Notes to Consolidated Financial Statements
MyoKardia, Inc. (the “Company”) is a clinical-stage biopharmaceutical company pioneering a precision medicine approach to discover, develop and commercialize targeted therapies for the treatment of serious and neglected rare cardiovascular diseases. The Company’s initial focus is on the treatment of heritable cardiomyopathies, a group of rare, genetically driven forms of heart failure that result from biomechanical defects in cardiac muscle contraction. The Company has used its precision medicine platform to generate a robust pipeline of therapeutic programs for the chronic treatment of the two most common forms of heritable cardiomyopathy—hypertrophic cardiomyopathy, or HCM, and dilated cardiomyopathy, or DCM. A Phase 2 clinical trial of mavacamten, the Company’s product candidate for the treatment of HCM, demonstrated improvements in signs and symptoms of symptomatic oHCM, and the Company plans to advance mavacamten into a pivotal Phase 3 clinical trial in the second quarter of 2018. Using its precision medicine development strategy, the Company believes it has efficiently generated clinical proof of mechanism for mavacamten in both healthy volunteers and in HCM patients, and intends to pursue a similar path for MYK-491, its product candidate for DCM, and for mavacamten in a second indication, nHCM. MYK-491 has completed a Phase 1 clinical trial in healthy volunteers which has helped identify starting dose for use in patients and a Phase 1b single-ascending dose clinical trial is currently underway in DCM patients with stable heart failure. The Company was incorporated on June 8, 2012 in Delaware and its corporate headquarters and operations are located in South San Francisco, California.
Through December 31, 2017, the Company has financed its operations through an initial public offering (“IPO”), two follow-on public offerings, private placements of redeemable convertible preferred stock and funds received in connection with a license and collaboration agreement with Aventis Inc., a wholly-owned subsidiary of Sanofi S.A. (“Sanofi”), entered into in August 2014 (the “Collaboration Agreement”) (See Note 4). The Company received net proceeds of $93.9 million from the sale of shares of its Series A, A-1 and B redeemable convertible preferred stock. On November 3, 2015, the Company completed its IPO of 6,253,125 shares of common stock at an offering price of $10.00 per share, resulting in net proceeds of approximately $55.6 million, after deducting underwriting discounts, commissions and offering costs. On October 3, 2016, the Company completed a follow-on public offering of 4,370,000 shares of common stock at an offering price of $15.00 per share, resulting in net proceeds of approximately $61.1 million, after deducting underwriting discounts, commissions and offering costs. On August 14, 2017, the Company completed another follow-on public offering of 4,025,000 shares of common stock at an offering price of $35.50 per share, resulting in net proceeds of approximately $133.9 million, after deducting underwriting discounts, commissions and offering costs. In connection with the Collaboration Agreement, the Company has received $115.7 million from Sanofi S.A., consisting of a $35.0 million upfront payment, a $25.0 million milestone payment for the submission of an Investigational New Drug (“IND”) application for MYK-491 with the FDA in November 2016, and a $45.0 million continuation payment from Sanofi in January 2017 and $10.7 million in reimbursements and prepayments for research and development costs under a Registration Program Plan (RPP) for mavacamten. As of December 31, 2017, the Company had an accumulated deficit of $123.8 million, cash and cash equivalents of $224.6 million, short-term investments of $31.9 million and long-term investments of $19.9 million.
The Company’s long-term success is dependent upon its ability to successfully develop, commercialize, and market its products, earn revenue, obtain capital when needed, and ultimately, to achieve profitable operations. However, if anticipated operating results are not achieved in future periods, management believes that planned expenditures may need to be reduced in order to extend the time period over which the then-available resources would be able to fund operations. The Company will need to raise additional capital to fully implement its business plan.
2. Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The consolidated financial statements of the Company include the Company’s accounts and have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). During 2015, the Company established a wholly-owned foreign subsidiary, MyoKardia Australia Pty Ltd. The consolidated financial statements include the Company’s accounts and those of its wholly-owned subsidiary. All intercompany accounts, transactions and balances have been eliminated during consolidation. The functional and reporting currency of the Company and its subsidiary is the United States (“US”) Dollar.