SPRUCE BIOSCIENCES INC

Previous wording

We are a late-stage biopharmaceutical company focused on developing and commercializing novel therapies for rare endocrine disorders with significant unmet medical need. We are initially developing our wholly-owned product candidate, tildacerfont, as the potential first non-steroidal therapy to offer markedly improved disease control and reduced steroid burden for patients suffering from classic congenital adrenal hyperplasia (“CAH”). Classic CAH is a serious and life-threatening disease with no known novel therapies approved in approximately 70 years. Over 200 subjects across nine completed clinical trials to date have been administered tildacerfont with no drug-related serious adverse events (“SAEs”) reported.

Current wording

We are a late-stage biopharmaceutical company focused on developing and commercializing novel therapies for endocrine and neurological disorders with significant unmet medical need. We are developing our product candidate, tildacerfont, an oral antagonist of the CRF 1 receptor, which is the receptor for corticotropin-releasing factor (“CRF”), for the treatment of classic congenital adrenal hyperplasia (“CAH”), polycystic ovary syndrome (“PCOS”), and major depressive disorder (“MDD”). Over 400 subjects across ten completed clinical trials to date have been administered tildacerfont with no drug-related serious adverse events (“SAEs”) reported.

Previous wording

We initiated CAHmelia-203, a placebo-controlled, double-blind Phase 2b clinical trial in 96 adult patients with classic CAH with highly elevated levels of androstenedione (“A4”) at baseline and reported topline results in March 2024. CAHmelia-203 enrolled 96 subjects with a mean baseline A4 level of 1,151 ng/dL, which is more than five times above the upper limit of normal (“ULN”). The clinical trial did not achieve the primary efficacy endpoint of change in A4 from baseline to week 12. 200mg once daily (“QD”) of tildacerfont demonstrated a placebo-adjusted reduction from baseline in A4 of -2.6% with a non-significant p-value at week 12. Compliance with study medication and glucocorticoid (“GC”) was low with approximately 50% of patients reporting 80% or greater compliance, resulting in lower-than-expected tildacerfont exposure. Tildacerfont was generally safe and well tolerated at all doses, with no treatment-related SAEs. Most adverse events were reported as mild to moderate. Based upon the outcome of the study, we decided to terminate the CAHmelia-203 study.

Current wording

Classic CAH is a serious and life-threatening disease with no known novel therapies approved in approximately 70 years. In March 2024, we reported topline results for CAHmelia-203, a placebo-controlled, double-blind Phase 2b clinical trial in adult patients with classic CAH and highly elevated levels of androstenedione (“A4”) at baseline. CAHmelia-203 enrolled 96 subjects with a mean baseline A4 level of 1,151 ng/dL, which is more than five times above the upper limit of normal (“ULN”). The clinical trial did not achieve the primary efficacy endpoint of change in A4 from baseline to week 12. 200mg once daily (“QD”) of tildacerfont demonstrated a placebo-adjusted reduction from baseline in A4 of -2.6% with a non-significant p-value at week 12. Compliance with study medication and glucocorticoid (“GC”) was low with approximately 50% of patients reporting 80% or greater compliance, resulting in lower-than-expected tildacerfont exposure. Tildacerfont was generally safe and well tolerated at all doses, with no treatment-related SAEs. Most adverse events were reported as mild to moderate. Based upon the outcome of the study, we terminated the CAHmelia-203 study.

Previous wording

We also initiated CAHmelia-204, a second Phase 2b clinical trial in 100 adult patients with classic CAH on mean daily dose of supraphysiologic GCs of 37 mg/day of hydrocortisone equivalents. Patients enrolled had a mean A4 level at baseline of 224 ng/dL (approximately the ULN) and 66% of patients enrolled had androgenic control, defined as having A4 values below the ULN at baseline. Topline results from CAHmelia-204 are anticipated in the third quarter of 2024.

Current wording

We also initiated CAHmelia-204, a second Phase 2b clinical trial in 100 adult patients with classic CAH on mean daily dose of supraphysiologic GCs of 37 mg/day of hydrocortisone equivalents. Patients enrolled had a mean A4 level at baseline of 224 ng/dL (approximately the ULN) and 66% of patients enrolled had androgenic control, defined as having A4 values below the ULN at baseline. Topline results from CAHmelia-204 are anticipated in the fourth quarter of 2024.

Previous wording

We are also investigating tildacerfont for the treatment of classic CAH in children. We believe there is a significant medical need to provide androgen-lowering and glucocorticoid-sparing therapies to pediatric classic CAH patients to reduce the risk of premature puberty and the adverse effects of glucocorticoids, including growth inhibition and short-stature as adults. We initiated CAHptain-205, a Phase 2 open-label clinical trial, which utilizes a sequential three cohort design, to evaluate the safety, efficacy, and pharmacokinetics of tildacerfont in children two to 17 years of age with classic CAH. We reported topline results in March 2024. CAHptain-205 enrolled 30 children between two and 17 years of age with a mean baseline GC dose of 14 mg/m2/day and mean baseline A4 level of 372 ng/dL. The study characterized the safety and pharmacokinetic profiles of tildacerfont, as well as changes in androgen levels over 12 weeks of treatment, and the ability to reduce daily GC dose upon A4 normalization. 73% of all patients (22 of 30 patients) met the efficacy endpoint of A4 or GC reduction from baseline at 12 weeks of treatment with tildacerfont. 70% of patients with elevated baseline A4 values (16 of 23 patients) demonstrated an A4 reduction at week 4. Tildacerfont was generally well tolerated at all doses with no treatment-related SAEs reported. Although the CAHptain-205 clinical trial met the efficacy endpoints, the activity observed was less consistent than anticipated and without clear dose response. Preliminary pharmacokinetic analysis suggests that tildacerfont is cleared more rapidly in children than in adult CAH patients. It is not uncommon for children to require relatively higher doses than adults to achieve optimal exposures of drugs. So, while we are encouraged by the activity observed thus far at suboptimal doses in this Phase 2 dose-ranging study, we plan to continue to evaluate the optimal dose, with topline interim results from additional dose ranging cohorts anticipated in the third quarter of 2024. Assuming positive results from CAHmelia-204 and CAHptain-205, we plan to meet with the U.S. Food and Drug Administration (“FDA”) and comparable foreign regulatory authorities to outline the design of a registrational clinical program in adult and pediatric classic CAH.

Current wording

We are also investigating tildacerfont for the treatment of classic CAH in children. We initiated CAHptain-205, a Phase 2 open-label clinical trial, which initially utilized a sequential three cohort design, to evaluate the safety, efficacy, and pharmacokinetics (“PK”) of tildacerfont in pediatric patients two to 17 years of age with classic CAH. The study characterized the safety and pharmacokinetic profiles of tildacerfont, as well as changes in androgen levels over 12 weeks of treatment, and the ability to reduce daily GC dose upon A4 normalization. In March 2024, we reported topline results from the first three cohorts of the clinical trial, which included 30 children between two and 17 years of age with a mean baseline GC dose of 14 mg/m2/day and mean baseline A4 level of 372 ng/dL. 73% of all patients (22 of 30 patients) met the efficacy endpoint of A4 or GC reduction from baseline at 12 weeks of treatment with tildacerfont. 70% of patients with elevated baseline A4 values (16 of 23 patients) demonstrated an A4 reduction at week 4. Tildacerfont was generally well tolerated at all doses with no treatment-related SAEs reported.

Previous wording

We have also submitted a pediatric investigational plan (“PIP”) to the Pediatric Committee (“PDCO”) of the European Medicines Agency (“EMA”) regarding a registrational program in children with classic CAH. PDCO issued an opinion on its agreement with the proposed PIP of tildacerfont for the treatment of CAH which endorsed the clinical program to evaluate the safety, tolerability and efficacy of tildacerfont for the treatment of CAH in patients from one year of age to less than 18 years of age. PDCO also granted a waiver for the treatment of CAH in patients less than one year of age.

Current wording

Although the CAHptain-205 clinical trial met the efficacy endpoints, the activity observed was less consistent than anticipated and without clear dose response. Preliminary PK analysis suggests that tildacerfont is cleared more rapidly in children than in adult CAH patients. The clinical trial was amended to include additional dose ranging cohorts in adults, adolescents and children. The maximum planned dose is 400mg BID, subject to adjustment based on safety and PK data obtained during the clinical trial. Dosing will initiate at 200mg BID in adults and adolescents. All cohorts administered doses above 200mg BID will be adaptive, so that the determination to initiate a cohort, and at what increased dose, may be determined by the sponsor, within the guidelines of the protocol, based on recommendations by an independent Data Monitoring Committee and emerging safety and exposure data. Individual and study stopping criteria will further ensure safety of the participants. Topline results from these additional dose ranging cohorts in adults, adolescents, and children are anticipated in the fourth quarter of 2024. Assuming positive results from CAHmelia-204 and CAHptain-205, we plan to meet with the U.S. Food and Drug Administration (“FDA”) and comparable foreign regulatory authorities to outline the design of a registrational clinical program in adult and pediatric classic CAH. We have also submitted a pediatric investigational plan (“PIP”) to the Pediatric Committee (“PDCO”) of the European Medicines Agency (“EMA”) regarding a registrational program in children with classic CAH. PDCO issued an opinion on its agreement with the proposed PIP of tildacerfont for the treatment of CAH which endorsed the clinical program to evaluate the safety, tolerability and efficacy of tildacerfont for the treatment of CAH in patients from one year of age to less than 18 years of age. PDCO also granted a waiver for the treatment of CAH in patients less than one year of age.

Previous wording

Beyond classic CAH, we believe tildacerfont has potential utility in polycystic ovary syndrome (“PCOS”), and in a range of diseases where the underlying biology supports a need to reduce excess secretion of or hyperresponsiveness to adrenocorticotropic hormone (“ACTH”). PCOS is a hormonal disorder common among females of reproductive age affecting nearly five million females in the United States and approximately 115 million females worldwide. PCOS is characterized by elevated levels of androgens, cysts in the ovaries, and irregular periods. We believe that tildacerfont may present a novel mechanism to reduce ACTH and provide a therapeutic option for females with PCOS. By leveraging our existing Phase 1 program, which includes safety, tolerability, and pharmacokinetics of tildacerfont, we initiated and completed POWER, a Phase 2 proof-of-concept, placebo-controlled, dose escalation trial which will evaluate the safety and efficacy of tildacerfont titrated to 200 mg QD compared to placebo at 12 weeks of treatment in subjects with PCOS and elevated adrenal androgens as measured by dehydroepiandrosterone sulfate (“DHEAS”) levels at baseline. In August 2023, we conducted an analysis of interim data from 20 patients (13 on tildacerfont and 7 on placebo) through the 12-week treatment period for the POWER clinical trial. The study enrolled 27 patients in total. The interim data from the study support target engagement and suggests that DHEAS may be reduced with tildacerfont treatment in women suffering from PCOS. Tildacerfont was well-tolerated, with a safety profile that is consistent with past studies. Most adverse events were classified as mild-moderate, balanced between treatment arms, unrelated to the study drug and single event occurrences. No serious adverse reactions or dose toxicities were observed, and there was no evidence of adrenal insufficiency. Final data from the POWER clinical trial will be presented at a future medical conference.

Current wording

Beyond classic CAH, we believe tildacerfont has potential utility in PCOS, and in a range of diseases where the underlying biology supports a need to reduce excess secretion of or hyperresponsiveness to adrenocorticotropic hormone (“ACTH”). PCOS is a hormonal disorder common among females of reproductive age affecting nearly five million females in the United States and approximately 115 million females worldwide. PCOS is characterized by elevated levels of androgens, cysts in the ovaries, and irregular periods. We believe that tildacerfont may present a novel mechanism to reduce ACTH and provide a therapeutic option for females with PCOS. In June 2024, we presented results from POWER, a Phase 2 proof-of-concept, placebo-controlled, dose escalation trial which will evaluate the safety and efficacy of tildacerfont titrated to 200mg QD compared to placebo at 12 weeks of treatment in subjects with PCOS and elevated adrenal androgens as measured by dehydroepiandrosterone sulfate (“DHEAS”) levels at baseline. In women with elevated baseline DHEAS, a significant reduction in DHEAS versus placebo was observed (p = 0.020). In study participants, a significant increase in sex hormone binding globulin (“SHBG”) versus placebo was also observed (p = 0.012). The Phase 2 study was not powered to test for statistical significance on the primary endpoint. However, the lowering of DHEAS, an adrenal androgen precursor, observed with 12-week exposure, suggests that tildacerfont may be of therapeutic benefit for some women with PCOS. Additionally, the observed increase in SHBG may potentially result in lower levels of free, bioactive sex hormones such as testosterone. Tildacerfont was well-tolerated with no safety signals observed. The majority of adverse events were mild to moderate. No SAEs were reported. We are currently evaluating strategic collaboration opportunities for the development and commercialization of tildacerfont for the treatment of PCOS.

Previous wording

Since inception, we have incurred significant losses and negative cash flows from operations. During the three months ended March 31, 2024 and 2023, we incurred net losses of $11.6 million and $12.8 million, respectively, and used $15.0 million and $11.8 million of cash in operations, respectively. As of March 31, 2024 and December 31, 2023, we had an accumulated deficit of $208.9 million and $197.2 million, respectively, and we do not expect positive cash flows from operations for the foreseeable future. We expect to continue to incur significant and increasing losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of expenditures on our planned research and development activities.

Current wording

Since inception, we have incurred significant losses and negative cash flows from operations. During the six months ended June 30, 2024 and 2023, we incurred net losses of $20.8 million and $25.6 million, respectively, and used $26.1 million and $9.8 million of cash in operations, respectively. As of June 30, 2024 and December 31, 2023, we had an accumulated deficit of $218.0 million and $197.2 million, respectively, and we do not expect positive cash flows from operations for the foreseeable future. We expect to continue to incur significant and increasing losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of expenditures on our planned research and development activities.

Previous wording

In October 2020, we consummated our initial public offering (“IPO”) and issued 6,900,000 shares of common stock for net proceeds of $93.4 million, after deducting underwriting discounts and commissions and offering expenses. Since inception through March 31, 2024, we have raised aggregate gross proceeds of $293.1 million, including $103.5 million from our IPO in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $5.0 million from the issuance of debt, $53.6 million from a private placement financing in February 2023, and the $15.0 million upfront payment from Kaken received in April 2023. As of March 31, 2024 and December 31, 2023, we had cash and cash equivalents of $81.2 million and $96.3 million, respectively.

Current wording

Since inception through June 30, 2024, we have raised aggregate gross proceeds of $293.1 million, including $103.5 million from our initial public offering (“IPO”) in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $5.0 million from the issuance of debt, $53.6 million from a private placement financing in February 2023, and the $15.0 million upfront payment from Kaken received in April 2023. As of June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $69.7 million and $96.3 million, respectively.

Previous wording

advance tildacerfont through our ongoing Phase 2b clinical trials in adult patients with classic CAH;

Current wording

advance tildacerfont through our ongoing clinical trials in adult and pediatric patients with classic CAH;

Previous wording

advance clinical development of tildacerfont in additional indications, including pediatric classic CAH and PCOS;

Current wording

advance clinical development of tildacerfont in additional indications, including PCOS and MDD;

Previous wording

pursue regulatory approvals of tildacerfont in patients with classic CAH and PCOS;

Current wording

pursue regulatory approvals of tildacerfont in patients with classic CAH, PCOS, and MDD;

Previous wording

In May 2016, we entered into a license agreement (the “Lilly License Agreement”) with Eli Lilly and Company (“Lilly”). Pursuant to the terms of the Lilly License Agreement, Lilly granted us an exclusive, worldwide, royalty bearing, sublicensable license under certain technology, patent rights, know-how, and proprietary materials, which we refer to collectively as the “Lilly IP”, and such patents (the “Lilly Licensed Patents”), relating to the CRF1 receptor antagonist compounds either listed in the Lilly License Agreement or covered by patent rights controlled by Lilly, which we refer to collectively as the “Lilly Compounds”, to research, develop, commercialize, make, have made, use, sell, offer to sell, and import the Lilly Compounds and any products containing a Lilly Compound, including any products containing a Lilly Compound and one or more additional active pharmaceutical ingredients (“APIs”) other than a Lilly Compound, which we refer to collectively as the “Lilly Licensed Products”, for all pharmaceutical uses, including all diagnostic, therapeutic, and prophylactic uses, for human or animal administration. Lilly retained rights under the Lilly IP and the Lilly Licensed Patents for internal research purposes.

Current wording

In May 2016, we entered into a license agreement (the “Lilly License Agreement”) with Eli Lilly and Company (“Lilly”). Pursuant to the terms of the Lilly License Agreement, Lilly granted us an exclusive, worldwide, royalty bearing, sublicensable license under certain technology, patent rights, know-how, and proprietary materials, which we refer to collectively as the “Lilly IP”, and such patents (the “Lilly Licensed Patents”), relating to the CRF 1 receptor antagonist compounds either listed in the Lilly License Agreement or covered by patent rights controlled by Lilly, which we refer to collectively as the “Lilly Compounds”, to research, develop, commercialize, make, have made, use, sell, offer to sell, and import the Lilly Compounds and any products containing a Lilly Compound, including any products containing a Lilly Compound and one or more additional active pharmaceutical ingredients (“APIs”) other than a Lilly Compound, which we refer to collectively as the “Lilly Licensed Products”, for all pharmaceutical uses, including all diagnostic, therapeutic, and prophylactic uses, for human or animal administration. Lilly retained rights under the Lilly IP and the Lilly Licensed Patents for internal research purposes.

Previous wording

Either party may terminate the Kaken License Agreement (i) in the event the other party shall have materially breached its obligations thereunder and such default shall have continued for a specified period after written notice thereof or (ii) upon the bankruptcy or insolvency of the other party. In addition, we may terminate the Kaken License Agreement upon prior written notice if Kaken ceases all development or commercialization activities for a specified period of time, subject to certain exceptions, or (iii)

Current wording

Either party may terminate the Kaken License Agreement (i) in the event the other party shall have materially breached its obligations thereunder and such default shall have continued for a specified period after written notice thereof or (ii) upon the bankruptcy or insolvency of the other party. In addition, we may terminate the Kaken License Agreement upon prior written notice if Kaken ceases all development or commercialization activities for a specified period of time, subject to certain exceptions, or (iii) challenges the validity, enforceability or scope of any of the patents licensed by us to Kaken under the Kaken License Agreement, subject to certain conditions. Kaken may terminate the Kaken License Agreement at any time for convenience upon prior written notice provided within a specified period of time to us.

Previous wording

As of March 31, 2024 and December 31, 2023, the outstanding principal was comprised of $3.0 million and $3.4 million, respectively, under the First Tranche. Repayment of principal under the First Tranche commenced in January 2023. Commitments available under the Second Tranche of $10.0 million expired on December 31, 2022.

Current wording

As of June 30, 2024 and December 31, 2023, the outstanding principal was comprised of $2.6 million and $3.4 million, respectively, under the First Tranche. Repayment of principal under the First Tranche commenced in January 2023. Commitments available under the Second Tranche of $10.0 million expired on December 31, 2022.

Previous wording

During the three months ended March 31, 2024 and 2023, we recognized $2.0 million, respectively, as collaboration revenue under the Kaken License Agreement.

Current wording

During the three months ended June 30, 2024 and 2023, we recognized $1.6 million and $2.2 million, respectively, as collaboration revenue under the Kaken License Agreement.

Previous wording

Research and development expenses decreased by $1.4 million during the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The overall decrease in research and development expenses was primarily related to the decrease in clinical development expenses and manufacturing expenses driven by the completion of enrollment in the CAHmelia-203 and CAHmelia-204 studies. This was offset by an increase in personnel related expenses attributable to restructuring charges related to severance and benefits and an increase in other research and development expenses to support clinical development operations. We expect research and development expenses to decrease following the decision to terminate the CAHmelia-203 study.

Current wording

Research and development expenses decreased by $5.0 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The overall decrease in research and development expenses was primarily related to the decrease in clinical development expenses and manufacturing expenses driven by the termination of the CAHmelia-203 study, completion of the POWER study, and the completion of enrollment in the CAHmelia-204 study, partially offset by an increase related to additional dose ranging cohorts in the CAHptain-205 clinical trial. There was also a decrease in personnel related expenses due to a decrease in headcount. We expect research and development expenses to decrease following the termination of the CAHmelia-203 clinical trial.

Previous wording

General and administrative expenses increased by $0.9 million during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to an increase in professional services, including legal, finance, and accounting and an increase in personnel expenses primarily due to an increase stock-based compensation expense.

Current wording

General and administrative expenses increased by $0.5 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to an increase in professional services, including legal, finance, and accounting and an increase in personnel expenses due to an increase in stock-based compensation expense.

Previous wording

Interest and other income, net increased by $0.6 million during the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase was primarily due to higher yield earned on money market fund balances in 2024.

Current wording

Interest and other income, net increased by $0.2 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The increase was primarily due to higher yield earned on money market fund balances in 2024.

Previous wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from operations. We anticipate that we will continue to incur net losses for the foreseeable future. As of March 31, 2024 and December 31, 2023, we had an accumulated deficit of $208.9 million and $197.2 million, respectively. As of March 31, 2024 and December 31, 2023, we had cash and cash equivalents of $81.2 million and $96.3 million, respectively. Since inception through March 31, 2024, we have raised aggregate gross proceeds of $293.1 million, including $103.5 million from our IPO in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $5.0 million from the issuance of debt, $53.6 million from a private placement financing in February 2023, and $15.0 million from the Kaken upfront payment received in April 2023.

Current wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from operations. We anticipate that we will continue to incur net losses for the foreseeable future. As of June 30, 2024 and December 31, 2023, we had an accumulated deficit of $218.0 million and $197.2 million, respectively. As of June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $69.7 million and $96.3 million, respectively. Since inception through June 30, 2024, we have raised aggregate gross proceeds of $293.1 million, including $103.5 million from our IPO in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $5.0 million from the issuance of debt, $53.6 million from a private placement financing in February 2023, and $15.0 million from the Kaken upfront payment received in April 2023.

Previous wording

We believe, based on our current operating plan, that our cash and cash equivalents as of March 31, 2024 will be sufficient to fund our operations and debt obligations for at least 12 months following the issuance date of our financial statements included elsewhere in this Quarterly Report. In addition, we have streamlined our operations and have implemented cost reduction measures, including termination of the CAHmelia-203 study and a reduction in force of approximately 21 percent, which has extended our cash runway through the end of 2025, beyond topline data readouts for CAHmelia-204 and additional dose ranging data from CAHptain-205.

Current wording

We believe, based on our current operating plan, that our cash and cash equivalents as of June 30, 2024 will be sufficient to fund our operations and debt obligations for at least 12 months following the issuance date of our financial statements included elsewhere in this Quarterly Report. In addition, we have streamlined our operations and have implemented cost reduction measures, including termination of the CAHmelia-203 study and a reduction in force of approximately 21% in March 2024, which has extended our cash runway through the end of 2025, beyond topline data readouts for CAHmelia-204 and additional dose ranging data from CAHptain-205.

Previous wording

At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, tildacerfont or any of our future product candidates. We expect our research and development expenses to increase significantly in the foreseeable future as we continue to invest in research and development activities related to developing tildacerfont, as tildacerfont continues advancing in late stage studies for the treatment of classic CAH in adult patients, as we conduct clinical trials of tildacerfont in additional indications beyond classic CAH in adult patients, as we seek regulatory approvals for tildacerfont, and incur expenses associated with hiring additional personnel to support our research and development efforts. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, the successful development of tildacerfont is highly uncertain, and we may never succeed in achieving regulatory approval for tildacerfont in classic CAH in adult patients or other indications.

Current wording

At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, tildacerfont or any of our future product candidates. We expect our research and development expenses to increase significantly in the foreseeable future as we continue to invest in research and development activities related to developing tildacerfont, as tildacerfont continues advancing in studies for the treatment of classic CAH in adult and pediatric patients, as we conduct clinical trials of tildacerfont in additional indications beyond classic CAH, as we seek regulatory approvals for tildacerfont, and incur expenses associated with hiring additional personnel to support our research and development efforts. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, the successful development of tildacerfont is highly uncertain, and we may never succeed in achieving regulatory approval for tildacerfont in classic CAH in adult and pediatric patients or other indications.

Previous wording

the effects of the disruptions to and volatility in the credit and financial markets in the United States and worldwide from geopolitical and macroeconomic events, including the COVID-19 pandemic, the wars in Ukraine and Israel and related sanctions, and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures.

Current wording

the effects of the disruptions to and volatility in the credit and financial markets in the United States and worldwide from geopolitical and macroeconomic events, including the wars in Ukraine and Israel and related sanctions, and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures.

Previous wording

We may be unable to raise additional funds or to enter into such agreements or arrangements on favorable terms, or at all. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from macroeconomic events, such as the COVID-19 pandemic, the wars in Ukraine and Israel and related sanctions, and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back, or discontinue the development or commercialization of tildacerfont or other research and development initiatives. We also could be required to seek collaborators for tildacerfont and any future product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to tildacerfont and any future product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves.

Current wording

We may be unable to raise additional funds or to enter into such agreements or arrangements on favorable terms, or at all. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from macroeconomic events, the wars in Ukraine and Israel and related sanctions, and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back, or discontinue the development or commercialization of tildacerfont or other research and development initiatives. We also could be required to seek collaborators for tildacerfont and any future product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to tildacerfont and any future product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves.

Previous wording

As of March 31, 2024, future payments of principal and interest on the Term Loan, which commenced repayment in January 2023 and matures in January 2026, were $3.2 million. For a description of the terms of the Loan Agreement, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Material Agreements — Loan Agreement" above.

Current wording

As of June 30, 2024, future payments of principal and interest on the Term Loan, which commenced repayment in January 2023 and matures in January 2026, were $2.8 million. For a description of the terms of the Loan Agreement, see the section titled

Previous wording

As of March 31, 2024, the total undiscounted lease payments for our non-cancelable operating lease for office space, which terminates in February 2028 unless renewed, was $1.4 million.

Current wording

As of June 30, 2024, the total undiscounted lease payments for our non-cancelable operating lease for office space, which terminates in February 2028 unless renewed, was $1.3 million.

Previous wording

For the three months ended March 31, 2024, net cash provided by investing activities was nil.

Current wording

For the six months ended June 30, 2024, net cash provided by investing activities was nil.

Previous wording

For the three months ended March 31, 2023, net cash provided by investing activities was $10.5 million, consisting of proceeds from maturities of investments of $22.4 million offset by purchases of investments of $11.9 million.

Current wording

For the six months ended June 30, 2023, net cash provided by investing activities was $32.5 million consisting of proceeds from maturities of investments of $44.4 million offset by purchases of investments of $11.9 million.

Previous wording

For the three months ended March 31, 2024, net cash used in financing activities was $0.2 million, consisting primarily of principal payments on the Term Loan of $0.4 million, offset by proceeds of $0.2 million from stock option exercises.

Current wording

For the six months ended June 30, 2024, net cash used in financing activities was $0.6 million, consisting primarily of principal payments on the Term Loan of $0.4 million, offset by proceeds of $0.2 million from stock option exercises.

Previous wording

For the three months ended March 31, 2023, net cash provided by financing activities was $50.5 million, consisting primarily of net proceeds received from the February 2023 private placement of $51.0 million, offset by principal payments on the Term Loan of $0.4 million.

Current wording

For the six months ended June 30, 2023, net cash provided by financing activities was $50.1 million, consisting primarily of net proceeds received from the February 2023 private placement of $50.9 million, offset by principal payments on the Term Loan of $0.8 million.

Previous wording

Our critical accounting estimates are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Annual Report. During the three months ended March 31, 2024, there were no changes to our critical accounting estimates from those discussed in the Annual Report.

Current wording

Our critical accounting estimates are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Annual Report. During the six months ended June 30, 2024, there were no changes to our critical accounting estimates from those discussed in the Annual Report.