ACADIA PHARMACEUTICALS INC. (Exact Name of Registrant As Specified in Its Charter)
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Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2009 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 000-50768 ACADIA PHARMACEUTICALS INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 06-1376651 (State of Incorporation) (I.R.S. Employer Identification No.) 3911 Sorrento Valley Boulevard San Diego, California 92121 (Address of Principal Executive Offices) (Zip Code) (858) 558-2871 (Registrant’s Telephone Number, Including Area Code) 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 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 x No ¨ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934. Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ Smaller reporting company ¨ (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x Total shares of common stock outstanding as of the close of business on April 30, 2009: Class Number of Shares Outstanding Common Stock, $0.0001 par value 37,179,124 Table of Contents ACADIA PHARMACEUTICALS INC. FORM 10-Q TABLE OF CONTENTS PAGE NO. TABLE OF CONTENTS i PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) 1 Condensed Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008 1 Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2009 and 2008 2 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and 2008 3 Notes to Condensed Consolidated Financial Statements 4 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 8 Item 3. Quantitative and Qualitative Disclosures About Market Risk 15 Item 4. Controls and Procedures 15 PART II. OTHER INFORMATION Item 1A. Risk Factors 17 Item 6. Exhibits 31 SIGNATURES 32 i Table of Contents PART I. FINANCIAL INFORMATION ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ACADIA PHARMACEUTICALS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except for par value and share data) (Unaudited) March 31, December 31, 2009 2008(1) Assets Cash and cash equivalents $ 18,840 $ 21,171 Investment securities, available-for-sale 27,544 38,912 Prepaid expenses, receivables and other current assets 1,903 2,299 Total current assets 48,287 62,382 Property and equipment, net 1,846 2,103 Other assets 238 192 Total assets $ 50,371 $ 64,677 Liabilities and Stockholders’ Equity Accounts payable $ 4,185 $ 2,283 Accrued expenses 6,474 7,535 Deferred revenue 92 438 Current portion of long-term debt 685 795 Total current liabilities 11,436 11,051 Other long-term liabilities 225 204 Long-term debt, less current portion 324 430 Total liabilities 11,985 11,685 Commitments (Note 10) Stockholders’ equity Preferred stock, $0.0001 par value; 5,000,000 shares authorized at March 31, 2009 and December 31, 2008; no shares issued and outstanding at March 31, 2009 and December 31, 2008 — — Common stock, $0.0001 par value; 75,000,000 shares authorized at March 31, 2009 and December 31, 2008; 37,179,124 shares and 37,177,874 shares issued and outstanding at March 31, 2009 and December 31, 2008, respectively 4 4 Additional paid-in capital 347,391 346,815 Accumulated deficit (309,101) (294,100) Accumulated other comprehensive income 92 273 Total stockholders’ equity 38,386 52,992 Total liabilities and stockholders’ equity $ 50,371 $ 64,677 (1) The condensed consolidated balance sheet at December 31, 2008 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying notes are an integral part of these condensed consolidated financial statements. 1 Table of Contents ACADIA PHARMACEUTICALS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (Unaudited) Three Months Ended March 31, 2009 2008 Revenues Collaborative revenues $ 374 $ 806 Operating expenses Research and development (includes stock-based compensation of $221 and $415 for the three months ended March 31, 2009 and 2008, respectively) 12,554 15,171 General and administrative (includes stock-based compensation of $354 and $421 for the three months ended March 31, 2009 and 2008, respectively) 2,988 3,270 Total operating expenses 15,542 18,441 Loss from operations (15,168) (17,635) Interest income 191 1,307 Interest expense (24) (52) Net loss $(15,001) $(16,380) Net loss per common share, basic and diluted $ (0.40) $ (0.44) Weighted average common shares outstanding, basic and diluted 37,179 37,053 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Table of Contents ACADIA PHARMACEUTICALS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Three Months Ended March 31, 2009 2008 Cash flows from operating activities Net loss $(15,001) $(16,380) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 225 275 Stock-based compensation 575 836 Amortization of investment premium/discount 35 (112) Other (4) (115) Changes in operating assets and liabilities: Prepaid expenses, receivables and other current assets 438 802 Other assets (49) 47 Accounts payable 1,907 (585) Accrued expenses (1,088) (4,816) Deferred revenue (347) (537) Other long-term liabilities 21 38 Net cash used in operating activities (13,288) (20,547) Cash flows from investing activities Purchases of investment securities (2,735) (27,112) Maturities of investment securities 13,930 51,824 Purchases of property and equipment (5) (77) Net cash provided by investing activities 11,190 24,635 Cash flows from financing activities Proceeds from issuance of common stock 1 101 Repayments of long-term debt (216) (262) Net cash used in financing activities (215) (161) Effect of exchange rate changes on cash (18) 91 Net increase (decrease) in cash and cash equivalents (2,331) 4,018 Cash and cash equivalents Beginning of period 21,171 16,987 End of period $ 18,840 $ 21,005 Supplemental schedule of noncash investing and financing activities Unrealized gain (loss) on investment securities $ (142) $ 135 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents ACADIA PHARMACEUTICALS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2009 (Unaudited) 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of ACADIA Pharmaceuticals Inc. (together with its wholly owned subsidiaries, ACADIA Pharmaceuticals AB and ACADIA Pharmaceuticals A/S, the “Company”) should be read in conjunction with the audited financial statements and notes thereto as of and for the year ended December 31, 2008 included in the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the Securities and Exchange Commission (the “SEC”). The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. The Company has not been profitable and has incurred substantial operating losses since its inception due in large part to expenditures for its research and development activities. At March 31, 2009, the Company had an accumulated deficit of $309.1 million. The Company expects its operating losses to continue for at least the next several years as it pursues the development