Lexeo Therapeutics Inc

Previous wording

Our most advanced cardiovascular product candidate, LX2006 for the treatment of patients with Friedreich ataxia, or FA, cardiomyopathy, is currently being evaluated in SUNRISE-FA, an ongoing Phase 1/2 clinical trial. We have observed an increase in frataxin protein expression in the hearts of three patients that have undergone cardiac biopsies across cohort 1 (n=1) and cohort 2 (n=2). In July 2024, we announced interim clinical data of LX2006 from the ongoing Lexeo-sponsored SUNRISE-FA trial and Cornell investigator-initiated trial, providing baseline characteristics from 11 participants that had been treated and follow-up data from 8 participants that had reached at least 6-months of follow-up, showing (i) that LX2006 has been well-tolerated with no treatment-related serious adverse events to date and (ii) improvements in key cardiac biomarkers including left ventricular mass index, lateral wall thickness, and high-sensitivity troponin I. In light of the evidence of treatment effect with improvements across multiple cardiac measures, we recently initiated formal engagements with the FDA to discuss surrogate endpoints for a future registrational study. LX2006 has received Rare Pediatric Disease designation, Orphan Drug designation, and Fast Track designation from the FDA, and Orphan Medicinal Product designation from the European Commission. Our second most advanced cardiovascular product candidate, LX2020 for the treatment of arrhythmogenic cardiomyopathy, or ACM, caused by mutations in the PKP2 gene, referred to as PKP2-ACM, received investigational new drug, or IND, clearance from the U.S. Food and Drug Administration, or FDA, in July 2023 and is currently being evaluated in HEROIC-PKP2, an ongoing Phase 1/2 clinical trial. LX2020 received Fast Track and Orphan Drug designations from the FDA in December 2023. We expect to provide an interim data readout from cohort 1 in the second half of 2024.

Current wording

Our most advanced cardiovascular product candidate, LX2006 for the treatment of patients with Friedreich ataxia, or FA, cardiomyopathy, is currently being evaluated in SUNRISE-FA, an ongoing Phase 1/2 clinical trial. We have observed an increase in frataxin protein expression in the hearts of four patients that have undergone cardiac biopsies across cohort 1 (n=1) and cohort 2 (n=3). In July 2024, we announced interim clinical data of LX2006 from the ongoing Lexeo-sponsored SUNRISE-FA trial and Cornell investigator-initiated trial, providing baseline characteristics from 11 participants that had been treated and follow-up data from 8 participants that had reached at least 6-months of follow-up, showing improvements in key cardiac biomarkers including left ventricular mass index, lateral wall thickness, and high-sensitivity troponin I. LX2006 has been generally well-tolerated across both SUNRISE-FA and Weill Cornell investigator-initiated trials to date. One possibly treatment-related Grade 2 event of asymptomatic myocarditis was observed one year after dosing; participant with multiple comorbidities and history of flu-like symptoms prior to diagnosis which may have been a contributing factor. A biopsy was performed six weeks after diagnosis and results were negative for myocarditis and participant remains asymptomatic. In November 2024, we announced that we reached alignment with the U.S. Food and Drug Administration, or FDA, on key elements of a registrational development plan for LX2006, including accelerated approval pathway with left ventricular mass index and frataxin protein expression as co-primary registrational endpoints. LX2006 has received Rare Pediatric Disease designation, Orphan Drug designation, Fast Track designation and Regenerative Medicine Advanced Therapy, or RMAT, designation from the FDA, and Orphan Medicinal Product designation from the European Commission. Our second most advanced cardiovascular product candidate, LX2020 for the treatment of arrhythmogenic cardiomyopathy, or ACM, caused by mutations in the PKP2 gene, referred to as PKP2-ACM, is currently being evaluated in HEROIC-PKP2, an ongoing Phase 1/2 clinical trial. We have completed enrollment of cohort 1 and expect to provide an interim data readout from that cohort in the later part of the first quarter or early part of the second quarter of 2025. LX2020 received Fast Track and Orphan Drug designations from the FDA in December 2023.

Previous wording

To date, we have funded our operations primarily through proceeds from the sale of shares of our convertible preferred stock and common stock, including our Private Placement, IPO and the subsequent partial exercise of the underwriters’ 30-day option to purchase additional shares of common stock. As of June 30, 2024, we had $175.0 million of cash and cash equivalents, and we had raised aggregate net proceeds of $100.3 million from our IPO and the subsequent partial exercise of the underwriters’ 30-day option to purchase additional shares of common stock, as well as totals of $88.7 million, $185.0 million and $3.9 million of net proceeds from the Private Placement, the sales of our convertible equity securities, and a convertible SAFE Note, respectively (see Note 7 to the unaudited consolidated financial statements appearing elsewhere in this Quarterly Report for more information). We have incurred significant operating losses since the commencement of our operations. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current gene therapy candidates or any future gene therapy candidates. Our net losses for the six months ended June 30, 2024 and the year ended December 31, 2023 were $42.9 million and $66.4 million, respectively, and our accumulated deficit was $224.8 million at June 30, 2024. We expect to continue to incur significant losses for the foreseeable future as we advance our current and future product candidates through preclinical and clinical development, continue to build our operations and transition to operating as a public company.

Current wording

To date, we have funded our operations primarily through proceeds from the sale of shares of our convertible preferred stock and common stock, including our Private Placement, IPO and the subsequent partial exercise of the underwriters’ 30-day option to purchase additional shares of common stock. As of September 30, 2024, we had $157.0 million of cash and cash equivalents, and we had raised aggregate net proceeds of $100.3 million from our IPO and the subsequent partial exercise of the underwriters’ 30-day option to purchase additional shares of common stock, as well as totals of $88.7 million, $185.0 million and $3.9 million of net proceeds from the Private Placement, the sales of our convertible equity securities, and the convertible SAFE Note, respectively (see Note 8 to the unaudited consolidated financial statements appearing elsewhere in this Quarterly Report for more information). We have incurred significant operating losses since the commencement of our operations. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current gene therapy candidates or any future gene therapy candidates. Our net losses for the nine months ended September 30, 2024 and the year ended December 31, 2023 were $72.4 million and $66.4 million, respectively, and our accumulated deficit was $254.2 million at September 30, 2024. We expect to continue to incur significant losses for the foreseeable future as we advance our current and future product candidates through preclinical and clinical development, continue to build our operations and operate as a public company.

Previous wording

Other income (expense) includes net foreign exchange gains and (losses).

Current wording

Other income (expense), net includes net foreign exchange gains and (losses).

Previous wording

The net increase of $5.3 million in total research and development expenses for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to increases in (i) clinical trial costs of $2.6 million excluding an adjustment reducing estimated accrued clinical trial expenses by $2.2 million for our LX1001 program recorded in the second quarter of 2024, (ii) employee compensation and stock-based compensation expenses of $2.5 million primarily due to increased headcount and equity awards granted since June 30, 2023, (iii) chemistry, manufacturing and controls, or CMC, expenses of $2.5 million, and (iv) license fees of $0.6 million related to the Third Cornell License Agreement. These increases were partially offset by an adjustment reducing estimated accrued clinical trial expenses by $2.2 million for our LX1001 program recorded in the second quarter of 2024 and a decrease in non-clinical and preclinical expenses of $0.8 million primarily related to our early stage cardiovascular and central nervous system, or CNS, disease programs.

Current wording

The net increase of $6.2 million in total research and development expenses for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily due to increases in (i) milestone expenses of $6.1 million, consisting primarily of a $6.0 million development milestone for our LX2020 program that was achieved during the third quarter of 2024 and subsequently paid to the selling shareholders of Stelios, (ii) employee compensation and stock-based compensation expenses of $2.4 million primarily due to increased headcount and equity awards granted to existing employees since September 30, 2023, (iii) quality assurance expenses of $0.3 million, (iv) preclinical expenses of $0.2 million, and (v) regulatory and program and portfolio management expenses of $0.2 million. These increases were partially offset by decreases in (i) clinical trial expenses of $1.5 million, (ii) chemistry, manufacturing and controls, or CMC, expenses of $1.4 million, and (iii) non-clinical expenses of $0.2 million.

Previous wording

The net increase of $4.3 million in general and administrative expenses for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to increases in (i) third-party legal fees and associated costs of $1.8 million, (ii) employee compensation and stock-based compensation expenses of $1.8 million primarily due to increased headcount and equity awards granted since June 30, 2023, and (iii) third-party audit, accounting, investor relations, public relations and other professional service provider fees, as well as insurance expenses, of $0.4 million primarily due to our becoming a publicly traded company in November 2023.

Current wording

The net increase of $5.1 million in general and administrative expenses for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily due to increases in (i) employee compensation and stock-based compensation expenses of $2.5 million primarily due to increased headcount and equity awards granted to existing employees since September 30, 2023, (ii) third-party legal fees and associated costs of $1.8 million, and (iii) third-party audit, tax, and other professional service provider fees, as well as insurance expenses, of $0.4 million primarily due to our becoming a publicly traded company in November 2023.

Previous wording

We recognized interest income of $2.3 million and $0.6 million for the three months ended June 30, 2024 and June 30, 2023, respectively, primarily related to interest earned on our investment in a U.S. government money market fund with an increased average invested balance in 2024 primarily due to the net proceeds received from our IPO and the subsequent partial exercise of the underwriters' option to purchase additional shares in November 2023, as well the net proceeds received from our Private Placement offering in March 2024.

Current wording

We recognized interest income of $2.1 million and $0.5 million for the three months ended September 30, 2024 and September 30, 2023, respectively, primarily related to interest earned on our investment in a U.S. government money market fund with an increased average invested balance in 2024 primarily due to the net proceeds received from our IPO and the subsequent partial exercise of the underwriters' option to purchase additional shares in November 2023, as well the net proceeds received from our Private Placement offering in March 2024.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

The following table summarizes our research and development expenses incurred for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our research and development expenses incurred for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

The net increase of $4.6 million in total research and development expenses for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to increases in (i) employee compensation and stock-based compensation expenses of $4.7 million primarily due to increased headcount and equity awards granted since June 30, 2023, (ii) CMC expenses of $4.3 million, (iii) clinical trial costs of $3.4 million excluding an adjustment reducing estimated accrued clinical trial expenses by $2.2 million for our LX1001 program recorded in the second quarter of 2024, (iv) license fees of $0.6 million related to the Third Cornell License Agreement, and (v) quality and program and portfolio management costs of $0.6 million. These increases were partially offset by (i) a decrease in milestone expense that consisted of a $3.5 million development milestone achieved and paid to Adverum in 2023, (ii) a decrease in non-clinical and preclinical expenses of $3.3 million primarily related to our early stage cardiovascular and CNS disease programs, and (iii) an adjustment reducing estimated accrued clinical trial expenses by $2.2 million for our LX1001 program recorded in the second quarter of 2024.

Current wording

The net increase of $10.8 million in total research and development expenses for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to increases in (i) employee compensation and stock-based compensation expenses of $7.1 million primarily due to increased headcount and equity awards granted to existing employees since September 30, 2023, (ii) CMC expenses of $2.9 million, (iii) net milestone expense of $2.6 million, including a $6.0 million development milestone for our LX2020 program that was achieved during the third quarter of 2024 and subsequently paid to the selling shareholders of Stelios, which was partially offset by a $3.5 million development milestone for our LX2006 program that was achieved and paid to Adverum in the first quarter of 2023, (iv) clinical trial costs of $1.9 million excluding an adjustment reducing estimated accrued clinical trial expenses by $2.2 million for our LX1001 program recorded in the second quarter of 2024, (v) quality assurance expenses of $0.7 million, and (vi) license fees of $0.7 million primarily related to the Third Cornell License Agreement. These increases were partially offset by decreases in (i) non-clinical and preclinical expenses of $3.3 million primarily related to our early stage cardiovascular and central nervous system disease programs, and (ii) estimated accrued clinical trial expenses of $2.2 million resulting from an adjustment recorded in the second quarter of 2024 for our LX1001 program.

Previous wording

The net increase of $8.9 million in general and administrative expenses for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to increases in (i) third-party legal fees and associated costs of $4.5 million, (ii) employee compensation and stock-based compensation expenses of $3.0 million primarily due to increased headcount and equity awards granted since June 30, 2023, (iii) third-party audit, accounting, investor relations, public relations and other professional service provider fees, as well as insurance expenses, of $0.9 million primarily due to our becoming a publicly traded company in November 2023, and (iv) travel expenses of $0.2 million.

Current wording

The net increase of $14.0 million in general and administrative expenses for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to increases in (i) third-party legal fees and associated costs of $6.0 million, (ii) employee compensation and stock-based compensation expenses of $5.5 million primarily due to increased headcount and equity awards granted to existing employees since September 30, 2023, (iii) third-party audit, tax, investor relations, public relations and other professional service provider fees, as well as insurance expenses, of $1.4 million primarily due to our becoming a publicly traded company in November 2023, (iv) travel, software and office supplies expenses of $0.4 million, and (v) capital tax expense of $0.2 million.

Previous wording

We recognized interest income of $4.0 million and $1.3 million for the six months ended June 30, 2024 and June 30, 2023, respectively, primarily related to interest earned on our investment in a U.S. government money market fund with an increased average invested balance in 2024 primarily due to the net proceeds received from our IPO and the subsequent partial exercise of the underwriters' option to purchase additional shares in November 2023, as well the net proceeds received from our Private Placement offering in March 2024.

Current wording

We recognized interest income of $6.1 million and $1.8 million for the nine months ended September 30, 2024 and September 30, 2023, respectively, primarily related to interest earned on our investment in a U.S. government money market fund with an increased average invested balance in 2024 primarily due to the net proceeds received from our IPO and the subsequent partial exercise of the underwriters' option to purchase additional shares in November 2023, as well the net proceeds received from our Private Placement offering in March 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 our operations. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates. Since our inception through June 30, 2024, we funded our operations primarily with total net proceeds from sales of our common stock, convertible SAFE Note and convertible equity securities of $377.9 million. As of June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $175.0 million and $121.5 million, respectively.

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 our operations. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates. Since our inception through September 30, 2024, we funded our operations primarily with total net proceeds from sales of our common stock, convertible SAFE Note and convertible equity securities of $377.9 million. As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $157.0 million and $121.5 million, respectively.

Previous wording

The following table summarizes our sources and uses of cash for the six months ended June 30, 2024 and June 30, 2023 (in thousands):

Current wording

The following table summarizes our sources and uses of cash for the nine months ended September 30, 2024 and September 30, 2023 (in thousands):

Previous wording

During the six months ended June 30, 2024, net cash used in operating activities consisted primarily of our net loss of $42.9 million, which was partially offset by $5.2 million of stock-based compensation expense, $1.8 million of net cash provided by changes in operating assets and liabilities, and $1.0 million of depreciation and amortization of operating and finance right-of-use assets.

Current wording

During the nine months ended September 30, 2024, net cash used in operating activities consisted primarily of our net loss of $72.4 million, which was partially offset by $9.1 million of net cash provided by changes in operating assets and liabilities, $9.0 million of stock-based compensation expense, and $1.5 million of depreciation and amortization of operating and finance right-of-use assets, as well as property and equipment.

Previous wording

During the six months ended June 30, 2023, net cash used in operating activities consisted primarily of our net loss of $32.1 million and $1.7 million of net cash used by changes in operating assets and liabilities, which were partially offset by $1.4 million of stock-based compensation expense and $0.9 million of depreciation and amortization of our right-of-use assets for our operating and finance leases

Current wording

During the nine months ended September 30, 2023, net cash used in operating activities consisted primarily of our net loss of $52.2 million, which was partially offset by $2.8 million of net cash provided by changes in operating assets and liabilities, $2.2 million of stock-based compensation expense, and $1.4 million of depreciation and amortization of operating and finance right-of-use assets, as well as property and equipment.

Previous wording

During the six months ended June 30, 2024, net cash used in investing activities was $0.4 million and consisted primarily of purchases of lab equipment.

Current wording

During the nine months ended September 30, 2024, net cash used in investing activities was $0.5 million and consisted primarily of purchases of lab equipment.

Previous wording

During the six months ended June 30, 2023, net cash used in investing activities of $39,000 consisted primarily of purchases of lab equipment.

Current wording

During the nine months ended September 30, 2023, net cash used in investing activities of $0.1 million consisted primarily of purchases of lab equipment and internal use software.

Previous wording

During the six months ended June 30, 2024, net cash provided by financing activities consisted primarily of the net proceeds received from the Private Placement offering of $88.7 million, as well as $0.4 million of proceeds received from the exercise of stock options, which were partially offset by $0.2 million of principal payments made on equipment finance leases.

Current wording

During the nine months ended September 30, 2024, net cash provided by financing activities consisted primarily of the net proceeds received from the Private Placement offering of $88.7 million, as well as $0.5 million of proceeds received from the exercise of stock options, which were partially offset by $0.3 million of principal payments made on equipment finance leases.

Previous wording

We qualify as an “emerging growth company” pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012. As an emerging growth company, we have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies.

Current wording

We qualify as an “emerging growth company” pursuant to the provisions of the JOBS Act. As an emerging growth company, we have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies.