PepGen Inc

Previous wording

We are initially focused on addressing the underlying cause of DMD and DM1, that have high unmet need. Our current pipeline consists of two clinical stage programs, PGN-EDO51 for DMD patients who are amenable to exon 51 skipping and PGN-EDODM1 for DM1 patients, along with three additional preclinical stage programs. We anticipate expanding this pipeline over time to include other neuromuscular targets as well as potential opportunities in neurologic diseases.

Current wording

We are initially focused on addressing the underlying cause of DMD and DM1, that have high unmet need. Our current pipeline consists of two clinical stage programs, PGN-EDO51 for DMD patients who are amenable to an exon 51-skipping approach and PGN-EDODM1 for DM1 patients, along with several additional preclinical stage programs. We anticipate expanding this pipeline over time to include other neuromuscular targets as well as potential opportunities in neurologic diseases.

Previous wording

We completed a first-in-human Phase 1 HV clinical trial with our lead product candidate, PGN-EDO51, in the third quarter of 2022. In the Phase 1 clinical trial, treatment with PGN-EDO51 resulted in the highest levels of mean exon skipping in humans following a single dose compared to publicly available data for a single dose of other DMD exon 51-skipping approaches that are approved or in clinical development.

Current wording

We completed a first-in-human Phase 1 clinical trial in HVs with our initial product candidate, PGN-EDO51, in the third quarter of 2022. In the Phase 1 HV clinical trial, treatment with PGN-EDO51 resulted in high levels of exon skipping in humans following a single dose. Our ongoing clinical development program for PGN-EDO51 is comprised of two parallel Phase 2 studies of PGN-EDO51 in DMD patients. The first study, CONNECT1, is an ongoing open-label MAD study in boys and young men living with DMD amenable to exon 51 skipping being conducted in Canada. In July 2024, we reported initial clinical data from the CONNECT1 study from the 5 mg/kg starting dose cohort, which we believe demonstrate a favorable emerging safety profile and promising early exon skipping and dystrophin production. All participants from the first cohort have continued in the LTE portion of the study. We have fully enrolled the 10 mg/kg dose cohort in CONNECT1 and expect to report initial safety, exon skipping and dystrophin production data from this cohort by the end of the third quarter of 2025.

Previous wording

In February 2024, we received clearance from the MHRA to initiate the second study, CONNECT2, a Phase 2, multinational, randomized, double-blind, placebo-controlled MAD study, in the U.K. The CONNECT2 study will evaluate multiple dose cohorts and trial participants will be administered PGN-EDO51 once every four weeks for six months. We will assess safety, tolerability, exon skipping, dystrophin expression and functional outcomes in this study. The CONNECT2 study, together with data from the CONNECT1 study, is designed to support a potential accelerated approval pathway for PGN-EDO51, subject to alignment with regulatory authorities.

Current wording

The CONNECT2 study will evaluate multiple dose cohorts and trial participants will be administered PGN-EDO51 once every four weeks for six months. We will assess safety, tolerability, exon skipping, dystrophin expression and functional outcomes in this study. The CONNECT2 study, together with data from the CONNECT1 study, is intended to support a potential accelerated approval pathway for PGN-EDO51, subject to regulatory authority feedback.

Previous wording

We are also developing PGN-EDODM1 for the treatment of DM1 and are utilizing what we believe to be a unique mechanism of action and a different delivery approach compared to other approaches in more advanced stages of clinical development. We have conducted extensive preclinical studies of our product candidate, and these preclinical data form the basis of our clinical development plan for PGN-EDODM1. In May 2023, we announced that we received a clinical hold notice from the FDA regarding our IND application to initiate our first-in-human Phase 1 FREEDOM study. In September 2023, we announced that Health Canada had cleared our CTA for the FREEDOM study in Canada. In October 2023, we announced that the FDA lifted the clinical hold on the FREEDOM study, allowing this study to proceed in the U.S. In December 2023, we announced that the MHRA had cleared our CTA for the FREEDOM study in the U.K. and we began dosing patients in this study. FREEDOM is a multinational, randomized, double-blind, placebo-controlled, SAD study designed to assess PGN-EDODM1's safety and tolerability, splicing correction and functional outcome measures in DM1 patients. We expect to report preliminary data from this study in the second half of 2024. In February 2024, we announced that PGN-EDODM1 received Fast Track designation from the FDA for the treatment of DM1. We also expect to open the FREEDOM2-DM1 Phase 2 randomized, double blind, placebo-controlled MAD study in DM1 patients in the second half of 2024.

Current wording

We are also developing PGN-EDODM1 for the treatment of DM1 and are utilizing what we believe to be a unique mechanism of action and a different delivery approach compared to other approaches in more advanced stages of clinical development. We have conducted extensive preclinical studies of our product candidate, and these preclinical data form the basis of our clinical development plan for PGN-EDODM1. Our clinical development program for PGN-EDODM1 includes two studies, FREEDOM, a multinational, randomized, double-blind, placebo-controlled Phase 1 SAD study, and FREEDOM2, a multinational, randomized, double blind, placebo-controlled Phase 2 MAD study. In the FREEDOM study, we are enrolling adult participants with DM1 in multiple geographies including the U.S., U.K. and Canada, to evaluate the safety and tolerability of PGN-EDODM1, as well as oligonucleotide muscle concentrations, splicing correction and functional outcome measures at day 28 and at week 16 following a single dose of PGN-EDODM1. On February 24, 2025, we reported initial data from the 5 mg/kg and 10 mg/kg dose cohorts in this study. PGN-EDODM1 was observed to have a favorable emerging safety profile and robust splicing correction in a dose-dependent manner in the 5 and 10 mg/kg dose cohorts. We expect to report data from the 15 mg/kg cohort of the FREEDOM study in the second half of 2025.

Previous wording

In addition to these lead candidates, we are developing EDO candidates for additional DMD sub-populations amenable to skipping of other exons, including exon 53, 45 and 44. We have previously reported robust exon 53-skipping levels following either a single dose or multiple doses in NHPs for our PGN-EDO53 program. We anticipate advancing PGN-EDO53 into CTA and/or IND-enabling preclinical studies in 2024.

Current wording

In addition to these lead candidates, we are evaluating EDO candidates for additional DMD sub-populations amenable to skipping of other exons, including exon 53, 45 and 44. In the future, we intend to apply our deep understanding of our EDO platform and PMO therapeutics to the development of additional product candidates in other indications.

Previous wording

Initial Public Offering and Liquidity

Current wording

Initial Public Offering, Follow-on Offering and Liquidity

Previous wording

On May 10, 2022, we closed our IPO in which we sold an aggregate of 9,000,000 shares at a public offering price of $12.00 per share for gross proceeds of $108.0 million. In connection with the IPO, we granted the underwriters a 30-day option to purchase

Current wording

In May 2022, we closed our IPO, in which we sold an aggregate of 9,000,000 shares of common stock at a public offering price of $12.00 per share for gross proceeds of $108.0 million. In connection with the IPO, we granted the underwriters a 30-day option to purchase 1,350,000 additional shares of common stock, which they exercised in part to purchase 1,238,951 additional shares of common stock for gross proceeds of $14.9 million. We received approximately $122.9 million in gross proceeds and $110.2 million in net proceeds in the IPO, after deducting underwriters’ fees and offering expenses.

Previous wording

Immediately prior to consummation of the IPO, all 12,546,805 outstanding shares of our redeemable convertible preferred stock, and 35,529 preferred stock warrants that were exercised on May 4, 2022, converted into 12,359,856 shares of common stock.

Current wording

Immediately prior to consummation of the IPO, all 12,546,805 outstanding shares of our redeemable convertible preferred stock, and 35,529 preferred stock warrants that were exercised on May 4, 2022, converted into 12,359,856 shares of our common stock.

Previous wording

On February 5, 2024, we issued and sold 1,000,000 shares at a purchase price of $10.00 per share under our ATM program, resulting in net proceeds of $9.9 million. On February 9, 2024, we issued and sold 7,530,000 shares at a purchase price of $10.635 per share, which was the closing sale price of our common stock on the Nasdaq Global Select Market on February 6, 2024 in a Follow-on Offering. The Follow-on Offering resulted in net proceeds of $76.9 million after deducting underwriters' fees of $3.2 million. Net proceeds from the ATM program and Follow-on Offering, after deducting underwriters' fees and before deducting costs of the offerings, were $86.8 million.

Current wording

On February 5, 2024, we issued and sold 1,000,000 of common stock shares at a purchase price of $10.00 per share under our ATM program, pursuant to the Sales Agreement with Stifel, resulting in net proceeds of $9.9 million. On February 9, 2024, we issued and sold 7,530,000 shares of common stock at a purchase price of $10.635 per share, which was the closing sale price of our common stock on the Nasdaq Global Select Market on February 6, 2024, in the Follow-on Offering. The Follow-on Offering resulted in net proceeds of $76.4 million after deducting underwriters' fees of $3.7 million. Net proceeds from the ATM program and Follow-on Offering, after deducting underwriters’ fees and costs of the offerings, were $86.3 million.

Previous wording

We have incurred operating losses in each year since our inception. Our net losses were $78.3 million and $69.1 million for the years ended December 31, 2023 and December 31, 2022, respectively. As of December 31, 2023, we had cash, cash equivalents, and marketable securities of $110.4 million, excluding proceeds from the ATM program offering and the Follow-on Offering made subsequent to December 31, 2023. As of December 31, 2023, we had an accumulated deficit of $181.2 million. We expect our expenses and operating losses will continue as we conduct our ongoing preclinical studies and current and planned clinical trials, continue our research and development activities, utilize third parties to manufacture our product candidates and related raw materials, hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with an exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs. In addition, we have several development, regulatory and commercial milestone payment obligations under our licensing arrangements. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies and current and planned clinical trials and our expenditures on other research and development activities.

Current wording

We have incurred operating losses in each year since our inception. Our net losses were $90.0 million and $78.6 million for the years ended December 31, 2024 and December 31, 2023, respectively. As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $120.2 million. As of December 31, 2024, we had an accumulated deficit of $271.5 million. We expect our expenses and operating losses will continue as we conduct our ongoing preclinical studies and current and planned clinical trials, continue our research and development activities, utilize third parties to manufacture our product candidates and related raw materials, hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with an exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs. In addition, we have several development, regulatory and commercial milestone payment obligations under our licensing arrangements. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies, current and planned clinical trials, manufacturing campaigns and our expenditures on other research and development activities.

Previous wording

Based on our current operating plans, we believe that our existing cash, cash equivalents, marketable securities, and proceeds from shares sold under our ATM program and in the Follow-on Offering will be sufficient to fund our operations into 2026. We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which will not be for at least the next several years, if ever. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Current wording

Based on our currently planned operations, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least 12 months from the date of the filing of this 10-K. We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which will not be for at least the next several years, if ever. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Previous wording

After the Reorganization was completed, PepGen Limited began the process of transferring certain operations, including financial management functions, to PepGen Inc. pursuant to an intercompany services agreement, effective as of April 2021, and certain assets, including a novation of all intellectual property assets, pursuant to an asset transfer agreement, effective as of January 1, 2022. After the transfer of intellectual property and other assets from PepGen Limited to PepGen Inc., there were limited operations through the end of 2022 at PepGen Limited.

Current wording

After the Reorganization was completed, PepGen Limited began the process of transferring certain operations, including financial management functions, to PepGen Inc. pursuant to an intercompany services agreement, effective as of April 2021, and certain assets, including a novation of all intellectual property assets, pursuant to an asset transfer agreement, effective as of January 1, 2022. After the transfer of intellectual property and other assets from PepGen Limited to PepGen Inc., there were limited operations through the end of 2022 at PepGen Limited. PepGen Limited was dissolved on December 10, 2024.

Previous wording

The following table (in thousands) summarizes our research and development expenses for the years ended December 31, 2023 and December 31, 2022. The direct external development program expenses reflect external costs attributable to our clinical development candidates and preclinical candidates selected for further development. Our internal resources, personnel and infrastructure are not directly tied to any one research or drug discovery program and are typically deployed across multiple programs. As such, we do not track internal expenses on a program-specific basis.

Current wording

The following table (in thousands) summarizes our research and development expenses for the years ended December 31, 2024 and December 31, 2023. The direct external development program expenses reflect external costs attributable to our clinical development candidates and preclinical candidates selected for further development. Our internal resources, personnel and infrastructure are not directly tied to any one research or drug discovery program and are deployed across multiple programs. As such, we do not track internal expenses on a program-specific basis

Previous wording

We expect our research and development expenses to increase in 2024 as we conduct our CONNECT1 and CONNECT2 Phase 2 clinical trials, our FREEDOM Phase 1 clinical trial, our planned FREEDOM2-DM1 Phase 2 clinical trial, and continue to conduct our ongoing research and development activities. The process of conducting preclinical studies, producing drug product supply, and completing clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for any of our product candidates.

Current wording

We expect that our research and development expenses will increase in 2025, as compared to 2024, as we conduct our ongoing Phase 2 clinical trials for PGN-EDO51 and our ongoing Phase 1 and Phase 2 clinical trials of PGN-EDODM1. We also continue to increase our research and development headcount to support these programs. Research and development expenses for our lead programs can be variable quarter-over-quarter due to the timing of manufacturing campaigns, which are accounted for under the percentage of completion method. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for any of our product candidates.

Previous wording

the status of clinical trials, animal and other preclinical studies and IND- or CTA-enabling studies;

Current wording

the status of clinical trials, the timing and costs, if any, associated with resolving a clinical hold, animal and other preclinical studies and IND- or CTA-enabling studies;

Previous wording

the cost and timing of manufacturing our product candidates;

Current wording

the cost and timing of manufacturing our product candidates and the cost and timing of our manufacturing campaigns;

Previous wording

We anticipate that our general and administrative expenses will remain consistent in 2024 as compared to 2023 to support our public company operating expenses associated with audit, legal, regulatory, and tax-related services associated with maintaining compliance with our exchange listing and SEC requirements, director and officer insurance premiums, and investor relations.

Current wording

We anticipate that our general and administrative expenses will increase in 2025 as compared to 2024 primarily due to personnel costs, including stock-based compensation expense. Other general and administrative expenses will remain consistent to support our public company operating expenses associated with audit, legal, regulatory, and tax-related services associated with maintaining compliance with our exchange listing and SEC requirements, director and officer insurance premiums, and investor relations.

Previous wording

We have not recorded a U.S. provision for federal or state income taxes as we have no revenue and have incurred losses since inception. During the year ended December 31, 2022, we recorded a $3.7 million tax charge associated with the transfer of our intellectual property assets from our wholly owned subsidiary, PepGen Limited, to the parent company, PepGen Inc. (see Note 11 of Notes to the Consolidated Financial Statements). We had no material tax liability for the year ended December 31, 2023.

Current wording

We recognized a tax benefit for the year ended December 31, 2024 due to the derecognition of an unrecognized tax benefit of $0.7 million upon the dissolution of our U.K.-based entity, PepGen Limited on December 10, 2024. Additionally, we recorded $0.1 million in state taxes on interest income generated from the Company's cash equivalents and marketable securities. We have not recorded a U.S. provision for federal or state income taxes as we have no revenue and have incurred losses since inception.

Previous wording

Research and development expenses increased by $14.0 million from $54.1 million for the year ended December 31, 2022, to $68.1 million for the year ended December 31, 2023. This increase was attributable to increased research and development activities related to the advancement of our pipeline programs, including a $2.7 million increase in preclinical and manufacturing costs, a $2.9 million increase in clinical costs due to our CONNECT1, CONNECT2 and FREEDOM trials, and a $5.4 million increase in personnel-related costs due to increased headcount, including an increase of $1.3 million in stock-based compensation expense. There was also an increase of $4.4 million in facility and office expenses related to rent and related expense on our principal facility lease and a $0.4 million increase in depreciation expense related to lab equipment in our new lab space. These increases were partially offset by a $1.5 million decrease in other research and development expense primarily related to the OUI exit fee that was expensed upon completion of our IPO and a $0.4 million decrease in consulting expense.

Current wording

Research and development expenses increased by $8.4 million from $68.1 million for the year ended December 31, 2023, to $76.5 million for the year ended December 31, 2024. This increase was attributable to expenses related to the advancement of clinical trials for our two lead programs, including a $7.6 million increase in clinical trial costs, a $0.7 million increase in manufacturing costs, and a $7.3 million increase in personnel-related costs, inclusive of an increase of $2.0 million in stock-based compensation expense. Additionally, there was an increase of $0.7 million in facility and other office related expenses, including depreciation, a $1.0 million increase in consulting expense, and a $0.3 million increase in other R&D expenses, primarily related to insurance expense. These increases were partially offset by a $9.3 million decrease in preclinical costs as our two lead programs are now in clinical trials.

Previous wording

General and administrative expenses increased by $2.4 million from $14.2 million for the year ended December 31, 2022, to $16.6 million for the year ended December 31, 2023. The increase was primarily driven by a $1.7 million increase in personnel-related costs due to increased headcount, including an increase of $1.0 million in stock-based compensation expense, an increase of $1.4 million in facility-related costs due to our expansion of operations in Boston, Massachusetts, and a $0.3 million increase in insurance expense associated with operating as a public company. These increases were partially offset by a $0.9 million decrease in consulting and legal expense.

Current wording

General and administrative expenses increased by $4.6 million from $16.6 million for the year ended December 31, 2023, to $21.3 million for the year ended December 31, 2024. The increase was driven primarily by an increase of $4.3 million in personnel-related costs due to increased headcount, inclusive of $2.4 million in stock-based compensation expense, and an increase of $0.6 million in facility and office related expenses related to rent expense for our operating lease and depreciation on office furniture. These increases were partially offset by a $0.3 million decrease in insurance expense.

Previous wording

Other income (expense), net was income of $6.2 million for the year ended December 31, 2023, compared to income of $2.9 million for the year ended December 31, 2022. The increase was primarily driven by interest earned from our money market fund and U.S. treasury holdings.

Current wording

Other income (expense), net was income of $7.1 million for the year ended December 31, 2024, compared to income of $6.2 million for the year ended December 31, 2023. The increase was primarily driven by interest earned from our money market fund and U.S. treasury holdings.

Previous wording

From our inception in January 2018 through December 31, 2023, we have funded our operations primarily through the sale of our common stock and convertible preferred stock. We received aggregate gross proceeds of $163.9 million from these sales prior to our IPO. Additionally, in May 2022, we received gross proceeds from our IPO of $108.0 million, and $14.9 million when the underwriters partially exercised their option to purchase 1,350,000 additional shares of common stock.

Current wording

From our inception in January 2018 through December 31, 2024, we have funded our operations primarily through the sale of our common stock and convertible preferred stock. We received aggregate gross proceeds of $163.9 million from these sales prior to our IPO. Additionally, in May 2022, we received gross proceeds from our IPO of $122.9 million.

Previous wording

We filed a shelf registration statement on Form S-3 with the SEC, which covers the offering, issuance and sale of an amount up to $300.0 million in the aggregate of shares of our common stock, preferred stock, debt securities, warrants, and/or units or any combination thereof, which was declared effective on June 16, 2023.

Current wording

On June 2, 2023, we filed a shelf registration statement on Form S-3 with the SEC, which covers the offering, issuance and sale of an amount up to $300.0 million in the aggregate of shares of our common stock, preferred stock, debt securities, warrants, and/or units or any combination thereof, which was declared effective on June 16, 2023.

Previous wording

On August 8, 2023, we filed a prospectus supplement and entered into a Sales Agreement with Stifel, Nicolaus & Company, Incorporated, as sales agent, which provides for the issuance and sale by us of up to $100.0 million of shares of common stock from time to time under the ATM program. On February 5, 2024, we issued and sold 1,000,000 shares at a purchase price of $10.00 per share under the ATM program, resulting in net proceeds of $9.9 million.

Current wording

On August 8, 2023, we filed a prospectus supplement and entered into the Sales Agreement with Stifel, as sales agent, which provides for the issuance and sale by us of up to $100.0 million of shares of common stock from time to time under the ATM program. On February 5, 2024, we issued and sold 1,000,000 shares of common stock at a purchase price of $10.00 per share under the ATM program, resulting in net proceeds of $9.9 million.

Previous wording

On February 9, 2024, we issued and sold 7,530,000 shares in the Follow-on Offering at a purchase price of $10.635 per share, resulting in net proceeds of $76.9 million after deducting underwriters' fees of $3.2 million.

Current wording

On February 9, 2024, we issued and sold 7,530,000 shares of common stock in the Follow-on Offering at a purchase price of $10.635 per share, resulting in net proceeds of $76.4 million after deducting underwriters’ fees and offering costs of $3.7 million.

Previous wording

As of December 31, 2023, we had cash, cash equivalents, and marketable securities in the amount of $110.4 million. On February 5, 2024, we issued and sold 1,000,000 shares at a purchase price of $10.00 per share under our ATM program, resulting in net proceeds of $9.9 million. On February 9, 2024, we issued and sold 7,530,000 shares at a purchase price of $10.635 per share, resulting in net proceeds of $76.9 million after deducting underwriting fees of $3.2 million in the Follow-on Offering. Based on our current operating plans, we believe that our existing cash, cash equivalents, marketable securities, together with proceeds from shares sold under our ATM Program and in the Follow-on Offering, will be sufficient to fund our operations into 2026. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.

Current wording

As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $120.2 million. Based on our currently planned operations, we believe that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operations for at least 12 months from the date of the filing of this 10-K. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.

Previous wording

For the year ended December 31, 2022, net cash used in operating activities was $59.3 million resulting from our net loss of $69.1 million partially offset by cash provided by changes in our operating assets and liabilities of $4.5 million and non-cash charges of $5.3 million. The net changes in our operating assets and liabilities were primarily due to an increase in accrued expenses of $5.5 million and receipt of $4.2 million associated with our U.K. R&D tax credit in 2022, which is accounted for in other receivables. These increases were partially offset by a $2.0 million decrease in operating lease liabilities related to cash paid towards tenant improvements on our new office and lab lease. Non-cash charges included $4.8 million in stock-based compensation expense and $0.5 million in depreciation expense.

Current wording

For the year ended December 31, 2024, net cash used in operating activities was $82.4 million resulting from our net loss of $90.0 million and by cash provided by changes in our operating assets and liabilities of $5.3 million partially offset by non-cash charges of $12.9 million. The net changes in our operating assets and liabilities were primarily due to an increase in prepaids and other current assets of $1.3 million, a decrease in accrued expenses of $1.7 million, and a $3.0 million decrease in operating lease liabilities. These changes were partially offset by a $0.7 million increase in accounts payable. Non-cash charges included $11.5 million in stock-based compensation expense, $3.9 million of accretion of discounts on our marketable securities, $3.7 million of amortization and interest accretion on our operating lease, and $1.5 million in depreciation expense.

Previous wording

Net cash used in investing activities was $32.0 million during the year ended December 31, 2023 as compared to $3.8 million during the year ended December 31, 2022. Cash used for investing activities was related to $29.4 million in purchases of marketable securities and $2.6 million in purchases of property and equipment during the year ended December 31, 2023. Cash used for investing activities related to $3.8 million in purchase of property and equipment during the year ended December 31, 2022.

Current wording

Net cash used in investing activities was $32.0 million during the year ended December 31, 2023. Cash used in investing activities was related to $29.4 million in purchases of marketable securities and $2.6 million in purchases of property and equipment.

Previous wording

Net cash used in financing activities was $0.2 million for the year ended December 31, 2023, which was primarily the result of $0.4 million in payments towards offering costs related to our Form S-3 and Sales Agreement filings in May and August 2023, respectively. These payments were partially offset by $0.3 million of proceeds from equity plans .

Current wording

Net cash used in financing activities was $0.2 million for the year ended December 31, 2023, which was primarily the result of $0.4 million in payments towards offering costs related to our Form S-3 and Sales Agreement filings in May and August 2023, respectively. These payments were partially offset by $0.3 million of proceeds from the purchase of shares under employee equity plans.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which are prepared in accordance with generally accepted accounting principles in the U.S., or GAAP. The preparation of our financial statements requires us to make estimates and management discussion assumptions that affect the reported amounts of assets, liabilities, costs, and expenses and the disclosure of contingent assets and liabilities in our financial statements and accompanying notes. We evaluate our estimates and judgments on an ongoing basis. We base our estimates and assumptions on historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.

Current wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which are prepared in accordance with generally accepted accounting principles in the U.S., or GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs, and expenses and the disclosure of contingent assets and liabilities in our financial statements and accompanying notes. We evaluate our estimates and judgments on an ongoing basis. We base our estimates and assumptions on historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.

Previous wording

We account for all stock-based compensation awards granted as stock-based compensation expense at fair value in accordance with the Financial Accounting Standards Board ASC Topic 718, Compensation—Stock Compensation. Stock-based compensation expense represents the cost of the grant date fair value of equity awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line or accelerated basis. We estimate the fair value of stock option awards using the Black-Scholes option pricing model and recognize forfeitures as they occur.

Current wording

We account for all stock-based compensation awards granted as stock-based compensation expense at fair value in accordance with the Financial Accounting Standards Board ASC Topic 718, Compensation—Stock Compensation. Stock-based compensation expense represents the cost of the grant date fair value of equity awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line or accelerated basis. We estimate the fair value of stock option awards using the Black-Scholes option pricing model and recognize forfeitures as they occur. The fair value of our common stock is used to determine the fair value of restricted stock awards.