Trevi Therapeutics Inc

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes for the year ended December 31, 2023 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March 20, 2024. Some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements on our current expectations and projections about future events. The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report on Form 10-Q, particularly including those risks identified in Part II-Item 1A “Risk Factors” and our other filings with the SEC.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes for the year ended December 31, 2023 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March 20, 2024. Some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements on our current expectations and projections about future events. The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report on Form 10-Q, particularly including those risks identified in Part II-Item 1A “Risk Factors” and our other filings with the SEC.

Previous wording

Our actual results and timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Statements made herein are as of the date of the filing of this Quarterly Report on Form 10-Q with the SEC and should not be relied upon as of any subsequent date. Even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, they may not be predictive of results or developments in future periods. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Current wording

Our actual results and the timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Statements made herein are as of the date of the filing of this Quarterly Report on Form 10-Q with the SEC and should not be relied upon as of any subsequent date. Even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, they may not be predictive of results or developments in future periods. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Previous wording

We are a clinical-stage biopharmaceutical company focused on the development and commercialization of the investigational therapy Haduvio (oral nalbuphine ER) for the treatment of chronic cough in idiopathic pulmonary fibrosis, or IPF, and refractory chronic cough, or RCC. These conditions share a common pathophysiology that is mediated through opioid receptors in the central and peripheral nervous systems. Due to nalbuphine’s mechanism of action as a modulator of opioid receptors, we believe Haduvio has the potential to be effective in treating each of these conditions.

Current wording

We are a clinical-stage biopharmaceutical company focused on the development and commercialization of the investigational therapy Haduvio (oral nalbuphine ER) for the treatment of chronic cough in idiopathic pulmonary fibrosis, or IPF, and refractory chronic cough, or RCC. Cough is mediated through a component of the peripheral nervous system in the lungs as well as components of the central nervous system in the brain. These nervous system components contain opioid receptors. Given this neurobiology, we believe that Haduvio has the potential to be effective in treating cough that originates from a variety of medical conditions based on the possibility for Haduvio to modulate nervous system functioning in both the peripheral and central nervous systems.

Previous wording

Haduvio is an oral extended-release formulation of nalbuphine. Nalbuphine is a mixed κ-opioid receptor agonist and μ-opioid receptor antagonist that has been approved and marketed as an injectable for pain indications for more than 20 years in the United States, or the U.S., and Europe. The κ- and μ-opioid receptors are known to be critical mediators of cough and itch. Nalbuphine’s mechanism of action also mitigates the risk of abuse associated with μ-opioid agonists because it antagonizes, or blocks, the μ-opioid receptor. Parenteral nalbuphine is not scheduled as a controlled substance in the U.S. and most of Europe.

Current wording

Haduvio is an oral extended-release formulation of nalbuphine. Nalbuphine is a mixed κ-opioid receptor agonist and μ-opioid receptor antagonist that has been approved and marketed as an injectable for pain indications for more than 30 years in the United States, or the U.S., and Europe. The κ- and μ-opioid receptors are known to be critical mediators of cough. Nalbuphine’s mechanism of action also mitigates the risk of abuse associated with μ-opioid agonists because it antagonizes, or blocks, the μ-opioid receptor. Parenteral nalbuphine is not scheduled as a controlled substance in the U.S. and most of Europe.

Previous wording

In December 2023, we initiated our Phase 2b CORAL clinical trial, which is a dose-ranging study evaluating the efficacy, safety and tolerability of Haduvio for chronic cough in IPF. This trial is expected to be conducted at multiple sites in up to 11 countries and uses a randomized, double-blind, placebo-controlled, parallel-arm design, which evaluates three doses of Haduvio over six weeks as compared to placebo. The primary efficacy endpoint for the trial is the relative change in 24-hour cough frequency at the end of week six versus baseline for Haduvio compared to placebo, as measured via an objective cough monitor. We expect the trial to enroll approximately 160 patients. The protocol for the Phase 2b CORAL clinical trial provides for a sample size re-estimation, or SSRE, analysis once approximately 50% of the patients in the trial are evaluable for the primary endpoint. The SSRE is expected to occur in the second half of 2024, and topline data from the full trial are expected to be available in the first half of 2025 assuming there are no adjustments made to the sample size.

Current wording

In December 2023, we initiated our Phase 2b CORAL clinical trial, which is a dose-ranging study evaluating the efficacy, safety and tolerability of Haduvio for chronic cough in IPF. This trial is expected to be conducted at multiple sites in up to 11 countries and uses a randomized, double-blind, placebo-controlled, parallel-arm design, which evaluates three doses of Haduvio over six weeks as compared to placebo. The primary efficacy endpoint for the trial is the relative change in 24-hour cough frequency at the end of week six versus baseline for Haduvio compared to placebo, as measured via an objective cough monitor. We expect the trial to enroll approximately 160 patients. The protocol for the Phase 2b CORAL clinical trial provides for a sample size re-estimation, or SSRE, analysis once approximately 50% of the patients in the trial are evaluable for the primary endpoint. The SSRE is expected to occur in the fourth quarter of 2024, and topline data from the full trial are expected to be available in the first half of 2025 assuming there are no adjustments made to the sample size.

Previous wording

RCC Program. We are also developing Haduvio for the treatment of RCC. In November 2023, we initiated our Phase 2a clinical trial of Haduvio for RCC, which we refer to as the Phase 2a RIVER trial. The Phase 2a RIVER trial is a randomized, double-blind, placebo-controlled, two-treatment, two-period, crossover study that is designed to evaluate the efficacy, safety, tolerability and dosing of Haduvio for the treatment of RCC. We are conducting this trial at multiple sites in the United Kingdom and Canada. The trial was designed to enroll approximately 60 adult patients. The primary endpoint of the study is a mean change in 24-hour cough frequency using an objective cough monitor in the overall population. Patients are randomized with a 1:1 stratification between those with 10-19 coughs/hour (moderate 24-hour cough frequency) and those with at least 20 coughs/hour (high 24-hour cough frequency). The study will also explore secondary endpoints, including patient reported outcome measures for cough frequency and severity. We expect to report topline efficacy and safety data in the second half of 2024.

Current wording

RCC Program. We are also developing Haduvio for the treatment of RCC. In November 2023, we initiated our Phase 2a clinical trial of Haduvio for RCC, which we refer to as the Phase 2a RIVER trial. The Phase 2a RIVER trial is a randomized, double-blind, placebo-controlled, two-treatment, two-period, crossover study that is designed to evaluate the efficacy, safety, tolerability and dosing of Haduvio for the treatment of RCC. We are conducting this trial at multiple sites in the United Kingdom and Canada. The trial was designed to enroll approximately 60 adult patients. The primary endpoint of the trial is a mean change in 24-hour cough frequency in the overall population as determined using an objective cough monitor. Patients are randomized with a 1:1 stratification between those with 10-19 coughs/hour (moderate 24-hour cough frequency) and those with at least 20 coughs/hour (high 24-hour cough frequency). The trial will also explore secondary endpoints, including patient reported outcome measures for cough frequency and severity. The study is now approximately 80% enrolled and we expect to report topline efficacy and safety data in the fourth quarter of 2024.

Previous wording

Human Abuse Potential. We initiated a human abuse potential, or HAP, study in the fourth quarter of 2022 to compare the abuse potential of oral nalbuphine to intravenous, or IV, butorphanol. The parenteral version of nalbuphine is currently unscheduled in the U.S. by the Drug Enforcement Agency. The study follows a randomized, double-blind, active and placebo-controlled five-way crossover design. The study is being conducted in two parts. The first part of the study characterized various IV butorphanol doses in order to select a dose to be studied and has been completed. The FDA requested that we submit the data from the first part of the study in support of our IV butorphanol dose selection for review and comment prior to commencing the second part of the study. We submitted the data to the FDA and the FDA agreed to the selected dose of IV butorphanol for the second part of the study. In the second part of the study, we are comparing oral nalbuphine with the selected dose of IV butorphanol using a drug-liking visual analog scale. We initiated dosing in the second part of the study in January 2024 and the study is now 75% enrolled. We expect to report topline data from the study in the second half of 2024.

Current wording

Human Abuse Potential. We initiated a human abuse potential, or HAP, study in the fourth quarter of 2022 to compare the abuse potential of oral nalbuphine to intravenous, or IV, butorphanol. The parenteral version of nalbuphine is currently unscheduled in the U.S. by the Drug Enforcement Agency. The study is a randomized, double-blind, active and placebo-controlled five-way crossover study. The study is being conducted in two parts. The first part of the study characterized various IV butorphanol doses in order to select a dose to be studied and has been completed. The U.S. Food and Drug Administration, or FDA, requested that we submit the data from the first part of the study in support of our IV butorphanol dose selection for review and comment prior to commencing the second part of the study. We submitted the data to the FDA and the FDA agreed to the selected dose of IV butorphanol. In the second part of the study, we are comparing the likeability of oral nalbuphine with the selected dose of IV butorphanol using various drug-liking scales, including the primary endpoint, which measures the peak effect for drug liking assessed using a visual analog scale. We are also evaluating safety and physiological measures, pharmacokinetic data, and abuse-related adverse events. We initiated dosing in the second part of the study in January 2024 and the study is approximately 95% enrolled. We expect to complete enrollment in the third quarter of 2024 and report topline data from the study in the fourth quarter of 2024.

Previous wording

Prurigo Nodularis Program. We also have a development program for the use of Haduvio for the treatment of prurigo nodularis. In June 2022, we reported positive results in our Phase 2b/3 clinical trial of Haduvio in patients with prurigo nodularis, which we refer to as the Phase 2b/3 PRISM trial. The Phase 2b/3 PRISM trial was a randomized, double-blind, placebo controlled, two-arm treatment study that was designed to evaluate the safety and efficacy of Haduvio in patients with prurigo nodularis in the United States and Europe. In total we enrolled 353 patients in the study. In the Phase 2b/3 PRISM trial, Haduvio demonstrated statistically significant results on the primary and all three key secondary endpoints. The safety results of the trial were generally consistent with the known safety profile of Haduvio from previous trials in other patient populations.

Current wording

Prurigo Nodularis Program. We also have a development program for the use of Haduvio for the treatment of prurigo nodularis. In June 2022, we reported positive results in our Phase 2b/3 clinical trial of Haduvio in patients with prurigo nodularis, which we refer to as the Phase 2b/3 PRISM trial. The Phase 2b/3 PRISM trial was a randomized, double-blind, placebo controlled, two-arm treatment study that was designed to evaluate the safety and efficacy of Haduvio in patients with prurigo nodularis in the U.S. and Europe. In total we enrolled 353 patients in the study. In the Phase 2b/3 PRISM trial, Haduvio demonstrated statistically significant results on the primary and all three key secondary endpoints. The safety results of the trial were generally consistent with the known safety profile of Haduvio from previous trials in other patient populations.

Previous wording

We expect that we will need to conduct an additional Phase 3 clinical trial to support the submission of a new drug application, or NDA, to the FDA, a marketing authorization application, or MAA, to the European Medicines Agency and an MAA to the Medicines and Healthcare Products Regulatory Agency in the United Kingdom for Haduvio for the treatment of prurigo nodularis, and we plan to request an end of Phase 2 meeting with the FDA. Following discussions with the FDA and other regulatory authorities, we plan to determine next steps with respect to our prurigo nodularis program, including with respect to the conduct of any future Phase 3 clinical trial. We may seek to enter into a strategic collaboration for the continued development of this program.

Current wording

We expect that we will need to conduct an additional Phase 3 clinical trial to support the submission of a new drug application to the FDA, a marketing authorization application, or MAA, to the European Medicines Agency and an MAA to the Medicines and Healthcare Products Regulatory Agency in the United Kingdom for Haduvio for the treatment of prurigo nodularis, and we plan to request an end of Phase 2 meeting with the FDA. Following discussions with the FDA and other regulatory authorities, we plan to determine next steps with respect to our prurigo nodularis program, including with respect to the conduct of any future Phase 3 clinical trial. We do not intend to complete the development of Haduvio for this indication ourselves, and may seek to enter into a strategic collaboration for the continued development of this program.

Previous wording

Since commencing operations in 2011, we have devoted substantially all of our efforts and financial resources to the clinical development of Haduvio. We have not generated any revenue from product sales and, as a result, we have never been profitable and have incurred net losses in each year since commencement of our operations. As of March 31, 2024, we had an accumulated deficit of $250.0 million, primarily as a result of research and development and general and administrative expenses. We do not expect to generate product revenue unless and until we obtain marketing approval for and commercialize Haduvio for the treatment of chronic cough in IPF and RCC or for the treatment of prurigo nodularis and we can provide no assurance that we will ever generate significant revenue or profits.

Current wording

Since commencing operations in 2011, we have devoted substantially all of our efforts and financial resources to the clinical development of Haduvio. We have not generated any revenue from product sales and, as a result, we have never been profitable and have incurred net losses in each year since commencement of our operations. As of June 30, 2024, we had an accumulated deficit of $262.4 million, primarily as a result of research and development and general and administrative expenses. We do not expect to generate product revenue unless and until we obtain marketing approval for and commercialize Haduvio for the treatment of chronic cough in IPF and RCC or for the treatment of prurigo nodularis and we can provide no assurance that we will ever generate significant revenue or profits.

Previous wording

In June 2020, we entered into a sales agreement with SVB Securities LLC (formerly SVB Leerink LLC), or SVB Securities, which we refer to as the ATM Sales Agreement, under which we were able to issue and sell shares of common stock, from time to time, having an aggregate offering price of up to $12.0 million. In May 2022, we and SVB Securities amended the ATM Sales Agreement to increase the maximum aggregate offering price of common stock that we were able to issue and sell from time to time under the ATM Sales Agreement by $50.0 million, from $12.0 million to up to $62.0 million. Sales of common stock under the ATM Sales Agreement were able to be made by any method that was deemed an “at-the-market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. We were not obligated to make any sales of our common stock under the ATM Sales Agreement. We began making sales pursuant to the ATM Sales Agreement in July 2020, and as of August 15, 2023, the date of termination of the ATM Sales Agreement, we had issued and sold an aggregate of 4,333,394 shares of common stock for gross proceeds of $12.7 million pursuant to the ATM Sales Agreement, before deducting estimated commissions and allocated fees of $1.0 million.

Current wording

In June 2020, we entered into a sales agreement with SVB Securities LLC (formerly SVB Leerink LLC), or SVB Securities, which we refer to as the ATM Sales Agreement, under which we were able to issue and sell shares of common stock, from time to time, having an aggregate offering price of up to $12.0 million. In May 2022, we and SVB Securities amended the ATM Sales Agreement to increase the maximum aggregate offering price of common stock that we were able to issue and sell from time to time under the ATM Sales Agreement by $50.0 million, from $12.0 million to up to $62.0 million. Sales of common stock under the ATM Sales Agreement were able to be made by any method that was deemed an “at-the-market” offering as defined in Rule 415(a)(4) under the Securities Act. We were not obligated to make any sales of our common stock under the ATM Sales Agreement. We began making sales pursuant to the ATM Sales Agreement in July 2020, and as of August 15, 2023, the date of termination of the ATM Sales Agreement, we had issued and sold an aggregate of 4,333,394 shares of common stock for gross proceeds of $12.7 million pursuant to the ATM Sales Agreement, before deducting estimated commissions and allocated fees of $1.0 million.

Previous wording

In June 2023, we filed with the SEC a universal shelf registration statement on Form S-3, or the Shelf Registration Statement, which allows us to offer and sell up to $200.0 million of common stock, preferred stock, debt securities, units and/or warrants from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale. The Shelf Registration Statement was filed to replace our prior universal shelf registration statement on Form S-3 and was declared effective on August 15, 2023. Further, in June 2023, we entered into a new sales agreement with Leerink Partners, LLC (formerly SVB Securities), or Leerink Partners, which we refer to as the 2023 ATM Sales Agreement, under which we may issue and sell shares of common stock, from time to time by any method that is deemed an “at-the-market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. We are not obligated to make any sales of our common stock under the 2023 ATM Sales Agreement. We filed a prospectus under the Shelf Registration Statement for the offer and sale of shares of our common stock having an aggregate offering price of up to $75.0 million pursuant to the 2023 ATM Sales Agreement. In accordance with the terms of the 2023 ATM Sales Agreement, the ATM Sales Agreement terminated upon effectiveness of the Shelf Registration Statement, at which point we were no longer able to issue and sell shares of our common stock under the ATM Sales Agreement. As of March 31, 2024, we had not made any sales pursuant to the 2023 ATM Sales Agreement. Subsequent to March 31, 2024, and through May 7, 2024, we issued and sold 1,474,926 shares of common stock for gross proceeds of $5.0 million, before deducting estimated commissions and allocated fees of $0.2 million under the 2023 ATM Sales Agreement.

Current wording

In June 2023, we filed with the SEC a universal shelf registration statement on Form S-3, or the Shelf Registration Statement, which allows us to offer and sell up to $200.0 million of common stock, preferred stock, debt securities, units and/or warrants from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale. The Shelf Registration Statement was filed to replace our prior universal shelf registration statement on Form S-3 and was declared effective on August 15, 2023. Further, in June 2023, we entered into a new sales agreement with Leerink Partners, LLC (formerly SVB Securities), or Leerink Partners, which we refer to as the 2023 ATM Sales Agreement, under which we may issue and sell shares of common stock, from time to time by any method that is deemed an “at-the-market” offering as defined in Rule 415(a)(4) under the Securities Act. We are not obligated to make any sales of our common stock under the 2023 ATM Sales Agreement. We filed a prospectus under the Shelf Registration Statement for the offer and sale of shares of our common stock having an aggregate offering price of up to $75.0 million pursuant to the 2023 ATM Sales Agreement. In accordance with the terms of the 2023 ATM Sales Agreement, the ATM Sales Agreement terminated upon effectiveness of the Shelf Registration Statement, at which point we were no longer able to issue and sell shares of our common stock under the ATM Sales Agreement. As of June 30, 2024, we had issued and sold 1,474,926 shares of common stock for gross proceeds of $5.0 million, before deducting estimated commissions and allocated fees of $0.2 million under the 2023 ATM Sales Agreement.

Previous wording

On April 11, 2022, we issued and sold in a private placement, or the April 2022 Private Placement, (i) an aggregate of 4,580,526 shares of our common stock, and (ii) pre-funded warrants to purchase up to an aggregate of 24,379,673 shares of our common stock. Each share of our common stock was sold at a price of $1.90, and each pre-funded warrant was sold at a price of $1.899 per warrant share, for gross proceeds of approximately $55.0 million. Each pre-funded warrant has an exercise price of $0.001 per share, became exercisable immediately upon issuance and will be exercisable until the pre-funded warrant is exercised in full. As of May 7, 2024, pre-funded warrants to purchase 17,282,760 shares of common stock that we issued and sold in the April 2022 Private Placement remained outstanding.

Current wording

On April 11, 2022, we issued and sold in a private placement, or the April 2022 Private Placement, (i) an aggregate of 4,580,526 shares of our common stock, and (ii) pre-funded warrants to purchase up to an aggregate of 24,379,673 shares of our common stock. Each share of our common stock was sold at a price of $1.90, and each pre-funded warrant was sold at a price of $1.899 per warrant share, for gross proceeds of approximately $55.0 million. Each pre-funded warrant has an exercise price of $0.001 per share, became exercisable immediately upon issuance and will be exercisable until the pre-funded warrant is exercised in full. As of July 31, 2024 pre-funded warrants to purchase 15,282,760 shares of common stock that we issued and sold in the April 2022 Private Placement remained outstanding.

Previous wording

As of March 31, 2024, we had cash, cash equivalents and marketable securities of $72.8 million. We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date of issuance of the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Current wording

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $69.5 million. We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date of issuance of the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Previous wording

We expect to incur substantial expenditures in the foreseeable future as we advance Haduvio through clinical development, the regulatory approval process and, if approved, commercial launch activities. Specifically, in the near term, we expect to incur substantial expenses relating to the trials we are conducting and plan to conduct for Haduvio including our Phase 2b CORAL clinical trial for the treatment of chronic cough in IPF, our Phase 2a RIVER clinical trial of Haduvio for the treatment of RCC, our planned Phase 1b respiratory physiology clinical trial in patients with IPF of varying disease severity and the second part of our HAP study to compare the abuse potential of oral nalbuphine to IV butorphanol.

Current wording

We expect to incur substantial expenditures in the foreseeable future as we advance Haduvio through clinical development, the regulatory approval process and, if approved, commercial launch activities. Specifically, in the near term, we expect to incur substantial expenses relating to the trials we are conducting and plan to conduct for Haduvio including our Phase 2b CORAL clinical trial for the treatment of chronic cough in IPF, our Phase 2a RIVER clinical trial of Haduvio for the treatment of RCC, our Phase 1b TIDAL respiratory physiology study in patients with IPF of varying disease severity and our HAP study to compare the abuse potential of oral nalbuphine to IV butorphanol.

Previous wording

Interest expense consists of the interest expense associated with our finance lease along with the SVB Loan Agreement pursuant to which we borrowed $14.0 million under the SVB Term Loan. In connection with the SVB Term Loan, we recognized interest expense which included amortization of deferred financing charges, accretion of loan discount-financing costs, accrual of the final payment fee, amortization of the term loan discount-interest and the stated interest on the SVB Term Loan.

Current wording

Interest expense consists of the interest expense associated with our finance lease. In 2023, interest expense also included interest under the SVB Loan Agreement pursuant to which we borrowed $14.0 million under the SVB Term Loan. In connection with the SVB Term Loan, we recognized interest expense which included amortization of deferred financing charges, accretion of loan discount-financing costs, accrual of the final payment fee, amortization of the term loan discount-interest and the stated interest on the SVB Term Loan.

Previous wording

General and administrative expenses for the three months ended March 31, 2024 increased to $3.1 million from $2.6 million for the corresponding period in 2023, primarily due to increases in information technology and finance staffing and activities as well as professional fees.

Current wording

General and administrative expenses for the three months ended June 30, 2024 increased to $3.3 million from $2.5 million for the corresponding period in 2023, primarily due to increases in personnel and related expenses, stock-based compensation expense, market research costs as well as information technology services.

Previous wording

Other income, net for the three months ended March 31, 2024 was $1.0 million compared to other income, net of $1.2 million for the corresponding period in 2023. The change was primarily due to a decrease in interest income of $0.2 million due to lower cash equivalent and marketable securities balances. In addition, during the three months ended March 31, 2023, we recorded $0.2 million in other income, net, related to a tax credit against employment taxes for certain previous periods provided under the CARES Act. No income was recorded related to tax credits under the CARES Act in 2024. These decreases were partially offset by lower interest expense of $0.2 million due to the early payoff of the SVB Term Loan in May 2023.

Current wording

Other income, net for the three months ended June 30, 2024 was $0.9 million compared to other income, net of $1.2 million for the corresponding period in 2023. The change was primarily due to a decrease in interest income due to lower cash equivalent and marketable securities balances.

Previous wording

Research and development expenses for the three months ended March 31, 2024 increased to $8.8 million from $5.0 million for the corresponding period in 2023, primarily due to increased clinical development expenses for our Phase 2b CORAL trial, our Phase 2a RIVER trial, and our HAP study. These increases were partially offset by decreased clinical development expenses for our Phase 2b/3 PRISM trial because dosing in the open-label extension portion of the PRISM trial completed in the first quarter of 2023.

Current wording

Research and development expenses for the six months ended June 30, 2024 increased to $18.8 million from $10.8 million for the corresponding period in 2023, primarily due to increased clinical development expenses for our Phase 2b CORAL trial, our Phase 2a RIVER trial, our HAP study and our recently initiated Phase 1b TIDAL study. These increases were partially offset by decreased clinical development expenses for our Phase 2b/3 PRISM trial.

Previous wording

In June 2020, we entered into the ATM Sales Agreement, under which we were able to issue and sell shares of common stock, from time to time, having an aggregate offering price of up to $12.0 million. In May 2022, we and SVB Securities amended the ATM Sales Agreement to increase the maximum aggregate offering price of common stock that we were able to issue and sell from time to time under the ATM Sales Agreement by $50.0 million, from $12.0 million to up to $62.0 million. Sales of common stock under the ATM Sales Agreement were able to be made by any method that was deemed an “at-the-market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. We were not obligated to make any sales of our common stock under the ATM Sales Agreement. We began making sales pursuant to the ATM Sales Agreement in July 2020 and through August 15, 2023, the date of termination of the ATM Sales Agreement, we had issued and sold an aggregate of 4,333,394 shares of common stock for gross proceeds of $12.7 million, before deducting estimated commissions and allocated fees of $1.0 million.

Current wording

In June 2020, we entered into the ATM Sales Agreement, under which we were able to issue and sell shares of common stock, from time to time, having an aggregate offering price of up to $12.0 million. In May 2022, we and SVB Securities amended the ATM Sales Agreement to increase the maximum aggregate offering price of common stock that we were able to issue and sell from time to time under the ATM Sales Agreement by $50.0 million, from $12.0 million to up to $62.0 million. Sales of common stock under the ATM Sales Agreement were able to be made by any method that was deemed an “at-the-market” offering as defined in Rule 415(a)(4) under the Securities Act. We were not obligated to make any sales of our common stock under the ATM Sales Agreement. We began making sales pursuant to the ATM Sales Agreement in July 2020 and through August 15, 2023, the date of termination of the ATM Sales Agreement, we had issued and sold an aggregate of 4,333,394 shares of common stock for gross proceeds of $12.7 million, before deducting estimated commissions and allocated fees of $1.0 million.

Previous wording

In June 2023, we filed with the SEC the Shelf Registration Statement, which allows us to offer and sell up to $200.0 million of common stock, preferred stock, debt securities, units and/or warrants from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale. The Shelf Registration Statement was filed to replace our prior universal shelf registration statement on Form S-3 and was declared effective on August 15, 2023. Further, in June 2023, we entered into the 2023 ATM Sales Agreement with Leerink Partners, under which we may issue and sell shares of common stock, from time to time by any method that is deemed an “at-the-market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. We are not obligated to make any sales of our common stock under the 2023 ATM Sales Agreement. We filed a prospectus under the Shelf Registration Statement for the offer and sale of shares of our common stock having an aggregate offering price of up to $75.0 million pursuant to the 2023 ATM Sales Agreement. In accordance with the terms of the 2023 ATM Sales Agreement, the ATM Sales Agreement terminated upon effectiveness of the Shelf Registration Statement, at which point we were no longer able to issue and sell shares of our common stock under the ATM Sales Agreement. As of March 31, 2024, we had not made any sales pursuant to the 2023 ATM Sales Agreement. Subsequent to March 31, 2024, and through May 7, 2024, we issued and sold 1,474,926 shares of common stock for gross proceeds of $5.0 million, before deducting estimated commissions and allocated fees of $0.2 million under the 2023 ATM Sales Agreement.

Current wording

In June 2023, we filed with the SEC the Shelf Registration Statement, which allows us to offer and sell up to $200.0 million of common stock, preferred stock, debt securities, units and/or warrants from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale. The Shelf Registration Statement was filed to replace our prior universal shelf registration statement on Form S-3 and was declared effective on August 15, 2023. Further, in June 2023, we entered into the 2023 ATM Sales Agreement with Leerink Partners, under which we may issue and sell shares of common stock, from time to time by any method that is deemed an “at-the-market” offering as defined in Rule 415(a)(4) under the Securities Act. We are not obligated to make any sales of our common stock under the 2023 ATM Sales Agreement. We filed a prospectus under the Shelf Registration Statement for the offer and sale of shares of our common stock having an aggregate offering price of up to $75.0 million pursuant to the 2023 ATM Sales Agreement. In accordance with the terms of the 2023 ATM Sales Agreement, the ATM Sales Agreement terminated upon effectiveness of the Shelf Registration Statement, at which point we were no longer able to issue and sell shares of our common stock under the ATM Sales Agreement. As of June 30, 2024, we had issued and sold 1,474,926 shares of common stock for gross proceeds of $5.0 million, before deducting estimated commissions and allocated fees of $0.2 million under the 2023 ATM Sales Agreement.

Previous wording

During the three months ended March 31, 2024, operating activities used $10.5 million of net cash, resulting from our net loss of $10.9 million and net changes in our operating assets and liabilities of $0.1 million, partially offset by net non-cash charges of $0.5 million. Changes in our operating assets and liabilities consisted of a $0.9 million decrease in accrued expenses and other liabilities partially offset by a $0.6 million decrease in prepaid expenses and other current assets and a $0.3 million increase in accounts payable. The decrease in accrued expenses and other liabilities was primarily due to a decrease in accrued compensation and benefits. The decrease in prepaid expenses and other current assets was primarily due to a decrease in prepayments related to our corporate insurance as well as our clinical trial work performed by our CROs. The decrease in accounts payable was primarily due to the timing of vendor invoices. The non-cash charges consisted primarily of stock-based compensation expense of $0.7 million and $0.1 million change in value of our operating lease right-of-use assets and liabilities, partially offset by $0.4 million of accretion of our available-for-sale marketable securities.

Current wording

During the six months ended June 30, 2024, operating activities used $19.2 million of net cash, resulting from our net loss of $23.3 million partially offset by net changes in our operating assets and liabilities of $2.7 million and net non-cash charges of $1.4 million. Changes in our operating assets and liabilities consisted of a $1.9 million decrease in prepaid expenses and other current assets and a $1.1 million increase in accrued expenses and other liabilities partially offset by a $0.3 million decrease in accounts payable. The decrease in prepaid expenses and other current assets was primarily due to a decrease in prepayments related to our clinical trial work performed by our CROs. The increase in accrued expenses and other liabilities was primarily due to an increase in accruals for clinical development and clinical trial work performed by our CROs. The decrease in accounts payable was primarily due to the timing of vendor invoices. The non-cash charges consisted primarily of stock-based compensation expense of $1.9 million, $0.2 million change in value of our operating lease right-of-use assets and liabilities and $0.1 million of depreciation and amortization, partially offset by $0.7 million of accretion of our available-for-sale marketable securities.

Previous wording

During the three months ended March 31, 2023, operating activities used $8.2 million of net cash, resulting from our net loss of $6.4 million and net changes in our operating assets and liabilities of $1.8 million. Changes in our operating assets and liabilities consisted of a $0.9 million decrease in accounts payable, a $0.8 million increase in prepaid expenses and other current assets, and a $0.1 million decrease in accrued expenses and other liabilities. The decrease in accounts payable was primarily due to the timing of vendor invoices. The increase in prepaid expenses and other current assets was primarily due to an increase in prepayments related to our clinical trial work performed by our CROs as well as an increase in interest income receivable related to our marketable securities. The decrease in accrued expenses and other liabilities was primarily due to a decrease in accrued compensation and benefits. The non-cash charges consisted primarily of stock-based compensation expense of $0.6 million and $0.1 million of accretion/accrual of term loan discounts and debt issuance costs, offset by $0.7 million of accretion of our available-for-sale marketable securities.

Current wording

During the six months ended June 30, 2023, operating activities used $18.1 million of net cash, principally resulting from our net loss of $13.5 million and net changes in our operating assets and liabilities of $4.8 million. Changes in our operating assets and liabilities consisted of a $2.5 million increase in prepaid expenses and other current assets, a $1.5 million decrease in accounts payable and a $0.8 million decrease in accrued expenses and other liabilities. The increase in prepaid expenses and other current assets was primarily due to an increase in prepayments related to our clinical trial work performed by our CROs as well as an increase in prepayments of our corporate insurance policies. The decrease in accounts payable was primarily due to the timing of vendor invoices. The decrease in accrued expenses and other liabilities was primarily due to a decrease in accrued compensation and benefits and interest payable partially offset by an increase in accruals for research, development and clinical trial work performed by our CROs and consultants. Net cash used in operating activities for the six months ended June 30, 2023 also included non-cash charges that consisted primarily of stock-based compensation expense of $1.2 million and $0.2 million of accretion/accrual of term loan discounts and debt issuance costs, which were partially offset by $1.3 million of accretion of our available-for-sale marketable securities.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities was $8.1 million, primarily related to $30.3 million of purchases of available-for-sale marketable securities, partially offset by $22.2 million of proceeds from maturities of available-for-sale marketable securities.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities was $5.3 million, primarily related to $40.2 million of purchases of available-for-sale marketable securities, partially offset by $34.9 million of proceeds from maturities of available-for-sale marketable securities.

Previous wording

During the three months ended March 31, 2023, net cash provided by investing activities was $9.0 million, primarily related to $18.0 million of proceeds from maturities of available-for-sale marketable securities, partially offset by $9.0 million of purchases of available-for-sale marketable securities and $0.1 million of purchases of property, equipment and leasehold improvements.

Current wording

During the six months ended June 30, 2023, net cash provided by investing activities was $28.6 million, consisting primarily of $37.7 million of proceeds from maturities of available-for-sale marketable securities partially offset by $9.0 million of purchases of available-for-sale marketable securities.

Previous wording

During the three months ended March 31, 2024, net cash used in financing activities was less than $0.1 million, primarily consisting of payments on our finance lease, partially offset by cash proceeds from the exercise of stock options.

Current wording

During the six months ended June 30, 2024, net cash provided by financing activities was $5.0 million, primarily consisting of gross cash proceeds of $5.0 million, net of commissions from sales of our common stock under the 2023 ATM Sales Agreement, and $0.2 million of cash proceeds from the exercise of stock options, partially offset by $0.1 million of payments on our finance lease.

Previous wording

the second part of our HAP study to compare the abuse potential of oral nalbuphine to IV butorphanol.

Current wording

our HAP study comparing the abuse potential of oral nalbuphine to IV butorphanol.

Previous wording

the scope, progress, timing, costs and results of clinical trials of Haduvio, including our Phase 2b CORAL clinical trial of Haduvio for the treatment of chronic cough in IPF, our Phase 2a RIVER clinical trial in RCC, the second part of our HAP study, and our planned Phase 1b clinical trial to evaluate the effect of Haduvio on respiratory physiology in patients with IPF of varying disease severity, as well as trials for any future product candidates;

Current wording

the scope, progress, timing, costs and results of clinical trials of Haduvio, including our Phase 2b CORAL clinical trial of Haduvio for the treatment of chronic cough in IPF, our Phase 2a RIVER clinical trial in RCC, our HAP study, and our Phase 1b TIDAL study to evaluate the effect of Haduvio on respiratory physiology in patients with IPF of varying disease severity, as well as trials for any future product candidates;

Previous wording

our potential obligation to make milestone payments to Endo Pharmaceuticals Inc., or Endo, which would become due upon the successful completion of the first Phase 3 clinical trial of a licensed product candidate and the marketing approval of a licensed product in the United States, as well as our potential obligations to pay Endo royalties on the net sales of the product;

Current wording

our potential obligation to make milestone payments to Endo Pharmaceuticals Inc., or Endo, which would become due upon the successful completion of the first Phase 3 clinical trial of a licensed product candidate and the marketing approval of a licensed product in the U.S., as well as our potential obligations to pay Endo royalties on the net sales of the product;

Previous wording

We do not have any committed external source of funds. Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations, licensing arrangements or other sources to complete the clinical development and commercialization of Haduvio for the treatment of chronic cough in IPF or RCC or for the treatment of prurigo nodularis or any other indication. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any debt financing into which we enter would result in fixed payment obligations and may involve agreements that include grants of security interests on our assets and restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, granting liens over our assets, redeeming stock or declaring dividends, that could adversely impact our ability to conduct our business. In addition, securing financing could require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s ability to oversee the development of our product candidates. Any debt financing that we seek or additional equity that we raise may contain terms that could adversely affect our common stockholders.

Current wording

We do not have any committed external source of funds. Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations, licensing arrangements or other sources to complete the clinical development and commercialization of Haduvio for the treatment of chronic cough in IPF or RCC or any other indication. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any debt financing into which we enter would result in fixed payment obligations and may involve agreements that include grants of security interests on our assets and restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, granting liens over our assets, redeeming stock or declaring dividends, that could adversely impact our ability to conduct our business. In addition, securing financing could require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s ability to oversee the development of our product candidates. Any debt financing that we seek or additional equity that we raise may contain terms that could adversely affect our common stockholders.

Previous wording

While our significant accounting policies are described in the Notes to our financial statements, we believe that the critical accounting policy related to research and development expenses that is described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2023, is the most important to understanding and evaluating our reported financial results. During the three months ended March 31, 2024, there were no material changes to our critical accounting policies.

Current wording

While our significant accounting policies are described in the Notes to our financial statements, we believe that the critical accounting policy related to research and development expenses that is described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2023, is the most important to understanding and evaluating our reported financial results. During the six months ended June 30, 2024, there were no material changes to our critical accounting policies.