Disc Medicine Inc

Previous wording

Bitopertin is the lead product candidate in our heme biosynthesis modulation portfolio. Bitopertin was previously evaluated by F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., or collectively, Roche, in a comprehensive clinical program in over 4,000 individuals in other indications which demonstrated the activity of bitopertin as a glycine transporter 1, or GlyT1, inhibitor and its effect on heme biosynthesis. We are initially developing bitopertin for the treatment of EPs, including EPP and XLP. In July 2022, we initiated BEACON, a Phase 2 open-label, parallel-dose clinical trial of bitopertin in EPP and XLP patients that is being conducted at sites in Australia. In October 2022, we initiated AURORA, a Phase 2, randomized, double-blind, placebo-controlled clinical trial of bitopertin in EPP patients that is being conducted at sites in the United States. We presented interim data from BEACON in June and December 2023, and we presented topline data from AURORA in April 2024. Additional analyses of the BEACON and AURORA trials are anticipated to be presented in the second quarter of 2024. We expect to have regulatory interactions to define optimal registrational endpoints moving forward in EPP in the second half of 2024. We entered into a collaborative research and development agreement with the National Institutes of Health, or NIH, to conduct an NIH-sponsored clinical trial of bitopertin in DBA. The FDA authorized the clinical trial to proceed and the trial began in July 2023. We are planning additional trials of bitopertin in other indications.

Current wording

Bitopertin is the lead product candidate in our heme biosynthesis modulation portfolio. Bitopertin was previously evaluated by F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., or collectively, Roche, in a comprehensive clinical program in over 4,000 individuals in other indications which demonstrated the activity of bitopertin as a glycine transporter 1, or GlyT1, inhibitor and its effect on heme biosynthesis. We are initially developing bitopertin for the treatment of EPs, including EPP and XLP. In July 2022, we initiated BEACON, a Phase 2 open-label, parallel-dose clinical trial of bitopertin in EPP and XLP patients that is being conducted at sites in Australia. In October 2022, we initiated AURORA, a Phase 2, randomized, double-blind, placebo-controlled clinical trial of bitopertin in EPP patients that is being conducted at sites in the United States. We presented interim data from BEACON in June and December 2023, and we presented topline data from AURORA in April 2024. Additional analyses of the BEACON and AURORA trials were presented in June 2024. We expect to have regulatory interactions to define optimal registrational endpoints moving forward in EPP in the second half of 2024. We entered into a collaborative research and development agreement with the National Institutes of Health, or NIH, to conduct an NIH-sponsored clinical trial of bitopertin in DBA. The FDA authorized the clinical trial to proceed and the trial began in July 2023. We are planning additional trials of bitopertin in other indications.

Previous wording

DISC-0974 is the lead product candidate in our iron homeostasis portfolio and was in-licensed from AbbVie Deutschland GmbH & Co. KG, or AbbVie. DISC-0974 is designed to suppress hepcidin production and increase serum iron levels. We submitted an IND to the FDA for DISC-0974 in June 2021, received clearance in July 2021, and participants completed a Phase 1 clinical trial in healthy volunteers in the U.S. in June 2022 with results showing an acceptable tolerability profile and evidence of target engagement, iron mobilization and augmented erythropoiesis. We initiated a Phase 1b/2 clinical trial in June 2022 in patients with anemia of MF, and initiated a separate Phase 1b/2 clinical trial in February 2023 in patients with non-dialysis dependent CKD and anemia. We presented interim data from both of these trials in December 2023 and anticipate presenting additional interim data for anemia of MF in the second quarter of 2024, including safety and changes in hepcidin, iron, and hemoglobin levels for additional patients, as well as longer follow-up. We anticipate presenting additional interim data for non-dialysis dependent CKD and anemia in second half of 2024. In addition, we are developing a preclinical anti-hemojuvelin, or HJV, monoclonal antibody, DISC-0998, which also targets hepcidin suppression and was in-licensed from AbbVie. DISC-0998 is designed to increase serum iron levels and has an extended serum half-life as compared to DISC-0974. We believe this profile may be desirable in certain subsets of patients with anemia associated with inflammatory diseases.

Current wording

DISC-0974 is the lead product candidate in our iron homeostasis portfolio and was in-licensed from AbbVie Deutschland GmbH & Co. KG, or AbbVie. DISC-0974 is designed to suppress hepcidin production and increase serum iron levels. We submitted an IND to the FDA for DISC-0974 in June 2021, received clearance in July 2021, and participants completed a Phase 1 clinical trial in healthy volunteers in the U.S. in June 2022 with results showing an acceptable tolerability profile and evidence of target engagement, iron mobilization and augmented erythropoiesis. We initiated a Phase 1b/2 clinical trial in June 2022 in patients with anemia of MF, and initiated a separate Phase 1b/2 clinical trial in February 2023 in patients with non-dialysis dependent CKD and anemia. We presented interim data from both of these trials in December 2023 and presented additional interim data for anemia of MF in June 2024, including safety and changes in hepcidin, iron, and hemoglobin levels for additional patients, as well as longer follow-up. We anticipate presenting additional interim data for non-dialysis dependent CKD and anemia in second half of 2024. In addition, we are developing a preclinical anti-hemojuvelin, or HJV, monoclonal antibody, DISC-0998, which also targets hepcidin suppression and was in-licensed from AbbVie. DISC-0998 is designed to increase serum iron levels and has an extended serum half-life as compared to DISC-0974. We believe this profile may be desirable in certain subsets of patients with anemia associated with inflammatory diseases.

Previous wording

Lastly, we are developing DISC-3405, a monoclonal antibody against Transmembrane Serine Protease 6, or TMPRSS6, that we licensed from Mabwell Therapeutics, Inc., or Mabwell. DISC-3405 is part of our iron homeostasis portfolio and is designed to induce hepcidin production and reduce serum iron levels. An IND for DISC-3405 was cleared by the FDA, and a Phase 1 clinical trial in healthy adult volunteers was initiated in October 2023. Interim data is anticipated to be presented in the first and second halves of 2024. We expect to develop DISC-3405 for the treatment of PV and other hematologic disorders.

Current wording

Lastly, we are developing DISC-3405, a monoclonal antibody against Transmembrane Serine Protease 6, or TMPRSS6, that we licensed from Mabwell Therapeutics, Inc., or Mabwell. DISC-3405 is part of our iron homeostasis portfolio and is designed to induce hepcidin production and reduce serum iron levels. An IND for DISC-3405 was cleared by the FDA, and a Phase 1 clinical trial in healthy adult volunteers was initiated in October 2023. Interim data was presented from the single-ascending dose (SAD) portion of the Phase 1 clinical trial of DISC-3405 in healthy volunteers in June 2024. We anticipate presenting data from the multiple-ascending dose (MAD) portion of the Phase 1 healthy volunteer study of DISC-3405 in the fourth quarter of 2024. We expect to develop DISC-3405 for the treatment of PV and other hematologic disorders.

Previous wording

Interest income primarily consists of interest earned on cash equivalents, consisting of money market funds, U.S. treasury notes and certificates of deposit.

Current wording

Interest income primarily consists of interest earned on cash equivalents, consisting of money market funds, U.S. government securities and certificates of deposit, and marketable securities, consisting of U.S. government securities.

Previous wording

In December 2022, we entered into the CVR agreement, described in more detail in Note 1 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 and Note 3 to our unaudited condensed consolidated financial statements, which provided a CVR to Gemini’s pre-merger common stockholders to receive common stock from the Company upon its receipt of certain proceeds, calculated in accordance with the CVR agreement, resulting from a disposition of Gemini’s pre-merger assets within one year after the closing of the merger. The disposition period ended December 29, 2023 and no dispositions of Gemini’s pre-merger assets were made during the disposition period. Therefore, there were no CVR payments made to the holders and there will not be any future CVR payments to the holders. Prior to December 29, 2023, the CVR liability was measured at fair value as of each reporting date and the change in the fair value for the period, if any, was recorded in the condensed consolidated statements of operations and comprehensive loss in the change in fair value of contingent value right liability. The change in fair value of the CVR liability was de minimis for the three months ended March 31, 2023.

Current wording

In December 2022, we entered into the CVR agreement, described in more detail in Note 1 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 and Note 3 to our unaudited condensed consolidated financial statements, which provided a CVR to Gemini’s pre-merger common stockholders to receive common stock from the Company upon its receipt of certain proceeds, calculated in accordance with the CVR agreement, resulting from a disposition of Gemini’s pre-merger assets within one year after the closing of the merger. The disposition period ended December 29, 2023 and no dispositions of Gemini’s pre-merger assets were made during the disposition period. Therefore, there were no CVR payments made to the holders and there will not be any future CVR payments to the holders. Prior to December 29, 2023, the CVR liability was measured at fair value as of each reporting date and the change in the fair value for the period, if any, was recorded in the condensed consolidated statements of operations and comprehensive loss in the change in fair value of contingent value right liability. The change in fair value of the CVR liability was $1.5 million for the three and six months ended June 30, 2023.

Previous wording

General and administrative expenses were $7.8 million for the three months ended March 31, 2024, compared to $4.9 million for the three months ended March 31, 2023. The increase of $2.8 million in general and administrative expenses was primarily due to an increase of $2.7 million in personnel-related costs due to higher general and administrative headcount, including an increase of $1.8 million in stock-based compensation driven by the Company's annual grant to employees in January 2024.

Current wording

General and administrative expenses were $7.4 million for the three months ended June 30, 2024, compared to $5.2 million for the three months ended June 30, 2023. The increase of $2.1 million in general and administrative expenses was primarily due to a $2.2 million increase in personnel-related costs due to higher general and administrative headcount, including an increase of $1.5 million in stock-based compensation driven by the Company's annual grant to employees in January 2024.

Previous wording

Other income, net was $4.5 million for the three months ended March 31, 2024, compared to other income, net of $2.4 million for the three months ended March 31, 2023. The change of $2.2 million in other income (expense), net was primarily due to an increase in interest income based on a larger cash and cash equivalents balance and higher interest rates.

Current wording

Other income, net was $4.6 million for the three months ended June 30, 2024, compared to other income, net of $1.4 million for the three months ended June 30, 2023. The change of $3.2 million in other income (expense), net was primarily due to an increase in interest income based on a larger cash, cash equivalents, and marketable securities balance and higher interest rates.

Previous wording

Income tax expense was less than $0.1 million for the three months ended March 31, 2024, compared to less than $0.1 million for the three months ended March 31, 2023. This expense relates to state income tax resulting from interest income.

Current wording

Income tax expense was $0.1 million for the three months ended June 30, 2024, compared to less than $0.1 million for the three months ended June 30, 2023. This expense relates to state income tax resulting from interest income.

Previous wording

Research and development expenses were $23.7 million for the three months ended March 31, 2024, compared to $20.2 million for the three months ended March 31, 2023. The increase of $3.5 million in research and development expenses was primarily due to a $3.8 million increase in bitopertin development expense related to increased clinical study and drug manufacturing activity, and a $3.3 million increase in personnel-related costs related to higher research and development headcount, including an increase of $1.2 million in stock-based compensation driven by the Company's annual grant to employees in January 2024; partially offset by a $5.3 million decrease related to the DISC-3405 program which incurred $10.0 million in an upfront license fee in the three months ended March 31, 2023.

Current wording

Research and development expenses were $47.2 million for the six months ended June 30, 2024, compared to $32.3 million for the six months ended June 30, 2023. The increase of $14.9 million in research and development expenses was primarily due to a $6.7 million increase in bitopertin development expense related to increased clinical study and drug manufacturing activity, and a $6.1 million increase in personnel-related costs related to higher research and development headcount, including an increase of $2.5 million in stock-based compensation driven by the Company's annual grant to employees in January 2024; partially offset by a $2.0 million decrease related to the DISC-3405 program which incurred $10.0 million in an upfront license fee in the six months ended June 30, 2023.

Previous wording

To date, we have funded our operations primarily with proceeds from the sale of our convertible preferred stock and common stock, the proceeds from the merger with Gemini, proceeds from at-the-market offerings, proceeds from a registered direct offering and proceeds from a follow-on public offering. Through March 31, 2024, we have received net proceeds of $144.5 million from sales of our Series Seed, Series A and Series B convertible preferred stock, $89.5 million from the merger with Gemini, $53.5 million from sales of common stock in a pre-closing private financing, $62.4 million from sales of common stock and pre-funded warrants in a registered direct offering, $147.9 million from sales of common stock and pre-funded warrants in a public follow-on offering and $41.3 million from at-the-market offerings. As of March 31, 2024, we had cash and cash equivalents of $342.6 million.

Current wording

To date, we have funded our operations primarily with proceeds from the sale of our convertible preferred stock and common stock, the proceeds from the merger with Gemini, proceeds from at-the-market offerings, proceeds from a registered direct offering, proceeds from a follow-on public offering, and proceeds from an underwritten offering. Through June 30, 2024, we have received net proceeds of $144.5 million from sales of our Series Seed, Series A and Series B convertible preferred stock, $89.5 million from the merger with Gemini, $53.5 million from sales of common stock in a pre-closing private financing, $62.4 million from sales of common stock and pre-funded warrants in a registered direct offering, $147.9 million from sales of common stock and pre-funded warrants in a public follow-on offering, $172.5 million from sales of common stock in an underwritten offering and $41.3 million from at-the-market offerings. As of June 30, 2024, we had cash, cash equivalents, and marketable securities of $500.9 million.

Previous wording

We have incurred significant operating losses since inception and, as of March 31, 2024, had an accumulated deficit of $215.6 million. In addition, we expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future. We believe that our current cash resources will enable us to fund our current planned operating expense and capital expenditure requirements well into 2026. We may also pursue additional cash resources through public or private equity offerings, collaborations or debt financings.

Current wording

We have incurred significant operating losses since inception and, as of June 30, 2024, had an accumulated deficit of $241.9 million. In addition, we expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future. We believe that our current cash resources will enable us to fund our current planned operating expense and capital expenditure requirements well into 2027. We may also pursue additional cash resources through public or private equity offerings, collaborations or debt financings.

Previous wording

During the three months ended March 31, 2024, net cash used in operating activities of $33.6 million was primarily due to our net loss of $26.9 million, which includes interest income of $4.5 million; and changes in operating assets and liabilities of $10.9 million, including a milestone payment of $5.0 million to Mabwell; offset by non-cash expenses of $4.2 million primarily related to stock-based compensation expense of $4.1 million.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities of $49.0 million was primarily due to our net loss of $53.3 million, which includes interest income of $9.1 million; and changes in operating assets and liabilities of $3.7 million, including a reduction in accounts payable for the payment of a milestone payment of $5.0 million to Mabwell; partially offset by non-cash expenses of $8.0 million primarily related to stock-based compensation expense of $8.1 million.

Previous wording

During the three months ended March 31, 2023, net cash used in operating activities of $35.5 million was primarily due to our net loss of $22.8 million primarily related to the $10.0 million upfront payment under the Mabwell license agreement and an increase in operating assets and liabilities of $13.8 million primarily related to the payment of merger-related costs which were included in accounts payable at December 31, 2022, partially offset by non-cash expenses of $1.1 million.

Current wording

During the six months ended June 30, 2023, net cash used in operating activities of $48.2 million was primarily due to our net loss of $38.7 million and an increase in operating assets and liabilities of $13.5 million primarily related to the payment of merger-related costs which were included in accounts payable at December 31, 2022, partially offset by non-cash expenses of $4.0 million.

Previous wording

During the three months ended March 31, 2024 and 2023, net cash used in investing activities was due to purchases of property and equipment.

Current wording

During the six months ended June 30, 2023, net cash used in investing activities was due to purchases of property and equipment.

Previous wording

During the three months ended March 31, 2024, net cash provided by financing activities of $15.9 million consisted primarily of aggregate net proceeds of $14.8 million from the at-the-market offerings.

Current wording

During the six months ended June 30, 2024, net cash provided by financing activities of $189.1 million consisted primarily of cash net proceeds of $172.7 million from the underwritten offering.

Previous wording

During the three months ended March 31, 2023, net cash provided by financing activities of $77.3 million consisted primarily of aggregate net proceeds of $62.4 million from sales of common stock and pre-funded warrants in a registered direct offering and aggregate net proceeds of $14.6 million from the at-the-market offerings.

Current wording

During the six months ended June 30, 2023, net cash provided by financing activities of $231.2 million consisted primarily of aggregate net proceeds of $147.9 million from sales of common stock and pre-funded warrants in a public follow-on offering, aggregate net proceeds of $62.5 million from sales of common stock and pre-funded warrants in a registered direct offering and aggregate net proceeds of $19.5 million from the at-the-market offerings.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. See our Annual Report on Form 10-K for the year ended December 31, 2023 for more information about critical accounting policies as well as a description of our other significant accounting policies.

Current wording

GAAP. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. See our Annual Report on Form 10-K for the year ended December 31, 2023 for more information about critical accounting policies as well as a description of our other significant accounting policies.