Aligos Therapeutics Inc

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed in “Risk Factors” and “Special note regarding forward-looking statements.”

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed in “Risk Factors” and “Special note regarding forward-looking statements.” Unless otherwise indicated, all information in this Quarterly Report on Form 10-Q gives effect to a 1-for-25 reverse stock split of our common stock that became effective on August 19, 2024, and all references to shares of common stock outstanding and per share amounts give effect to the reverse stock split.

Previous wording

We are a clinical-stage biopharmaceutical company focused on developing novel therapeutics to address unmet medical needs in liver diseases and viral infections, including in the areas of metabolic dysfunction associated steatohepatitis (MASH), chronic hepatitis B (CHB) and coronavirus infections (e.g., SARS-CoV-2, SARS-CoV, MERS-CoV, and other related infections). The Aligos team has a demonstrated track record of success in drug development and medicinal chemistry in liver and viral diseases, resulting in three potential best-in-class drug candidates, all of which are currently in clinical studies.

Current wording

We are a clinical-stage biopharmaceutical company focused on developing novel therapeutics to address unmet medical needs in liver diseases and viral infections, including in the areas of chronic hepatitis B (CHB), metabolic dysfunction associated steatohepatitis (MASH), and coronavirus infections (e.g., SARS-CoV-2, SARS-CoV, MERS-CoV, and other related infections). The Aligos team has a demonstrated track record of success in drug development and medicinal chemistry in liver and viral diseases, resulting in three potential best-in-class drug candidates, all of which are currently in clinical studies.

Previous wording

Our pipeline of drug candidates includes ALG-055009 for MASH, ALG-000184 for CHB, ALG‑097558 for coronavirus infections, and we also have a portfolio of preclinical programs. ALG-055009 is our potential best-in-class thyroid hormone receptor beta (THR-β) agonist for MASH with enhanced pharmacologic properties vs. competitor THR-β agonists. Phase 1 data demonstrated linear pharmacokinetics (PK) with low variability, a well-tolerated safety profile, and expected thyromimetic effects. Phase 2a enrollment was completed in May 2024 and topline data are expected in the early fourth quarter of 2024. ALG-000184 is our potential best-/first-in-class CAM-E for CHB with enhanced pharmacologic properties vs. competitor CAM-E drugs and has demonstrated greater HBV DNA suppression compared to the standard of care, nucleos(t)ide analogs (NAs), as well as multi-log 10 reductions in viral antigens. Dosing with ALG‑000184 is ongoing in 96-week Phase 1b cohorts with interim readouts expected throughout the year that will be presented at upcoming scientific conferences.

Current wording

Our pipeline of drug candidates includes ALG-000184 for CHB, ALG-055009 for MASH, ALG‑097558 for coronavirus infections, and we also have a portfolio of preclinical programs. ALG-000184 is our potential best-/first-in-class Capsid Assembly Modulator (CAM-E) for CHB with enhanced pharmacologic properties vs. competitor CAM-E drugs and has demonstrated greater HBV DNA suppression compared to the standard of care, nucleos(t)ide analogs (NAs), as well as multi-log 10 reductions in viral antigens. ALG-055009 is our potential best-in-class thyroid hormone receptor beta (THR-β) agonist for MASH with enhanced pharmacologic properties vs. competitor THR-β agonists. Phase 2a topline data demonstrated that ALG-055009 dose groups met the primary endpoint with statistically significant reductions in liver fat at Week 12 as measured by Magnetic Resonance Imaging Proton Density Fat Fraction (MRI-PDFF).

Previous wording

Our second area of focus seeks to enhance the viral suppression and rate of functional cure for CHB, which often results in life-threatening conditions such as cirrhosis, end-stage liver disease and, the most common form of liver cancer, hepatocellular carcinoma (HCC). To achieve this, we are developing a portfolio of differentiated CHB drug candidates, including a small molecule Capsid Assembly Modulator that results in the production of empty viral capsids (CAM-E) and small molecule inhibitors of the Programmed Cell Death Ligand 1 (PD‑1/PD-L1) interaction.

Current wording

Our primary area of focus seeks to enhance the viral suppression and rate of functional cure for CHB, which often results in life-threatening conditions such as cirrhosis, end-stage liver disease, and the most common form of liver cancer, hepatocellular carcinoma (HCC). To achieve this, we are developing a portfolio of differentiated CHB drug candidates, including a small molecule Capsid Assembly Modulator that results in the production of empty viral capsids and small molecule inhibitors of the Programmed Cell Death Ligand 1 (PD‑1/PD-L1) interaction.

Previous wording

(HBeAg) positive/negative CHB subjects. For these studies, ALG‑000184 was found to be well tolerated with a favorable PK profile and demonstrated potentially best-in-class multi-log 10 HBV DNA and RNA reductions at all doses tested, as well as HBV surface antigen (HBsAg) reductions in a subset of HBeAg positive subjects receiving 300 mg ALG‑000184 (Hou et. al, AASLD 2022). Based on the favorable profile after dosing up to 300 mg ALG‑000184 x 28 days, additional Phase 1b cohorts are currently ongoing and evaluating the risk-benefit profile of up to 300 mg doses of ALG‑000184 with or without entecavir (ETV) therapy for up to 96 weeks in HBeAg positive/negative CHB subjects. Preliminary data have been presented for several of these cohorts (Agarwal et al., EASL 2024, Yuen et al., EASL 2024) and indicate that ALG‑000184 dosed for up to 72 weeks was well tolerated with a favorable PK profile and potentially best-in-class antiviral activity.

Current wording

We have completed the initial Phase 1a study in healthy volunteers (HVs) for our CAM-E, ALG‑000184, and a Phase 1b dose range finding study evaluating the safety, pharmacokinetic (PK) and antiviral activity of 10-300 mg doses of ALG‑000184 for 28 days among untreated HBV e-antigen (HBeAg) positive/negative CHB subjects. For these studies, ALG‑000184 was found to be well tolerated with a favorable PK profile and demonstrated potentially best-in-class multi-log 10 HBV DNA and RNA reductions at all doses tested, as well as HBV surface antigen (HBsAg) reductions in a subset of HBeAg positive subjects receiving 300 mg ALG‑000184 (Hou et. al, AASLD 2022). Based on the favorable profile after dosing up to 300 mg ALG‑000184 x 28 days, additional Phase 1b cohorts are currently ongoing and evaluating the risk-benefit profile of up to 300 mg doses of ALG000184 with or without entecavir (ETV) therapy for up to 96 weeks in HBeAg positive and HBeAg negative CHB subjects. Preliminary data have been presented for several of these cohorts (Agarwal et al., EASL 2024, Yuen et al., EASL 2024) and indicate that ALG000184 (± ETV) dosed for up to 72 weeks was well tolerated with a favorable PK profile and potentially best-in-class antiviral activity.

Previous wording

Data from ≤72 weeks following an oral daily dose of 300 mg ALG-000184 monotherapy demonstrated sustained HBV DNA suppression (<LLOQ <10 IU/mL) in 9/10 (90%) HBeAg-positive CHB subjects. This monotherapy arm also showed that as HBeAg declined to near undetectability in this patient population, anti-HBe antibody (HBeAb) levels exhibited a positive increasing trend. Data from ≤60 weeks who received a daily single dose of 300 mg ALG-000184 monotherapy demonstrated complete suppression of HBV DNA (<LLOQ 10 IU/mL) and RNA (<LLOQ 10 copies/mL) for all 11 HBeAg-negative CHB subjects (100%), with reduction in HBcrAg levels indicating inhibition of HBV replication, as well as inhibition of cccDNA establishment/replenishment. In both patient populations, ALG-000184 continued to be well tolerated with no viral breakthrough.

Current wording

Data from ≤72 weeks following an oral daily dose of 300 mg ALG-000184 monotherapy demonstrated HBV DNA suppression (<LLOQ <10 IU/mL) in 6/10 (60%) subjects by Week 48 and in 9/10 (90%) HBeAg-positive CHB subjects by Week 72. This monotherapy arm also showed that as HBeAg declined to near undetectability in this patient population, and that anti-HBe antibody (HBeAb) levels exhibited a positive increasing trend. Data from subjects who received a daily single dose of 300 mg ALG-000184 monotherapy demonstrated complete sustained suppression of HBV DNA (<LLOQ 10 IU/mL) and RNA (<LLOQ 10 copies/mL) for all 11 HBeAg-negative CHB subjects (100%) by week 48, with reduction in HBcrAg levels indicating inhibition of HBV replication, and suggesting inhibition of cccDNA establishment/replenishment. In both patient populations, ALG-000184 continued to be well tolerated with no viral breakthrough.

Previous wording

Compared to Phase 3 studies with the current standard of care NAs, tenofovir disproxil fumarate (TDF) and tenofovir alafenamide (TAF) (Buti et al., Lancet Gastro, 2016), these Phase 1b data indicate that ALG‑000184 treatment may result in a substantially higher proportion of subjects with HBV DNA levels < LLOQ (10 IU/mL) at Week 48, which is the approvable endpoint for chronic suppressive therapy in HBV (FDA Guidance, Chronic Hepatitis B Virus Infection: Developing Drugs for Treatment Guidance for Industry, April 2022 – Section III.B.1.a). We recently received supportive feedback from the FDA regarding chronic suppressive therapy with ALG-000184. Subsequent clinical studies of ALG‑000184 can be conducted to show superiority to standard of care with the proportion of subjects with HBV DNA levels < LLOQ (10 IU/mL) at Week 48, as the primary approvable endpoint. Additionally, in combination with other mechanisms of action such as those in our CHB portfolio, ALG-000184 may lead to higher rates of functional cure. Dosing of HBeAg positive/negative subjects with ALG‑000184 ± ETV in ongoing cohorts will continue throughout 2024 and interim safety, PK, and antiviral activity data will be presented at scientific conferences throughout the year.

Current wording

Compared to Phase 3 studies with the current standard of care NAs, tenofovir disoproxil fumarate (TDF) and tenofovir alafenamide (TAF) (Buti et al., Lancet Gastro, 2016), these Phase 1b data indicate that ALG‑000184 treatment may result in a substantially higher proportion of subjects with HBV DNA levels < LLOQ (10 IU/mL) at Week 48, which is the approvable endpoint for chronic suppressive therapy in HBV (Food and Drug Administration (FDA) Guidance, Chronic Hepatitis B Virus Infection: Developing Drugs for Treatment Guidance for Industry, April 2022 – Section III.B.1.a). We recently received supportive feedback from the FDA regarding chronic suppressive therapy with ALG-000184. Subsequent clinical studies of ALG‑000184 can be conducted to show superiority to standard of care with the proportion of subjects with HBV DNA levels < LLOQ (10 IU/mL) at Week 48, as the primary approvable endpoint. Additionally, in combination with other mechanisms of action such as Amoytop’s mipeginterferon alfa-2b and those in our CHB portfolio, ALG-000184 may lead to higher rates of functional cure. Dosing of HBeAg positive and HBeAg negative subjects with ALG000184 ± ETV will continue throughout 2024 and interim safety, PK, and antiviral activity data will be presented at scientific conferences throughout the year. In October 2024, Aligos announced that the FDA cleared the Company’s investigational new drug application (IND) for a Phase 1 drug-drug interaction study, and while Phase 2 enabling activities are ongoing, we plan the submission of a new Phase 2 protocol under the existing IND in the first quarter of 2025.

Previous wording

We are also exploring ways to boost immune responses via small molecule inhibitors of the Programmed Cell Death Ligand 1 (PD-L1) transmembrane protein and its interaction with Programmed Cell Death Protein 1 (PD-1). We have rationally designed these T cell activating drug candidates to partition preferentially to the liver and thereby potentially mitigate systemic toxicity with the goal to develop better tolerated PD-1/PD-L1 inhibitors for CHB patients. Lead molecules developed to date show similar in vivo efficacy in tumor models to approved PD-1/PD-L1 antibodies. Our small molecule lead compounds also demonstrate greater PD-L1 target occupancy at a lower dose in a humanized PD-L1 subcutaneous tumor model compared to competitor small molecule PD-L1 inhibitors. We have recently selected two lead molecules and have completed scale-up to enable further advancement towards clinical development.

Current wording

We are also exploring ways to boost immune responses via small molecule inhibitors of the Programmed Cell Death Ligand 1 (PD-L1) transmembrane protein and its interaction with Programmed Cell Death Protein 1 (PD-1). We have rationally designed these T cell activating drug candidates to partition preferentially to the liver and thereby potentially mitigate systemic toxicity with the goal to develop better tolerated PD-1/PD-L1 inhibitors for CHB patients. Lead molecules developed to date show in vivo efficacy in tumor models similar to approved PD-1/PD-L1 antibodies. Our small molecule lead compounds also demonstrate greater PD-L1 target occupancy at a lower dose in a humanized PD-L1 subcutaneous tumor model compared to competitor small molecule PD-L1 inhibitors. We have recently selected two lead molecules and have completed scale-up to enable further advancement towards clinical development.

Previous wording

Our primary area of focus is MASH, a complex, chronic liver disease which is a leading cause of liver-related morbidity including cirrhosis, hepatocellular carcinoma, liver transplant, and end-stage liver disease. The FDA recently approved the first drug for the treatment of MASH, resmetirom, a THR-β agonist, but a need remains for better therapies due to resmetirom’s sub-optimal risk-benefit profile, particularly its likely sub-maximal efficacy. To achieve this, we have purpose-built ALG-055009 to have increased potency (~50-fold greater vs. resmetirom in head-to-head in vitro studies) and ß selectivity as well as enhanced pharmacologic properties to deliver a better PK profile; we believe all of these advantages make ALG-055009 well positioned to be a potential best-in-class THR-β agonist.

Current wording

MASH is a complex, chronic liver disease which is a leading cause of liver-related morbidity including cirrhosis, hepatocellular carcinoma, liver transplant, and end-stage liver disease. The FDA recently approved the first drug for the treatment of MASH, resmetirom, a THR-β agonist, but a need remains for better therapies due to resmetirom’s sub-optimal risk-benefit profile, particularly its likely sub-maximal efficacy. To achieve this, we have purpose-built ALG-055009 to have increased potency (~50-fold greater vs. resmetirom in head-to-head in vitro studies) and ß selectivity as well as enhanced pharmacologic properties to deliver a better PK profile; we believe all of these advantages make ALG-055009 well positioned to be a potential best-in-class THR-β agonist.

Previous wording

ALG-055009 completed evaluation in a Phase 1 study in healthy volunteers (HVs) (oral single ascending doses (SAD)) and in subjects with hyperlipidemia (14 oral daily doses). Clinical data after single doses up to 4 mg and multiple doses up to 1 mg showed that ALG‑055009 was well tolerated, had dose proportional PK with low intersubject variability, and demonstrated expected thyromimetic effects (i.e., generally dose proportional increases in sex hormone binding globulin and decreases in various atherogenic lipids and thyroid hormones). In this same study, we also evaluated relative bioavailability where we showed the soft gelatin capsules being used in current studies deliver similar exposures compared to the solution used in Phase 1 studies; we observed low intersubject PK variability and there was no evidence of a meaningful food effect. Based on these promising Phase 1 data, we initiated the Phase 2a HERALD study (NCT06342947) at sites across the United States. The study is a 12-week randomized, placebo-controlled trial evaluating 4 doses (0.3 mg, 0.5 mg, 0.7 mg, and 0.9 mg) of ALG-055009 vs. placebo in approximately 100 subjects with presumed liver fibrosis at stages 1-3 (F1-F3) with MASH. In addition to collecting safety and PK data, this study is also designed to assess multiple efficacy biomarkers, which include MRI-PDFF and other non-invasive tests previously shown to be impacted by treatment with THR‑ß agonists. We anticipate announcing topline safety and 12-week MRI-PDFF data from this study in the early fourth quarter of 2024.

Current wording

ALG-055009 completed evaluation in a Phase 1 study in HVs (oral single ascending doses (SAD)) and in subjects with hyperlipidemia (14 oral daily doses). Clinical data after single doses up to 4 mg and multiple doses up to 1 mg showed that ALG‑055009 was well tolerated, had dose proportional PK with low intersubject variability, and demonstrated expected thyromimetic effects (i.e., generally dose proportional increases in sex hormone binding globulin and decreases in various atherogenic lipids and thyroid hormones). In this same study, we also evaluated relative bioavailability where we showed the soft gelatin capsules being used in current studies deliver similar exposures compared to the solution used in Phase 1 studies; we observed low intersubject PK variability and there was no evidence of a meaningful food effect.

Previous wording

Our third area of focus is to develop drug candidates with pan-coronavirus antiviral activity, including against Severe Acute Respiratory Syndrome coronavirus 2 (SARS-CoV-2), the virus responsible for COVID-19. In this area of focus, we are exploring small molecule coronavirus 3CL protease inhibitors (PIs) in collaboration with Katholieke Universiteit Leuven (KU Leuven), the Center for Innovation and Stimulation of Drug Discovery (CISTIM) and the Centre for Drug Design and Discovery (CD3).

Current wording

Another area of focus is to develop drug candidates with pan-coronavirus antiviral activity, including against Severe Acute Respiratory Syndrome coronavirus 2 (SARS-CoV-2), the virus responsible for COVID-19. In this area of focus, we are exploring small molecule coronavirus 3CL protease inhibitors (PIs) in collaboration with the Rega Institute at Katholieke Universiteit Leuven (KU Leuven), the Center for Innovation and Stimulation of Drug Discovery (CISTIM) and the Centre for Drug Design and Discovery (CD3). This collaboration led to the discovery of ALG-097558 which has advanced into Phase 1 clinical trials.

Previous wording

ALG‑097558 has been shown to be at least 6-fold more potent than nirmatrelvir and other PIs in clinical development against a panel of SARS-CoV-2 variants (including Omicron). It also has demonstrated broad pan-coronavirus activity, including against SARS-CoV and MERS-CoV. Single doses up to 2000 mg and multiple doses up to 800 mg Q12 for 7 days have been well tolerated with an acceptable PK profile that indicates ritonavir boosting is not required. Based on these Phase 1 data (Wilkes et al, ESCMID, 2024), the projected efficacious dose range to treat SARS-CoV-2 is 200-600 mg ALG-097558 Q12 x 5 days. Future development of ALG-097558, including ongoing Phase 2 enabling activities, will be funded by external sources, including public funding sources as described below.

Current wording

ALG‑097558 has been shown to be at least 6-fold more potent than nirmatrelvir and other PIs in clinical development against a panel of SARS-CoV-2 variants (including Omicron). It also has demonstrated broad pan-coronavirus activity, including against SARS-CoV and MERS-CoV. In Phase 1 clinical studies, single doses up to 2000 mg and multiple doses up to 800 mg Q12 for 7 days have been well tolerated with an acceptable PK profile that indicates ritonavir boosting is not required. Based on these Phase 1 data (Wilkes et al, ESCMID, 2024), the projected efficacious dose range to treat SARS-CoV-2 is 200-600 mg ALG-097558 Q12 x 5 days.

Previous wording

Preclinical activities for our coronavirus program were partially funded through a grant from the National Institutes of Health (NIH) and the National Institute of Allergy and Infectious Diseases (NIAID) Antiviral Drug Discovery (AViDD) Centers for Pathogens of Pandemic Concern program through the Metropolitan AntiViral Drug Accelerator (MAVDA) consortium. Specific clinical and nonclinical studies for the ALG-097558 program and the follow up compound, are now also being funded with federal funds from the NIAID, NIH, Department of Health and Human Services, under Contract No. 75N93023C00052. We filed an IND in the third quarter of 2024 and clinical studies in special populations are planned to be initiated in the second half of 2024 through the end of 2025 as part of this NIAID contract. We expect to receive approximately $13.8 million in funds across these two NIH awards and contracts to support these activities. We are also presently seeking additional external funding (e.g., from governmental agencies) to support future studies (e.g., Phase 2) as we advance ALG-097558 for the treatment of COVID-19 and future coronavirus pandemics.

Current wording

Preclinical activities for our coronavirus program were partially funded through a grant from the National Institutes of Health (NIH) and the National Institute of Allergy and Infectious Diseases (NIAID) Antiviral Drug Discovery (AViDD) Centers for Pathogens of Pandemic Concern program through the Metropolitan AntiViral Drug Accelerator (MAVDA) consortium. Specific clinical and nonclinical studies for the ALG-097558 program and the follow up compound, are now also being funded with federal funds from the NIAID, NIH, Department of Health and Human Services, under Contract No. 75N93023C00052. We filed an IND in the third quarter of 2024 and clinical studies in special populations are planned to be initiated in the second half of 2024 through the end of 2025 as part of this NIAID contract. We expect to receive approximately $13.8 million in funds across these two NIH awards and contracts to support these activities. We are also seeking additional external funding (e.g., from governmental agencies) to support future studies (e.g., Phase 2) as we advance ALG-097558 for the treatment of COVID-19 and future coronavirus pandemics.

Previous wording

We have incurred net losses and negative cash flows from operations in each year since our formation in February 2018. Our net losses were $29.8 million and $41.7 million for the six months ended June 30, 2024 and 2023, respectively, and our net losses were $87.7 million for the year ended December 31, 2023. We have had no revenue from product sales. As of June 30, 2024, we had an accumulated deficit of $516.6 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. Our net operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of our clinical trials and nonclinical studies and our other research and development expenses. We have no internal manufacturing capabilities or sales force and outsource a substantial portion of our clinical trial work to third parties.

Current wording

We have incurred net losses and negative cash flows from operations in each year since our formation in February 2018. Our net losses were $49.1 million and $59.8 million for the nine months ended September 30, 2024 and 2023, respectively, and our net losses were $87.7 million for the year ended December 31, 2023. We have had no revenue from product sales. As of September 30, 2024, we had an accumulated deficit of $535.9 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. Our net operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of our clinical trials and nonclinical studies and our other research and development expenses. We have no internal manufacturing capabilities or sales force and outsource a substantial portion of our clinical trial work to third parties.

Previous wording

We track direct external research and development expenses on a program-specific basis (metabolic dysfunction-associated steatohepatitis, chronic hepatitis B, coronaviruses and early-stage programs). The following table summarizes these research and development costs, in thousands:

Current wording

We track direct external research and development expenses on a program-specific basis (CHB, MASH, coronaviruses and early-stage programs). The following table summarizes these research and development costs, in thousands:

Previous wording

Comparison of the three and six months ended June 30, 2024 and 2023

Current wording

Comparison of the three and nine months ended September 30, 2024 and 2023

Previous wording

The following table summarizes our operating expenses for the three and six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our operating expenses for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Revenue from collaborations decreased by $2.6 million and $4.9 million, respectively, for the three and six months ended June 30, 2024, when compared to the same period in 2023. The decrease was primarily due to the completion of the Amended Agreement with Merck in the first quarter of 2024.

Current wording

Revenue from collaborations decreased by $2.1 million and $7.0 million, respectively, for the three and nine months ended September 30, 2024, when compared to the same period in 2023. The decrease was primarily due to the completion of the Amended Agreement with Merck in the first quarter of 2024.

Previous wording

Revenue from customers decreased by $3.2 million and $2.7 million, respectively, for the three and six months ended June 30, 2024, when compared to the same period in 2023. The decrease was due to the near completion of the original agreement with Amoytop.

Current wording

Revenue from customers increased by $0.2 million and decreased by $2.5 million, respectively, for the three and nine months ended September 30, 2024, when compared to the same period in 2023. The nine month decrease was due to the near completion of the original agreement with Amoytop and the start of the extension agreement. The three month increase was due to additional work completed on the extension.

Previous wording

Research and development expenses increased by $4.3 million during the three months ended June 30, 2024, compared to the same period in 2023. The increase in the three-month period was primarily due to a $6.4 million increase in third party expenses due to increased clinical study costs. This was partially offset by a $0.9 million decrease in employee-related costs including a $0.3 million decrease in stock-based compensation, a $0.1 million decrease in travel and recruiting, a $1.0 million decrease in in facility and other expenses.

Current wording

Research and development expenses increased by $0.9 million during the three months ended September 30, 2024, compared to the same period in 2023. The increase in the three-month period was primarily due to a $1.0 million increase in third party expenses due to increased clinical study costs, a $0.3 million increase in facility and other expenses, and a $0.1 million increase in travel and recruiting. This was partially offset by a $0.5 million decrease in employee-related costs including a $0.3 million decrease in stock-based compensation.

Previous wording

Research and development expenses increased by $2.5 million during the six months ended June 30, 2024, compared to the same period in 2023. The increase in the six-month period was primarily due to a $6.5 million increase in third party expenses due to increased clinical study costs. This was partially offset by a $2.8 million decrease in employee-related costs including a $1.1 million decrease in stock-based compensation, a $0.1 million decrease in depreciation, and a decrease of $1.0 million in facility and other expenses.

Current wording

Research and development expenses increased by $3.5 million during the nine months ended September 30, 2024, compared to the same period in 2023. The increase in the nine-month period was primarily due to a $7.6 million increase in third party expenses due to increased clinical study costs. This was partially offset by a $3.3 million decrease in employee-related costs including a $1.4 million decrease in stock-based compensation, a $0.1 million decrease in depreciation, and a decrease of $0.7 million in facility and other expenses.

Previous wording

General and administrative expenses decreased by $2.9 million during the three months ended June 30, 2024, compared to the same period in 2023. This was primarily due to a $1.6 million decrease in third party expenses due to reduced legal and IP spend, a $0.2 million decrease in facility and other expenses, and a $1.0 million decrease in employee-related costs.

Current wording

General and administrative expenses decreased by $1.8 million during the three months ended September 30, 2024, compared to the same period in 2023. This was primarily due to a $0.7 million decrease in third party expenses due to reduced legal and IP spend, and a $1.1 million decrease in employee-related costs.

Previous wording

General and administrative expenses decreased by $4.7 million during the six months ended June 30, 2024, compared to the same period in 2023. This was primarily due to a $2.8 million decrease in third party expenses due to reduced legal and IP spend, a $0.6 million decrease in facility and other expenses, and a $1.2 million decrease in employee-related costs.

Current wording

General and administrative expenses decreased by $6.5 million during the nine months ended September 30, 2024, compared to the same period in 2023. This was primarily due to a $3.6 million decrease in third party expenses due to reduced legal and IP spend, a $1.0 million decrease in facility and other expenses, a $2.3 million decrease in employee-related costs, and a $0.2 million decrease in depreciation. This was partially offset by a $0.6 million increase in travel and recruiting.

Previous wording

The following table summarizes our interest and other income, net for the three and six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our interest and other income, net for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Interest income, net decreased by $0.6 million and $0.8 million for the three and six months ended June 30, 2024 when compared to the same periods ended June 30, 2023, primarily due to a general decrease in market interest rates.

Current wording

Interest income, net decreased by $0.5 million and $1.4 million for the three and nine months ended September 30, 2024 when compared to the same periods ended September 30, 2023, primarily due to a general decrease in market interest rates.

Previous wording

Other income, net increased by $31.2 million and $17.6 million, respectively, for the three and six months ended June 30, 2024 compared to the same periods ended June 30, 2023, due to the change in fair value of the Common Warrants associated with the Securities Purchase Agreement which are remeasured at the end of each reporting period.

Current wording

Other income, net increased by $0.5 million and $18.0 million, respectively, for the three and nine months ended September 30, 2024 compared to the same periods ended September 30, 2023, due to the change in fair value of the Common Warrants associated with the Securities Purchase Agreement which are remeasured at the end of each reporting period.

Previous wording

As of June 30, 2024, we had cash, cash equivalents and investments of $94.5 million.

Current wording

As of September 30, 2024, we had cash, cash equivalents and investments of $74.9 million.

Previous wording

Our primary use of cash is to fund operating expenses, which consist primarily of research and development costs related to our drug candidates and our discovery programs, and to a lesser extent, general and administrative expenditures. We expect our expenses to increase substantially in connection with our ongoing clinical development activities related to our MASH drug candidate ALG‑055009, which we have initiated clinical trials, as well as our research and development of our other drug candidates within our CHB and coronavirus programs.

Current wording

Our primary use of cash is to fund operating expenses, which consist primarily of research and development costs related to our drug candidates and our discovery programs, and to a lesser extent, general and administrative expenditures. We expect our expenses to increase substantially in connection with our ongoing clinical development activities related to our CHB drug candidate

Previous wording

During the six months ended June 30, 2024, operating activities utilized $42.2 million of cash, primarily resulting from our net loss of $29.8 million and net changes in operating assets and liabilities of $1.4 million, partially offset by non-cash charges of $11.1 million. Net cash used in operating activities resulted in changes in our operating assets and liabilities of $1.4 million, consisting of a decrease of $4.8 million in accrued liabilities, a decrease of $1.3 million in operating lease liabilities, a decrease of $0.1 million in deferred revenue from collaborations, an increase of $0.1 million in deferred revenue from customers, and a decrease in other assets of $0.3 million, partially offset by an increase of $4.3 million in accounts payable. The decrease in deferred revenue from collaborations was due to the recognition of revenue from collaborations due to progress towards the completion of the projects. The decrease in accrued liabilities was largely due to the bonus payments that occurred in the first quarter of 2024. The decrease in accounts payable is due to the timing of payments to vendors.

Current wording

During the nine months ended September 30, 2024, operating activities utilized $62.3 million of cash, primarily resulting from our net loss of $49.1 million, net changes in operating assets and liabilities of $4.6 million, and non-cash charges of $8.6 million. Net cash used in operating activities resulted in changes in our operating assets and liabilities of $4.6 million, consisting of a decrease of $2.7 million in accrued liabilities, a decrease of $2.0 million in operating lease liabilities, a decrease of $0.1 million in deferred revenue from collaborations, an decrease of $0.6 million in deferred revenue from customers, partially offset by an increase of $0.2 million in accounts payable and a decrease in other assets of $0.5 million. The decrease in deferred revenue from collaborations was due to the recognition of revenue from collaborations due to progress towards the completion of the projects. The decrease in accrued liabilities was largely due to the bonus payments that occurred in the first quarter of 2024. The decrease in accounts payable is due to the timing of payments to vendors.

Previous wording

During the six months ended June 30, 2023, operating activities utilized $36.0 million of cash, primarily resulting from our net loss of $41.7 million and net changes in operating assets and liabilities of $3.0 million, partially offset by non-cash charges of $8.8 million. Net cash used in operating activities resulted in changes in our operating assets and liabilities of $3.0 million, consisting of a decrease of $1.5 million in accounts payable, a decrease of $2.2 million in accrued liabilities, a decrease of $1.2 million in operating lease liabilities, and a decrease of $4.6 million in deferred revenue from collaborations, partially offset by a decrease in other assets of $4.3 million and an increase of $2.2 million in deferred revenue from customers. The decrease in deferred revenue from collaborations was due to the recognition of revenue from collaborations due to progress towards the completion of the projects. The decrease in accrued liabilities was largely due to charges related to the discontinuation of our ASO and STOPs drug candidates. The decrease in accounts payable is due to the timing of payments to vendors.

Current wording

During the nine months ended September 30, 2023, operating activities utilized $56.3 million of cash, primarily resulting from our net loss of $59.8 million and net changes in operating assets and liabilities of $9.2 million, partially offset by non-cash charges of $12.7 million. Net cash used in operating activities resulted in changes in our operating assets and liabilities of $9.2 million, consisting of a decrease of $1.8 million in accounts payable, a decrease of $3.7 million in accrued liabilities, a decrease of $1.8 million in operating lease liabilities, and a decrease of $6.7 million in deferred revenue from collaborations, partially offset by a decrease in other assets of $3.5 million and an increase of $1.2 million in deferred revenue from customers. The decrease in deferred revenue from collaborations was due to the recognition of revenue from collaborations due to progress towards the completion of the projects. The decrease in accrued liabilities was largely due to reduced manufacturing spend. The decrease in accounts payable is due to the timing of payments to vendors.

Previous wording

During the six months ended June 30, 2024, investing activities used $48.6 million of cash, primarily due to $88.6 million of purchase of short-term investments partially offset by $40.0 million related to maturities of short-term investments.

Current wording

During the nine months ended September 30, 2024, investing activities used $38.3 million of cash, primarily due to $108.1 million of purchase of short-term investments partially offset by $70.0 million related to maturities of short-term investments.

Previous wording

During the six months ended June 30, 2023, investing activities provided $45.0 million of cash, primarily due to $45.0 million of investment maturities.

Current wording

During the nine months ended September 30, 2023, investing activities provided $45.0 million of cash, primarily due to $45.0 million of investment maturities.

Previous wording

During the six months ended June 30, 2024, net cash provided by financing activities was $262.0 thousand, consisting primarily due to proceeds from the ESPP purchase.

Current wording

During the nine months ended September 30, 2024, net cash provided by financing activities was $258.0 thousand, consisting primarily due to proceeds from the ESPP purchase.

Previous wording

During the six months ended June 30, 2023, net cash provided by financing activities was $413.0 thousand, consisting primarily of proceeds from the ESPP purchase and from the exercise of stock options, partially offset by payments of our finance leases.

Current wording

During the nine months ended September 30, 2023, net cash provided by financing activities was $392 thousand, consisting primarily of proceeds from the ESPP purchase and from the exercise of stock options, partially offset by payments of our finance leases.