OnKure Therapeutics Inc
For the period ended Sep 30, 2024. Filed Nov 7, 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.
Sep 30, 2024 · Filed Nov 7, 2024
OKUR$2.87+13.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0000950170-24-096411
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000950170-24-123233
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 85 previous paragraphs and 81 current paragraphs.
17 unchanged; 30 reworded; 33 added; 38 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 3 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 (33)
Current report
Merger
Current report
On the Closing Date, Reneo, consummated the previously announced Merger pursuant to the terms of the Merger Agreement, by and among Reneo, Merger Sub I, Merger Sub II, and Legacy OnKure. Pursuant to the Merger Agreement, on the Closing Date, (i) Reneo effected the Reverse Stock Split, (ii) Reneo changed its name to “OnKure Therapeutics, Inc.”, (iii) Reneo reclassified all of its common stock as Class A Common Stock, and (iv) Merger Sub I merged with and into Legacy OnKure, with Legacy OnKure as the surviving company in the Merger and, after giving effect to such Merger, Legacy OnKure became a wholly-owned subsidiary of OnKure Therapeutics, Inc. Pursuant to the terms of the Merger Agreement, we determined that the Merger would qualify for the intended tax treatment even if only the merger with Merger Sub I was consummated, and therefore the parties determined not to consummate the second merger with Merger Sub II contemplated by the Merger Agreement.
Current report
Concurrently with the closing of the Merger, Reneo completed a private placement with certain investors (the PIPE Investors) to purchase 2,839,005 shares of Class A Common Stock at a price per share of approximately $22.895 per share for an aggregate purchase price of approximately $65.0 million, including the conversion of outstanding convertible notes and accrued but unpaid interest thereon held by certain Legacy OnKure investors (the Concurrent PIPE Investments). In connection with the Concurrent PIPE Investments, Reneo entered into a registration rights agreement with the PIPE Investors, pursuant to which Reneo agreed to use commercially reasonable efforts to prepare and file a registration statement with the SEC within 45 calendar days after the Closing Date, registering the resale of the shares of Class A Common Stock issued pursuant to the Concurrent PIPE
Current report
Investments. The Company filed such Registration Statement on Form S-1 with the SEC, and it was declared effective by the SEC on October 30, 2024. Immediately after the effective time of the Merger, following the consummation of the Concurrent PIPE Investments, Legacy OnKure stockholders owned approximately 53.6%, pre-Merger Reneo stockholders owned approximately 25.1%, and the PIPE Investors owned approximately 21.3% of the Combined Company’s outstanding common stock.
Current report
Post-Merger Business
Current report
As a result of the Merger, Reneo’s historic business operations ceased and our go-forward operations will be those of Legacy OnKure.
Current report
We are a clinical-stage biopharmaceutical company focused on the discovery and development of precision medicines designed to target biologically validated drivers of cancers underserved by available therapies. Using a structure- and computational chemistry-driven drug design platform, we are committed to improving clinical outcomes for patients by building a robust pipeline of small molecule drugs designed to selectively target specific mutations thought to be key drivers of cancer. Our lead product candidate, OKI-219, is a highly selective inhibitor of 3 kinase alpha (PI3Kα), a key mediator in cancer growth signaling, harboring the H1047R mutation (PI3KαH1047R) that has a much smaller impact on non-mutated (or wild-type) PI3Kα (PI3KαWT). OKI-219 is currently in a first-in-human Phase 1 monotherapy dose-escalation trial in H1074R-mutated advanced solid tumors including breast cancer. Early clinical data are anticipated in the fourth quarter of 2024. In addition to OKI-219,we are also pursuing programs designed to selectively target the other specific mutations of PI3Kα.
Current report
The unaudited interim financial information included in this section are representative of Reneo’s operations prior to the closing of the Merger, the adoption of our business plan and the commencement of conducting our business.
Current report
On October 22, 2024, we provided vTv Therapeutics notice of our intention to terminate the vTv License Agreement effective 90 days from the date of notice. Following termination of the vTv License Agreement, we intend to cease maintenance and prosecution of all mavodelpar intellectual property.
Current report
Components of Reneo’s Results of Operations
Current report
Reneo’s Results of Operations
Current report
The following table summarizes Reneo’s results of operations for the three months ended September 30, 2024 and 2023 (unaudited and in thousands):
Current report
Comparison of Nine Months Ended September 30, 2024 and 2023 (Unaudited)
Current report
The following table summarizes Reneo’s results of operations for the nine months ended September 30, 2024 and 2023 (unaudited and in thousands):
Current report
As a result of the Merger, Reneo’s historic business operations ceased and our go-forward operations will be those of Legacy OnKure. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates. We expect that our research and development and general and administrative costs will continue to increase significantly, including in connection with conducting clinical trials and manufacturing our product candidates to support commercialization and providing general and administrative support for our operations, including the costs associated with operating as a public company following the Closing. As a result, we will need additional capital to fund our operations, which we may seek to obtain from equity or debt financings, collaborations, licensing arrangements or other sources.
Current report
Our primary uses of cash to date have been to fund our research and development activities, including with respect to our PI3Kα and other programs, business planning, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital and providing general and administrative support for these activities.
Current report
We have never generated any revenue from product sales and do not expect to generate any meaningful product revenue unless and until we obtain regulatory approval for our product candidates, and management does not know when, or if, that will occur. Until we can generate significant revenue from product sales, if ever, we will continue to require substantial additional capital to develop our product candidates and fund operations for the foreseeable future. We are subject to all the risks inherent in the development of new biopharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business.
Current report
In order to complete the development of our product candidates and to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize product candidates, if approved, we will require substantial additional capital. Accordingly, until such time that we can generate a sufficient amount of revenue from product sales or other sources, we expect to seek to raise any necessary additional capital through equity financings, debt financings or other capital sources, which could include income from collaborations, partnerships, licensing or other strategic arrangements with third parties. To the extent that we raise additional capital through equity financings or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, including restricting our operations and limiting our ability to incur liens, issue additional debt, pay dividends, repurchase our own common stock, make certain investments or engage in merger, consolidation, licensing or asset sale transactions. If we raise capital through collaborations, partnerships and other similar arrangements with third parties, we may be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We may be unable to raise additional capital from these sources on favorable terms, or at all.
Current report
Our ability to secure capital is dependent upon a number of factors, including our success in developing our product candidates. The failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including requiring us to delay, reduce or curtail our research, product development or future commercialization efforts. We may also be required to license rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. We cannot provide assurance that we will ever generate positive cash flow from operating activities.
Current report
Our future funding requirements will depend on many factors, including:
Current report
the scope, timing, progress, results and costs of researching and developing OKI-219, and conducting preclinical studies and clinical trials;
Current report
the scope, timing, progress, results and costs of researching and developing other product candidates that we may pursue;
Current report
the costs, timing and outcome of regulatory review of our product candidates;
Current report
the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution for our product candidates for which it receives marketing approval;
Current report
the costs of manufacturing commercial-grade products and producing sufficient inventory to support commercial launch;
Current report
the revenue, if any, received from commercial sales of our products, should its product candidates receive marketing approval;
Current report
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
Current report
our ability to establish, maintain and derive value from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties on favorable terms, if at all;
Current report
the extent to which we acquire or in-licenses other product candidates and technologies, if any; and
Current report
the costs associated with operating as a public company.
Current report
A change in the outcome of any of these or other factors with respect to the development of OKI-219 or any of our future product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we may need additional capital to meet the capital requirements associated with such operating plans.
Current report
Reneo’s Cash Flows
Current report
Reneo’s Material Cash Requirements
Removed paragraphs (38)
Previous report
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report
Overview
Previous report
Reneo is a pharmaceutical company historically focused on the development and commercialization of therapies for patients with rare genetic mitochondrial diseases, which are often associated with the inability of mitochondria to produce adenosine triphosphate. Our only product candidate, mavodelpar, is a potent and selective agonist of the peroxisome proliferator-activated receptor delta (PPARδ). Mavodelpar has been shown to increase transcription of genes involved in mitochondrial function and increase fatty acid oxidation , and may increase production of new mitochondria.
Previous report
On December 14, 2023, we announced that our pivotal STRIDE study, a global, randomized, double-blind, placebo-controlled Phase 2b trial of mavodelpar in adult patients with primary mitochondria myopathy due to mitochondrial DNA defects, did not meet its primary or secondary efficacy endpoints. As a result, we suspended the development activities for mavodelpar and implemented cash preservation activities, including a substantial workforce reduction. We implemented a reduction in workforce in December 2023 and February 2024, and currently have eight full-time employees remaining.
Previous report
In January 2024, our Board of Directors retained an independent financial advisor to initiate a formal process to evaluate potential strategic alternatives focused on maximizing stockholder value, including, but not limited to, a merger, sale, other business combination, a strategic partnership with one or more parties, or the licensing, sale or divestiture of our assets. We are no longer pursuing further clinical development of mavodelpar at this time.
Previous report
On May 10, 2024, we entered into an Agreement and Plan of Merger (Merger Agreement and the transactions contemplated thereby, Proposed Transactions) with Radiate Merger Sub I, Inc., a Delaware corporation and our direct, wholly owned subsidiary (Merger Sub I), Radiate Merger Sub II, LLC, a Delaware limited liability company and our direct, wholly owned subsidiary (Merger Sub II), and OnKure, Inc., a Delaware corporation (OnKure), pursuant to which, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, (a) Merger Sub I will merge with and into OnKure (the First Merger), with Merger Sub I ceasing to exist and OnKure surviving the First Merger as our wholly owned subsidiary (Reneo following the First Merger, NewCo), and (b) as promptly as practicable following the First Merger, OnKure, as the surviving corporation of the First Merger, will merge with and into Merger Sub II, with OnKure ceasing to exist and Merger Sub II surviving the Second Merger as a wholly owned subsidiary of NewCo (the Second Merger, and together with the First Merger, the Mergers). At the effective time of the First Merger (First Effective Time) and upon filing of an amendment to our amended and restated certificate of incorporation to reclassify our common stock, each share of our common stock existing and outstanding immediately prior thereto will be recapitalized and remain outstanding as a share of NewCo Class A common stock without any conversion or exchange thereof, subject to a proposed reverse stock split of all of the shares of our common stock outstanding at the time of effectiveness thereof by a ratio to be determined by OnKure subject to our approval (the Reverse Stock Split). Upon the First Effective Time, all shares of OnKure capital stock outstanding immediately prior to the First Effective Time, after giving effect to an assumed common stock exchange ratio of 0.24482 and an assumed preferred stock exchange ratio of 1.50062, will be converted into the right to receive approximately 76,958,781 shares of NewCo common stock in the aggregate, which is subject to adjustment as set forth in the Merger Agreement.
Previous report
In connection with the Mergers, on May 10, 2024, we concurrently entered into a Subscription Agreement with certain existing OnKure stockholders and new investors (collectively, PIPE Investors) pursuant to which, among other things, we agreed to issue to the PIPE Investors shares of NewCo Class A common stock concurrently with the Mergers in a private placement transaction for an aggregate purchase price of $65.0 million, which amount may be increased to up to $85.0 million through additional subscriptions from additional PIPE Investors (the Concurrent PIPE Investments). The closing of the Concurrent PIPE Investments is conditioned upon the satisfaction or waiver of the conditions to the closing of the Mergers and the substantially concurrent closing of the Mergers, as well as certain other conditions.
Previous report
Immediately after the Mergers, pre-Mergers OnKure stockholders are expected to own approximately 69.4% of NewCo on a fully-diluted basis and pre-Mergers Reneo stockholders are expected to own approximately 30.6% of NewCo on a fully-diluted basis. Following the completion of the Concurrent PIPE Investments, assuming a subscription amount of (i) $65.0 million, pre-Mergers OnKure stockholders are expected to own approximately 54.8% of NewCo on a fully-diluted basis, pre-Mergers Reneo stockholders are expected to own approximately 24.2% of NewCo on a fully-diluted basis, and the PIPE Investors are expected to own approximately 21.0% of NewCo on a fully-diluted basis, and (ii) $85.0 million, pre-Mergers OnKure stockholders are expected to own approximately 51.5% of NewCo on a fully-diluted basis, pre-Mergers Reneo stockholders are expected to own approximately 22.7% of NewCo on a fully-diluted basis, and the PIPE Investors are expected to own approximately 25.8% of NewCo on a fully-diluted basis. The exchange ratios, and related pro forma ownership, will be adjusted (i) to account for the effect of the proposed Reverse Stock Split and (ii) to the extent that Reneo’s net cash as of the close of business on the business day immediately preceding the closing date of the Mergers is less than $59.0 million or greater than $61.0 million (resulting in pre-Mergers Reneo stockholders owning less or more of NewCo, respectively). The expected relative ownership percentages of pre-Mergers OnKure stockholders and pre-Mergers Reneo stockholders of NewCo are calculated using the treasury stock method, as described in the Merger Agreement.
Previous report
The Mergers, which have been approved by our Board of Directors and the board of directors of OnKure, are expected to close in the second half of 2024, subject to the satisfaction or waiver of certain closing conditions, including the approval of our stockholders. Certain stockholders of Reneo holding approximately 28.2% of the outstanding shares of our common stock entered into support agreements with Reneo and OnKure to vote all of their shares of our common stock in favor of the Mergers, subject to the terms of the support agreements. Although we have entered into the Merger Agreement and intend to consummate the proposed Mergers, there is no assurance that we will be able to successfully consummate the proposed Mergers on a timely basis, or at all. If, for any reason, the proposed Mergers are not completed, we will reconsider our strategic alternatives and could pursue another strategic transaction similar to the proposed Mergers, potential collaborative, partnering or other strategic arrangements for our assets, including a license, sale or divestiture of our assets, or liquidate and distribute available cash.
Previous report
Upon the achievement of certain pre-specified development and regulatory milestones, we are also required to pay vTv Therapeutics milestone payments totaling up to $64.5 million. We are also required to pay vTv Therapeutics up to $30.0 million in total sales-based milestones upon achievement of certain sales thresholds of the licensed product. As of June 30, 2024, we have paid an aggregate of $2.0 million in development and regulatory milestone payments. In addition, we are obligated to make tiered royalty payments to vTv Therapeutics at mid-single digit to low teen percentage royalty rates, based on tiers of annual net sales of licensed products, subject to certain customary reductions. There were no milestone payments achieved or recorded for the three and six months ended June 30, 2024 and 2023.
Previous report
Although we have suspended development activities related to mavodelpar, we are continuing to maintain and prosecute mavodelpar intellectual property.
Previous report
Components of Our Results of Operations
Previous report
The following table summarizes our research and development expenses for the three and six months ended June 30, 2024 and 2023 (unaudited and in thousands):
Previous report
As a result of implementing our cash preservation activities, including suspension of development activities for mavodelpar, we expect our research and development expenses to decrease for the foreseeable future. If we pursue further development of mavodelpar or any other product candidates in the future, we cannot determine with certainty the timing of initiation, the duration or the completion costs of such clinical trials due to the inherently unpredictable nature of preclinical and clinical development. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. We may need to raise substantial additional capital in the future. In addition, we cannot forecast whether any future product candidate may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
Previous report
Our research and development costs may vary significantly based on factors such as:
Previous report
the scope, rate of progress, expense and results of clinical trials and preclinical studies;
Previous report
per patient trial costs;
Previous report
the number of trials required for approval;
Previous report
the number of sites included in the trials;
Previous report
the countries in which the trials are conducted;
Previous report
the number of patients that participate in the trials;
Previous report
uncertainties in patient enrollment or drop out or discontinuation rates;
Previous report
potential additional safety monitoring requested by regulatory agencies;
Previous report
the duration of patient participation in the trials and follow-up;
Previous report
the safety and efficacy of our product candidate;
Previous report
the extent to which we establish strategic collaborations or other arrangements.
Previous report
Results of Operations
Previous report
The following table summarizes our results of operations for the three months ended June 30, 2024 and 2023 (unaudited and in thousands):
Previous report
Comparison of Six Months Ended June 30, 2024 and 2023 (Unaudited)
Previous report
The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023 (unaudited and in thousands):
Previous report
In November 2023, we entered into an at-the-market equity offering sales agreement (Sales Agreement) with Leerink Partners LLC (Leerink) under which we could offer and sell, from time to time, at our sole discretion, up to $100.0 million in shares of our common stock (2023 ATM Facility). Effective as of April 8, 2024, we terminated the Sales Agreement. We did not sell any shares of our common stock under the 2023 ATM Facility.
Previous report
From our inception in 2014, we have incurred significant losses and negative cash flows from operations. As of June 30, 2024, we had an accumulated deficit of $232.3 million. For the three and six months ended June 30, 2024, we had a net loss of $5.4 million and $13.8 million, respectively, and we used $27.8 million of cash in operating activities during the six months ended June 30, 2024.
Previous report
We believe that our existing cash, cash equivalents, and short-term investments will be sufficient to meet our cash requirements through at least the next 12 months. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, including as a result of the proposed Mergers with OnKure, and actual results could vary materially.
Previous report
If, for any reason, the proposed Mergers are not completed, we will reconsider our strategic alternatives and could pursue another strategic transaction similar to the proposed Mergers, potential collaborative, partnering or other strategic arrangements for our assets, including a license, sale or divestiture of our assets, or liquidate and distribute available cash. If we liquidate, we would be required to pay all of our debts and contractual obligations, and to set aside certain reserves for potential future claims, and there can be no assurances as to the amount or timing of available cash left to distribute to our stockholders after paying our debts and other obligations and setting aside funds for reserves.
Previous report
Cash Flows
Previous report
Material Cash Requirements
Previous report
Performance Award. See Note 8 of Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding a special performance award that our chief executive officer may be entitled to receive, including the maximum payout.
Previous report
In addition to the contractual obligations above, we also expect to have near term future material cash requirements associated with the proposed Mergers.
Reworded paragraphs (30)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023. Unless otherwise indicated, all references in this Quarterly Report on Form 10-Q to “Reneo,” the “company,” “we,” “our,” “us” or similar terms refer to Reneo Pharmaceuticals, Inc. and its subsidiaries.
Current wording
You should read the following discussion and analysis of Reneo’s financial condition and results of operations together with (i) the consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, (ii) the audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Reneo’s Annual Report on Form 10-K for the year ended December 31, 2023, (iii) Legacy OnKure’s audited financial statements and the related notes for the years ended December 31, 2023 and 2022 included in the proxy statement/prospectus (the Proxy Statement/Prospectus) filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the Securities Act), with the SEC on August 26, 2024 and (iv) the unaudited pro forma condensed combined financial statements for the six months ended June 30, 2024 and for the year ended December 31, 2023 included in the Proxy Statement/Prospectus. Unless otherwise indicated, all references in this Quarterly Report on Form 10-Q to “OnKure,” the “Company,” “we,” “our,” “us” or similar terms refer to OnKure Therapeutics, Inc. and its subsidiaries after completion of the Merger. In addition, references to “Reneo” refers to the Company prior to the completion of the Merger.
Previous wording
In December 2017, we entered into a License Agreement (vTv License Agreement) with vTv Therapeutics LLC (vTv Therapeutics), under which we obtained an exclusive, worldwide, sublicensable license under certain vTv Therapeutics intellectual property to develop, manufacture and commercialize PPARδ agonists and products containing such PPARδ agonists, including mavodelpar, for any therapeutic, prophylactic or diagnostic application in humans. Since we have suspended all development activity related to mavodelpar, we are not currently performing any development efforts under the vTv License Agreement.
Current wording
In December 2017, Reneo entered into a License Agreement (vTv License Agreement) with vTv Therapeutics LLC (vTv Therapeutics), under which Reneo obtained an exclusive, worldwide, sublicensable license under certain vTv Therapeutics intellectual property to develop, manufacture and commercialize PPARδ agonists and products containing such PPARδ agonists, including mavodelpar, Reneo’s product candidate, for any therapeutic, prophylactic or diagnostic application in humans. Since all development activity related to mavodelpar has been suspended, no development efforts under the vTv License Agreement are currently being performed.
Previous wording
Under the terms of the vTv License Agreement, we paid vTv Therapeutics an initial upfront license fee of $3.0 million and $2.0 million of milestone payments and issued an aggregate of 576,443 shares of our common stock to vTv Therapeutics. On October 30, 2023, we repurchased from vTv Therapeutics all 576,443 shares of our common stock previously issued to vTv Therapeutics under the vTv License Agreement for an aggregate purchase price of approximately $4.4 million in a private, non-underwritten transaction.
Current wording
Under the terms of the vTv License Agreement, Reneo paid vTv Therapeutics an initial upfront license fee of $3.0 million and $2.0 million of milestone payments and issued an aggregate of 576,443 shares of Reneo’s common stock to vTv Therapeutics. On October 30, 2023, Reneo repurchased from vTv Therapeutics all 576,443 shares of Reneo’s common stock previously issued to vTv Therapeutics under the vTv License Agreement for an aggregate purchase price of approximately $4.4 million in a private, non-underwritten transaction.
Previous wording
Research and development expenses primarily relate to preclinical and clinical development of mavodelpar. Research and development expenses include:
Current wording
Research and development expenses primarily related to preclinical and clinical development of mavodelpar. Research and development expenses included:
Previous wording
raw materials related to manufacturing of our product candidate for clinical trials and preclinical studies, including fees paid to third-party manufacturers;
Current wording
raw materials related to manufacturing of Reneo’s product candidate for clinical trials and preclinical studies, including fees paid to third-party manufacturers;
Previous wording
fees for maintaining licenses under our third-party licensing agreements.
Current wording
fees for maintaining licenses under Reneo’s third-party licensing agreements.
Previous wording
Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. Costs for certain activities, such as manufacturing and preclinical studies and clinical trials, are generally recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and collaborators. We expense amounts paid to acquire licenses associated with products under development when the ultimate recoverability of the amounts paid is uncertain and the technology has no alternative future use when acquired.
Current wording
Reneo recognized research and development expenses as incurred and capitalized payments made prior to the receipt of goods or services to be used in research and development until receipt of the goods or services. Costs for certain activities, such as manufacturing and preclinical studies and clinical trials, were generally recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to Reneo by its vendors and collaborators. Reneo expensed amounts paid to acquire licenses associated with products under development when the ultimate recoverability of the amounts paid was uncertain and the technology had no alternative future use when acquired.
Previous wording
General and administrative expenses consist primarily of costs related to the proposed Mergers with OnKure, personnel expenses, including severance payments, salaries, benefits, and stock-based compensation expenses for personnel in executive, finance and administrative functions. General and administrative expenses also include professional fees for accounting, legal, and commercial development, insurance and corporate facility costs not otherwise included in research and development expenses. We expect our general and administrative expenses , not related to the proposed Mergers, to decrease for the foreseeable future as a result of our cash preservation activities.
Current wording
General and administrative expenses consisted primarily of costs related to the Merger, personnel expenses, including severance payments, salaries, benefits, and stock-based compensation expenses for personnel in executive, finance and administrative functions. General and administrative expenses also include professional fees for accounting, legal, and commercial development, insurance and corporate facility costs not otherwise included in research and development expenses.
Previous wording
Other income consists of interest income on our cash, cash equivalents and short-term investments.
Current wording
Other income consisted of interest income on Reneo’s cash, cash equivalents and short-term investments.
Previous wording
Research and development expenses decreased by $13.8 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023. This decrease was primarily due to the suspension of development activities for mavodelpar and cash preservation activities, including workforce reductions in December 2023 and February 2024.
Current wording
Research and development expenses decreased by $12.7 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023. This decrease was primarily due to the suspension of development activities for mavodelpar and cash preservation activities, including workforce reductions in December 2023 and February 2024.
Previous wording
General and administrative expenses decreased by $0.9 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023. This decrease was primarily due to a decrease of $1.6 million in facility and personnel-related costs related to our workforce reductions in December 2023 and February 2024 and a decrease of $1.7 million in commercial development and consulting costs due to the suspension of mavodelpar development activities, offset by an increase of $2.4 million in legal and advisory fees related to the proposed Mergers.
Current wording
General and administrative expenses decreased by $3.5 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023. This decrease was primarily due to a decrease of $2.1 million in commercial development and consulting costs due to the suspension of mavodelpar development activities and a decrease of $1.3 million in facility and personnel-related costs related to Reneo’s workforce reductions in December 2023 and February 2024.
Previous wording
The decrease in other income for the three months ended June 30, 2024, compared to the three months ended June 30, 2023 relates to a decrease in our short-term investment balance during 2024.
Current wording
The decrease in other income for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, relates to a decrease in Reneo’s short-term investment balance during 2024.
Previous wording
Research and development expenses decreased by $19.9 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023. This decrease was primarily due to the suspension of development activities for mavodelpar and cash preservation activities, including workforce reductions in December 2023 and February 2024.
Current wording
Research and development expenses decreased by $32.6 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. This decrease was primarily due to the suspension of development activities for mavodelpar and cash preservation activities, including workforce reductions in December 2023 and February 2024.
Previous wording
General and administrative expenses decreased by $1.4 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023. This decrease was primarily due to a decrease of $2.1 million in facility and personnel-related costs related to our workforce reductions in December 2023 and February 2024 and a decrease of $1.9 million in commercial development and consulting costs due to the suspension of mavodelpar development activities, offset by an increase of $2.7 million in legal and advisory fees related to the proposed Mergers.
Current wording
General and administrative expenses decreased by $4.9 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. This decrease was primarily due to a decrease of $3.4 million in commercial development and consulting costs due to the suspension of mavodelpar development activities and a decrease of $3.3 million in facility and personnel-related costs related to Reneo’s workforce reductions in December 2023 and February 2024, offset by an increase of $2.1 million in legal and advisory fees related to the proposed Merger.
Previous wording
The decrease in other income for the six months ended June 30, 2024, compared to the six months ended June 30, 2023 relates to a decrease in our short-term investment balance during 2024.
Current wording
The decrease in other income for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, relates to a decrease in Reneo’s short-term investment balance during 2024.
Previous wording
Since inception, we have financed our operations primarily through the sale of equity securities. We have not generated any revenue from the sale of any products. As of June 30, 2024, we had available cash, cash equivalents and short-term investments of approximately $76.7 million, which we believe will be sufficient to fund our current operating plan for at least the next 12 months from the date of issuance of these unaudited condensed financial statements.
Current wording
Since inception, Reneo has incurred significant losses and negative cash flows from operations, and financed its operations primarily through the sale of equity securities. Reneo has not generated any revenue from the sale of any products. As of September 30, 2024, Reneo had available cash, cash equivalents and short-term investments of approximately $76.7 million.
Previous wording
the cost and timing of manufacturing our product candidates; and
Current wording
the cost and timing of attracting, hiring and retaining skilled personnel to support our operations and continued growth;
Previous wording
The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023 (unaudited and in thousands):
Current wording
The following table summarizes Reneo’s cash flows for the nine months ended September 30, 2024 and 2023 (unaudited and in thousands):
Previous wording
Net cash used in operating activities for the six months ended June 30, 2024 was $27.8 million, consisting primarily of our net loss of $13.8 million adjusted for non-cash items of $0.6 million primarily due to $2.1 million of stock-based compensation expense, offset by $1.6 million of amortization/accretion on short-term investments and a $14.6 million net change in operating assets and liabilities. The change in our net operating assets and liabilities was primarily due to a decrease in prepaid and other current assets of $2.3 million, offset by a decrease in accounts payable and accrued expenses of $16.8 million due to timing of payments.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2024 was $30.1 million, consisting primarily of Reneo’s net loss of $17.5 million adjusted for non-cash items of $1.2 million primarily due to $2.9 million of stock-based compensation expense, offset by $1.9 million of amortization/accretion on short-term investments and a $13.8 million net change in operating assets and liabilities. The change in Reneo’s net operating assets and liabilities was primarily due to a decrease in prepaid and other current assets of $3.4 million, offset by a decrease in accounts payable and accrued expenses of $16.9 million due to timing of payments.
Previous wording
Net cash used in operating activities for the six months ended June 30, 2023 was $25.2 million, consisting primarily of our net loss of $34.6 million adjusted for non-cash items of $1.5 million primarily due to $2.4 million of stock-based compensation expense and $0.8 million in fair value of a performance award, offset by $2.0 million of amortization/accretion on short-term investments and a $7.9 million net change in operating assets and liabilities. The change in our net operating assets and liabilities was primarily due to a decrease in prepaid and other current assets of $1.3 million and an increase in accounts payable and accrued expenses of $6.8 million due to timing of receipt of invoices and payments.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2023 was $43.9 million, consisting primarily of Reneo’s net loss of $53.8 million adjusted for non-cash items of $1.8 million primarily due to $3.8 million of stock-based compensation expense and $1.0 million in fair value of a performance award, offset by $3.6 million of amortization/accretion on short term investments and an $8.1 million net change in operating assets and liabilities. The change in Reneo’s net operating assets and liabilities was primarily due to a decrease in prepaid and other current assets of $2.1 million and an increase in accounts payable and accrued expenses of $6.4 million due to timing of receipt of invoices and payments.
Previous wording
Net cash provided by investing activities for the six months ended June 30, 2024 was $36.2 million, consisting primarily of the net proceeds from maturities of available-for-sale short-term investments.
Current wording
Net cash provided by investing activities for the nine months ended September 30, 2024 was $61.2 million, consisting primarily of the net proceeds from maturities of available-for-sale short-term investments.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2023 was $50.5 million, consisting primarily of the net purchase of available-for-sale short-term investments.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2023 was $29.3 million, consisting primarily of the net purchase of available-for-sale short-term investments.
Previous wording
Net cash used in financing activities for the six months ended June 30, 2024 was $0.1 million consisting primarily of the payment of deferred costs in connection with the Concurrent PIPE Investments.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2024 was $0.1 million consisting primarily of cash deposits received in connection with the Concurrent PIPE Investments.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2023 was $64.8 million, consisting primarily of the net proceeds of $58.9 million, $4.7 million, and $1.0 million from the sale of common stock in our May 2023 public offering, in our May 2023 private placement, and under our May 2022 at-the-market equity offering sales agreement with SVB Securities LLC, respectively.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2023 was $65.0 million, consisting primarily of the net proceeds of $58.9 million, $4.7 million, and $1.0 million from the sale of common stock in Reneo’s May 2023 public offering, Reneo’s May 2023 private placement, and Reneo’s May 2022 at-the-market equity offering sales agreement, respectively.
Previous wording
The discussion below summarizes our significant contractual obligations and commitments as of June 30, 2024.
Current wording
The discussion below summarizes Reneo’s significant contractual obligations and commitments as of September 30, 2024.
Previous wording
Leases. See Note 7 of Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding our leases, including the future operating lease minimum payments.
Current wording
Leases. See Note 7 of Notes to Reneo’s Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding our leases, including the future operating lease minimum payments.
Previous wording
vTv License Agreement. See Note 9 of Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding the vTv License Agreement, including potential milestone and royalty payments.
Current wording
vTv License Agreement. See Note 9 of Notes to Reneo’s Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding the vTv License Agreement terminated in October 2024, including potential milestone and royalty payments.
Previous wording
Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.
Current wording
Reneo’s management’s discussion and analysis of its financial condition and results of operations are based on its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements required Reneo to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Reneo based its estimates on historical experience, known trends and events, and various other factors that it believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.
Previous wording
Our critical accounting policies are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2023, and the notes to our consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. During the six months ended June 30, 2024, there were no material changes to our critical accounting policies from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
Reneo’s critical accounting policies are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in its Annual Report on Form 10-K for the year ended December 31, 2023, and the notes to the consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. During the nine months ended September 30, 2024, there were no material changes to Reneo’s critical accounting policies from those discussed in its Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
See Note 2 of Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our consolidated financial statements.
Current wording
See Note 2 of Notes to Reneo’s Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to Reneo’s consolidated financial statements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
After giving effect to the Merger and the PIPE Financing in October 2024, we believe the resulting cash resources are sufficient to fund our planned operations for at least the next 12 months from the date of issuance of these unaudited condensed financial statements.