kdny:ContingentConsiderationRelatedToAcquisitionMember 2020-09-30 0001435049 us-gaap:CashMember 2020-09-30 0001435049 us-gaap:MoneyMarketFundsMember 2020-09-30 0001435049 us-gaap:CommercialPaperMember 2020-09-30 0001435049 us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2020-09-30 0001435049 us-gaap:CorporateDebtSecuritiesMember 2020-09-30 0001435049 us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2020-09-30 0001435049 us-gaap:CashMember 2019-12-31 0001435049 us-gaap:MoneyMarketFundsMember 2019-12-31 0001435049 us-gaap:CommercialPaperMember 2019-12-31 0001435049 us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-12-31 0001435049 us-gaap:CorporateDebtSecuritiesMember 2019-12-31 0001435049 us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-12-31 0001435049 us-gaap:LeaseholdImprovementsMember 2020-09-30 0001435049 us-gaap:LeaseholdImprovementsMember 2019-12-31 0001435049 us-gaap:EquipmentMember 2020-09-30 0001435049 us-gaap:EquipmentMember 2019-12-31 0001435049 us-gaap:OfficeEquipmentMember 2020-09-30 0001435049 us-gaap:OfficeEquipmentMember 2019-12-31 0001435049 us-gaap:FurnitureAndFixturesMember 2020-09-30 0001435049 us-gaap:FurnitureAndFixturesMember 2019-12-31 0001435049 us-gaap:ConstructionInProgressMember 2020-09-30 0001435049 us-gaap:ConstructionInProgressMember 2019-12-31 0001435049 us-gaap:LicensingAgreementsMember 2020-09-30 0001435049 us-gaap:InProcessResearchAndDevelopmentMember 2020-09-30 0001435049 us-gaap:LicensingAgreementsMember 2019-12-31 0001435049 us-gaap:InProcessResearchAndDevelopmentMember 2019-12-31 0001435049 kdny:NovartisPharmaceuticalsCorporationMember 2020-01-01 2020-09-30 0001435049 us-gaap:InProcessResearchAndDevelopmentMember 2020-01-01 2020-09-30 0001435049 kdny:NovartisAgreementMember 2015-04-01 2015-04-30 0001435049 kdny:NovartisAgreementMember 2016-04-01 2016-06-30 0001435049 kdny:NovartisAgreementMember srt:MaximumMember 2020-01-01 2020-09-30 0001435049 kdny:NovartisAgreementMember 2020-01-01 2020-09-30 0001435049 kdny:NovartisAgreementMember kdny:NovartisPharmaceuticalsCorporationMember 2020-01-01 2020-09-30 0001435049 kdny:NovartisAgreementMember country:US 2020-01-01 2020-09-30 0001435049 kdny:NovartisAgreementMember kdny:SpecifiedEuropeanCountriesAndJapanMember 2020-01-01 2020-09-30 0001435049 kdny:NovartisAgreementMember kdny:UnitedStatesSpecifiedEuropeanCountriesAndOrJapanMember 2020-01-01 2020-09-30 0001435049 kdny:NovartisAgreementMember 2015-04-01 2020-09-30 0001435049 kdny:NovartisAgreementMember 2020-09-30 0001435049 kdny:NovartisAgreementMember 2020-07-01 2020-09-30 0001435049 kdny:NovartisAgreementMember 2019-07-01 2019-09-30 0001435049 kdny:NovartisAgreementMember 2019-01-01 2019-09-30 0001435049 kdny:LillyAgreementMember 2019-01-01 2019-03-31 0001435049 kdny:LillyAgreementMember srt:MaximumMember 2020-01-01 2020-09-30 0001435049 kdny:LillyAgreementMember 2020-01-01 2020-09-30 0001435049 kdny:LillyAgreementMember 2020-07-01 2020-09-30 0001435049 kdny:LillyAgreementMember 2019-07-01 2019-09-30 0001435049 kdny:LillyAgreementMember 2019-01-01 2019-09-30 0001435049 kdny:LillyAgreementMember 2020-09-30 0001435049 kdny:MerckLicenseAgreementMember 2017-01-01 2017-12-31 0001435049 kdny:MerckLicenseAgreementMember 2018-01-01 2018-03-31 0001435049 kdny:MerckLicenseAgreementMember 2020-01-01 2020-03-31 0001435049 kdny:MerckLicenseAgreementMember 2017-12-31 0001435049 kdny:MerckLicenseAgreementMember 2018-03-31 0001435049 kdny:MerckLicenseAgreementMember 2020-09-30 0001435049 kdny:MerckLicenseAgreementMember srt:MaximumMember kdny:ProductCandidateMember 2020-01-01 2020-09-30 0001435049 kdny:MerckLicenseAgreementMember srt:MaximumMember us-gaap:ProductMember 2020-01-01 2020-09-30 0001435049 kdny:MerckLicenseAgreementMember 2020-07-01 2020-09-30 0001435049 kdny:MerckLicenseAgreementMember 2020-01-01 2020-09-30 0001435049 stpr:CA 2020-09-30 0001435049 country:NL 2020-01-01 2020-09-30 kdny:LeaseFacility 0001435049 country:NL 2020-09-30 0001435049 kdny:SubleaseMember stpr:CA kdny:PerfectDayIncMember 2020-01-01 2020-09-30 utr:sqft 0001435049 kdny:SubleaseMember stpr:CA kdny:PerfectDayIncMember 2020-09-30 0001435049 kdny:SubleaseMember stpr:CA 2020-01-01 2020-09-30 iso4217:USD utr:sqft 0001435049 stpr:CA kdny:PerfectDayIncMember 2020-08-25 2020-08-25 0001435049 kdny:SubleaseMember stpr:CA 2020-09-30 0001435049 kdny:SubleaseMember stpr:CA 2020-07-01 2020-09-30 0001435049 kdny:SubleaseMember stpr:CA 2019-07-01 2019-09-30 0001435049 kdny:SubleaseMember stpr:CA 2019-01-01 2019-09-30 0001435049 kdny:BankOfAmericaMerrillLynchMember 2016-12-31 0001435049 kdny:BankOfAmericaMerrillLynchMember 2020-09-30 0001435049 kdny:OptionsIssuedAndOutstandingMember 2020-09-30 0001435049 us-gaap:RestrictedStockUnitsRSUMember 2020-09-30 0001435049 kdny:CommonStockWarrantsMember 2020-09-30 0001435049 srt:MinimumMember 2020-01-01 2020-09-30 0001435049 kdny:MoreThanTenPercentVotingPowerMember srt:MinimumMember 2020-01-01 2020-09-30 0001435049 kdny:MoreThanTenPercentVotingPowerMember 2020-01-01 2020-09-30 0001435049 kdny:TwoZeroOneFivePlanMember 2015-04-30 0001435049 kdny:TwoZeroOneFivePlanMember 2020-01-01 2020-09-30 0001435049 kdny:TwoZeroOneFivePlanMember 2020-01-01 2020-01-01 0001435049 kdny:TwoZeroOneFivePlanMember 2020-09-30 0001435049 kdny:TwoZeroZeroNinePlanMember 2015-02-01 2015-02-28 0001435049 kdny:TwoZeroZeroNinePlanMember 2020-09-30 0001435049 us-gaap:RestrictedStockUnitsRSUMember 2019-12-31 0001435049 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-09-30 0001435049 us-gaap:RestrictedStockUnitsRSUMember 2020-09-30 0001435049 kdny:TwoZeroOneFiveESPPMember 2015-04-30 0001435049 kdny:TwoZeroOneFiveESPPMember 2020-01-01 2020-01-01 0001435049 kdny:TwoZeroOneFiveESPPMember 2020-09-30 0001435049 kdny:TwoZeroOneFiveESPPMember 2019-01-01 2019-09-30 0001435049 us-gaap:ResearchAndDevelopmentExpenseMember 2020-07-01 2020-09-30 0001435049 us-gaap:ResearchAndDevelopmentExpenseMember 2019-07-01 2019-09-30 0001435049 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-09-30 0001435049 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-09-30 0001435049 us-gaap:GeneralAndAdministrativeExpenseMember 2020-07-01 2020-09-30 0001435049 us-gaap:GeneralAndAdministrativeExpenseMember 2019-07-01 2019-09-30 0001435049 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-09-30 0001435049 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-09-30 0001435049 srt:MinimumMember 2019-01-01 2019-09-30 0001435049 srt:MaximumMember 2019-01-01 2019-09-30 kdny:Employee 0001435049 us-gaap:EmployeeSeveranceMember 2020-01-01 2020-09-30 0001435049 us-gaap:EmployeeSeveranceMember us-gaap:ScenarioPlanMember 2020-10-01 2020-12-31 0001435049 us-gaap:EmployeeSeveranceMember 2020-09-30 0001435049 us-gaap:EmployeeSeveranceMember 2020-07-01 2020-09-30 0001435049 kdny:CoronavirusAidReliefAndEconomicSecurityActMember 2020-01-01 2020-09-30 0001435049 us-gaap:InternalRevenueServiceIRSMember us-gaap:EarliestTaxYearMember 2019-01-01 2019-09-30 0001435049 us-gaap:InternalRevenueServiceIRSMember us-gaap:LatestTaxYearMember 2019-01-01 2019-09-30 0001435049 us-gaap:StateAndLocalJurisdictionMember us-gaap:EarliestTaxYearMember 2019-01-01 2019-09-30 0001435049 us-gaap:StateAndLocalJurisdictionMember us-gaap:LatestTaxYearMember 2019-01-01 2019-09-30 0001435049 us-gaap:CaliforniaFranchiseTaxBoardMember 2019-01-01 2019-09-30 0001435049 kdny:EmployeeAndNonEmployeeStockOptionMember 2020-07-01 2020-09-30 0001435049 kdny:EmployeeAndNonEmployeeStockOptionMember 2019-07-01 2019-09-30 0001435049 kdny:EmployeeAndNonEmployeeStockOptionMember 2020-01-01 2020-09-30 0001435049 kdny:EmployeeAndNonEmployeeStockOptionMember 2019-01-01 2019-09-30 0001435049 us-gaap:RestrictedStockUnitsRSUMember 2020-07-01 2020-09-30 0001435049 us-gaap:RestrictedStockUnitsRSUMember 2019-07-01 2019-09-30 0001435049 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-09-30 0001435049 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-09-30 0001435049 kdny:CommonStockCommittedUnderEmployeeStockPurchasePlanMember 2020-07-01 2020-09-30 0001435049 kdny:CommonStockCommittedUnderEmployeeStockPurchasePlanMember 2019-07-01 2019-09-30 0001435049 kdny:CommonStockCommittedUnderEmployeeStockPurchasePlanMember 2020-01-01 2020-09-30 0001435049 kdny:CommonStockCommittedUnderEmployeeStockPurchasePlanMember 2019-01-01 2019-09-30 0001435049 kdny:CommonStockWarrantsMember 2020-07-01 2020-09-30 0001435049 kdny:CommonStockWarrantsMember 2019-07-01 2019-09-30 0001435049 kdny:CommonStockWarrantsMember 2020-01-01 2020-09-30 0001435049 kdny:CommonStockWarrantsMember 2019-01-01 2019-09-30 0001435049 kdny:AmendedEmployeeEquityVestingPolicyMember us-gaap:SubsequentEventMember kdny:AdurosMember 2020-10-05 2020-10-05 0001435049 kdny:AmendedEmployeeEquityVestingPolicyMember us-gaap:SubsequentEventMember kdny:AdurosMember kdny:ExecutiveManagementTeamMember kdny:EmployeeBonusesMember 2020-10-05 2020-10-05 0001435049 kdny:AmendedEmployeeEquityVestingPolicyMember us-gaap:SubsequentEventMember kdny:AdurosMember kdny:ExecutiveManagementTeamMember us-gaap:EmployeeSeveranceMember 2020-10-05 2020-10-05 0001435049 us-gaap:SubsequentEventMember 2020-10-02 2020-10-02 0001435049 kdny:MergerAgreementMember us-gaap:SubsequentEventMember kdny:AdurosMember 2020-10-05 2020-10-05

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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, 2020

OR

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

For the transition period from              to             

Commission File Number 001-37345

 

CHINOOK THERAPEUTICS, INC.

(Exact name of Registrant as specified in its Charter)

 

 

Delaware

 

94-3348934

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

1600 Fairview Avenue East, Suite 100

Seattle, WA 98102

(Address of principal executive offices including zip code)

Registrant’s telephone number, including area code: (206) 485-7051

 

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 $0.0001 per share

KDNY

The Nasdaq Global Select 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

 

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

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

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES      NO  

The number of shares of Registrant’s Common Stock outstanding as of November 2, 2020 was 42,158,432.

 

 

 

 


 

Table of Contents

 

 

 

 

Page

 

 

PART I—FINANCIAL INFORMATION

 

Item 1.

 

Condensed Consolidated Financial Statements (unaudited)

3

 

 

Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019

3

 

 

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019

4

 

 

Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019

5

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2020 and 2019

6

 

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019

8

 

 

Notes to the Condensed Consolidated Financial Statements

9

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

25

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

37

Item 4.

 

Controls and Procedures

37

 

 

 

 

 

 

PART II—OTHER INFORMATION

 

Item 1.

 

Legal Proceedings

38

Item 1A.

 

Risk Factors

38

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

77

Item 3.

 

Defaults Upon Senior Securities

77

Item 4.

 

Mine Safety Disclosures

77

Item 5.

 

Other Information

77

Item 6.

 

Exhibits

77

EXHIBIT INDEX

78

SIGNATURES

80

 

In this Quarterly Report on Form 10-Q, “we,” “our,” “us,” “Chinook” and the “Company” refer to Chinook Therapeutics, Inc. and its consolidated subsidiaries.  The terms “Aduro” or the “Predecessor Registrant” refer to Aduro Biotech, Inc. and its consolidated subsidiaries, the predecessor reporting entity.

 

2


 

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (unaudited)

 

CHINOOK THERAPEUTICS, INC. (formerly Aduro Biotech, Inc.)

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited) 

 

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

72,569

 

 

$

59,624

 

Marketable securities

 

 

90,562

 

 

 

153,978

 

Accounts receivable

 

 

1,216

 

 

 

342

 

Prepaid expenses and other current assets

 

 

2,934

 

 

 

3,958

 

Total current assets

 

 

167,281

 

 

 

217,902

 

Marketable securities

 

 

8,000

 

 

 

 

Property and equipment, net

 

 

20,468

 

 

 

24,688

 

Operating lease right-of-use assets

 

 

20,162

 

 

 

21,110

 

Goodwill

 

 

8,537

 

 

 

8,167

 

Intangible assets, net

 

 

19,405

 

 

 

18,978

 

Restricted cash

 

 

1,750

 

 

 

468

 

Other assets

 

 

1,283

 

 

 

 

Total assets

 

$

246,886

 

 

$

291,313

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

325

 

 

$

414

 

Accrued clinical trial and manufacturing expenses

 

 

2,051

 

 

 

4,253

 

Accrued expenses and other liabilities

 

 

6,972

 

 

 

8,181

 

Operating lease liabilities

 

 

1,715

 

 

 

1,803

 

Deferred revenue

 

 

3,786

 

 

 

6,950

 

Total current liabilities

 

 

14,849

 

 

 

21,601

 

Contingent consideration

 

 

2,205

 

 

 

1,051

 

Deferred revenue

 

 

159,754

 

 

 

166,963

 

Deferred tax liabilities

 

 

3,687

 

 

 

3,527

 

Operating lease liabilities

 

 

30,414

 

 

 

31,636

 

Other long-term liabilities

 

 

1,443

 

 

 

940

 

Total liabilities

 

 

212,352

 

 

 

225,718

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares

   issued and outstanding at September 30, 2020 and December 31, 2019

 

 

 

 

 

 

Common stock, $0.0001 par value; 300,000,000 shares authorized; 16,268,861

   and 16,147,137 shares issued and outstanding at September 30, 2020 and

   December 31, 2019

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

558,920

 

 

 

552,083

 

Accumulated other comprehensive income

 

 

1,246

 

 

 

414

 

Accumulated deficit

 

 

(525,634

)

 

 

(486,904

)

Total stockholders’ equity

 

 

34,534

 

 

 

65,595

 

Total liabilities and stockholders’ equity

 

$

246,886

 

 

$

291,313

 

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

3


 

CHINOOK THERAPEUTICS, INC. (formerly Aduro Biotech, Inc.)

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenue

 

$

3,787

 

 

$

4,799

 

 

$

23,311

 

 

$

13,625

 

Total revenue

 

 

3,787

 

 

 

4,799

 

 

 

23,311

 

 

 

13,625

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

9,232

 

 

 

15,251

 

 

 

36,168

 

 

 

49,402

 

General and administrative

 

 

7,604

 

 

 

8,601

 

 

 

24,707

 

 

 

24,657

 

Restructuring and related expense

 

 

1,712

 

 

 

341

 

 

 

8,066

 

 

 

3,702

 

Loss on impairment of intangible assets

 

 

 

 

 

5,006

 

 

 

 

 

 

5,006

 

Amortization of intangible assets

 

 

146

 

 

 

138

 

 

 

418

 

 

 

417

 

Total operating expenses

 

 

18,694

 

 

 

29,337

 

 

 

69,359

 

 

 

83,184

 

Loss from operations

 

 

(14,907

)

 

 

(24,538

)

 

 

(46,048

)

 

 

(69,559

)

Interest income

 

 

164

 

 

 

1,366

 

 

 

1,497

 

 

 

4,334

 

Other income (expense), net

 

 

12

 

 

 

(32

)

 

 

(35

)

 

 

(54

)

Total other income

 

 

176

 

 

 

1,334

 

 

 

1,462

 

 

 

4,280

 

Loss before income tax

 

 

(14,731

)

 

 

(23,204

)

 

 

(44,586

)

 

 

(65,279

)

Income tax benefit

 

 

191

 

 

 

2,252

 

 

 

5,856

 

 

 

2,322

 

Net loss

 

$

(14,540

)

 

$

(20,952

)

 

$

(38,730

)

 

$

(62,957

)

Net loss per common share, basic and diluted

 

$

(0.90

)

 

$

(1.31

)

 

$

(2.39

)

 

$

(3.94

)

Shares used in computing net loss per common share, basic and

   diluted

 

 

16,232,971

 

 

 

16,046,517

 

 

 

16,185,855

 

 

 

15,988,032

 

 

 

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

 

4


 

CHINOOK THERAPEUTICS, INC. (formerly Aduro Biotech, Inc.)

Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

 

$

(14,540

)

 

$

(20,952

)

 

$

(38,730

)

 

$

(62,957

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on marketable securities, net of tax of $0

 

 

(68

)

 

 

(7

)

 

 

(40

)

 

 

324

 

Foreign currency translation adjustments, net of tax of $0

 

 

875

 

 

 

(1,213

)

 

 

872

 

 

 

(1,442

)

Other comprehensive gain (loss)

 

 

807

 

 

 

(1,220

)

 

 

832

 

 

 

(1,118

)

Comprehensive loss

 

$

(13,733

)

 

$

(22,172

)

 

$

(37,898

)

 

$

(64,075

)

 

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

 

5


 

CHINOOK THERAPEUTICS, INC. (formerly Aduro Biotech, Inc.)

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2019

 

 

16,147,137

 

 

$

2

 

 

$

552,083

 

 

$

414

 

 

$

(486,904

)

 

$

65,595

 

Issuance of common stock upon exercise of stock

   options

 

 

17,691

 

 

 

 

 

 

80

 

 

 

 

 

 

 

 

 

80

 

Release of restricted stock units

 

 

2,585

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,035

 

 

 

 

 

 

 

 

 

2,035

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(554

)

 

 

 

 

 

(554

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,575

)

 

 

(7,575

)

Balance at March 31, 2020

 

 

16,167,413

 

 

 

2

 

 

 

554,198

 

 

 

(140

)

 

 

(494,479

)

 

 

59,581

 

Issuance of common stock upon exercise of stock

   options

 

 

596

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

3

 

Issuance of common stock under

   Employee Stock Purchase Plan

 

 

8,582

 

 

 

 

 

 

40

 

 

 

 

 

 

 

 

 

40

 

Release of restricted stock units

 

 

35,201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,028

 

 

 

 

 

 

 

 

 

3,028

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

579

 

 

 

 

 

 

579

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,615

)

 

 

(16,615

)

Balance at June 30, 2020

 

 

16,211,792

 

 

 

2

 

 

 

557,269

 

 

 

439

 

 

 

(511,094

)

 

 

46,616

 

Issuance of common stock upon exercise of stock options

 

 

3,008

 

 

 

 

 

 

19

 

 

 

 

 

 

 

 

 

19

 

Release of restricted stock units

 

 

54,061

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,632

 

 

 

 

 

 

 

 

 

1,632

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

807

 

 

 

 

 

 

807

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,540

)

 

 

(14,540

)

Balance at September 30, 2020

 

 

16,268,861

 

 

$

2

 

 

$

558,920

 

 

$

1,246

 

 

$

(525,634

)

 

$

34,534

 

 

 

 

 

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

 

6


 

CHINOOK THERAPEUTICS, INC. (formerly Aduro Biotech, Inc.)

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2018

 

 

15,914,342

 

 

$

2

 

 

$

538,901

 

 

$

940

 

 

$

(404,532

)

 

$

135,311

 

Issuance of common stock upon exercise of stock

   options

 

 

50,896

 

 

 

 

 

 

251

 

 

 

 

 

 

 

 

 

251

 

Release of restricted stock units

 

 

5,170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,703

 

 

 

 

 

 

 

 

 

3,703

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(449

)

 

 

 

 

 

(449

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,427

)

 

 

(23,427

)

Balance at March 31, 2019

 

 

15,970,408

 

 

 

2

 

 

 

542,855

 

 

 

491

 

 

 

(427,959

)

 

 

115,389

 

Issuance of common stock upon exercise of stock

   options

 

 

34,785

 

 

 

 

 

 

188

 

 

 

 

 

 

 

 

 

188

 

Issuance of common stock under Employee

   Stock Purchase Plan

 

 

11,749

 

 

 

 

 

 

164

 

 

 

 

 

 

 

 

 

164

 

Release of restricted stock units

 

 

9,111

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,336

 

 

 

 

 

 

 

 

 

3,336

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

551

 

 

 

 

 

 

551

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,578

)

 

 

(18,578

)

Balance at June 30, 2019

 

 

16,026,053

 

 

 

2

 

 

 

546,543

 

 

 

1,042

 

 

 

(446,537

)

 

 

101,050

 

Issuance of common stock upon exercise of stock

   options

 

 

24,023

 

 

 

 

 

 

93

 

 

 

 

 

 

 

 

 

93

 

Release of restricted stock units

 

 

52,813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,075

 

 

 

 

 

 

 

 

 

3,075

 

Other comprehensive loss