Korro Bio Inc
For the period ended Jun 30, 2024. Filed Aug 13, 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 13, 2024
KRRO$14.75+0.1%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.
0000950170-24-059493
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0000950170-24-096189
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 105 previous paragraphs and 97 current paragraphs.
70 unchanged; 18 reworded; 9 added; 15 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 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 (9)
Current report
General and administrative expenses were $7.0 million for the three months ended June 30, 2024, compared to $5.3 million for the three months ended June 30, 2023. The increase of $1.7 million was primarily driven by a $0.8 million increase in employee related expenses driven by an increase in headcount to support the overall growth of our company, a $0.8 million increase in information technology, facilities and other expenses, and a $0.1 million increase in professional fees.
Current report
General and administrative expenses were $14.9 million for the six months ended June 30, 2024, compared to $10.7 million for the six months ended June 30, 2023. The increase of $4.2 million was primarily driven by a $1.5 million increase in employee related expenses driven by an increase in headcount to support the overall growth of our company, a $1.1 million increase in information technology and other costs, a $0.8 million increase in facility costs primarily due to the expansion of our mixed-use office spaces and overall support of the growth of our company, and a $0.8 million increase in professional fees.
Current report
Total other income, net was $4.2 million for the six months ended June 30, 2024, compared to $1.3 million for the six months ended June 30, 2023. The increase of $2.9 million was primarily due to an increase of $2.9 million in interest income earned from our cash, cash equivalents and marketable securities driven by steady interest rates and higher cash, cash equivalent and marketable securities balance.
Current report
Comparison of the Six Months Ended June 30, 2024 and 2023
Current report
Net cash used in operating activities was $36.5 million for the six months ended June 30, 2024, which consisted of $41.4 million of net loss, $5.4 million of non-cash adjustments to net loss and an increase of $0.5 million in the net change in operating assets and liabilities. Non-cash adjustments primarily consisted of $2.3 million of amortization of operating lease right of use, or ROU, assets, $1.8 million of stock-based compensation expenses, and $1.4 million of depreciation expenses. The increase in net assets consisted primarily of a $5.3 million increase in operating lease liabilities, a $1.4 million increase in prepaid expenses and other current assets, offset by a $4.1 million decrease in accrued expenses and other liabilities and a $0.5 million decrease in accounts payable.
Current report
Net cash used in operating activities was $34.4 million for the six months ended June 30, 2023, which consisted of $37.3 million of net loss, $3.7 million of non-cash adjustments to net loss and an increase of $0.9 million in the net change in operating assets and liabilities. Non-cash adjustments primarily consisted of $1.7 million of depreciation expense, $1.3 million of amortization of operating lease ROU assets, and $0.7 million of stock-based compensation expenses. The increase in net assets consisted primarily of a $0.4 million increase in accounts payables and a $0.1 million increase in prepaid expenses and other current assets, offset by a $0.9 million decrease in operating lease liabilities and a $0.2 million decrease in accrued expenses and other liabilities.
Current report
Net cash provided by investing activities was $12.1 million for the six months ended June 30, 2023 and consisted primarily of $18.0 million proceeds from maturity of marketable securities, offset by $5.9 million of purchase of property and equipment.
Current report
Net cash provided by financing activities was $67.7 million for the six months ended June 30, 2024 and consisted primarily of net proceeds from the April 2024 PIPE.
Current report
Net cash provided by financing activities was $45.4 million for the six months ended June 30, 2023 and consisted primarily of net proceeds from the issuance of Legacy Korro’s Series B-2 convertible preferred stock.
Removed paragraphs (15)
Previous report
Merger Agreement & Pre-Closing Financing
Previous report
On July 14, 2023, we entered into the Merger Agreement with the private company formerly known as Korro Bio, Inc., or Legacy Korro, and Frequency Merger Sub, Inc., our wholly-owned subsidiary, or Merger Sub. Pursuant to the Merger Agreement, on November 3, 2023, or the Closing Date, following approval by our stockholders and Legacy Korro's stockholders, Merger Sub merged with and into Legacy Korro, or the Merger, with Legacy Korro continuing as our wholly owned subsidiary and the surviving corporation of the Merger. The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. The Merger Agreement was approved by the members of the board of directors of both our company and Legacy Korro. In connection with the completion of the Merger, we changed our name from Frequency Therapeutics, Inc. to Korro Bio, Inc. The Merger was accounted for as a reverse recapitalization and accordingly, the financial statements of Legacy Korro became our financial statements. Except as otherwise indicated, references herein to “we”, “us” or the “Company”, refer to Korro Bio, Inc. on a post-merger basis; references to “Legacy Korro” refer to the business of privately held Korro Bio, Inc., prior to completion of the Merger; and references to Frequency refer to Frequency Therapeutics, Inc. prior to completion of the Merger.
Previous report
Immediately prior to the execution of the Merger Agreement, certain new and existing investors of Legacy Korro agreed to purchase shares of Legacy Korro's common stock at $2.78 per share for the aggregate amount of $117.3 million in the Pre-Closing Financing. The Pre-Closing Financing was contingent on and closed immediately prior to consummation of the Merger.
Previous report
Subject to the terms and conditions of the Merger Agreement, immediately prior to the Closing Date, each then outstanding share of Legacy Korro's common stock (including common stock issued upon the conversion of Legacy Korro's preferred stock but excluding the common stock issued in the Pre-Closing Financing) converted into the right to receive 5,161,114 shares of our common stock calculated in accordance with the Merger Agreement (which takes into account the 1-for-50 reverse stock split of our common stock effected immediately prior to the Merger).
Previous report
Shares of Legacy Korro's common stock issued pursuant to the Pre-Closing Financing were converted into the right to receive 2,077,864 shares of our common stock calculated in accordance with Merger Agreement at the effective time of the Merger (which takes into account the 1-for-50 reverse stock split of our common stock effected immediately prior to the Merger).
Previous report
Research and development expenses decreased by $1.1 million from $14.7 million for the three months ended March 31, 2023 to $13.6 million for the three months ended March 31, 2024. The decrease in research and development expenses was primarily attributable to the following:
Previous report
$0.4 million of decreased consulting costs attributed to the increase in internal resources which led to a reduction in our reliance on external consulting services;
Previous report
$1.6 million of increased personnel-related expenses driven by an increase in headcount to support the expansion of our research and development function;
Previous report
General and administrative expenses increased by $2.5 million from $5.4 million for the three months ended March 31, 2023 to $7.9 million for the three months ended March 31, 2024. The increase in general and administrative expenses was primarily attributable to the following:
Previous report
$0.7 million of increased personnel-related expenses is primarily driven by a $0.3 million increase in stock-based compensation expenses, and a $0.3 million increase in headcount costs to support growth in research and development and increased public company regulation;
Previous report
$0.7 million of increased professional service fees primarily attributable to increased compliance costs as a public company;
Previous report
$0.6 million of increased facilities expenses primarily attributable to the expansion of our mixed-use office space; and
Previous report
$0.5 million of increased other general and administrative expense primarily attributable to increased IT cloud service fees and corporate expenses.
Previous report
Net cash used in operating activities for the three months ended March 31, 2024 was $21.9 million, compared to net cash used in operating activities of $19.7 million for the three months ended March 31, 2023. The increase of $2.2 million in cash used in operating activities was primarily due to $2.8 million of merger related severance payments in the three months ended March 31, 2024.
Previous report
Net cash provided by financing activities for the three months ended March 31, 2024 was less than $0.1 million, compared to $45.4 million for the three months ended March 31, 2023. The decrease of $45.4 million in cash provided by financing activities is primarily due to $45.5 million of net proceeds received from the sale of Legacy Korro's Series B-2 convertible preferred stock in the three months ended March 31, 2023 where there was no comparable activity in the three months ended March 31, 2024.
Reworded paragraphs (18)
Previous wording
We have incurred significant operating losses since inception. Our net losses were $19.6 million and $19.6 million for the three months ended March 31, 2024 and 2023, respectively. We had an accumulated deficit of $202.6 million as of March 31, 2024. We expect to continue to incur significant and increasing expenses and operating losses and negative operating cash flows for the foreseeable future as we continue our research and development efforts, advances product candidates through clinical stages, and seeks regulatory approvals for its pipeline candidates. As a result of the Merger (as defined below), we also expect to incur additional costs associated with maintaining compliance with Nasdaq listing rules and the requirements of the U.S. Securities and Exchange Commission, or SEC, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of its preclinical studies, initiation and conduct of any clinical trials, and its expenditures on other research and development activities, including the expansion of its pipeline.
Current wording
We have incurred significant operating losses since inception. Our net losses were $41.4 million and $37.3 million for the six months ended June 30, 2024 and 2023, respectively. We had an accumulated deficit of $224.4 million as of June 30, 2024. We expect to continue to incur significant and increasing expenses and operating losses and negative operating cash flows for the foreseeable future as we continue our research and development efforts, advances product candidates through clinical stages, and seeks regulatory approvals for its pipeline candidates. As a result of the Merger (as defined below), we also expect to incur additional costs associated with maintaining compliance with Nasdaq listing rules and the requirements of the U.S. Securities and Exchange Commission, or SEC, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of its preclinical studies, initiation and conduct of any clinical trials, and its expenditures on other research and development activities, including the expansion of its pipeline.
Previous wording
On April 17, 2024, we entered into a subscription agreement with certain new and existing accredited investors to issue and sell an aggregate of 1,249,283 shares of common stock in a private placement, or the April 2024 PIPE, that resulted in gross proceeds of approximately $70.0 million, before deducting placement agent fees and estimated offering expenses. The PIPE, which closed on April 22, 2024, was led by funds affiliated with Deep Track Capital, with participation from Atlas Venture, Blue Owl Healthcare Opportunities, NEA, Rock Springs Capital, Tri Locum Partners, and other leading healthcare investors.
Current wording
On April 17, 2024, we entered into a subscription agreement with certain new and existing accredited investors to issue and sell an aggregate of 1,249,283 shares of common stock in a private placement, or the April 2024 PIPE, that resulted in gross proceeds of approximately $70.0 million, before deducting placement agent fees and offering expenses of approximately $2.6 million. The April 2024 PIPE, which closed on April 22, 2024, was led by funds affiliated with Deep Track Capital, with participation from Atlas Venture, Blue Owl Healthcare Opportunities, NEA, Rock Springs Capital, Tri Locum Partners, and other leading healthcare investors.
Previous wording
external research and development expenses incurred under agreements with contract research organizations, or CROs as well as with consultants;
Current wording
external research and development expenses incurred under agreements with contract research organizations, or CROs, contract and manufacturing organization, or CMOs, as well as with consultants;
Previous wording
Our external research and development expenses consist primarily of fees paid to CROs and outside consultants in connection with our preclinical development activities. Our external research and development expenses also include fees incurred under license agreements. As a pre-clinical company, we do not yet track these external research and development costs on a program-by-program basis. We plan to track program costs on our lead development candidate KRRO-110 upon filing of an Investigational New Drug, or IND, application.
Current wording
Our external research and development expenses consist primarily of fees paid to CROs, CMOs and outside consultants in connection with our preclinical development activities. Our external research and development expenses also include fees incurred under license agreements. As a pre-clinical company, we do not yet track these external research and development costs on a program-by-program basis. We plan to track program costs on our lead development candidate KRRO-110 upon filing of an Investigational New Drug, or IND, application.
Previous wording
Other income, net primarily consists of interest income earned on money market fund accounts.
Current wording
Other income, net primarily consists of interest income earned on money market fund accounts and marketable securities.
Previous wording
Comparison of the Three Months Ended March 31, 2024 and 2023
Current wording
Comparison of the Three and Six Months Ended June 30, 2024 and 2023
Previous wording
The following table summarizes our results of operations for the three months ended March 31, 2024 and 2023:
Current wording
The following table summarizes our results of operations for the three and six months ended June 30, 2024 and 2023:
Previous wording
The following table summarizes our research and development expenses for the three months ended March 31, 2024 and 2023:
Current wording
The following table summarizes our research and development expenses for the three and six months ended June 30, 2024 and 2023:
Previous wording
$0.8 million of decreased lab supplies and consumables, primarily attributable to reduction in consumables purchased for screening and sequencing;
Current wording
Research and development expenses were $17.1 million for the three months ended June 30, 2024, compared to $13.1 million for the three months ended June 30, 2023. The increase of $4.0 million was primarily driven by a $2.4 million increase in discovery, preclinical and contract manufacturing costs as we prepared for our first-in-human trial of KRRO-110, a $0.9 million increase in license and milestone fees, a $0.9 million increase in personnel-related expenses primarily due to an increase in headcount to support the expansion of our research and development function, a $0.6 million increase in facility costs that support our overall research and development activities, partially offset by a $1.0 million decrease in lab supplies and consumables primarily due to reduction in consumables purchased for screening and sequencing.
Previous wording
$2.6 million of decreased sponsored research and license fees primarily attributable to an upfront cash payment of $2.5 million made to Genevant in March 2023 upon execution of a collaboration and license agreement;
Current wording
Research and development expenses were $30.7 million for the six months ended June 30, 2024, compared to $27.8 million for the six months ended June 30, 2023. The increase of $2.9 million was primarily driven by a $2.4 million increase in discovery, preclinical and contract manufacturing costs as we prepared for our first-in-human trial of KRRO-110, a $2.5 million increase in personnel-related expenses primarily due to an increase in headcount to support the expansion of our research and development function, and a $1.9 million increase in facility costs primarily due to the expansion of our mixed-use office spaces and overall support of research and development activities, partially offset by a $1.8 million decrease in lab supplies and consumables primarily due to reduction in consumables purchased for screening and sequencing, a $1.7 million decrease in sponsored research and license fees primarily attributable to an upfront payment of $2.5 million made to Genevant in March 2023 upon execution of a collaboration and license agreement partially offset by the achievement of a $1.0 million milestone in the first half of 2024, and a $0.4 million decrease in consulting and other costs.
Previous wording
The following table summarizes our general and administrative expenses for the three months ended March 31, 2024 and 2023:
Current wording
The following table summarizes our general and administrative expenses for the three and six months ended June 30, 2024 and 2023:
Previous wording
Total other income, net increased by $1.4 million from $0.5 million for the three months ended March 31, 2023 to $1.9 million for the three months ended March 31, 2024. The increase in other income, net was primarily attributable to an increase of $1.9 million in interest income earned on money market fund accounts driven by rising interest rates and higher cash and cash equivalent balance.
Current wording
Total other income, net was $2.3 million for the three months ended June 30, 2024, compared to $0.8 million for the three months ended June 30, 2023. The increase of $1.5 million was primarily due to an increase of $1.5 million in interest income earned from our cash, cash equivalents and marketable securities driven by steady interest rates and higher cash, cash equivalent and marketable securities balance.
Previous wording
Since our inception, we have generated recurring net losses. We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all. Since inception, we have funded our operations primarily through proceeds from the issuance of convertible preferred stock and common stock. To date, we have raised approximately $223.6 million of aggregate gross proceeds from the sale of convertible preferred stock, $117.3 million from the Pre-Closing Financing and $70.0 million from the April 2024 PIPE. As of March 31, 2024, we had cash and cash equivalents of $138.8 million.
Current wording
Since our inception, we have generated recurring net losses. We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all. Since inception, we have funded our operations primarily through proceeds from the issuance of convertible preferred stock and common stock. To date, we have raised approximately $223.6 million of aggregate gross proceeds from the sale of convertible preferred stock, $117.3 million from the Pre-Closing Financing and $70.0 million from the April 2024 PIPE. As of June 30, 2024, we had cash, cash equivalents and marketable securities of $187.8 million.
Previous wording
Since inception, we have incurred significant operating losses and, as of March 31, 2024, had an accumulated deficit of $202.6 million. We expect to continue to incur significant expenses, operating losses, and negative operating cash flows for the foreseeable future. In addition, we have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all.
Current wording
Since inception, we have incurred significant operating losses and, as of June 30, 2024, had an accumulated deficit of $224.4 million. We expect to continue to incur significant expenses, operating losses, and negative operating cash flows for the foreseeable future. In addition, we have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all.
Previous wording
As of March 31, 2024, we had cash and cash equivalents of $138.8 million. We expect that our cash and cash equivalents outstanding as of March 31, 2024, together with the gross proceeds of $70.0 million from the April 2024 PIPE will be sufficient to fund our operating expenses and capital expenditure requirements into the second half of 2026. We have based this estimate on assumptions that may prove to be wrong, and we could expend our capital resources sooner than we expect. We may also pursue additional cash resources through public or private equity, collaborations or debt financings. There is no assurance that we will be successful in obtaining sufficient financing on acceptable terms to continue funding our operations.
Current wording
As of June 30, 2024, we had cash, cash equivalents and marketable securities of $187.8 million. We expect that our cash, cash equivalents and marketable securities outstanding as of June 30, 2024 will be sufficient to fund our operating expenses and capital expenditure requirements into the second half of 2026. We have based this estimate on assumptions that may prove to be wrong, and we could expend our capital resources sooner than we expect. We may also pursue additional cash resources through public or private equity, collaborations or debt financings. There is no assurance that we will be successful in obtaining sufficient financing on acceptable terms to continue funding our operations.
Previous wording
The following table summarizes our cash flows for the three months ended March 31, 2024 and 2023:
Current wording
The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023:
Previous wording
Net cash used in investing activities for the three months ended March 31, 2024 was $5.6 million, compared to net cash provided by investing activities of $15.5 million for the three months ended March 31, 2023. Net cash provided by investing activities primarily consists of proceeds from maturities of investments partially offset by cash used to purchase property and equipment.
Current wording
Cash (Used in) Provided by Investing Activities
Previous wording
Cash Provided by (used in) Investing Activities
Current wording
Net cash used in investing activities was $108.0 million for the six months ended June 30, 2024 and consisted primarily of $96.4 million of purchase of marketable securities and $11.6 million of purchase of property and equipment.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
$1.3 million of increased facilities-related costs primarily due to the expansion of our mixed-use office spaces and depreciation of lab equipment.
Previous report — wording carried elsewhere
Comparison of the Three Months Ended March 31, 2024 and 2023