Instil Bio, Inc 10-Q for FY2022 Q3

Instil Bio, Inc. (TIL)

10-Q 2022-11-14 For: 2022-09-30

Added on April 07, 2026

About this 10-Q

Instil Bio, Inc filed this 10-Q on November 14, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).

Headline figures

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $56.22M; compared with a net loss of $43.01M a year earlier
Diluted EPS: -$0.43; compared with -$0.33 a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.000001 par value per share	TIL	The Nasdaq Stock Market LLC


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


Class of Common Stock			Outstanding at
129,775,097 shares of Common Stock, $0.000001 par value per share			November 10, 2022


			Page
Part I. Financial Information			2
Item 1. Financial Statements (Unaudited)			2
Condensed Consolidated Balance Sheets			2
Condensed Consolidated Statements of Operations and Comprehensive Loss			3
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity			4
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			18
Item 3. Quantitative and Qualitative Disclosures About Market Risk			29
Item 4. Controls and Procedures			29
Part II. Other Information			31
Item 1. Legal Proceedings			31
Item 1A. Risk Factors			31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			94
Item 3. Defaults Upon Senior Securities			94
Item 4. Mine Safety Disclosures			94
Item 5. Other Information			94
Item 6. Exhibits			95
Signatures			97


	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	41,118	$	37,590
Marketable securities	262,169		416,509
Prepaid expenses and other current assets	10,369		9,921
Total current assets	313,656		464,020
Property, plant and equipment, net	185,057		121,999
Operating lease right-of-use assets	13,190		—
Intangibles	10,104		10,104
Goodwill	5,722		5,722
Other long-term assets	5,012		8,138
Total assets	$	532,741	$	609,983
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,328	$	5,568
Accrued expenses and other current liabilities	36,361		34,449
Contingent consideration, current portion	412		1,341
Total current liabilities	42,101		41,358
Contingent consideration, net of current portion	10,518		10,980
Operating lease liabilities, non-current	5,630		—
Deferred tax liabilities	555		2,426
Loan payable	62,974		—
Other long-term liabilities	375		20
Total liabilities	122,153		54,784
Commitments and contingencies (Note 6)
Stockholders’ equity:
Common stock, par value $0.000001 per share; 300,000,000 shares authorized; 129,753,672 and 129,028,278 shares issued and outstanding as of September 30, 2022, and December 31, 2021, respectively	—		—
Additional paid-in capital	781,973		757,003
Accumulated other comprehensive loss	(335)		(87)
Accumulated deficit	(371,050)		(201,717)
Total stockholders’ equity	410,588		555,199
Total liabilities and stockholders’ equity	$	532,741	$	609,983


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


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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operating expenses:
Research and development	$	39,660	$	29,064	$	120,334	$	64,674
General and administrative	16,989		13,960		49,325		37,134
Total operating expenses	56,649		43,024		169,659		101,808
Loss from operations	(56,649)		(43,024)		(169,659)		(101,808)
Interest income	1,276		22		1,859		45
Interest expense	(807)		—		(1,138)		—
Other expense, net	(415)		(661)		(1,863)		(702)
Loss before income tax benefit	(56,595)		(43,663)		(170,801)		(102,465)
Income tax benefit	371		658		1,468		1,021
Net loss	(56,224)		(43,005)		(169,333)		(101,444)
Other comprehensive (loss) income:
Foreign currency translation	391		124		580		197
Unrealized loss on available-for-sale securities, net	(169)		(18)		(828)		(18)
Net comprehensive loss	$	(56,002)	$	(42,899)	$	(169,581)	$	(101,265)
Net loss per share, basic and diluted	$	(0.43)	$	(0.33)	$	(1.31)	$	(1.03)
Weighted-average shares used in computing net loss per share, basic and diluted	129,680,217		128,794,142		129,391,225		98,256,027


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount				(Loss) Income
Balance - December 31, 2021	129,028,278	$	—	$	757,003	$	(87)	$	(201,717)	$	555,199
Shares of common stock issued in connection with incentive stock plan	189,638	—		338		—		—		338
Stock-based compensation	—	—		7,493		—		—		7,493
Net loss	—	—		—		—		(54,117)		(54,117)
Other comprehensive loss	—	—		—		(354)		—		(354)
Balance - March 31, 2022	129,217,916	—		764,834		(441)		(255,834)		508,559
Shares of common stock issued in connection with incentive stock plan	332,381	—		565		—		—		565
Stock-based compensation	—	—		8,316		—		—		8,316
Net loss	—	—		—		—		(58,992)		(58,992)
Other comprehensive loss	—	—		—		(116)		—		(116)
Balance - June 30, 2022	129,550,297	—		773,715		(557)		(314,826)		458,332
Shares of common stock issued in connection with incentive stock plan	203,375	—		269		—		—		269
Stock-based compensation	—	—		7,989		—		—		7,989
Net loss	—	—		—		—		(56,224)		(56,224)
Other comprehensive income	—	—		—		222		—		222
Balance - September 30, 2022	129,753,672	$	—	$	781,973	$	(335)	$	(371,050)	$	410,588


	Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount				(Loss) Income
Balance - December 31, 2020	70,176,046	$	331,966	20,591,554	$	—	$	5,607	$	(283)	$	(44,923)	$	(39,599)
Issuance of Series C convertible preferred shares at $12.58 per share	4,174,551	52,460		—	—		—		—		—		—
Issuance of common shares upon initial public offering net of underwriting discounts, commissions and offering costs	—	—		18,400,000	—		339,174		—		—		339,174
Conversion of redeemable convertible preferred stock	(74,350,597)	(384,426)		89,220,699	—		384,426		—		—		384,426
Shares of common stock issued in connection with incentive stock plan	—	—		530,870	—		1,438		—		—		1,438
Stock-based compensation	—	—		—	—		2,812		—		—		2,812
Net loss	—	—		—	—		—		—		(23,128)		(23,128)
Foreign currency translation	—	—		—	—		—		30		—		30
Balance - March 31, 2021	—	—		128,743,123	—		733,457		(253)		(68,051)		665,153
Deferred financing costs in connection with initial public offering	—	—		—	—		(158)		—		—		(158)
Stock-based compensation	—	—		—	—		5,745		—		—		5,745
Net loss	—	—		—	—		—		—		(35,311)		(35,311)
Foreign currency translation	—	—		—	—		—		43		—		43
Balance - June 30, 2021	—	—		128,743,123	—		739,044		(210)		(103,362)		635,472
Shares of common stock issued in connection with incentive stock plan	—	—		114,160	—		121		—		—		121
Stock-based compensation	—	—		—	—		8,726		—		—		8,726
Net loss	—	—		—	—		—		—		(43,005)		(43,005)
Other comprehensive income	—	—		—	—		—		106		—		106
Balance - September 30, 2021	—	$	—	128,857,283	$	—	$	747,891	$	(104)	$	(146,367)	$	601,420


	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(169,333)	$	(101,444)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	23,798		17,293
Non-cash lease expense	1,292		—
Foreign exchange remeasurement loss	2,768		602
Change in fair value of contingent consideration	(691)		130
Depreciation and amortization	3,888		1,859
Non-cash interest expense	596		—
Change in fair value of derivative instrument	(810)		—
Other	(739)		12
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(2,168)		(2,877)
Other long-term assets	(2,076)		(3,160)
Accounts payable	683		3,750
Operating lease liabilities	(225)		—
Accrued expenses and current other liabilities	(171)		4,487
Net cash used in operating activities	(143,188)		(79,348)
Cash flows from investing activities:
Purchase of marketable securities	(556,510)		(699,987)
Maturities of marketable securities	711,000		205,000
Purchases of property, plant and equipment	(71,577)		(39,367)
Purchase of derivative financial instrument	(1,174)		—
Net cash provided by (used in) investing activities	81,739		(534,354)
Cash flows from financing activities:
Proceeds from initial public offering, net of issuance costs	—		339,016
Proceeds from issuance of convertible preferred stock, net of issuance costs	—		52,460
Proceeds from exercise of stock options	1,172		1,559
Proceeds from note payable	64,512		—
Other financing activities	—		(69)
Net cash provided by financing activities	65,684		392,966
Net increase (decrease) in cash and cash equivalents	4,235		(220,736)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(707)		(128)
Cash, cash equivalents and restricted cash—beginning of period	38,090		241,764
Cash, cash equivalents and restricted cash—end of period	$	41,618	$	20,900

Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	$	554	$	—

Supplemental disclosure of noncash information:
Conversion of preferred stock to common stock upon IPO	$	—	$	384,426
Purchases of property, plant and equipment in accounts payable and accrued expenses and other current liabilities	$	15,033	$	12,690


	September 30, 2022		December 31, 2021
Land	$	31,243	$	31,243
Laboratory equipment	17,915		13,962
Buildings(1)	32,778		6,034
Office and computer equipment	6,135		2,239
Leasehold improvements	4,310		1,836
Manufacturing equipment	8,636		1,717
Vehicles	64		64
Construction work-in-progress	90,333		67,883
Total property, plant and equipment, gross	191,414		124,978
Less: accumulated depreciation	(6,357)		(2,979)
Total property, plant and equipment, net	$	185,057	$	121,999


	September 30, 2022		December 31, 2021
Accrued construction costs	$	14,337	$	12,085
Accrued compensation and benefits	13,612		11,928
Accrued research, development and clinical trial expenses	3,083		4,234
Operating lease liabilities, current	2,275		—
Accrued operational expenses	2,121		5,292
Other current liabilities	933		910
Total accrued expenses and other current liabilities	$	36,361	$	34,449


	As of September 30, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Financial Assets
Money market funds	$	19,910	$	—	$	—	$	19,910
U.S. Treasury bills	—		262,169		—		262,169
Derivative financial instrument	—		1,984		—		1,984
Total	$	19,910	$	264,153	$	—	$	284,063
Financial Liabilities
Contingent consideration	$	—	$	—	$	10,930	$	10,930

	As of December 31, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Financial Assets
Money market funds	$	18,493	$	—	$	—	$	18,493
U.S. Treasury bills	—		416,509		—		416,509
Total	$	18,493	$	416,509	$	—	$	435,002
Financial Liabilities
Contingent consideration	$	—	$	—	$	12,321	$	12,321


	September 30, 2022
	Maturity	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury bills	Less than one year	$	263,047	$	—	$	(878)	$	262,169


	As of September 30, 2022
Weighted-average remaining lease term (in years)	3.5
Weighted-average discount rate	6.70	%


	As of December 31, 2021
2022	$	2,411
2023	2,354
2024	2,215
2025	1,936
2026	1,272
Total	$	10,188


	September 30, 2022
Principal amount	$	65,628
Unamortized debt issuance cost	(2,654)
Net carrying amount	$	62,974


	INSTIL BIO, INC.

November 14, 2022	By:	/s/ Sandeep Laumas
		Sandeep Laumas Chief Financial Officer and Chief Business Officer (On behalf of the registrant and in his capacity as Principal Financial Officer and Principal Accounting Officer)


	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Short-term lease cost	$	521	$	871
Operating lease cost	1,151		3,823
Variable lease cost	301		761
Total lease cost	$	1,973	$	5,455


	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Cash paid for operating lease liabilities	$	788	$	2,607


	As of September 30, 2022
2022 (remaining three months)	$	666
2023	2,775
2024	2,393
2025	1,909
2026	1,268
Total future lease payments	9,011
Less: imputed interest	1,106
Total lease liability balance	7,905
Less: current portion of operating lease liabilities	2,275
Total operating lease liabilities, non-current	$	5,630


	Three and Nine Months Ended September 30, 2022
Contractual interest expense	$	806
Amortization of debt issuance cost	332
Total interest expense related to the Loan	$	1,138


	September 30,
	2022	2021
Stock options to purchase common stock	23,376,213	19,840,732


	Three Months Ended September 30,				Change
	2022		2021		$
Operating expenses:
Research and development	$	39,660	$	29,064	$	10,596
General and administrative	16,989		13,960		3,029
Total operating expenses	56,649		43,024		13,625
Loss from operations	(56,649)		(43,024)		(13,625)
Interest income	1,276		22		1,254
Interest expense	(807)		—		(807)
Other expense, net	(415)		(661)		246
Loss before income tax benefit	(56,595)		(43,663)		(12,932)
Income tax benefit	371		658		(287)
Net loss	$	(56,224)	$	(43,005)	$	(13,219)


Exhibit Number			Description of Exhibit
3.1			Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-40215), filed with the SEC on March 23, 2021).
3.2			Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-40215), filed with the SEC on March 23, 2021).
4.1			Second Amended and Restated Investors’ Rights Agreement, by and among the Company and certain of its stockholders, dated December 30, 2020 (incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (File No. 333-253620), filed with the SEC on February 26, 2021).
10.1			Employment Agreement, by and between the Registrant and Timothy L. Moore, dated as of September 6, 2022.
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.
101			The following financial information from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations and Comprehensive Loss, (iii) the Consolidated Statements of Preferred Stock and of Stockholders Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements.
104			Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


1.			I have reviewed this quarterly report on Form 10-Q of Instil Bio, Inc.;


2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.			The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:


			(a)			Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


			(b)			Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


			(c)			Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


			(a)			All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and


			(b)			Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




/s/ Bronson Crouch
Bronson Crouch
Chief Executive Officer (Principal Executive Officer)




/s/ Sandeep Laumas
Sandeep Laumas
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)


			1.			The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended (the “Exchange Act”); and


			2.			The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.