Sagimet Biosciences Inc 10-Q for FY2023 Q3

Sagimet Biosciences Inc. (SGMT)

10-Q 2023-11-13 For: 2023-09-30

Added on April 06, 2026

About this 10-Q

Sagimet Biosciences Inc filed this 10-Q on November 13, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2M
Net loss: $6.35M; compared with a net loss of $7.47M a year earlier

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(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, 2023

OR

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

	For the transition period from to


Delaware	20-5991472
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

155 Bovet Road, Suite 303
San Mateo, California	94402
(Address of principal executive offices)	(Zip Code)


Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Series A Common Stock, $0.0001 par value per share	SGMT	Nasdaq Global Market


Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	Smaller reporting company ☒

	Emerging growth company ☒


	PART I - FINANCIAL INFORMATION	Page

Item 1.	Financial Statements (Unaudited)	5
	Condensed Balance Sheets	5
	Condensed Statements of Operations and Comprehensive Loss	6
	Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)	7
	Condensed Statements of Cash Flows	9
	Notes to Condensed Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	35

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		41


	As of		As of
	September 30,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	101,842	$	158
Short-term investments in marketable securities		—		32,187
Prepaid expenses and other current assets		974		447
Total current assets		102,816		32,792
Operating lease right-of-use assets		109		212
Deposits		—		27
Total assets	$	102,925	$	33,031
Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	1,702	$	1,125
Accrued expenses and other current liabilities		3,244		4,021
Operating lease liabilities		103		133
Total current liabilities		5,049		5,279
Long-term liabilities
Operating lease liabilities, less current portion		—		78
Series A common stock warrant liability		1		—
Redeemable convertible preferred stock warrant liability		—		4
Total liabilities		5,050		5,361

Commitments and contingencies (Note 7)

Redeemable convertible preferred stock: $0.0001 par value; no shares and 1,373,810,170 shares authorized at September 30, 2023 and December 31, 2022, respectively; no shares and 1,373,730,625 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively; liquidation value of $232,963 at December 31, 2022		—		214,620
Stockholders’ equity (deficit):
Undesignated preferred stock, $0.0001 par value; 10,000,000 shares and no shares authorized at September 30, 2023 and December 31, 2022, respectively; no shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		—		—
Common stock, $0.0001 par value; no shares and 1,608,370,000 shares authorized at September 30, 2023 and December 31, 2022, respectively; no shares and 185,084 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		—		1
Series A common stock, $0.0001 par value; 500,000,000 shares and no shares authorized at September 30, 2023 and December 31, 2022, respectively; 21,375,402 shares and no shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		2		—
Series B common stock, $0.0001 par value; 15,000,000 shares and no shares authorized at September 30, 2023 and December 31, 2022, respectively; 1,520,490 and no shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		—		—
Additional paid-in capital		339,466		35,001
Accumulated other comprehensive loss		—		(84)
Accumulated deficit		(241,593)		(221,868)
Total stockholders’ equity (deficit)		97,875		(186,950)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)	$	102,925	$	33,031


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue:
License revenue	$	2,000	$	—	$	2,000	$	—
Total revenue		2,000		—		2,000		—
Operating expenses:
Research and development		4,958		6,838		14,121		19,072
General and administrative		4,494		848		9,153		4,595
Total operating expenses		9,452		7,686		23,274		23,667
Loss from operations		(7,452)		(7,686)		(21,274)		(23,667)
Other income, net:
Change in fair value of redeemable convertible preferred stock warrant liability		—		1		(1)		3
Change in fair value of Series A common stock warrant liability		4		—		4		—
Interest income and other		1,095		218		1,546		360
Total other income, net		1,099		219		1,549		363
Net loss	$	(6,353)	$	(7,467)	$	(19,725)	$	(23,304)
Other comprehensive (loss) gain:
Net unrealized (loss) gain on investments in marketable securities		—		(56)		84		(162)
Total other comprehensive (loss) gain		—		(56)		84		(162)
Comprehensive loss	$	(6,353)	$	(7,523)	$	(19,641)	$	(23,466)
Net loss per share attributable to common stockholders, basic and diluted	$	—	$	(40.34)	$	—	$	(126.13)
Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted		—		185,084		—		184,756

Net loss per share attributable to Series A and Series B common stockholders, basic and diluted	$	(0.35)	$	—	$	(3.22)	$	—
Weighted-average shares outstanding used in computing net loss per share attributable to Series A and Series B common stockholders, basic and diluted		18,194,682		—		6,131,541		—


	Redeemable																				Accumulated
	Convertible								Series A				Series B				Additional				Other		Total
	Preferred Stock				Common Stock				Common Stock				Common Stock				Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit		(Loss) Income		(Deficit) Equity
Balance at January 1, 2023		1,373,730,625	$	214,620		185,084	$	1		—	$	—		—	$	—	$	35,001	$	(221,868)	$	(84)	$	(186,950)
Net loss		—		—		—		—		—		—		—		—		—		(6,587)		—		(6,587)
Unrealized gain on investments in marketable securities		—		—		—		—		—		—		—		—		—		—		71		71
Stock-based compensation expense		—		—		—		—		—		—		—		—		767		—		—		767
Balance at March 31, 2023		1,373,730,625	$	214,620		185,084	$	1		—	$	—		—	$	—	$	35,768	$	(228,455)	$	(13)	$	(192,699)
Net loss		—		—		—		—		—		—		—		—		—		(6,785)		—		(6,785)
Exercise of common stock warrants		—		—		25,231		—		—		—		—		—		—		—		—		—
Unrealized gain on investments in marketable securities		—		—		—		—		—		—		—		—		—		—		13		13
Stock-based compensation expense		—		—		—		—		—		—		—		—		1,057		—		—		1,057
Balance at June 30, 2023		1,373,730,625	$	214,620		210,315	$	1		—	$	—		—	$	—	$	36,825	$	(235,240)	$	—	$	(198,414)
Net loss		—		—		—		—		—		—		—		—		—		(6,353)		—		(6,353)
Conversion of Redeemable Convertible Preferred Stock to Series A and Series B Common Stock		(1,373,730,625)		(214,620)		—		—		15,117,912		1		1,520,490		—		214,619		—		—		214,620
Reclass of Common Stock to Series A Common Stock		—		—		(210,315)		(1)		210,315		1		—		—		—		—		—		—
Sale of Series A Common Stock in public offering, net of issuance costs of $10,267		—		—		—		—		6,026,772		—		—		—		86,161		—		—		86,161
Issuance of Series A Common Stock upon exercise of stock options		—		—		—		—		7,614		—		—		—		6		—		—		6
Exercise of common stock warrants		—		—		—		—		12,789		—		—		—		—		—		—		—
Stock-based compensation expense		—		—		—		—		—		—		—		—		1,855		—		—		1,855
Balance at September 30, 2023		—	$	—		—	$	—		21,375,402	$	2		1,520,490	$	—	$	339,466	$	(241,593)	$	—	$	97,875


													Accumulated
	Redeemable convertible								Additional				Other		Total
	Preferred Stock				Common Stock				Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit		Loss		Deficit
Balance at January 1, 2022		1,373,730,625	$	214,620		183,457	$	1	$	33,109	$	(191,369)	$	—	$	(158,259)
Net loss		—		—		—		—		—		(8,735)		—		(8,735)
Exercise of stock options		—		—		1,627		—		12		—		—		12
Stock-based compensation expense		—		—		—		—		387		—		—		387
Balance at March 31, 2022		1,373,730,625	$	214,620		185,084	$	1	$	33,508	$	(200,104)	$	—	$	(166,595)
Net loss		—		—		—		—		—		(7,102)		—		(7,102)
Unrealized loss on investments in marketable securities		—		—		—		—		—		—		(106)		(106)
Stock-based compensation expense		—		—		—		—		383		—		—		383
Balance at June 30, 2022		1,373,730,625	$	214,620		185,084	$	1	$	33,891	$	(207,206)	$	(106)	$	(173,420)
Net loss		—		—		—		—		—		(7,467)		—		(7,467)
Unrealized loss on investments in marketable securities		—		—		—		—		—		—		(56)		(56)
Stock-based compensation expense		—		—		—		—		389		—		—		389
Balance at September 30, 2022		1,373,730,625	$	214,620		185,084	$	1	$	34,280	$	(214,673)	$	(162)	$	(180,554)


	As of December 31, 2022
	Amortized		Unrealized		Unrealized		Estimated
	cost		Gains		Losses		Fair Value
Commercial paper	$	15,950	$	—	$	—	$	15,950
Corporate debt securities		12,286		—		(65)		12,221
U.S. Treasury securities		4,035		—		(19)		4,016
Total	$	32,271	$	—	$	(84)	$	32,187


	September 30, 2023
	Total
	fair value		Level 1		Level 2		Level 3
Liabilities:
Series A Common Stock Warrant Liability	$	1	$	—	$	—	$	1


	December 31, 2022
	Total fair
	value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents - money market funds	$	38	$	38	$	—	$	—
Commercial paper		15,950		—		15,950		—
Corporate debt securities		12,221		—		12,221		—
U.S. Treasury securities		4,016		—		4,016		—
Total	$	32,225	$	38	$	32,187	$	—
Liabilities:
Redeemable Convertible Preferred Stock Warrant Liability	$	4	$	—	$	—	$	4


Balance - January 1, 2023	$	4
Change in fair value of Redeemable Convertible Preferred Stock Warrant Liability		1
Change in fair value of Series A Common Stock Warrant Liability		(4)
Balance - September 30, 2023	$	1

Balance - January 1, 2022	$	7
Change in fair value of Redeemable Convertible Preferred Stock Warrant Liability		(3)
Balance - December 31, 2022	$	4


	September 30,
	2023
Remainder of 2023	$	27
2024		79
Total lease payments		106
Less: interest		(3)
Total	$	103


	December 31,
	2022
2023	$	157
2024		80
Total lease payments		237
Less: interest		(26)
Total	$	211


	December 31, 2022
		Issued and
	Authorized	Outstanding	Liquidation		Carrying
	Shares	Shares	Preference		Value
Series A	23,301	23,301	$	233	$	232
Series B	3,217	3,217		37		37
Series B‑1	8,827,439	8,827,439		7,768		7,258
Series C	22,732,250	22,732,250		20,004		17,909
Series D	24,509,954	24,430,409		21,499		19,833
Series A’	720,199	720,199		—		—
Series B’	1,953,304	1,953,304		—		—
Series B‑1’	14,001,243	14,001,243		—		2,780
Series C’	1,037	1,037		—		—
Series D’	3,475,426	3,475,426		—		739
Series D‑1	51,331,148	51,331,148		45,171		26,894
Series E	631,638,725	631,638,725		58,231		58,496
Series F	614,592,927	614,592,927		80,020		80,442
Total	1,373,810,170	1,373,730,625	$	232,963	$	214,620


				Weighted-
	Number of			Average
	Shares	Weighted-		Remaining
	Underlying	Average		Contractual	Aggregate
	Outstanding	Exercise		Term	Intrinsic
	Options	Price		(in Years)	Value
Outstanding, January 1, 2023	3,190,450	$	7.10	8.1	$	3,998
Options granted	585,919		13.51
Options exercised	(7,614)		0.79
Options cancelled	(498)		4.77
Options expired	(1,752)		0.79
Outstanding, September 30, 2023	3,766,505	$	8.11	7.69	$	17,737
Shares vested and exercisable as of September 30, 2023	1,784,725	$	6.98	6.34	$	10,206


	Nine Months Ended				Nine Months Ended
	September 30, 2023				September 30, 2022
Expected volatility	89	-	91	%	88	-	90	%
Risk-free interest rate			3.6	%	2.3	-	3.0	%
Dividend yield			—				—
Expected term	5.0	-	7.0	years	5.4	-	7.0	years


	Three Months		Three Months		Nine Months		Nine Months
	Ended September 30,		Ended September 30,		Ended September 30,		Ended September 30,
	2023		2022		2023		2022
Numerator:
Net loss attributable to common stockholders	$	—	$	(7,467)	$	—	$	(23,304)
Denominator:
Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted		—		185,084		—		184,756
Net loss per share attributable to common stockholders, basic and diluted	$	—	$	(40.34)	$	—	$	(126.13)

Numerator:
Net loss attributable to Series A and Series B common stockholders	$	(6,353)	$	—	$	(19,725)	$	—
Denominator:
Weighted-average shares outstanding used in computing net loss per share attributable to Series A and Series B common stockholders, basic and diluted		18,194,682		—		6,131,541		—
Net loss per share attributable to Series A and Series B common stockholders, basic and diluted	$	(0.35)	$	—	$	(3.22)	$	—


	Three Months Ended
	September 30,
	2023		2022		Change		% Change
Revenue:
License revenue	$	2,000	$	—	$	2,000	nm
Total revenue		2,000		—		2,000	nm

Operating expenses:
Research and development		4,958		6,838		(1,880)	(27)	%
General and administrative		4,494		848		3,646	nm
Total operating expenses		9,452		7,686		1,766	23	%
Loss from operations		(7,452)		(7,686)		234	(3)	%
Other income, net:
Change in fair value of redeemable convertible preferred stock warrant liability		—		1		(1)	nm
Change in fair value of Series A common stock warrant liability		4		—		4	nm
Interest income and other		1,095		218		877	nm
Total other income, net		1,099		219		880	nm
Net loss	$	(6,353)	$	(7,467)	$	1,114	(15)	%


Exhibit Number	Description	Method of Filing

3.1	Eleventh Amended and Restated Certificate of Incorporation of Sagimet Biosciences Inc.	Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-41742) filed on July 18, 2023)

3.2	Second Amended and Restated Bylaws of Sagimet Biosciences Inc.	Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-41742) filed on July 18, 2023)

10.1•	Sagimet Biosciences Inc. 2023 Stock Option and Incentive Plan	Incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form S-1 (File No. 333-272901) filed on June 23, 2023)

10.2•	Forms of Incentive Stock Option Agreement, Non-Qualified Stock Option Agreement for Non-Employee Directors and Non-Qualified Stock Option Agreement for Company Employees under the Sagimet Biosciences Inc. 2023 Stock Option and Incentive Plan under the Sagimet Biosciences Inc. 2023 Stock Option and Incentive Plan	Incorporated herein by reference to Exhibit 10.6 to the Company’s Registration Statement on Form S-1 (File No. 333-272901) filed on June 23, 2023)

10.3•	Forms of Restricted Stock Unit Award Agreement for Non-Employee Directors and Restricted Stock Unit Award Agreement for Company Employees under the Sagimet Biosciences Inc. 2023 Stock Option and Incentive Plan	Incorporated herein by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1 (File No. 333-272901) filed on June 23, 2023)

10.4•	Form of Restricted Stock Award Agreement under the Sagimet Biosciences Inc. 2023 Stock Option and Incentive Plan	Incorporated herein by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1 (File No. 333-272901) filed on June 23, 2023)

10.5•	Sagimet Biosciences Inc. 2023 Employee Stock Purchase Plan	Incorporated herein by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1 (File No. 333-272901) filed on June 23, 2023)

10.6•	Sagimet Biosciences Inc. 2023 Non-Employee Director Compensation Policy	Incorporated herein by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (File No. 333-272901) filed on June 23, 2023)

10.7•	Sagimet Biosciences Inc. Senior Executive Cash Incentive Bonus Plan	Incorporated herein by reference to Exhibit 10.21 to the Company’s Registration Statement on Form S-1 (File No. 333-272901) filed on June 23, 2023)

10.8*	Amended and Restated Patent Assignment Agreement by and between the Registrant and Gannex Pharma Co., Ltd., dated July 2, 2023	Incorporated herein by reference to Exhibit 10.24 to the Company’s Registration Statement on Form S-1 (File No. 333-272901) filed on July 10, 2023)

10.9•	Executive Employment Agreement by and between the Company and David Happel, dated August 15, 2023	Incorporated herein by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No. 001-41742) filed on August 21, 2023)

10.10•	Executive Employment Agreement by and between the Company and George Kemble, dated August 15, 2023	Incorporated herein by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (File No. 001-41742) filed on August 21, 2023)

10.11•	Executive Employment Agreement by and between the Company and Eduardo Martins, dated August 15, 2023	Incorporated herein by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (File No. 001-41742) filed on August 21, 2023)

10.12•	Executive Employment Agreement by and between the Company and Anthony Rimac, dated August 15, 2023	Incorporated herein by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q (File No. 001-41742) filed on August 21, 2023)

10.13•	Executive Employment Agreement by and between the Company and Elizabeth Rozek, dated August 15, 2023	Incorporated herein by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q (File No. 001-41742) filed on August 21, 2023)

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	Filed herewith.

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	Filed herewith.

32.1	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2022	Furnished herewith.

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101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed herewith.

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	SAGIMET BIOSCIENCES, INC.

Date: November 13, 2023	By:	/s/ David Happel
		David Happel
		President and Chief Executive Officer
		(Principal Executive Officer)


Date: November 13, 2023	By:	/s/ Anthony Rimac
		Anthony Rimac
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Date: November 13, 2023	By:	/s/ David Happel
		David Happel
		President and Chief Executive Officer
		(Principal Executive Officer)

[
Date: November 13, 2023	By:	/s/ Anthony Rimac
		Anthony Rimac
		Chief Financial Officer
		(Principal Financial and Accounting Officer)