Candel Therapeutics Inc

Previous wording

We have initiated a randomized phase 2 clinical trial in the United States evaluating CAN-2409 in borderline resectable and locally advanced pancreatic adenocarcinoma. In March 2023, in connection with our cost management and dynamic portfolio management initiatives, we elected to pause new enrollment in this randomized phase 2 clinical trial, subject to additional funding. Despite the pause in new patient enrollment, we presented initial positive interim overall survival and immunological biomarker clinical data at the Society for Immunotherapy of Cancer (SITC) Annual Meeting in the fourth quarter of 2023. In December 2023, we announced that the FDA granted fast track designation for CAN-2409 plus valacyclovir for the treatment of patients with pancreatic ductal adenocarcinoma (PDAC) to improve overall survival. In April 2024, we announced updated positive overall survival data and also announced that the FDA has granted Orphan Drug Designation for CAN-2409 for the treatment of pancreatic cancer.

Current wording

We have initiated a randomized phase 2 clinical trial in the United States and Mexico evaluating the activity of CAN-2409 in borderline resectable and locally advanced pancreatic ductal adenocarcinoma (PDAC). Initial positive phase 2 data revealed notable clinical improvements in patients with borderline resectable PDAC following CAN-2409 plus prodrug together with SoC chemoradiation. In March 2023, in connection with our cost management and dynamic portfolio management initiatives, we elected to pause new enrollment in this randomized phase 2 clinical trial, subject to additional funding. Despite the pause in new patient enrollment, we presented initial positive interim overall survival and immunological biomarker clinical data at the Society for Immunotherapy of Cancer (SITC) Annual Meeting in the fourth quarter of 2023. In December 2023, we announced that the FDA granted fast track designation for CAN-2409 plus valacyclovir for the treatment of patients with PDAC to improve overall survival. In April 2024, we announced updated positive overall survival data and also announced that the FDA has granted orphan drug designation for CAN-2409 for the treatment of pancreatic cancer.

Previous wording

In a previous phase 1b trial, a statistically significant increase in the number of CD8+ tumor infiltrating lymphocytes was observed. Initial positive phase 2 data revealed notable improvements in patients with borderline resectable PDAC following CAN-2409 plus prodrug together with SoC chemoradiation; the following data were disclosed as of the March 29, 2024 data cutoff:

Current wording

The following data were disclosed as of the March 29, 2024 data cutoff:

Previous wording

Importantly, 4 out of 7 patients who received CAN-2409 were still alive at the time of data cutoff, with 2 patients surviving more than 50.0 months from enrollment. Only 1 out of 6 patients, randomized to control SoC chemotherapy, remained alive at data cutoff (alive at 50.6 months).

Current wording

Importantly, 4 out of 7 patients who received CAN-2409 were still alive at the time of data cutoff, with 2 patients surviving more than 50.0 months from enrollment. Only 1 out of 6 patients, randomized to control SoC chemotherapy alone, remained alive at data cutoff (alive at 50.6 months).

Previous wording

In pancreatic tissue of patients treated with CAN-2409 plus prodrug together with SoC (but not SoC alone), dense aggregates of CD8+ granzyme B positive cytotoxic T cells, dendritic cells, and B cells were observed in the tumor microenvironment.

Current wording

In pancreatic tissue of patients treated with CAN-2409 plus prodrug together with SoC (but not SoC alone), dense aggregates of CD8+ granzyme B positive cytotoxic T cells, dendritic cells, and B cells were observed within the tumor microenvironment. These lymphocyte aggregates resemble tertiary lymphoid structures, whose formation in solid tumors is known to be associated with improved prognosis and better response to therapy.

Previous wording

Our lead HSV-based product candidate, CAN-3110, is currently in an ongoing investigator-sponsored phase 1b clinical trial in our initial target indication of recurrent high-grade glioma (HGG). These patients have failed SoC treatment and have a poor prognosis (expected overall survival < 6-9 months). In February 2024, we announced that the FDA granted fast track designation for CAN-3110 for the treatment of patients with recurrent HGG to improve overall survival. Initial overall survival data from this clinical trial was presented in an oral presentation at the ASCO Annual Meeting in June 2021, and additional biomarker data was reported in an oral presentation at the Society for Neuro-Oncology Annual Meeting in November 2021. During our Research and Development Day in December 2022, we presented updated data demonstrating that CAN-3110 was well tolerated with no observed dose-limiting toxicity; achieved 11.6 months mOS with a single dose; and showed evidence of persistent herpes simplex virus 1 (HSV-1) antigen and HSV-1 replication consistent with mechanism of action​ as well as robust evidence of immune activation​. In May 2023, we presented clinical and biomarker data from this ongoing clinical trial in an oral presentation at the American Society of Gene & Cell Therapy (ASGCT) Annual Meeting where we reported mOS in arm A (n=41) ongoing at 11.8 months and mOS in arm B (n=9) ongoing at 12.0 months as of the April 20, 2023 data cutoff. Safety and tolerability data reported no dose-limiting toxicities in both arm A and arm B. In October 2023, we jointly published an article in Nature that reported extended survival associated with immune activation in patients with recurrent HGG treated with CAN-3110. Notably, new data reported an increased survival in 66% of patients with positivity for anti-HSV1 antibodies (mOS of 14.2 months). Immune status was positively associated with survival both in patients with pre-existing HSV1 antibodies (pre-treatment) and in 33% of patients that, while negative at baseline, developed anti-HSV1 antibodies after a single injection of CAN-3110. Clinical responses were observed in both injected and uninjected lesions in patients with multifocal disease. Significant tumor responses in both arm A and arm B were observed, with continued reduction in tumor volume in a patient in arm B approximately one year after CAN-3110 treatment. Clinical response for this patient, in follow-up as of data cutoff, continued without additional treatment. Analysis of post-treatment samples demonstrated evidence of persistent HSV antigen expression and replication in both injected and uninjected tumor tissue associated with CD8+ T cell infiltration. The extent of immune activation, measured by gene profiling and quantification of immune cells in post-treatment specimens, was associated with the presence of anti-HSV1 antibodies and survival. Survival was also associated with the diversity of the T cell repertoire in circulating T cells, sugge…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Initial overall survival data from this clinical trial was presented in an oral presentation at the American Society of Clinical Oncology (ASCO) Annual Meeting in June 2021, and additional biomarker data was reported in an oral presentation at the Society for Neuro-Oncology Annual Meeting in November 2021. During our Research and Development Day in December 2022, we presented updated data demonstrating that a single administration of CAN-3110 was well tolerated with no observed dose-limiting toxicity; achieved 11.6 months mOS; and showed evidence of persistent herpes simplex virus 1 (HSV-1) antigen and HSV-1 replication consistent with mechanism of action​ as well as robust evidence of immune activation​. In May 2023, we presented clinical and biomarker data from this ongoing clinical trial in an oral presentation at the American Society of Gene & Cell Therapy (ASGCT) Annual Meeting where we reported mOS in arm A (n=41) ongoing at 11.8 months and mOS in arm B (n=9) ongoing at 12.0 months as of the April 20, 2023 data cutoff. Safety and tolerability data reported no dose-limiting toxicities in both arm A and arm B. In October 2023, we jointly published an article in Nature that reported extended survival associated with immune activation in patients with recurrent HGG treated with CAN-3110. Notably, new data reported an increased survival in 66% of patients with positivity for anti-HSV1 antibodies (mOS of 14.2 months). Immune status was positively associated with survival both in patients with pre-existing HSV1 antibodies (pre-treatment) and in 33% of patients that, while negative at baseline, developed anti-HSV1 antibodies after a single injection of CAN-3110. Clinical responses were observed in both injected and uninjected lesions in patients with multifocal disease. Significant tumor responses in both arm A and arm B were observed, with continued reduction in tumor volume in a patient in arm B approximately one year after CAN-3110 treatment. Clinical response for this patient continues to date without additional treatment. Analysis of post-treatment samples demonstrated evidence of persistent HSV antigen expression and replication in both injected and uninjected tumor tissue associated with CD8+ T cell infiltration. The extent of immune activation, measured by gene profiling and quantification of immune cells in post-treatment specimens, was associated with the presence of anti-HSV1 antibodies and survival. Survival was also associated with the diversity of the T cell repertoire in circulating T cells, suggesting that patients treated with CAN-3110 were able to mount a diverse immune response against the virus and tumor antigens released during the oncolytic process had improved survival.

Previous wording

We are conducting an extension of the clinical trial known as arm C, in which patients with recurrent HGG will receive a repeat dosing regimen of CAN-3110 (up to six injections over four months). Clinical data from arm C will help evaluate whether multiple injections can increase mOS. This clinical trial extension is supported by the Break Through Cancer foundation. In March 2024, we announced, during the 5th Glioblastoma Drug Development Summit in Boston, that six patients have been treated with multiple injections (up to six) of CAN-3110 in arm C, reporting good tolerability and safety. In April 2024, we announced the acceptance of an abstract at the ASCO Annual Meeting, to be presented in June 2024, that will feature data regarding the feasibility and tolerability of multiple injections of CAN-3110.

Current wording

We are conducting an extension of the clinical trial known as arm C, in which patients with recurrent HGG will receive a repeat dosing regimen of CAN-3110 (up to six injections over four months). Clinical data from arm C will help evaluate whether multiple injections can increase mOS. This clinical trial extension is supported by the Break Through Cancer foundation. In June 2024, a poster presentation at the ASCO Annual Meeting showed additional detail from the arm C portion of the study, which incorporates two sub-cohorts of six patients each. To date, we have dosed six patients with multiple injections of CAN-3110 (up to six injections over a period of four months), completing cohort 1 of arm C. No dose-limiting toxicities or severe adverse events were observed. More than 300 core biopsies were obtained from all six patients, across the planned dose ranging time points, which were processed for “-omic” analysis, including single-cell RNA sequencing and cell profiling. Updated phase 1b data from the patients in cohort 1/arm C for CAN-3110 in recurrent HGG is expected in the second half of 2024.

Previous wording

We are also designing other novel viral immunotherapy candidates using our proprietary enLIGHTEN™ Discovery Platform, a systematic, iterative HSV-based discovery platform leveraging human biology and advanced analytics to create new viral immunotherapy candidates for solid tumors. In October 2022, we entered into a collaboration with the University of Pennsylvania (UPenn) Center for Cellular Immunotherapies to study the impact of novel viral immunotherapy candidates based on Candel’s enLIGHTEN™ Discovery Platform to strengthen the activity of UPenn’s investigational CAR-T cell therapies in difficult to treat solid tumors. In November 2023, during the SITC 2023 Annual Meeting, we presented two posters describing the key elements of the platform and the development of the first experimental agent from the enLIGHTEN Discovery Platform. The new agent, Alpha-201 Macro1, is an investigational viral immunotherapy designed to interfere with the CD47/SIRPα pathway and activate innate immune surveillance. Results demonstrated monotherapy activity following local administration in a preclinical model of lung and breast cancer. Additional preclinical data presented at SITC confirmed the capability of the enLIGHTEN™ Advanced Analytics suite to predict optimal gene payload combinations to arm viral vectors, that enable the design of potential combination therapeutics to overcome tumor resistance especially in cancers resistant to ICI treatment.

Current wording

We are also designing additional novel viral immunotherapy candidates using our proprietary enLIGHTEN™ Discovery Platform, a systematic, iterative HSV-based discovery platform leveraging human biology and advanced analytics to create new viral immunotherapy candidates for solid tumors. In October 2022, we entered into a collaboration with the University of Pennsylvania (UPenn) Center for Cellular Immunotherapies to study the impact of novel viral immunotherapy candidates based on Candel’s enLIGHTEN™ Discovery Platform to strengthen the activity of UPenn’s investigational CAR-T cell therapies in difficult to treat solid tumors. In November 2023, during the SITC 2023 Annual Meeting, we presented two posters describing the key elements of the platform and the development of the first experimental agent from the enLIGHTEN Discovery Platform. The first agent based on enLIGHTEN™, Alpha-201 Macro1, is an investigational viral immunotherapy designed to interfere with the CD47/SIRPα pathway and activate innate immune surveillance. Results demonstrated monotherapy activity of this agent following local administration in a preclinical model of lung and breast cancer. Additional preclinical data presented at SITC confirmed the capability of the enLIGHTEN™ Advanced Analytics suite to predict optimal gene payload combinations to arm viral vectors, that enable the design of potential combination therapeutics to overcome tumor resistance especially in cancers resistant to ICI treatment.

Previous wording

In April 2024, during the American Association for Cancer Research's 2024 Annual Meeting, we presented data on a second pre-candidate from our enLIGHTEN™ Discovery Platform, a first-in-class multimodal immunotherapy for induction of tertiary lymphoid structures, being developed as a novel therapeutic strategy for solid tumors.

Current wording

In April 2024, during the American Association for Cancer Research's 2024 Annual Meeting, we presented data on a second preclinical candidate from the enLIGHTEN™ Discovery Platform, a first-in-class multimodal immunotherapy for induction of tertiary lymphoid structures, being developed as a novel therapeutic strategy for solid tumors. Data presented included preclinical in vivo evidence of monotherapy activity of this preclinical candidate as well as activity when administered in combination with immune checkpoint inhibitors (improved survival as compared to PD-1 only treated mice).

Previous wording

Our cash and cash equivalents were $25.7 million as of March 31, 2024. In accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), 205-40, Presentation of Financial Statements - Going Concern, we are required to assess our ability to continue as a going concern for the one-year look forward period following the date that the condensed consolidated financial statements are issued. Based on our current operating plan and existing cash and cash equivalents, we determined that substantial doubt exists regarding our ability to continue as a going concern for the one-year period following the date these condensed consolidated financial statements are issued. To sustain its future operations beyond such one-year period, we will require additional funding. We expect to finance our cash needs through a combination of public or private equity or debt financings, government grants, and other sources, which may include collaborations, strategic alliances and licensing arrangements with third parties. There is no assurance that we will be successful in obtaining sufficient funding on acceptable terms, if at all, and could be forced to delay, reduce, or eliminate some or all of its research, clinical trials, product development or future commercialization efforts, which could materially adversely affect our business prospects or our ability to continue as a going concern.

Current wording

Our cash and cash equivalents were $21.5 million as of June 30, 2024. In accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), 205-40, Presentation of Financial Statements - Going Concern, we are required to assess our ability to continue as a going concern for the one-year look forward period following the date that the condensed consolidated financial statements are issued. Based on our current operating plan and existing cash and cash equivalents, we determined that substantial doubt exists regarding our ability to continue as a going concern for the one-year period following the date these condensed consolidated financial statements are issued. To sustain its future operations beyond such one-year period, we will require additional funding. We expect to finance our cash needs through a combination of public or private equity or debt financings, government grants, and other sources, which may include collaborations, strategic alliances and licensing arrangements with third parties. There is no assurance that we will be successful in obtaining sufficient funding on acceptable terms, if at all, and could be forced to delay, reduce, or eliminate some or all of its research, clinical trials, product development or future commercialization efforts, which could materially adversely affect our business prospects or our ability to continue as a going concern.

Previous wording

Periphagen. On December 9, 2019, we entered into a series of agreements, including an exclusive license agreement, a novation agreement, an equipment purchase agreement and an intellectual property assignment agreement, collectively the Periphagen Agreements, with Periphagen, whereby we acquired certain assets and licensed certain rights (including specified patent rights and know-how, or the Licensed IP Rights) of Periphagen, primarily consisting of exclusive rights to their technology platform and a portfolio of pre-clinical, development stage virus vectors. The primary classes of assets are HSV-derived assets expressing neurotrophin-3 (or NT-3 Assets) and other HSV-derived assets (Gene Transfer Neuro-Assets). Under the license agreement, Periphagen granted us a worldwide exclusive license with the right to grant sublicenses through multiple tiers under the Licensed IP Rights to conduct research and to develop, make, have made, use, have used, offer for sale, have sold, export and import products incorporating the Licensed IP Rights in all fields of use except the treatment, diagnosis, and prevention of nononcologic skin diseases and conditions (including use as an aesthetic).

Current wording

Periphagen. On December 9, 2019, we entered into a series of agreements, including an exclusive license agreement, a novation agreement, an equipment purchase agreement and an intellectual property assignment agreement, collectively the Periphagen Agreements, with Periphagen, whereby we acquired certain assets and licensed certain rights (including specified patent rights and know-how, or the Licensed IP Rights) of Periphagen, primarily consisting of exclusive rights to their technology platform and a portfolio of preclinical, development stage virus vectors. The primary classes of assets are HSV-derived assets expressing neurotrophin-3 (or NT-3 Assets) and other HSV-derived assets (Gene Transfer Neuro-Assets). Under the license agreement, Periphagen granted us a worldwide exclusive license with the right to grant sublicenses through multiple tiers under the Licensed IP Rights to conduct research and to develop, make, have made, use, have used, offer for sale, have sold, export and import products incorporating the Licensed IP Rights in all fields of use except the treatment, diagnosis, and prevention of nononcologic skin diseases and conditions (including use as an aesthetic).

Previous wording

In November 2023, our board of directors authorized a restructuring plan to focus on continuation and expansion of development of CAN-3110 as well as the enLIGHTENTM Discovery Platform, which resulted in a reduction of our workforce by approximately 45%. Each affected employee’s separation occurred in December 2023. As a result, we incurred costs of $0.7 million related to severance benefits for the affected employees, including severance payments and limited reimbursement of medical insurance premiums. The restructuring plan was completed in the first quarter of 2024 when the final severance payments of $46,000 were made.

Current wording

In November 2023, our board of directors authorized a restructuring plan to focus on key clinical readouts for CAN-2409 and continuation and expansion of development of CAN-3110 as well as the enLIGHTENTM Discovery Platform, which resulted in a reduction of our workforce by approximately 45%. Each affected employee’s separation occurred in December 2023. As a result, we incurred costs of $0.7 million related to severance benefits for the affected employees, including severance payments and limited reimbursement of medical insurance premiums. The restructuring plan was completed in the first quarter of 2024 when the final severance payments of $46,000 were made.

Previous wording

Interest income was $0.3 million for the three months ended March 31, 2024, compared to interest income of $0.7 million for the three months ended March 31, 2023, and represents earnings on our cash equivalents. The decrease in interest income is the result of interest being generated on a lower cash equivalents balance for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Current wording

Interest income was $0.2 million for the three months ended June 30, 2024, compared to interest income of $0.5 million for the three months ended June 30, 2023, and represents earnings on our cash equivalents. The decrease in interest income is the result of interest being generated on a lower cash equivalents balance for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Previous wording

Interest expense was $0.6 million for each of the three months ended March 31, 2024 and 2023, and represents interest expense on our outstanding debt obligations.

Current wording

Interest expense was $0.6 million for each of the six months ended June 30, 2024 and 2023, and represents interest expense on our outstanding debt obligations.

Previous wording

The change in fair value of our warrant liability was a decrease of $7,000 for the three months ended March 31, 2024, compared to a decrease of $0.7 million for the three months ended March 31, 2023. The change in fair value of the warrant liability is primarily driven by changes in the underlying value of our stock price.

Current wording

The change in fair value of our warrant liability was an increase of $13.3 million for the three months ended June 30, 2024, compared to a decrease of $0.1 million for the three months ended June 30, 2023. The change in fair value of the warrant liability is primarily driven by changes in the underlying value of our stock price.

Previous wording

Research and development expenses decreased $1.4 million from $5.5 million for the three months ended March 31, 2023 to $4.1 million for the three months ended March 31, 2024. The decrease was primarily attributable to a $0.7 million decrease in employee-related expenses due to the corporate restructuring in the fourth quarter of 2023 and a $0.5 million decrease in clinical development costs driven by decreased regulatory costs for CAN-2409 programs.

Current wording

Research and development expenses decreased $2.3 million from $11.4 million for the six months ended June 30, 2023 to $9.1 million for the six months ended June 30, 2024. The decrease was primarily attributable to a $1.5 million decrease in clinical development costs driven by decreased regulatory, manufacturing and clinical trial costs for CAN-2409 programs and a $0.6 million decrease in employee-related expenses due to the corporate restructuring in the fourth quarter of 2023. The $0.6 million decrease in employee-related costs was driven by a decrease of $1.8 million in payroll related costs, which was partially offset by a $1.2 million increase in stock based compensation expense.

Previous wording

General and administrative expenses decreased $0.4 million from $4.2 million for the three months ended March 31, 2023 to $3.8 million for the three months ended March 31, 2024. The decrease was primarily attributable to a $0.6 million decrease in employee-related expenses due to the corporate restructuring in the fourth quarter of 2023 and a $0.1 million decrease in the cost of directors and officers insurance. These decreases were partially offset by a $0.5 million increase in professional and consulting fees.

Current wording

General and administrative expenses decreased $0.4 million from $7.8 million for the six months ended June 30, 2023 to $7.4 million for the six months ended June 30, 2024. The decrease was primarily attributable to a $0.6 million decrease in employee-related expenses due to the corporate restructuring in the fourth quarter of 2023 and a $0.3 million decrease in the cost of directors and officers insurance. These decreases were partially offset by a $0.7 million increase in professional and consulting fees.

Previous wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates. We expect that our research and development and general and administrative costs will continue to increase significantly, including in connection with conducting clinical trials for our product candidates, developing our manufacturing capabilities which may include the cost of establishing a relationship with contract manufacturers to support commercial launch of our product candidate CAN-2409 and costs associated with equipping our laboratory and manufacturing facility to support clinical trials and commercialization and providing general and administrative support for our operations, including the cost associated with operating as a public company. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. Based on current plans and assumptions, we expect that our existing cash and cash equivalents will be sufficient to fund our current operating plan into the fourth quarter of 2024.

Current wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates. We expect that our research and development and general and administrative costs will continue to increase significantly, including in connection with conducting clinical trials for our product candidates, developing our manufacturing capabilities which may include the cost of establishing a relationship with contract manufacturers to support commercial launch of our product candidate CAN-2409 and costs associated with equipping our laboratory and manufacturing facility to support clinical trials and commercialization and providing general and administrative support for our operations, including the cost associated with operating as a public company. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. Based on current plans and assumptions, we expect that our existing cash and cash equivalents will be sufficient to fund our current operating plan into the first quarter of 2025.

Previous wording

We do not currently have any approved products and have never generated any revenue from product sales. We have financed our operations primarily through proceeds from government grants and proceeds from the sale of convertible notes, common stock, and our convertible preferred stock. As of March 31, 2024, we have raised approximately $161.2 million, including $15.6 million of government grants, $66.1 million from the sale of convertible preferred stock, and $79.5 million from the sale of our common stock. Our cash and cash equivalents totaled $25.7 million as of March 31, 2024. We had $19.7 million of debt as of March 31, 2024. As of March 31, 2024, we have raised $0.2 million under our ATM Program (as defined below). We did not raise any additional funds under our ATM Program subsequent to March 31, 2024.

Current wording

We do not currently have any approved products and have never generated any revenue from product sales. We have financed our operations primarily through proceeds from government grants and proceeds from the sale of convertible notes, common stock, and our convertible preferred stock. As of June 30, 2024, we have raised approximately $165.7 million, including $15.6 million of government grants, $66.1 million from the sale of convertible preferred stock, $82.7 million from the sale of our common stock, and $1.3 million from stock option exercises. Our cash and cash equivalents totaled $21.5 million as of June 30, 2024. We had $17.3 million of debt as of June 30, 2024. As of June 30, 2024, we have raised $3.6 million under our ATM Program (as defined below). Subsequent to June 30, 2024 and through August 5, 2024, we have raised an additional $4.1 million of net proceeds under our ATM Program.

Previous wording

On August 5, 2022, we filed a shelf registration statement on Form S-3 (as amended, the Shelf) with the SEC, which covers the offering, issuance and sale by us of up to an aggregate of $200.0 million of our common stock, preferred stock, debt securities, warrants and/or units of any combination thereof. We simultaneously entered into a sales agreement with Jefferies LLC, as sales agent, to provide for the issuance and sale by us of up to $75.0 million of our common stock from time to time in “at-the-market” offerings under the Shelf (the ATM Program). The Shelf was declared effective by the SEC on August 12, 2022. As of May 6, 2024, we have sold and issued 109,485 shares of common stock under the ATM Program, with total net proceeds of $0.2 million.

Current wording

On August 5, 2022, we filed a shelf registration statement on Form S-3 (as amended, the Shelf) with the SEC, which covers the offering, issuance and sale by us of up to an aggregate of $200.0 million of our common stock, preferred stock, debt securities, warrants and/or units of any combination thereof. We simultaneously entered into a sales agreement with Jefferies LLC, as sales agent, to provide for the issuance and sale by us of up to $75.0 million of our common stock from time to time in “at-the-market” offerings under the Shelf (the ATM Program). The Shelf was declared effective by the SEC on August 12, 2022. As of August 5, 2024, we have sold and issued 1,268,741 shares of common stock under the ATM Program, with total net proceeds of $7.7 million.

Previous wording

As of March 31, 2024, we had an accumulated deficit of $145.2 million and have not generated any product sales. We do not know when, or if, we will generate revenue from product sales. We will not generate significant revenue from product sales unless and until we obtain regulatory approval and commercialize one of our current or future product candidates. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical and contract manufacturing costs, legal and other regulatory expenses, and general overhead costs. We expect that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to risks in the development of our products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We will require substantial additional financing to fund our operations and to continue to execute our strategy, and we will pursue a range of options to secure additional capital.

Current wording

As of June 30, 2024, we had an accumulated deficit of $167.5 million and have not generated any product sales. We do not know when, or if, we will generate revenue from product sales. We will not generate significant revenue from product sales unless and until we obtain regulatory approval and commercialize one of our current or future product candidates. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical and contract manufacturing costs, legal and other regulatory expenses, and general overhead costs. We expect that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to risks in the development of our products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We will require substantial additional financing to fund our operations and to continue to execute our strategy, and we will pursue a range of options to secure additional capital.

Previous wording

Cash Flows for the three months ended March 31, 2024 and 2023

Current wording

Cash Flows for the six months ended June 30, 2024 and 2023

Previous wording

Net cash used in operating activities for the three months ended March 31, 2024 was $8.4 million, primarily consisting of a net loss of $8.2 million as we incurred expenses associated with our clinical programs and incurred costs associated with operating as a public company. We had non-cash charges of $1.5 million in non-cash charges primarily related to non-cash stock compensation and depreciation expense. Net cash used in operating activities was also impacted by $1.7 million in changes in operating assets and liabilities, primarily driven by a decrease of $1.6 million in accrued expenses.

Current wording

Net cash used in operating activities for the six months ended June 30, 2024 was $14.6 million, primarily consisting of a net loss of $30.5 million as we incurred expenses associated with our clinical programs and incurred costs associated with operating as a public company. We had non-cash charges of $17.1 million primarily related to the $13.3 million change in the fair value of our warrant liability and non-cash stock compensation. Net cash used in operating activities was also impacted by $1.2 million in changes in operating assets and liabilities, primarily driven by a decrease of $1.1 million in accrued expenses.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2023 was $10.8 million, primarily consisting of a net loss of $8.8 million as we incurred expenses associated with our clinical programs, increased our headcount and incurred costs associated with operating as a public company. In addition, we had non-cash income of $0.7 million as a result of the change in the fair value of our warrant liability. Non-cash income was partially offset by $1.2 million in non-cash charges primarily related to non-cash stock compensation and depreciation expense. Net cash used in operating activities was also impacted by $2.5 million in changes in operating assets and liabilities, primarily driven by a decrease of $1.8 million in accrued expenses and a $0.7 million increase to prepaid expenses and other current assets.

Current wording

Net cash used in operating activities for the six months ended June 30, 2023 was $18.0 million, primarily consisting of a net loss of $18.4 million as we incurred expenses associated with our clinical programs, increased our headcount and incurred costs associated with operating as a public company. In addition, we had non-cash income of $0.9 million as a result of the change in the fair value of our warrant liability. Non-cash income was offset by $2.3 million in non-cash charges primarily related to non-cash stock compensation and depreciation expense. Net cash used in operating activities was also impacted by $1.1 million in changes in operating assets and liabilities, primarily driven by a decrease of $1.2 million in accrued expenses.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2024 was $7,000 and consisted of the purchase of fixed assets.

Current wording

Net cash used in investing activities for the six months ended June 30, 2024 was $13,000 and consisted of the purchase of fixed assets.

Previous wording

Net cash provided by investing activities for the three months ended March 31, 2023 was $19,000 and consisted of proceeds from the sale of fixed assets, which was partially offset by the purchase of fixed assets.

Current wording

Net cash used in investing activities for the six months ended June 30, 2023 was $0.2 million and consisted of the purchase of fixed assets, which was partially offset by proceeds from the sale of fixed assets.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2024 was $1.3 million and consisted of $1.7 million of principal payments on our term loan with SVB, partially offset by $0.2 million of proceeds from option exercises and $0.2 million of net proceeds from the issuance of common stock under our ATM Program.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2024 was $0.7 million and consisted of $1.2 million of proceeds from option exercises and $3.6 million of net proceeds from the issuance of common stock under our ATM Program, partially offset by $4.2 million of principal payments on our term loan with SVB.

Previous wording

There were no financing activities for the three months ended March 31, 2023.

Current wording

There were no financing activities for the six months ended June 30, 2023.

Previous wording

We believe that our existing cash and cash equivalents as of March 31, 2024, will enable us to fund our operating expenses and capital expense requirements into the fourth quarter of 2024. We have based this estimate on assumptions that may prove to be incorrect, and we could utilize our available capital resources sooner than we currently expect.

Current wording

We believe that our existing cash and cash equivalents as of June 30, 2024, will enable us to fund our operating expenses and capital expense requirements into the first quarter of 2025. We have based this estimate on assumptions that may prove to be incorrect, and we could utilize our available capital resources sooner than we currently expect.

Previous wording

During the three months ended March 31, 2024, there were no material changes to our critical accounting estimates as reported in our Annual Report on Form 10-K for the year ended December 31, 2023. For a full discussion of these estimates, see “Critical Accounting Estimates” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

During the three and six months ended June 30, 2024, there were no material changes to our critical accounting estimates as reported in our Annual Report on Form 10-K for the year ended December 31, 2023. For a full discussion of these estimates, see “Critical Accounting Estimates” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023.