Biomea Fusion, Inc S-1/A, filed Apr 15, 2021

Biomea Fusion, Inc. (BMEA)

S-1/A 2021-04-15

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



	Per share	Total

Initial public offering price	$	$

Underwriting discounts and commissions⁽¹⁾	$	$

Proceeds to Biomea Fusion, Inc., before expenses	$	$


	Page

Prospectus summary		1

Risk factors		12

Special note regarding forward-looking statements		82

Market and industry data		84

Use of proceeds		85

Dividend policy		87

Capitalization		88

Dilution		90

Selected financial data		93

Management’s discussion and analysis of financial condition and results of operations		94

Business		107

Management		139

Executive and director compensation		149

Certain relationships and related party transactions		160

Principal stockholders		163

Description of capital stock		166

Shares eligible for future sale		172

Material U.S. federal income tax consequences to non-U.S. holders		175

Underwriting		179

Legal matters		191

Experts		191

Where you can find additional information		191

Index to financial statements		F-1



	Year ended December 31,
(in thousands, except share and per share data)	2019			2020

Statements of operations data:
Operating expenses:
Research and development	$	1,092		$	3,671
General and administrative		103			1,656

Total operating expenses		1,195			5,327

Loss from operations		(1,195	)		(5,327	)
Other income (expense), net		(3	)		3

Net loss attributable to common stockholders	$	(1,198	)	$	(5,324	)

Net loss per share attributable to common stockholders, basic and diluted⁽¹⁾	$	(0.20	)	$	(0.51	)

Weighted–average shares used in computing net loss per share attributable to common stockholders, basic and diluted⁽¹⁾		6,051,712			10,532,942

Pro forma net loss per share, basic and diluted (unaudited)⁽²⁾				$	(0.50	)

Pro forma weighted–average shares outstanding, basic and diluted (unaudited)⁽²⁾					10,708,048



	As of December 31, 2020
(in thousands)	Actual			Pro forma⁽¹⁾			Pro forma as adjusted⁽²⁾⁽³⁾
				(unaudited)

Balance sheet data:
Cash and cash equivalents	$	61,695		$	61,695		$	170,095
Working capital⁽⁴⁾		60,604			60,604			169,004
Total assets		62,526			62,526			170,926
Convertible preferred stock		55,738			—			—
Accumulated deficit		(8,175	)		(8,175	)		(8,175	)
Total stockholders’ equity		5,169			60,907			169,307



	As of December 31, 2020
(in thousands, except per share amounts)	Actual			Pro forma			Pro forma as adjusted⁽¹⁾
				(unaudited)

Cash and cash equivalents	$	61,695		$	61,695		$	170,095

Convertible preferred stock, $0.0001 par value, per share; 7,064,925 shares authorized, 7,064,925 issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted	$	55,738		$	—		$	—
Stockholders’ equity:
Preferred stock, $0.0001 par value per share; no shares authorized, issued and outstanding, actual; 10,000,000 shares authorized, no shares issued and outstanding, pro forma and pro forma as adjusted		—			—			—
Common stock, $0.0001 par value per share; 25,300,080 shares authorized, 12,702,942 shares issued and outstanding, actual; 25,300,080 shares authorized and 19,767,867 shares issued and outstanding, pro forma; 300,000,000 shares authorized and 27,267,867 shares issued and outstanding, pro forma as adjusted		1			2			3
Additional paid—in capital		13,343			69,080			177,479
Accumulated deficit		(8,175	)		(8,175	)		(8,175	)

Total stockholders’ equity		5,169			60,907			169,307

Total capitalization	$	60,907		$	60,907		$	169,307


Assumed initial public offering price per share			$	16.00
Historical net tangible book value per share as of December 31, 2020	$	0.40
Pro forma increase in net tangible book value per share as of December 31, 2020 attributable to the pro forma transactions described above		2.68

Pro forma net tangible book value per share as of December 31, 2020		3.08
Increase in pro forma net tangible book value per share attributable to new investors participating in this offering		3.13

Pro forma as adjusted net tangible book value per share after this offering				6.21

Dilution per share to new investors participating in this offering			$	9.79



	Shares purchased				Total consideration				Weighted- average price per share
	Number		Percent		Amount		Percent		Weighted- average price per share
Existing stockholders⁽¹⁾		19,767,867		72.5%	$	69,302,563		36.6%	$	3.51
New investors		7,500,000		27.5%		120,000,000		63.4%	$	16.00

Total		27,267,867		100.0%	$	189,302,563		100.0%



	As of December 31,
(in thousands)	2019			2020
Balance sheet data:
Cash and cash equivalents	$	239		$	61,695
Working capital⁽¹⁾		(21	)		60,604
Total assets		265			62,526
Convertible preferred stock		—			55,738
Accumulated deficit		(2,851	)		(8,175	)
Total stockholders’ (deficit) equity		(21	)		5,169



	Year ended December 31,						$ Change
	2019			2020			$ Change

Operating expenses:
Research and development	$	1,092		$	3,671		$	2,579
General and administrative		103			1,656			1,553


Total operating expenses		1,195			5,327			4,132

Loss from operations		(1,195	)		(5,327	)		(4,132	)

Other income (expense), net		(3	)		3			6


Net loss	$	(1,198	)	$	(5,324	)	$	(4,126	)



Name	Age	Position(s)

Executive Officers and Employee Directors
Thomas Butler	40	Chief Executive Officer, Co-Founder and Director

Rainer (Ramses) Erdtmann	57	President, Chief Operating Officer, Co-Founder and Director

Sunny Lee Ryan	51	Executive Vice President of Finance

Key Employees
Thorsten Kirschberg	51	Executive Vice President of Chemistry

Heow Tan	62	Chief Technology and Quality Officer

Non-Employee Directors
Eric Aguiar, M.D.^(1)(2)(3)	59	Director

Bihua Chen⁽²⁾⁽³⁾	52	Director

Michael J. M. Hitchcock Ph.D.^(1)(2)(3)	71	Director

John Kwon⁽⁴⁾	47	Director

Sotirios Stergiopoulos, M.D.⁽¹⁾	49	Director



Name and principal position	Year		Salary ($)		Bonus⁽¹⁾ ($)		Stock awards⁽²⁾ ($)		Total ($)

Thomas Butler,		2020		228,750		134,400		1,153,215		1,516,365
Chief Executive Officer

Ramses Erdtmann,		2020		14,773		21,420		270,690		306,883
President and Chief Operating Officer

Sunny Lee Ryan,		2020		83,333		75,000		230,090		388,423
Executive Vice President, Finance



Name⁽¹⁾	Series A convertible preferred stock (#)		Aggregate cash purchase price ($)
Entities affiliated with Cormorant Asset Management⁽²⁾		2,270,872		18,000,000
Entities affiliated with Tavistock Group⁽³⁾		1,261,591		10,000,000
Aisling Capital V, LP⁽⁴⁾		504,640		4,000,000
Point Sur Investors LLC⁽⁵⁾		252,320		2,000,000
Clifton Capital LP⁽⁶⁾		126,155		1,000,000



Name⁽¹⁾	Common stock (#)		Aggregate cash purchase price ($)
Clifton Capital LP⁽²⁾		766,180		3,000,000
John Kwon⁽²⁾		90,026		352,500



	Number of shares beneficially owned (#)		Percentage of shares beneficially owned
Name of beneficial owner	Number of shares beneficially owned (#)		Before offering (%)		After offering (%)
Greater than 5% Stockholders:
Biomea Health, LLC⁽¹⁾		4,365,342		22.1		16.0
A2A Pharmaceuticals Inc.⁽²⁾		4,365,342		22.1		16.0
Entities affiliated with Cormorant Asset Management⁽³⁾		2,270,872		11.5		8.3
Entities affiliated with Tavistock Group⁽⁴⁾		1,261,591		6.4		4.6

Named Executive Officers and Directors:
Thomas Butler⁽⁵⁾		2,624,018		13.2		9.6
Ramses Erdtmann⁽⁶⁾		2,359,657		11.9		8.7
Sunny Lee Ryan⁽⁷⁾		64,655		*		*
Eric Aguiar, M.D.		—		*		*
Bihua Chen⁽⁸⁾		2,270,872		11.5		8.3
Michael J.M. Hitchcock, Ph.D.		—		*		*
John Kwon⁽⁹⁾		90,026		*		*
Sotirios Stergiopoulos, M.D.⁽¹⁰⁾		4,365,342		22.1		16.0
All executive officers and directors as a group (eight persons)⁽¹¹⁾		11,774,570		59.4		43.1


J.P. Morgan		Jefferies		Piper Sandler



Approximate number of shares		First date available for sale into public market
19,767,867 shares		181 days after the date of this prospectus, upon expiration of the lock-up agreements referred to below, subject in some cases to applicable volume, manner of sale and other limitations under Rule 144 and Rule 701.



Name	Number of shares
J.P. Morgan Securities LLC
Jefferies LLC
Piper Sandler & Co.

Total		7,500,000



	Without option to purchase additional shares exercise	With full option to purchase additional shares exercise
Per share	$	$
Total	$	$



Section 96 (1) (a)		the offer, transfer, sale, renunciation or delivery is to: (a) persons whose ordinary business, or part of whose ordinary business, is to deal in securities, as principal or agent; (b) the South African Public Investment Corporation; (c) persons or entities regulated by the Reserve Bank of South Africa; (d) authorised financial service providers under South African law; (e) financial institutions recognised as such under South African law; (f) a wholly-owned subsidiary of any person or entity contemplated in (c), (d) or (e), acting as agent in the capacity of an authorized portfolio manager for a pension fund, or as manager for a collective investment scheme (in each case duly registered as such under South African law); or (g) any combination of the person in (a) to (f); or

Section 96 (1) (b)		the total contemplated acquisition cost of the securities, for any single addressee acting as principal is equal to or greater than ZAR1,000,000 or such higher amount as may be promulgated by notice in the Government Gazette of South Africa pursuant to section 96(2)(a) of the South African Companies Act.



	Page
Report of independent registered public accounting firm		F-2
Balance sheet		F-3
Statements of operations		F-4
Statements of convertible preferred stock and stockholders’ equity (deficit)		F-5
Statements of cash flows		F-6
Notes to financial statements		F-7



	December 31,
(in thousands, except share and per share amounts)	2019			2020

Assets

Current assets:
Cash and cash equivalents	$	239		$	61,695
Prepaid expenses and other current assets		26			528

Total current assets		265			62,223

Property and equipment, net		—			81
Other long-term assets		—			12
Right of use assets		—			210

Total assets	$	265		$	62,526


Liabilities, convertible preferred stock and stockholders’ equity (deficit)

Current liabilities:
Accounts payable	$	271		$	727
Accrued liabilities		15			633
Loans payable		—			36
Lease liability-short-term		—			223

Total current liabilities		286			1,619

Total liabilities	$	286		$	1,619


Commitments and contingencies (Note 9)
Series A convertible preferred stock; $0.0001 par value; 0 shares and 7,064,925 shares authorized as of December 31, 2019 and 2020, respectively; 0 shares and 7,064,925 shares issued and outstanding as of December 31, 2019 and 2020, respectively; aggregate liquidation preference of $0 and $56,000 as of December 31, 2019 and 2020, respectively;		—			55,738

Stockholders’ equity (deficit):
Common stock; $0.0001 par value; 17,030,755 and 25,300,080 shares authorized as of December 31, 2019 and 2020; 8,703,234 and 11,953,107 shares issued and outstanding as of December 31, 2019 and 2020, respectively;		1			1
Additional paid-in capital		2,829			13,343
Accumulated deficit		(2,851	)		(8,175	)

Total stockholders’ equity (deficit)		(21	)		5,169

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	265		$	62,526



	Series A convertible preferred stock				Common stock				Additional paid-in capital		Accumulated deficit			Total stockholders’ equity (deficit)
(in thousands, except share amounts)	Shares		Amount		Shares		Amount		Additional paid-in capital		Accumulated deficit			Total stockholders’ equity (deficit)
Balance at January 1, 2019		—	$	—		4,274,734	$	—	$	1,390	$	(1,653	)	$	(263	)
Issuance of common stock		—		—		4,428,500		—		1,440		—			1,440
Net loss and comprehensive loss		—		—		—		—		—		(1,198	)		(1,198	)

Balance at December 31, 2019		—		—		8,703,234		1		2,829		(2,851	)		(21	)
Issuance of Series A convertible preferred stock, net of issuance costs of $261		7,064,925		55,738		—		—		—		—			—
Issuance of common stock, net of issuance costs of $68		—		—		3,175,279		—		10,192		—			10,192
Issuance of restricted shares of common stock		—		—		74,594		—		—		—			—
Stock-based compensation expense		—		—		—		—		322		—			322
Net loss and comprehensive loss		—		—		—		—		—		(5,324	)		(5,324	)

Balance at December 31, 2020		7,064,925	$	55,738		11,953,107	$	1	$	13,343	$	(8,175	)	$	5,169



	Years ended December 31,
(in thousands)	2019			2020

Cash flows from operating activities
Net loss	$	(1,198	)	$	(5,324	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		—			8
Non-cash lease expenses		—			124
Stock-based compensation expense		—			322
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		7			(472	)
Other long-term assets		—			(12	)
Accounts payable		(98	)		418
Accrued liabilities		10			588
Lease liabilities		—			(111	)

Net cash used in operating activities		(1,279	)		(4,459	)


Cash flows from investing activities
Purchase of property and equipment		—			(51	)

Net cash used in investing activities		—			(51	)


Cash flows from financing activities
Proceeds from issuance of PPP loan		—			36
Proceeds from issuance of Series A convertible preferred stock, net of issuance costs		—			55,738
Proceeds from issuance of common stock, net of issuance costs		1,440			10,192

Net cash provided by financing activities		1,440			65,966

Net increase in cash and cash equivalents		161			61,456
Cash and cash equivalents at the beginning of the year		78			239

Cash and cash equivalents at the end of the year	$	239		$	61,695


Supplemental disclosure of non-cash investing and financing activities:
Acquisition of property and equipment in accounts payable	$	—		$	38

Acquisition of right of use leased asset	$	—		$	334

Unpaid deferred offering costs	$	—		$	29


Laboratory equipment		5 years
Furniture and fixtures		3 years
Leasehold improvements		Shorter of remaining lease term or estimated useful life



(In thousands)
Years ending December 31,
2021	$	223
Total undiscounted lease payments		223
Less: Present value adjustments		(0	)
Present value of lease payments	$	223



	Shares authorized		Shares issued and outstanding		Original issue price		Carrying value		Liquidation preference
Series A convertible preferred stock		7,064,925		7,064,925	$	7.93	$	55,738	$	56,000



	Number of awards		Weighted- average grant date fair value (in dollars)		Weighted- average remaining contractual term (in years)
Balance at December 31, 2019		—	$	—		—
Granted		824,429		4.02
Balance at December 31, 2020		824,429	$	4.02		3.6



(in thousands)	Year ended December 31, 2020
Research and development	$	89
General and administrative		233

Total	$	322



	Year ended December 31, 2020
Federal statutory income tax rate		21.0%
State taxes		1.1%
Other		(0.1)%
Change in valuation allowance		(4.3)%
LLC loss prior to C-Corp conversion		(17.7)%

Provision for income taxes		0%



	December 31, 2020
Deferred Tax Assets:
Net operating loss carryforwards	$	286
Operating lease right-of-use asset liability		62
Accruals and reserves		11
Fixed assets		2
Intangible assets		1

Gross deferred tax assets		362
Less: Valuation allowance		(303	)

Deferred tax assets, net of valuation allowance		59
Operating lease right-of-use asset		(59	)

Net deferred tax assets	$	(0	)



Item	Amount paid or to be paid
SEC registration fee	$	15,997
FINRA filing fee		22,494
Nasdaq listing fee		225,000
Printing expenses		375,000
Legal fees and expenses		1,400,000
Accounting fees and expenses		1,100,000
Transfer agent’s fees and expenses		4,000
Miscellaneous expenses		57,509

Total	$	3,200,000



		Incorporated by reference
Exhibit number	Exhibit description	Form		Date		Number			Filed herewith

1.1	Form of Underwriting Agreement		S-1/A		4-12-2021		1,1

3.1	Amended and Restated Certificate of Incorporation, as amended, currently in effect		S-1/A		4-12-2021		3.1

3.2	Form of Amended and Restated Certificate of Incorporation, to be in effect immediately prior to the completion of this offering		S-1/A		4-12-2021		3.2

3.3	Bylaws, currently in effect		S-1		3-26-2021		3.3

3.4	Form of Amended and Restated Bylaws, to be in effect immediately prior to the completion of this offering		S-1/A		4-12-2021		3.4

4.1	Reference is made to Exhibits 3.1 through 3.4

4.2	Form of Common Stock Certificate		S-1/A		4-12-2021		4.2

5.1	Opinion of Latham & Watkins LLP		S-1/A		4-12-2021		5.1

10.1	Investors’ Rights Agreement, dated December 18, 2020, by and among the Registrant and the investors listed therein		S-1		3-26-2021		10.1

10.2	Secondary Sublease, dated August 18, 2020, by and between the Registrant and Interactive Memories, Inc. d/b/a Mixbook		S-1/A		4-12-2021		10.2

10.3(a)#	2020 Equity Incentive Plan		S-1		3-26-2021		10.3	(a)


BIOMEA FUSION, INC.

By		/s/ Thomas Butler
		Thomas Butler
		Chief Executive Officer



Signature	Title	Date

/s/ Thomas Butler Thomas Butler	Chief Executive Officer and Director (Principal Executive Officer)	April 15, 2021

/s/ Sunny Lee Ryan Sunny Lee Ryan	Executive Vice President of Finance (Principal Financial and Accounting Officer)	April 15, 2021

* Eric Aguiar, M.D.	Director	April 15, 2021

* Bihua Chen	Director	April 15, 2021

* Ramses Erdtmann	Director	April 15, 2021

* Michael J. M. Hitchcock, Ph.D.	Director	April 15, 2021

* John Kwon	Director	April 15, 2021

* Sotirios Stergiopoulos, M.D.	Director	April 15, 2021