Centessa Pharmaceuticals plc 10-Q for FY2021 Q2

Centessa Pharmaceuticals plc (CNTA)

10-Q 2021-08-16 For: 2021-06-30

Added on April 10, 2026

About this 10-Q

Centessa Pharmaceuticals plc filed this 10-Q on August 16, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $41.45M; compared with a net loss of $2.23M a year earlier
Diluted EPS: -$0.65

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, nominal value £0.002 per share	CNTA	Nasdaq Stock Market, LLC*
American Depositary Shares, each representing one ordinary share, nominal value £0.002 per share	CNTA	Nasdaq Stock Market, LLC


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	o
		Emerging growth company	x


		Page
PART I.	FINANCIAL INFORMATION	6

Item 1.	Financial Statements	6
	Consolidated and Combined Balance Sheets	6
	Consolidated and C ombined Statements of Operations and Comprehensive Loss	7
	Consolidated and Combined Statements of Shareholders’ Equity	8
	Consolidated and Com bined Statements of Cash Flows	11
	Notes to U naudited C onsolidated and Combined F inancial S tatements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	53
Item 4.	Controls and Procedures	53

PART II.	OTHER INFORMATION	54

Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	118
Item 3.	Defaults Upon Senior Securities	118
Item 4.	Mine Safety Disclosures	119
Item 5.	Other Information	119
Item 6.	Exhibits	120
Signatures		121


	Successor		Predecessor
	June 30, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	613,759	$	7,227
Tax incentive receivable	13,939		2,633
Prepaid expenses and other current assets	15,984		1,305
Total current assets	643,682		11,165
Property and equipment, net	75		—
Tax incentive receivable	—		552
Total assets	$	643,757	$	11,717
Liabilities, convertible preferred shares, combined deficit and shareholders’ equity
Current liabilities:
Accounts payable	$	7,261	$	1,032
Accrued expenses and other current liabilities	16,924		1,047
Convertible term notes	—		5,339
Term loans	—		288
Derivative liability	—		913
Total current liabilities	24,185		8,619
Contingent value rights	33,930		—
Total liabilities	58,115		8,619
Commitments and contingencies (Note 7)
Convertible preferred shares (£0.0001 nominal value): No shares authorized issued and outstanding at June 30, 2021; 6,549,205 shares issued and outstanding at December 31, 2020	—		25,521
Combined deficit and shareholders’ equity:
Combined deficit	—		(22,423)
Series A convertible preferred shares: £0.002 nominal value: 22,840,902 shares authorized. No shares issued and outstanding	—		—
Ordinary shares: £0.002 nominal value: 89,899,419 shares authorized, issued and outstanding at June 30, 2021; No shares authorized, issued and outstanding at December 31, 2020	252		—
Additional paid-in capital	866,889		—
Accumulated other comprehensive income (loss)	3,225		—
Accumulated deficit	(284,724)		—
Total combined deficit and shareholders' equity	585,642		3,098
Total liabilities, convertible preferred shares, combined deficit and shareholders' equity	$	643,757	$	11,717


	Successor				Predecessor
	Three months ended June 30, 2021		Period from January 30, 2021 through June 30, 2021		Period from January 1, 2021 through January 29, 2021		Three months ended June 30, 2020		Six months ended June 30, 2020
Operating expenses:
Research and development	18,134		28,276		600		1,871		4,681
General and administrative	11,841		17,436		121		258		638
Change in fair value of contingent value rights	11,312		11,312		—		—		—
Acquired in-process research and development	—		220,454		—		—		—
Loss from operations	(41,287)		(277,478)		(721)		(2,129)		(5,319)
Interest income (expense), net	27		35		(9)		(17)		(34)
Amortization of debt discount	—		—		(37)		(72)		(142)
Other income (expense), net	(191)		(2,699)		—		(10)		(12)
Gain on extinguishment of debt	—		—		—		—		267
Net loss	(41,451)		(280,142)		(767)		(2,228)		(5,240)
Other comprehensive loss:
Foreign currency translation adjustment	1,094		3,315		45		(25)		(731)
Total comprehensive loss	$	(40,357)	$	(276,827)	$	(722)	$	(2,253)	$	(5,971)

Net loss per ordinary share - basic and diluted	$	(0.65)	$	(4.89)
Weighted average ordinary shares outstanding - basic and diluted	63,516,656		57,309,693


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


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


	Series A Preferred			Ordinary Shares			Additional paid-in capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Balance at January 1, 2021	—	—		7,500,000	21		—		$	(86)	$	(3,149)	$	(3,214)
Foreign currency translation adjustments	—	—		—	—		—		(4)		—		(4)
Net loss	—	—		—	—		—		—		(1,433)		(1,433)
Balance at January 29, 2021	—	$	—	7,500,000	$	21	$	—	$	(90)	$	(4,582)	$	(4,651)


	Convertible Preferred Shares									Combined Deficit
	Series A			Series B			Series Seed
	Shares	Amount		Shares	Amount		Shares	Amount
Balance at January 1, 2021	4,337,282	$	13,329	1,111,923	$	10,840	1,100,000	$	1,352	$	(22,423)
Foreign currency translation adjustments	—	—		—	—		—	—		45
Net loss	—	—		—	—		—	—		(767)
Balance at January 29, 2021	4,337,282	$	13,329	1,111,923	$	10,840	1,100,000	$	1,352	$	(23,145)


Unvested ordinary shares			988,342
Stock options			10,530,410
			11,518,752


Estimated fair value of Centessa ordinary shares issued	$	261,387
Estimated fair value of replacement equity awards allocated to consideration paid	1,310
Estimated fair value of contingent value rights	22,618
Transaction costs	4,597
Total consideration given	$	289,912


Assets acquired:
Cash and cash equivalents	$	68,038
Tax incentive receivable	8,752
Prepaid expenses and other current assets	2,551
Other assets	203
In-process research and development assets	223,593
Total assets acquired	303,137


Liabilities assumed:
Accounts payable	3,607
Accrued expenses and other current liabilities	3,128
Convertible notes	6,199
Loan with related party	291
Total liabilities assumed	13,225
Net assets acquired	$	289,912


	Fair value measurement at reporting date using
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
June 30, 2021 (Successor)
Liabilities
Contingent Value Rights	$	—	$	—	$	33,930


	Contingent Value Rights		Derivative Liability
Balance at January 1, 2021 (Predecessor)	$	—	$	913
Additions	—		—
Change in fair value	—		—
Settlements	—		(913)
Balance at January 29, 2021 (Predecessor)	$	—	$	—
Balance at January 30, 2021 (Successor)	$	—	$	—
Additions	22,618		—
Balance at March 31, 2021 (Successor)	22,618		—
Change in fair value of contingent value rights	11,312		—
Balance at June 30, 2021 (Successor)	$	33,930	$	—


	Number of Shares	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term
Balance at January 30, 2021	—
Granted	11,414,307	$	6.89
Exercised	(50,000)	$	5.84
Forfeited	(833,897)	$	5.84
Balance at June 30, 2021	10,530,410	$	6.98	9.6
Exercisable at June 30, 2021	518,857	$	4.40	7.6


Expected term (in years)	5.84
Expected stock price volatility	65.51	%
Risk-free interest rate	0.85	%
Expected dividend yield	0	%
Estimated fair value of ordinary share	$6.98


	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
Unvested at January 30, 2021	—
Granted	1,213,802	$	15.57
Vested	(225,460)	$	5.84
Unvested at June 30, 2021	988,342	$	17.79


	Successor		Predecessor
	Three months ended June 30, 2021		Three months ended June 30, 2020
ZF874 (Z Factor)	$	2,445	$	721
LB1 (LockBody)	685		315
LB2 (LockBody)	736		220
MGX292 (Morphogen-IX)	466		638
Lixivaptan (Palladio)	3,152		—
SerpinPC (ApcinteX)	535		—
PearlRiver (preclinical)	708		—
Imgatuzumab (Pega-One)	2,219		—
CBS001/CBS004 (Capella)	636		—
Janpix (preclinical)	1,150		—
Inexia and Orexia (preclinical)	4,155		—
Other preclinical and clinical development expenses	700		—
Personnel expenses	3,790		505
Research tax credits	(3,243)		(528)
	$	18,134	$	1,871


	Successor		Predecessor
	June 30, 2021		December 31, 2020
D&O Insurance	$	10,234	$	9
Research and development costs	3,941		992
Value added tax receivable	1,365		298
Other	444		6
	$	15,984	$	1,305


	Predecessor
	December 31, 2020
Morphogen-IX deficit
Ordinary shares	$	13
Additional paid-in capital	364
Accumulated other comprehensive income	629
Accumulated deficit	(9,225)
Total Morphogen-IX deficit	$	(8,219)
Z Factor deficit
Ordinary shares	$	12
Additional paid-in capital	461
Accumulated other comprehensive income	139
Accumulated deficit	(8,568)
Total Z Factor deficit	$	(7,956)
LockBody deficit
Ordinary shares	$	—
Additional paid-in capital	—
Accumulated other comprehensive income (loss)	(196)
Accumulated deficit	(6,052)
Total LockBody deficit	$	(6,248)
Total combined deficit	$	(22,423)


	Successor				Predecessor
	Three Months Ended June 30, 2021		Period from January 30, 2021 through June 30, 2021		Period from January 1, 2021 through January 29, 2021		Three Months Ended June 30, 2020		Six Months Ended June 30, 2020
Research and development	$	924	$	2,041	$	—	$	90	$	153
General and administrative	2,305		3,919		—		—		—
	$	3,229	$	5,960	$	—	$	90	$	153


	Successor		Predecessor
	Period from January 30, 2021 through June 30, 2021		Period from January 1, 2021 through January 29, 2021		Six months ended June 30, 2020
Operating expenses:
Research and development	$	28,276	$	600	$	4,681
General and administrative	17,436		121		638
Change in fair value of contingent value rights	11,312		—		—
Acquired in-process research and development	220,454		—		—
Loss from operations	(277,478)		(721)		(5,319)
Interest income (expense), net	35		(9)		(34)
Amortization of debt discount	—		(37)		(142)
Other income (expense), net	(2,699)		—		(12)
Gain on extinguishment of debt	—		—		267
Net loss	$	(280,142)	$	(767)	$	(5,240)


Exhibit number						Description of exhibit

3.1*						Articles of Association of the registrant, as currently in effect (incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-255393)).
4.1						Form of Deposit Agreement (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1 (File No. 333-255393)).
4.2						Form of American Depositary Receipt (included in Exhibit 4.1) (incorporated by reference to Exhibit 4 .2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-255393)).
10.2#						Senior Executive Cash Incentive Bonus Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-255393 ).
10.3#						2021 Employee Share Purchase Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-255393)).
10.4#						2021 Share Option Plan and forms of award agreements thereunder (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1A (File No. 333-255393)).
10.7#						Form of Deed of Indemnity between the registrant and each of its directors and executive officers. (incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-255393)).
31.1						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 .
32.2*						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


#			Indicates a management contract or any compensatory plan, contract or arrangement.
*			This certification will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically incorporated by reference into such filing.


			CENTESSA PHARMACEUTICALS PLC

			By:			/s/ Saurabh Saha, M.D., Ph.D.
						Name: Saurabh Saha, M.D., Ph.D.
						Title: Chief Executive Officer (Principal Executive Officer)




			By:			/s/ Gregory Weinhoff, M.D., M.B.A.
						Name: Gregory Weinhoff, M.D., M.B.A.
						Title: Chief Financial Officer (Principal Financial Officer)