Climb Bio Inc

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K filed with the SEC on March 28, 2024. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve substantial risks and uncertainties. As a result of many factors, including those factors set forth in Part II, Item 1A. “Risk Factors” of this Quarterly Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. For further information regarding our forward-looking statements, see “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us” and “our” refer to Eliem Therapeutics, Inc. and its wholly owned subsidiaries.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K filed with the SEC on March 28, 2024. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve substantial risks and uncertainties. As a result of many factors, including those factors set forth in Part II, Item 1A. “Risk Factors” of this Quarterly Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. For further information regarding our forward-looking statements, see “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report.

Previous wording

We are a biotechnology company primarily focused on developing therapeutics for autoimmune-driven inflammatory diseases, including advancing budoprutug (previously referred to as TNT119), an anti-CD19 monoclonal antibody designed for a broad range of autoimmune diseases, including systemic lupus erythematosus and lupus nephritis (SLE/LN) immune thrombocytopenia (ITP) and membranous nephropathy (MN). Budoprutug is designed to achieve broad and deep depletion of pathogenic B cells with a favorable tolerability profile and convenient dosing regimen with the potential for subcutaneous administration. We believe this reduction of autoantibodies has the potential to be disease modifying in autoantibody driven diseases, such as SLE/LN, ITP and MN. In a Phase 1b clinical trial of budoprutug in MN, 3 out of 5 (or 60%) of patients that received four doses of budoprutug achieved a complete remission of proteinuria, a primary symptom of MN.

Current wording

We are a clinical-stage biotechnology company primarily focused on developing therapeutics for patients with immune-mediated diseases. Our lead product candidate, budoprutug (previously referred to as TNT119), is an anti-CD19 monoclonal antibody that has demonstrated B-cell depletion and has potential to treat a broad range of B-cell mediated diseases, including primary membranous nephropathy (pMN), immune thrombocytopenia (ITP) and systemic lupus erythematosus (SLE). Budoprutug is designed to achieve broad and deep depletion of pathogenic B cells with a favorable tolerability profile and convenient dosing regimen with the potential for subcutaneous administration. We believe this reduction of autoantibodies has the potential to be disease modifying in autoantibody driven diseases, such as pMN, ITP and SLE. In a Phase 1b clinical trial of budoprutug in pMN, 3 out of 5 (or 60%) of patients that received four doses of budoprutug achieved a complete remission of proteinuria, a primary symptom of pMN, and a complete and sustained B-cell depletion was observed in all patients (5/5).

Previous wording

We are developing budoprutug for the treatment of SLE/LN, the underlying pathology of which involves production of autoantibodies by autoreactive B cells that contribute to inflammation and tissue damage. CD19 is a protein expressed on the surface of these B cells and plays a key role in B cell activation. Because budoprutug is designed to target and deplete CD19-expressing B cells known to produce autoantibodies, we believe budoprutug has the potential to treat SLE/LN. In ITP, we believe targeting plasmablasts and plasma cells is likely to decrease the production of autoantibodies, increase platelet count and ameliorate disease. B cell depletion with anti-CD20 targeting monoclonal antibodies (mAbs) whose expression initiates somewhat later and is lost somewhat earlier than anti-CD19, has demonstrated efficacy in ITP disease for some patients in clinical trials by third parties. For those patients who do not respond to anti-CD20 therapy, we believe an anti-CD19 approach, such as budoprutug, may have the ability to further deplete pathogenic CD20-CD19+ cells.

Current wording

In addition to pMN, we are also developing budoprutug for the treatment of ITP and SLE. In ITP, we believe targeting plasmablasts and plasma cells is likely to decrease the production of autoantibodies, increase platelet count and ameliorate disease. B cell depletion with anti-CD20 targeting monoclonal antibodies (mAbs) whose expression initiates somewhat later and is lost somewhat earlier than anti-CD19, has demonstrated efficacy in ITP disease for some patients in clinical trials by third parties. For those patients who do not respond to anti-CD20 therapy, we believe an anti-CD19 approach, such as budoprutug, may have the ability to further deplete pathogenic CD20-CD19+ cells. In SLE, the underlying pathology involves production of autoantibodies by autoreactive B cells that contribute to inflammation and tissue damage. CD19 is a protein expressed on the surface of these B cells and plays a key role in B cell activation. Because budoprutug is designed to target and deplete CD19-expressing B cells known to produce autoantibodies, we believe budoprutug has the potential to treat SLE.

Previous wording

Previously, we focused primarily on developing novel therapies for neuronal excitability disorders to address unmet needs in psychiatry, epilepsy, chronic pain, and other disorders of the peripheral and central nervous systems, and our lead program was ETX-123, a Kv7.2/3 potassium channel opener. ETX-123 is designed to harness the efficacy of the Kv7.2/3 channel mechanism while attempting to improve the safety and tolerability relative to earlier molecules, based on our insights into the mechanisms of toxicity and the potency and selectivity profile. In July 2023, we made the determination to pause further development of our Kv7 program, and we continue to evaluate our Kv7 program, including seeking a partner for further development of both Kv7 and ETX-155.

Current wording

Previously, we focused primarily on developing novel therapies for neuronal excitability disorders to address unmet needs in psychiatry, epilepsy, chronic pain, and other disorders of the peripheral and central nervous systems, and our lead program was ETX-123, a Kv7.2/3 potassium channel opener. ETX-123 is designed to harness the efficacy of the Kv7.2/3 channel mechanism while attempting to improve the safety and tolerability relative to earlier molecules, based on our insights into the mechanisms of toxicity and the potency and selectivity profile. In July 2023, we made the determination to pause further development of our Kv7 program, and we continue to evaluate our Kv7 program, including seeking a partner for further development.

Previous wording

On June 27, 2024, we completed our acquisition of Tenet (the Acquisition). In connection with the closing of the Acquisition, we issued and sold 31,238,282 shares of our common stock at a price of $3.84 per share in a private placement (the Private Placement) to several accredited institutional investors. We received aggregate gross proceeds from the private placement of approximately $120.0 million, before deducting offering expenses of $0.3 million.

Current wording

On June 27, 2024, we completed our acquisition (the Acquisition) of Tenet Medicines, Inc. (Tenet). In connection with the closing of the Acquisition, we issued and sold 31,238,282 shares of our common stock at a price of $3.84 per share in a private placement (the Private Placement) to several accredited institutional investors. We received aggregate gross proceeds from the Private Placement of approximately $120.0 million, before deducting offering expenses of $0.3 million.

Previous wording

We have incurred significant operating losses since inception, as we have devoted substantially all of our resources to organizing and staffing our company, identifying potential product candidates, business planning, raising capital, undertaking research, executing preclinical studies and clinical development trials, and providing general and administrative support for business activities. We incurred net losses of $54.9 million and $5.2 million for the three months ended June 30, 2024 and 2023, respectively, and $56.6 million and $27.5 million for the six months ended June 30, 2024 and 2023, respectively. We had an accumulated deficit of $212.6 million and $156.0 million as of June 30, 2024 and December 31, 2023, respectively.

Current wording

We have incurred significant operating losses since inception, as we have devoted substantially all of our resources to organizing and staffing our company, identifying potential product candidates, business planning, raising capital, undertaking research, executing preclinical studies and clinical development trials, and providing general and administrative support for business activities. We incurred net losses of $8.9 million and $4.0 million for the three months ended September 30, 2024 and 2023, respectively, and $65.5 million and $31.5 million for the nine months ended September 30, 2024 and 2023, respectively. We had an accumulated deficit of $221.5 million and $156.0 million as of September 30, 2024 and December 31, 2023, respectively.

Previous wording

Since our inception, we have primarily funded our operations with an aggregate of $328.0 million in net proceeds from the sale and issuance of shares of our redeemable convertible preferred stock, our initial public offering of our common stock and the sale and issuance of shares in the Private Placement of our common stock that was completed in June 2024. We had cash and cash equivalents of $223.1 million and cash, cash equivalents, and marketable securities of $106.8 million as of June 30, 2024 and December 31, 2023, respectively. Based on our current operating plan, we estimate that our cash and cash equivalents will be sufficient to fund our planned operations into 2027. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently anticipate, which case we would be required to obtain additional financing, which may not be available to us on acceptable terms, or at all.

Current wording

Since our inception, we have primarily funded our operations with an aggregate of $328.0 million in net proceeds from the sale and issuance of shares of our redeemable convertible preferred stock, our initial public offering of our common stock and the sale and issuance of shares in the Private Placement of our common stock that was completed in June 2024. We had cash, cash equivalents and marketable securities of $217.9 million and $106.8 million as of September 30, 2024 and December 31, 2023, respectively. Based on our current operating plan, we estimate that our cash, cash equivalents and marketable securities will be sufficient to fund our planned operations through 2027. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently anticipate, which case we would be required to obtain additional financing, which may not be available to us on acceptable terms, or at all.

Previous wording

Until such time, if ever, as we can generate significant revenue from product sales, if ever, we may finance our operations through equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. 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 any future development of our product candidates. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide, resulting from increased volatility in the trading prices for shares in the biopharmaceutical industry, or otherwise. 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 product development programs, commercialization efforts or other operations. Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose.

Current wording

Until such time, if ever, as we can generate significant revenue from product sales, we may finance our operations through equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. 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 any future development of our product candidates. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide, resulting from increased volatility in the trading prices for shares in the biopharmaceutical industry, or otherwise. 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 product development programs, commercialization efforts or other operations. Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose.

Previous wording

On June 27, 2024, we acquired 100% of the share capital of Tenet in exchange for 5,560,047 shares of our common stock, valued at $41.9 million, or $7.53 per share. The Acquisition is accounted for as an asset acquisition. The total cost of the asset acquisition was $52.8 million, which also included (i) $5.8 million of direct transaction costs incurred and (ii) $5.0 million related to a loan provided to Tenet prior to the closing of the Acquisition that was effectively settled upon the closing of the Acquisition. We recognized in-process research and development (IPR&D) expense of $51.7 million for the three and six months ended June 30, 2024, as the IPR&D was determined to have no future alternative use.

Current wording

On June 27, 2024, we acquired 100% of the share capital of Tenet in exchange for 5,560,047 shares of our common stock, valued at $41.9 million, or $7.53 per share. The Acquisition is accounted for as an asset acquisition. The total cost of the asset acquisition was $52.8 million, which also included (i) $5.8 million of direct transaction costs incurred and (ii) $5.0 million related to a loan provided to Tenet prior to the closing of the Acquisition that was effectively settled upon the closing of the Acquisition. We recognized in-process research and development (IPR&D) expense of $51.7 million for the nine months ended September 30, 2024, as the IPR&D was determined to have no future alternative use.

Previous wording

Our research and development expenses consist primarily of direct and indirect costs incurred in connection with our discovery efforts, preclinical studies, and clinical trial activities related to our pipeline, including our paused product candidates ETX-123 and ETX-155. Research and development expenses related to our recently acquired product candidate budoprutug as part of the Tenet Acquisition were not material in the three and six months ended June 30, 2024.

Current wording

Our research and development expenses consist primarily of direct and indirect costs incurred in connection with our discovery efforts, preclinical studies, and clinical trial activities related to our pipeline, including budoprutug and our previous product candidates ETX-123 and ETX-155.

Previous wording

Given our stage of development and the utilization of our resources across our various programs, we have not historically tracked our research and development costs by program. Research and development expenses are presented net of refundable research and development tax credits from the U.K. government.

Current wording

Given our stage of development and the utilization of our resources across our current and legacy programs, we have not historically tracked our research and development costs by program or indication. Research and development expenses are presented net of refundable research and development tax credits from the U.K. government.

Previous wording

We expect our research and development expenses to increase substantially for the foreseeable future as we conduct our ongoing research and development activities. The process of conducting preclinical studies, acquiring drug product supply, and conducting clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for budoprutug or any future product candidate we may develop.

Current wording

We expect our research and development expenses to increase substantially for the foreseeable future as we conduct our ongoing research and development activities. The process of conducting preclinical studies, acquiring drug product supply, and conducting clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for budoprutug or any product candidate we may develop.

Previous wording

The timelines and costs associated with research and development activities are uncertain and can vary significantly among product candidates and development programs due to the inherently unpredictable nature of preclinical and clinical development. We anticipate that we will make determinations as to which indications to pursue in connection with our clinical development of budoprutug or any future product candidates we may develop and how much funding to direct to each such indication on an ongoing basis in response to preclinical and clinical results, regulatory developments, and ongoing assessments as to each such indication’s commercial potential. We will need to raise substantial additional capital in the future.

Current wording

The timelines and costs associated with research and development activities are uncertain and can vary significantly among product candidates and development programs due to the inherently unpredictable nature of preclinical and clinical development. We anticipate that we will make determinations as to which indications to pursue in connection with our clinical development of budoprutug or any product candidates we may develop and how much funding to direct to each such indication on an ongoing basis in response to preclinical and clinical results, regulatory developments, and ongoing assessments as to each such indication’s commercial potential. We will need to raise substantial additional capital in the future.

Previous wording

A change in the outcome of any of these variables with respect to the development of budoprutug or any future product candidates we may develop could significantly change the costs and timing associated with the development.

Current wording

A change in the outcome of any of these variables with respect to the development of budoprutug or any product candidates we may develop could significantly change the costs and timing associated with the development.

Previous wording

The following table sets forth our results of operations (dollars in thousands):

Current wording

The following table sets forth our results of operations (in thousands):

Previous wording

Research and development expenses decreased by 71.6% from $3.7 million for the three months ended June 30, 2023 to $1.0 million for the three months ended June 30, 2024. The decrease was due to a (i) a $2.1 million decrease in direct clinical and preclinical expenses, primarily due to the pause of ETX-123 in July 2023, and (ii) a $1.0 million reduction in personnel-related expenses from reduced headcount. This decrease was partially offset by a $0.5 million decrease in the U.K. refundable research and development tax credits due to the overall reduction in qualifying research and development expenses.

Current wording

Research and development expenses increased 111.6% from $2.9 million for the three months ended September 30, 2023 to $6.1 million for the three months ended September 30, 2024. Research and development expenses, related party increased by $0.2 million for the three months ended September 30, 2024. In total, research and development expenses increased by 117.2% from $2.9 million for the three months ended September 30, 2023 to $6.3 million for the three months ended September 30, 2024. The increase was due to (i) a $2.1 million increase in personnel-related expenses, primarily driven by restructuring costs of $2.7 million, partially offset by a decrease of $0.6 million from reduced headcount, (ii) a $1.0 million increase in direct preclinical and clinical expenses related to the development of budoprutug, and (iii) a $0.3 million decrease in the U.K. refundable research and development tax credits due to the overall reduction in qualifying research and development expense.

Previous wording

Foreign currency gain (loss) decreased from a $0.4 million gain for the three months ended June 30, 2023 to a $2,000 loss for the three months ended June 30, 2024. The decrease was driven by unfavorable changes in foreign currency exchange rates between the British Pound and the U.S. Dollar in the three months ended June 30, 2024.

Current wording

Foreign currency gain (loss) increased from a $0.2 million loss for the three months ended September 30, 2023 to a $0.1 million gain for the three months ended September 30, 2024. The increase was driven by favorable changes in foreign currency exchange rates between the British Pound and the U.S. Dollar in the three months ended September 30, 2024.

Previous wording

Interest income, net increased from $1.1 million for the three months ended June 30, 2023 to $1.5 million for the three months ended June 30, 2024, which was driven by an increase in investment income. The increase was due to greater rates of return on our investments as a result of higher interest rates in the three months ended June 30, 2024.

Current wording

Interest income, net increased from $1.3 million for the three months ended September 30, 2023 to $2.8 million for the three months ended September 30, 2024, which was driven by an increase in investment income from an increase in marketable securities during the three months ended September 30, 2024.

Previous wording

The following table sets forth our results of operations (dollars in thousands):

Current wording

The following table sets forth our results of operations (in thousands):

Previous wording

Acquired IPR&D expense, related party was $51.7 million for the three months ended June 30, 2024. This amount represents the recognition of IPR&D expense from the Acquisition completed on June 27, 2024.

Current wording

Acquired IPR&D expense, related party was $51.7 million for the nine months ended September 30, 2024. This amount represents the recognition of IPR&D expense from the Acquisition completed on June 27, 2024.

Previous wording

Research and development expenses decreased by 77.3% from $9.4 million for the six months ended June 30, 2023 to $2.1 million for the six months ended June 30, 2024. The decrease was due to a (i) a $4.7 million decrease in direct clinical and preclinical expenses, primarily due to the pause of ETX-123 in July 2023 and ETX-155 in February 2023, and (ii) a $4.2 million decrease in personnel-related expenses, which was driven by restructuring costs of $1.8 million in the prior period and $2.4 million from reduced headcount. This decrease was partially offset by a $1.6 million decrease in the U.K. refundable research and development tax credits due to the overall reduction in qualifying research and development expenses.

Current wording

Research and development expenses decreased by 33.1% from $12.3 million for the nine months ended September 30, 2023 to $8.2 million for the nine months ended September 30, 2024. Research and development expenses, related party increased by $0.2 million for the nine months ended September 30, 2024. In total, research and development expenses decreased by 31.8% from $12.3 million for the nine months ended September 30, 2023 to $8.4 million for the nine months ended September 30, 2024. The decrease was due to (i) a $3.8 million decrease in direct clinical and preclinical expenses, primarily due to the pause of ETX-123 in July 2023 and ETX-155 in February 2023, and (ii) a $2.0 million decrease in personnel-related expenses, which was driven by a $2.9 million decrease from reduced headcount, partially offset by an increase in restructuring costs of $0.9 million. This decrease was partially offset by a $1.9 million decrease in the U.K. refundable research and development tax credits due to the overall reduction in qualifying research and development expenses.

Previous wording

General and administrative expenses decreased by 73.1% from $20.7 million for the six months ended June 30, 2023 to $5.6 million for the six months ended June 30, 2024. This decrease was due to (i) a $15.3 million reduction in personnel-related expenses, which was driven by restructuring costs of $14.5 million in the prior period and $0.7 million from reduced headcount. The decrease was partially offset by a $0.2 million increase in other general and administrative expenses, largely driven by an increase in consulting fees and legal expenses.

Current wording

General and administrative expenses decreased by 51.6% from $22.9 million for the nine months ended September 30, 2023 to $11.1 million for the nine months ended September 30, 2024. This decrease was due to (i) a $13.5 million reduction in personnel-related expenses, which was driven by a decrease in restructuring costs of $14.1 million, partially offset by an increase of $0.6 million from increased headcount and (ii) a $0.5 million decrease in insurance costs. The decrease was partially offset by a $2.2 million increase in other general and administrative expenses, largely driven by an increase in consulting fees and legal expenses.

Previous wording

Foreign currency gain (loss) decreased from a $0.6 million gain for the six months ended June 30, 2023 to a $35,000 loss for the six months ended June 30, 2024. The decrease was driven by unfavorable changes in foreign currency exchange rates between the British Pound and the U.S. Dollar in the six months ended June 30, 2024.

Current wording

Foreign currency gain decreased from a $0.4 million gain for the nine months ended September 30, 2023 to a $17,000 gain for the nine months ended September 30, 2024. The decrease was driven by unfavorable changes in foreign currency exchange rates between the British Pound and the U.S. Dollar in the nine months ended September 30, 2024.

Previous wording

Interest income, net increased from $2.0 million for the six months ended June 30, 2023 to $2.8 million for the six months ended June 30, 2024, which was driven by an increase in investment income. The increase was due to greater rates of return on our investments as a result of higher interest rates in the six months ended June 30, 2024.

Current wording

Interest income, net increased from $3.3 million for the nine months ended September 30, 2023 to $5.6 million for the nine months ended September 30, 2024, which was driven by an increase in investment income from an increase in marketable securities during the nine months ended September 30, 2024.

Previous wording

Since our inception, we have primarily funded our operations with an aggregate of $328.0 million in net proceeds from the sale and issuance of shares of our redeemable convertible preferred stock, our initial public offering of our common stock and the sale and issuance of shares of our common stock in the Private Placement. We have not generated any revenue from product sales or otherwise. We have incurred net losses from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. As of June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $223.1 million and cash, cash equivalents, and marketable securities of $106.8 million, respectively, and an accumulated deficit of $212.6 million and $156.0 million, respectively.

Current wording

Since our inception, we have primarily funded our operations with an aggregate of $328.0 million in net proceeds from the sale and issuance of shares of our redeemable convertible preferred stock, our initial public offering of our common stock and the sale and issuance of shares of our common stock in the Private Placement. We have not generated any revenue from product sales or otherwise. We have incurred net losses from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. As of September 30, 2024 and December 31, 2023, we had cash, cash equivalents and marketable securities of $217.9 million and $106.8 million, respectively, and an accumulated deficit of $221.5 million and $156.0 million, respectively.

Previous wording

We believe our cash and cash equivalents of $223.1 million as of June 30, 2024 will be sufficient to fund our operations into 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Current wording

We believe our cash, cash equivalents and marketable securities of $217.9 million as of September 30, 2024 will be sufficient to fund our operations through 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Previous wording

We anticipate that our expenses will increase for the foreseeable future as we continue to advance budoprutugand any future product candidates we may develop, expand our corporate infrastructure, and incur costs associated with potential commercialization. We are subject to all of the risks typically related to the development of biopharmaceutical candidates, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business.

Current wording

We anticipate that our expenses will increase for the foreseeable future as we continue to advance budoprutugand any product candidates we may develop, expand our corporate infrastructure, and incur costs associated with potential commercialization. We are subject to all of the risks typically related to the development of biopharmaceutical candidates, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business.

Previous wording

Until such time, if ever, as we can generate substantial revenue from product sales, we may finance our operations through equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms or at all. 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 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, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or budoprutug, or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. Our failure to raise capital or enter into such other arrangements when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts, or grant rights to develop and market budoprutug or any future product candidates we may develop even if we would otherwise prefer to develop and market such product candidates ourselves.

Current wording

Until such time, if ever, as we can generate substantial revenue from product sales, we may finance our operations through equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms or at all. 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 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, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or budoprutug, or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. Our failure to raise capital or enter into such other arrangements when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts, or grant rights to develop and market budoprutug or any product candidates we may develop even if we would otherwise prefer to develop and market such product candidates ourselves.

Previous wording

For the six months ended June 30, 2024, net cash used in operating activities was $2.5 million. This consisted primarily of net loss of $56.6 million. The decrease in cash was partially offset by total non-cash adjustments of $52.8 million that primarily related to IPR&D and stock-based compensation expense, as well as changes in our operating assets and liabilities that resulted in a net increase in cash of $1.3 million.

Current wording

For the nine months ended September 30, 2024, net cash used in operating activities was $10.0 million. This consisted primarily of a net loss of $65.5 million, partially offset by total non-cash adjustments of $55.5 million that primarily related to IPR&D and stock-based compensation expense.

Previous wording

For the six months ended June 30, 2023, net cash used in operating activities was $23.1 million. This consisted primarily of net loss of $27.5 million and changes in our operating assets and liabilities that resulted in a net decrease in cash of $5.1 million, primarily related to personnel and research and development activities. The decrease in cash was partially offset by total non-cash adjustments of $9.5 million that primarily related to stock-based compensation expense.

Current wording

For the nine months ended September 30, 2023, net cash used in operating activities was $19.7 million. This consisted primarily of net loss of $31.5 million and changes in our operating assets and liabilities that resulted in a net increase in cash of $2.3 million, primarily related to the receipt of research and development tax credits from the U.K. The decrease in cash was partially offset by total non-cash adjustments of $9.5 million that consisted of stock-based compensation expense of $11.6 million, ROU asset impairment expense of $0.2 million, and non-cash lease expense of $0.3 million, partially offset by accretion of discounts on investments of $2.0 million, and foreign currency gain on remeasurement of $0.6 million

Previous wording

For the six months ended June 30, 2024, net cash provided by investing activities was $4.1 million. This consisted of $13.8 million in proceeds received from maturities of marketable securities, primarily offset by the issuance of a promissory loan of $5.0 million and cash paid of $4.6 million in connection with the Acquisition.

Current wording

For the nine months ended September 30, 2024, net cash used in investing activities was $67.7 million. This consisted of purchases of $71.8 million of marketable securities, the issuance of a promissory loan of $5.0 million and cash paid of $4.6 million in connection with the Acquisition, partially offset by $13.8 million in proceeds received from maturities of marketable securities.

Previous wording

For the six months ended June 30, 2023, net cash provided by investing activities was $4.2 million. This consisted of $60.2 million in proceeds received from maturities of marketable securities, primarily offset by purchases of $56.0 million of marketable securities.

Current wording

For the nine months ended September 30, 2023, net cash provided by investing activities was $32.2 million. This consisted of $90.7 million in proceeds received from maturities of marketable securities, primarily offset by purchases of $58.4 million of marketable securities.

Previous wording

For the six months ended June 30, 2024, net cash provided by financing activities was $128.4 million. This consisted of $119.7 million in proceeds received from the issuance of our common stock in the Private Placement and $8.7 million in proceeds from exercises of stock options.

Current wording

For the nine months ended September 30, 2024, net cash provided by financing activities was $130.7 million. This consisted of $119.7 million in proceeds received from the issuance of our common stock in the Private Placement and $10.9 million in proceeds from exercises of stock options.

Previous wording

A summary of our critical accounting policies is presented in our audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2023 included in our Annual Report on Form 10-K. There were no other material changes to our critical accounting policies during the six months ended June 30, 2024.

Current wording

A summary of our critical accounting policies is presented in our audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2023 included in our Annual Report on Form 10-K. There were no other material changes to our critical accounting policies during the nine months ended September 30, 2024.