Kyverna Therapeutics Inc
For the period ended Jun 30, 2024. Filed Aug 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 12, 2024
KYTX$4.88+5.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0000950170-24-059628
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-12.
0000950170-24-095462
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 178 previous paragraphs and 156 current paragraphs.
122 unchanged; 20 reworded; 7 added; 36 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 4 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
our ability to prosecute, grow and defend our intellectual property portfolio against infringement claims;
Current report
our ability to expand internationally;
Current report
not meaningful
Current report
Comparison of the Six Months Ended June 30, 2024 and 2023
Current report
not meaningful
Current report
Research and development expenses increased by $30.7 million, or 160%, from $19.1 million for the six months ended June 30, 2023 to $49.8 million for the six months ended June 30, 2024. License fees for the six months ended June 30, 2024 and 2023 mainly included expenses related to the minimum annual royalties of $0.3 million payable under our in-licensing agreements during the six months ended June 30, 2024. CRO, CMO and other third-party preclinical studies and clinical trial expenses increased by $22.6 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, as we continued advancing our lead product candidate, KYV-101, through clinical development, and we continued to advance KYV-201 through preclinical development. Other research and development costs, including laboratory materials and supplies, decreased by $1.2 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, mainly due to the timing of procurement of materials for our research and development activities.
Current report
Personnel-related research and development costs increased by $7.1 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 as a result of hiring personnel in our research and development organization. Our research and development headcount increased from 52 as of June 30, 2023 to 88 as of June 30, 2024. The increase in personnel-related research and development costs included an increase of $1.0 million in stock-based compensation expense. Facilities and overhead costs increased by $2.1 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, mainly due to a $0.6 million increase in scientific conference expense, a $0.5 million increase in software license expense, a $0.4 million increase in depreciation expense, a $0.2 million increase in equipment repair expense and a $0.7 million increase in allocated overhead expenses, partially offset by a $0.3 million decrease in rent expense.
Removed paragraphs (36)
Previous report
License and Collaboration Agreements
Previous report
Patent License Agreements with the National Institutes of Health
Previous report
In May 2021, we entered into two patent license agreements, or the NIH Agreements, with the National Institutes of Health, or the NIH, pursuant to which we obtained exclusive, worldwide licenses to certain patents to use a novel, fully human anti-CD19 CAR in our autologous and allogeneic CAR T-cell products for the treatment of patients with autoimmune disease. We paid $3.3 million for the acquired licenses.
Previous report
Commencing in January 2023 and subsequently on January 1 of each calendar year thereafter until the NIH Agreements terminate, we are required to make minimum annual royalty payments of $0.2 million, which, commencing January 1, 2024, may be credited against any earned royalties due based on a low single-digit percentage of net sales made in a respective year. In addition, benchmark royalties following the completion of certain regulatory-and clinical-related benchmarks are due to the NIH, with the minimum cumulative royalty due for the first product reaching FDA approval or foreign-equivalent approval totaling $5.7 million for the autologous patent license agreement and $1.7 million for the allogeneic patent license agreement. Additional benchmark royalties would be payable for a subsequent indication under each NIH Agreement. If we enter into a sublicensing agreement, we are required to pay the NIH a sublicense royalty as a percentage of the fair market value of any consideration received for each sublicense granted. The sublicensing percentage starts at a high teens to low twenties percentage if clinical trials for the product candidate have not yet begun and decreases to a mid-single-digit percentage if the product candidate receives FDA approval or foreign-equivalent approval.
Previous report
Unless terminated sooner, the NIH Agreements remain in effect until the last licensed patent rights granted pursuant to the respective agreement expire.
Previous report
We accounted for the acquisition of the licenses, including patent rights and know-how, as an asset acquisition. As the acquired technology did not have an alternative use for accounting purposes, we recorded the consideration of $3.3 million as a research and development expense in the statements of operations and comprehensive loss for the year ended December 31, 2021. We recognized $0.2 million as research and development expense related to minimum annual royalty payments for the three months ended March 31, 2024. No benchmark royalties were probable or payable as of March 31, 2024 and December 31, 2023.
Previous report
Intellia License and Collaboration Agreement
Previous report
In December 2021, we entered into a License and Collaboration Agreement, or the Intellia Agreement, with Intellia Therapeutics, Inc., or Intellia, to research and develop an allogeneic CD19-directed CAR cell therapy product, or the CRISPR Product, suitable for validation through pre-clinical and clinical proof-of-concept clinical trials, including the performance of activities as agreed in the collaboration plan. Pursuant to the Intellia Agreement, Intellia granted us an exclusive, worldwide, sublicensable in multiple tiers, royalty bearing license under certain of Intellia’s intellectual property to research, develop, sell and otherwise exploit the CRISPR Product. We are performing the majority of the work under the collaboration plan.
Previous report
As a consideration for the licenses granted to us pursuant to the Intellia Agreement, we issued to Intellia shares of Series B Preferred Stock with a fair value of $7.0 million. We are also obligated to make aggregate milestone payments to Intellia of up to $64.5 million upon the achievement of specified development and regulatory milestones and are obligated to pay to Intellia low to mid-single-digit royalties as a percentage of annual worldwide sales, subject to certain adjustments, and additional potential royalties and milestones to Intellia’s licensors. The royalties are payable on a country-by-country basis, commencing upon the first commercial sale of the CRISPR Product in the applicable country and expiring upon the later of (i) 12 years after the first commercial sale or (ii) the expiration of the last-to-expire valid patent claim.
Previous report
Under the Intellia Agreement, Intellia owns rights, title and interests in and to any intellectual property developed in the course of performance under the Intellia Agreement that is not specifically directed to the CRISPR Product. We granted to Intellia certain non-exclusive, royalty-free, fully paid-up, worldwide licenses under our intellectual property solely to perform the activities designated to Intellia under the collaboration, and to research, develop or otherwise exploit any human therapeutic product that is developed or commercialized by Intellia, utilizes or incorporates Intellia intellectual property and that is not the CRISPR Product or any product directed to CD19 or any other B-cell antigen.
Previous report
In addition, we granted Intellia an exclusive option, or the Intellia Option, to enter into a co-development and co-commercialization agreement with us for the CRISPR Product, or the Co-Co Agreement, for a fee payable to us. If Intellia exercises the Intellia Option, we and Intellia would share equally the regulatory and clinical development expenses associated with obtaining approval of the CRISPR Product in the United States and would also share equally all net profits and losses from commercialization of the CRISPR Product in the United States. If Intellia exercises the Intellia Option, no milestone payments will be due and payable from that time forward and we will only pay royalties on sales outside of the United States. In addition, upon exercise of the Intellia Option, following regulatory approval of the CRISPR Product, Intellia will have exclusive commercialization rights for the CRISPR Product for U.S. administration, subject to our rights to co-promote the CRISPR Product in the United States, and we will retain the sole and exclusive rights to research, develop, or otherwise exploit the CRISPR Product for rest-of-world administration and shall have sole decision-making authority in relation thereto, subject to the parties’ obligations to cooperate regarding certain development, regulatory and commercialization strategies.
Previous report
During the term of the Co-Co Agreement, subject to certain exceptions, neither party will clinically develop or commercialize a cell therapy product directed to CD19 other than the CRISPR Product for use in the treatment or prevention of certain indications set forth in the Intellia Agreement and any additional indication that the parties mutually agree to include (any such product, a Competitive Product); provided, however, that (i) any products for use in any indications that are the subject of a development program or third-party collaboration as of the effective date of the Co-Co Agreement shall not be considered Competitive Products and (ii) any products for use in any additional indications that are the subject of a development program or third-party collaboration as of the date that such additional indications are included in the global development plan shall not be considered Competitive Products.
Previous report
The Intellia Agreement terminates on a country-by-country basis upon the expiration of the last valid claim within Intellia’s patent rights covering the CRISPR Product within such country, unless the agreement is earlier terminated in its entirety by either party for insolvency, by either party for material breach of contract, by Intellia if we participate in legal action or proceeding challenging the validity or enforceability of Intellia’s patents, or by the execution of the Co-Co Agreement. We may terminate the Intellia Agreement in its entirety, or on a country-by-country basis, by providing a written notice after the expiration or termination of the Intellia Option. Following the expiration of the term for a given country, the licenses granted to us in such country will automatically become fully paid-up, perpetual, irrevocable and royalty-free licenses.
Previous report
No milestone payments were probable or payable as of March 31, 2024 and December 31, 2023.
Previous report
Gilead Collaboration, Option and License Agreement
Previous report
In January 2020, we entered into a Collaboration, Option and License Agreement, or the Gilead Agreement, with Gilead. Simultaneously with the entry into the Gilead Agreement, we entered into (i) a License Agreement, or the Kite Agreement, with Kite Pharma, Inc., or Kite, an affiliate of Gilead, and (ii) a stock purchase agreement, pursuant to which we issued to Gilead an aggregate of 6,890,744 shares of our Series A-2 redeemable convertible preferred stock, of which 4,042,066 shares were issued as consideration under the Kite Agreement.
Previous report
Pursuant to the Gilead Agreement, we and Gilead collaborated to develop potential cell-based therapy products using the SynNotch Technology and the SynNotch intellectual property related thereto, controlled by Gilead through Kite, for the treatment, diagnosis or prevention of autoimmune, inflammatory, or allogeneic stem cell transplant inflammatory diseases (excluding post-transplant infectious diseases), subject to certain exceptions. The Gilead Agreement initially involved the research and development of cell-based products for the treatment, diagnosis or prevention of two indications under two research programs and non-exclusive research licenses, specifically, Crohn’s disease, or Program A, and Ulcerative colitis, or Program B. Upon execution of the Gilead Agreement, Gilead paid us a one-time, non-refundable and non-creditable payment of $17.5 million.
Previous report
Pursuant to the Gilead Agreement, we also granted Gilead, on a research program-by-program basis, an exclusive option, exercisable at any time during the Option Period for such program, to obtain an exclusive license under such program’s intellectual property to develop, manufacture, and commercialize optioned products belonging to such program for a specified fee and on the terms and conditions set out in the Gilead Agreement. For purposes of the foregoing, an Option Period meant, on a program-by-program basis, the period commencing on the date of execution of the Gilead Agreement and ending upon the earlier of (i) the expiration of the review period for such program and (ii) the ten-year anniversary of the date of execution of the Gilead Agreement.
Previous report
On November 30, 2022, after the completion of research activities under Program A and Program B, Gilead provided us with notice that Program A and Program B were terminated. There are currently no other active programs under the Gilead Agreement.
Previous report
On October 24, 2023, after agreement by both parties that the Gilead Agreement had no active programs, Gilead provided us with 90 days’ written notice to terminate the Gilead Agreement, and such termination became effective as of January 22, 2024.
Previous report
We concluded that the Gilead Agreement was in the scope of revenue recognition guidance. We estimated the transaction price as $17.5 million, which was allocated to two performance obligations, Program A and Program B, based on the relative fair value of each program. Other milestone payments were constrained and not included in the transaction price as they were considered not probable.
Previous report
As of March 31, 2024 and December 31, 2023, Gilead owned less than 10% and more than 10% of our outstanding equity, respectively.
Previous report
Kite License Agreement
Previous report
Concurrently with the Gilead Agreement, we entered into the Kite Agreement. Pursuant to the Kite Agreement, Kite granted to us a ten-year, co-exclusive license for the SynNotch technology primarily used in our own internal research and development programs for the treatment, diagnosis or prevention of autoimmune, inflammatory or allogeneic stem cell transplant inflammatory diseases (excluding post-transplant infectious diseases). Upon expiration of the ten-year co-exclusive license term, the license will become a non-exclusive license through expiration of the related patents.
Previous report
Kite had licensed certain of the SynNotch technology included in the Kite Agreement pursuant to that certain Amended and Restated Exclusive License Agreement, between The Regents of the University of California and Kite (as successor to Cell Design Labs, Inc.), or the UCSF License Agreement. We are responsible for all costs and payments arising under the UCSF License Agreement and as a result of activities under the Kite Agreement, including earned royalties based on a low single-digit percentage of net sales, milestone payments in an aggregate amount of up to $10.8 million and accrued interest payables. Pursuant to the Kite Agreement, we are also obligated to pay mid-teen-and mid-single-digit percentages of annual maintenance fees, minimum annual royalties and patent prosecution costs payable under the UCSF License Agreement during the co-exclusive term and non-exclusive term, respectively. We were also obligated to pay a $6.3 million sublicensing fee under the UCSF License Agreement, which we agreed to offset with future milestone payments payable by Gilead under the Gilead Agreement.
Previous report
Unless terminated earlier, the Kite Agreement will expire upon the expiration of all licensed patents and Kite improvement patents therein. We have the right to terminate the Kite Agreement at will, in our sole discretion, in its entirety upon 90 days’ written notice to Kite. In addition, either party may terminate the Kite Agreement for uncured material breach by the other party, or upon the occurrence of insolvency-related events of the other party.
Previous report
The acquisition of the co-exclusive license under the Kite Agreement, including patent rights and know-how, was accounted for as an asset acquisition. As the acquired technology did not have an alternative use for accounting purposes, the consideration of $3.5 million was recorded as a research and development expense in the statements of operations and comprehensive loss for the year ended December 31, 2020. The sublicensing fee payable of $6.3 million was recognized as research and development expenses in the statement of operations and comprehensive loss for the year ended December 31, 2020.
Previous report
As of March 31, 2024 and December 31, 2023, we recognized the total sublicensing fee of $6.3 million as current accrued license expense – related party, of which $2.5 million became payable as a result of the qualified financing. We expect to pay such amount of $2.5 million by mid-2024. The remaining $3.8 million was available to be offset against future milestones payable by Gilead under the Gilead Agreement; however, due to the termination of the Gilead Agreement, there are no future milestones payable to offset the sublicensing fee, and the payment schedule for the remaining $3.8 million of the sublicensing fee has not been agreed to by us and Gilead.
Previous report
We only paid minimal costs related to annual maintenance fees, patent prosecutions costs and minimal annual royalties for the three months ended March 31, 2024 and 2023 under the Kite Agreement. No milestone payments were due or payable under the Kite Agreement as of March 31, 2024 and December 31, 2023.
Previous report
Research and Development Expenses
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General and Administrative Expenses
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Interest Income
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Research and Development Expenses
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General and Administrative Expenses
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Interest Income
Previous report
Net cash used in financing activities for the three months ended March 31, 2023, was $0.1 million, which primarily consisted of a payment of $0.2 million related to finance lease obligations.
Reworded paragraphs (20)
Previous wording
We intend to initially focus our neurology development on myasthenia gravis, or MG, and multiple sclerosis, or MS. We received IND clearance in November 2023 for a Phase 2 trial in MG, and we received IND clearance in December 2023 for a Phase 2 trial in MS. We also received U.S. Food and Drug Administration Orphan Drug Designation in April 2024 for KYV-101 for the treatment of MG. We believe our approach may present a significant advantage over current standard-of-care therapies for autoimmune diseases by aiming to directly deplete B cells and potentially resetting disease-contributing B cells.
Current wording
We intend to initially focus our neurology development on myasthenia gravis, or MG; multiple sclerosis, or MS; and stiff person syndrome, or SPS. We received IND clearance in November 2023 for a Phase 2 trial in MG, IND clearance in December 2023 for a Phase 2 trial in MS, and IND clearance in June 2024 for a Phase 2 trial in SPS. We received U.S. Food and Drug Administration Orphan Drug Designation in April 2024 for KYV-101 for the treatment of MG. Furthermore, we received U.S. Food and Drug Administration Regenerative Medicine Advanced Therapy (RMAT) designation in July 2024 for KYV-101 for the treatment of SPS. We believe our approach may present a significant advantage over current standard-of-care therapies for autoimmune diseases by aiming to directly deplete B cells and potentially resetting disease-contributing B cells.
Previous wording
We have incurred significant losses and negative cash flows from operations since our inception. We have funded our operations primarily from sales of our redeemable convertible preferred stock, issuances of convertible notes, revenue from our collaboration agreement with Gilead Sciences, Inc., or Gilead, which terminated effective as of January 22, 2024, and from the sale of shares of our common stock in our initial public offering (the “IPO”) in February 2024. Our net losses were $26.7 million and $11.1 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, we had an accumulated deficit of $162.7 million. Management has determined that our cash and cash equivalents and available-for-sale marketable securities of $369.8 million as of March 31, 2024 will be sufficient to fund our planned operations for at least one year from the date of this Quarterly Report on Form 10-Q. We plan to monitor expenses and raise additional capital through equity or debt financings, strategic alliances or licensing arrangements. Our ability to access capital when needed is not assured and if capital is not available to us when, and in the amounts, needed, we could be required to delay, scale back or abandon some or all of our development programs and other operations, which could materially harm our business, financial condition and results of operations.
Current wording
We have incurred significant losses and negative cash flows from operations since our inception. We have funded our operations primarily from sales of our redeemable convertible preferred stock, issuances of convertible notes, revenue from our collaboration agreement with Gilead Sciences, Inc., or Gilead, which terminated effective as of January 22, 2024, and from the sale of shares of our common stock in our initial public offering (the “IPO”) in February 2024. Our net losses were $28.8 million and $55.5 million for the three and six months ended June 30, 2024, respectively, compared with $13.1 million and $24.2 million net losses for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $191.5 million. Management has determined that our cash and cash equivalents and available-for-sale marketable securities of $346.2 million as of June 30, 2024 will be sufficient to fund our planned operations for at least one year from the date of this Quarterly Report on Form 10-Q. We plan to monitor expenses and raise additional capital through equity or debt financings, strategic alliances or licensing arrangements. Our ability to access capital when needed is not assured and if capital is not available to us when, and in the amounts, needed, we could be required to delay, scale back or abandon some or all of our development programs and other operations, which could materially harm our business, financial condition and results of operations.
Previous wording
procure manufacturing of clinical supply for our product candidates;
Current wording
procure manufacturing of clinical supply and manufacturing operations for our product candidates;
Previous wording
Interest expense consists primarily of interest expense related to our lab equipment finance leases.
Current wording
Interest expense consists primarily of interest expense related to our laboratory equipment finance leases.
Previous wording
Research and development expenses increased by $13.8 million, or 158%, from $8.7 million for the three months ended March 31, 2023 to $22.5 million for the three months ended March 31, 2024. License fees for the three months ended March 31, 2024 and 2023 mainly included expenses related to the minimum annual royalties of $0.2 million payable to the NIH. CRO, CMO and other third-party preclinical studies and clinical trial expenses increased by $9.9 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, as we continued advancing our lead product candidate, KYV-101, through clinical development, and we continued to advance KYV-201 through preclinical development. Other research and development costs, including laboratory materials and supplies, decreased by $0.5 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, mainly due to the timing of procurement of materials for our research and development activities.
Current wording
Research and development expenses increased by $16.9 million, or 163%, from $10.4 million for the three months ended June 30, 2023 to $27.3 million for the three months ended June 30, 2024. License fees of $0.1 million and zero for the three months ended June 30, 2024 and 2023, respectively, mainly included expenses related to the minimum annual royalties payable under our in-licensing agreements. CRO, CMO and other third-party preclinical studies and clinical trial expenses increased by $12.7 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, as we continued advancing our lead product candidate, KYV-101, through clinical development, and we continued to advance KYV-201 through preclinical development. Other research and development costs, including laboratory materials and supplies, decreased by $0.8 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, mainly due to the timing of procurement of materials for our research and development activities.
Previous wording
Personnel-related research and development costs increased by $3.4 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 as a result of hiring personnel in our research and development organization. Our research and development headcount increased from 46 as of March 31, 2023 to 79 as of March 31, 2024. The increase in personnel-related research and development costs included an increase of $0.5 million in stock-based compensation expense. Facilities and overhead costs increased by $1.0 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, mainly due to a $0.3 million increase in software license expense, a $0.2 million increase in depreciation expense and a $0.3 million increase in allocated overhead expenses.
Current wording
Personnel-related research and development costs increased by $3.8 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 as a result of hiring personnel in our research and development organization. Our research and development headcount increased from 52 as of June 30, 2023 to 88 as of June 30, 2024. The increase in personnel-related research and development costs included an increase of $0.6 million in stock-based compensation expense. Facilities and overhead costs increased by $1.1 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, mainly due to a $0.5 million increase in scientific conference costs, a $0.3 million increase in depreciation expense, a $0.2 million increase in software license expense, a $0.1 million increase in equipment repair costs and a $0.3 million increase in allocated overhead expenses, offset by a $0.3 million decrease in rent expense.
Previous wording
During the three months ended March 31, 2024, KYV-101 program expenses increased by $8.4 million, primarily attributable to a $7.4 million increase in CRO, CMO and other clinical trials costs as we continued to advance KYV-101 through clinical development across two broad areas of autoimmune disease: rheumatology and neurology. KYV-101 program expenses during the three months ended March 31, 2024 also include $1.5 million of external expense related to the development of our Ingenui-T manufacturing process. KYV-201 expenses for the three months ended March 31, 2024 increased by $0.6 million, mainly due to an increase in CRO, CMO and other third-party preclinical studies, as we continued to advance KYV-201 through preclinical development. Other programs and research and development activities increased by $0.4 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 and include expenses related to our preclinical activities, including reagents, lab supplies, outsourced research and development and professional consulting services.
Current wording
During the three months ended June 30, 2024, KYV-101 program expenses increased by $10.2 million primarily attributable to a $9.0 million increase in CRO, CMO and other clinical trials costs as we continued to advance KYV-101 through clinical development across two broad areas of autoimmune disease: rheumatology and neurology. KYV-101 program CRO, CMC and other clinical trial costs during the three months ended June 30, 2024 also include $0.8 million of external expense related to the development of our Ingenui-T manufacturing process. Other change relates to a $1.2 million increase in professional consulting costs. KYV-201 expenses for the three months ended June 30, 2024 increased by $1.4 million, mainly due to an increase in CRO, CMO and other third-party preclinical studies, as we continued to advance KYV-201 through preclinical development. Other programs and research and development activities increased by $0.5 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and include expenses related to our preclinical activities, including reagents, lab supplies, outsourced research and development and professional consulting services.
Previous wording
Interest income increased $2.4 million, from $0.3 million for the three months ended March 31, 2023 to $2.7 million for the three months ended March 31, 2024. The increase primarily relates to increased amounts invested in available-for-sale marketable securities and cash equivalents as well as an increase in interest rates on these securities during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Current wording
Interest income increased $4.4 million, from $0.3 million for the three months ended June 30, 2023 to $4.7 million for the three months ended June 30, 2024. The increase primarily relates to increased amounts invested in available-for-sale marketable securities and cash equivalents as well as an increase in interest rates on these securities during the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Previous wording
General and administrative expenses increased $4.1 million, or 152%, from $2.7 million for the three months ended March 31, 2023 to $6.9 million for the three months ended March 31, 2024. The increase in general and administrative expenses was primarily attributable to a $2.4 million increase in salaries and benefits, including an increase of $1.4 million in stock-based compensation expense, an increase of $1.1 million in professional services costs related to legal, accounting and consulting services, and a $0.7 million increase in facilities and overhead costs. The increase in stock-based compensation expense for the three months ended March 31, 2024 includes a one-time stock-based compensation expense of $1.1 million in connection with the CEO note forgiveness. The increase in the facilities and overhead costs is primarily due to a $0.2 million increase in rent expense, a $0.2 million increase in software license expenses, and a $0.2 million increase in other allocated overhead costs.
Current wording
General and administrative expenses increased $7.4 million, or 131%, from $5.6 million for the six months ended June 30, 2023 to $13.0 million for the six months ended June 30, 2024. The increase in general and administrative expenses was primarily attributable to a $3.8 million increase in salaries and benefits, including an increase of $1.6 million in stock-based compensation expense, an increase of $1.8 million in professional services costs related to legal, accounting and consulting services, and a $1.8 million increase in facilities and overhead costs. The increase in stock-based compensation expense for the six months ended June 30, 2024 includes a one-time stock-based compensation expense of $1.1 million in connection with the CEO note forgiveness. The increase in the facilities and overhead costs is primarily due to a $0.7 million increase in rent expense, a $0.4 million increase in software license expenses, and a $0.3 million increase in D&O insurance expenses.
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 our operations. Through March 31, 2024, we have primarily funded our operations from sales of shares of our redeemable convertible preferred stock of $168.0 million, issuances of convertible notes of $2.0 million, an upfront payment of $17.5 million under the Gilead Agreement and net proceeds from the IPO of $336.2 million. As of March 31, 2024, we had $369.8 million in cash, cash equivalents and available-for-sale marketable securities.
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 our operations. Through June 30, 2024, we have primarily funded our operations from sales of shares of our redeemable convertible preferred stock of $168.0 million, issuances of convertible notes of $2.0 million, an upfront payment of $17.5 million under the Gilead Agreement and net proceeds from the IPO of $336.2 million. As of June 30, 2024, we had $346.2 million in cash, cash equivalents and available-for-sale marketable securities.
Previous wording
We have incurred significant losses and negative cash flows from operations since our inception. As of March 31, 2024, we had an accumulated deficit of $162.7 million. Based on the current cash forecast, management has determined that our cash and cash equivalents and available-for-sale marketable securities of $369.8 million as of March 31, 2024 will be sufficient to fund our planned operations for at least one year from the date of this Quarterly Report on Form 10-Q. This forecast of cash resources and planned operations involves risks and uncertainties, and the actual amount of expenses could vary materially as a result of a number of factors.
Current wording
We have incurred significant losses and negative cash flows from operations since our inception. As of June 30, 2024, we had an accumulated deficit of $191.5 million. Based on the current cash forecast, management has determined that our cash and cash equivalents and available-for-sale marketable securities of $346.2 million as of June 30, 2024 will be sufficient to fund our planned operations for at least one year from the date of this Quarterly Report on Form 10-Q. This forecast of cash resources and planned operations involves risks and uncertainties, and the actual amount of expenses could vary materially as a result of a number of factors.
Previous wording
Net cash used in operating activities was $25.5 million and $11.5 million for the three months ended March 31, 2024 and 2023, respectively.
Current wording
Net cash used in operating activities was $49.7 million and $22.7 million for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
Cash used in operating activities for the three months ended March 31, 2023, was primarily due to our net loss of $11.1 million, decreased by non-cash charges of $1.2 million and increased by a net reduction of $1.5 million in our net operating assets and liabilities. The non-cash charges primarily consisted of a $0.5 million stock-based compensation expense, a $0.4 million non-cash lease expense, a $0.4 million depreciation and amortization expense, partially offset by $0.1 million of income related to the accretion of discounts on available-for-sale marketable securities. The change in our net operating assets and liabilities was primarily due to a $0.8 million decrease in accrued compensation, an increase in other non-current assets of $0.4 million, a decrease in operating lease liabilities of $0.3 million and an increase in prepaid expenses and other current assets of $0.2 million, offset by a $0.1 million increase in accounts payable and a $0.1 increase in other accrued expenses and current liabilities.
Current wording
Cash used in operating activities for the six months ended June 30, 2024, was primarily due to our net loss of $55.5 million, decreased by non-cash charges of 3.2 million and increased by a net reduction of $2.6 million in our net operating assets and liabilities. The non-cash charges primarily consisted of a $3.6 million stock-based compensation expense, a $1.2 million non-cash lease expense and a $1.0 million depreciation and amortization expense, partially offset by $2.5 million of income related to the accretion of discounts on available-for-sale marketable securities. The change in our net operating assets and liabilities was primarily due to a decrease in operating lease liability of $1.1 million, a decrease in other non-current assets of $0.3 million and a decrease in accrued compensation of $0.1 million, offset by an increase in other current liabilities of $2.6 million, an increase in accounts payable by $1.0 million and an increase in prepaid expense and other current assets of $0.5 million.
Previous wording
Cash used in operating activities for the three months ended March 31, 2024, was primarily due to our net loss of $26.7 million, decreased by other non-cash charges of $3.0 million and increased by a net reduction of $1.8 million in our net operating assets and liabilities. Non-cash changes primarily consisted of a $2.3 million stock-based compensation expense, a $0.5 million depreciation and amortization expense and a $0.5 million non-cash lease expense, partially offset by a $0.3 million accretion of discount on available-for-sale marketable securities. The change in our net operating assets and liabilities was primarily due to an increase in prepaid other current assets of $2.6 million, a $1.4 million decrease in accrued compensation, a decrease in operating lease liabilities of $0.5 million, an increase in other non-current assets of $0.3 million and a $0.1 million decrease in other accrued expenses and current liabilities, offset by an increase in accounts payable of $3.1 million,
Current wording
Cash used in operating activities for the six months ended June 30, 2023, was primarily due to our net loss of $24.2 million, decreased by non-cash charges of $2.5 million and increased by a net reduction of $1.0 million in our net operating assets and liabilities. The non-cash charges primarily consisted of a $0.9 million stock-based compensation expense, a $0.8 million non-cash lease expense and a $0.8 million depreciation and amortization expense, partially offset by $0.1 million of income related to the accretion of discounts on available-for-sale marketable securities. The change in our net operating assets and liabilities was primarily due to a decrease in prepaid expense and other current assets of $0.8 million, a decrease in operating lease liability of $0.8 million and a decrease in accrued compensation of $0.3 million, offset by a $0.6 million increase in accounts payable and $0.3 million increase in other current liabilities.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2024, was $122.9 million, which consisted of $145.3 million of purchases of available-for-sale marketable securities and $0.5 million of purchases of property and equipment, offset by $23.0 million in proceeds from maturities of available-for-sale marketable securities.
Current wording
Net cash used in investing activities for the six months ended June 30, 2024, was $190.8 million, which consisted of $225.2 million of purchases of available-for-sale marketable securities and $1.6 million of purchases of property and equipment, offset by $36.0 million in proceeds from maturities of available-for-sale marketable securities.
Previous wording
Net cash provided by investing activities for the three months ended March 31, 2023, was $13.7 million, which consisted of $13.7 million in proceeds from maturities of available-for-sale marketable securities, partially offset by less than $0.1 million of purchases of property and equipment.
Current wording
Net cash provided by investing activities for the six months ended June 30, 2023, was $13.7 million, which consisted of $13.7 million in proceeds from maturities of available-for-sale marketable securities, partially offset by less than $0.1 million of purchases of property and equipment.
Previous wording
Net cash provided by financing activities for the three months ended March 31, 2024, was $338.0 million, which consisted of $341.2 million cash proceeds from the issuance of shares of our common stock in the IPO, net of underwriting discount and less than $0.1 million of proceeds from exercises of stock options, partially offset by $3.0 million payments for deferred offering costs and a payment of $0.2 million related to finance lease obligations.
Current wording
Net cash provided by financing activities for the six months ended June 30, 2024, was $337.5 million, which consisted of $341.2 million cash proceeds from the issuance of shares of our common stock in the IPO, net of underwriting discount and less than $0.1 million of proceeds from exercises of stock options, partially offset by $3.4 million payments for deferred offering costs and a payment of $0.5 million related to finance lease obligations.
Previous wording
We have milestone, royalty and other payments due to third parties under our existing license and collaboration agreements. Refer to Note 6 to our condensed financial statements included in this Quarterly Report on Form 10-Q for additional details. We cannot estimate when such payments will be due and none of these events were probable to occur as of March 31, 2024, except for the sublicensing fee under our Kite Agreement as discussed above under “License and Collaboration Agreements—Kite License Agreement”.
Current wording
We have milestone, royalty and other payments due to third parties under our existing license and collaboration agreements. Refer to Note 6 to our condensed financial statements included in this Quarterly Report on Form 10-Q for additional details. We cannot estimate when such payments will be due and none of these events were probable to occur as of June 30, 2024, except for the sublicensing fee under our Kite Agreement as discussed in Note 6 to our condensed financial statements included in this Quarterly Report on Form 10-Q under “Kite License Agreement (Related Party)”.
Previous wording
As of March 31, 2024, we leased approximately 68,000 square feet of office and laboratory space in Emeryville, California under operating leases which have terms through February 2027. We also have multiple leases for laboratory equipment with 36-month terms that are accounted for as finance leases. As of March 31, 2024, our non-cancellable lease obligations were $10.5 million and $1.8 million under operating and finance leases, respectively, of which $2.7 million and $1.0 million related to operating and finance leases, respectively, are due within the next 12 months.
Current wording
As of June 30, 2024, we leased approximately 68,000 square feet of office and laboratory space in Emeryville, California under operating leases which have terms through February 2027. We also have multiple leases for laboratory equipment with 36-month terms that are accounted for as finance leases. As of June 30, 2024, our non-cancellable lease obligations were $9.7 million and $1.5 million under operating and finance leases, respectively, of which $2.9 million and $1.0 million related to operating and finance leases, respectively, are due within the next 12 months.
Previous wording
Our significant accounting policies and critical accounting estimates are described in Note 2 to our audited financial statements for the year ended December 31, 2023 included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 26, 2024. There have been no material changes to our significant accounting policies or critical accounting estimates during the three months ended March 31, 2024, except the fair value of our common stock is the closing price per share on NASDAQ at the grant date for stock-based awards granted as of and subsequent to the IPO.
Current wording
Our significant accounting policies and critical accounting estimates are described in Note 2 to our audited financial statements for the year ended December 31, 2023 included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 26, 2024. There have been no material changes to our significant accounting policies or critical accounting estimates during the six months ended June 30, 2024, except the fair value of our common stock is the closing price per share on NASDAQ at the grant date for stock-based awards granted as of and subsequent to the IPO.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
General and administrative expenses increased $3.2 million, or 111%, from $2.9 million for the three months ended June 30, 2023 to $6.1 million for the three months ended June 30, 2024. The increase in general and administrative expenses was primarily attributable to a $1.4 million increase in salaries and benefits, including an increase of $0.3 million in stock-based compensation expense, an increase of $0.7 million in professional services costs related to legal, accounting and consulting services, and a $1.1 million increase in facilities and overhead costs. The increase in the facilities and overhead costs is primarily due to a $0.5 million increase in rent expense, a $0.2 million increase in D&O insurance expenses and a $0.1 million increase in software license expenses.
Current report — wording carried from elsewhere
The following table summarizes our results of operations for the periods presented:
Current report — wording carried from elsewhere
The following table summarizes our research and development expenses for the periods presented:
Current report — wording carried from elsewhere
The following table summarizes our external costs by program for the periods presented:
Current report — wording carried from elsewhere
During the six months ended June 30, 2024, KYV-101 program expenses increased by $18.6 million, primarily attributable to a $16.4 million increase in CRO, CMO and other clinical trials costs as we continued to advance KYV-101 through clinical development across two broad areas of autoimmune disease: rheumatology and neurology. KYV-101 program CRO, CMO and other clinical trials costs during the six months ended June 30, 2024 also include $2.3 million of external expense related to the development of our Ingenui-T manufacturing process. Other change relates to a $2.1 million increase in profession consulting costs and a $0.2 million in other external costs for KYV-101. KYV-201 expenses for the six months ended June 30, 2024 increased by $1.9 million, mainly due to an increase in CRO, CMO and other third-party preclinical studies, as we continued to advance KYV-201 through preclinical development. Other programs and research and development activities increased by $1.0 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 and include expenses related to our preclinical activities, including reagents, lab supplies, outsourced research and development and professional consulting services.
Current report — wording carried from elsewhere
Interest income increased $6.8 million, from $0.6 million for the six months ended June 30, 2023 to $7.4 million for the six months ended June 30, 2024. The increase primarily relates to increased amounts invested in available-for-sale marketable securities and cash equivalents as well as an increase in interest rates on these securities during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current report — wording carried from elsewhere
Net provided by financing activities for the six months ended June 30, 2023, was $24.8 million, which consisted of $25.1 million cash proceeds from the issuance of redeemable convertible preferred stock, net of issuance costs and less than $0.1 million of proceeds from exercises of stock options, partially offset by a payment of $0.4 million related to finance lease obligations.