Design Therapeutics Inc

Previous wording

To date, we have incurred net losses and negative cash flows from operations since our inception and as of March 31, 2024 had an accumulated deficit of $188.7 million. Our cash, cash equivalents and investment securities balance as of March 31, 2024 was $270.7 million. Our net losses have resulted primarily from costs incurred in connection with organizing and staffing our company, business planning, raising capital, developing and optimizing our technology platform, identifying potential product candidates, undertaking research and nonclinical studies, clinical development activities, engaging in manufacturing for our development programs, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales.

Current wording

To date, we have incurred net losses and negative cash flows from operations since our inception and as of June 30, 2024 had an accumulated deficit of $200.5 million. Our cash, cash equivalents and investment securities balance as of June 30, 2024 was $261.0 million. Our net losses have resulted primarily from costs incurred in connection with organizing and staffing our company, business planning, raising capital, developing and optimizing our technology platform, identifying potential product candidates, undertaking research and nonclinical studies, clinical development activities, engaging in manufacturing for our development programs, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales.

Previous wording

Research and Development Expenses. The decrease in research and development expenses was primarily due to a decrease in clinical activities for our FA program compared to the same period of the prior year and a reduction in expenses associated with our early-stage programs.

Current wording

Research and Development Expenses. The decrease in research and development expenses compared to the same period of the prior year was primarily due to the completion of clinical activities for our FA program in 2023 and a reduction in expenses associated with our early-stage programs.

Previous wording

General and Administrative Expenses. The decrease in general administrative expenses was primarily due to a $0.7 million decrease in personnel-related costs inclusive of stock-based compensation, with the remaining decrease attributed to lower professional fees and other expenses incurred during the three months ended March 31, 2024 as compared to the same period in 2023.

Current wording

General and Administrative Expenses. The decrease in general administrative expenses was primarily due to lower headcount, resulting in a $0.7 million decrease in personnel-related costs inclusive of stock-based compensation, a $0.1 million decrease in professional services and a $0.2 million decrease in other expenses incurred during the three months ended June 30, 2024 as compared to the same period in 2023.

Previous wording

As of March 31, 2024, we had $270.7 million of combined cash and cash equivalents and investment securities, a decrease of $11.1 million from the $281.8 million of cash and cash equivalents and investment securities at December 31, 2023. Further detail of the change in our cash and cash equivalents for the three months ended March 31, 2024 and 2023 is summarized below (in thousands):

Current wording

As of June 30, 2024, we had $261.0 million of combined cash, cash equivalents and investment securities, a decrease of $20.8 million from the $281.8 million of cash, cash equivalents and investment securities at December 31, 2023. Further detail of the change in our cash and cash equivalents for the six months ended June 30, 2024 and 2023 is summarized below (in thousands):

Previous wording

Operating Activities. The decrease in our net cash used in operating activities was primarily due to the $8.2 million decrease in net loss, partially offset by an increase in net working capital for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Current wording

Operating Activities. The decrease in our net cash used in operating activities was primarily due to the $16.3 million decrease in net loss, partially offset by an increase in net working capital for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Previous wording

Investing Activities. The increase in net cash provided by investing activities was due to a net increase in cash provided from the maturity of our investment securities during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, which was partially offset by increased purchases of equipment. We have classified our investment securities as available-for-sale and all investments are made in accordance with our investment policy.

Current wording

Investing Activities. The increase in net cash provided by investing activities was primarily due to a net increase in cash provided from the maturity of our investment securities during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. We have classified our investment securities as available-for-sale and all investments are made in accordance with our investment policy.

Previous wording

Financing Activities. Net cash provided by financing activities for the three months ended March 31, 2024 was comprised of proceeds received from the issuance of common stock from employee stock option exercises.

Current wording

Financing Activities. Net cash provided by financing activities for the six months ended June 30, 2024 and 2023 was comprised of proceeds received from the issuance of common stock through our employee stock purchase plan and from employee stock option exercises.

Previous wording

the timing of any milestone and royalty payments to Wisconsin Alumni Research Foundation (WARF), or other future licensors;

Current wording

the timing of any milestone and royalty payments to our current and future licensors;

Previous wording

For the three months ended March 31, 2024, no payments were made pursuant to the License Agreement. In 2022, pursuant to the License Agreement, we paid $0.1 million to WARF upon the acceptance of an Investigational New Drug Application (IND) in the U.S. We will be required to make further aggregate milestone payments of up to $17.5 million upon achievement of certain other regulatory and commercial milestones. We may also be required to pay royalties based on annual net product sales in the low single digits on our or our sublicensees’ net product sales on a country-by-country and product-by-product basis, and are subject to a minimum royalty of $0.1 million per calendar year upon first commercial product sale. Further, we may be required to pay sublicense fees in the mid-single digits percentage for fees, royalties or other payments earned from the granting of sublicenses to the WARF patents and know-how.

Current wording

For the six months ended June 30, 2024, no payments were made pursuant to the License Agreement. In 2022, pursuant to the License Agreement, we paid $0.1 million to WARF upon the acceptance of an Investigational New Drug Application (IND) in the U.S. We will be required to make further aggregate milestone payments of up to $17.5 million upon achievement of certain other regulatory and commercial milestones. We may also be required to pay royalties based on annual net product sales in the low single digits on our or our sublicensees’ net product sales on a country-by-country and product-by-product basis, and are subject to a minimum royalty of $0.1 million per calendar year upon first commercial product sale. Further, we may be required to pay sublicense fees in the mid-single digits percentage for fees, royalties or other payments earned from the granting of sublicenses to the WARF patents and know-how.

Previous wording

We are responsible for reimbursing WARF for costs incurred in connection with prosecuting and maintaining patent rights that are specific to the License Agreement. Expenses recognized in connection with legal patent fees under this License Agreement were immaterial for each of the three months ended March 31, 2024 and 2023.

Current wording

We are responsible for reimbursing WARF for costs incurred in connection with prosecuting and maintaining patent rights that are specific to the License Agreement. Expenses recognized in connection with legal patent fees under this License Agreement were immaterial for each of the six months ended June 30, 2024 and 2023.