BeyondSpring Inc 6-K, filed Sep 3, 2020
BeyondSpring Inc. (BYSI)
6-K
2020-09-03
For: 2020-06-30
View Original
Added on
April 10, 2026
About this 6-K
BeyondSpring Inc filed this 6-K on September 3, 2020.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of June 30, 2020
Commission File Number: 001-38024
BeyondSpring Inc.
BeyondSpring Inc.
28 Liberty Street, 39th Floor
New York, New York 10005
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction
in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is
not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
On September 3, 2020, BeyondSpring Inc. issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information contained in this report, except the second and third paragraphs of Exhibit 99.1, which contain certain quotes by the Chairman and Chief Executive Officer of BeyondSpring Inc., is hereby
incorporated by reference into the Registration Statements on Form F-3, File No. 333-224437 and File No. 333-234193, and the Registration Statement on Form S-8, File No. 333-216639.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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BeyondSpring Inc.
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By:
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/s/ Lan Huang
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Name: Lan Huang
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Title: Chairman and Chief Executive Officer
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Date: September 3, 2020
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Exhibit 99.1
BeyondSpring Provides Second-Quarter 2020 Financial Results and Business Updates
- Reported Positive Topline Pre-Specified Interim Results from PROTECTIVE-2 (Study 106) Phase 3, Demonstrating Plinabulin’s Superiority in Combination with Neulasta for CIN Prevention vs. Neulasta
Alone-
- Completed PROTECTIVE-2 Phase 3 Enrollment and On Track to Report Final Results in Q4 2020 / Expect to Submit NDA for CIN to the FDA by End of 2020 -
- Triple Plinabulin I/O Combination Achieved 100 Percent Complete Response in PD-1 Non-responsive Animal Model; To Initiate Clinical Studies at MD Anderson in H2 2020 -
NEW YORK, September 3, 2020 – BeyondSpring Inc. (the “Company” or “BeyondSpring”) (NASDAQ: BYSI), a global biopharmaceutical company focused on the development of innovative cancer therapies, announced today its financial results and provided an
operational update for the three months ended June 30, 2020.
“BeyondSpring’s mission has been to develop innovative, transformative medicines that improve clinical outcomes in high unmet medical needs,” said Dr. Lan Huang, Co-Founder, Chairman and Chief Executive Officer of BeyondSpring. “With our lead
asset, first-in-class agent Plinabulin in late stage developments in two large oncology market opportunities, CIN and NSCLC, we believe that we are at a significant inflection point that will potentially result in helping many patients in need.”
Dr. Huang continued, “We expect to file NDA for CIN, Plinabulin’s first indication, to the U.S. FDA by the end of the year. Plinabulin would potentially reduce infection and hospitalization after chemotherapy, and enable doctors to provide
chemotherapy to their patients without compromise – this means stable doses, sustained cycles and the strongest regimens possible so that patients can stay the course with their treatment – for potential survival benefit. As a potent antigen
presenting cell inducer, we believe that Plinabulin is a ‘pipeline in a drug’ for multiple cancer indications.”
Select Second-Quarter 2020 and Recent Business Highlights
Recent Clinical Highlights
| • |
Plinabulin in CIN indication
|
Positive Superior Topline Pre-Specified Interim Results from PROTECTIVE-2 Phase 3
In June 2020, BeyondSpring reported positive topline results of the pre-specified interim analysis of its PROTECTIVE-2 Phase 3 trial, evaluating Plinabulin in combination with Neulasta, compared to Neulasta alone. The interim results showed the
combination’s significantly enhanced the efficacy of Neulasta in the “rate of Grade 4 neutropenia prevention” (p<0.01), the primary endpoint for the study, which is clinically meaningful. The enrollment of a total of 221 patients has been
completed.
Expanded Access Program (EAP) Initiation
In August 2020, BeyondSpring initiated an EAP for Plinabulin in response to the recent NCCN guideline updates highlighting the need for maximum CIN prevention and resource allocation for COVID-19 patients. The program enables doctors across the
U.S. to use Plinabulin, both alone and in combination with G-CSFs, to prevent CIN. The first patient dosed in the U.S. avoided Grade 4 neutropenia in Cycle 2 with the Plinabulin-Neulasta combination, despite experiencing Grade 4 neutropenia in
Cycle 1 with Neulasta alone.
| • |
Plinabulin in NSCLC indication
|
DSMB Recommends DUBLIN-3 (Study 103) Phase 3 for NSCLC to Continue Without Modification
In June 2020, BeyondSpring reported that it reached the pre-specified second interim analysis for DUBLIN-3 for NSCLC treatment with Plinabulin. Upon reviewing the efficacy and safety data of over 500 patients at an approximately 300-patient
death event, the DSMB advised BeyondSpring to continue the study without any modifications. DUBLIN-3 is a global Phase 3 trial for Plinabulin in combination with docetaxel, compared to docetaxel alone, for the treatment of second- / third-line EGFR
wild-type NSCLC.
1
| • |
Triple I/O Combination Therapy with Plinabulin
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New Preclinical Data Demonstrates Immune-Enhancing Effects
In June 2020, BeyondSpring presented at the American Association for Cancer Research (AACR) Virtual Annual Meeting that the triple I/O combination of Plinabulin, anti-PD-1 and radiation demonstrated a 100 percent complete response in a PD-1
antibody model, indicating that Plinabulin enhances immuno-radiotherapy for cancer patients. The combination therapy is being advanced toward a Phase 1 clinical trial in patients who failed or progressed on PD-1 / PD-L1 antibody treatments.
BeyondSpring expects the first patient dosing in H2 2020.
Recent Corporate Highlights
BeyondSpring Appoints Paul Friel to Chief Commercial Officer
In August 2020, BeyondSpring announced the appointment of Paul Friel to the role of Chief Commercial Officer. Mr. Friel has nearly 30 years of experience in the pharmaceutical and biotech industry. He has held positions as General Manager and
President at Takeda Canada and Vice President of Sales for Vyaire. During his tenure with Takeda, Mr. Friel was instrumental in helping the organization expand its presence and grow to over 5,000 employees and $10 billion in sales.
Throughout Mr. Friel’s 24-years at TAP and Takeda, he served in multiple commercial roles and was responsible for business development, integration, geographic expansion and Head of Commercial for Latin America for Takeda. He later led Takeda
expansions into Mexico, Brazil and Canada. In the last four years of Mr. Friel’s tenure at Takeda, he was integral for launching eight products, including the second fastest biologic launch in the U.S.
BeyondSpring Appoints Dr. Ravi Majeti to Board of Directors
During the same month, BeyondSpring also announced the appointment of Dr. Ravi Majeti, Co-Founder and former Board member of Forty Seven, Inc., and Chief, Division of Hematology, at Stanford University to the Company’s Board of Directors. Dr.
Majeti co-founded Forty Seven in 2014 and was a major contributor to the research and technology that led to Forty Seven’s $4.9 billion acquisition by Gilead in March 2020.
Equity Financings
In June and July 2020, BeyondSpring closed a public offering of 2,219,500 ordinary shares and a private placement of 384,615 ordinary shares at $13.00 per share. Gross proceeds from the public offering and private placement were $33.9 million
before deducting underwriting discounts, commissions and other offering expenses. The Company intends to use the net proceeds of the public offering and private placement to support the commercialization of Plinabulin, continued clinical and
pre-clinical development and for general corporate purposes.
Financial Results for the Three Months Ended June 30, 2020
Research and development (“R&D”) expenses were $11.0 million for the quarter ended June 30, 2020, compared to $5.2 million for the quarter ended June 30, 2019. The $5.8 million increase was largely attributable to an increase of $4.9 million
in clinical trial expenses.
General and administrative (“G&A”) expenses were $2.6 million for the quarter ended June 30, 2020, compared to $2.1 million for the quarter ended June 30, 2019. The $0.5 million increase was mainly due to an increase in cost related to
pre-launch preparation of Plinabulin.
2
Net loss attributable to the Company was $12.8 million for the quarter ended June 30, 2020, compared to $7.4 million for the quarter ended June 30, 2019.
As of June 30, 2020, the Company had a cash and cash equivalents of $38.1 million. The Company believes it has sufficient cash to support its clinical trials and submit an NDA in the U.S. for Plinabulin for the CIN indication, as well as to
advance its immuno-oncology pipeline and protein degradation research platform.
Anticipated Milestones
The following outlines the Company’s anticipated upcoming milestones and projected timelines:
| • |
Final data readout for PROTECTIVE-2 Phase 3 for CIN – Q4 2020
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| • |
NDA submission for Plinabulin for CIN in the U.S. – end of 2020
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| • |
Final topline data readout for DUBLIN-3 for NSCLC – H1 2021
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| • |
Rolling NDA submission for Plinabulin for NSCLC in China – H1 2021
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| • |
NDA submission for Plinabulin for NSCLC in the U.S. – H2 2021
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Conference Call and Webcast Information
BeyondSpring’s management will host a conference call and webcast today at 8 a.m. Eastern Time to discuss the financial results and provide a corporate update. The dial-in numbers for the conference call are 1-877-451-6152 (U.S.) or
1-201-389-0879 (international). Please reference conference ID: 13709037. A live webcast will be available on BeyondSpring’s website at www.beyondspringpharma.com under “Events & Presentations” in the Investors section. An archived
replay of the webcast will be available for 30 days.
About BeyondSpring
Headquartered in New York, BeyondSpring is a global, clinical-stage biopharmaceutical company focused on developing innovative immuno-oncology cancer therapies to improve clinical outcomes for
patients with high unmet medical needs. BeyondSpring’s first-in-class lead immune asset, Plinabulin, is a potent antigen-presenting cell (APC) inducer. It is currently in two Phase 3 clinical trials for two severely unmet medical needs indications:
one is for the prevention of chemotherapy-induced neutropenia (CIN), the most frequent cause for a chemotherapy regimen dose’s decrease, delay, downgrade or discontinuation, which can lead to suboptimal clinical outcomes. The other is for non-small
cell lung cancer (NSCLC) treatment in EGFR wild-type patients. As a “pipeline drug,” Plinabulin is in various I/O combination studies to boost PD-1 / PD-L1 antibody anti-cancer effects. In addition to Plinabulin, BeyondSpring’s extensive pipeline
includes three pre-clinical immuno-oncology assets and a drug discovery platform dubbed “molecular glue” that uses the protein degradation pathway.
Cautionary Note Regarding Forward-Looking Statements
This press release includes forward-looking statements that are not historical facts. Words such as “will,” “expect,” “anticipate,” “plan,” “believe,” “design,” “may,” “future,” “estimate,” “predict,”
“objective,” “goal,” or variations thereof and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are based on BeyondSpring’s current knowledge and its present
beliefs and expectations regarding possible future events and are subject to risks, uncertainties and assumptions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a
result of several factors including, but not limited to, difficulties raising the anticipated amount needed to finance the Company’s future operations on terms acceptable to the Company, if at all, unexpected results of clinical trials, delays or
denial in regulatory approval process, results that do not meet our expectations regarding the potential safety, the ultimate efficacy or clinical utility of our product candidates, increased competition in the market, and other risks described in
BeyondSpring’s most recent Form 20-F on file with the U.S. Securities and Exchange Commission. All forward-looking statements made herein speak only as of the date of this release and BeyondSpring undertakes no obligation to update publicly such
forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by law.
Contacts
Scott Eckstein / Caitlin Kasunich
KCSA Strategic Communications
212.896.1210 / 212.896.1241
seckstein@kcsa.com / ckasunich@kcsa.com
3
BEYONDSPRING INC.
AUDITED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2019 AND
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2020
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
|
December 31,
|
June 30,
|
||||||||
|
Note
|
2019
|
2020
|
|||||||
| $ |
$ | ||||||||
|
(Unaudited)
|
|||||||||
|
Assets
|
|||||||||
|
Current assets:
|
|||||||||
|
Cash and cash equivalents
|
35,933
|
38,080
|
|||||||
|
Advances to suppliers
|
4,519
|
4,330
|
|||||||
|
Prepaid expenses and other current assets
|
410
|
567
|
|||||||
|
Total current assets
|
40,862
|
42,977
|
|||||||
|
Noncurrent assets:
|
|||||||||
|
Property and equipment, net
|
3
|
209
|
194
|
||||||
|
Operating lease right-of-use assets
|
2,538
|
2,464
|
|||||||
|
Other noncurrent assets
|
946
|
1,088
|
|||||||
|
Total noncurrent assets
|
3,693
|
3,746
|
|||||||
|
Total assets
|
44,555
|
46,723
|
|||||||
|
Liabilities and equity
|
|||||||||
|
Current liabilities:
|
|||||||||
|
Accounts payable
|
2,537
|
1,947
|
|||||||
|
Accrued expenses
|
5,861
|
7,187
|
|||||||
|
Due to related parties
|
5
|
29
|
61
|
||||||
|
Current portion of operating lease liabilities
|
537
|
649
|
|||||||
|
Other current liabilities
|
11
|
1,089
|
1,462
|
||||||
|
Total current liabilities
|
10,053
|
11,306
|
|||||||
|
Noncurrent liabilities:
|
|||||||||
|
Long-term loans
|
4
|
1,436
|
2,050
|
||||||
|
Operating lease liabilities
|
1,935
|
1,745
|
|||||||
|
Total noncurrent liabilities
|
3,371
|
3,795
|
|||||||
|
Total liabilities
|
13,424
|
15,101
|
|||||||
|
Equity:
|
|||||||||
|
Ordinary shares ($0.0001 par value; 500,000,000 shares authorized; 27,885,613 and 30,117,881 shares issued and outstanding as of December 31, 2019 and June 30, 2020, respectively)
|
7
|
3
|
3
|
||||||
|
Additional paid-in capital
|
7
|
246,979
|
277,618
|
||||||
|
Accumulated deficit
|
7
|
(216,845
|
)
|
(245,682
|
)
|
||||
|
Accumulated other comprehensive income
|
7
|
140
|
197
|
||||||
|
Total BeyondSpring Inc.’s shareholder’s equity
|
30,277
|
32,136
|
|||||||
|
Noncontrolling interests
|
7
|
854
|
(514
|
)
|
|||||
|
Total equity
|
31,131
|
31,622
|
|||||||
|
Total liabilities and equity
|
44,555
|
46,723
|
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
4
BEYONDSPRING INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2020
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
(Unaudited)
|
Three months ended
|
Six months ended
|
||||||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||||||
|
Note
|
2019
|
2020
|
2019
|
2020
|
|||||||||||||||
| $ |
$ |
$ |
$ |
||||||||||||||||
|
Revenue
|
-
|
-
|
-
|
-
|
|||||||||||||||
|
Operating expenses
|
|||||||||||||||||||
|
Research and development
|
(5,202
|
)
|
(11,028
|
)
|
(11,532
|
)
|
(24,732
|
)
|
|||||||||||
|
General and administrative
|
(2,147
|
)
|
(2,589
|
)
|
(3,786
|
)
|
(5,517
|
)
|
|||||||||||
|
Loss from operations
|
(7,349
|
)
|
(13,617
|
)
|
(15,318
|
)
|
(30,249
|
)
|
|||||||||||
|
Foreign exchange gain (loss), net
|
(169
|
)
|
9
|
4
|
(65
|
)
|
|||||||||||||
|
Interest expense
|
(103
|
)
|
(21
|
)
|
(140
|
)
|
(42
|
)
|
|||||||||||
|
Interest income
|
1
|
28
|
7
|
92
|
|||||||||||||||
|
Other income
|
-
|
2
|
-
|
3
|
|||||||||||||||
|
Loss before income tax
|
(7,620
|
)
|
(13,599
|
)
|
(15,447
|
)
|
(30,261
|
)
|
|||||||||||
|
Income tax benefit
|
6
|
-
|
-
|
-
|
-
|
||||||||||||||
|
Net loss
|
(7,620
|
)
|
(13,599
|
)
|
(15,447
|
)
|
(30,261
|
)
|
|||||||||||
|
Less: Net loss attributable to noncontrolling interests
|
(268
|
)
|
(846
|
)
|
(802
|
)
|
(1,424
|
)
|
|||||||||||
|
Net loss attributable to BeyondSpring Inc.
|
(7,352
|
)
|
(12,753
|
)
|
(14,645
|
)
|
(28,837
|
)
|
|||||||||||
|
Net loss per share
|
|||||||||||||||||||
|
Basic and diluted
|
10
|
(0.32
|
)
|
(0.46
|
)
|
(0.64
|
)
|
(1.04
|
)
|
||||||||||
|
Weighted-average shares outstanding
|
|||||||||||||||||||
|
Basic and diluted
|
10
|
23,094,161
|
27,921,026
|
23,061,941
|
27,826,737
|
||||||||||||||
|
Other comprehensive loss, net of tax of nil:
|
|||||||||||||||||||
|
Foreign currency translation adjustment gain (loss)
|
225
|
(2
|
)
|
31
|
51
|
||||||||||||||
|
Comprehensive loss
|
(7,395
|
)
|
(13,601
|
)
|
(15,416
|
)
|
(30,210
|
)
|
|||||||||||
|
Less: Comprehensive loss attributable to noncontrolling interests
|
(230
|
)
|
(848
|
)
|
(805
|
)
|
(1,430
|
)
|
|||||||||||
|
Comprehensive loss attributable to BeyondSpring Inc.
|
(7,165
|
)
|
(12,753
|
)
|
(14,611
|
)
|
(28,780
|
)
|
|||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
5
BEYONDSPRING INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2020
(Amounts in thousands of U.S. Dollars (“$”))
(Unaudited)
|
Six months ended June 30,
|
|||||||||||
|
Note
|
2019
|
2020
|
|||||||||
|
|
$ | $ | |||||||||
|
Operating activities:
|
|||||||||||
|
Net loss
|
(15,447
|
)
|
(30,261
|
)
|
|||||||
|
Adjustments to reconcile net loss to net cash from operating activities:
|
|||||||||||
|
Share-based compensation
|
12
|
1,287
|
4,306
|
||||||||
|
Depreciation expenses
|
3
|
41
|
32
|
||||||||
|
Non-cash operating lease expense
|
260
|
296
|
|||||||||
|
Changes in operating assets and liabilities:
|
|||||||||||
|
Advances to suppliers
|
86
|
189
|
|||||||||
|
Due from related parties
|
481
|
-
|
|||||||||
|
Prepaid expenses and other current assets
|
106
|
(115
|
)
|
||||||||
|
Other noncurrent assets
|
(48
|
)
|
(142
|
)
|
|||||||
|
Accounts payable
|
(1,130
|
)
|
(590
|
)
|
|||||||
|
Accrued expenses
|
589
|
1,326
|
|||||||||
|
Due to related parties
|
25
|
-
|
|||||||||
|
Operating lease liabilities
|
(297
|
)
|
(300
|
)
|
|||||||
|
Other current liabilities
|
944
|
(65
|
)
|
||||||||
|
Net cash used in operating activities
|
(13,103
|
)
|
(25,324
|
)
|
|||||||
|
Investing activities:
|
|||||||||||
|
Acquisitions of property and equipment
|
(4
|
)
|
(17
|
)
|
|||||||
|
Net cash used in investing activities
|
(4
|
)
|
(17
|
)
|
|||||||
|
Financing activities:
|
|||||||||||
|
Proceeds from issuance of ordinary shares, net of underwriting discounts and commissions
|
5,596
|
26,938
|
|||||||||
|
Payments of offering costs
|
(6 |
)
|
(147
|
)
|
|||||||
|
Proceeds from loans
|
4
|
2,986
|
635
|
||||||||
|
Proceeds from related party borrowings
|
5
|
1,350
|
32
|
||||||||
|
Net cash provided by financing activities
|
9,926
|
27,458
|
|||||||||
|
Effect of foreign exchange rate changes, net
|
(34
|
)
|
30
|
||||||||
|
Net increase/(decrease) in cash and cash equivalents
|
(3,215
|
)
|
2,147
|
||||||||
|
Cash and cash equivalents at beginning of period
|
3,889
|
35,933
|
|||||||||
|
Cash and cash equivalents at end of period
|
674
|
38,080
|
|||||||||
|
Supplemental disclosures
|
|||||||||||
|
Non-cash activities:
|
|||||||||||
|
Operating right-of-use assets obtained in exchange for operating lease liabilities
|
-
|
222 |
|||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
6
BEYONDSPRING INC.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of U.S. Dollars (“$”) and Renminbi (“RMB”), except for number of shares and per share data)
| 1. |
Nature of the business and basis of preparation
|
BeyondSpring Inc. (the “Company”) was incorporated in the Cayman Islands on November 21, 2014. The Company and its subsidiaries (collectively, the “Group”) are principally engaged in clinical
stage biopharmaceutical activities focused on the development of innovative cancer therapies. The Company is under the control of Mr. Linqing Jia and Dr. Lan Huang as a couple (collectively, the “Founders”) since its incorporation.
On May 21, 2019, the Company entered into a sales agreement with Jefferies LLC (“Jefferies”) to act as an agent in selling the Company’s ordinary shares in an at-the-market (“ATM”) offering
program. As of June 30, 2020, the Company received aggregate gross proceeds of $13,185 on 630,228 ordinary shares sold in respect thereof.
In June 2020, the Company completed a public offering of an aggregate of 2,219,500 ordinary shares of the Company at a public offering price of $13.00 per share for net proceeds of $26,395.
On June 18, 2020, the Company entered into a share subscription agreement for the sale of an aggregate of 384,615 ordinary shares at $13.00 per share in a private placement transaction (the
“Private Placement”). Gross proceeds of $5,000 was received in July 2020.
7
BEYONDSPRING INC.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of U.S. Dollars (“$”) and Renminbi (“RMB”), except for number of shares and per share data)
| 1. |
Nature of the business and basis of preparation (continued)
|
As of June 30, 2020, the subsidiaries of the Company are as follows:
|
Name of company
|
Place of incorporation
|
Date of
incorporation
|
Percentage of
ownership by the
Company
|
Principal
activities
|
|
BeyondSpring Pharmaceuticals Inc.
(“BeyondSpring US”)
|
Delaware,
United States of America (“U.S.”)
|
June 18, 2013
|
100%
|
Clinical trial activities
|
|
BeyondSpring Ltd.
|
The British Virgin Islands (“BVI”)
|
December 3, 2014
|
100%
|
Holding company
|
|
BeyondSpring (HK) Limited
(“BeyondSpring HK”)
|
Hong Kong
|
January 13, 2015
|
100%
|
Holding company
|
|
Wanchun Biotechnology Limited
(“BVI Biotech”)
|
BVI
|
April 1, 2015
|
100%
|
Holding company
|
|
|
||||
|
Wanchun Biotechnology (Shenzhen) Ltd.
(“Wanchun Shenzhen”)
|
The People’s Republic of China
(“PRC”)
|
April 23, 2015
|
100%
|
Holding company
|
|
Dalian Wanchunbulin Pharmaceuticals Ltd.
(“Wanchunbulin”)
|
PRC
|
May 6, 2015
|
57.97%
|
Clinical trial activities
|
|
BeyondSpring Pharmaceuticals Australia PTY Ltd.
(“BeyondSpring Australia”)
|
Australia
|
March 3, 2016
|
100%
|
Clinical trial activities
|
|
|
||||
|
Beijing Wanchun Pharmaceutical Technology Ltd.
(“Beijing Wanchun”)
|
PRC
|
May 21, 2018
|
57.97%
|
Clinical trial activities
|
|
|
||||
|
SEED Therapeutics Inc.
(“SEED”)
|
BVI
|
June 25, 2019
|
100%
|
Holding company
|
|
SEED Technology Limited
(“SEED Technology”)
|
BVI
|
December 9, 2019
|
57.97%
|
Holding company
|
8
BEYONDSPRING INC.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of U.S. Dollars (“$”) and Renminbi (“RMB”), except for number of shares and per share data)
| 1. |
Nature of the business and basis of preparation (continued)
|
The accompanying unaudited interim condensed consolidated balance sheet as of June 30, 2020, the unaudited interim condensed consolidated statements of comprehensive loss for the three and
six months ended June 30, 2019 and 2020, the cash flows for the six months ended June 30, 2019 and 2020, and the related footnote disclosures are unaudited. These unaudited interim condensed consolidated financial statements of the Company have
been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial information using accounting policies that are consistent with those used in the preparation of the Company’s audited
consolidated financial statements for the year ended December 31, 2019. Accordingly, these unaudited interim condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for annual
financial statements.
In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the financial
position, operating results and cash flows of the Company for each of the periods presented. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of results to be expected for any other
interim period or for the full year of 2020. The consolidated balance sheet as of December 31, 2019 was derived from the audited consolidated financial statements at that date but does not include all of the disclosures required by U.S. GAAP
for annual financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2019.
| 2. |
Summary of significant accounting policies
|
Basis of consolidation
The unaudited interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances
between the Company and its subsidiaries are eliminated upon consolidation.
Going concern
According to Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements - Going Concern (“ASC 205-40”), management must
evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This
evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this
methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only
considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant
conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.
The Company has incurred operating losses and negative cash flows from operations since inception. To date, the Company has no product revenue and management expects operating losses to
continue for the foreseeable future, and has primarily funded these losses through equity financings. The Company incurred a net loss of $30,261 during the six months ended June 30, 2020 and has an accumulated deficit of $245,682 as of June 30,
2020. Net cash used in operations was approximately $25,324 for the six months ended June 30, 2020. As of June 30, 2020, the Company had $31,671 net current assets and $38,080 cash and cash equivalents on hand.
9
BEYONDSPRING INC.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of U.S. Dollars (“$”) and Renminbi (“RMB”), except for number of shares and per share data)
| 2. |
Summary of significant accounting policies (continued)
|
Going concern (continued)
Based on the Company’s cash and cash equivalents on hand at June 30, 2020 and the $5,000 proceeds received in July 2020 from the Private Placement, management does not believe that there is
substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. The accompanying unaudited interim condensed consolidated financial statements have been prepared
on a going concern basis.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include,
but are not limited to share-based compensation, clinical trial accrual, valuation allowance for deferred tax assets, estimating uncertain tax position, measurement of operating right-of-use assets and lease liabilities and estimating of useful
life for property and equipment. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying
values of assets and liabilities. Actual results could differ from these estimates.
Fair value measurements
The Company measures certain financial assets and liabilities at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level
hierarchy, as follows:
| • |
Level 1— Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
| • |
Level 2— Other inputs that are directly or indirectly observable in the marketplace.
|
| • |
Level 3— Unobservable inputs which are supported by little or no market activity.
|
ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) describes three main approaches to measuring the fair value of assets and liabilities:
(1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses
valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would
currently be required to replace an asset.
Financial instruments of the Company primarily include cash, due to related parties, accounts payable and long-term loans. Except for the long-term loans, the carrying values of these
financial instruments approximated their fair value due to their short-term nature as of December 31, 2019 and June 30, 2020.
10
BEYONDSPRING INC.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of U.S. Dollars (“$”) and Renminbi (“RMB”), except for number of shares and per share data)
| 2. |
Summary of significant accounting policies (continued)
|
Fair value measurements (continued)
As of December 31, 2019 and June 30, 2020, the total carrying amount of long-term loans was $1,436 and $2,050, compared with an estimated fair value of $1,373 and $1,925, respectively. The
fair value of the long-term loans is estimated by discounting cash flows using interest rates currently available for debts with similar terms and maturities (Level 2 fair value measurement).
Recent accounting pronouncements
New accounting standard that have not yet been adopted
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the
Accounting for Income Taxes. This update simplifies the accounting for income taxes as part of the FASB’s overall initiative to reduce complexity in accounting standards. The amendments include removal of certain exceptions to the
general principles of ASC 740, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The update is effective in fiscal years beginning after December 15, 2020,
and interim periods therein, and early adoption is permitted. Certain amendments in this update should be applied retrospectively or modified retrospectively, all other amendments should be applied prospectively. The Company is currently
evaluating the impact on its financial statements of adopting this guidance.
| 3. |
Property and equipment, net
|
Property and equipment consist of the following:
|
December 31,
2019
|
June 30,
2020
|
|||||||
|
$
|
$
|
|||||||
|
(Unaudited)
|
||||||||
|
Office equipment
|
150
|
158
|
||||||
|
Laboratory equipment
|
114
|
113
|
||||||
|
Motor vehicles
|
23
|
22
|
||||||
|
Leasehold improvements
|
103
|
114
|
||||||
|
390
|
407
|
|||||||
|
Less: accumulated depreciation
|
(181
|
)
|
(213
|
)
|
||||
|
Property and equipment, net
|
209
|
194
|
||||||
Depreciation expenses for the three and six months ended June 30, 2019 were $23 and $41, respectively. Depreciation expenses for the three and six months ended June 30, 2020 were $17 and
$32, respectively.
11
BEYONDSPRING INC.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of U.S. Dollars (“$”) and Renminbi (“RMB”), except for number of shares and per share data)
| 4. |
Long-term loans
|
On March 28, 2019, the Company borrowed a three-year term loan with a principal amount of $1,493 (RMB10,000) from China Construction Bank, which bears an annual
interest rate of 120.0% of the three-year loan interest rate quoted by the People’s Bank of China. The loan is guaranteed by the shareholder of the Company, Shenzhen Sangel Capital Management Limited Company (“Shenzhen Sangel”) and Mr.
Mulong Liu, a shareholder of Shenzhen Sangel. The maturity date of the loan is March 28, 2022.
On May 3, 2020, the Company obtained a two-year term loan with a principal amount of $635 from Citibank, North America (“Citibank”) under a Paycheck Protection Program initiated by U.S.
Small Business Administration. The loan bears an annual interest rate of 1%. Under the Paycheck Protection Program, the Company is eligible to apply for forgiveness of the loan in an amount equal to the sum of certain qualified costs.
| 5. |
Related party transactions
|
Loan from related parties
In October and December 2019, the Company borrowed 60-day interest-free loans totaling of $29 (RMB200) from Dalian Wanchun Biotechnology Co., Ltd. (“Wanchun Biotech”).
During the six months ended June 30, 2020, the Company borrowed 60-day interest-free loans totaling of $32 (RMB230) from Wanchun Biotech. The maturity of the loans was extended to October 2020.
| 6. |
Income taxes
|
There is no provision for income taxes because the Company and its subsidiaries were in a cumulative loss position for the three and six months ended June 30, 2019 and 2020.
The Company recorded a full valuation allowance against deferred tax assets for all periods presented. There were no material changes in unrecognized tax benefits and
related interest and penalties for the three and six months ended June 30, 2020. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly change within the next 12 months.
12
BEYONDSPRING INC.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of U.S. Dollars (“$”) and Renminbi (“RMB”), except for number of shares and per share data)
| 7. |
Equity (deficit)
|
The movement of equity (deficit) is as follows:
|
BeyondSpring Inc.’s shareholders
|
||||||||||||||||||||||||||||||||
|
Ordinary share
|
Additional
paid-in
|
Accumulated
|
Accumulated
other
comprehensive
|
Subtotal
|
Non
controlling
|
Total
equity
|
||||||||||||||||||||||||||
|
Shares
|
Amount
|
capital
|
deficit
|
(loss) gain
|
interests
|
(deficit)
|
||||||||||||||||||||||||||
| $ |
$
|
$
|
$
|
$
|
$
|
$
|
||||||||||||||||||||||||||
|
Balances at January 1, 2020 (audited)
|
27,885,613
|
3
|
246,979
|
(216,845
|
) |
140
|
30,277
|
854
|
31,131
|
|||||||||||||||||||||||
|
Issuance of ordinary shares
|
2,228,975
|
-
|
26,395
|
-
|
-
|
26,395
|
-
|
26,395
|
||||||||||||||||||||||||
|
Share-based compensation
|
3,293
|
-
|
4,244
|
-
|
-
|
4,244
|
62
|
4,306
|
||||||||||||||||||||||||
|
Foreign currency translation adjustment gain (loss)
|
-
|
-
|
-
|
-
|
57
|
57
|
(6
|
)
|
51
|
|||||||||||||||||||||||
|
Net loss
|
-
|
-
|
-
|
(28,837
|
)
|
-
|
(28,837
|
)
|
(1,424
|
)
|
(30,261
|
)
|
||||||||||||||||||||
|
Balances at June 30, 2020 (unaudited)
|
30,117,881
|
3
|
277,618
|
(245,682
|
)
|
197
|
32,136
|
(514
|
)
|
31,622
|
||||||||||||||||||||||
|
Balances at January 1, 2019 (audited)
|
23,184,612
|
2
|
170,950
|
(178,760
|
)
|
42
|
(7,766
|
)
|
(1,616
|
)
|
(9,382
|
)
|
||||||||||||||||||||
|
Issuance of ordinary shares
|
309,868
|
-
|
5,429
|
-
|
-
|
5,429
|
-
|
5,429
|
||||||||||||||||||||||||
|
Share-based compensation
|
100,000
|
-
|
1,287
|
-
|
-
|
1,287
|
-
|
1,287
|
||||||||||||||||||||||||
|
Capital injection shared by noncontrolling interests
|
-
|
-
|
(578
|
)
|
-
|
-
|
(578
|
)
|
578
|
-
|
||||||||||||||||||||||
|
Foreign currency translation adjustment gain (loss)
|
-
|
-
|
-
|
-
|
34
|
34
|
(3
|
)
|
31
|
|||||||||||||||||||||||
|
Net loss
|
-
|
-
|
-
|
(14,645
|
)
|
-
|
(14,645
|
)
|
(802
|
)
|
(15,447
|
)
|
||||||||||||||||||||
|
Balances at June 30, 2019 (unaudited)
|
23,594,480
|
2
|
177,088
|
(193,405
|
)
|
76
|
(16,239
|
)
|
(1,843
|
)
|
(18,082
|
)
|
||||||||||||||||||||
| 8. |
Restricted net assets
|
As a result of PRC laws and regulations, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. As of December 31, 2019 and
June 30, 2020, amounts restricted were the net assets of the Company’s PRC subsidiaries, which amounted to $2,032 and nil, respectively.
| 9. |
Employee defined contribution plan
|
Full time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund
and other welfare benefits are provided to employees. Chinese labor regulations require that the Company’s PRC subsidiaries make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The
Company has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits, which were expensed as incurred, were $18 and $39 for the three and six months ended June 30, 2019 and were $21
and $47 for the three and six months ended June 30, 2020, respectively.
13
BEYONDSPRING INC.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of U.S. Dollars (“$”) and Renminbi (“RMB”), except for number of shares and per share data)
| 10. |
Net loss per share
|
Basic and diluted net loss per share attributable to ordinary shareholders was calculated as follows:
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
|
2019
(Unaudited)
|
2020
(Unaudited)
|
2019
(Unaudited)
|
2020
(Unaudited)
|
|||||||||||||
|
Numerator:
|
||||||||||||||||
|
Net loss attributable to BeyondSpring Inc.—basic and diluted
|
$
|
(7,352
|
)
|
$
|
(12,753
|
)
|
$
|
(14,645
|
)
|
$
|
(28,837
|
)
|
||||
|
Denominator:
|
||||||||||||||||
|
Weighted average number of ordinary shares outstanding—basic and diluted
|
23,094,161
|
27,921,026
|
23,061,941
|
27,826,737
|
||||||||||||
|
Net loss per share —basic and diluted
|
$
|
(0.32
|
)
|
$
|
(0.46
|
)
|
$
|
(0.64
|
)
|
$
|
(1.04
|
)
|
||||
The effects of restricted shares and share options were excluded from the calculation of diluted loss per share as their effect would have been anti-dilutive during the three and six months
ended June 30, 2019 and 2020.
| 11. |
Supplemental balance sheet information
|
Other current liabilities consist of the following:
|
As of December 31,
2019
|
As of June 30,
2020
|
|||||||
| $ |
$ |
|||||||
|
(Unaudited)
|
||||||||
|
Compensation related
|
226
|
228
|
||||||
|
Professional services
|
-
|
374
|
||||||
|
Other taxes related
|
798
|
815
|
||||||
|
Others
|
65
|
45
|
||||||
|
Total
|
1,089
|
1,462
|
||||||
14
BEYONDSPRING INC.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of U.S. Dollars (“$”) and Renminbi (“RMB”), except for number of shares and per share data)
| 12. |
Share-based compensation
|
During the six months ended June 30, 2020, the Company granted a total of 381,420 share options and 3,293 restricted shares, respectively.
The following table summarizes total share-based compensation expense recognized for the three and six months ended June 30, 2019 and 2020:
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
|
2019
|
2020
|
2019
|
2020
|
|||||||||||||
| $ |
$ |
$ | $ |
|||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
|
Research and development
|
220
|
568
|
376
|
3,751
|
||||||||||||
|
General and administrative
|
696
|
268
|
911
|
555
|
||||||||||||
|
Total
|
916
|
836
|
1,287
|
4,306
|
||||||||||||
15