Cullinan Therapeutics Inc
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
CGEM$11.31+4.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0000950170-24-060535
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0000950170-24-093320
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 107 current paragraphs.
67 unchanged; 32 reworded; 8 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Immunology
Current report
Oncology
Current report
In June 2024, we presented the first clinical data from the CPI therapy combination dose escalation module of the clinical trial, as well as updated data from the monotherapy dose escalation module, at the American Society of Clinical Oncology Annual Meeting. The preliminary clinical data from CLN-619 in combination with the CPI pembrolizumab demonstrated objective tumor responses across multiple tumor types. Three partial responses were observed in patients with tumor types typically unresponsive to CPI treatment, including patients with non-small cell lung cancer ("NSCLC") with oncogenic mutations. The preliminary clinical data for CLN-619 as a monotherapy demonstrated objective tumor responses and extended stable disease across multiple tumor types. We observed one complete response, two partial responses and nine stable disease for at least 18 weeks resulting in a clinical benefit rate of 41.4%. The initial clinical data indicates CLN-619 has an acceptable safety profile across all doses assessed in the monotherapy dose escalation and in combination with pembrolizumab. No dose-limiting toxicities were observed. Consistent with other monoclonal antibodies, infusion-related reactions were limited to the first dose and were all Grade 1 or Grade 2 in patients receiving mandated pre-medication.
Current report
The Phase 1 clinical trial continues to enroll expansion cohorts in cervical cancer (monotherapy), endometrial cancers (monotherapy and combination), NSCLC (monotherapy and combination), and ovarian cancer (combination). Additional expansion cohorts may be initiated based on clinical activity observed in the current clinical trial. Data from the disease specific expansion cohorts for endometrial and cervical cancers are anticipated in the first half of 2025. Separately, in February 2024, the FDA cleared our IND application to evaluate CLN-619 in a Phase 1 clinical trial in relapsed/refractory multiple myeloma patients.
Current report
In June 2024, we announced initial clinical data from the pivotal Phase 2b portion of our REZILIENT1 clinical trial of zipalertinib in patients with NSCLC harboring EGFRex20 insertion mutations who received zipalertinib after prior treatment with amivantamab. As of a January 12, 2024 data cut-off, 31 patients had been enrolled. Patients had received a median of three prior systemic anti-cancer regimens, including prior platinum-based chemotherapy, prior anti-PD1/L1 therapy, and prior EGFR tyrosine kinase inhibitor therapy. At the data cut-off, 18 patients were evaluable for response and showed similar anti-tumor activity compared with those post prior chemotherapy in the previously reported Phase 1/2a part of the clinical trial. Zipalertinib demonstrated a manageable safety profile, similar to what has been previously reported. There were no grade 4 or grade 5 treatment-related adverse events. We intend to present additional data from the pivotal Phase 2b portion of our REZILIENT1 clinical trial in an oral abstract at the European Society for Medical Oncology in September 2024.
Current report
The $8.9 million increase in research and development expenses in the three months ended June 30, 2024 compared to the same period in 2023 was primarily due to increases in clinical costs ($2.3 million), chemistry, manufacturing and controls ("CMC") costs ($2.2 million), preclinical costs ($2.2 million), personnel costs relating to additional headcount ($1.5 million), and equity-based compensation costs ($0.6 million).
Current report
The $5.2 million increase in general and administrative expenses in the six months ended June 30, 2024 compared to the same period in 2023 was primarily due to increases in both personnel costs ($2.9 million) and equity-based compensation costs ($2.9 million) relating to additional headcount.
Current report
Because (i) the market value of our common stock held by non-affiliates exceeded $700 million as of June 30, 2024, (ii) we have been a public company for more than one year, and (iii) we have filed at least one annual report, we will cease to be an EGC as of December 31, 2024. As a result, beginning with our Annual Report on Form 10-K for the year ended December 31, 2024, we will not be able to rely on the extended transition period noted above and will be required to adopt all new accounting pronouncements within the same time periods as other public companies that are not EGCs. We will also be subject to certain other requirements that apply to other public companies but did not previously apply to us due to our status as an EGC, including the provisions of Section 404 of the Sarbanes-Oxley Act, which require that our independent registered public accounting firm provides an attestation report on the effectiveness of our internal control over financial reporting.
Removed paragraphs (2)
Previous report
CLN-978 is a CD19xCD3 T cell engager ("TCE") with extended serum half-life that we are developing for autoimmune diseases. We discontinued enrollment in our Phase 1 clinical trial of CLN-978 in patients with relapsed/refractory B cell non-Hodgkin lymphoma (“B-NHL”) to focus ongoing development on autoimmune indications based on preclinical studies that demonstrated robust potency against target cells expressing low levels of CD19.
Previous report
We will remain an emerging growth company until the earliest to occur of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which requires the market value of our common stock that is held by non-affiliates to exceed $700.0 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Reworded paragraphs (32)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 10-K”), filed with the Securities and Exchange Commission (the “SEC”) on March 14, 2024. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results could differ materially from those discussed in these forward-looking statements. Please also refer to those factors described in “Part I, Item 1A. Risk Factors” of our 2023 10-K for important factors that we believe could cause actual results to differ materially from those in our forward-looking statements.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 10-K”), filed with the Securities and Exchange Commission (the “SEC”) on March 14, 2024. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results could differ materially from those discussed in these forward-looking statements. Please also refer to those factors described in “Part I, Item 1A. Risk Factors” of our 2023 10-K and "Part II. Item 1A. Risk Factors" in this Quarterly Report on Form 10-Q for important factors that we believe could cause actual results to differ materially from those in our forward-looking statements.
Previous wording
We are a clinical-stage biopharmaceutical company dedicated to creating new standards of care for patients. Our strategy is to identify high-impact targets, which we define as those that inhibit key drivers of disease or harness the immune system to eliminate diseased cells in both oncology and autoimmune diseases, and then select what we believe is the optimal therapeutic modality for those targets. We source innovation both internally and externally, focusing on product candidates with novel technology or differentiated mechanisms. Before we advance a product candidate into clinical development, we evaluate its potential for activity as a single agent as well as its ability to generate an immune response or to inhibit disease processes. Using this strategy, we have built a broad and deep pipeline of targeted oncology and autoimmune programs that includes six distinct clinical-stage product candidates.
Current wording
We are a clinical-stage biopharmaceutical company dedicated to creating new standards of care for patients. Our strategy is to identify high-impact targets, which we define as those that inhibit key drivers of disease or harness the immune system to eliminate diseased cells in both autoimmune diseases and cancer, and then select what we believe is the optimal therapeutic modality for those targets. We source innovation both internally and externally, focusing on product candidates with novel technology or differentiated mechanisms. Before we advance a product candidate into clinical development, we evaluate its potential for activity as a single agent as well as its ability to generate an immune response or to inhibit disease processes. Using this strategy, we have built a broad and deep pipeline of targeted immunology and oncology programs that includes multiple distinct clinical-stage product candidates.
Previous wording
Academic and industry groups have generated clinical data and case series demonstrating that CD19 targeted CAR T cell therapy could lead to sustained improvements in disease manifestations, including durable remission from symptoms in some cases, in multiple autoimmune disease indications including systemic lupus erythematosus (“SLE”). Nonetheless, cell therapy has many limitations, including the need for lymphodepleting chemotherapy, which is associated with significant toxicities, an FDA-recognized risk of secondary malignancies, and extended manufacturing lead times. More recently, academic investigators have published data demonstrating the potential for a CD19xCD3 TCE to achieve similar outcomes in multiple autoimmune disease indications. Based on these emerging clinical data supporting the efficacy of CD19 directed therapy in multiple autoimmune diseases and our belief that CLN-978 may address the limitations of CAR T therapy, we are exploring the development of CLN-978 in a variety of autoimmune diseases and are committed to assessing its broad potential. We plan to submit an IND application to evaluate CLN-978 in patients with SLE as a first indication in the third quarter of 2024.
Current wording
CLN-978 is a CD19xCD3 T cell engager ("TCE") that we are developing for autoimmune diseases. Academic and industry groups have generated clinical data and case series demonstrating that CD19 targeted CAR T cell therapy could lead to sustained improvements in disease manifestations, including durable remission from symptoms in some cases, in multiple autoimmune disease indications including systemic lupus erythematosus (“SLE”). Nonetheless, cell therapy has many limitations, including the need for lymphodepleting chemotherapy, which is associated with significant toxicities, a United States Food and Drug Administration ("FDA")-recognized risk of secondary malignancies, and extended manufacturing lead times. More recently, academic investigators have published data demonstrating the potential for a CD19xCD3 TCE to achieve similar outcomes in multiple autoimmune disease indications. Based on these emerging clinical data supporting the efficacy of CD19 directed therapy in multiple autoimmune diseases and our belief that CLN-978 may address many of the limitations of CAR T therapy, we are exploring the development of CLN-978 in a variety of autoimmune diseases and are committed to assessing its broad potential. We plan to submit an investigational new drug ("IND") application to evaluate CLN-978 in patients with SLE as a first indication in the third quarter of 2024. In addition, we plan to initiate a clinical trial to evaluate CLN-978 in patients with rheumatoid arthritis in collaboration with the Friedrich-Alexander University of Erlangen-Nuremberg and Università Cattolica del Sacro Cuore, Rome.
Previous wording
Clinical observations from three patients treated in a Phase 1 dose escalation trial of patients with relapsed/refractory B-NHL show that CLN-978 was clinically active at the initial starting dose of 30 micrograms administered subcutaneously once weekly. Two of the three patients experienced objective clinical benefit, including one patient who experienced a complete response. Grade 1 cytokine release syndrome occurred in two patients following the first dose of CLN-978 only, and no patients experienced immune effector cell-associated neurotoxicity syndrome. Other adverse events were mostly low-grade and/or mechanistically based (e.g., transient lymphopenia after the first dose only). Of the two patients with detectable B cells at baseline, both experienced rapid, deep, and sustained B cell depletion after administration of CLN-978. These data support that CLN-978 can not only deplete peripheral blood B cells but also demonstrate clinical activity in a tissue resident disease at a dose with a favorable safety profile.
Current wording
Clinical observations from three patients treated in a Phase 1 dose escalation trial of patients with relapsed/refractory B-NHL showed that CLN-978 was clinically active at the initial starting dose of 30 micrograms administered subcutaneously once weekly. Two of the three patients experienced objective clinical benefit, including one patient who experienced a complete response. Grade 1 cytokine release syndrome occurred in two patients following the first dose of CLN-978 only, and no patients experienced immune effector cell-associated neurotoxicity syndrome. Other adverse events were mostly low-grade and/or mechanistically based (e.g., transient lymphopenia after the first dose only). Of the two patients with detectable B cells at baseline, both experienced rapid, deep, and sustained B cell depletion after administration of CLN-978. These data support that CLN-978 can not only deplete peripheral blood B cells but also demonstrate clinical activity in a tissue resident disease at a dose with a favorable safety profile.
Previous wording
CLN-619, our lead unpartnered oncology program, is a monoclonal antibody that stabilizes expression of MICA/B on the tumor cell surface to promote tumor cell lysis mediated by both cytotoxic innate and adaptive immune cells. CLN-619 is being investigated as both monotherapy and in combination with checkpoint inhibitor therapy in an ongoing Phase 1 clinical trial in patients with advanced solid tumors. We intend to present initial data from the checkpoint inhibitor therapy combination dose escalation module of the clinical trial, as well as updated data from the monotherapy dose escalation module, in June 2024 at the American Society of Clinical Oncology Annual Meeting. Initial data from the disease specific expansion cohorts are anticipated in the first half of 2025. Separately, in February 2024, the United States (“U.S.”) Food and Drug Administration (“FDA”) cleared our Investigational New Drug (“IND”) application to evaluate CLN-619 in a Phase 1 clinical trial in relapsed/refractory multiple myeloma patients.
Current wording
CLN-619, our lead unpartnered oncology program, is a monoclonal antibody that stabilizes expression of MICA/B on the tumor cell surface to promote tumor cell lysis mediated by both cytotoxic innate and adaptive immune cells. CLN-619 is being investigated as both monotherapy and in combination with checkpoint inhibitor (“CPI”) therapy in an ongoing Phase 1 clinical trial in patients with advanced solid tumors.
Previous wording
Zipalertinib (CLN-081/TAS6417), which we are co-developing with an affiliate of Taiho Pharmaceutical Co., Ltd ("Taiho"), is an orally-available small-molecule, irreversible epidermal growth factor receptor ("EGFR") inhibitor that is designed to selectively target cells expressing EGFR exon 20 ("EGFRex20") insertion mutations with relative sparing of cells expressing wild-type EGFR. The FDA has granted Breakthrough Therapy designation to zipalertinib. In collaboration with our partners at Taiho, we are evaluating zipalertinib in the pivotal Phase 2b portion of the REZILIENT1 clinical trial in patients with EGFRex20 non-small-cell lung cancer ("NSCLC") who progressed after prior systemic therapy, and in a global Phase 3 clinical trial (“REZILIENT3”) in combination with chemotherapy as a potential first-line treatment for EGFRex20 NSCLC adult patients. We expect to complete enrollment in the pivotal Phase 2b portion of the REZILIENT1 clinical trial by year-end 2024. We will receive 50% of any future pre-tax profits from potential U.S. sales of zipalertinib.
Current wording
Zipalertinib (CLN-081/TAS6417), which we are co-developing with an affiliate of Taiho Pharmaceutical Co., Ltd ("Taiho"), is an orally-available small-molecule, irreversible epidermal growth factor receptor ("EGFR") inhibitor that is designed to selectively target cells expressing EGFR exon 20 ("EGFRex20") insertion mutations with relative sparing of cells expressing wild-type EGFR. We will receive 50% of any future pre-tax profits from potential U.S. sales of zipalertinib. The FDA has granted Breakthrough Therapy designation to zipalertinib. In collaboration with our partners at Taiho, we are evaluating zipalertinib in the pivotal Phase 2b portion of the REZILIENT1 clinical trial in patients with EGFRex20 NSCLC who progressed after prior systemic therapy, and in a global Phase 3 clinical trial (“REZILIENT3”) in combination with chemotherapy as a potential first-line treatment for EGFRex20 NSCLC adult patients. We expect to complete enrollment in the pivotal Phase 2b portion of the REZILIENT1 clinical trial by year-end 2024.
Previous wording
CLN-049 is a FLT3xCD3 T cell engaging bispecific antibody being investigated in patients with relapsed/refractory acute myeloid leukemia ("AML") or myelodysplastic syndrome ("MDS"). CLN-049 is currently in an ongoing Phase 1 clinical trial with updated clinical data expected in the second half of 2024. In December 2023, we initiated a second Phase 1 clinical trial designed to evaluate the safety of CLN-049 in minimal residual disease-positive AML.
Current wording
CLN-049 is a FLT3xCD3 T cell engaging bispecific antibody. CLN-049 is being investigated in an ongoing Phase 1 clinical trial in patients with relapsed/refractory acute myeloid leukemia ("AML") or myelodysplastic syndrome ("MDS"). We have also initiated a second Phase 1 clinical trial designed to evaluate the safety of CLN-049 in minimal residual disease (“MRD”)-positive AML. Following a review of data from the Phase 1 clinical trial of CLN-049, we reported that in the ongoing Phase 1 clinical trial of CLN-049 in patients with relapsed/refractory AML and MDS, dose-limiting injection site reactions were observed during dose escalation with subcutaneous administration. Based on these findings, together with observations of preliminary clinical activity, dose escalation is now continuing in the study with intravenous administration.
Previous wording
CLN-617 is a fusion protein combining two potent antitumor cytokines, interleukin-2 ("IL-2") and interleukin-12 ("IL-12") with tumor retention domains for the treatment of solid tumors. In December 2023, we dosed the first patient in the CLN-617 first-in-human Phase 1 clinical trial.
Current wording
CLN-617 is a fusion protein combining two potent antitumor cytokines, interleukin-2 ("IL-2") and interleukin-12 ("IL-12") with tumor retention domains for the treatment of solid tumors. Patient enrollment continues in the ongoing CLN-617 first-in human Phase 1 clinical trial in patients with advanced solid tumors.
Previous wording
CLN-418 is a B7H4x4-1BB fully human bispecific immune activator designed to achieve conditional activation of 4-1BB by targeting B7H4, a tumor-associated antigen that is highly expressed across multiple cancers with minimal expression on normal tissues. CLN-418 is being investigated in an ongoing Phase 1 clinical trial in patients with advanced solid tumors with initial clinical data expected in the second half of 2024.
Current wording
CLN-418 is a B7H4x4-1BB fully human bispecific immune activator designed to achieve conditional activation of 4-1BB by targeting B7H4, a tumor-associated antigen that is highly expressed across multiple cancers with minimal expression on normal tissues. In August 2024, following a review of the data from the Phase 1 clinical trial of CLN-418, we notified Harbour BioMed US Inc. (“Harbour”) of our decision to terminate the license and collaboration agreement for CLN-418 (the “Harbour License Agreement”), effective November 2024. In connection with the termination of the Harbour License Agreement, we will discontinue development of CLN-418 and return development and commercial rights for CLN-418 to Harbour and focus our resources on our other product candidates. Refer to Note 5 of our notes to the consolidated financial statements in this Quarterly Report on Form 10-Q for additional detail regarding the Harbour License Agreement.
Previous wording
In addition to the product candidates described above, we are developing several preclinical oncology programs, all in the discovery stage, including our collaboration with Icahn School of Medicine at Mount Sinai for the development of novel hematopoietic progenitor kinase 1 degraders.
Current wording
In addition to the product candidates described above, we are developing several preclinical programs, all in the discovery stage, including our collaboration with Icahn School of Medicine at Mount Sinai for the development of novel hematopoietic progenitor kinase 1 degraders.
Previous wording
When we were a private company, we established development subsidiaries when we acquired or licensed exclusive worldwide rights to intellectual property, including for CLN-619, CLN-049, and CLN-617. The structure of our financing arrangements with each development subsidiary enables us to increase our economic ownership when we provide additional capital. We have not established development subsidiaries for our other current product candidates and programs. We are co-developing zipalertinib, for which Taiho holds the intellectual property rights, with an affiliate of Taiho. We hold worldwide intellectual property rights for CLN-978 and U.S. intellectual property rights for CLN-418, and we hold worldwide intellectual property rights or exclusive options for worldwide intellectual property for our earlier-stage programs. The following table shows our ownership interest as of March 31, 2024 in our development subsidiaries and their product candidates:
Current wording
We have a controlling interest in the worldwide intellectual property rights for CLN-619, CLN-049, and CLN-617. We hold the worldwide intellectual property rights for CLN-978 and the U.S. intellectual property rights for CLN-418, and we hold the worldwide intellectual property rights or exclusive options for worldwide intellectual property for our earlier-stage programs. We are co-developing zipalertinib, for which Taiho holds the intellectual property rights, with an affiliate of Taiho. The following table shows our ownership interest as of June 30, 2024 in product candidates in which we have a controlling interest in the worldwide intellectual property rights:
Previous wording
We have funded our operations primarily through the sale of equity securities and from licensing or selling the rights to our product candidates. As of March 31, 2024, we have received net proceeds of $579.6 million from equity financings, inclusive of our net proceeds of $264.5 million from our initial public offering ("IPO"). We have received $18.9 million in revenue from a previous license agreement and cash proceeds of $275.0 million from the sale of our equity interest in our zipalertinib development subsidiary to Taiho. In April 2024, we sold shares of our common stock and pre-funded warrants for shares of our common stock in a private placement (the “2024 Private Placement”) for gross proceeds of $280.0 million, before deducting offering expenses. Refer to Note 13 of our notes to the consolidated financial statements in this Quarterly Report on Form 10-Q for additional detail regarding the 2024 Private Placement.
Current wording
We have funded our operations primarily through the sale of equity securities and from licensing or selling the rights to our product candidates. As of June 30, 2024, we have received net proceeds of $842.2 million from equity financings. We have received $18.9 million in revenue from a previous license agreement and cash proceeds of $275.0 million from the sale of our equity interest in our zipalertinib development subsidiary to Taiho. In April 2024, we sold shares of our common stock and pre-funded warrants for shares of our common stock in a private placement (the “2024 Private Placement”) for net proceeds of $262.7 million, after deducting offering expenses of $17.3 million. Refer to Note 6 of our notes to the consolidated financial statements in this Quarterly Report on Form 10-Q for additional detail regarding the 2024 Private Placement.
Previous wording
As of March 31, 2024, we had cash, cash equivalents, short-term investments, and interest receivable of $434.8 million. Interest receivable is included in prepaid expenses and other current assets on the consolidated balance sheets and represents accrued and unpaid interest on our marketable securities. We have a history of significant operating losses and have had negative cash flows from operations since our inception. As of March 31, 2024, we had an accumulated deficit of $238.0 million. We expect to continue to generate operating losses for the foreseeable future. Our future viability is dependent on the success of our research and development and our ability to access additional capital to fund our operations. There can be no assurance that our current operating plan will be achieved or that additional funding will be available on terms acceptable to us, or at all.
Current wording
As of June 30, 2024, we had cash, cash equivalents, short-term investments, and interest receivable of $664.9 million. Interest receivable is included in prepaid expenses and other current assets on the consolidated balance sheets and represents accrued and unpaid interest on our marketable securities. We have a history of significant operating losses and have had negative cash flows from operations since our inception. As of June 30, 2024, we had an accumulated deficit of $280.0 million. We expect to continue to generate operating losses for the foreseeable future. Our future viability is dependent on the success of our research and development and our ability to access additional capital to fund our operations. There can be no assurance that our current operating plan will be achieved or that additional funding will be available on terms acceptable to us, or at all.
Previous wording
Comparison of the Three Months Ended March 31, 2024 and 2023
Current wording
Comparison of the Three and Six Months Ended June 30, 2024 and 2023
Previous wording
The following table presents our results of operations for the three months ended March 31, 2024 and 2023 (in thousands):
Current wording
The following table presents our results of operations for the three and six months ended June 30, 2024 and 2023 (in thousands):
Previous wording
The following table summarizes our research and development expenses for the three months ended March 31, 2024 and 2023 (in thousands):
Current wording
The following table summarizes our research and development expenses for the three and six months ended June 30, 2024 and 2023 (in thousands):
Previous wording
The $21.5 million decrease in research and development expenses in the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to the one-time upfront in-licensing fee for CLN-418 in 2023 ($25.0 million) and decreased chemistry, manufacturing and controls ("CMC") costs ($1.8 million), partially offset by increased clinical costs ($5.2 million).
Current wording
The $12.6 million decrease in research and development expenses in the six months ended June 30, 2024 compared to the same period in 2023 was primarily due to the one-time upfront in-licensing fee for CLN-418 in 2023 ($25.0 million), partially offset by increases in clinical costs ($7.5 million), preclinical costs ($2.3 million), personnel costs relating to additional headcount ($2.3 million), and equity-based compensation costs ($0.7 million).
Previous wording
The $1.7 million increase in general and administrative expenses in the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to increases in both personnel costs ($1.4 million) and equity-based compensation costs ($0.9 million) relating to increased headcount, partially offset by decreases in legal fees ($0.6 million).
Current wording
The $3.6 million increase in general and administrative expenses in the three months ended June 30, 2024 compared to the same period in 2023 was primarily due to increases in both equity-based compensation costs ($2.0 million) and personnel costs ($1.5 million) relating to additional headcount.
Previous wording
The $1.0 million increase in other income in the three months ended March 31, 2024 compared to the same period in 2023 was primarily related to higher investment income.
Current wording
The $2.6 million and $3.6 million increases in other income for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 were primarily related to higher investment income.
Previous wording
We have a history of significant operating losses and have had negative cash flows from operations since our inception and expect to continue to generate operating losses for the foreseeable future. We have not yet commercialized any products and we do not expect to generate revenue from sales of products for several years, if at all. To date, we have funded our operations primarily with proceeds from the sale of equity securities and from licensing or selling the rights to our product candidates. As of March 31, 2024, we had cash, cash equivalents, short-term investments, and interest receivable of $434.8 million.
Current wording
We have a history of significant operating losses and have had negative cash flows from operations since our inception and expect to continue to generate operating losses for the foreseeable future. We have not yet commercialized any products and we do not expect to generate revenue from sales of products for several years, if at all. To date, we have funded our operations primarily with proceeds from the sale of equity securities and from licensing or selling the rights to our product candidates. As of June 30, 2024, we had cash, cash equivalents, short-term investments, and interest receivable of $664.9 million.
Previous wording
In May 2023, we entered into an agreement with Cowen and Company, LLC (“Cowen”) to establish an at-the-market equity offering program (the "ATM"), pursuant to which we may offer and sell up to $125.0 million of our common stock from time to time through Cowen, acting as our sales agent. We made no sales under the ATM in the three months ended March 31, 2024. Through March 31, 2024, we have sold approximately 3.3 million shares under the ATM and received net proceeds of $38.4 million, after deducting commissions. As of March 31, 2024, we had $85.6 million in shares of our common stock remaining under the ATM.
Current wording
In May 2023, we entered into an agreement with Cowen and Company, LLC (“Cowen”) to establish an at-the-market equity offering program (the "ATM"), pursuant to which we may offer and sell up to $125.0 million of our common stock from time to time through Cowen, acting as our sales agent. We made no sales under the ATM in the six months ended June 30, 2024. Through June 30, 2024, we have sold approximately 3.3 million shares under the ATM and received net proceeds of $38.4 million, after deducting commissions. As of June 30, 2024, we had $85.6 million in shares of our common stock remaining under the ATM.
Previous wording
In April 2024, we completed the 2024 Private Placement in which we issued approximately 14.4 million shares of our common stock and pre-funded warrants to purchase approximately 0.3 million additional shares of our common stock. We received gross proceeds of $280.0 million from the 2024 Private Placement, before deducting offering expenses.
Current wording
In April 2024, we completed the 2024 Private Placement in which we issued approximately 14.4 million shares of our common stock and pre-funded warrants to purchase approximately 0.3 million additional shares of our common stock. We received net proceeds of $262.7 million from the 2024 Private Placement, after deducting offering costs of $17.3 million. Refer to Note 6 of our notes to the consolidated financial statements in this Quarterly Report on Form 10-Q for additional detail regarding the 2024 Private Placement.
Previous wording
Comparison of Cash Flows for the Three Months Ended March 31, 2024 and 2023
Current wording
Comparison of Cash Flows for the Six Months Ended June 30, 2024 and 2023
Previous wording
The following table summarizes our sources and uses of cash for the three months ended March 31, 2024 and 2023 (in thousands):
Current wording
The following table summarizes our sources and uses of cash for the six months ended June 30, 2024 and 2023 (in thousands):
Previous wording
For the three months ended March 31, 2024, our operating activities used $38.2 million of cash, which primarily consisted of our operating expenses, excluding non-cash items, of $34.7 million and a $9.8 million net change in our non-tax operating assets and liabilities, partially offset by an income tax refund of $3.9 million and interest income, excluding accretion on marketable securities, of $2.4 million. The non-cash operating expenses primarily consisted of equity-based compensation expense.
Current wording
For the six months ended June 30, 2024, our operating activities used $74.5 million of cash, which primarily consisted of our operating expenses, excluding non-cash items, of $74.1 million and a $9.3 million net change in our non-tax operating assets and liabilities, partially offset by interest income, excluding accretion on marketable securities, of $6.7 million, and a net income tax refund of $2.3 million. The non-cash operating expenses primarily consisted of equity-based compensation expense.
Previous wording
For the three months ended March 31, 2023, operating activities used $51.0 million of cash, which primarily consisted of our operating expenses, excluding non-cash items, of $55.4 million, partially offset by interest income, excluding accretion on marketable equity securities, of $3.1 million and a benefit of $1.4 million from the net change in our non-tax operating assets and liabilities. The non-cash operating expenses primarily consisted of equity-based compensation expense.
Current wording
For the six months ended June 30, 2023, operating activities used $82.0 million of cash, which primarily consisted of our operating expenses, excluding non-cash items, of $85.0 million and income taxes paid of $4.7 million, partially offset by interest income, excluding accretion on marketable securities, of $6.3 million and a $1.2 million benefit from the net change in our non-tax operating assets and liabilities. The non-cash operating expenses primarily consisted of equity-based compensation expense.
Previous wording
For the three months ended March 31, 2024, net cash provided by investing activities was $13.0 million, which primarily consisted of $144.3 million of proceeds from the maturities of marketable securities, partially offset by $131.4 million of purchases of marketable securities.
Current wording
For the six months ended June 30, 2024, net cash used in investing activities was $172.2 million, which primarily consisted of $456.3 million of purchases of marketable securities, partially offset by $284.1 million of proceeds from the maturities of marketable securities.
Previous wording
For the three months ended March 31, 2023, net cash provided by investing activities was $15.2 million, which primarily consisted of proceeds of $104.5 million from the maturities of marketable securities, partially offset by $89.1 million used for the purchase of marketable securities.
Current wording
For the six months ended June 30, 2023, net cash provided by investing activities was $27.3 million, which primarily consisted of proceeds of $198.1 million from the maturities of marketable securities, partially offset by $170.6 million used for the purchase of marketable securities.
Previous wording
For the three months ended March 31, 2024, net cash provided by financing activities was $1.1 million in net proceeds from the issuance of common stock under equity-based compensation plans.
Current wording
For the six months ended June 30, 2024, net cash provided by financing activities was $263.3 million, which primarily consisted of $262.7 million of net proceeds from the issuance of common stock under our 2024 Private Placement and $4.4 million in net proceeds from the issuance of common stock under equity-based compensation plans, partially offset by $3.8 million paid to acquire shares of our CLN-619 development subsidiary that were held by noncontrolling interests.
Previous wording
For the three months ended March 31, 2023, net cash provided by financing activities was $1.8 million, which primarily consisted of $1.8 million from the issuance of a convertible note by our CLN-619 development subsidiary to a noncontrolling interest.
Current wording
For the six months ended June 30, 2023, net cash provided by financing activities was $40.4 million, which primarily consisted of $38.4 million of net proceeds from the issuance of common stock under our ATM, and $1.8 million from the issuance of a convertible note by our CLN-619 development subsidiary to a noncontrolling interest.
Previous wording
As of March 31, 2024, total future minimum lease payments were $3.6 million with $1.6 million payable within twelve months. See Note 11 to our consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail on our lease obligations and the timing of expected future payments.
Current wording
As of June 30, 2024, total future minimum lease payments were $3.0 million with $1.4 million payable within twelve months. See Note 10 to our consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail on our lease obligations and the timing of expected future payments.
Previous wording
In April 2012, the Jumpstart Our Business Startups Act (the “JOBS Act") was enacted. Section 107 of the JOBS Act provides that an "emerging growth company" ("EGC") can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for new or revised accounting standards during the period in which we remain an emerging growth company; however, we may adopt certain new or revised accounting standards early.
Current wording
We currently qualify as an "emerging growth company" ("EGC") under the Jumpstart Our Business Startups Act which allows us to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for new or revised accounting standards during the period in which we remain an EGC; however, we may adopt certain new or revised accounting standards early.