PMV Pharmaceuticals, Inc. - Quarter Report: 2023 March (Form 10-Q)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2023


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

For the transition period from to

Commission File Number: 001-39539

PMV PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	46-3218129
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
One Research Way Princeton, NJ	08540
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (609) 642-6670

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

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.00001

PMVP

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of May 8, 2023, the registrant had 45,775,461 shares of common stock, $0.00001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Condensed Financial Statements (Unaudited)	1
	Condensed Balance Sheets (Unaudited)	1
	Condensed Statements of Operations and Comprehensive Loss (Unaudited)	2
	Condensed Statements of Stockholders’ Equity (Unaudited)	3
	Condensed Statements of Cash Flows (Unaudited)	4
	Notes to Unaudited Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
PART II.	OTHER INFORMATION	22
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
Signatures		26

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy, development plans, planned preclinical studies and clinical trials, future results of clinical trials, expected research and development costs, regulatory strategy, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•

our financial performance;

•

the sufficiency of our existing cash, cash equivalents and short-term marketable securities to fund our future operating expenses and capital expenditure requirements;

•

our need to raise additional funding before we can expect to generate any revenues from product sales;

•

our ability to obtain additional funding for our operations, when needed, including funding necessary to complete further development and commercialization of our product candidates, if approved;

•

the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•

the implementation of our strategic plans for our business and product candidates;

•

the size of the market opportunity for our product candidates and our ability to maximize those opportunities;

•

the initiation, timing, progress and results of our research and development programs, preclinical studies, clinical trials and investigational new drug applications, or IND, and other regulatory submissions;

•

the beneficial characteristics, safety, efficacy and therapeutic effects of our product candidates;

•

our estimates of the number of patients for each of our programs including patients expected to have certain p53 mutations and the number of patients that will enroll in our clinical trials;

•

the ability of our clinical trials to demonstrate safety and efficacy of our product candidates, and other favorable results;

•

our plans relating to the clinical development of our product candidates, including the disease areas to be evaluated;

•

the timing, progress and focus of our clinical trials, and the reporting of data from those trials;

•

our ability to obtain and maintain regulatory approval of our product candidates;

•

our plans relating to commercializing our product candidates, if approved;

•

the expected benefits of our existing and any potential future strategic collaborations with third parties and our ability to attract collaborators with development, regulatory and commercialization expertise;

•

the success of competing therapies that are or may become available;

•

the timing or likelihood of regulatory filings and approvals, including our expectation to seek accelerated reviews or special designations, such as breakthrough therapy and orphan drug designation, for our product candidates, including our intention to seek accelerated approval for PC14586, our lead product candidate;

•

our plans relating to the further development and manufacturing of our product candidates, including for additional indications that we may pursue;

•

existing regulations and regulatory developments in the United States and other jurisdictions;

•

our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available;

•

our plans to rely on third parties to conduct and support preclinical and clinical development;

•

our ability to retain the continued service of our key personnel and to identify, hire and then retain additional qualified personnel; and

•

the impact of the ongoing COVID-19 pandemic, geopolitical tensions such as the Ukraine-Russia war, macroeconomic events such as global supply chain challenges, elevated inflation and interest rates and monetary policy changes, or other potential global disruptions on our business.

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the section titled “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the United States Securities and Exchange Commission on March 1, 2023, as well as in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

iii

PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements (Unaudited).

PMV Pharmaceuticals, Inc.

Condensed Balance Sheets

(unaudited)

(in thousands, except share and per share amounts)


	March 31, 2023 (unaudited)			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	142,942		$	108,297
Restricted cash		822			822
Marketable securities, current		86,492			132,757
Prepaid expenses and other current assets		3,022			5,130
Total current assets		233,278			247,006
Property and equipment, net		11,238			10,955
Marketable securities, noncurrent		—			2,495
Right-of-use assets		9,130			9,539
Other assets		314			313
Total assets	$	253,960		$	270,308
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,774		$	2,996
Accrued expenses		8,535			7,308
Operating lease liabilities, current		281			528
Total current liabilities		10,590			10,832
Operating lease liabilities, noncurrent		13,197			13,448
Total liabilities		23,787			24,280
Stockholders’ equity:
Preferred stock, $0.00001 par value, 5,000,000 shares authorized at March 31, 2023 and December 31, 2022. No shares issued or outstanding at March 31, 2023 and December 31, 2022.		—			—
Common stock, $0.00001 par value, 1,000,000,000 shares authorized; 45,774,761 and 45,771,332 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively.		—			—
Additional paid-in capital		490,460			487,516
Accumulated deficit		(260,171	)		(241,043	)
Accumulated other comprehensive loss		(116	)		(445	)
Total stockholders’ equity		230,173			246,028
Total liabilities and stockholders’ equity	$	253,960		$	270,308

The accompanying notes are an integral part of these unaudited condensed financial statements.

PMV Pharmaceuticals, Inc.

Condensed Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share amounts)


	Three Months Ended March 31,
	2023			2022
Operating expenses:
Research and development	$	15,073		$	11,836
General and administrative		6,407			6,783
Total operating expenses		21,480			18,619
Loss from operations		(21,480	)		(18,619	)
Other income (expense):
Interest income, net		2,325			229
Other income (expense), net		27			(41	)
Total other income (expense)		2,352			188
Loss before (benefit) provision for income taxes		(19,128	)		(18,431	)
(Benefit) provision for income taxes		—			2
Net loss		(19,128	)		(18,433	)
Unrealized gain (loss) on available for sale investments, net of tax		329			(588	)
Comprehensive loss	$	(18,799	)	$	(19,021	)

Net loss per share -- basic and diluted	$	(0.42	)	$	(0.41	)
Weighted-average common shares outstanding		45,773,357			45,466,044

The accompanying notes are an integral part of these unaudited condensed financial statements.

PMV Pharmaceuticals, Inc.

Condensed Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share amounts)


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at December 31, 2021		45,433,684	$	—	$	476,363	$	(78	)	$	(167,726	)	$	308,559
Exercise of stock options		98,708		—		128		—			—			128
Stock-based compensation expense		—		—		2,177		—			—			2,177
Net loss		—		—		—		—			(18,433	)		(18,433	)
Unrealized loss on available for sale investments		—		—		—		(588	)		—			(588	)
Balance at March 31, 2022		45,532,392	$	—	$	478,668	$	(666	)	$	(186,159	)	$	291,843


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at December 31, 2022		45,771,332	$	—	$	487,516	$	(445	)	$	(241,043	)	$	246,028
Exercise of stock options		3,429		—		12		—			—			12
Stock-based compensation expense		—		—		2,932		—			—			2,932
Net loss		—		—		—		—			(19,128	)		(19,128	)
Unrealized gain on available for sale investments		—		—		—		329			—			329
Balance at March 31, 2023		45,774,761	$	—	$	490,460	$	(116	)	$	(260,171	)	$	230,173

The accompanying notes are an integral part of these unaudited condensed financial statements.

PMV Pharmaceuticals, Inc.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)


	Three Months Ended March 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(19,128	)	$	(18,433	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		2,932			2,177
Depreciation		171			84
(Accretion) amortization of premiums on marketable securities		(712	)		54
Non-cash lease (income) expense		(89	)		83
Other, net		(1	)		—
Change in operating assets and liabilities:
Prepaid expenses and other assets		2,108			(924	)
Operating lease right-of-use assets and liabilities		—			786
Accounts payable		(1,520	)		239
Accrued expenses		1,227			(2,064	)
Net cash used in operating activities		(15,012	)		(17,998	)
Cash flows from investing activities:
Purchases of property and equipment		(156	)		(796	)
Purchases of marketable securities		(23,502	)		(93,705	)
Maturities of marketable securities		73,303			55,676
Net cash provided by (used in) investing activities		49,645			(38,825	)
Cash flows from financing activities:
Proceeds from the exercise of stock options and common stock issued under the 2020 ESPP		12			128
Net cash provided by financing activities		12			128
Net increase (decrease) in cash and cash equivalents		34,645			(56,695	)
Cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash - beginning of period		109,119			173,289
Cash, cash equivalents, and restricted cash - end of period	$	143,764		$	116,594
Supplemental disclosures of noncash investing activities
Accrued purchases of property and equipment	$	298		$	1,436
Supplemental disclosures of cash flow information
Cash paid for income taxes	$	—		$	2

The accompanying notes are an integral part of these unaudited condensed financial statements.

PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

1. Formation and Business of the Company

Organization and Liquidity

PMV Pharmaceuticals, Inc. (the “Company” or “We”) was incorporated in the state of Delaware in March 2013. Since inception, the Company has devoted substantially all of its time and efforts to performing research and development activities and raising capital. We are a precision oncology company pioneering the discovery and development of small molecule, tumor-agnostic therapies targeting p53. The Company’s headquarters are located at One Research Way, Princeton, New Jersey.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, technical risks associated with the successful research, development and manufacturing of product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Current and future programs will require significant research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

The Company has incurred net losses and negative cash flows from operations since its inception. During the three months ended March 31, 2023, the Company incurred a net loss of $19,128. For the three months ended March 31, 2023, the Company used $15,012 of cash for operations. At March 31, 2023, the Company had an accumulated deficit of $260,171. Cash, cash equivalents, and marketable securities were $229,434 as of March 31, 2023. Management expects to incur substantial additional operating losses for the next several years and may need to obtain additional debt or equity financings in order to complete development of its products, obtain regulatory approvals, launch and commercialize its products and continue research and development programs. The Company believes it has adequate cash, cash equivalents, and marketable securities to operate for at least the next 12 months from the date of issuance of these financial statements.

2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) on March 1, 2023. Since the date of those financial statements, there have been no changes to its significant accounting policies.

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the interim period reporting requirements of Form 10-Q and Article 10 of Regulation S-X. The condensed balance sheet as of March 31, 2023, the condensed statements of operations and comprehensive loss, condensed statements of stockholders’ equity and the condensed statements of cash flows for the three months ended March 31, 2023 and 2022 are unaudited, but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for any interim period are not necessarily indicative of results for the year ending December 31, 2023, or for any other subsequent interim period. The condensed balance sheet as of December 31, 2022, has been derived from our audited financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, research and development costs, accrued research and development costs and related prepaid expenses and stock-based compensation. Actual results could differ materially from those estimates.

PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

Cash, Cash Equivalents and Marketable Securities

Management considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

The Company’s marketable debt securities have been classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Marketable debt securities with maturities of 12 months or less are classified as short-term and marketable debt securities with maturities greater than 12 months are classified as long-term. The Company’s marketable debt securities are carried at fair value, with unrealized gains and losses, net of taxes, reported as a component of accumulated other comprehensive loss in stockholders’ equity. Premiums and discounts on marketable debt securities are amortized into earnings over the life of the security and recorded on the interest income, net line of the income statement. For the three months ended March 31, 2023 and 2022, the Company recorded $712 of accretion and $54 of amortization, respectively.

Restricted cash as of March 31, 2023 and December 31, 2022 included a $822 deposit at the Company’s commercial bank underlying a stand-by letter of credit issued in favor of a landlord (See Note 6) and is classified in current assets.

Comprehensive Loss

The Company presents comprehensive loss in a single statement within its financial statements. Other comprehensive loss consists of unrealized gains and losses on marketable securities, net of tax.

Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the circumstances present. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its operating right-of-use (“ROU”) assets and operating lease liabilities at the lease commencement date, and thereafter if modified. The lease term includes any renewal options that the Company is reasonably certain to exercise. The Company’s policy is to not record leases with a lease term of 12 months or less on its balance sheets. The Company’s only existing leases are for office and laboratory space.

The ROU asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its estimated secured incremental borrowing rate for that lease term.

Lease expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in operating expense in the statements of operations.

Payments due under each lease agreement include fixed and variable payments. Variable payments relate to the Company’s share of the lessor’s operating costs associated with the underlying asset and are recognized when the event on which those payments are assessed occurs. Variable payments have been excluded from the lease liability and associated right-of-use asset. Neither of the Company’s leases contain residual value guarantees.

The interest rate implicit in lease agreements is typically not readily determinable, and as such, the Company utilizes the incremental borrowing rate to calculate lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash, cash equivalents, and marketable securities. Cash and cash equivalents were held at two financial institutions. At times, such deposits may be in excess of insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents. The Company’s marketable securities are carried at fair value and include any unrealized gains and losses. Any investments with unrealized losses are considered to be temporarily impaired.

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to,

PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

rapid technological change, uncertainty of market acceptance of the product, competition from substitute products and larger companies, protection of proprietary technology, any future strategic relationships and dependence on key individuals.

Products developed by the Company require clearances from the U.S. Food and Drug Administration or other international regulatory agencies prior to commercial sales. There can be no assurance the Company’s product candidates will receive the necessary clearances. If the Company is denied clearance, clearance is delayed or it is unable to maintain clearance, it could have a materially adverse impact on the Company.

3. Fair Value Measurements

The Company’s financial assets consist of money market funds, U.S. government debt securities and corporate debt securities. The following tables show the Company’s cash equivalents and available-for-sale securities’ carrying amounts and fair values as of March 31, 2023, and December 31, 2022:


	As of March 31, 2023
	Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Quoted priced in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial assets
Money market funds	$	136,888	$	—	$	—		$	136,888	$	136,888	$	—	$	—
Corporate securities		67,134		—		(48	)		67,086		—		67,086		—
Government securities		19,474		—		(68	)		19,406		13,680		5,726		—
Total financial assets	$	223,496	$	—	$	(116	)	$	223,380	$	150,568	$	72,812	$	—


	As of December 31, 2022
	Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Quoted Priced in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Money market funds	$	106,861	$	—	$	—		$	106,861	$	106,861	$	—	$	—
Corporate securities		103,755		21		(185	)		103,591		—		103,591		—
Government securities		31,942		—		(281	)		31,661		20,981		10,680		—
Total financial assets	$	242,558	$	21	$	(466	)	$	242,113	$	127,842	$	114,271	$	—

Cash Equivalents — As of March 31, 2023, the Company had cash of $6,054 and cash equivalents of $136,888. Cash equivalents consisted of money market funds of $136,888. As of December 31, 2022, the Company had cash of $1,436 and cash equivalents of $106,861, consisting of money market funds. Money market funds are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets, whereas corporate debt securities are classified within level 2 of the fair value hierarchy because they are valued using inputs other than quoted prices that are observable for the asset or liability either directly or indirectly.

Marketable Securities — Marketable securities of $86,492 as of March 31, 2023, consisted of corporate debt securities of $67,086 and government debt securities of $19,406. There were $86,492 current marketable securities and no noncurrent marketable securities as of March 31, 2023. Marketable securities of $135,252 as of December 31, 2022, consisted of corporate debt securities of $103,591 and government debt securities of $31,661. There were $132,757 current marketable securities and $2,495 noncurrent marketable securities as of December 31, 2022.

As of March 31, 2023, and December 31, 2022, aggregated gross unrealized losses of available-for-sale investments were not material, and accordingly, no allowance for credit losses was recorded.

PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

4. Property and Equipment, Net


	March 31, 2023			December 31, 2022
Machinery & equipment		2,861		$	2,448
Computers		13			13
Furniture & fixtures		69			69
Leasehold improvements		10,649			409
Assets not placed in service		—			10,200
Total property and equipment		13,592			13,139
Less: Accumulated depreciation		(2,354	)		(2,184	)
Property and equipment, net	$	11,238		$	10,955

Depreciation expense for the three months ended March 31, 2023 and 2022 was $171 and $84, respectively.

5. Accrued Expenses

Accrued expenses consist of the following:


	March 31, 2023		December 31, 2022
Accrued compensation	$	1,846	$	2,897
Accrued legal and professional services		264		152
Accrued research and development costs		6,425		4,259
Total	$	8,535	$	7,308

6. Commitments and Contingencies

Operating Leases

In June 2015, the Company executed a noncancelable operating lease for approximately 13,000 square feet of laboratory, research and development, and office space in Cranbury, New Jersey. This location operated as the Company's headquarters until March 2023.

In June 2017, the Company obtained an additional noncancelable operating lease for about 6,000 square feet of laboratory space in the same corporate center. As a result of the additional space, both leases were set to expire in June 2022. In January 2022, the Company signed a lease extension for both leases for up to one additional year through June 2023, with the option to terminate upon 120 days of written notice, with an increase in base rent as per the lease extension.

In August 2018, the Company executed two noncancelable operating leases. One lease for approximately 6,000 square feet for vivarium, laboratory and general office space in South Brunswick, New Jersey. The lease was set to expire in July 2022. In January 2022, the Company signed a lease extension for up to one additional year through July 2023, with the option to terminate upon 120 days of written notice, with an increase in base rent as per the lease extension. The second lease is for office space in Lexington, Massachusetts, that expires August 2023, with an option to renew for a one-time, three-year extension.

In January 2021, the Company signed a lease for 50,581 square feet of office and laboratory space at One Research Way in Princeton, New Jersey. That lease term extends through 2032, has a five-year extension option, and replaced the Company’s two existing facilities as the Company’s headquarters in March 2023. Payment under this lease will total $19,889 through May 2032. The Company received a lease incentive of $4,046 from the lessor for a buildout of laboratory, vivarium, and office space, to be reimbursed to the Company in 2022 and 2023. Management estimated the timing and amounts of reimbursements and included them as a reduction of lease payments when initially measuring the lease liability and right-of-use asset upon commencement. Since the inception date of the lease, $2,969 reimbursements were received. For the three months ended March 31, 2023, no reimbursements were received.

PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

The components of lease cost for the three months ended March 31, 2023, and 2022, are as follows:


	Three Months Ended March 31,
(in thousands)	2023		2022
Operating lease cost	$	597	$	511
Variable lease cost		319		197
Total lease cost	$	916	$	708

Amounts reported in the balance sheet for leases where the Company is the lessee as of March 31, 2023, and December 31, 2022, are as follows:


Operating Leases (in thousands, except lease term and discount rate data):	March 31, 2023			December 31, 2022
Right-of-use assets, operating leases	$	9,130		$	9,539

Operating lease liabilities, current	$	281		$	528
Operating lease liabilities, non-current		13,197			13,448
Total operating lease liabilities	$	13,478		$	13,976

Weighted-average remaining lease term (years)		8.98			9.08
Weighted-average discount rate		5.75	%		5.75	%

Other information related to leases for the three months ended March 31, 2023 and 2022, respectively, as follows:


	Three Months Ended March 31,
(in thousands)	2023		2022
Net cash paid (received) for amounts included in the measurement of lease liabilities	$	686	$	(358	)
Leased assets obtained in exchange for new or modified operating lease liabilities		—		10,349

Future minimum lease payments, net of reimbursements, remaining as of March 31, 2023, under operating leases by fiscal year were as follows:


Fiscal year	(in thousands)
2023	$	532
2024		1,814
2025		1,869
2026		1,925
2027		1,983
Thereafter		9,494
Total minimum lease payments	$	17,617
Less: Amounts representing imputed interest		(4,139	)
Present value of lease liabilities	$	13,478

Rent expense recorded during the three months ended March 31, 2023 and 2022 was $597 and $511, respectively.

The Company currently subleases the office space at 420 Bedford Street in Lexington, Massachusetts to another company. This sublease agreement expires in August, 2023. In April 2021, the Company entered into a sublease agreement with the previous tenants of the office space at One Research Way in Princeton, NJ to begin April 2021 and end June 2021. Sublease income recorded during the three months ended March 31, 2023 and 2022 was $29.

PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

Contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when future expenditures are probable and such expenditures can be reasonably estimated.

7. Stockholders’ Equity

The Company is authorized to issue up to 1,000,000,000 shares of common stock with a par value of $0.00001 per share and 5,000,000 shares of preferred stock with a par value of $0.00001 per share. At March 31, 2023 and December 31, 2022, there were 45,774,761 and 45,771,332 shares of common stock issued and outstanding, respectively.

Common stockholders are entitled to receive dividends if and when declared by the board of directors subject to the rights of any preferred stockholders. As of March 31, 2023, no dividends on common stock had been declared by the Company.

8. Stock Plan

2020 Equity Incentive Plan

The 2020 Equity Incentive Plan (the “2020 Plan”) was approved by the board of directors on September 24, 2020. The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards, cash-based awards and dividend equivalent rights to the Company’s officers, employees, directors, and consultants. The number of shares of common stock initially reserved for issuance under the 2020 Plan was 4,406,374, which shall be increased, upon approval by the board of directors, on January 1, 2021 and each January 1 thereafter, in an amount equal to the least of (i) 4,406,374 shares of common stock, (ii) five percent (5%) of the outstanding common stock on the immediately preceding December 31, or (iii) such number of common stock determined by the board of directors no later than the immediately preceding December 31. For 2023, the board's compensation committee, as the 2020 Plan administrator, exercised its discretion under clause (iii) to increase the number of shares of common stock reserved for issuance under the 2020 Plan by a lesser amount of 1,830,853 shares, effective as of January 1, 2023. As of March 31, 2023, there were 6,414,476 shares available for issuance under the 2020 Plan.

On September 9, 2022, the Company granted 374,899 Restricted Stock Units ("RSUs") to employees pursuant to an employee retention program approved by the board's compensation committee. The RSUs have graded vesting on an annual basis for two years of continuous service, as per the 2020 Plan.

2020 Employee Stock Purchase Plan

The 2020 Employee Stock Purchase Plan (the “2020 ESPP”) was approved by the board of directors on September 24, 2020. A total of 400,752 shares of common stock were initially reserved for issuance under this plan, which shall be increased, upon approval by the board of directors, on January 1, 2021 and each January 1 thereafter, to the lesser of (i) 801,504 shares of common stock, (ii) 1% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, or (iii) an amount determined by the board of directors or any of its committees no later than the last day of the immediately preceding fiscal year. For 2023, the 2020 ESPP reserved shares were increased under clause (iii) by 457,713 shares, effective as of January 1, 2023. As of March 31, 2023, 95,905 shares are issued or outstanding, and there were 705,559 shares available for issuance, under the 2020 ESPP.

PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

Stock Options

The following table summarizes option activity for the three-month period ended March 31, 2023:


				Options Outstanding
									Weighted-
							Weighted		Average		Aggregate
	Shares						Average		Remaining		Intrinsic
	Available			Number of			Exercise		Contractual Life		Value
	for Grant			Options			Price		(in years)		(in 000s)
Balances at December 31, 2022		4,618,292			5,278,771		$	10.40		6.82	$	17,244
Shares reserved for issuance		1,830,853			—			—
Options granted		(50,000	)		50,000		$	8.05
Options forfeited / cancelled		15,331			(15,331	)	$	16.31
Options exercised		—			(3,429	)	$	3.29
Balances at March 31, 2023 (unaudited)		6,414,476			5,310,011		$	10.37		6.60	$	5,612
At March 31, 2023
Vested and expected to vest					5,310,011		$	10.37		6.60	$	5,612
Exercisable					3,490,036		$	7.33		5.64	$	5,359

At March 31, 2023, the total compensation cost related to nonvested awards not yet recognized was $22,437. The weighted-average period over which the nonvested awards is expected to be recognized was 2.5 years.

The Company estimated the fair value of the options using the Black-Scholes options valuation model. The fair value of the options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value was estimated using the following assumptions:


	Three Months Ended		Three Months Ended
	March 31,		March 31,
	2023		2022
Risk-free interest rate		3.58%		1.48% - 2.01%
Expected life (in years)		6.25		5.77 - 6.44
Dividend yield		0%		0%
Expected volatility		79.90%		77.00%

The weighted average assumptions used to estimate the fair value of stock purchase rights under the ESPP are as follows:


	Three Months Ended		Three Months Ended
	March 31,		March 31,
	2023		2022
Risk-free interest rate		4.65%		0.06%
Expected life (in years)		0.49		0.50
Dividend yield		0%		0%
Expected volatility		76.33%		76.50%

Expected Term: The Company uses the simplified method to calculate expected term described in the SEC’s Staff Accounting Bulletin No. 107, which takes into account vesting term and expiration date of the options.

Volatility: Volatility is based on the historical volatility of the Company's publicly traded shares for the expected term.

Risk Free Interest Rate: The risk-free rate is based on the U.S. Treasury yields in effect at the time of grant for periods corresponding with the expected term of the option.

Dividend Yield: The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and therefore, used an expected dividend yield of zero in the valuation model.

PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

Restricted Stock Units

The following table presents RSU activity under the 2020 Plan as of March 31, 2023:


	Number of Stock Units		Weighted-Average Grant Date Fair Value
Unvested shares at December 31, 2022		374,899	$	13.60
Granted		—		—
Unvested shares at March 31, 2023		374,899	$	13.60

As of March 31, 2023, there was $3,688 of unrecognized compensation cost related to RSUs that are expected to vest. These costs are expected to be recognized over a weighted average remaining vesting period of 1.4 years.

Stock-based compensation expense recorded under ASC 718 related to stock options granted and common stock issued under the 2020 ESPP were allocated to research and development and general and administrative expense as follows:


	For the Three Months Ended
	March 31,		March 31,
	2023		2022
Research and development	$	1,263	$	649
General and administrative		1,669		1,528
Total stock-based compensation	$	2,932	$	2,177

Stock-based compensation expense by award type included within the condensed consolidated statements of operations is as follows:


	For the Three Months Ended
	March 31,		March 31,
	2023		2022
Stock options	$	2,281	$	2,113
Restricted stock units		597		—
Employee stock purchase plan		54		64
Total stock-based compensation	$	2,932	$	2,177

9. Income Taxes

During the three months ended March 31, 2023 and 2022, the Company recorded a full valuation allowance on federal and state net deferred tax assets since management does not forecast the Company to be in a taxable position in the near future.

10. Net Loss per Share

The Company excluded all outstanding stock options and restricted stock awards at each period end from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect. The following common stock equivalents were excluded from the calculation of diluted net loss per share:


	As of March 31,
	2023		2022
Options to purchase common stock		5,310,011		5,238,796
Unvested RSUs		374,899		—
Expected shares to be purchased under 2020 ESPP		47,974		23,569
Total		5,732,884		5,262,365

PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

11. Related Parties

The Company has consulting agreements with two members of its board of directors; one of which waived his consulting fees starting as of September 2021. Total consulting fees paid in each of the three months ended March 31, 2023 and 2022, were $8.3 and $25.0, respectively. There were no amounts owed under the consulting agreements as of March 31, 2023.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited financial statements and the related notes and other financial information included in this Quarterly Report on Form 10-Q and our audited financial statements and notes thereto as of and for the years ended December 31, 2022 and 2021 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, including Contractual Obligations and Commitments, and Critical Accounting Policies and Significant Judgments and Estimates, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission, or the SEC, on March 1, 2023. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” refer to PMV Pharmaceuticals, Inc.

In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including but not limited to those set forth under the captions “Special Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as updated by our subsequent filings under the Securities Exchange Act of 1934, as amended. Furthermore, past operating results are not necessarily indicative of results that may occur in future periods.

Overview

We are a precision oncology company pioneering the discovery and development of small molecule, tumor-agnostic therapies targeting p53. p53 is a well-defined tumor suppressor protein known as the “guardian of the genome,” and normal, or wild-type, p53 has the ability to eliminate cancer cells. However, mutant p53 proteins can be misfolded and lose their wild-type tumor suppressing function. These p53 mutations are found in approximately half of all cancers. The field of p53 biology was established by our co-founder Dr. Arnold Levine when he discovered the p53 protein in 1979. We have leveraged more than four decades of research experience and developed unique insights into p53 to create a precision oncology platform designed to generate selective, small molecule, tumor-agnostic therapies that structurally correct specific mutant p53 proteins to restore their wild-type function. We are deploying our precision oncology platform to target the top ten most frequent, or hotspot, p53 mutations that are collectively associated with approximately 10-15% of all cancers. In addition, we are expanding the utilization of our platform to target other p53-related cancers.

Since our formation in March 2013, we have devoted substantially all of our time and efforts to performing research and development activities and raising capital. We are not profitable and have incurred losses in each year since our inception. Our net losses were $73.3 million and $57.8 million for the years ended December 31, 2022 and 2021, respectively. During the three months ended March 31, 2023, the Company incurred a net loss of $19.1 million. As of March 31, 2023, we had an accumulated deficit of $260.2 million. We do not currently have any product candidates approved for sale, and we continue to incur significant research and development and general administrative expenses related to our operations. We initiated a Phase 1/2 clinical trial in October 2020 for our lead product candidate, PC14586. In October 2020, we were granted FDA Fast Track Designation of PC14586 for the treatment of patients with locally advanced or metastatic solid tumors that have a p53 Y220C mutation. We dosed our first patient in this clinical trial in the fourth quarter of 2020. In June 2022, we presented our initial Phase 1 clinical data for PC14586. We expect that our operating expenses will increase significantly as we advance our product candidates through preclinical and clinical development, seek regulatory approval, and prepare for and, if approved, proceed to commercialization; acquire, discover, validate, and develop additional product candidates; obtain, maintain, protect, and enforce our intellectual property portfolio; and hire additional personnel. Furthermore, we have incurred and will continue to incur additional costs associated with operating as a public company that we did not experience as a private company. We expect to continue to incur significant losses for the foreseeable future.

Our ability to generate product revenue will depend on the successful development, regulatory approval, and eventual commercialization of one or more of our product candidates. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through private or public equity or debt financings, collaborative, or other arrangements with corporate sources, or through other sources of financing. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates.

We plan to continue to use third-party service providers, including clinical research organizations, or CROs, and contract manufacturing organization, or CMOs, to carry out our preclinical and clinical development and to manufacture and supply the materials to be used during the development and commercialization of our product candidates. We do not currently have a sales force.

Components of Results of Operations

Revenue

To date, we have not generated any revenue from any sources, including from product sales, and we do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts for our product candidates are successful and result in regulatory approval, or license agreements with third parties, we may generate revenue in the future from product sales. However, there can be no assurance as to when we will generate such revenue, if at all.

Operating Expenses

Research and Development Expenses

Our research and development expenses consist primarily of costs incurred to conduct research, such as the discovery and development of our product candidates as well as the development of future product candidates. Research and development expenses include personnel costs, including stock-based compensation expense, third-party contractor services, laboratory materials and supplies, and depreciation and maintenance of research equipment. We expense research and development costs as they are incurred.

As we are at a very early stage of development, we do not allocate our costs by product candidate or development program, as a significant amount of research and development expenses include compensation costs, materials, supplies, depreciation on and maintenance of research equipment, and the cost of services provided by outside contractors, which are not tracked by product candidate or development program. In particular, with respect to internal costs, several of our departments support multiple product candidate research and development programs, and therefore the costs cannot be allocated to a particular product candidate or development program. Substantially all of our research and development costs are associated with our lead product candidate, PC14586. We initiated a Phase 1/2 clinical trial in October 2020 for our lead product candidate, PC14586. In October 2020, we were granted FDA Fast Track Designation of PC14586 for the treatment of patients with locally advanced or metastatic solid tumors that have a p53 Y220C mutation. We dosed our first patient in this clinical trial in the fourth quarter of 2020. In June 2022, we presented our initial Phase 1 clinical data for PC14586 at the 2022 ASCO Annual Meeting.

We expect our research and development expenses to increase substantially in absolute dollars in the future as we advance our product candidates into and through clinical trials and pursue regulatory approval of our product candidates. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidates may be affected by a variety of factors including: the safety and efficacy of our product candidates, early clinical data, investment in our clinical program, the ability of any future collaborators to successfully develop our licensed product candidates, competition, manufacturing capability, and commercial viability. We may never succeed in achieving regulatory approval for any of our product candidates. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects.

General and Administrative Expenses

General and administrative expenses include personnel costs, expenses for outside professional services and other allocated expenses. Personnel costs consist of salaries, bonuses, benefits, and stock-based compensation. Outside professional services consist of legal, accounting and audit services and other consulting fees. Allocated expenses consist of rent expense related to our office and research and development facilities. We have incurred additional expenses as a public company, including expenses related to compliance with the rules and regulations of the SEC, and those of any national securities exchange on which our securities are traded, additional insurance expenses, investor relations activities and other administrative and professional services. We have increased our headcount significantly to support our operations as a public company. We also expect to increase our general and administrative expenses as we advance our product candidates through preclinical research and development, manufacturing, clinical development, and commercialization.

Interest Income, Net

Interest income, net primarily consists of interest income from our interest-bearing cash, cash equivalents and short-term marketable securities and interest costs related to amortization of premiums and discounts on short-term marketable securities.

Results of Operations

Comparison of the Three Months ended March 31, 2023 and 2022.

The following table summarizes our results of operations (in thousands):


	Three Months Ended March 31,
Statement of operations data:	2023 (Unaudited)			2022 (Unaudited)			Change
Operating expenses:
Research and development	$	15,073		$	11,836		$	3,237
General and administrative		6,407			6,783			(376	)

Total operating expenses		21,480			18,619			2,861

Loss from operations		(21,480	)		(18,619	)		(2,861	)
Other income (expense):
Interest income, net		2,325			229			2,096
Other income (expense), net		27			(41	)		68

Total other income (expense)		2,352			188			2,164

Loss before (benefit) provision for income taxes		(19,128	)		(18,431	)		(697	)
(Benefit) provision for income taxes		—			2			(2	)

Net loss	$	(19,128	)	$	(18,433	)	$	(695	)

Research and Development Expenses

The following table summarizes our research and development expenses incurred during the periods indicated (in thousands):


	Three Months Ended March 31,
Statement of operations data:	2023 (Unaudited)		2022 (Unaudited)		Change
Research	$	1,538	$	2,277	$	(739	)
Development		8,838		6,647		2,191
Personnel related		3,434		2,263		1,171
Stock-based compensation		1,263		649		614
Total	$	15,073	$	11,836	$	3,237

Research and development expenses were $15.1 million for the three months ended March 31, 2023, compared to $11.8 million for the three months ended March 31, 2022. The increase of $3.3 million, compared to the three months ended March 31, 2022, was primarily due to the following:

•

$0.8 million decrease in research expenses, largely driven by decreased contractual research organization costs;

•

$2.2 million increase in development expenses associated with advancing our lead product candidate, PC14586, through the Phase 1/2 clinical trial; and

•

$1.9 million increase in expenses for personnel related costs and stock-based compensation, primarily driven by increased headcount.

General and Administrative Expenses

General and administrative expenses were $6.4 million for the three months ended March 31, 2023, compared to $6.8 million for the three months ended March 31, 2022. The decrease of $0.4 million, compared to the three months ended March 31, 2022, was primarily due to following:

•

$0.5 million decrease in finance and legal related expense due to decreased audit fees;

•

$0.2 million decrease in insurance expenses; and

•

$0.3 million increase due to facility related costs for our new office and laboratory building in Princeton, New Jersey.

Interest Income, Net

Interest income, net primarily consists of interest income from our interest-bearing cash, cash equivalents and marketable securities and interest costs related to amortization of premiums and discounts on marketable securities. Interest income, net was $2.3 million for the three months ended March 31, 2023. The increase of $2.1 million compared to the three months ended March 31, 2022, is driven by increased interest rates from cash and investments in marketable securities and U.S treasuries during the three months ended March 31, 2023.

Liquidity and Capital Resources

Our financial condition is summarized as follows:


	As of March 31,		As of December 31,
	2023		2022		Change
Financial assets:
Cash and cash equivalents	$	142,942	$	108,297	$	34,645
Marketable securities - current		86,492		132,757		(46,265	)
Marketable securities - noncurrent		—		2,495		(2,495	)
Total financial assets	$	229,434	$	243,549	$	(14,115	)

Working capital:
Current assets	$	233,278	$	247,006	$	(13,728	)
Current liabilities		10,590		10,832		(242	)
Total working capital	$	222,688	$	236,174	$	(13,486	)

Sources of Liquidity

Since our inception, we have not generated any revenue from any product sales or any other sources and have incurred significant operating losses and negative cash flows from our operations. We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all. As of March 31, 2023, we had cash, cash equivalents, and marketable securities of $229.4 million and an accumulated deficit of $260.2 million. In September 2020, we completed an IPO of 13,529,750 shares of our common stock, which includes the exercise in full by the underwriters of their option to purchase 1,764,750 additional shares of common stock, at a public offering price of $18.00 per share for aggregate gross proceeds of $243.5 million. We received $223.2 million in net proceeds after deducting underwriting discounts and commissions and other offering expenses payable by us.

We have a shelf registration statement on Form S-3 on file with the SEC, which registers the offering, issuance, and sale of up to $200 million of various equity and debt securities and up to $150 million of common stock pursuant to our at-the-market equity offering program, dated October 4, 2021, or the ATM program. As of March 31, 2023, we have not sold any securities under the shelf registration statement on Form S-3 or under our ATM program.

Contractual Obligations and Commitments

We enter into contracts in the normal course of business with CROs and other vendors to assist in the performance of our research and development activities and other services and products for operating purposes. These contracts generally provide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations and commitments.

In January 2021, we signed a lease for 50,581 square feet of office and laboratory space at One Research Way in Princeton, New Jersey. That lease term extends through 2032, has a five-year extension option, and is intended to replace our two existing facilities. Payments under this lease will total $19.9 million through May 2032. Amounts related to future lease payments as of March 31, 2023, totaled $18.7 million, with $2.1 million to be paid within the next 12 months.

Plan of Operation and Future Funding Requirements

We use our capital resources primarily to fund operating expenses, mainly research and development expenditures. We plan to increase our research and development expenses for the foreseeable future as we continue the preclinical and clinical development of our product candidates. At this time, due to the inherently unpredictable nature of preclinical and clinical development and given the early stage of our product candidates, we cannot reasonably estimate the costs we will incur and the timelines that will be required to complete development, obtain marketing approval and commercialize our current product candidates or any future product candidates, if at all. For the same reasons, we are also unable to predict when, if ever, we will generate revenue from product sales or whether, or when, if ever, we may achieve profitability. Clinical and preclinical development timelines, the probability of success, and development costs can differ materially from expectations. In addition, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Due to our significant research and development expenditures, we have generated substantial operating losses in each period since inception. We have incurred an accumulated deficit of $260.2 million through March 31, 2023. We expect to incur substantial additional losses in the future as we expand our research and development activities. For the three months ended March 31, 2023 and 2022, our cash operating expenditures were $15.0 million and $18.0 million, respectively. We expect to increase our investment in operations in the remainder of 2023 and 2024. Based on our research and development plans, we expect that our cash, cash equivalents and marketable securities as of March 31, 2023 will be sufficient to fund our operations at least through 2024.

We have based this estimate on assumptions that may prove to be wrong, however, and we could use our capital resources sooner than we expect.

The timing and amount of our operating expenditures will depend largely on:

•

the timing and progress of preclinical and clinical development activities;

•

the number and scope of preclinical and clinical programs we decide to pursue;

•

the timing and amount of milestone payments we may receive under any future collaboration agreements;

•

our ability to maintain future licenses and research and development programs and to establish new collaboration and/or in-licensing arrangements;

•

the costs involved in prosecuting and enforcing patent and other intellectual property claims;

•

the cost and timing of regulatory approvals; and

•

our efforts to build out our new office and laboratory headquarters, enhance operational systems and hire additional personnel, including personnel to support development of our product candidates and satisfy our obligations as a public company.

Until such time, if ever, as we can generate substantial revenue from product sales, we expect to fund our operations and capital funding needs through equity and/or debt financing. We may also consider entering into collaboration arrangements or selectively partnering for clinical development and commercialization. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations or our ability to incur additional indebtedness or pay dividends, among other items. If we raise additional funds through governmental funding, collaborations, strategic partnerships and alliances or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could materially and adversely affect our business, financial condition, results of operations and prospects.

Cash Flows

The following table summarizes our cash flows for the period indicated (in thousands):


	Three Months Ended March 31,
	2023 (Unaudited)			2022 (Unaudited)
Cash used in operating activities	$	(15,012	)	$	(17,998	)
Cash provided by (used in) investing activities		49,645			(38,825	)
Cash provided by financing activities		12			128

Net increase (decrease) in cash and cash equivalents	$	34,645		$	(56,695	)

Operating Activities

Net cash used in operating activities for the three months ended March 31, 2023, was $15.0 million, which consisted primarily of net loss of $19.1 million partially offset by non-cash charges of $2.3 million. Changes in our net operating assets increased operating cash by $1.8 million. The non-cash charges primarily consisted of stock-based compensation of $2.9 million, accretion of premiums on marketable securities of $0.7 million, depreciation of $0.2 million, and non-cash lease expense of $0.1 million. The change in our net operating assets and liabilities was primarily due to a decrease in prepaid expenses and other assets, an increase in accrued expenses, offset by a decrease in outstanding payables.

Net cash used in operating activities for the three months ended March 31, 2022, was $18.0 million, which consisted primarily of net loss of $18.4 million partially offset by non-cash charges of $2.4 million. Changes in our net operating assets decreased operating cash by $2.0 million. The non-cash charges primarily consisted of stock-based compensation of $2.2 million, depreciation and amortization of $0.1 million, and non-cash lease expense of $0.1 million. The change in our net operating assets and liabilities was primarily due to an increase in prepaid expenses and other assets, a decrease in accrued expenses, an increase in outstanding payables, and an increase in operating lease right of use assets and liabilities driven by a cash reimbursement of $0.8 million for the buildout of the new office building in Princeton, New Jersey.

Investing Activities

Our investing activities provided $49.6 million of cash during the three months ended March 31, 2023, which consisted primarily of maturities of marketable securities of $73.3 million, purchases of marketable securities of $23.5 million, along with purchase of property and equipment of $0.2 million.

Our investing activities used $38.8 million of cash during the three months ended March 31, 2022, which consisted primarily of purchases of marketable securities of $93.7 million, along with purchase of property and equipment of $0.8 million, partially offset by maturities of marketable securities of $55.7 million.

Financing Activities

Our financing activities generated no change in cash during the three months ended March 31, 2023.

Our financing activities provided $0.1 million of cash during the three months ended March 31, 2022, which consisted primarily of proceeds from the exercise of stock options.

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the amounts reported in those financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.

We believe that the accounting policies described below involve a high degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of our operations. During the three-month period ended March 31, 2023, there were no material changes to our critical accounting policies from those described in our audited financial statements for the year ended December 31, 2022, included in our Annual Report on Form 10-K filed with the SEC on March 1, 2023, except as noted below.

Research and Development Costs, Accrued Research and Development Costs and Related Prepaid Expenses

Research and development costs are expensed as incurred. Research and development expenses consist principally of personnel costs, including salaries, stock-based compensation and benefits for employees, third-party license fees and other operational costs related to our research and development activities, including sourcing of raw materials and manufacturing of our product candidates, allocated facility-related expenses and external costs of outside vendors, and other direct and indirect costs. Non-refundable research and development advance payments are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or services are performed.

As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses. This process involves reviewing open contracts and purchase orders, communicating with our applicable personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in the financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of the estimates with the service providers and make adjustments if necessary. Examples of estimated accrued research and development expenses include fees paid to:

•

vendors, including research laboratories, in connection with preclinical development activities;

•

CROs and investigative sites in connection with preclinical studies and clinical trials; and

•

CMOs in connection with drug substance and drug product formulation of preclinical studies and clinical trial materials.

We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple research institutions and CROs that supply, conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the prepaid expense accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

Stock-Based Compensation

We measure all stock options and other stock-based awards granted to our employees, directors, consultants, and other non-employee service providers based on the fair value on the date of the grant. Compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is typically the vesting term.

We classify stock-based compensation expense in our statement of operations in the same way the award recipient’s payroll costs are classified or in which the award recipients’ service payments are classified.

We use the Black-Scholes option pricing model to estimate the fair value of stock options on the date of grant. Using the Black-Scholes option pricing model requires management to make significant assumptions and judgments. We determined these assumptions for the Black-Scholes option-pricing model.

Expected volatility was derived from the average historical stock volatility of our common stock over a period equivalent to the expected term of the stock-based awards if data was available, and over the longest period for which trading activity is available if data matching the expected term was unavailable.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, see Note 2 of the notes to our unaudited condensed financial statements for the three months ended March 31, 2023 included elsewhere in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks in the ordinary course of our business. These risks primarily relate to interest rate risks.

We had cash, cash equivalents, and marketable securities of $229.4 million and restricted cash of $0.8 million as of March 31, 2023. The Company’s cash equivalents consist of interest-bearing U.S. treasury securities, money market funds, and corporate debt securities. Our exposure due to changes in interest rates is not material due to the nature and amount of our money-market funds and short-term marketable securities.

We are not currently exposed to significant market risk related to changes in foreign currency exchange rates; however, we may contract with foreign vendors that are located outside the United States in the future. This may subject us to fluctuations in foreign currency exchange rates in the future.

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our Securities Exchange Act of 1934, as amended reports is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We carry out a variety of ongoing procedures, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2023.

There have not been any changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently involved in any litigation or legal proceedings that, in management’s opinion, are likely to have any material adverse effect on the Company.

Item 1A. Risk Factors.

Other than as described below, there have been no material changes to the Company’s risk factors as set forth in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC on March 1, 2023. You should carefully review and consider the information regarding certain factors which could materially affect our business, financial condition or future results set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC on March 1, 2023.

We will require substantial additional capital to finance our operations in the future. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and product development programs or future commercialization efforts.

Developing biopharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive, and uncertain process that takes years to complete. Our operations have consumed substantial amounts of cash since inception, and we expect our expenses to increase in connection with our ongoing activities, particularly as we conduct clinical trials of, and seek marketing approval for, PC14586, and advance our future product candidates. Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with sales, marketing, manufacturing and distribution activities. Our expenses could increase beyond expectations if we are required by the FDA or other regulatory agencies to perform preclinical studies or clinical trials in addition to those that we currently anticipate. Other unanticipated costs may also arise. Because the design and outcome of our planned and anticipated clinical trials are highly uncertain, we cannot reasonably estimate the actual amount of resources and funding that will be necessary to successfully complete the development and commercialization of any product candidate we develop. Accordingly, we will need to obtain substantial additional funding in order to continue our operations.

As of December 31, 2022, we had $243.5 million in cash, cash equivalents, and marketable securities. Although we believe that our available cash, cash equivalents, and marketable securities will be sufficient to fund our planned operations at least through 2024, this belief is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned. This belief also does not reflect the possibility that we may not be able to access a portion of our existing cash and cash equivalents due to market conditions. For example, recent events surrounding certain banks, including Silicon Valley Bank, First Republic Bank and Signature Bank, created temporary uncertainty on their customers’ cash deposits in excess of the Federal Deposit Insurance Corporation, or the FDIC, limits prior to actions taken by governmental entities. Although we did not have any cash or cash equivalents on deposit with the affected banks, if other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash and cash equivalents may be threatened and could have a material adverse effect on our business and financial condition. The failure of a bank, or other adverse conditions in the financial or credit markets impacting financial institutions at which we maintain balances, could adversely impact our liquidity and financial performance. There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the United States, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a failure or liquidity crisis.

Our future capital requirements depend on many factors, including:

•

the scope, progress, results, and costs of researching and developing our current product candidates or any future product candidates we choose to pursue, and conducting preclinical studies and clinical trials, including our clinical trials of PC14586;

•

the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates or any future product candidates;

•

the number and characteristics of any additional product candidates we develop or acquire;

•

the timing and amount of any milestone, royalty and/or other payments we are required to make pursuant to any future license or collaboration agreements;

•

the cost of manufacturing our product candidates or any future product candidates and any products we successfully commercialize;

•

the cost of building a sales force in anticipation of product commercialization;

•

the cost of commercialization activities of our product candidates, if approved for sale, including marketing, sales, and distribution costs;

•

our ability to establish future collaborations, licensing, or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty, or other payments due under any such agreement;

•

any product liability or other lawsuits related to our products;

•

the expenses needed to attract, hire, and retain skilled personnel;

•

the costs associated with being a public company;

•

the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing our intellectual property portfolio;

•

the timing, receipt, and amount of sales of any future approved products;

•

the impact of the COVID-19 pandemic, which may exacerbate the magnitude of the factors discussed above; and

•

financial conditions affecting the banking system and financial markets.

We do not have any committed external source of funds and adequate additional financing may not be available to us on acceptable terms, or at all. In addition, our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions, inflation expectations, rising interest rates and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic, geopolitical tensions, such as the Ukraine-Russia war, and global conditions affecting financial markets. Our failure to raise capital as and when needed or on acceptable terms would have a negative impact on our financial condition and our ability to pursue our business strategy, and we may have to delay, reduce the scope of, suspend, or eliminate one or more of our research-stage programs, clinical trials, or future commercialization efforts.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Unregistered Sales of Equity Securities

None.

(b) Use of Proceeds

Our registration statement on Form S-1 (File No. 333-248627) relating to the IPO was declared effective by the SEC. The IPO closed on September 25, 2020 at which time we sold 13,529,750 shares of common stock (including the exercise in full by the underwriters of their option to purchase an additional 1,764,750 shares of common stock) at a public offering price of $18.00 per share. We received net proceeds from the IPO of approximately $223.2 million, after deducting the underwriting discounts and commissions of approximately $17.0 million and estimated offering related expenses of approximately $3.3 million. No offering expenses were paid or payable, directly, or indirectly, to our directors, officers, or persons owning 10% or more of any class of equity securities or to our affiliates. Goldman Sachs & Co. LLC, BofA Securities, Cowen, and Evercore ISI acted as joint book-running managers for the offering.

There has been no material change in the planned use of proceeds from the IPO from that described in the prospectus filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act on September 24, 2020.

We have a shelf registration statement on Form S-3 (File No. 333-260012), which was declared effective by the SEC on April 28, 2022. The shelf registration statement consists of (i) a base prospectus pursuant to which we may offer and sell, from time to time, up to $200 million of shares of our common stock, shares of our preferred stock, various series of debt securities and warrants to purchase any of such securities in one or more registered offerings, and (ii) a prospectus supplement pursuant to which we may offer and sell, from time to time, up to $150 million of shares of common stock in "at-the-market" offerings. The Company has not issued any securities pursuant to the shelf registration statement. There has been no material change in the planned use of proceeds as described in the shelf registration statement. None of the offering expenses were paid or payable, directly, or indirectly, to our directors, officers, or persons owning 10% or more of any class of equity securities or to our affiliates.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.


Exhibit Number	Description	Form	File No.	Number	Filing Date

3.1	Amended and Restated Certificate of Incorporation of the Registrant	8-K	001-39539	3.1	September 29, 2020

3.2	Amended and Restated Bylaws of the Registrant, as currently in effect	8-K	001-39539	3.2	September 29, 2020

3.3+	Amended and Restated Bylaws of the Registrant, to be effective on June 8, 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.

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.INS	Inline XBRL Instance Document

101.SCH	Inline XBRL Taxonomy Extension Schema Document

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

† The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

+ Filed herewith.

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.


	PMV Pharmaceuticals, Inc.

Date: May 10, 2023	By:	/s/ David H. Mack
		David H. Mack, Ph.D.
		President, Chief Executive Officer, and Director
		(Principal Executive Officer)

	PMV Pharmaceuticals, Inc.

Date: May 10, 2023	By:	/s/ Winston Kung
		Winston Kung
		Chief Operating Officer and Chief Financial Officer
		(Principal Financial Officer)