Sarepta Therapeutics Inc

Previous wording

our expectation that our partnerships with Catalent, Inc. (“Catalent”) will support our clinical and commercial manufacturing demand for our SRP-9001 Duchenne program and LGMD programs, while also acting as a manufacturing platform for potential future gene therapy programs;

Current wording

our expectation that our partnership with Catalent, Inc. (“Catalent”) will support our clinical and commercial manufacturing demand for our SRP-9001 Duchenne program and LGMD programs, while also acting as a manufacturing platform for potential future gene therapy programs;

Previous wording

estimated timelines and milestones for the remainder of 2024 and beyond, including meeting with the FDA in the second half of 2024 with respect to SRP-5051;

Current wording

estimated timelines and milestones for the remainder of 2024 and beyond;

Previous wording

ELEVIDYS (delandistrogene moxeparvovec-rokl), approved by the FDA on June 20, 2024, is an adeno-associated virus-based gene therapy for the treatment of ambulatory pediatric patients at least 4 years old with Duchenne with a confirmed mutation in the Duchenne gene. ELEVIDYS is also approved for non-ambulatory patients under the accelerated approval pathway. ELEVIDYS was previously granted accelerated approval by the FDA on June 22, 2023 for the treatment of ambulatory pediatric patients aged 4 through 5 years with Duchenne with a confirmed mutation in the Duchenne gene. ELEVIDYS is contraindicated in patients with any deletion in exon 8 and/or exon 9 in the Duchenne gene.

Current wording

ELEVIDYS (delandistrogene moxeparvovec-rokl), approved by the FDA on June 20, 2024, is an adeno-associated virus-based (“AAV”) gene therapy for the treatment of ambulatory patients at least four years old with Duchenne with a confirmed mutation in the Duchenne gene. ELEVIDYS is also approved for non-ambulatory patients under the accelerated approval pathway. ELEVIDYS was previously granted accelerated approval by the FDA on June 22, 2023 for the treatment of ambulatory patients aged four through five years with Duchenne with a confirmed mutation in the Duchenne gene. ELEVIDYS is contraindicated in patients with any deletion in exon 8 and/or exon 9 in the Duchenne gene.

Previous wording

SRP-5051 uses our next-generation chemistry platform, cell-penetrating peptide-conjugated PPMO, and our exon-skipping technology to skip exon 51 of the dystrophin gene. SRP-5051, a peptide conjugated PMO, is designed to bind to exon 51 of dystrophin pre-mRNA, resulting in exclusion of this exon during mRNA processing in patients with genetic mutations that are amenable to exon 51 skipping. Exon skipping is intended to promote the production of an internally truncated but functional dystrophin protein. In the fourth quarter of 2017, we commenced a first-in-human, single ascending dose, study for the treatment of Duchenne in patients who are amenable to exon 51 skipping. In 2019, we commenced Study 5051-201. In December 2020, we announced an interim analysis on clinical results from the 10 mg/kg and 20 mg/kg dose cohorts of Part A of Study 5051-201. In May 2021, we announced results from the 30 mg/kg cohort of Part A of Study 5051-201. We initiated Part B of Study 5051-201 in the fourth quarter of 2021. In July 2022, the FDA placed Study 5051-201 on clinical hold following a serious adverse event of hypomagnesemia. The clinical hold was lifted in August 2022. We completed enrollment of Part B of Study 5051-201 in the first quarter of 2023. In January 2024, we announced results from Part B of Study 5051-201. We plan to meet with FDA to discuss next steps in the second half of 2024.

Current wording

SRP-5051 uses our next-generation chemistry platform, cell-penetrating peptide-conjugated PPMO, and our exon-skipping technology to skip exon 51 of the dystrophin gene. SRP-5051, a peptide conjugated PMO, is designed to bind to exon 51 of dystrophin pre-mRNA, resulting in exclusion of this exon during mRNA processing in patients with genetic mutations that are amenable to exon 51 skipping. In 2019, we commenced Study 5051-201. In November 2024, we announced that we discontinued development of SRP-5051 and our PPMO program for treatment of Duchenne.

Previous wording

We have developed proprietary state-of-the-art Chemistry, Manufacturing and Controls (“CMC”) capabilities that allow manufacturing and testing of our products and product candidates to support both clinical development as well as commercialization. We continue to refine and optimize our manufacturing processes and test methods. We have entered into certain manufacturing and supply arrangements with third-party suppliers which will in part utilize these capabilities to support production of certain of our product candidates and their components. We have also opened facilities over the past several years that significantly enhanced our internal research and development capabilities. However, we currently do not have internal GMP manufacturing capabilities to produce our products and product candidates for commercial and/or clinical use. For our current and future manufacturing needs, we have entered into supply agreements with specialized contract manufacturing organizations (each a “CMO”) to produce custom raw materials, the active pharmaceutical ingredients (“APIs”), drug product and finished goods for our products and product candidates for both commercial and clinical use. All of our CMO partners have extensive technical expertise, GMP experience and experience manufacturing our specific technology.

Current wording

We have developed proprietary state-of-the-art Chemistry, Manufacturing and Controls (“CMC”) capabilities that allow manufacturing and testing of our products and product candidates to support both clinical development and commercialization. We continue to refine and optimize our manufacturing processes and test methods. We have entered into certain manufacturing and supply arrangements with third-party suppliers which will in part utilize these capabilities to support production of certain of our product candidates and their components. We have also opened facilities over the past several years that significantly enhanced our internal research and development capabilities. However, we currently do not have internal GMP manufacturing capabilities to produce our products and product candidates for commercial and/or clinical use. For our current and future manufacturing needs, we have entered into supply agreements with specialized contract manufacturing organizations (each a “CMO”) to produce custom raw materials, the active pharmaceutical ingredients (“APIs”), drug product and finished goods for our products and product candidates for both commercial and clinical use. All of our CMO partners have extensive technical expertise, GMP experience and experience manufacturing our specific technology.

Previous wording

As of June 30, 2024, we had approximately $1,476.1 million of cash, cash equivalents, restricted cash and investments, consisting of $383.6 million of cash and cash equivalents, $1,076.9 million of short-term investments and $15.6 million of non-current restricted cash. We believe that our balance of cash, cash equivalents and investments is sufficient to fund our current operational plan for at least the next twelve months.

Current wording

As of September 30, 2024, we had approximately $1,395.8 million of cash, cash equivalents, restricted cash and investments, consisting of $197.9 million of cash and cash equivalents, $1,182.3 million of investments, and $15.6 million of restricted cash. We believe that our balance of cash, cash equivalents and investments is sufficient to fund our current operational plan for at least the next twelve months.

Previous wording

There have been no changes to our critical accounting policies and significant estimates as detailed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

There have not been significant changes to our critical accounting policies and significant estimates as detailed in our Annual Report on Form 10-K for the year ended December 31, 2023, apart from additional monitoring of our valuation allowance, as noted below.

Previous wording

Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

Net product revenues for our products for the three and six months ended June 30, 2024 increased by $121.6 million and $249.5 million, respectively, compared with the three and six months ended June 30, 2023. The increase primarily reflects $121.7 million and $255.7 million, respectively, of net product revenues associated with sales of ELEVIDYS during the three and six months ended June 30, 2024, which was approved by the FDA and launched in June 2023.

Current wording

Net product revenues for our products for the three and nine months ended September 30, 2024 increased by $120.4 million and $370.0 million, respectively, compared with the three and nine months ended September 30, 2023. The increases primarily reflect additional net product revenues of $111.9 million and $367.5 million, respectively, associated with sales of ELEVIDYS during the three and nine months ended September 30, 2024 due to an increase in demand following its June 2023 FDA approval and launch and expanded label in June 2024.

Previous wording

For the six months ended June 30, 2024 and 2023, we recognized $56.4 million and $44.3 million of collaboration and other revenues, respectively. The increase is primarily due to the $48.0 million of collaboration revenue recognized in the six months ended June 30, 2024 related to Roche’s declined option to acquire the ex-US rights to a certain external, early stage Duchenne development program. This was partially offset by the amortization of the single, combined performance obligation under the Collaboration Agreement during the six months ended June 30, 2023, which was fully amortized as of December 31, 2023. In addition, in accordance with the Collaboration Agreement, the parties agreed to enter into a supply agreement in order for Sarepta to supply Roche with clinical and commercial batches of ELEVIDYS (the “Supply Agreement”). While the Supply Agreement is in the process of being negotiated, we delivered batches of commercial ELEVIDYS supply to Roche that were agreed upon on a purchase order-by-purchase order basis. For the six months ended June 30, 2024, we recognized $8.4 million of contract manufacturing and other revenues, which is primarily related to these Roche shipments and royalty revenue from Roche, with no similar activity for the six months ended June 30, 2023.

Current wording

Collaboration and other revenues primarily relate to our collaboration arrangement with F. Hoffman-La Roche Ltd. (“Roche”). For the three months ended September 30, 2024 and 2023, we recognized $37.4 million and $22.5 million of collaboration and other revenues, respectively. In accordance with the Collaboration Agreement with Roche (the “Collaboration Agreement”), the parties agreed to enter into a supply agreement in order for us to supply Roche with clinical and commercial batches of ELEVIDYS (the “Supply Agreement”). While the Supply Agreement is in the process of being negotiated, we delivered batches of commercial ELEVIDYS supply to Roche that were agreed upon on a purchase order-by-purchase order basis. For the three months ended September 30, 2024, we recognized $27.9 million of contract manufacturing revenue, which is related to these Roche shipments, with no similar activity during the three months ended September 30, 2023. In addition, we recognized $9.5 million of royalty revenue from sales of ELEVIDYS by Roche, with no similar activity for the three months ended September 30, 2023. This was partially offset by the amortization of the single, combined performance obligation under the Collaboration Agreement during the three months ended September 30, 2023, which was fully amortized as of December 31, 2023. Please refer to Note 3, License and Collaboration Agreements for further discussion of the Collaboration Agreement.

Previous wording

Our cost of sales (excluding amortization of in-licensed rights) consists of inventory costs that relate to sales of our products and the related overhead costs and royalty payments primarily to BioMarin Pharmaceuticals, Inc. (“BioMarin”) and the University of Western Australia (“UWA”) for our PMO Products and to Nationwide Children’s Hospital (“Nationwide”) for ELEVIDYS. Prior to receiving regulatory approval for EXONDYS 51, VYONDYS 53, AMONDYS 45 and ELEVIDYS by the FDA in September 2016, December 2019, February 2021 and June 2023, respectively, we expensed such manufacturing and material costs as research and development expenses. For the PMO Products, all previously expensed manufacturing costs had been fully consumed prior to the three and six months ended June 30, 2024 and 2023. For ELEVIDYS sold in the three and six months ended June 30, 2024, the majority of related manufacturing costs incurred had previously been expensed as research and development expenses, as such costs were incurred prior to the FDA approval of the product. If product related costs had not previously been expensed as research and development expenses prior to receiving FDA approval, the incremental inventory costs related to ELEVIDYS sold, including products sold to Roche under the Collaboration Agreement, would have been approximately $15.9 million and $39.7 million for the three and six months ended June 30, 2024, respectively.

Current wording

Our cost of sales (excluding amortization of in-licensed rights) consists of inventory costs that relate to sales of our products and the related overhead costs and royalty payments primarily to BioMarin Pharmaceuticals, Inc. (“BioMarin”) and the University of Western Australia (“UWA”) for our PMO Products and to Nationwide Children’s Hospital (“Nationwide”) for ELEVIDYS. Prior to receiving regulatory approval for our products, we expensed manufacturing and material costs as research and development expenses. For the PMO Products, all previously expensed manufacturing costs had been fully consumed prior to the three and nine months ended September 30, 2024 and 2023. For ELEVIDYS sold in the three and nine months ended September 30, 2024, a portion of related manufacturing costs incurred had previously been expensed as research and development expenses, as such costs were incurred prior to FDA approval of the product. For ELEVIDYS sold in the three and nine months ended September 30, 2023, the majority of related manufacturing costs incurred had previously been expensed as research and development expenses, as such costs were incurred prior to FDA approval of the product. If product related costs had not previously been expensed as research and development expenses prior to receiving FDA approval, the incremental inventory costs related to ELEVIDYS sold, including products sold to Roche under the Collaboration Agreement, would have been approximately $29.1 million and $68.8 million for the three and nine months ended September 30, 2024, respectively.

Previous wording

$2.6 million decrease in clinical trial expenses primarily due to a ramp-down of the ESSENCE studies for AMONDYS 45 and VYONDYS 53;

Current wording

$9.5 million decrease in clinical trial expenses primarily due to a decrease in activity for our PPMO platform and a ramp-down of the ESSENCE studies for AMONDYS 45 and VYONDYS 53;

Previous wording

$3.0 million decrease in compensation and other personnel expenses primarily due to an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023, partially offset by changes in headcount;

Current wording

$4.3 million decrease in stock-based compensation expense primarily due to an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023 and expanded label in June 2024, partially offset by changes in headcount;

Previous wording

$1.3 million decrease in pre-clinical expenses primarily due to a decrease in toxicology study activity in our PPMO and PMO platforms;

Current wording

$2.0 million decrease in pre-clinical expenses primarily due to a decrease in toxicology study activity in our PPMO platform;

Previous wording

$7.1 million decrease in research and other expenses primarily driven by $7.5 million of up-front payments as a result of the execution of certain research and license agreements in the three months ended June 30, 2023, with no similar up-front or milestone activity for the three months ended June 30, 2024. This was partially offset by the termination of an external early stage Duchenne development program during the three months ended June 30, 2024; and

Current wording

$4.1 million decrease in research and other expenses primarily due to milestone achievements in certain research and license agreements during the three months ended September 30, 2023, with no similar milestone activity for the three months ended September 30, 2024; and

Previous wording

$10.2 million decrease in the offset to expense associated with a collaboration reimbursement from Roche due to timing and frequency of clinical supply costs and engineering runs for our SRP-9001 gene therapy programs.

Current wording

$26.6 million increase in the offset to expense associated with a collaboration reimbursement from Roche, primarily due to reimbursable costs associated with the termination of the Thermo Agreement during the three months ended September 30, 2024, with no similar activity for the three months ended September 30, 2023. This was partially offset by a decrease in clinical supply costs due to timing for our SRP-9001 gene therapy programs.

Previous wording

Research and development expenses for the three months ended June 30, 2024 decreased by $62.2 million, or 26%, compared with the three months ended June 30, 2023. The decrease was primarily driven by the following:

Current wording

Research and development expenses for the nine months ended September 30, 2024 decreased by $77.3 million, or 11%, compared with the nine months ended September 30, 2023. The decrease was primarily driven by the following:

Previous wording

$58.0 million decrease in manufacturing expenses primarily due to the capitalization of commercial batches of ELEVIDYS manufactured upon its approval in June 2023;

Current wording

$33.2 million decrease in manufacturing expenses primarily due to the capitalization of commercial batches of ELEVIDYS manufactured upon its approval in June 2023, a decrease in clinical batches for our Eteplirsen program and a decrease in activity for our PPMO platform, partially offset by $91.9 million of costs associated with the termination of the Thermo Agreement. Please refer to Note 16, Commitments and Contingenciesfor further discussion of the Thermo Agreement;

Previous wording

$2.4 million decrease in compensation and other personnel expenses primarily due to an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023, partially offset by changes in headcount;

Current wording

$2.5 million decrease in compensation and other personnel expenses primarily due to an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023 and expanded label in June 2024, partially offset by changes in headcount;

Previous wording

$1.8 million decrease in stock-based compensation expense primarily due to an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023, partially offset by the achievement of performance conditions related to certain restricted stock units with performance conditions (“PSUs”) during the three months ended June 30, 2024 and changes in the value of stock awards;

Current wording

$6.2 million decrease in stock-based compensation expense primarily due to an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023 and expanded label in June 2024, partially offset by the achievement of performance conditions related to certain restricted stock units with performance conditions (“PSUs”) during the nine months ended September 30, 2024 and changes in headcount;

Previous wording

$1.3 million decrease in pre-clinical expenses primarily due to a decrease in toxicology study activity in our PPMO and PMO platforms;

Current wording

$3.3 million decrease in pre-clinical expenses primarily due to a decrease in toxicology study activity in our PPMO platform, partially offset by an increase in toxicology study activity in our LGMD gene therapy programs;

Previous wording

$8.8 million decrease in the offset to expense associated with a collaboration reimbursement from Roche due to timing and frequency of clinical supply costs and engineering runs for our SRP-9001 gene therapy programs.

Current wording

$17.8 million increase in the offset to expense associated with a collaboration reimbursement from Roche due to reimbursable costs associated with the termination of the Thermo Agreement during the nine months ended September 30, 2024, with no similar activity for the nine months ended September 30, 2023. This was partially offset by a decrease in clinical supply costs due to timing for our SRP-9001 gene therapy programs.

Previous wording

Selling, general and administrative expenses for the three months ended June 30, 2024 increased by $20.2 million, or 17%, compared with the three months ended June 30, 2023. This increase was primarily driven by the following:

Current wording

Selling, general and administrative expenses for the three months ended September 30, 2024 increased by $7.3 million, or 6%, compared with the three months ended September 30, 2023. This increase was primarily driven by the following:

Previous wording

$10.8 million increase in professional service expenses primarily related to ongoing litigation matters and the continued efforts to commercialize ELEVIDYS;

Current wording

$2.5 million increase in professional service expenses primarily related to the continued efforts to commercialize ELEVIDYS, partially offset by lower expenses related to ongoing litigation matters;

Previous wording

$5.4 million increase in compensation and other personnel expenses primarily due to changes in headcount;

Current wording

$2.9 million increase in compensation and other personnel expenses primarily due to changes in headcount; and

Previous wording

Selling, general and administrative expenses for the six months ended June 30, 2024 increased by $36.5 million, or 16%, compared with the six months ended June 30, 2023. This increase was primarily driven by the following:

Current wording

Selling, general and administrative expenses for the nine months ended September 30, 2024 increased by $43.8 million, or 13%, compared with the nine months ended September 30, 2023. This increase was primarily driven by the following:

Previous wording

$6.2 million increase in professional service expenses primarily related to the continued efforts to commercialize ELEVIDYS and ongoing litigation matters;

Current wording

$13.3 million increase in professional service expenses primarily related to the continued efforts to commercialize ELEVIDYS and ongoing litigation matters;

Previous wording

$1.8 million increase in compensation and other personnel expenses primarily due to changes in headcount;

Current wording

$8.3 million increase in compensation and other personnel expenses primarily due to changes in headcount;

Previous wording

$4.9 million increase in stock-based compensation expense primarily related to the achievement of performance conditions related to certain PSUs during the three months ended June 30, 2024;

Current wording

$4.1 million increase in stock-based compensation expense primarily related to the achievement of performance conditions related to certain PSUs during the nine months ended September 30, 2024;

Previous wording

$2.3 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts; and

Current wording

$5.8 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts; and

Previous wording

$4.9 million increase in other expenses primarily due to the timing of charitable contribution activity.

Current wording

$12.2 million increase in other expenses primarily due to the timing of charitable contribution activity.

Previous wording

Amortization of in-licensed rights relates to the agreements we entered into with UWA, Nationwide, BioMarin, and Parent Project Muscular Dystrophy in April 2013, December 2016, July 2017 and May 2018, respectively. Each in-licensed right is being amortized on a straight-line basis over the remaining life of the relevant patent from the date the related fee was incurred, either the regulatory approval of or the first commercial sale of the applicable product. For the three and six months ended June 30, 2024, we recorded amortization of in-licensed rights of approximately $0.6 million and $1.2 million, respectively. For the three and six months ended June 30, 2023, we recorded amortization of in-licensed rights of approximately $0.2 million and $0.4 million, respectively.

Current wording

Amortization of in-licensed rights relates to the agreements we entered into with UWA, Nationwide, BioMarin, and Parent Project Muscular Dystrophy in April 2013, December 2016, July 2017 and May 2018, respectively. Each in-licensed right is being amortized on a straight-line basis over the remaining life of the relevant patent from the date the related fee was incurred, either the regulatory approval of or the first commercial sale of the applicable product. For the three and nine months ended September 30, 2024, we recorded amortization of in-licensed rights of approximately $0.6 million and $1.8 million, respectively. For the three and nine months ended September 30, 2023, we recorded amortization of in-licensed rights of approximately $0.4 million and $0.8 million, respectively.

Previous wording

Other income, net primarily consists of interest expense on our debt facilities, interest income on our cash, cash equivalents and investments, amortization of investment premium or accretion of investment discount, unrealized gain or loss from our investment in our strategic investments and change in the fair value of contingent consideration related to regulatory-related contingent payments meeting the definition of a derivative. Our cash equivalents and investments consist of money market funds, corporate bonds, commercial paper, government and government agency debt securities and certificates of deposit.

Current wording

Other income (expense), net primarily consists of interest expense on our debt instruments, interest income on our cash, cash equivalents and investments, amortization of investment premium or accretion of investment discount, unrealized gain or loss from our investment in our strategic investments, the changes in the fair value of the derivative assets associated with the capped call options for our $570.0 million aggregate principal amount of senior convertible notes due on November 15, 2024 (the “2024 Notes”) and the changes in the fair value of contingent consideration related to regulatory-related contingent payments meeting the definition of a derivative liability. Our cash equivalents and investments consist of money market funds, corporate bonds, commercial paper, government and government agency debt securities and certificates of deposit.

Previous wording

Income tax expense for the three and six months ended June 30, 2024 was approximately $7.1 million and $12.4 million, respectively. Income tax expense for the three and six months ended June 30, 2023 was approximately $9.4 million and $13.4 million, respectively. Income tax expense for the three and six months ended June 30, 2024 and 2023 relates to state, federal and foreign income taxes.

Current wording

Income tax expense for the three and nine months ended September 30, 2024 was approximately $0.4 million and $12.8 million, respectively. Income tax expense for the three and nine months ended September 30, 2023 was approximately $7.8 million and $21.2 million, respectively. Income tax expense for the three and nine months ended September 30, 2024 and 2023 relates to state, federal and foreign income taxes for which available tax losses or credits were not available to offset. As of September 30, 2024, we continued to maintain a full valuation allowance against our deferred tax assets, with the exception of deferred tax assets in certain foreign jurisdictions. We continue to monitor the available evidence relative to recovery of our deferred tax assets and whether such evidence would be sufficient to conclude that it is more likely than not that such deferred tax assets may be partially or fully recoverable. If we were to remove our valuation allowance in part or full, any such adjustment could have a material impact on our effective tax rate in the applicable period and beyond.

Previous wording

We have entered into long-term contractual arrangements from time to time for our facilities, the provision of goods and services, and issuance of debt securities, among others. Additional information regarding our obligations under debt and manufacturing arrangements are provided in Note 10, Indebtednessand Note 15, Commitments and Contingencies to the unaudited condensed consolidated financial statements contained in Item 1. There have been no material changes to our obligations under leasing arrangements as reported in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

We have entered into long-term contractual arrangements from time to time for our facilities, the provision of goods and services, and issuance of debt securities, among others. Additional information regarding our obligations under debt, lease and manufacturing arrangements are provided in Note 10, Indebtedness, Note 13, Leasesand Note 16, Commitments and Contingencies to the unaudited condensed consolidated financial statements contained in Item 1. There have been no material changes to our obligations under leasing arrangements as reported in our Annual Report on Form 10-K for the year ended December 31, 2023.

Previous wording

For products and product candidates that are currently approved or are in various research and development stages, we may be obligated to make up to $2.8 billion of future development, regulatory, up-front royalty and sales milestone payments associated with our license and collaboration agreements. Payments under these agreements generally become due and payable upon the achievement of certain development, regulatory or commercial milestones. Because the achievement of these milestones is not probable, and payment is not required as of June 30, 2024, such contingencies have not been recorded in our unaudited condensed consolidated financial statements. Amounts related to contingent milestone payments are not yet considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory approval and commercial milestones.

Current wording

For products and product candidates that are currently approved or are in various research and development stages, we may be obligated to make up to $2.7 billion of future development, regulatory, up-front royalty and sales milestone payments associated with our license and collaboration agreements. Payments under these agreements generally become due and payable upon the achievement of certain development, regulatory or commercial milestones. Because the achievement of these milestones is not probable, and payment is not required as of September 30, 2024, such contingencies have not been recorded in our unaudited condensed consolidated financial statements. Amounts related to contingent milestone payments are not yet considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory approval and commercial milestones.

Previous wording

Cash used in operating activities, which consists of our net income (loss) adjusted for non-cash items and changes in net operating assets and liabilities, totaled $227.1 million and $331.6 million for the six months ended June 30, 2024 and 2023, respectively. Cash used in operating activities for the six months ended June 30, 2024 was primarily driven by the net income of $42.6 million, adjusted for the following non-cash items:

Current wording

Cash used in operating activities, which consists of our net income (loss) adjusted for non-cash items and changes in net operating assets and liabilities, totaled $297.8 million and $446.3 million for the nine months ended September 30, 2024 and 2023, respectively. Cash used in operating activities for the nine months ended September 30, 2024 was primarily driven by the net income of $76.2 million, adjusted for the following non-cash items:

Previous wording

$91.2 million in stock-based compensation expense;

Current wording

$134.6 million in stock-based compensation expense;

Previous wording

$17.5 million in depreciation and amortization expense;

Current wording

$27.3 million in depreciation and amortization expense;

Previous wording

These amounts were partially offset by the following:

Current wording

These amounts were partially offset by $33.5 million in accretion of investment discount, net.