ALX ONCOLOGY HOLDINGS INC

Previous wording

We are focused on evorpacept development with the standard-of-care agents, revolving around these two cell types: macrophages and dendritic cells. We initially pursued, and continue to pursue, development of evorpacept based on two well-validated mechanisms of action involving SIRP alpha expression on macrophages and dendritic cells as discussed below. In April 2020, we began exploring a third less well-validated mechanism of action, which led us to test the combination of evorpacept with azacitidine in myelodysplastic syndromes (MDS) patients, but our data failed to validate this third mechanism as discussed below.

Current wording

We are focused on evorpacept development with the standard-of-care agents, revolving around these two cell types: macrophages and dendritic cells. We initially pursued, and continue to pursue, development of evorpacept based on two well-validated mechanisms of action involving SIRP alpha expression on macrophages and dendritic cells as discussed below.

Previous wording

The positive interim data in our randomized ASPEN-06 clinical trial supports the clinical validation of this mechanism of action. ASPEN-06 evaluates the contribution of evorpacept to HERCEPTIN® (trastuzumab) plus standard of care (CYRAMZA® (ramucirumab) + paclitaxel) versus standard of care plus HERCEPTIN in second line or later HER2-positive gastric/gastroesophageal junction (GEJ) cancer.

Current wording

The topline data in our randomized ASPEN-06 Phase 2 clinical trial supports the clinical validation of this mechanism of action. ASPEN-06 evaluates the contribution of evorpacept to HERCEPTIN® (trastuzumab) plus standard of care (CYRAMZA® (ramucirumab) + paclitaxel), or Evo-TRP, versus TRP in second line or later HER2-positive gastric/gastroesophageal junction (GEJ) cancer, where all patients had received an anti-HER2 agent in prior lines of therapy. As reported in July 2024, based upon data cutoff as of 24 May 2024:

Previous wording

Our earlier ASPEN-01 Phase 1 positive data in combination with rituximab in non-Hodgkin lymphoma (NHL) and the recent clinical data of our IST collaborator from the ongoing Phase 1/2 investigator-sponsored trial (IST) of evorpacept in combination with rituximab and lenalidomide (-R 2) patients with relapsed refractory B-cell NHL (R/R B-NHL) provide additional support for the clinical validation of this mechanism of action and support exploring combinations of evorpacept with other anti-cancer antibodies.

Current wording

Our earlier ASPEN-01 Phase 1 positive data in combination with rituximab in non-Hodgkin lymphoma (NHL) and the recent clinical data of our IST collaborator from the ongoing Phase 1/2 investigator-sponsored trial (IST) of evorpacept in combination with rituximab and lenalidomide patients with relapsed refractory B-cell NHL (R/R B-NHL) provide additional support for the clinical validation of this mechanism of action and support exploring combinations of evorpacept with other anti-cancer antibodies.

Previous wording

This mechanism of action may also apply to antibody-drug conjugates (ADCs), which are being investigated in two separate Phase 1 trials: one in combination with PADCEV® (enfortumab vedotin-ejfv) in patients with urothelial cancer (ASPEN-07), and the other in combination with fam-trastuzumab deruxtecan-nxki in patients with unresectable or metastatic HER2-positive and HER2-low breast cancer.

Current wording

This mechanism of action may also apply to antibody-drug conjugates (ADCs), which are being investigated in two separate Phase 1 trials: one in combination with PADCEV® (enfortumab vedotin-ejfv) in patients with urothelial cancer (ASPEN-07), and the other in combination with ENHERTU® (fam-trastuzumab deruxtecan-nxki) in patients with unresectable or metastatic HER2-positive and HER2-low breast cancer.

Previous wording

In October 2023, we announced positive prespecified interim Phase 2 clinical data from our ASPEN-06 clinical trial. This prespecified interim analysis reported results from 54 randomized patients with second and third line gastric/GEJ cancer, including patients previously treated with fam-trastuzumab deruxtecan-nxki and checkpoint inhibitors. A confirmed overall response rate (ORR) of 52% was demonstrated for evorpacept in combination with trastuzumab + ramucirumab + paclitaxel compared to 22% for the control group of trastuzumab + ramucirumab + paclitaxel. Median duration of response (mDOR) was not reached for the evorpacept combination treatment arm compared to 7.4 months for the control group. The safety profile of evorpacept was consistent with previous clinical trials and was well-tolerated.

Current wording

In October 2023, we announced positive prespecified interim Phase 2 clinical data from our ASPEN-06 clinical trial. This prespecified interim analysis reported results from 54 randomized patients with second and third line gastric/GEJ cancer, including patients previously treated with fam-trastuzumab deruxtecan-nxki and checkpoint inhibitors. A confirmed overall response rate (ORR) of 52% was demonstrated for Evo-TRP treatment arm compared to 22% for the TRP control arm. Median duration of response (mDOR) was not reached for the Evo-TRP treatment arm compared to 7.4 months for the control group. The safety profile of evorpacept was consistent with previous clinical trials and was well-tolerated.

Previous wording

In February 2023, we announced the dosing of the first patient in the ASPEN-07 trial, a Phase 1 study evaluating evorpacept in combination with an ADC, enfortumab vedotin-ejfv, for the second-line treatment of locally advanced or metastatic UC.

Current wording

In February 2023, we announced the dosing of the first patient in the ASPEN-07 trial, a Phase 1 study evaluating evorpacept in combination with an ADC, enfortumab vedotin-ejfv (“EV”), for the second-line treatment of locally advanced or metastatic UC.

Previous wording

Our collaborator, Jazz Pharmaceuticals plc (Jazz), is sponsoring and managing an ongoing Phase 1 trial of zanidatamab for the treatment of advanced HER2-expressing breast cancer and other solid tumors in combination with evorpacept (Zanidatamab Trial). We announced the dosing of the first patient in this trial in October 2021.

Current wording

Our collaborator, Jazz Pharmaceuticals plc (Jazz), is sponsoring and managing an ongoing Phase 1 trial of zanidatamab, a HER2-targeted anti-cancer antibody, for the treatment of advanced HER2-expressing breast cancer and other solid tumors in combination with evorpacept (Zanidatamab Trial). We announced the dosing of the first patient in this trial in October 2021.

Previous wording

Our collaborator, Quantum Leap Healthcare Collaborative (Quantum Leap), is sponsoring and managing an ongoing Phase 1 trial (I-SPY) to evaluate evorpacept in combination with an ADC, fam-trastuzumab deruxtecan-nxki, for the treatment of patients with unresectable or metastatic HER2-positive and HER2-low breast cancer. We announced the dosing of the first patient in March 2023.

Current wording

Our collaborator, Quantum Leap Healthcare Collaborative (Quantum Leap), is sponsoring and managing an ongoing Phase 1 trial (I-SPY) to evaluate evorpacept in combination with fam-trastuzumab deruxtecan-nxki for the treatment of patients with unresectable or metastatic HER2-positive and HER2-low breast cancer. We announced the dosing of the first patient in March 2023.

Previous wording

In 2021, an IST of evorpacept was initiated in combination with rituximab and lenalidomide for the treatment of patients with indolent and aggressive NHL, sponsored by MD Anderson Cancer Center in Texas. We announced the dosing of the first patient in September 2021.

Current wording

In 2021, an IST of evorpacept was initiated in combination with rituximab and lenalidomide (R 2) for the treatment of patients with indolent and aggressive NHL, sponsored by MD Anderson Cancer Center in Texas. We announced the dosing of the first patient in September 2021.

Previous wording

In April 2024, MD Anderson Cancer Center reported clinical data from the ongoing Phase 1/2 IST of evorpacept in combination with R 2 in patients with R/R B-NHL. The new data were presented in an oral presentation at the 2024 American Association for Cancer Research (“AACR”) Annual Meeting. The clinical trial enrolled a total of 20 patients with indolent (n=18) and aggressive (n=2) R/R B-NHL where all patients had received prior rituximab and 72% had received prior chemoimmunotherapy. Patients received evorpacept 30 mg/kg Q2W (n=3) or 60 mg/kg Q4W (n=17) in combination with standard R 2 treatment. The regimen was well tolerated, and there were no dose-limiting toxicities. Patients with indolent R/R B-NHL (n=18) had a best ORR of 94% and a CRR of 83%. The median duration of response was not reached.

Current wording

In April 2024, MD Anderson Cancer Center reported clinical data from the ongoing Phase 1/2 IST of evorpacept in combination with R 2 in patients with R/R B-NHL. The new data were presented in an oral presentation at the 2024 American Association for Cancer Research (“AACR”) Annual Meeting. The Phase 1 part of the clinical trial enrolled a total of 20 patients with indolent (n=18) and aggressive (n=2) R/R B-NHL where all patients had received prior rituximab and 72% had received prior chemoimmunotherapy. Patients received evorpacept 30 mg/kg Q2W (n=3) or 60 mg/kg Q4W (n=17) in combination with standard R 2 treatment. The regimen was well tolerated, and there were no dose-limiting toxicities. Patients with indolent R/R B-NHL (n=18) had a best ORR of 94% and a CRR of 83%. The median duration of response was not reached. The Phase 2 part of the clinical trial is actively accruing treatment naïve patients in the 1L setting.

Previous wording

In April 2023, we announced a collaboration with Sanofi who will sponsor and manage a Phase 1/2 trial of isatuximab and dexamethasone in combination with evorpacept for the treatment of patients with relapsed or refractory multiple myeloma.

Current wording

In April 2023, we announced a collaboration with Sanofi who will sponsor and manage a Phase 1/2 trial of SARCLISA® (isatuximab), an anti-cancer antibody, and dexamethasone in combination with evorpacept for the treatment of patients with relapsed or refractory multiple myeloma.

Previous wording

In March 2022, we filed a universal shelf registration statement (Shelf Registration Statement), which provides for aggregate offerings of up to $450.0 million of the Company’s securities. In May 2022, we filed an amendment to the Shelf Registration Statement, which was declared effective by the Securities and Exchange Commission (SEC) on May 31, 2022. We believe that our Shelf Registration Statement provides us with flexibility to raise additional capital to finance our operations as needed. In December 2021, we entered into a sales agreement (as amended, Sales Agreement) with Cantor Fitzgerald & Co. and Credit Suisse Securities (USA) LLC (Credit Suisse), under which we may, subject to the effectiveness of the Shelf Registration Statement, offer and sell our common stock, having aggregate gross proceeds of up to $150.0 million, from time to time through them as our sales agents in an at-the-market (ATM) offering. In August 2023, we entered into an amendment to the Sales Agreement to include UBS Securities LLC as an additional sales agent and to remove Credit Suisse as a sales agent. As of March 31, 2024, we had issued approximately 211,819 shares of common stock pursuant to the Sales Agreement for net proceeds of $3.0 million. Subsequent to March 31, 2024, we have sold 1,794,091 shares of common stock pursuant to the Sales Agreement for approximately $26.2 million in net proceeds. We may terminate this ATM program at any time, pursuant to its terms.

Current wording

In March 2022, we filed a universal shelf registration statement (Shelf Registration Statement), which provides for aggregate offerings of up to $450.0 million of the Company’s securities. In May 2022, we filed an amendment to the Shelf Registration Statement, which was declared effective by the Securities and Exchange Commission (SEC) on May 31, 2022. We believe that our Shelf Registration Statement provides us with flexibility to raise additional capital to finance our operations as needed. In December 2021, we entered into a sales agreement (as amended, Sales Agreement) with Cantor Fitzgerald & Co. and Credit Suisse Securities (USA) LLC (Credit Suisse), under which we may, subject to the effectiveness of the Shelf Registration Statement, offer and sell our common stock, having aggregate gross proceeds of up to $150.0 million, from time to time through them as our sales agents in an at-the-market (ATM) offering. In August 2023, we entered into an amendment to the Sales Agreement to include UBS Securities LLC as an additional sales agent and to remove Credit Suisse as a sales agent. As of June 30, 2024, we had issued approximately 2,005,910 shares of common stock pursuant to the Sales Agreement for net proceeds of $29.2 million. We may terminate this ATM program at any time, pursuant to its terms.

Previous wording

In October 2022, we entered into a loan and security agreement (Loan Agreement) with Oxford Finance LLC, Oxford Finance Credit Fund II LP, and Silicon Valley Bank (SVB) (collectively, the Lenders). Upon closing of the Loan Agreement, we drew $10.0 million and have access to draw an additional $40.0 million through the end of 2023. A further $50.0 million may become available to us, $25.0 million upon the achievement of pre-determined development milestones and $25.0 million at the Lenders’ sole discretion. The Company received net proceeds of $9.3 million from the issuance of the term loan, after deducting debt issuance costs of approximately $0.7 million.

Current wording

In October 2022, we entered into a loan and security agreement (Loan Agreement) with Oxford Finance LLC, Oxford Finance Credit Fund II LP, and Silicon Valley Bank (SVB) (collectively, the Lenders). Upon closing of the Loan Agreement, we drew $10.0 million. Under the original terms of the Loan Agreement, we had the right to draw an additional $40.0 million through the end of 2023. A further $50.0 million was potentially available to us, $25.0 million upon the achievement of pre-determined development milestones and $25.0 million at the Lenders’ sole discretion. The Company received net proceeds of $9.3 million from the issuance of the term loan, after deducting debt issuance costs of approximately $0.7 million.

Previous wording

From inception through March 31, 2024, we have raised an aggregate of $616.5 million to fund our operations, of which $175.1 million were net proceeds from sales of our convertible preferred stock, $5.8 million were net proceeds from borrowings under a term loan, $169.5 million were net proceeds from our initial public offering, $194.9 million were net proceeds from our follow-on offering, $9.3 million were net proceeds from borrowings under the Loan Agreement, $58.9 million were net proceeds from our follow-on offering in October 2023, and $3.0 million were net proceeds from our ATM offering.

Current wording

From inception through June 30, 2024, we have raised an aggregate of $642.7 million to fund our operations, of which $175.1 million were net proceeds from sales of our convertible preferred stock, $5.8 million were net proceeds from borrowings under a term loan, $169.5 million were net proceeds from our initial public offering, $194.9 million were net proceeds from our follow-on offering in December 2020, $9.3 million were net proceeds from borrowings under the Loan Agreement, $58.9 million were net proceeds from our follow-on offering in October 2023, and $29.2 million were net proceeds from our ATM offering.

Previous wording

We have incurred net losses in each year since inception. Our net losses were $35.6 million and $30.2 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, we had an accumulated deficit of $521.9 million. Substantially all of our operating losses are a result of expenses incurred in connection with our research and development programs, primarily evorpacept, and from general and administrative expenses associated with our operations.

Current wording

We have incurred net losses in each year since inception. Our net losses were $39.4 million and $34.2 million for the three months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $561.3 million. Substantially all of our operating losses are a result of expenses incurred in connection with our research and development programs, primarily evorpacept, and from general and administrative expenses associated with our operations.

Previous wording

The following table summarizes our results of operations for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our results of operations for the three months and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

The following table summarizes our research and development (R&D) expenses incurred for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our research and development (R&D) expenses incurred for the three months and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

R&D expenses increased by $7.0 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily attributable to (i) an increase of $2.8 million in clinical and development costs primarily due to $2.9 million in clinical costs from an increase in the number of active trials and patient enrollment as well as manufacturing of clinical trial materials to support a higher number of active clinical trials and future expected patient enrollment related to the advancement of our lead product candidate, evorpacept, (ii) an increase of $1.0 million in personnel and related costs primarily driven by headcount growth, (iii) an increase of $1.8 million in stock-based compensation expense of which $1.2 million was due to a reclassification of stock-based compensation from G&A to R&D because of the change in roles for our former Chief Executive Officer who transitioned to Chief Scientific Officer in September 2023 and the remaining amount was due to additional awards granted since March 31, 2023, and (iv) an increase of $1.4 million in other research costs of which $1.0 million was due to a development milestone payment to ScalmiBio stockholders and $0.2 million was due to additional VAT fees related to companion drugs purchased for use in our clinical trials.

Current wording

Research and development expenses increased by $12.1 million during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily attributable to (i) an increase of $2.5 million in clinical and development costs primarily due to $3.5 million in clinical costs from an increase in the number of active trials and patient enrollment as well as manufacturing of clinical trial materials to support a higher number of active clinical trials and future expected patient enrollment related to the advancement of our lead product candidate, evorpacept, offset by a decrease of $0.6 million related to reaching the maximum spending limit under the Jazz Collaboration and a decrease of $0.3 million related to the Tallac Collaboration for costs related to the IND filing, for which the primary work was completed in the prior years, (ii) an increase of $1.6 million in preclinical costs for development of new targets, (iii) an increase of $2.2 million in personnel and related costs due primarily to an increase driven by headcount growth, (iv) an increase of $3.6 million in stock-based compensation expense of which $2.3 million was due to a change in classification from the comparative periods of stock-based compensation from G&A to R&D as a result of the change in roles for our former Chief Executive Officer who transitioned to Chief Scientific Officer in September 2023 and the remaining amount was due to additional awards granted since June 30, 2023, and (v) an increase of $2.1 million in other research costs of which $1.0 million was due to a development milestone payment to ScalmiBio stockholders and of which $0.7 million was due to VAT refunds received in prior year that were not present in the current year.

Previous wording

The following table summarizes our general and administrative (G&A) expenses incurred for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our general and administrative (G&A) expenses incurred for the three months and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

G&A expenses decreased by $1.4 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was primarily attributable to (i) a decrease of $1.1 million in stock-based compensation expense primarily due to a reclassification of stock-based compensation from G&A to R&D as described above under R&D expenses, (ii) a decrease of $0.1 million in other G&A costs from a reduction in corporate insurance due to lower premiums, and (iii) a decrease of $0.1 million in personnel and related costs primarily driven by terminations in the current quarter and in the fourth quarter of 2023.

Current wording

G&A expenses decreased by $0.4 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily attributable to a decrease of $0.8 million in stock-based compensation expense primarily due to a change in classification from the comparative periods of stock-based compensation from G&A to R&D as described above under R&D expenses, offset by an increase of $0.3 million in other G&A costs from accounting consulting costs and an increase of $0.1 million in personnel and related costs primarily driven by headcount growth.

Previous wording

Interest income increased by $0.3 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily attributable to higher interest rates.

Current wording

Interest income increased by $0.2 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily attributable to higher interest rates.

Previous wording

Other income (expense), net decreased by $0.1 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was primarily attributable to absence in the current period of other income from an immaterial service contract, under which the Company provides R&D services for another company.

Current wording

Other (expense) income, net decreased by $0.3 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily attributable to absence in the current period of other income from an immaterial service contract, under which the Company provides R&D services for another company.

Previous wording

Since our inception, we have incurred significant operating losses and have not generated any product revenue. We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all, subject to regulatory and marketing approval of any of our product candidates. To date, we have funded our operations with proceeds from the sales of shares of our common stock and convertible preferred stock and borrowings under our term loan. As of March 31, 2024, we had cash, cash equivalents and short-term and long-term investments of $184.5 million.

Current wording

Since our inception, we have incurred significant operating losses and have not generated any product revenue. We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all, subject to regulatory and marketing approval of any of our product candidates. To date, we have funded our operations with proceeds from the sales of shares of our common stock and convertible preferred stock and borrowings under our term loan. As of June 30, 2024, we had cash, cash equivalents and short-term and long-term investments of $186.2 million.

Previous wording

We have incurred losses and negative cash flows from operations since inception and anticipate that we will continue to incur net losses for the foreseeable future. As of March 31, 2024, we had an accumulated deficit of $521.9 million. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials for our product candidates in development. In addition, we expect to incur additional costs associated with operating as a public company. Management recognizes the need to raise additional capital to fully implement its business plan. The timing and amount of such future capital requirements are difficult to forecast and will depend on many factors, including:

Current wording

We have incurred losses and negative cash flows from operations since inception and anticipate that we will continue to incur net losses for the foreseeable future. As of June 30, 2024, we had an accumulated deficit of $561.3 million. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials for our product candidates in development. In addition, we expect to incur additional costs associated with operating as a public company. Management recognizes the need to raise additional capital to fully implement its business plan. The timing and amount of such future capital requirements are difficult to forecast and will depend on many factors, including:

Previous wording

In December 2021, we entered into the Sales Agreement with Cantor Fitzgerald & Co. and Credit Suisse Securities (USA) LLC, under which we may offer and sell our common stock, having aggregate gross proceeds of up to $150.0 million, from time to time through them as our sales agents in our ATM offering program. In March 2022, we filed a Shelf Registration Statement with the SEC. In May 2022, we filed an amended Shelf Registration Statement, which was declared effective by the SEC on May 31, 2022. In August 2023, we entered into an amendment to the Sales Agreement to include UBS Securities LLC as an additional sales agent and to remove Credit Suisse as a sales agent. During the quarter ended March 31, 2024, we sold an aggregate of 211,819 shares of common stock under our Sales Agreement for net proceeds of $3.0 million, after deducting commissions. Subsequent to March 31, 2024, we have sold an additional 1,794,091 shares of common stock pursuant to the Sales Agreement for approximately $26.2 million in net proceeds. We may terminate this ATM program and the Sales Agreement at any time, pursuant to its terms.

Current wording

In December 2021, we entered into the Sales Agreement with Cantor Fitzgerald & Co. and Credit Suisse Securities (USA) LLC, under which we may offer and sell our common stock, having aggregate gross proceeds of up to $150.0 million, from time to time through them as our sales agents in our ATM offering program. In March 2022, we filed a Shelf Registration Statement with the SEC. In May 2022, we filed an amended Shelf Registration Statement, which was declared effective by the SEC on May 31, 2022. In August 2023, we entered into an amendment to the Sales Agreement to include UBS Securities LLC as an additional sales agent and to remove Credit Suisse as a sales agent. As of June 30, 2024, we sold an aggregate of 2,005,910 shares of common stock under our Sales Agreement for net proceeds of $29.2 million, after deducting commissions. We may terminate this ATM program and the Sales Agreement at any time, pursuant to its terms.

Previous wording

In October 2022, we entered into the Loan Agreement as described above. Upon closing of the Loan Agreement, we drew $10.0 million and have access to draw an additional $40.0 million through the end of 2023. A further $50.0 million may become available to us, $25.0 million upon the achievement of pre-determined development milestones and $25.0 million at the Lenders’ sole discretion. For a description of the terms of the Loan Agreement, see “Note 6. Term Loan” to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. On May 31, 2023, we entered into a second amendment to the Loan Agreement. The primary purpose of the second amendment was to reduce the percentage of the amount required to be held in our collateral account with SVB-First Citizens from 100% to not less than 50% of the aggregate dollar value of all our collateral accounts.

Current wording

In October 2022, we entered into the Loan Agreement as described above. Upon closing of the Loan Agreement, we drew $10.0 million. Under the original terms of the Loan Agreement, we had the right to draw an additional $40.0 million through the end of 2023. A further $50.0 million was potentially available to us, $25.0 million upon the achievement of pre-determined development milestones and $25.0 million at the Lenders’ sole discretion. For a description of the terms of the Loan Agreement, see “Note 6. Term Loan” to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. On May 31, 2023, we entered into a second amendment to the Loan Agreement. The primary purpose of the second amendment was to reduce the percentage of the amount required to be held in our collateral account with SVB-First Citizens from 100% to not less than 50% of the aggregate dollar value of all our collateral accounts.

Previous wording

We believe our existing cash, cash equivalents, short-term and long-term investments, and recent use of the ATM program along with the ability to draw down an additional $40 million of our term loan at our discretion will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2026. We have based these estimates on assumptions in which actuals may materially differ, and we could utilize our available capital resources sooner than we expect.

Current wording

We believe our existing cash, cash equivalents, short-term and long-term investments, and recent use of the ATM program will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2026. We have based these estimates on assumptions in which actuals may materially differ, and we could utilize our available capital resources sooner than we expect.

Previous wording

The following table presents a summary of the net cash flow activity for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table presents a summary of the net cash flow activity for the six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

In the three months ended March 31, 2024, net cash used in operating activities of $37.9 million was attributable to a net loss of $35.6 million and a change in our net operating assets and liabilities of $8.6 million, offset by non-cash charges of $6.2 million. The change in operating assets and liabilities was primarily due to (i) a decrease in accounts payable and accrued expenses and other current liabilities of $3.6 million primarily due to timing of invoices and payments, (ii) a decrease in other assets of $0.1 million, (iii) an increase in prepaid and other current assets of $4.5 million and (iv) a decrease in other non-current liabilities of $0.6 million. Non-cash charges consisted primarily of stock-based compensation expense of $7.0 million, non-cash lease costs of $0.4 million, and depreciation and amortization costs of $0.2 million offset by net amortization of premiums and accretion of discounts on investments of $1.6 million.

Current wording

In the six months ended June 30, 2024, net cash used in operating activities of $64.5 million was attributable to a net loss of $75.0 million and a change in our net operating assets and liabilities of $2.3 million, offset by non-cash charges of $12.8 million. The change in operating assets and liabilities was primarily due to (i) an increase in accounts payable and accrued expenses and other current liabilities of $2.9 million primarily due to timing of invoices and payments, (ii) a decrease in other assets of $1.9 million, (iii) an increase in prepaid and other current assets of $6.1 million and (iv) a decrease in other non-current liabilities of $1.1 million. Non-cash charges consisted primarily of stock-based compensation expense of $14.3 million, non-cash lease costs of $0.9 million, and depreciation and amortization costs of $0.4 million offset by net amortization of premiums and accretion of discounts on investments of $2.9 million.

Previous wording

In the three months ended March 31, 2023, net cash used in operating activities of $27.8 million was attributable to a net loss of $30.2 million and a change in net operating assets and liabilities of $3.4 million, offset by non-cash charges of $5.8 million. The change in operating assets and liabilities was primarily due to (i) a decrease in accounts payable and accrued expenses and other current liabilities of $4.6 million primarily due to timing of invoices and payments, (ii) a decrease in other assets of $1.2 million, (iii) a decrease in prepaid and other current assets of $0.2 million and (iv) a decrease in other non-current liabilities of $0.2 million. Non-cash charges consisted primarily of stock-based compensation expense of $6.4 million and non-cash lease costs of $0.3 million offset by net amortization of premiums and accretion of discounts on investments of $1.1 million.

Current wording

In the six months ended June 30, 2023, net cash used in operating activities of $59.5 million was attributable to a net loss of $64.3 million and a change in net operating assets and liabilities of $6.2 million, offset by non-cash charges of $11.0 million. The change in operating assets and liabilities was primarily due to (i) a decrease in accounts payable and accrued expenses and other current liabilities of $7.1 million primarily due to timing of invoices and payments, (ii) a decrease in other assets of $3.4 million, (iii) an increase in prepaid and other current assets of $2.0 million and (iv) a decrease in other non-current liabilities of $0.5 million. Non-cash charges consisted primarily of stock-based compensation expense of $12.6 million and non-cash lease costs of $0.6 million offset by net amortization of premiums and accretion of discounts on investments of $2.8 million.

Previous wording

In the three months ended March 31, 2024, net cash provided by investing activities of $26.5 million was attributable to cash received for maturities of investments of $57.9 million offset by purchases of short-term and long-term investments of $31.3 million and purchases of property and equipment of $0.1 million.

Current wording

In the six months ended June 30, 2024, net cash provided by investing activities of $27.4 million was attributable to cash received for maturities of investments of $121.9 million offset by purchases of short-term and long-term investments of $94.2 million and purchases of property and equipment of $0.2 million.

Previous wording

In the three months ended March 31, 2023, net cash provided by investing activities of $42.3 million was attributable to cash received for maturities of investments of $115.2 million offset by purchases of short-term and long-term investments of $72.2 million and purchases of property and equipment of $0.7 million.

Current wording

In the six months ended June 30, 2023, net cash provided by investing activities of $48.5 million was attributable to cash received for maturities of investments of $169.7 million offset by purchases of short-term and long-term investments of $118.7 million and purchases of property and equipment of $2.4 million.

Previous wording

In the three months ended March 31, 2024, net cash provided by financing activities of $3.1 million was attributable to proceeds from our ATM offering program of $3.0 million and proceeds from the exercise of stock options under equity incentive plans of $0.2 million offset by principal payments on finance leases of $0.2 million.

Current wording

In the six months ended June 30, 2023, net cash provided by financing activities was $0.2 million, attributable to proceeds from the exercise of stock options under equity incentive plans of $0.1 million and proceeds from issuance of common stock pursuant to employee stock purchase plan of $0.3 million and by principal payments on finance leases of $0.2 million.

Previous wording

Our significant accounting policies and critical accounting estimates are more fully described in the notes to our audited consolidated financial statements and in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates,” respectively, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. During the three months ended March 31, 2024, there were no material changes to our critical accounting policies and estimates from those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 7, 2024.

Current wording

Our significant accounting policies and critical accounting estimates are more fully described in the notes to our audited consolidated financial statements and in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates,” respectively, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. During the six months ended June 30, 2024, there were no material changes to our critical accounting policies and estimates from those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 7, 2024.