Dianthus Therapeutics Inc DE
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
DNTH$86.03+3.6%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 2024-08-08.
0000950170-24-093948
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.
0000950170-24-123285
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 163 previous paragraphs and 167 current paragraphs.
132 unchanged; 29 reworded; 6 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 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 (6)
Current report
We plan to initiate a single, two-part (Part A and Part B) Phase 3 trial of DNTH103 in patients with Chronic Inflammatory Demyelinating Polyneuropathy (“CIDP”) by the end of 2024. The planned trial will be a global, randomized withdrawal, double-blind, placebo-controlled Phase 3 trial in adult patients with CIDP. In the open-label Part A of this trial, participants will be administered a loading dose followed by 300mg of DNTH103 administered every two weeks via S.C. injection for up to 13 weeks. Part A includes an interim responder analysis of a pre-defined number of participants. Only participants who respond to DNTH103 in Part A will be randomized into Part B, a double-blind, placebo-controlled treatment period of up to 52 weeks, where they will be assessed for prevention of relapse, safety and tolerability, followed by an open-label extension period. We believe this single pivotal trial may support a Biologics License Application (“BLA”) filing in adult patients with CIDP. We anticipate providing additional information regarding the Phase 3 trial design and timelines by the end of 2024.
Current report
Shelf Registration Statement and ATM Offering Program
Current report
On October 1, 2024, we filed a registration statement with the SEC for the issuance of common stock, preferred stock, warrants, debt securities, rights and units up to an aggregate of $500.0 million. On October 9, 2024, the registration statement was declared effective by the SEC. The registration statement includes an ATM offering program for the sale of up to $200.0 million of shares of our common stock.
Current report
Comparison of the Nine Months Ended September 30, 2024 and September 30, 2023
Current report
We have an open market sales agreement with TD Securities (USA) LLC (“TD Cowen”) (the “ATM Agreement”) pursuant to which, we may sell from time to time, through TD Cowen, shares of our common stock for an aggregate sales price of up to $200 million. Any sales of our common stock pursuant to the ATM Agreement are made under our registration statement on Form S-3 which was deemed effective by the SEC on October 9, 2024. We have not sold any shares of our common stock or received any proceeds from the ATM offering program as of the date of this report.
Current report
For the nine months ended September 30, 2023, net cash provided by financing activities primarily consisted of proceeds of $72.0 million from the sale of shares of Former Dianthus common stock in the pre-closing financing and net cash acquired in connection with the reverse recapitalization of $69.7 million, partially offset by $3.3 million of reverse recapitalization transactions costs.
Removed paragraphs (2)
Previous report
Comparison of the Six Months Ended June 30, 2024 and June 30, 2023
Previous report
For the six months ended June 30, 2023, net cash provided by financing activities consisted of $0.4 million of proceeds from promissory notes payable to Fairmount Funds, offset by a $0.4 million repayment of promissory notes payable to Fairmount Funds.
Reworded paragraphs (29)
Previous wording
DNTH103 is designed to selectively target the active form of C1s, inhibiting only the classical pathway, while leaving the lectin and alternative pathways intact. As a result, we aim to demonstrate that DNTH103 may have a reduced risk of infections from encapsulated bacteria when compared to C5 terminal inhibitors, thus potentially avoiding a FDA Boxed Warning and associated Risk Evaluation and Mitigation Strategy (“REMS”). We believe that DNTH103 has the potential to yield therapeutic benefit in multiple autoimmune and inflammatory disease indications where inappropriate activation of the classical pathway cascade drives or exacerbates the disease pathology by inhibiting the ability of activated C1s to effect downstream complement activity, ameliorating complement mediated cell death and disruption of normal cellular function.
Current wording
Our most advanced product candidate, DNTH103, is a clinical-stage, highly potent, highly selective and fully human monoclonal immunoglobulin G4 with picomolar binding affinity that is designed to selectively bind only to the active form of the C1s complement protein, while leaving the lectin and alternative pathways intact. DNTH103 is also engineered with YTE half-life extension technology, a specific three amino acid change in the Fc domain, and has a pharmacokinetic profile designed to support less frequent, lower dose, self-administration as a convenient S.C. injection. As a result of its more targeted profile, we aim to demonstrate that DNTH103 may have a reduced risk of infections from encapsulated bacteria when compared to C5 terminal inhibitors, thus potentially avoiding a FDA Boxed Warning and associated Risk Evaluation and Mitigation Strategy (“REMS”). The active form of C1s is generated during complement activation by cleavage of the inactive proenzyme C1s. As a validated complement target in the autoimmune and inflammatory field, C1s inhibition prevents further progression of the classical pathway cascade. We believe that DNTH103 has the potential to yield therapeutic benefit in multiple autoimmune and inflammatory disease indications where inappropriate activation of the classical pathway cascade drives or exacerbates the disease pathology by inhibiting the ability of activated C1s to effect downstream complement activity, ameliorating complement mediated cell death and disruption of normal cellular function.
Previous wording
Our most advanced product candidate, DNTH103, is a clinical-stage, highly potent, highly selective and fully human monoclonal immunoglobulin G4 with picomolar binding affinity that is designed to selectively bind only to the active form of the C1s complement protein. The active form of C1s is generated during complement activation by cleavage of the inactive proenzyme C1s. As a validated complement target in the autoimmune and inflammatory field, C1s inhibition prevents further progression of the classical pathway cascade. DNTH103 is engineered with YTE half-life extension technology, a specific three amino acid change in the Fc domain, and has a pharmacokinetic profile designed to support less frequent, lower dose, self-administration as a convenient S.C. injection. Data reported from DNTH103’s Phase 1 clinical trial in 60 healthy volunteers across eight dose cohorts validates the extended half-life and potent classical pathway inhibition and supports a potentially differentiated safety profile of DNTH103. The topline data confirmed its approximately 60-day half-life and highly potent classical pathway inhibition with every two weeks S.C. dosing of 300mg/2mL surpassing the calculated IC90 of 87ug/mL, establishing DNTH103’s best-in-class potential to be the first self-administered subcutaneous injection dosed as infrequently as every two weeks to treat a range of autoimmune disorders. Based on the clinical data available to date, DNTH103 was generally well tolerated with no serious adverse events or complement-related infections.
Current wording
Data reported from DNTH103’s Phase 1 clinical trial in 60 healthy volunteers across eight dose cohorts validates the extended half-life and potent classical pathway inhibition and supports a potentially differentiated safety profile of DNTH103. The topline data confirmed its approximately 60-day half-life and highly potent classical pathway inhibition with every two weeks S.C. dosing of 300mg/2mL surpassing the calculated IC90 of 87ug/mL, establishing DNTH103’s best-in-class potential to be the first self-administered subcutaneous injection dosed as infrequently as every two weeks to treat a range of autoimmune disorders. Based on the clinical data available to date, DNTH103 was generally well tolerated with no serious adverse events or complement-related infections.
Previous wording
On September 11, 2023, we completed a business combination with Former Dianthus pursuant to which, among other matters, Former Dianthus became as a wholly owned subsidiary of ours (the “Reverse Merger”). In connection with the completion of the Reverse Merger, we changed our name from “Magenta Therapeutics, Inc.” to “Dianthus Therapeutics, Inc.,” and the business conducted by us became primarily the business conducted by Former Dianthus.
Current wording
On September 11, 2023, we completed a business combination with Former Dianthus pursuant to which, among other matters, Former Dianthus became a wholly owned subsidiary of ours (the “Reverse Merger”). In connection with the completion of the Reverse Merger, we changed our name from “Magenta Therapeutics, Inc.” to “Dianthus Therapeutics, Inc.,” and the business conducted by us became primarily the business conducted by Former Dianthus.
Previous wording
To date, we have funded our operations primarily with proceeds from the sale of capital stock and have raised aggregate gross proceeds of $423.5 million from private placements. As of June 30, 2024, we had cash, cash equivalents and short-term investments of $360.7 million. Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments should be sufficient to fund our operations into the second half of 2027. Until we achieve profitability, we plan to fund our operations and capital expenditures with cash on hand and expect to seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. There can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. If we are unable to raise sufficient additional capital, we will be required to seek other alternatives which may include, among others, a delay or termination of our clinical trials or the development of our product candidates, temporary or permanent curtailment of our operations, a sale of our assets, or other alternatives with strategic or financial partners.
Current wording
To date, we have funded our operations primarily with proceeds from the sale of capital stock and have raised aggregate gross proceeds of $423.5 million from private placements. As of September 30, 2024, we had cash, cash equivalents and investments of $342.6 million. Based on our current operating plan, we believe that our existing cash, cash equivalents and investments should be sufficient to fund our operations into the second half of 2027. Until we achieve profitability, we plan to fund our operations and capital expenditures with cash on hand and expect to seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. There can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. If we are unable to raise sufficient additional capital, we will be required to seek other alternatives which may include, among others, a delay or termination of our clinical trials or the development of our product candidates, temporary or permanent curtailment of our operations, a sale of our assets, or other alternatives with strategic or financial partners.
Previous wording
We have incurred significant recurring losses. We generated net losses of $31.4 million and $18.2 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $120.8 million. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on a variety of factors, including the timing, scope and results of our research and development activities. We expect our expenses and capital requirements will increase substantially in connection with our ongoing activities, if and as we:
Current wording
We have incurred significant recurring losses. We generated net losses of $56.5 million and $33.0 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $146.0 million. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on a variety of factors, including the timing, scope and results of our research and development activities. We expect our expenses and capital requirements will increase substantially in connection with our ongoing activities, if and as we:
Previous wording
We are a party to an option agreement and license agreement with Zenas BioPharma, Inc. (formerly Zenas BioPharma Limited) (“Zenas BioPharma”), a related party. In September 2020, we entered into an option agreement with Zenas BioPharma (“Zenas Option”), through which we provided Zenas BioPharma an option to enter into an exclusive license agreement for the development and commercialization of products arising from our research of monoclonal antibody antagonists targeting certain specific complement proteins. In June 2022, we and Zenas BioPharma executed a license agreement (“Zenas License Agreement”). The Zenas Option and Zenas License Agreement are collectively referred to as the “Zenas Agreements.” The Zenas License Agreement provides Zenas BioPharma with a license in the People’s Republic of China, including Hong Kong, Macau, and Taiwan, for the development and commercialization of sequences and products under the first antibody sequence.
Current wording
We are party to an option agreement and license agreement with Zenas BioPharma, Inc. (formerly Zenas BioPharma Limited) (“Zenas BioPharma”), a related party. In September 2020, we entered into an option agreement with Zenas BioPharma (“Zenas Option”), through which we provided Zenas BioPharma an option to enter into an exclusive license agreement for the development and commercialization of products arising from our research of monoclonal antibody antagonists targeting certain specific complement proteins. In June 2022, we and Zenas BioPharma executed a license agreement (“Zenas License Agreement”). The Zenas Option and Zenas License Agreement are collectively referred to as the “Zenas Agreements.” The Zenas License Agreement provides Zenas BioPharma with a license in the People’s Republic of China, including Hong Kong, Macau, and Taiwan, for the development and commercialization of sequences and products under the first antibody sequence.
Previous wording
For the three months ended June 30, 2024 and 2023, we recognized related party license revenue totaling $1.9 million and $1.0 million, respectively, associated with the Zenas Agreements. For the six months ended June 30, 2024 and 2023, we recognized related party license revenue totaling $2.7 million and $1.5 million, respectively, associated with the Zenas Agreements.
Current wording
For the three months ended September 30, 2024 and 2023, we recognized related party license revenue totaling $2.2 million and $0.9 million, respectively, associated with the Zenas Agreements. For the nine months ended September 30, 2024 and 2023, we recognized related party license revenue totaling $4.9 million and $2.4 million, respectively, associated with the Zenas Agreements.
Previous wording
Other income/(expense) consists primarily of interest income generated from earnings on invested cash equivalents and short-term investments.
Current wording
Other income/(expense) consists primarily of interest income generated from earnings on invested cash equivalents and investment securities.
Previous wording
Under the terms of the Zenas Agreements, we recognized related party license revenue of $2.7 million and $1.5 million for the six months ended June 30, 2024 and 2023, respectively. The increase was primarily due increased clinical operations activity costs associated with the commencement of DNTH103's Phase 2 clinical trial in gMG in the first quarter of 2024, along with preparations to initiate additional Phase 2 clinical trials in MMN and CIDP in the second half of 2024.
Current wording
Under the terms of the Zenas Agreements, we recognized related party license revenue of $2.2 million and $0.9 million for the three months ended September 30, 2024 and 2023, respectively. The increase was primarily due to increased clinical operations activity costs associated with the commencement of DNTH103's Phase 2 clinical trials in gMG and MMN in 2024, along with preparations to initiate a Phase 3 clinical trial in CIDP by the end of 2024.
Previous wording
Research and development expenses were $18.1 million for the three months ended June 30, 2024, as compared to $10.3 million for the three months ended June 30, 2023, an increase of $7.8 million. This increase was due to (1) a $5.1 million increase in external research and development costs, consisting of preclinical study costs, CMC activities, third-party consulting services, clinical operation activities, license and milestone payments and discovery activities and (2) a $2.7 million increase in internal research and development costs, consisting of personnel and related costs, stock-based compensation expense, and other costs.
Current wording
Research and development expenses were $25.5 million for the three months ended September 30, 2024, as compared to $8.0 million for the three months ended September 30, 2023, an increase of $17.5 million. This increase was due to (1) a $14.0 million increase in external research and development costs, consisting of preclinical study costs, CMC activities, third-party consulting services, clinical operation activities, licensing and milestone payments and discovery activities and (2) a $3.5 million increase in internal research and development costs, consisting of personnel and related costs and stock-based compensation expense.
Previous wording
The $9.7 million increase in external research and development costs was due to a $9.6 million increase in expenses related to our lead product candidate, DNTH103, and a $0.1 million increase in expenses related to our discovery activities. For the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, there were increases in expenses related to DNTH103 of $6.1 million in clinical operations activities, $3.1 million in CMC activities, $0.5 million in third-party consulting services and $0.5 million in licensing and milestone payments, partially offset by a decrease of $0.6 million in preclinical study costs related to DNTH103. The increased amount of DNTH103-related costs in clinical operations, CMC, consulting and milestone payments results from activities related to the commencement of DNTH103’s Phase 2 clinical trial in gMG in the first quarter of 2024 and our preparations to initiate additional Phase 2 clinical trials in MMN (following the clearance of our Phase 2 IND application by the FDA in the second quarter of 2024) and in CIDP in the second half of 2024. The decreased amounts of DNTH103-related preclinical study costs was due to the substantial completion of a chronic toxicology study in the second half of 2023. The $0.1 million increase in expenses related to our discovery activities was due to development activities of potential molecules beyond DNTH103 in the six months ended June 30, 2024.
Current wording
The $14.0 million increase in external research and development costs was due to a $13.8 million increase in expenses related to our lead product candidate, DNTH103, and a $0.2 million increase in discovery activities. For the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, there were increases in expenses related to DNTH103 of $6.8 million in CMC activities, $5.8 million in clinical operations activities, $0.9 million in preclinical study costs and $0.4 million in licensing and milestone payments, which were partially offset by a decrease of $0.1 million in third-party consulting services related to DNTH103. The increased DNTH103-related costs in CMC activities, clinical operations, preclinical study costs and licensing and milestone payments were primarily due to activities related to the commencement of DNTH103’s Phase 2 clinical trials in gMG and MMN in 2024, along with preparations to initiate a Phase 3 clinical trial in CIDP by the end of 2024. The $0.2 million increase in expenses related to our discovery activities was due to development activities of potential molecules beyond DNTH103 in the three months ended September 30, 2024.
Previous wording
The $2.7 million increase in internal research and development costs was due to a $1.5 million increase in personnel and related costs and a $1.2 million increase in stock-based compensation expense. The increases were due to the build out of our internal research and development function to support our ongoing and planned Phase 2 clinical trials.
Current wording
The $3.5 million increase in internal research and development costs was due to a $2.2 million increase in personnel and related costs and a $1.3 million increase in stock-based compensation expense. The increases were due to the buildout of our internal research and development function to support our ongoing and planned Phase 2 and Phase 3 clinical trials.
Previous wording
General and administrative expenses were $11.6 million for the six months ended June 30, 2024, as compared to $4.8 million for the six months ended June 30, 2023, an increase of $6.8 million. The increase was primarily due to increases of $1.6 million in personnel-related costs, $2.3 million in stock-based compensation expense, $1.2 million in professional services costs, $0.9 million in third-party consulting services costs and $0.8 million in other costs. The increases in costs were due to the build out of our general and administrative function to support our operations as a public company and to support our ongoing and planned Phase 2 clinical trials.
Current wording
General and administrative expenses were $6.5 million for the three months ended September 30, 2024, as compared to $8.7 million for the three months ended September 30, 2023, a decrease of $2.2 million. The decrease in general and administrative expenses was primarily due to decreases of $3.4 million in personnel-related costs related to severance costs to former employees of Magenta in the prior period and $1.1 million in director and officer insurance costs related to the Reverse Merger in the prior period. These decreases were partially offset by increases of $1.4 million in stock-based compensation expense, $0.7 million in professional services costs and $0.2 million in facilities costs as we continue to build out our general and administrative function to support our operations as a public company and to support our ongoing and planned Phase 2 and Phase 3 clinical trials.
Previous wording
Other income was $4.6 million for the three months ended June 30, 2024, as compared to $0.6 million for the three months ended June 30, 2023, an increase of $4.0 million. The increase was primarily due to an increase in interest income from a larger investment balance and higher interest rates on investments.
Current wording
Other income was $4.7 million for the three months ended September 30, 2024, as compared to $1.0 million for the three months ended September 30, 2023, an increase of $3.7 million. The increase was primarily due to an increase of $3.4 million in interest income from a larger investment balance and higher interest rates on investments and a $0.3 million gain on an investment in a related party.
Previous wording
The following table summarizes our results of operations and other comprehensive loss for the periods indicated:
Current wording
The following table summarizes our results of operations for the periods indicated:
Previous wording
Under the terms of the Zenas Agreements, we recognized related party license revenue of $1.9 million and $1.0 million for the three months ended June 30, 2024 and 2023, respectively. The increase was primarily due to increased clinical operations activity costs associated with the commencement of DNTH103's Phase 2 clinical trial in gMG in the first quarter of 2024, along with preparations to initiate additional Phase 2 clinical trials in MMN and Chronic Inflammatory Demyelinating Polyneuropathy (“CIDP”) in the second half of 2024.
Current wording
Under the terms of the Zenas Agreements, we recognized related party license revenue of $4.9 million and $2.4 million for the nine months ended September 30, 2024 and 2023, respectively. The increase was primarily due to increased clinical operations activity costs associated with the commencement of DNTH103's Phase 2 clinical trials in gMG and MMN in 2024, along with preparations to initiate a Phase 3 clinical trial in CIDP by the end of 2024.
Previous wording
Research and development expenses were $31.2 million for the six months ended June 30, 2024, as compared to $16.1 million for the six months ended June 30, 2023, an increase of $15.1 million. This increase was due to (1) a $9.7 million increase in external research and development costs, consisting of preclinical study costs, CMC activities, third-party consulting services, clinical operation activities, license and milestone payments and discovery activities and (2) a $5.4 million increase in internal research and development costs, consisting of personnel and related costs, stock-based compensation expense, and other costs.
Current wording
Research and development expenses were $56.7 million for the nine months ended September 30, 2024, as compared to $24.1 million for the nine months ended September 30, 2023, an increase of $32.6 million. This increase was due to (1) a $23.7 million increase in external research and development costs, consisting of preclinical study costs, CMC activities, third-party consulting services, clinical operation activities, licensing and milestone payments and discovery activities and (2) a $8.9 million increase in internal research and development costs, consisting of personnel and related costs, stock-based compensation expense, and other costs.
Previous wording
The $5.1 million increase in external research and development costs was related to our lead product candidate, DNTH103. For the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, there were increases in expenses related to DNTH103 of $3.7 million in clinical operations activities, $0.7 million in CMC activities, $0.4 million in third-party consulting services and $0.4 million in licensing and milestone payments, partially offset by a decrease of $0.1 million in preclinical study costs related to DNTH103. The increased amount of DNTH103-related costs in clinical operations, consulting and milestone payments results from activities related to the commencement of DNTH103’s Phase 2 clinical trial in gMG in the first quarter of 2024 and our preparations to initiate additional Phase 2 clinical trials in MMN (following the clearance of our Phase 2 IND application by the FDA in the second quarter of 2024) and in CIDP in the second half of 2024.
Current wording
The $23.7 million increase in external research and development costs was due to a $23.5 million increase in expenses related to our lead product candidate, DNTH103, and a $0.2 million increase in expenses related to our discovery activities. For the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, there were increases in expenses related to DNTH103 of $11.9 million in clinical operations activities, $9.9 million in CMC activities, $0.9 million in licensing and milestone payments, $0.5 million in third-party consulting services and $0.3 million in preclinical study costs related to DNTH103. The increased DNTH103-related costs in clinical operations, CMC activities, licensing and milestone payments, third-party consulting services and preclinical study costs were primarily due to activities related to the commencement of DNTH103’s Phase 2 clinical trials in gMG and MMN in 2024, along with preparations to initiate a Phase 3 clinical trial in CIDP by the end of 2024. The $0.2 million increase in expenses related to our discovery activities was due to development activities of potential molecules beyond DNTH103 in the nine months ended September 30, 2024.
Previous wording
The $5.4 million increase in internal research and development costs was due to a $3.0 million increase in personnel and related costs, a $1.9 million increase in stock-based compensation expense, and a $0.5 million increase in other costs. The increases were due to the build out of our internal research and development function to support our ongoing and planned Phase 2 clinical trials.
Current wording
The $8.9 million increase in internal research and development costs was due to a $5.2 million increase in personnel and related costs, a $3.2 million increase in stock-based compensation expense and a $0.5 million increase in other costs. The increases were due to the buildout of our internal research and development function to support our ongoing and planned Phase 2 and Phase 3 clinical trials.
Previous wording
General and administrative expenses were $6.0 million for the three months ended June 30, 2024, as compared to $2.5 million for the three months ended June 30, 2023, an increase of $3.5 million. The increase was primarily due to increases of $0.8 million in personnel-related costs, $1.4 million in stock-based compensation expense, $0.4 million in professional services costs, $0.3 million in third-party consulting services costs and $0.6 million in other costs. The increases in costs were due to the build out of our general and administrative function to support our operations as a public company and to support our ongoing and planned Phase 2 clinical trials.
Current wording
General and administrative expenses were $18.2 million for the nine months ended September 30, 2024, as compared to $13.5 million for the nine months ended September 30, 2023, an increase of $4.7 million. The increase was primarily due to increases of $3.6 million in stock-based compensation expense, $1.8 million in professional services costs, $1.0 million in third-party consulting services costs and $0.3 million in facilities costs. The increases in costs were due to the buildout of our general and administrative function to support our operations as a public company and to support our ongoing and planned Phase 2 and Phase 3 clinical trials. These increases were partially offset by decreases of $1.7 million in personnel-related costs related to severance costs to former employees of Magenta in the prior period and $0.3 million in other costs related to the Reverse Merger in the prior period.
Previous wording
Other income was $8.7 million for the six months ended June 30, 2024, as compared to $1.2 million for the six months ended June 30, 2023, an increase of $7.5 million. The increase was primarily due to an increase of $7.6 million in interest income from a larger investment balance and higher interest rates on investments, partially offset by an increase in other expenses of $0.1 million.
Current wording
Other income was $13.4 million for the nine months ended September 30, 2024, as compared to $2.2 million for the nine months ended September 30, 2023, an increase of $11.2 million. The increase was primarily due to an increase of $11.1 million in interest income from a larger investment balance and higher interest rates on investments and a $0.3 million gain on an investment in a related party, partially offset by an increase in other expenses of $0.2 million.
Previous wording
In order to complete the development of DNTH103 or any future 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, if ever, we expect to seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. To the extent that we raise additional capital through equity financings or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common 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 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. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from bank failures, other general macroeconomic conditions and otherwise. Our 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 seek other alternatives which may include, among others, a delay or termination of our clinical trials or the development of our product candidates, temporary or permanent curtailment of our operations, a sale of our assets, or other alternatives with strategic or financial partners. We cannot provide assurance that we will ever generate positive cash flow from operating activities.
Current wording
In order to complete the development of DNTH103 or any future 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, if ever, we expect to seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. To the extent that we raise additional capital through equity financings, such as our ATM offering program, or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common 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 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. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from bank failures, other general macroeconomic conditions and otherwise. Our 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 seek other alternatives which may include, among others, a delay or termination of our clinical trials or the development of our product candidates, temporary or permanent curtailment of our operations, a sale of our assets, or other alternatives with strategic or financial partners. We cannot provide assurance that we will ever generate positive cash flow from operating activities.
Previous wording
To date, we have funded our operations primarily with proceeds from the sale of capital stock and have raised aggregate gross proceeds of $423.5 million. However, we have incurred significant recurring losses. We had an accumulated deficit of $120.8 million as of June 30, 2024. As of June 30, 2024, we had cash, cash equivalents and short-term investments of $360.7 million. Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments should be sufficient to fund our operations into the second half of 2027. Until we achieve profitability, we plan to fund our operations and capital expenditures with cash on hand and expect to seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. There can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. Our 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 seek other alternatives which may include, among others, a delay or termination of our clinical trials or the development of our product candidates, temporary or permanent curtailment of our operations, a sale of our assets, or other alternatives with strategic or financial partners.
Current wording
To date, we have funded our operations primarily with proceeds from the sale of capital stock and have raised aggregate gross proceeds of $423.5 million. However, we have incurred significant recurring losses. We had an accumulated deficit of $146.0 million as of September 30, 2024. As of September 30, 2024, we had cash, cash equivalents and investments of $342.6 million. Based on our current operating plan, we believe that our existing cash, cash equivalents and investments should be sufficient to fund our operations into the second half of 2027. Until we achieve profitability, we plan to fund our operations and capital expenditures with cash on hand and expect to seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. There can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. Our 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 seek other alternatives which may include, among others, a delay or termination of our clinical trials or the development of our product candidates, temporary or permanent curtailment of our operations, a sale of our assets, or other alternatives with strategic or financial partners.
Previous wording
For the six months ended June 30, 2023, net cash used in operating activities consisted of a net loss of $18.2 million, partially offset by a decrease in net operating assets and liabilities of $2.6 million and net non-cash operating expenses of $0.6 million. The decrease in net operating assets and liabilities was primarily attributable to decreases in receivable from Zenas BioPharma of $4.3 million, unbilled receivable from Zenas BioPharma of $0.5 million and prepaid expenses and other current assets of $0.7 million, partially offset by an increase in deferred transaction costs related to the Reverse Merger of $1.2 million and a decrease in accounts payable, accrued expenses and operating lease liabilities of $1.7 million. The non-cash operating expenses consisted mainly of stock-based compensation expense of $1.0 million and amortization of right-of-use operating lease assets of $0.1 million, partially offset by accretion of discount on short-term investments of $0.5 million.
Current wording
For the nine months ended September 30, 2024, net cash used in operating activities consisted of a net loss of $56.5 million, partially offset by a decrease in net operating assets and liabilities of $0.1 million and net non-cash operating expenses of $5.7 million. The decrease in net operating assets and liabilities was primarily attributable to an increase in accounts payable, accrued expenses and operating lease liabilities of $5.9 million, partially offset by increases in other assets of $3.1 million, unbilled receivable from Zenas BioPharma of $1.1 million, receivable from Zenas BioPharma of $1.1 million and prepaid expenses and other current assets of $0.4 million and a decrease in deferred revenue of $0.1 million. The non-cash operating expenses consisted primarily of stock-based compensation expense of $9.0 million and amortization of right-of-use operating lease assets of $0.3 million, partially offset by accretion of discount on investment securities of $3.3 million and a gain on an investment in related party of $0.3 million.
Previous wording
For the six months ended June 30, 2024, net cash used in operating activities consisted of a net loss of $31.4 million and an increase in net operating assets and liabilities of $2.5 million, partially offset by net non-cash operating expenses of $4.4 million. The increase in net operating assets and liabilities was primarily attributable to increases in other assets of $1.5 million, unbilled receivable from Zenas BioPharma of $0.6 million, receivable from Zenas BioPharma of $0.5 million and prepaid expenses and other current assets of $0.1 million, partially offset by an increase in accounts payable, accrued expenses and operating lease liabilities of $0.2 million. The non-cash operating expenses consisted mainly of stock-based compensation expense of $5.1 million and amortization of right-of-use operating lease assets of $0.2 million, partially offset by accretion of discount on short-term investments of $0.9 million.
Current wording
For the nine months ended September 30, 2023, net cash used in operating activities consisted of a net loss of $33.0 million, partially offset by a decrease in net operating assets and liabilities of $6.5 million and net non-cash operating expenses of $1.5 million. The decrease in net operating assets and liabilities was primarily attributable to decreases in receivable from Zenas BioPharma of $4.5 million, unbilled receivable from Zenas BioPharma of $0.4 million and prepaid expenses and other current assets of $2.5 million, partially offset by a decrease in accounts payable, accrued expenses and lease liabilities of $0.9 million. The non-cash operating expenses consisted primarily of stock-based compensation expense of $2.2 million and amortization of right-of-use lease assets of $0.2 million, partially offset by accretion of discount on investment securities of $0.9 million.
Previous wording
For the six months ended June 30, 2024, net cash used in investing activities consisted of $27.3 million of purchases of short-term investments, partially offset by $23.0 million of proceeds from maturities of short-term investments.
Current wording
For the nine months ended September 30, 2024, net cash used in investing activities consisted primarily of $305.6 million of purchases of investment securities, partially offset by $42.0 million of proceeds from maturities of investment securities.
Previous wording
For the six months ended June 30, 2023, net cash provided by investing activities consisted of $43.9 million of proceeds from maturities of short-term investments, partially offset by $3.9 million of purchases of short-term investments.
Current wording
For the nine months ended September 30, 2023, net cash provided by investing activities consisted primarily of $59.8 million of proceeds from maturities of investment securities, partially offset by $31.2 million of purchases of investment securities.
Previous wording
For the six months ended June 30, 2024, net cash provided by financing activities consisted of $215.3 million of net proceeds from the private placement and $0.3 million of proceeds from the exercise of stock options.
Current wording
For the nine months ended September 30, 2024, net cash provided by financing activities consisted of $215.3 million of net proceeds from the private placement and $0.6 million of proceeds from the exercise of stock options.
Previous wording
In July 2020, Former Dianthus entered into a collaborative research agreement with IONTAS Limited (“IONTAS”) to perform certain milestone-based research and development activities under our first development program. The agreement was amended in January 2023 to extend services to additional development programs. We are obligated to pay development and commercial milestone payments of up to £5.4 million (approximately $6.8 million based on the June 30, 2024 exchange rate) with the first development program and of up to £2.5 million (approximately $3.2 million based on the June 30, 2024 exchange rate) with the second development program.
Current wording
In July 2020, Former Dianthus entered into a collaborative research agreement with IONTAS Limited (“IONTAS”) to perform certain milestone-based research and development activities under our first development program. The agreement was amended in January 2023 to extend services to additional development programs. We are obligated to pay development and commercial milestone payments of up to £5.4 million (approximately $7.2 million based on the September 30, 2024 exchange rate) with the first development program and of up to £2.5 million (approximately $3.3 million based on the September 30, 2024 exchange rate) with the second development program.