Rubius Therapeutics, Inc. - 10-K filing on 2023-02-27

Nature of the Business and Basis of Presentation	12 Months Ended
Nature of the Business and Basis of Presentation	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of the Business and Basis of Presentation	Nature of the Business and Basis of Presentation Rubius Therapeutics, Inc. (“Rubius” or the “Company”) is a biopharmaceutical company that has developed a platform and pipeline focused on creating an entirely new class of cellular medicines, called Red Cell Therapeutics, for the treatment of cancer and autoimmune diseases. Rubius was incorporated in April 2013 as VL26, Inc. under the laws of the State of Delaware. In January 2015, the Company changed its name to Rubius Therapeutics, Inc. On July 27, 2022, the Company received a deficiency letter from the Listing Qualifications Department, or the Staff, of The Nasdaq Stock Market LLC, or Nasdaq, notifying the Company that, for the last 30 consecutive business days, the bid price for its common stock had closed below the $1.00 per share minimum bid price requirement for continued inclusion on the Nasdaq Global Select Market. In February 2023, the Company was notified by the Staff that it would be delisted at the opening of business on February 15, 2023 unless the Company were to timely request a hearing before a Nasdaq Hearings Panel, or the Panel, to address the deficiencies and present a plan to regain compliance. On February 13, 2023, the Company timely requested a hearing before the Panel, which request will stay any further delisting action by the Staff pending the ultimate outcome of the hearing and the expiration of any extension that may be granted by the Panel, unless the Company determine to withdraw its hearing request. The Company’s common stock will remain listed and eligible for trading on Nasdaq at least pending the ultimate conclusion of the hearing process. On September 13, 2022, the Company's Board of Directors approved certain operational and organizational steps that the Company undertook in connection with a new strategic reorganization plan and related cost-saving measures (collectively, the “Reorganization Plan”). The Company discontinued its ongoing Phase 1 clinical trials of RTX-240 and RTX-224 for the treatment of advanced solid tumors and restructured the organization to support advancing drug candidates based on its next generation platform. Under the Reorganization Plan, the Company reduced its overall workforce by approximately 75%, primarily consisting of employees who were focused on clinical development of RTX-240 and RTX-224, with the remainder coming from its manufacturing and general and administrative functions. On November 2, 2022, in light of the Company’s financial condition, including the repayment and termination of its $75.0 million credit facility with SLR Investment Corp., and the early stage of its programs, its Board of Directors approved a plan to review strategic alternatives, including a sale or merger of the Company or one or more sales of its assets, and to significantly and immediately reduce its operations (the “Strategic Plan”). In connection with the Strategic Plan, the Company terminated 42 of its employees (representing 82% of its then-current employee base), leaving a core team of individuals to lead the strategic review process. On February 20, 2023, following the conclusion of the Company's review of strategic alternatives, the Company's Board of Directors unanimously approved the dissolution and liquidation of the Company pursuant to a plan of complete liquidation and dissolution, which plan is subject to stockholder approval. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, the ability to establish clinical- and commercial-scale manufacturing processes and the ability to secure additional capital to fund operations. In addition, the Company is subject to uncertainty regarding the performance and safety of its product candidates in humans. Product candidates currently under development will require significant additional 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 and extensive compliance-reporting capabilities. It is uncertain when, if ever, the Company will realize significant revenue from product sales. Under Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40) (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. As required by ASC 205-40, this evaluation shall initially not take into consideration the potential mitigating effects of plans that have not been fully implemented as of the date the financial statements are issued. As of December 31, 2022, the Company had an accumulated deficit of $856.7 million, and cash and cash equivalents of $14.9 million. For the year ended December 31, 2022, the Company incurred a net loss of $179.7 million and used $150.1 million of cash in operations. The Company expects that its operating losses and negative cash flows will continue for the foreseeable future. Management has assessed the Company’s ability to continue as a going concern in accordance with the requirements of ASC 205-40 and determined that the Company’s accumulated deficit, history of losses and future expected losses met the ASC 205-40 standard for raising substantial doubt about the Company’s ability to continue as a going concern. The Company does not have adequate financial resources to fund its forecasted operating costs for at least twelve months from the filing of its Annual Report on Form 10-K. Through the implementation of its Strategic Plan, the Company’s primary goal was to successfully complete a review of strategic alternatives and consummate a transaction or series of transactions to realize value for the Company’s platform and programs. On February 20, 2023, following the conclusion of the Company's review of strategic alternatives, the Company's Board of Directors unanimously approved the dissolution and liquidation of the Company. As a result, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.