SUTRO BIOPHARMA INC

Previous wording

You should read the following discussion of our financial condition and results of operations in conjunction with our condensed financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2023. In addition to historical financial information, this discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as statements of our plans, objectives, expectations, intentions and belief. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” under Part II, Item 1A below. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements related to our expectations regarding our future results of operations and financial position, business strategy, market size for our product candidates, potential future milestone and royalty payments, the value of the our holdings of Vaxcyte common stock, potential growth opportunities, nonclinical and clinical development activities, efficacy and safety profile of our product candidates, our ability to maintain and recognize the benefits of certain designations received by product candidates, our ability to successfully leverage Fast Track Designation, the timing and results of nonclinical studies and clinical trials, collaboration with third parties, the expected impact of pandemics or contagious diseases, such as the COVID-19 pandemic, on our operations, and the receipt and timing of potential regulatory designations, approvals and commercialization of product candidates, are forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “predict,” “target,” “intend,” “could,” “would,” “should,” “project,” “plan,” “expect,” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Current wording

You should read the following discussion of our financial condition and results of operations in conjunction with our condensed financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2023. In addition to historical financial information, this discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as statements of our plans, objectives, expectations, intentions and belief. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” under Part II, Item 1A below. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements related to our expectations regarding our future results of operations and financial position, business strategy, market size for our product candidates, potential future milestone and royalty payments, potential growth opportunities, nonclinical and clinical development activities, efficacy and safety profile of our product candidates, our ability to maintain and recognize the benefits of certain designations received by product candidates, our ability to successfully leverage Fast Track Designation, the timing and results of nonclinical studies and clinical trials, collaboration with third parties, the expected impact of pandemics or contagious diseases, such as the COVID-19 pandemic, on our operations, and the receipt and timing of potential regulatory designations, approvals and commercialization of product candidates, are forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “predict,” “target,” “intend,” “could,” “would,” “should,” “project,” “plan,” “expect,” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Previous wording

Once identified, production of protein drug candidates can be rapidly and predictably scaled in our current Good Manufacturing Practices, or cGMP, compliant manufacturing facility. We have the ability to manufacture our proprietary cell-free extract that supports our production of proteins on a large scale using a semi-continuous fermentation process. Our most advanced product candidate is STRO-002, or luveltamab tazevibulin, or luvelta, an ADC directed against folate receptor-alpha, or FolRα, for patients with FolRα-expressing cancers, including ovarian cancer.

Current wording

Once identified, production of protein drug candidates can be rapidly and predictably scaled in our current Good Manufacturing Practices, or cGMP, compliant manufacturing facility. We have the ability to manufacture our proprietary cell-free extract that supports our production of proteins on a large scale using a semi-continuous fermentation process. Our most advanced product candidate is STRO-002, or luveltamab tazevibulin, or luvelta, an ADC directed against folate receptor-alpha, or FRα, for patients with FRα-expressing cancers, including ovarian cancer.

Previous wording

In 2019, we began enrolling patients in a Phase 1 trial of luvelta that focused on ovarian and endometrial cancers. The Phase 1 trial assessing safety, tolerability and preliminary efficacy of luvelta to treat platinum resistant ovarian cancer has been completed and near-final results from this Phase 1 trial reported in January 2024 showed that luvelta exhibited a manageable safety profile together with promising preliminary efficacy data in the tested patient population. We began enrolling patients in a Phase 2/3 trial of luvelta for the treatment of platinum-resistant ovarian cancer, the REFRαME-O1 study, in June 2023. In April 2024 we announced we had completed enrollment of Part 1 of this study and had initiated enrollment of Part 2 of the study.

Current wording

In 2019, we began luvelta development by enrolling a cohort of patients in a Phase 1 trial of luvelta that focused on ovarian cancer. The Phase 1 trial assessing safety, tolerability and preliminary efficacy of luvelta to treat platinum resistant ovarian cancer has been completed, and results from this Phase 1 trial reported at ASCO 2023 showed that luvelta exhibited a manageable safety profile together with promising preliminary efficacy data in the tested patient population.

Previous wording

In January 2024, we presented an aggregated data set from our Phase I trials of luvelta. This data set included data from all ovarian cancer patients treated with luvelta as a monotherapy in Phase 1 studies, regardless of FolRα expression levels, dose level of luvelta, or platinum sensitivity or resistance, corresponding to a total of 99 patients, of which 92 were RECIST-evaluable, with 21% platinum sensitive patients and 78% platinum refractory patients. Patients received a median of three prior lines of therapy. There were 72% of the patients that had experienced prior bevacizumab therapy and 70% had been treated with a PARP inhibitor. These patients were not selected for FolRα expression levels and were treated at starting dose levels ≤2.9 mg/kg, 4.3 mg/kg, 5.2 mg/kg or ≥5.6 mg/kg.

Current wording

In January 2024, we presented an aggregated data set from our Phase I trials of luvelta. This data set included data from all ovarian cancer patients treated with luvelta as a monotherapy in Phase 1 studies, regardless of FRα expression levels, dose level of luvelta, or platinum sensitivity or resistance, corresponding to a total of 99 patients, of which 92 were RECIST-evaluable, with 21% platinum sensitive patients and 78% platinum resistant patients. Patients received a median of three prior lines of therapy. There were 72% of the patients that had experienced prior bevacizumab therapy and 70% had been treated with a PARP inhibitor. These patients were not selected for FRα expression levels and were treated at starting dose levels ≤2.9 mg/kg, 4.3 mg/kg, 5.2 mg/kg or ≥5.6 mg/kg.

Previous wording

We also presented a subset of the aggregated data from our Phase 1 trials of luvelta for which 43 patients with platinum resistant ovarian cancer selected for FolRα TPS ≥25%, or tumors with ≥25% of the tumor cells expressing FolRα at any level of staining intensity, were treated with 4.3 mg/kg or 5.2 mg/kg doses of luvelta, corresponding to all patients treated in phase 1 studies that would be eligible for enrollment in the REFRαME-O1 registrational study. The ORR observed for this subset population was 28%, with a DOR of 5.7 months and PFS of 5.8 months.

Current wording

We also presented a subset of the aggregated data from our Phase 1 trials of luvelta, for which 43 patients with platinum resistant ovarian cancer selected for FRα TPS ≥25%, or tumors with ≥25% of the tumor cells expressing FRα at any level of staining intensity, were treated with 4.3 mg/kg or 5.2 mg/kg doses of luvelta, corresponding to patients treated across phase 1 studies that would be similar to the target population for the REFRαME-O1 registrational study. The Objective Response Rate, or ORR, observed for this subset population was 28%, with a DOR of 5.7 months and an estimated PFS of 5.8 months.

Previous wording

Based on the data from our Phase 1 program, we selected FolRα expression TPS ≥25% as the target eligibility cutoff or threshold for further study in clinical development of luvelta. We estimate that approximately 80% of the platinum resistant ovarian cancer patients would be eligible for luvelta treatment based on this TPS ≥25% threshold for FolRα expression.

Current wording

Based on the data from our Phase 1 program, we selected FRα expression TPS ≥25% as the target eligibility cutoff or threshold for further study in clinical development of luvelta. We estimate that approximately 80% of the platinum resistant ovarian cancer patients would be eligible for luvelta treatment based on this TPS ≥25% threshold for FRα expression.

Previous wording

In 2022 we initiated an exploratory cohort, or cohort C, of 15 patients to assess the safety of treatment with luvelta at 5.2 mg/kg in combination with prophylactic pegfilgrastim and presented preliminary data from ten patients from this cohort in January 2023. In January 2024 we announced updated data from this cohort based on 16 patients. In particular:

Current wording

In 2022, we initiated an additional exploratory cohort, or cohort C, of 15 patients to assess the safety of treatment with luvelta at 5.2 mg/kg in combination with prophylactic pegfilgrastim and presented preliminary data from ten patients from this cohort in January 2023. In January 2024 we announced updated data from this cohort based on 16 patients. In particular:

Previous wording

In addition to the Phase 1 studies discussed above, we initiated a Phase 2/3 study, the REFRαME-O1 study, of luvelta for the treatment of platinum-resistant ovarian cancer in June 2023. This study comprises two parts; in Part 1, we anticipate enrolling 50 patients randomized 1:1 to two different doses of luvelta, either 4.3 mg/kg or 5.2 mg/kg plus prophylactic pegfilgrastim for two cycles, followed by reduction to 4.3 mg/kg. After proceeding to Part 2 of the study, the non-optimized dose of luvelta will be dropped and approximately 516 patients will be randomized 1:1 to the selected luvelta dose or investigators choice of chemotherapy. The protocol will include an optional interim analysis for ORR and DOR to support a potential application for accelerated approval and the endpoints that will be assessed for a potential full approval are PFS and OS. The REFRαME-O1 study patient population includes those with platinum-resistant ovarian cancer, 1-3 lines of prior treatment and tumors that express FolRα at TPS≥25% and excludes primary platinum refractory patients and those with ECOG PS of 0-1.

Current wording

Following the studies discussed above, we initiated a Phase 2/3 study, the REFRαME-O1 study, of luvelta for the treatment of platinum-resistant ovarian cancer in June 2023. This study comprises two parts; in Part 1, we enrolled 57 patients randomized 1:1 to two different doses of luvelta, either 4.3 mg/kg or 5.2 mg/kg plus prophylactic pegfilgrastim for two cycles, followed by reduction to 4.3 mg/kg. After proceeding to Part 2 of the study and selecting an optimized dose, the non-optimized dose of luvelta will be dropped and approximately 516 patients will be randomized 1:1 to the selected luvelta dose or investigator’s choice of chemotherapy. The protocol includes an optional interim analysis for ORR and DOR to support a potential application for accelerated approval and the endpoints that will be assessed to support a potential full approval are PFS and OS. The REFRαME-O1 study patient population includes those who have platinum-resistant ovarian cancer, have received 1-3 lines of prior treatment, have received prior bevacizumab treatment unless not available or contraindicated, and whose tumors express FRα at TPS≥25%. In April 2024, we announced that we had completed enrollment of Part 1 of this study and had initiated enrollment of Part 2 of the study.

Previous wording

We also opened for enrollment a Phase 1 trial to assess the combination of luvelta and bevacizumab for treatment of ovarian cancer in December 2021 and presented initial preliminary results of this study in January 2024. Safety signals from this study were generally consistent with those previously reported and the combination treatment with luvelta and bevacizumab demonstrated clinical activity in treated patients regardless of their FolRα expression status. We expect to present updated results from the initial cohort of the bevacizumab combination study at 2024 ESMO Congress in September 2024. In addition, we are enrolling patients in the expansion phase of the bevacizumab combination Phase 1b study and expect to present initial data from this trial in in the first half of 2025.

Current wording

We initiated a Phase 1 trial to assess the combination of luvelta and bevacizumab for treatment of ovarian cancer in December 2021 and presented initial preliminary results of this study in January 2024 and updated results at the 2024 ESMO Congress in September 2024. Safety signals from this study were generally consistent with those previously reported, and the combination treatment with luvelta and bevacizumab demonstrated clinical activity in treated patients regardless of their FRα expression status and prior bevacizumab exposure. At the recommended Phase 2 dose (4.3 mg/kg), an ORR of 56% (5/9) was observed, while no (0/6) patients had a response at 3.5 mg/kg and 50% (1/2) of patients had a response at 5.2 mg/kg. An ORR of 35% (6/17) was observed in the overall population of RECIST evaluable patients with a median duration of response of 9.3 months. In patients with ≥25% FRα expression, an ORR of 44% (4/9) was observed; in patients with <25% FRα expression, an ORR of 29% (2/7) was observed. No new safety signals were observed compared with either agent alone; consistent with previous reported luvelta safety results, the most common adverse event was neutropenia. In addition, we are enrolling patients in the expansion phase of the bevacizumab combination Phase 1b study and expect to present initial data from this trial in in the first half of 2025.

Previous wording

We also began enrolling patients in an expansion cohort for FolRα-selected endometrial cancer in the fourth quarter of 2021 and presented initial preliminary results from the study at the 2023 ESMO Congress in October 2023. In this trial, luvelta showed encouraging preliminary anti-tumor activity in FolRα-selected patients, defined by a TPS of >25% FolRα expression, and the safety profile was consistent with prior data in patients with platinum-resistant ovarian cancer.

Current wording

We also began enrolling patients in an expansion cohort for FRα -selected endometrial cancer in the fourth quarter of 2021 and presented initial preliminary results from the study at the 2023 ESMO Congress in October 2023. In this trial, luvelta showed encouraging preliminary anti-tumor activity in FRα-selected patients, defined by a TPS of >25% FRα expression, and the safety profile was consistent with prior data in patients with platinum-resistant ovarian cancer.

Previous wording

Finally, our IND for the treatment of NSCLC with luvelta was cleared by the FDA in the first half of 2024 and we expect to initiate the Phase 2 study in the second half of 2024. Initial data is expected in the first half of 2025.

Current wording

Our IND for the treatment of FRα-expressing non-small cell lung cancer, or NSCLC, with luvelta was cleared by the FDA in the first half of 2024 and we initiated the Phase 2 study in August 2024. Initial preliminary data is expected in 2025.

Previous wording

In addition, we have been offering compassionate use of luvelta to treat pediatric patients with relapsed/refractory CBFA2T3-GLIS2, or CBF/GLIS, acute myeloid leukemia, or AML, commonly known as RAM phenotype AML. Updated compassionate use data continued to show anti-leukemic activity of luvelta in pediatric patients with relapsed/refractory CBF/GLIS AML and was presented at ASH 2023 in December 2023. The data showed that luvelta was well tolerated as a monotherapy agent and in combination with standard cancer therapies. Luvelta was granted Orphan Drug Designation by the FDA in December 2022 in this pediatric patient population. We expect to begin enrollment of a registration-directed trial of luvelta for treatment of pediatric RAM phenotype AML in the second half of 2024.

Current wording

In addition, we have been offering compassionate use of luvelta to treat pediatric patients with relapsed/refractory CBFA2T3-GLIS2, or CBF/GLIS, acute myeloid leukemia, or AML, commonly known as RAM phenotype AML, via single patient INDs. Updated compassionate use data continued to show anti-leukemic activity of luvelta in pediatric patients with relapsed/refractory CBF/GLIS AML and was presented at ASH 2023 in December 2023. The data showed that luvelta was well tolerated as a monotherapy agent and in combination with standard cancer therapies. Luvelta was granted Rare Pediatric Disease and Orphan Drug Designations by the FDA in November and December 2022, respectively, in this pediatric patient population. We initiated a registration-directed trial of luvelta for treatment of pediatric RAM phenotype AML in October 2024.

Previous wording

Our most advanced asset in preclinical development is STRO-004. We believe STRO-004 has the potential to be a best-in-class ADC targeting TF. Preclinical data suggest that STRO-004 has potent antitumor activity and the potential for a differentiated safety profile. We anticipate being ready to file an IND for STRO-004 in 2025.

Current wording

Our most advanced asset in preclinical development is STRO-004. a tissue factor, or TF, targeting ADC, which features a DAR8 exatecan payload and site-specific linker design. We believe STRO-004 has the potential to be a best-in-class ADC targeting TF. Preclinical data suggest that STRO-004 has potent antitumor activity and the potential for a differentiated safety profile. We anticipate filing an IND for STRO-004 in the second half of 2025. Our other preclinical assets include dual-payload ADCs, or ADC 2, and immunostimulatory ADCs, or iADCs. We plan to file three INDs over the next three years, including for STRO-004.

Previous wording

Enabled through our proprietary XpressCF® and XpressCF+®platforms, we have entered into multi-target, product-focused collaborations with leading pharmaceutical and biotechnology companies in the field of oncology, with our ongoing relationships that include licensing to Ipsen, on an exclusive basis, the right to research, develop, manufacture and commercialize STRO-003; an immunostimulatory antibody-drug conjugates collaboration with Astellas; a cytokine derivatives collaboration with Merck; and a licensing agreement for luvelta in Greater China with Tasly. In August 2023, Tasly received its first IND clearance by NMPA in Greater China for luvelta.

Current wording

Enabled through our proprietary XpressCF® and XpressCF+®platforms, we have entered into multi-target, product-focused collaborations with leading pharmaceutical and biotechnology companies in the field of oncology, with our ongoing relationships that include licensing to Ipsen, on an exclusive basis, the right to research, develop, manufacture and commercialize STRO-003; an immunostimulatory ADC collaboration with Astellas; and a licensing agreement for luvelta in Greater China with Tasly. In August 2023, Tasly received its first IND clearance by NMPA in Greater China for luvelta.

Previous wording

Our XpressCF® and XpressCF+® platforms have also supported Vaxcyte, focused on discovery and development of vaccines for the treatment and prophylaxis of infectious disease. The lead programs for Vaxcyte are VAX-31 and VAX-24, its 31-valent and 24-valent, respectively, pneumococcal conjugate vaccine candidates. Vaxcyte is responsible for performing all research and development activities, and we provide technical support and supply XtractCF® and other materials to Vaxcyte. In June 2023, we entered into a purchase and sale agreement (the “Purchase Agreement”) with Blackstone, in which Blackstone acquired the right to receive our 4% revenue interest in Vaxcyte’s future products, including Vaxcyte’s pneumococcal conjugate vaccine, or PCV, products such as VAX-24 and VAX-31. As described further below, following agreement with Vaxcyte on the Form Definitive Agreement and upon effectiveness of an amendment to the licensing agreement, the revenue interest in the 4% royalty on potential future sales of Vaxcyte products other than Vaxcyte’s PCV products reverted to us. In November 2023, Vaxcyte exercised its option to access expanded rights to develop and manufacture cell-free extract for use in development and manufacture of its vaccine products, among certain other rights.

Current wording

Our XpressCF® and XpressCF+® platforms have also supported Vaxcyte, focused on discovery and development of vaccines for the treatment and prophylaxis of infectious disease. The lead programs for Vaxcyte are VAX-31 and VAX-24, its 31-valent and 24-valent, respectively, pneumococcal conjugate vaccine candidates. Vaxcyte is responsible for performing all research and development activities, and we provide technical support and supply XtractCF® and other materials to Vaxcyte. In June 2023, we entered into a purchase and sale agreement (the “Purchase Agreement”) with Blackstone, in which Blackstone acquired the right to receive our 4% revenue interest in Vaxcyte’s pneumococcal conjugate vaccine, or PCV, products such as VAX-24 and VAX-31. Following agreement with Vaxcyte on the Form Definitive Agreement and upon effectiveness of an amendment to the licensing agreement, the revenue interest in the 4% royalty on potential future sales of Vaxcyte products other than Vaxcyte’s PCV products reverted to us. Thus, we retain the right to receive a 4% royalty on sales of Vaxcyte’s products other than PCV products. In November 2023, Vaxcyte exercised its option to access expanded rights to develop and manufacture cell-free extract for use in development and manufacture of its vaccine products, among certain other rights.

Previous wording

Since the commencement of our operations, we have devoted substantially all of our resources to performing research and development and manufacturing activities in support of our own product development efforts and those of our collaborators, raising capital to support and expand such activities and providing general and administrative support for these operations. We have funded our operations to date primarily from upfront, milestone and other payments under our collaboration agreements with Merck, Astellas, Vaxcyte, Ipsen, BMS, EMD Serono, BioNova, and Tasly, the issuance and sale of redeemable convertible preferred stock, our initial public offering, or IPO, follow-on public and other offerings of common stock, sales of our common stock through our At-the-Market Facility (“ATM Facility”) pursuant to our Open Market Sales Agreement SM dated April 2, 2021 (the “Sales Agreement”) with Jefferies LLC (“Jefferies”), debt financing, and the royalty monetization agreement with Blackstone.

Current wording

Since the commencement of our operations, we have devoted substantially all of our resources to performing research and development and manufacturing activities in support of our own product development efforts and those of our collaborators, raising capital to support and expand such activities and providing general and administrative support for these operations. We have funded our operations to date primarily from upfront, milestone and other payments under our collaboration agreements with BMS, Merck, Astellas, Vaxcyte, Ipsen, EMD Serono, BioNova, and Tasly, the issuance and sale of redeemable convertible preferred stock, our initial public offering, or IPO, follow-on public and other offerings of common stock, sales of our common stock through our At-the-Market Facility (“ATM Facility”) pursuant to our Open Market Sales Agreement SM dated April 2, 2021 (the “Sales Agreement”) with Jefferies LLC (“Jefferies”), debt financing, sale of our holdings of Vaxcyte common stock, and the royalty monetization agreement with Blackstone.

Previous wording

We do not have any products approved for commercial sale and have not generated any revenue from commercial product sales. We had a loss from operations of $105.3 million and a net loss of $106.2 million for the six months ended June 30, 2024, which net loss included the non-operating, unrealized gain of $8.5 million related to our holdings of Vaxcyte common stock. We had a loss from operations of $88.4 million and a net loss of $88.6 million for the six months ended June 30, 2023, which net loss included the non-operating, unrealized gain of $1.3 million related to our holdings of Vaxcyte common stock. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We cannot assure you that we will have net income or that we will generate positive cash flow from operating activities in the future. As of June 30, 2024, we had an accumulated deficit of $665.6 million. We do not expect to generate any revenue from commercial product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, access, marketing, manufacturing and distribution. Our operating expenses would significantly increase due to continued activities to develop, and seek regulatory approvals for, our product candidates, engage in other research and development activities, expand our pipeline of product candidates, continue to develop our manufacturing facility and capabilities, maintain and expand our intellectual property portfolio, seek regulatory and marketing approval for any product candidates that we may develop, acquire or in-license other assets or technologies, ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval, and operate as a public company. Current capital market conditions provide a challenging financing environment. In this context, we are continuing our process of evaluating our programs and spending. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, our expenditures on other research and development activities and the timing of achievement and receipt of upfront, milestones and other collaboration agreement payments.

Current wording

We do not have any products approved for commercial sale and have not generated any revenue from commercial product sales. We had a loss from operations of $173.2 million and a net loss of $155.0 million for the nine months ended September 30, 2024, which net loss included the non-operating, realized gain of $32.1 million related to the sale of our holdings of Vaxcyte common stock. We had a loss from operations of $132.4 million and a net loss of $137.9 million for the nine months ended September 30, 2023, which net loss included the non-operating, unrealized gain of $2.0 million related to our holdings of Vaxcyte common stock. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We cannot assure you that we will have net income or that we will generate positive cash flow from operating activities in the future. As of September 30, 2024, we had an accumulated deficit of $714.4 million. We do not expect to generate any revenue from commercial product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, access, marketing, manufacturing and distribution. Our operating expenses would significantly increase due to continued activities to develop, and seek regulatory approvals for, our product candidates, engage in other research and development activities, expand our pipeline of product candidates, continue to develop our manufacturing facility and capabilities, maintain and expand our intellectual property portfolio, seek regulatory and marketing approval for any product candidates that we may develop, acquire or in-license other assets or technologies, ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval, and operate as a public company. In light of our current resources and the cost of development, we are continuing our process of evaluating our programs and spending. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, our expenditures on other research and development activities and the timing of achievement and receipt of upfront, milestones and other collaboration agreement payments.

Previous wording

Interest expense includes interest incurred on our debt and amortization of debt issuance costs, including accretion of the final payment. Additionally, we identified a financing component under the Astellas Agreement and recorded interest expense associated with the upfront payment.

Current wording

Interest expense includes interest incurred on our debt and amortization of debt issuance costs, including accretion of the final payment. Additionally, we identified a financing component under the Astellas Agreement and recorded interest expense associated with the upfront payment. Other income (expense), net, also includes the realized gain on the sale of Vaxcyte common stock.

Previous wording

Total revenue increased by $15.3 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. This was primarily due to a $17.4 million increase from Astellas, of which $18.4 million was from the ongoing performance related to partially unsatisfied performance obligations, and included a cumulative catch-up adjustment of $17.8 million on the contract modification date from Astellas' decision not to nominate a third target program under the Astellas Agreement, which was partially offset by decreases of $0.8 million from the financing component related to the Astellas Agreement and $0.2 million from research and development services and materials supply. Additionally, there was a $0.1 million increase in Vaxcyte revenue, primarily due to an increase in research and development services and materials supply, and a $0.1 million in Ipsen revenue from research and development services and materials supply, which commenced in the second quarter of 2024. These increases were partially offset by a $2.2 million decrease in BMS revenue due to its decision to end clinical development of CC-99712 in 2023, and a $0.1 million decrease in Merck revenue, primarily due to a decrease in research and development services and materials supply.

Current wording

Total revenue decreased by $8.4 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This was primarily due to an earned $5.0 million contingent payment from Tasly in 2023, a $2.3 million decrease from Astellas, of which $1.2 million was from the financing component related to the Astellas Agreement, $0.6 million was from research and development services, and $0.5 million was from the ongoing performance related to partially unsatisfied performance obligations, a $0.9 million decrease in Vaxcyte revenue, primarily due to a decrease in research and development services and materials supply, a $0.2 million decrease in BMS revenue due to its decision to end clinical development of CC-99712 in 2023, and a $0.1 million decrease in Merck revenue due to its decision to end clinical development of MK-1484 during the three months ended September 30, 2024. These decreases were partially offset by a $0.2 million in Ipsen revenue from research and development services and materials supply, which commenced in the second quarter of 2024.

Previous wording

Research and development expense increased by $20.4 million, or 49%, during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The overall increase was due primarily to increases of $11.6 million in outside services mainly due to increased CMO-related activities, $4.0 million in preclinical research and clinical development expenses, $3.2 million in facilities expenses and IT-related expenses, $1.2 million in personnel related expenses due to higher headcount, and $0.8 million in equipment and office-related expenses, partially offset by a decrease of $0.4 million in laboratory supplies.

Current wording

Research and development expense increased by $16.4 million, or 36%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The overall increase was due primarily to increases of $6.9 million in outside services mainly due to increased CMO-related activities, $3.1 million in preclinical research and clinical development expenses, $2.4 million in facilities expenses and IT-related expenses, $2.2 million in personnel-related expenses due to higher headcount, $1.0 million in laboratory supplies, and $0.8 million in equipment and office-related expenses.

Previous wording

General and administrative expense decreased by $2.6 million, or 18%, during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The overall decrease was due primarily to decreases of $2.6 million in IT-related expenses and $0.8 million in personnel related expenses, partially offset by increases of $0.3 million in outside services, $0.3 million in allocated facilities-related expenses, and $0.2 million in equipment and office-related expenses.

Current wording

General and administrative expense decreased by $0.9 million, or 6%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The overall decrease was due primarily to decreases of $2.6 million in IT-related expenses and $0.1 million in equipment-related expenses, partially offset by increases of $1.0 million in outside services, $0.6 million in personnel-related expenses, and $0.2 million in travel-related expenses.

Previous wording

Interest income increased by $2.1 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, due primarily to higher average investment balances and higher average rates of return in 2024.

Current wording

Interest income increased by $0.3 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, due primarily to higher average investment balances and higher average rates of return in 2024.

Previous wording

Non-cash interest expense increased by $6.8 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. Non-cash interest expense was recognized on our deferred royalty obligation related to the June 2023 sale of future Vaxcyte royalties pursuant to the Purchase Agreement, using the effective interest method based on the imputed interest rate derived from estimated amounts and timing of potential future royalty payments to be earned and received by Blackstone from Vaxcyte under the 2015 License Agreement.

Current wording

Non-cash interest expense increased by $2.0 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. Non-cash interest expense was recognized on our deferred royalty obligation related to the June 2023 sale of future Vaxcyte royalties pursuant to the Purchase Agreement, using the effective interest method based on the imputed interest rate derived from estimated amounts and timing of potential future royalty payments to be earned and received by Blackstone from Vaxcyte under the 2015 License Agreement.

Previous wording

Interest and other income (expense), net, decreased by $1.1 million during the three months ended June 30, 2024, as compared to the three months ended June, 2023, primarily due to decreases of $0.8 million from the financing component related to the Astellas Agreement and $0.3 million in interest incurred on our loan which was fully paid in March 2024.

Current wording

Interest and other income (expense), net, decreased by $24.9 million during the three months ended September 30, 2024, as compared to the three months ended September 2023, primarily due to a recognized gain of $23.7 million on the sale of Vaxcyte common stock, and a decrease of $1.2 million from the financing component related to the Astellas Agreement.

Previous wording

Comparison of the Six Months Ended June 30, 2024, and 2023

Current wording

Comparison of the Nine Months Ended September 30, 2024, and 2023

Previous wording

Total revenue increased by $15.6 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This was primarily due to a $22.5 million increase from Astellas, of which $23.0 million was from the ongoing performance related to partially unsatisfied performance obligations, and included a cumulative catch-up adjustment of $17.8 million on the contract modification date from Astellas' decision not to nominate a third target program under the Astellas Agreement, $0.4 million from materials supply, and $0.3 million from research and development services, which were partially offset by a decrease of $1.2 million from the financing component related to the Astellas Agreement. Additionally, there was a $1.0 million increase in Tasly revenue, primarily due to an increase in clinical product supply under the 2023 Tasly Supply Agreement, a $0.1 million increase in Vaxcyte revenue, primarily due to an increase in research and development services and materials supply, and a $0.1 million in Ipsen revenue from research and development services and materials supply, which commenced in the second quarter of 2024. These increases were partially offset by a $5.4 million combined decrease in BMS and EMD Serono revenue due to their decisions to end clinical development of CC-99712 and M1231, respectively, in 2023, and a $2.7 million decrease in Merck revenue, primarily due to a $2.5 million decrease in manufacturing activities supporting clinical trial supply and a $0.2 million decrease in research and development services and materials supply.

Current wording

Total revenue increased by $7.2 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. This was primarily due to a $20.2 million increase from Astellas, of which $22.5 million was from the ongoing performance related to partially unsatisfied performance obligations, and included a cumulative catch-up adjustment of $17.8 million on the contract modification date from Astellas' decision not to nominate a third target program under the Astellas Agreement and $0.4 million from materials supply, which were partially offset by decreases of $2.3 million from the financing component related to the Astellas Agreement and $0.4 million from research and development services. Additionally, there was a $0.3 million increase in Ipsen revenue from research and development services and materials supply, which commenced in the second quarter of 2024. These increases were partially offset by a $5.6 million combined decrease in BMS and EMD Serono revenue due to their decisions to end clinical development of CC-99712 and M1231, respectively, in 2023, a $4.1 million decrease in Tasly revenue, primarily due to an earned $5.0 million contingent payment from Tasly in 2023, which was partially offset by a $0.9 million increase in clinical product supply under the 2023 Tasly Supply Agreement, a $2.8 million decrease in Merck revenue, primarily due to a $2.6 million decrease in manufacturing activities supporting clinical trial supply and a $0.2 million decrease in research and development services. Further, Merck decided to end clinical development of MK-1484 during the three months ended September 30, 2024. Lastly, Vaxcyte revenue decreased by $0.8 million, primarily due to a $1.0 million decrease in materials supply, partially offset by a $0.2 million increase in research and development services.

Previous wording

Research and development expense increased by $37.9 million, or 47%, during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The overall increase was due primarily to increases of $23.4 million in outside services mainly due to increased CMO-related activities, $6.2 million in preclinical research and clinical development expenses, $5.8 million in facilities expenses and IT-related expenses, $3.0 million in personnel related expenses due to higher headcount, and $1.7 million in equipment and office-related expenses, partially offset by a decrease of $2.2 million in laboratory supplies.

Current wording

Research and development expense increased by $54.3 million, or 43%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The overall increase was due primarily to increases of $30.3 million in outside services mainly due to increased CMO-related activities, $9.3 million in preclinical research and clinical development expenses, $8.2 million in facilities expenses and IT-related expenses, $5.2 million in personnel-related expenses due to higher headcount, $2.4 million in equipment and office-related expenses, and $0.2 million in travel-related expenses, partially offset by a decrease of $1.3 million in laboratory supplies.

Previous wording

General and administrative expense decreased by $5.4 million, or 18%, during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The overall decrease was due primarily to decreases of $5.1 million in IT-related expenses and $1.9 million in personnel related expenses, partially offset by increases of $0.8 million in outside services, $0.4 million in equipment and office-related expenses, and $0.4 million in allocated facilities-related expenses.

Current wording

General and administrative expense decreased by $6.4 million, or 14%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The overall decrease was due primarily to decreases of $7.8 million in IT-related expenses and $1.2 million in personnel-related expenses, partially offset by increases of $1.8 million in outside services, $0.4 million in equipment and office-related expenses, and $0.4 million in allocated facilities-related expenses.

Previous wording

Interest income increased by $3.6 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, due primarily to higher average investment balances and higher average rates of return in 2024.

Current wording

Interest income increased by $3.9 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, due primarily to higher average investment balances and higher average rates of return in 2024.

Previous wording

Non-cash interest expense increased by $14.0 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. Non-cash interest expense was recognized on our deferred royalty obligation related to the June 2023 sale of future Vaxcyte royalties pursuant to the Purchase Agreement using the effective interest method based on the imputed interest rate derived from estimated amounts and timing of future royalty payments to be earned and received by Blackstone from Vaxcyte under the 2015 License Agreement.

Current wording

Non-cash interest expense increased by $16.0 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. Non-cash interest expense was recognized on our deferred royalty obligation related to the June 2023 sale of future Vaxcyte royalties pursuant to the Purchase Agreement using the effective interest method based on the imputed interest rate derived from estimated amounts and timing of future royalty payments to be earned and received by Blackstone from Vaxcyte under the 2015 License Agreement.

Previous wording

Interest and other income (expense), net, decreased by $1.9 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, due primarily to the decreases of $1.2 million from the financing component related to the Astellas Agreement and $0.7 million in interest incurred on our loan which was fully paid in March 2024.

Current wording

Interest and other income (expense), net, decreased by $35.3 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, due primarily to a recognized gain of $32.1 million on the sale of Vaxcyte common stock and decreases of $2.3 million from the financing component related to the Astellas Agreement and $0.9 million in interest incurred on our loan which was fully paid in March 2024.

Previous wording

To date, we have incurred significant net losses, and negative cash flows from operations. Our operations have been funded primarily by payments received from our collaborators, and net proceeds from equity sales, debt, and a royalty monetization. As of June 30, 2024, we had cash, cash equivalents and marketable securities of $375.6 million, equity securities of $50.4 million, and an accumulated deficit of $665.6 million.

Current wording

To date, we have incurred significant net losses, and negative cash flows from operations. Our operations have been funded primarily by payments received from our collaborators, and net proceeds from equity sales, debt, sale of shares of Vaxcyte common stock, and a royalty monetization. As of September 30, 2024, we had cash, cash equivalents and marketable securities of $388.3 million, and an accumulated deficit of $714.4 million.

Previous wording

In May 2024, Vaxcyte paid us $25.0 million in cash as the second of two installment payments for the Option exercise price under the Vaxcyte Agreement.

Current wording

In May 2024, Vaxcyte paid us $25.0 million as the second of two installment payments for the Option exercise price under the Vaxcyte Agreement.

Previous wording

In June 2021, we entered into a third amendment, or Third Amendment, to our manufacturing facility lease, dated May 18, 2011, as amended, by and between Alemany Plaza LLC, located at San Carlos, California, or San Carlos Lease, as an extension to the term of the San Carlos Lease for a period of five years, or the Lease Extension Period. Pursuant to the Third Amendment, the San Carlos Lease will expire on July 31, 2026, and it includes an option to renew the San Carlos Lease for an additional five years. The aggregate estimated base rent payments due over the Lease Extension Period is approximately $4.2 million, subject to certain terms contained in the San Carlos Lease.

Current wording

In June 2021, we entered into a third amendment, (the "Third Amendment") to our manufacturing facility lease, dated May 18, 2011, as amended, by and between Alemany Plaza LLC, located at San Carlos, California, or San Carlos Lease, as an extension to the term of the San Carlos Lease for a period of five years, (the "Lease Extension Period"). Pursuant to the Third Amendment, the San Carlos Lease will expire on July 31, 2026, and it includes an option to renew the San Carlos Lease for an additional five years. The aggregate estimated base rent payments due over the Lease Extension Period is approximately $4.2 million, subject to certain terms contained in the San Carlos Lease.

Previous wording

In June 2021, we entered into a first amendment, or First Amendment, to our manufacturing facility lease, dated March 4, 2015, as amended, by and between 870 Industrial Road LLC, located at San Carlos, California, or the Industrial Lease, as an extension to the term of the Industrial Lease for a period of five years, or the Industrial Lease Extension Period. Pursuant to the first Amendment, the Industrial Lease will expire on June 30, 2026, and it includes an option to renew the Industrial Lease for an additional five years. The aggregate estimated base rent payments due over the Industrial Lease Extension Period is approximately $4.3 million, subject to certain terms contained in the Industrial Lease.

Current wording

In June 2021, we entered into a first amendment, or First Amendment, to our manufacturing facility lease, dated March 4, 2015, as amended, by and between 870 Industrial Road LLC, located at San Carlos, California, (the "Industrial Lease"), as an extension to the term of the Industrial Lease for a period of five years, (the "Industrial Lease Extension Period"). Pursuant to the first Amendment, the Industrial Lease will expire on June 30, 2026, and it includes an option to renew the Industrial Lease for an additional five years. The aggregate estimated base rent payments due over the Industrial Lease Extension Period is approximately $4.3 million, subject to certain terms contained in the Industrial Lease.

Previous wording

In September 2020, we entered into a sublease agreement, or the Sublease with Five Prime Therapeutics, Inc., or the Sublessor, for approximately 115,466 square feet, in a building located in South San Francisco, California, or the Premises. We use the Premises as our corporate headquarters and to conduct (or expand) research and development activities. We commenced making monthly payments for the first 85,755 square feet of the Premises, or Initial Premises, in July 2021, with occupancy of such space commencing in August 2021. We were provided early access to the Initial Premises in the fourth quarter of 2020 to conduct certain planning and tenant improvement work. The Sublease is subordinate to the lease agreement, effective December 12, 2016, between the Sublessor and HCP Oyster Point III LLC, or the Landlord. We commenced using the remaining 29,711 square feet of the Premises, or the Expansion Premises, on July 1, 2023 under the sublease agreement. The Sublease for both the Initial Premises and Expansion Premises will expire on December 31, 2027. With a commencement date on the Initial Premises of July 1, 2021, and Expansion Premises of July 1, 2023, the aggregate estimated base rent payments due over the term of the Sublease are approximately $39.1 million, including the approximately $5.2 million in potential financial benefit to us of base rent abatement to be provided by the Sublessor, subject to certain terms contained in the Sublease. The Sublease contains customary provisions requiring us to pay our pro rata share of utilities and a portion of the operating expenses and certain taxes, assessments and fees of the Premises and provisions allowing the Sublessor to terminate the Sublease upon the termination of the lease with the Landlord or if we fail to remedy a breach of certain of our obligations within specified time periods. Additionally, we posted a security deposit of $0.9 million, which is reflected as restricted cash in non-current assets on our Balance Sheets as of June 30, 2024 and December 31, 2023.

Current wording

Premises in the fourth quarter of 2020 to conduct certain planning and tenant improvement work. The Sublease is subordinate to the lease agreement, effective December 12, 2016, between the Sublessor and HCP Oyster Point III LLC (the "Landlord"). We commenced using the remaining 29,711 square feet of the Premises, (the "Expansion Premises"), on July 1, 2023 under the sublease agreement. The Sublease for both the Initial Premises and Expansion Premises will expire on December 31, 2027. With a commencement date on the Initial Premises of July 1, 2021, and Expansion Premises of July 1, 2023, the aggregate estimated base rent payments due over the term of the Sublease are approximately $39.1 million, including the approximately $5.2 million in potential financial benefit to us of base rent abatement to be provided by the Sublessor, subject to certain terms contained in the Sublease. The Sublease contains customary provisions requiring us to pay our pro rata share of utilities and a portion of the operating expenses and certain taxes, assessments and fees of the Premises and provisions allowing the Sublessor to terminate the Sublease upon the termination of the lease with the Landlord or if we fail to remedy a breach of certain of our obligations within specified time periods. Additionally, we posted a security deposit of $0.9 million, which is reflected as restricted cash in non-current assets on our Balance Sheets as of September 30, 2024 and December 31, 2023.

Previous wording

Cash used in operating activities for the six months ended June 30, 2024 was $55.3 million. Our net loss of $106.2 million included non-cash charges of $14.5 million for non-cash interest expense on our deferred royalty obligation, $12.2 million for stock-based compensation, $8.5 million for the unrealized gain on equity securities as a result of the remeasurement of the estimated fair value of our investment in Vaxcyte common stock, $5.5 million for the accretion of discount on marketable securities, $3.5 million for depreciation and amortization, and $2.5 million for non-cash lease expense. Cash used in operating activities also reflected a net change in operating assets and liabilities of $31.7 million, due to a decrease of $29.1 million in accounts receivable primarily from receiving $25.0 million from Vaxcyte as the second of two installment payments for the Option exercise price under the Vaxcyte Agreement, and an increase of $21.2 million in deferred revenue primarily due to the upfront payment from Ipsen, partially offset by revenue recognized under the Astellas Agreement, which were partially offset by a decrease of $8.7 million in accounts payable, accrued expenses and other liabilities due to timing of payments, a decrease of $4.7 million in accrued compensation expense primarily due to bonuses paid in 2024 in connection with certain company 2023 goal achievements, a decrease of $3.0 million in our operating lease liability, and an increase of $2.1 million in prepaid expenses and other assets.

Current wording

Cash used in operating activities for the nine months ended September 30, 2024 was $119.8 million. Our net loss of $155.0 million included non-cash amounts of $32.1 million for the realized gain on the sale of Vaxcyte common stock, $22.4 million for non-cash interest expense on our deferred royalty obligation, $18.8 million for stock-based compensation, $8.2 million for the accretion of discount on marketable securities, $5.4 million for depreciation and amortization, and $3.8 million for non-cash lease expense. Cash used in operating activities also reflected a net change in operating assets and liabilities of $24.6 million, due to a decrease of $29.4 million in accounts receivable primarily from receiving $25.0 million from Vaxcyte as the second of two installment payments for the Option exercise price under the Vaxcyte Agreement, and an increase of $16.1 million in deferred revenue primarily due to the upfront payment from Ipsen, partially offset by revenue recognized under the Astellas Agreement, which were partially offset by a decrease of $10.0 million in accounts payable, accrued expenses and other liabilities due to timing of payments, a decrease of $4.7 million in our operating lease liability, an increase of $4.6 million in prepaid expenses and other assets, and a decrease of $1.5 million in accrued compensation expense primarily due to bonuses paid in 2024 in connection with certain company 2023 goal achievements.

Previous wording

Cash used in operating activities for the six months ended June 30, 2023 was $92.2 million. Our net loss of $88.6 million included non-cash charges of $12.7 million for stock-based compensation, $3.6 million for the accretion of discount on marketable securities, $3.3 million for depreciation and amortization, $1.3 million for the unrealized gain on equity securities as a result of the remeasurement of the estimated fair value of our investment in Vaxcyte common stock, $1.3 million for non-cash lease expense, and $0.4 million for non-cash interest expense on our deferred royalty obligation. Cash used in operating activities also reflected a net change in operating assets and liabilities of $16.7 million, due to a decrease of $8.7 million in deferred revenue from revenue recognized under our collaboration agreements, a decrease of $3.6 million in accrued compensation expense primarily due to bonuses paid in 2023 in connection with certain company 2022 goal achievements, an increase of $2.9 million in accounts receivable from our collaborators, a decrease of $1.7 million in our operating lease liability, and an increase of $0.1 million in prepaid expenses and other assets, which were partially offset by an increase of $0.5 million in accounts payable, accrued expenses and other liabilities due to timing of payments.

Current wording

Cash used in operating activities for the nine months ended September 30, 2023 was $125.7 million. Our net loss of $137.9 million included non-cash amounts of $18.7 million for stock-based compensation, $6.4 million for non-cash interest expense on our deferred royalty obligation, $6.0 million for the accretion of discount on marketable securities, $5.1 million for depreciation and amortization, $2.4 million for non-cash lease expense, and $2.0 million for the unrealized gain on equity securities as a result of the remeasurement of the estimated fair value of our investment in Vaxcyte common stock. Cash used in operating activities also reflected a net change in operating assets and liabilities of $12.8 million, due to an increase of $9.5 million in accounts receivable from our collaborators, a decrease of $4.5 million in deferred revenue from revenue recognized under our collaboration agreements, a decrease of $3.1 million in our operating lease liability, and a decrease of $1.8 million in accrued compensation expense, which were partially offset by an increase of $5.3 million in accounts payable, accrued expenses and other liabilities due to timing of payments, and a decrease of $0.8 million in prepaid expenses and other assets.

Previous wording

Cash used in investing activities of $16.3 million for the six months ended June 30, 2024 was primarily related to purchases of marketable securities of $292.3 million, and purchases of property and equipment of $1.2 million, principally for laboratory equipment, partially offset by maturities and sales of marketable securities of $277.2 million, .

Current wording

Cash provided by investing activities of $131.0 million for the nine months ended September 30, 2024 was primarily related to maturities and sales of marketable securities of $394.5 million, and net proceeds from the sale of Vaxcyte common stock of $74.0 million, partially offset by purchases of marketable securities of $335.5 million, and purchases of property and equipment of $2.0 million, principally for laboratory equipment.

Previous wording

Cash provided by investing activities of $133.6 million for the six months ended June 30, 2023 was primarily related to maturities and sales of marketable securities of $277.5 million, partially offset by purchases of marketable securities of $141.4 million, and purchases of property and equipment of $2.5 million, principally for laboratory equipment.

Current wording

Cash provided by investing activities of $19.6 million for the nine months ended September 30, 2023 was primarily related to maturities and sales of marketable securities of $402.2 million, partially offset by purchases of marketable securities of $379.7 million, and purchases of property and equipment of $2.9 million, principally for laboratory equipment.