SPRUCE BIOSCIENCES INC

Previous wording

We also initiated CAHmelia-204, a second Phase 2b clinical trial in 100 adult patients with classic CAH on mean daily dose of supraphysiologic GCs of 37 mg/day of hydrocortisone equivalents. Patients enrolled had a mean A4 level at baseline of 224 ng/dL (approximately the ULN) and 66% of patients enrolled had androgenic control, defined as having A4 values below the ULN at baseline. Topline results from CAHmelia-204 are anticipated in the fourth quarter of 2024.

Current wording

We also initiated CAHmelia-204, a second Phase 2b clinical trial in 100 adult patients with classic CAH on mean daily dose of supraphysiologic GCs of 37 mg/day of hydrocortisone equivalents. Patients enrolled had a mean A4 level at baseline of 224 ng/dL (approximately the ULN) and 66% of patients enrolled had androgenic control, defined as having A4 values below the ULN at baseline. Topline results from CAHmelia-204 are anticipated in December 2024.

Previous wording

Although the CAHptain-205 clinical trial met the efficacy endpoints, the activity observed was less consistent than anticipated and without clear dose response. Preliminary PK analysis suggests that tildacerfont is cleared more rapidly in children than in adult CAH patients. The clinical trial was amended to include additional dose ranging cohorts in adults, adolescents and children. The maximum planned dose is 400mg BID, subject to adjustment based on safety and PK data obtained during the clinical trial. Dosing will initiate at 200mg BID in adults and adolescents. All cohorts administered doses above 200mg BID will be adaptive, so that the determination to initiate a cohort, and at what increased dose, may be determined by the sponsor, within the guidelines of the protocol, based on recommendations by an independent Data Monitoring Committee and emerging safety and exposure data. Individual and study stopping criteria will further ensure safety of the participants. Topline results from these additional dose ranging cohorts in adults, adolescents, and children are anticipated in the fourth quarter of 2024. Assuming positive results from CAHmelia-204 and CAHptain-205, we plan to meet with the U.S. Food and Drug Administration (“FDA”) and comparable foreign regulatory authorities to outline the design of a registrational clinical program in adult and pediatric classic CAH. We have also submitted a pediatric investigational plan (“PIP”) to the Pediatric Committee (“PDCO”) of the European Medicines Agency (“EMA”) regarding a registrational program in children with classic CAH. PDCO issued an opinion on its agreement with the proposed PIP of tildacerfont for the treatment of CAH which endorsed the clinical program to evaluate the safety, tolerability and efficacy of tildacerfont for the treatment of CAH in patients from one year of age to less than 18 years of age. PDCO also granted a waiver for the treatment of CAH in patients less than one year of age.

Current wording

Although the CAHptain-205 clinical trial met the efficacy endpoints, the activity observed was less consistent than anticipated and without clear dose response. Preliminary PK analysis suggests that tildacerfont is cleared more rapidly in children than in adult CAH patients. The clinical trial was amended to include additional dose ranging cohorts in adults, adolescents and children. The maximum planned dose is 400mg BID, subject to adjustment based on safety and PK data obtained during the clinical trial. Dosing will initiate at 200mg BID in adults and adolescents. All cohorts administered doses above 200mg BID will be adaptive, so that the determination to initiate a cohort, and at what increased dose, may be determined by the sponsor, within the guidelines of the protocol, based on recommendations by an independent Data Monitoring Committee and emerging safety and exposure data. Individual and study stopping criteria will further ensure safety of the participants. Topline results from these additional dose ranging cohorts in adults, adolescents, and children are anticipated in December 2024. Assuming positive results from CAHmelia-204 and CAHptain-205, we plan to meet with the U.S. Food and Drug Administration (“FDA”) and comparable foreign regulatory authorities to outline the design of a registrational clinical program in adult and pediatric classic CAH. We have also submitted a pediatric investigational plan (“PIP”) to the Pediatric Committee (“PDCO”) of the European Medicines Agency (“EMA”) regarding a registrational program in children with classic CAH. PDCO issued an opinion on its agreement with the proposed PIP of tildacerfont for the treatment of CAH which endorsed the clinical program to evaluate the safety, tolerability and efficacy of tildacerfont for the treatment of CAH in patients from one year of age to less than 18 years of age. PDCO also granted a waiver for the treatment of CAH in patients less than one year of age.

Previous wording

Since inception, we have incurred significant losses and negative cash flows from operations. During the six months ended June 30, 2024 and 2023, we incurred net losses of $20.8 million and $25.6 million, respectively, and used $26.1 million and $9.8 million of cash in operations, respectively. As of June 30, 2024 and December 31, 2023, we had an accumulated deficit of $218.0 million and $197.2 million, respectively, and we do not expect positive cash flows from operations for the foreseeable future. We expect to continue to incur significant and increasing losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of expenditures on our planned research and development activities.

Current wording

Since inception, we have incurred significant losses and negative cash flows from operations. During the nine months ended September 30, 2024 and 2023, we incurred net losses of $29.5 million and $38.0 million, respectively, and used $35.3 million and $22.1 million of cash in operations, respectively. As of September 30, 2024 and December 31, 2023, we had an accumulated deficit of $226.7 million and $197.2 million, respectively, and we do not expect positive cash flows from operations for the foreseeable future. We expect to continue to incur significant and increasing losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of expenditures on our planned research and development activities.

Previous wording

Since inception through June 30, 2024, we have raised aggregate gross proceeds of $293.1 million, including $103.5 million from our initial public offering (“IPO”) in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $5.0 million from the issuance of debt, $53.6 million from a private placement financing in February 2023, and the $15.0 million upfront payment from Kaken received in April 2023. As of June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $69.7 million and $96.3 million, respectively.

Current wording

Since inception through September 30, 2024, we have raised aggregate gross proceeds of $293.1 million, including $103.5 million from our initial public offering (“IPO”) in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $5.0 million from the issuance of debt, $53.6 million from a private placement financing in February 2023, and the $15.0 million upfront payment from Kaken received in April 2023. As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $60.1 million and $96.3 million, respectively.

Previous wording

We have agreed to supply Kaken’s clinical drug supply requirements of tildacerfont pursuant to a clinical supply agreement that the parties plan to consummate. During the Royalty Term, we have agreed to supply Kaken’s requirements of tildacerfont pursuant to the Kaken License Agreement and a commercial supply agreement to be entered into by the parties, though Kaken may procure alternate suppliers. Following the Royalty Term, Kaken at its option may continue to purchase Company-manufactured tildacerfont at a purchase price equal to our manufacturing cost plus a low double-digit administrative fee.

Current wording

We have agreed to supply Kaken’s clinical drug supply requirements of tildacerfont pursuant to a clinical supply agreement. During the Royalty Term, we have agreed to supply Kaken’s requirements of tildacerfont pursuant to the Kaken License Agreement and a commercial supply agreement to be entered into by the parties, though Kaken may procure alternate suppliers. Following the Royalty Term, Kaken at its option may continue to purchase Company-manufactured tildacerfont at a purchase price equal to our manufacturing cost plus a low double-digit administrative fee.

Previous wording

As of June 30, 2024 and December 31, 2023, the outstanding principal was comprised of $2.6 million and $3.4 million, respectively, under the First Tranche. Repayment of principal under the First Tranche commenced in January 2023. Commitments available under the Second Tranche of $10.0 million expired on December 31, 2022.

Current wording

As of September 30, 2024 and December 31, 2023, the outstanding principal was comprised of $2.2 million and $3.4 million, respectively, under the First Tranche. Repayment of principal under the First Tranche commenced in January 2023. Commitments available under the Second Tranche of $10.0 million expired on December 31, 2022.

Previous wording

During the three months ended June 30, 2024 and 2023, we recognized $1.6 million and $2.2 million, respectively, as collaboration revenue under the Kaken License Agreement.

Current wording

During the three months ended September 30, 2024 and 2023, we recognized $0.6 million and $3.1 million, respectively, as collaboration revenue under the Kaken License Agreement.

Previous wording

Research and development expenses decreased by $5.0 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The overall decrease in research and development expenses was primarily related to the decrease in clinical development expenses and manufacturing expenses driven by the termination of the CAHmelia-203 study, completion of the POWER study, and the completion of enrollment in the CAHmelia-204 study, partially offset by an increase related to additional dose ranging cohorts in the CAHptain-205 clinical trial. There was also a decrease in personnel related expenses due to a decrease in headcount. We expect research and development expenses to decrease following the termination of the CAHmelia-203 clinical trial.

Current wording

Research and development expenses decreased by $6.9 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The overall decrease in research and development expenses was primarily related to the decrease in clinical development expenses and manufacturing expenses driven by the termination of the CAHmelia-203 study, completion of the POWER study, and the completion of enrollment in the CAHmelia-204 study, partially offset by an increase related to additional dose ranging cohorts in the CAHptain-205 clinical trial. There was also a decrease in personnel related expenses due to a decrease in headcount.

Previous wording

General and administrative expenses increased by $1.4 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to an increase in professional services, including legal, finance, and accounting and an increase in personnel expenses due to an increase in stock-based compensation expense.

Current wording

General and administrative expenses increased by $0.2 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to an increase in legal professional services offset by a decrease in personnel expenses due to a decrease in recruiting expenses.

Previous wording

Interest and other income, net decreased by $0.3 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The decrease was primarily due to lower average daily balances on cash and cash equivalents for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Current wording

Interest and other income, net decreased by $0.6 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The decrease was primarily due to lower average daily balances on cash and cash equivalents for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Previous wording

During the six months ended June 30, 2024 and 2023, we recognized $3.6 million and $4.1 million, respectively, as collaboration revenue under the Kaken License Agreement.

Current wording

During the nine months ended September 30, 2024 and 2023, we recognized $4.2 million and $7.2 million, respectively, as collaboration revenue under the Kaken License Agreement.

Previous wording

Research and development expenses decreased by $6.4 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The overall decrease in research and development expenses was primarily related to the decrease in clinical development expenses and manufacturing expenses driven by the termination of the CAHmelia-203 study, completion of the POWER study, and the completion of enrollment in the CAHmelia-204 study, partially offset by an increase related to additional dose ranging cohorts in the CAHptain-205 clinical trial. There was also a decrease in personnel related expenses due to a decrease in headcount. We expect research and development expenses to decrease following the termination of the CAHmelia-203 clinical trial.

Current wording

Research and development expenses decreased by $13.4 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The overall decrease in research and development expenses was primarily related to the decrease in clinical development expenses and manufacturing expenses driven by the termination of the CAHmelia-203 study, completion of the POWER study, and the completion of enrollment in the CAHmelia-204 study, partially offset by an increase related to additional dose ranging cohorts in the CAHptain-205 clinical trial. There was also a decrease in personnel related expenses due to a decrease in headcount which was partially offset by an increase in stock-based compensation expense.

Previous wording

General and administrative expenses increased by $0.5 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to an increase in professional services, including legal, finance, and accounting and an increase in personnel expenses due to an increase in stock-based compensation expense.

Current wording

General and administrative expenses increased by $1.6 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to an increase in legal professional services and an increase in personnel expenses due to an increase in stock-based compensation expense offset by a decrease in recruiting expenses and insurance costs for directors and officers.

Previous wording

Interest expense was fairly consistent during the six months ended June 30, 2024, compared to the six months ended June 30, 2023 and was related to the Term Loan.

Current wording

Interest expense was fairly consistent during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 and was related to the Term Loan.

Previous wording

Interest and other income, net increased by $0.2 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The increase was primarily due to higher yield earned on money market fund balances in 2024.

Current wording

Interest and other income, net increased by $0.4 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase was primarily due to higher yield earned on money market fund balances in 2024.

Previous wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from operations. We anticipate that we will continue to incur net losses for the foreseeable future. As of June 30, 2024 and December 31, 2023, we had an accumulated deficit of $218.0 million and $197.2 million, respectively. As of June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $69.7 million and $96.3 million, respectively. Since inception through June 30, 2024, we have raised aggregate gross proceeds of $293.1 million, including $103.5 million from our IPO in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $5.0 million from the issuance of debt, $53.6 million from a private placement financing in February 2023, and $15.0 million from the Kaken upfront payment received in April 2023.

Current wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from operations. We anticipate that we will continue to incur net losses for the foreseeable future. As of September 30, 2024 and December 31, 2023, we had an accumulated deficit of $226.7 million and $197.2 million, respectively. As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $60.1 million and $96.3 million, respectively. Since inception through September 30, 2024, we have raised aggregate gross proceeds of $293.1 million, including $103.5 million from our IPO in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $5.0 million from the issuance of debt, $53.6 million from a private placement financing in February 2023, and $15.0 million from the Kaken upfront payment received in April 2023.

Previous wording

We believe, based on our current operating plan, that our cash and cash equivalents as of June 30, 2024 will be sufficient to fund our operations and debt obligations for at least 12 months following the issuance date of our financial statements included elsewhere in this Quarterly Report. In addition, we have streamlined our operations and have implemented cost reduction measures, including termination of the CAHmelia-203 study and a reduction in force of approximately 21% in March 2024, which has extended our cash runway through the end of 2025, beyond topline data readouts for CAHmelia-204 and additional dose ranging data from CAHptain-205.

Current wording

We believe, based on our current operating plan, that our cash and cash equivalents as of September 30, 2024 will be sufficient to fund our operations and debt obligations for at least 12 months following the issuance date of our financial statements included elsewhere in this Quarterly Report. In addition, we have streamlined our operations and have implemented cost reduction measures, including termination of the CAHmelia-203 study and a reduction in force of approximately 21% in March 2024, which has extended our cash runway through the end of 2025, beyond anticipated topline data readouts for CAHmelia-204 and CAHptain-205.

Previous wording

As of June 30, 2024, future payments of principal and interest on the Term Loan, which commenced repayment in January 2023 and matures in January 2026, were $2.8 million. For a description of the terms of the Loan Agreement, see the section titled

Current wording

As of September 30, 2024, future payments of principal and interest on the Term Loan, which commenced repayment in January 2023 and matures in January 2026, were $2.3 million. For a description of the terms of the Loan Agreement, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Material Agreements — Loan Agreement” above.

Previous wording

As of June 30, 2024, the total undiscounted lease payments for our non-cancelable operating lease for office space, which terminates in February 2028 unless renewed, was $1.3 million.

Current wording

As of September 30, 2024, the total undiscounted lease payments for our non-cancelable operating lease for office space, which terminates in February 2028 unless renewed, was $1.2 million.

Previous wording

Net cash used in operating activities increased by $16.3 million during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to the receipt of the $15.0 million upfront payment from Kaken in April 2023.

Current wording

Net cash used in operating activities increased by $13.2 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to the receipt of the $15.0 million upfront payment from Kaken in April 2023.

Previous wording

For the six months ended June 30, 2024, net cash provided by investing activities was nil.

Current wording

For the nine months ended September 30, 2024, net cash provided by investing activities was nil.

Previous wording

For the six months ended June 30, 2023, net cash provided by investing activities was $32.5 million consisting of proceeds from maturities of investments of $44.4 million offset by purchases of investments of $11.9 million.

Current wording

For the nine months ended September 30, 2023, net cash provided by investing activities was $46.5 million consisting primarily of proceeds from maturities of investments of $58.4 million offset by purchases of investments of $11.9 million.

Previous wording

For the six months ended June 30, 2024, net cash used in financing activities was $0.6 million, consisting primarily of principal payments on the Term Loan of $0.4 million, offset by proceeds of $0.2 million from stock option exercises.

Current wording

For the nine months ended September 30, 2024, net cash used in financing activities was $1.0 million, consisting primarily of principal payments on the Term Loan of $1.2 million, offset by proceeds of $0.2 million from stock option exercises.

Previous wording

For the six months ended June 30, 2023, net cash provided by financing activities was $50.1 million, consisting primarily of net proceeds received from the February 2023 private placement of $50.9 million, offset by principal payments on the Term Loan of $0.8 million.

Current wording

For the nine months ended September 30, 2023, net cash provided by financing activities was $49.7 million, consisting primarily of net proceeds received from the February 2023 private placement of $50.9 million, offset by principal payments on the Term Loan of $1.2 million.

Previous wording

Our critical accounting estimates are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Annual Report. During the six months ended June 30, 2024, there were no changes to our critical accounting estimates from those discussed in the Annual Report.

Current wording

Our critical accounting estimates are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Annual Report. During the nine months ended September 30, 2024, there were no changes to our critical accounting estimates from those discussed in the Annual Report.