Athira Pharma Inc

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the potential learnings from our ACT-AD and SHAPE trials and LIFT-AD independent unblinded interim efficacy and futility analysis and their ability to inform and improve future clinical development plans;

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the potential learnings from our ACT-AD and SHAPE trials, LIFT-AD independent unblinded interim efficacy and futility analysis, and LIFT-AD trial and their ability to inform and improve future clinical development plans;

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the potential benefits of any strategic collaboration agreements we may enter into; and

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the potential benefits of any strategic collaborations, partnerships, or other transactions we may enter into;

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our expectations regarding the time during which we will be an emerging growth company under the JOBS Act.

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our expectations regarding the time during which we will be an emerging growth company under the JOBS Act; and

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We are a late clinical-stage biopharmaceutical company focused on developing small molecules engineered to restore neuronal health and slow neurodegeneration. Our approach is designed to modulate the neurotrophic hepatocyte growth factor, or HGF, system, that is critical to normal brain function and may play a key role in maintaining the health and functioning of neuronal networks. We believe that by acting on the neurotrophic HGF system and its multiple downstream signaling pathways, we may be able to enhance the body’s natural ability to protect and repair neuronal networks by reducing inflammation, promoting regeneration, and reducing disease-specific protein pathologies, thereby positively impacting the course of disease. We aim to achieve these goals by advancing our pipeline of novel small molecule compounds which are designed to and have exhibited properties in enhancing the neurotrophic HGF system in either the central nervous system, or CNS, by crossing the blood brain barrier, or BBB, or the peripheral nervous system, or PNS.

Current wording

We are a clinical-stage biopharmaceutical company focused on developing small molecules engineered to restore neuronal health and slow neurodegeneration. Our approach is designed to modulate the neurotrophic hepatocyte growth factor, or HGF, system, that is critical to normal brain function and may play a key role in maintaining the health and functioning of neuronal networks. We believe that by acting on the neurotrophic HGF system and its multiple downstream signaling pathways, we may be able to enhance the body’s natural ability to protect and repair neuronal networks by reducing inflammation, promoting regeneration, and reducing disease-specific protein pathologies, thereby positively impacting the course of disease. We aim to achieve these goals by advancing our pipeline of novel small molecule compounds which are designed to and have exhibited properties in enhancing the neurotrophic HGF system in either the central nervous system, or CNS, by crossing the blood brain barrier, or BBB, or the peripheral nervous system, or PNS.

Previous wording

Our lead drug candidate, fosgonimeton, is a potentially first-in-class, small molecule drug candidate designed to positively modulate the neurotrophic HGF system for potential treatment of neurodegenerative diseases. The effects of fosgonimeton in its primary target indication, Alzheimer's disease, or AD, were previously evaluated in our ACT-AD clinical trial and are currently being evaluated in our LIFT-AD clinical trial.

Current wording

Our other drug candidate, fosgonimeton, is a small molecule drug candidate designed to positively modulate the neurotrophic HGF system for potential treatment of neurodegenerative diseases. The effects of fosgonimeton in AD were previously evaluated in our ACT-AD and LIFT-AD clinical trials.

Previous wording

ACT-AD 1 was a randomized, double-blind, placebo-controlled, parallel-group 26-week exploratory Phase 2 clinical trial with fosgonimeton in mild-to-moderate AD, with event-related potential, or ERP, P300 latency as the primary endpoint. Initiated in November 2020, the trial was designed to better characterize the overall effects of fosgonimeton on working memory processing speed and cognitive measures and inform the Phase 2/3 LIFT-AD trial. Topline results for this exploratory Phase 2 ACT-AD trial were announced in June 2022, and the primary and all secondary endpoints were not met by protocoled analysis. However, a post hoc analysis of results from ACT-AD in a pre-specified subgroup suggested positive effects on measures of cognition, function and neurodegeneration in participants taking fosgonimeton alone without background acetylcholinesterase inhibitors, or AChEIs. Additionally, data from post hoc analysis of plasma biomarkers from participants on fosgonimeton without background AChEIs showed descriptive improvements (non-statistically significant) in markers of neuroinflammation and AD-specific protein pathologies when compared to placebo. Fosgonimeton was generally well tolerated in the ACT-AD study, with a favorable safety profile, and there were no treatment-related serious adverse events or deaths observed. While we have completed the ACT-AD trial, its open-label extension is ongoing.

Current wording

ACT-AD 1 was a randomized, double-blind, placebo-controlled, parallel-group 26-week exploratory Phase 2 clinical trial with fosgonimeton in mild-to-moderate AD, with event-related potential, or ERP, P300 latency as the primary endpoint. Initiated in November 2020, the trial was designed to better characterize the overall effects of fosgonimeton on working memory processing speed and cognitive measures and inform the Phase 2/3 LIFT-AD trial. Topline results for this exploratory Phase 2 ACT-AD trial were announced in June 2022, and the primary and all secondary endpoints were not met by protocoled analysis. However, a post hoc analysis of results from ACT-AD in a pre-specified subgroup suggested positive effects on measures of cognition, function and neurodegeneration in participants taking fosgonimeton alone without background acetylcholinesterase inhibitors, or AChEIs. Additionally, data from post hoc analysis of plasma biomarkers from participants on fosgonimeton without background AChEIs showed descriptive improvements (non-statistically significant) in markers of neuroinflammation and AD-specific protein pathologies when compared to placebo. Fosgonimeton was generally well tolerated in the ACT-AD study, with a favorable safety profile, and there were no treatment-related serious adverse events or deaths observed.

Previous wording

LIFT-AD is a randomized, double-blind, placebo-controlled, parallel-group 26-week Phase 2/3 clinical trial with fosgonimeton in mild-to-moderate AD. The primary endpoint for the Phase 2/3 LIFT-AD trial is the Global Statistical Test, or GST, which combines the scores from the co-key secondary endpoints of cognition (Alzheimer's Disease Assessment Scale-Cognitive Subscale, or ADAS-Cog11) and function (Alzheimer’s Disease Cooperative Study-Activities of Daily Living, or ADCS-ADL23), and which we believe is a comprehensive measure of overall disease burden. Guided by the results from the completed exploratory ACT-AD Phase 2 trial, in September 2022, we proactively amended LIFT-AD to focus on participants not on background AChEIs, and in May 2023, we further amended LIFT-AD to focus on 40 mg dosing, which we have selected for further development and as the potential dose for regulatory approval of fosgonimeton in this indication. In January 2024, we announced the completion of enrollment with a total of approximately 315 patients randomized in the primary analysis population. In July 2024, we announced the completion of dosing for the last patient in LIFT-AD and that we are targeting to report topline LIFT-AD results by the end of the third quarter of 2024.

Current wording

LIFT-AD was a randomized, double-blind, placebo-controlled, parallel-group 26-week Phase 2/3 clinical trial with fosgonimeton in mild-to-moderate AD. The primary endpoint for the Phase 2/3 LIFT-AD trial was the Global Statistical Test, or GST, which combines the scores from the co-key secondary endpoints of cognition (Alzheimer's Disease Assessment Scale-Cognitive Subscale (ADAS-Cog11) and function (Alzheimer’s Disease Cooperative Study-Activities of Daily Living, or ADCS-ADL23). Guided by the results from the completed exploratory ACT-AD Phase 2 trial, in September 2022, we proactively amended LIFT-AD to focus on participants not on background AChEIs, and in May 2023, we further amended LIFT-AD to focus on 40 mg dosing, which we had selected for further development and as the potential dose for regulatory approval of fosgonimeton in this indication. In September 2024, we announced the topline results for LIFT-AD, and the primary and key secondary endpoints did not reach statistical significance compared with placebo at 26 weeks. However, both components of GST, cognition (ADAS-Cog11) and function (ADCS-ADL23), directionally favored fosgonimeton treatment, and in pre-specified subgroups characterized by more rapid disease progression (moderate AD and APOE4 carriers), cognition and function improved or stabilized in the fosgonimeton treated group. In addition, data across biomarkers of protein pathology (Aβ42/40, p-Tau181, and p-Tau217), inflammation (GFAP) and neurodegeneration (NfL) showed directional improvements with fosgonimeton treatment that are consistent with the broad neuroprotective mechanism of HGF modulation. Based on these results, we decided to pause further development of fosgonimeton and to shift our focus to the clinical development of ATH-1105.

Previous wording

In July 2021, we announced that we would enroll participants into an open-label extension, or OLEX, trial 1 for our LIFT-AD and ACT-AD clinical trials, enabling eligible participants who have completed either trial and elect to participate in the OLEX trial to receive open-label treatment with fosgonimeton. Subsequently, we have extended the OLEX trial several times and eligible participants may now receive up to 48 months of open-label treatment, which allows us to collect up to 54 months total of long-term exposure data.

Current wording

In July 2021, we announced that we would enroll participants into an open-label extension, or OLEX, trial 1 for our LIFT-AD and ACT-AD clinical trials, enabling eligible participants who have completed either trial and elect to participate in the OLEX trial to receive open-label treatment with fosgonimeton. In September 2024, based on the results from LIFT-AD, we determined to stop the OLEX trial.

Previous wording

We are focused on the development of small molecule therapeutics which enables us to use well-established and widely available manufacturing processes and infrastructure, formulation processes and drug administration technologies or devices. We do not currently operate our own facilities for manufacturing, storing, or distributing our drug candidates. We utilize third-party contract manufacturing organizations, or CMOs, to manufacture and supply our preclinical and clinical materials during the development of our drug candidates. We believe the synthesis of fosgonimeton is reliable and reproducible and the synthetic methods can be further optimized to enable large-scale production that continues to avoid use of toxic materials or specialized equipment or handling during the manufacturing process. We plan to continue to optimize the manufacturing process to support future large-scale and commercial supply. Our goal is to identify and develop small molecule drug candidates that are cost-effective to manufacture and easily transferable to third party CMOs. We expect to use similar contract resources for commercialization of our drug products, at least until our resources and operations are at a scale that justifies investment in internal manufacturing capabilities.

Current wording

We are focused on the development of small molecule therapeutics which enables us to use well-established and widely available manufacturing processes and infrastructure, formulation processes and drug administration technologies or devices. Our lead drug candidate, ATH-1105, is currently in clinical development for the potential treatment of ALS, and additional drug candidates are in development. We do not currently operate our own facilities for manufacturing, storing, or distributing our drug candidates. We utilize third-party contract manufacturing organizations, or CMOs, to manufacture and supply our preclinical and clinical materials during the development of our drug candidates. We believe the synthesis of ATH-1105 is reliable and reproducible and the synthetic methods can be further optimized to enable large-scale production that continues to avoid use of toxic materials or specialized equipment or handling during the manufacturing process. We plan to continue to optimize the manufacturing process to support future large-scale and commercial supply that may be needed. Our goal is to identify and develop small molecule drug candidates that are cost-effective to manufacture and easily transferable to third party CMOs. We expect to use similar contract resources for commercialization of our drug products, at least until our resources and operations are at a scale that justifies investment in internal manufacturing capabilities.

Previous wording

Given our stage of development, we have not yet established a commercial organization or distribution capabilities. We intend to build a commercial infrastructure to support sales of our drug candidates. We expect to manage sales, marketing and distribution through internal resources and third-party relationships. While we may commit significant financial and management resources to commercial activities, we will also consider collaborating with one or more pharmaceutical companies to enhance our commercial capabilities.

Current wording

Given our stage of development, we have not yet established a commercial organization or distribution capabilities. To the extent that we successfully develop our drug candidates, we intend to build a commercial infrastructure to support future sales. We expect to manage sales, marketing and distribution through internal resources and third-party relationships. While we may commit significant financial and management resources to commercial activities, we will also consider collaborating with one or more pharmaceutical companies to enhance our commercial capabilities.

Previous wording

To date, we have funded our operations primarily through proceeds from the sale of equity securities, including proceeds from the sale and issuance of common stock in our IPO and in a subsequent follow-on public offering, the sale and issuance of convertible preferred stock, common stock warrants, and convertible notes, and to a lesser extent from grant income and stock option exercises. From inception to June 30, 2024, we have raised aggregate net cash proceeds of approximately $407.4 million primarily from the issuance of our common stock (excluding option exercises), convertible preferred stock, common stock warrants, and convertible notes. We have incurred significant operating losses to date. Our net losses were $53.2 million and $57.4 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $362.4 million and cash, cash equivalents and investments of $91.8 million.

Current wording

To date, we have funded our operations primarily through proceeds from the sale of equity securities, including proceeds from the sale and issuance of common stock in our IPO and in a subsequent follow-on public offering, the sale and issuance of convertible preferred stock, common stock warrants, and convertible notes, and to a lesser extent from grant income and stock option exercises. From inception to September 30, 2024, we have raised aggregate net cash proceeds of approximately $407.4 million primarily from the issuance of our common stock (excluding option exercises), convertible preferred stock, common stock warrants, and convertible notes. We have incurred significant operating losses to date. Our net losses were $81.9 million and $90.4 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $391.1 million and cash, cash equivalents and investments of $68.9 million.

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We expect to continue to incur increasing operating losses for the foreseeable future as we:

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We expect to continue to incur operating losses for the foreseeable future as we:

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continue to advance fosgonimeton and our other drug candidates through preclinical studies and clinical trials, and continue the open label extension of the ACT-AD and LIFT-AD trials;

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continue to advance ATH-1105 and any other drug candidates through preclinical studies and clinical trials;

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continue to grow our discovery organization and invest in our drug development programs;

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continue to invest in our drug development programs;

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attract, hire and retain additional personnel;

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attract, hire and retain personnel;

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expand our laboratory and office facilities;

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maintain our laboratory and office facilities;

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seek regulatory approval for any drug candidates that successfully complete clinical trials;

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seek regulatory approval for any drug candidates that successfully complete clinical trials; and

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We will require substantial additional funding to support our continuing operations and further the development of our drug candidates. Until such time as we can generate significant revenue from drug product sales, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, which could include income from collaboration, licensing or similar arrangements, for the foreseeable future. Adequate funding may not be available when needed or on terms acceptable to us, or at all. If we are unable to raise additional capital as needed, we may have to significantly delay, scale back or discontinue development of our drug candidates. Our ability to raise additional funds may be negatively impacted by potential adverse global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce or terminate our drug product development programs, commercialization efforts or other operations. Insufficient liquidity may also require us to relinquish rights to drug candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities. Based upon our current operating plan, we estimate that our existing cash, cash equivalents and investments will be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months following the date of this report.

Current wording

We will require substantial additional funding to support our continuing operations and further the development of our drug candidates. Until such time as we can generate significant revenue from drug product sales, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, which could include income from collaboration, licensing or similar arrangements, for the foreseeable future. Adequate funding may not be available when needed or on terms acceptable to us, or at all. If we are unable to raise additional capital as needed, we may have to significantly delay, scale back or discontinue development of our drug candidates or other operations. Our ability to raise additional funds may be negatively impacted by potential adverse global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce or terminate our drug product development programs, commercialization efforts or other operations. Insufficient liquidity may also require us to relinquish rights to drug candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities. Based upon our current operating plan, we estimate that our existing cash, cash equivalents and investments will be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months following the date of this report.

Previous wording

As of the date of this report, we cannot reasonably determine the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our drug candidates. Drug candidates in later stages of development generally have higher development costs than those in earlier stages. We expect that our research and development expenses will increase for the foreseeable future as we continue to invest in research and development activities related to developing our drug candidates, as our drug candidates advance into later stages of development, as we conduct larger clinical trials, as we seek regulatory approvals for any drug candidates that successfully complete clinical trials, as we expand our drug product pipeline, as we maintain, expand, protect and enforce our intellectual property portfolio, and as we incur expenses associated with hiring additional personnel to support our research and development efforts. In particular, we have seen, and expect to continue to see, our research and development expenses increase as we conduct our clinical trials for fosgonimeton, including open-label extensions for those trials. Additionally, we may experience an overall increase in research and development expenses as a result of inflation.

Current wording

As of the date of this report, we cannot reasonably determine the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our drug candidates. Drug candidates in later stages of development generally have higher development costs than those in earlier stages. We expect to continue to incur research and development expenses for the foreseeable future as we continue to invest in research and development activities related to developing our drug candidates, our drug candidates advance into later stages of development, we conduct larger clinical trials, we seek regulatory approvals for any drug candidates that successfully complete clinical trials, we expand our drug product pipeline, we maintain, expand, protect and enforce our intellectual property portfolio, and we incur expenses associated with hiring or retaining personnel to support our research and development efforts. We also expect our research and development expenses to decrease in the near term as a result of our decision to pause further development of fosgonimeton and to shift our focus to the clinical development of ATH-1105.

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the number of trials required for regulatory approval, in particular with respect to fosgonimeton for the treatment of mild-to-moderate AD (including any potential confirmatory or Phase 3 registrational trials);

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the number of trials required for regulatory approval;

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the impact of health epidemics, including COVID-19, on timelines and clinical operations, which may lead to increased costs; and

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the impact of health epidemics on timelines and clinical operations, which may lead to increased costs; and

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We expect that our general and administrative expenses will increase for the foreseeable future as we increase our headcount to support our continued research activities and development of our programs. We also anticipate that we will continue to incur expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, and those of any national securities exchange on which our securities are traded, legal, auditing, additional insurance expenses, investor relations activities, and other administrative and professional services. We expect continued legal expenses related to our ongoing legal proceedings and proposed settlement to resolve such claims. We also expect to continue to increase the size of our administrative function to support the growth of our business. Additionally, we may experience an overall increase in general and administrative expenses as a result of inflation.

Current wording

We expect to continue to incur general and administrative expenses for the foreseeable future as we maintain our headcount to support our continued research activities and development of our programs. We also anticipate that we will continue to incur expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, and those of any national securities exchange on which our securities are traded, legal, auditing, additional insurance expenses, investor relations activities, and other administrative and professional services. We expect continued legal expenses related to our ongoing legal proceedings and proposed settlement to resolve such claims. We also expect general and administrative expenses to decrease in the near term as a result of the Restructuring and related cost savings.

Previous wording

Research and development expenses increased by $0.6 million, from $21.6 million for the three months ended June 30, 2023 to $22.2 million for the three months ended June 30, 2024. The increase was driven primarily by an increase in ATH-1105 program costs of $3.3 million associated with the Phase 1 clinical trial, which commenced in the second quarter of 2024. This increase was partially offset by decreases in fosgonimeton program costs of $1.4 million and preclinical and other direct costs of $1.2 million, and to a lesser extent, a decrease in personnel-related expenses. The decrease in fosgonimeton program costs of $1.4 million was driven by decreases in contract research organization and clinical site visit costs for our Phase 2/3 LIFT-AD clinical trial and the corresponding open-label extension for our Phase 2 ACT-AD and Phase 2/3 LIFT-AD clinical trials of $2.0 million and a decrease in contract manufacturing costs of $0.4 million, partially offset by an increase in program consulting costs of $1.2 million.

Current wording

Research and development expenses decreased by $9.3 million, from $27.2 million for the three months ended September 30, 2023 to $17.9 million for the three months ended September 30, 2024. The decrease was driven primarily by decreases in fosgonimeton program costs of $10.7 million and preclinical and other direct costs of $0.9 million, and to lesser extents, decreases in ATH-1020 program costs and personnel-related expenses. The decrease in fosgonimeton program costs of $10.7 million was driven by decreases in contract research organization and clinical site visit costs for our Phase 2/3 LIFT-AD clinical trial and the corresponding open-label extension for our Phase 2 ACT-AD and Phase 2/3 LIFT-AD clinical trials of $5.2 million and a decrease in contract manufacturing costs of $5.5 million. These decreases were partially offset by an increase in ATH-1105 program costs of $2.4 million associated with the Phase 1 clinical trial, which commenced in the second quarter of 2024.

Previous wording

General and administrative expenses decreased by $6.2 million, from $18.5 million for the six months ended June 30, 2023 to $12.3 million for the six months ended June 30, 2024. The decrease was primarily due to a decrease in legal costs of $2.4 million, a decrease in business development expenses of $1.8 million, a decrease in professional services expenses of $1.1 million, a decrease in other general corporate expenses of $0.6 million, and a decrease in personnel-related costs of $0.4 million.

Current wording

General and administrative expenses decreased by approximately $0.2 million, from $7.8 million for the three months ended September 30, 2023 to $7.6 million for the three months ended September 30, 2024. The decrease was due to decreases in general corporate expenses of $0.4 million and in business development expenses of $0.3 million. These decreases were partially offset by an increase in personnel-related expenses of $0.3 million and an increase in professional services expenses of $0.1 million.

Previous wording

Other income, net, decreased by $0.8 million, from $2.0 million for the three months ended June 30, 2023 to $1.2 million for the three months ended June 30, 2024 due to lower income from accretion of discounts on debt securities purchased below par value and held to maturity and lower interest income earned on our available-for-sale securities. These decreases resulted from lower balances of available-for-sale securities held during the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Current wording

Other income, net, decreased by $1.2 million, from $2.1 million for the three months ended September 30, 2023 to $0.9 million for the three months ended September 30, 2024 due to lower income from accretion of discounts on debt securities purchased below par value and held to maturity and lower interest income earned on our available-for-sale securities. These decreases resulted from lower balances of available-for-sale securities held during the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Previous wording

Research and development expenses increased by $0.5 million, from $42.9 million for the six months ended June 30, 2023 to $43.4 million for the six months ended June 30, 2024. The increase was driven primarily by an increase in ATH-1105 program costs of $3.3 million associated with the Phase 1 clinical trial, which commenced in the second quarter of 2024. This increase was partially offset by decreases in fosgonimeton program costs of $1.4 million and preclinical and other direct costs of $1.2 million, and to a lesser extent, a decrease in personnel-related expenses. The decrease in fosgonimeton program costs of $1.4 million was driven by a decrease in contract manufacturing costs of $2.4 million, and decreases in contract research organization and clinical site visit costs for our Phase 2/3 LIFT-AD clinical trial and the corresponding open-label extension for our Phase 2 ACT-AD and Phase 2/3 LIFT-AD clinical trials of $1.8 million, partially offset by an increase in program consulting costs of $3.0 million.

Current wording

Research and development expenses decreased by $8.8 million, from $70.1 million for the nine months ended September 30, 2023 to $61.3 million for the nine months ended September 30, 2024. The decrease was driven primarily by decreases in fosgonimeton program costs of $12.1 million, preclinical and other direct costs of $3.1 million, personnel-related expenses of $0.5 million, and ATH-1020 program costs of $0.2 million. The decrease in fosgonimeton program costs of $12.1 million was driven by decreases in contract research organization and clinical site visit costs for our Phase 2/3 LIFT-AD clinical trial and the corresponding open-label extension for our Phase 2 ACT-AD and Phase 2/3 LIFT-AD clinical trials of $7.0 million and a decrease in contract manufacturing costs of $7.9 million, partially offset by an increase in program consulting costs of $3.0 million. These decreases were partially offset by an increase in ATH-1105 program costs of $6.8 million associated with the Phase 1 clinical trial, which commenced in the second quarter of 2024, and to a lesser extent, an increase in facilities and other indirect costs.

Previous wording

General and administrative expenses decreased by $4.1 million, from $10.0 million for the three months ended June 30, 2023 to $5.9 million for the three months ended June 30, 2024. The decrease was primarily due to a decrease in legal costs of $1.8 million, a decrease in business development expenses of $1.3 million, a decrease in professional services expenses of $0.6 million, and a decrease in other general corporate expenses of $0.4 million.

Current wording

General and administrative expenses decreased by $6.4 million, from $26.3 million for the nine months ended September 30, 2023 to $19.9 million for the nine months ended September 30, 2024. The decrease was primarily due to a decrease in business development expenses of $2.0 million, a decrease in general corporate expenses of $1.0 million, and a decrease in professional services expenses of $0.9 million. Additionally, legal expenses, excluding expenses recognized in connection with the Department of Justice investigation, decreased by $2.4 million.

Previous wording

Grant income recognized during the six months ended June 30, 2023 of $0.2 million represented the remaining balance of the total $15.2 million approved grant amount available at the beginning of the quarter. There was no grant income recognized during the six months ended June 30, 2024.

Current wording

Grant income recognized during the nine months ended September 30, 2023 of $0.2 million represented the remaining balance of the total $15.2 million approved grant amount available at the beginning of the quarter. There was no grant income recognized during the nine months ended September 30, 2024.

Previous wording

Other income, net, decreased by $1.3 million, from $3.8 million for the six months ended June 30, 2023 to $2.5 million for the six months ended June 30, 2024 due to lower income from accretion of discounts on debt securities purchased below par value and held to maturity and lower interest income earned on our available-for-sale securities. These decreases resulted from lower balances of available-for-sale securities held during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

Other income, net, decreased by $2.5 million, from $5.9 million for the nine months ended September 30, 2023 to $3.4 million for the nine months ended September 30, 2024 due to lower income from accretion of discounts on debt securities purchased below par value and held to maturity and lower interest income earned on our available-for-sale securities. These decreases resulted from lower balances of available-for-sale securities held during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Previous wording

Since our inception, we have funded our operations primarily with proceeds from the sale and issuance of common stock, convertible preferred stock, common stock warrants, and convertible notes, and to a lesser extent from grant income and stock option exercises. From our inception through June 30, 2024, we have raised aggregate net cash proceeds of

Current wording

Since our inception, we have funded our operations primarily with proceeds from the sale and issuance of common stock, convertible preferred stock, common stock warrants, and convertible notes, and to a lesser extent from grant income and stock option exercises. From our inception through September 30, 2024, we have raised aggregate net cash proceeds of $407.4 million primarily from the issuance of our common stock (excluding option exercises), convertible preferred stock, common stock warrants, and convertible notes.

Previous wording

As of June 30, 2024, we had $91.8 million in cash, cash equivalents and investments and have not generated positive cash flows from operations. Since our inception, we have devoted substantially all of our resources to our research and development efforts such as small molecule compound discovery, nonclinical studies and clinical trials, as well as manufacturing activities, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations.

Current wording

As of September 30, 2024, we had $68.9 million in cash, cash equivalents and investments and have not generated positive cash flows from operations. Since our inception, we have devoted substantially all of our resources to our research and development efforts such as small molecule compound discovery, nonclinical studies and clinical trials, as well as manufacturing activities, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations.

Previous wording

Our material cash requirements include our operating leases for laboratory and office facilities. As of June 30, 2024, we had lease payment obligations of $1.6 million, with $0.5 million payable within 12 months. For additional information regarding our lease commitments, see Note 7 to our unaudited condensed consolidated financial statements included elsewhere in this report. We are contingently committed to $0.9 million of potential future milestone payments, in addition to sales-based payments and royalties, under our license agreement with WSU. Payments generally are due and payable only upon achievement of certain developmental, regulatory, and sales milestones for which the specific timing cannot be predicted. Refer to Note 6 to our unaudited condensed consolidated financial statements for additional information regarding the WSU license agreement. Additionally, we have purchase obligations and open purchase orders that support normal operations and are primarily due in the next 12 months. These purchase obligations and open purchase orders are generally cancellable in full or in part through the contractual provisions. We also anticipate that our research and development expenses and our general and administrative expenses will increase over at least the near-term as we advance our clinical development and our drug candidates through clinical trials, adjust our headcount to support our operations, and incur legal and other professional expenses related to our ongoing legal proceedings. We cannot predict with certainty the amount and timing of these increased expenses.

Current wording

Our material cash requirements include our operating leases for laboratory and office facilities. As of September 30, 2024, we had lease payment obligations of $1.5 million, with $0.5 million payable within 12 months. For additional information regarding our lease commitments, see Note 7 to our unaudited condensed consolidated financial statements included elsewhere in this report. We are contingently committed to $0.9 million of potential future milestone payments, in addition to sales-based payments and royalties, under our license agreement with WSU. Payments generally are due and payable only upon achievement of certain developmental, regulatory, and sales milestones for which the specific timing cannot be predicted. Refer to Note 6 to our unaudited condensed consolidated financial statements for additional information regarding the WSU license agreement. Additionally, we have purchase obligations and open purchase orders that support normal operations and are primarily due in the next 12 months. These purchase obligations and open purchase orders are generally cancellable in full or in part through the contractual provisions. We anticipate that our research and development expenses and our general and administrative expenses will decrease in the near-term as a result of our decision to pause further development of fosgonimeton and to shift our focus to the clinical development of ATH-1105, and our decrease in headcount as a result of the Restructuring.

Previous wording

Based upon our current operating plan, we estimate that our $91.8 million of cash, cash equivalents and investments at June 30, 2024 will be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months following the date of this report. We will need to raise substantial additional capital to fund the development of our drug candidates. Until such time as we can generate significant revenue from drug product sales, we expect to finance our operations through the sale of equity securities, debt financings, or other capital, which could include income from collaboration, licensing or similar arrangements with third parties, or receiving research contributions, or grants. For example, in January 2023, we entered into a sales agreement with Cantor Fitzgerald and BTIG to sell shares of our common stock having aggregate sales proceeds of up to $75.0 million, from time to time, through an ATM equity offering program under which Cantor Fitzgerald and BTIG are acting as sales agents. As of the date of this report, we have not sold any securities pursuant to this ATM offering. To the extent that we raise additional capital through the sale of equity 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 preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates or grant licenses on terms that may not be favorable to us or may reduce the value of our common stock. Adequate funding may not be available when needed or on terms acceptable to us, or at all. Our ability to raise additional funds may be negatively impacted by potential adverse global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce or terminate our drug product development programs, commercialization efforts or other operations. Insufficient liquidity may also require us to relinquish rights to drug candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. We cannot assure you that we will ever be profitable or generate positive cash flows from operating activities.

Current wording

Based upon our current operating plan, we estimate that our $68.9 million of cash, cash equivalents and investments at September 30, 2024 will be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months following the date of this report. However, our resource requirements could materially change depending on the outcome of our ongoing strategic alternative review process, including to the extent we identify and enter into any potential strategic transaction. We will need to raise substantial additional capital to fund the development of our drug candidates. Until such time as we can generate significant revenue from drug product sales, we expect to finance our operations through the sale of equity securities, debt financings, or other capital, which could include income from collaboration, licensing or similar arrangements with third parties, or receiving research contributions, or grants. For example, in January 2023, we entered into a sales agreement with Cantor Fitzgerald and BTIG to sell shares of our common stock having aggregate sales proceeds of up to $75.0 million, from time to time, through an ATM equity offering program under which Cantor Fitzgerald and BTIG are acting as sales agents. As of the date of this report, we have not sold any securities pursuant to this ATM offering. To the extent that we raise additional capital through the sale of equity 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 preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates or grant licenses on terms that may not be favorable to us or may reduce the value of our common stock. Adequate funding may not be available when needed or on terms acceptable to us, or at all. Our ability to raise additional funds may be negatively impacted by potential adverse global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce or terminate our drug product development programs, commercialization efforts or other operations. Insufficient liquidity may also require us to relinquish rights to drug candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. We cannot assure…

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Previous wording

the costs associated with expanding our laboratory and office facilities; and

Current wording

the costs associated with any expansion of our laboratory and office facilities; and

Previous wording

During the six months ended June 30, 2024, net cash used in operating activities was $48.1 million. This consisted primarily of a net loss of $53.2 million, partially offset by non-cash charges of $6.1 million, and an increase in our net operating assets of $1.0 million. The non-cash charges primarily consisted of stock-based compensation expense, depreciation expense, and amortization of premiums and accretion of discounts on available-for-sale securities. The increase in our net operating assets was primarily due to a decrease in accounts payable and accrued expenses, partially offset by a decrease in prepaid expenses and other assets.

Current wording

During the nine months ended September 30, 2024, net cash used in operating activities was $71.2 million. This consisted primarily of a net loss of $81.9 million, partially offset by non-cash charges of $9.2 million, and a decrease in our net operating assets of $1.5 million. The non-cash charges primarily consisted of stock-based compensation expense, depreciation expense, and amortization of premiums and accretion of discounts on available-for-sale securities. The decrease in our net operating assets was primarily due to a decrease in prepaid expenses and other assets and an increase in accounts payable, partially offset by a decrease accrued expenses.

Previous wording

During the six months ended June 30, 2023, net cash used in operating activities was $50.5 million. This consisted primarily of a net loss of $57.4 million, partially offset by non-cash charges of $5.7 million and a decrease in our net operating assets of $1.2 million. The non-cash charges primarily consisted of stock-based compensation expense, amortization of premiums and accretion of discounts on available-for-sale securities, and depreciation expense. The decrease in our net operating assets was primarily due to a decrease in unbilled grant receivable and an increase in accrued expenses, partially offset by a decrease in accounts payable and an increase in prepaid expenses and other current assets.

Current wording

During the nine months ended September 30, 2023, net cash used in operating activities was $74.5 million. This consisted primarily of a net loss of $90.4 million, partially offset by non-cash charges of $8.1 million and a decrease in our net operating assets of $7.8 million. The non-cash charges primarily consisted of stock-based compensation expense, amortization of premiums and accretion of discounts on available-for-sale securities, and depreciation expense. The decrease in our net operating assets was primarily due to an increase in accrued expenses and a decrease in unbilled grant receivable, partially offset by a decrease in accounts payable and an increase in prepaid expenses and other current and long-term assets, net.

Previous wording

During the six months ended June 30, 2024, net cash provided by investing was $39.6 million. This consisted of maturities of available-for-sale securities of $51.0 million, partially offset by purchases of available-for-sale securities of $11.3 million.

Current wording

During the nine months ended September 30, 2024, net cash provided by investing was $57.6 million. This consisted of maturities of available-for-sale securities of $68.9 million, partially offset by purchases of available-for-sale securities of $11.3 million.

Previous wording

During the six months ended June 30, 2023, net cash provided by investing was $68.0 million. This consisted of maturities of available-for-sale securities of $93.2 million, partially offset by purchases of available-for-sale securities of $24.9 million and property and equipment of $0.3 million.

Current wording

During the nine months ended September 30, 2023, net cash provided by investing activities was $88.7 million. This consisted of maturities of available-for-sale securities of $116.7 million, partially offset by purchases of available-for-sale securities of $27.7 million and property and equipment of $0.3 million.

Previous wording

During the six months ended June 30, 2024, net cash provided by financing activities was $0.1 million, consisting of proceeds received from the issuance of common stock under our employee stock purchase plan.

Current wording

During the nine months ended September 30, 2024, net cash provided by financing activities was $0.2 million, consisting of proceeds received from the exercise of stock options and the issuance of common stock under our employee stock purchase plan.

Previous wording

During the six months ended June 30, 2023, net cash provided by financing activities was $0.3 million, consisting of proceeds received from exercises of stock options and the issuance of common stock under our employee stock purchase plan.

Current wording

During the nine months ended September 30, 2023, net cash provided by financing activities was $0.3 million, consisting of proceeds received from exercises of stock options and the issuance of common stock under our employee stock purchase plan.