Disc Medicine Inc
For the period ended Dec 31, 2024. Filed Feb 27, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 27, 2025
IRON$78.91+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-21.
0000950170-24-034432
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-27.
0000950170-25-028390
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 114 previous paragraphs and 119 current paragraphs.
73 unchanged; 27 reworded; 16 added; 14 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
As of December 31, 2024, we had cash, cash equivalents and marketable securities of $489.9 million. In January 2025 we completed an underwritten offering of shares of our common stock and pre-funded warrants for net proceeds of approximately $243.3 million, after deducting estimated offering expenses payable by us. We believe that our cash, cash equivalents and marketable securities, including the net proceeds of our January 2025 underwritten public offering, will be sufficient to fund our current operating and capital expenditure plans and our debt service obligations into 2028, without taking into account any potential net cash inflows from bitopertin or any other marketed product, if approved during such period. We have based these estimates on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See Liquidity and Capital Resourcesfor additional details.
Current report
Selling, General and Administrative Expenses
Current report
Interest Expense
Current report
Interest expense primarily consists of amortization of debt issuance costs and discount and interest expense under the Hercules Loan Agreement.
Current report
These increases were partially offset by a $6.2 million decrease related to the DISC-3405 program which incurred $15.0 million in upfront and milestone license fees in 2023 related to our license agreement with Mabwell which did not recur in 2024. The decrease related to prior year license fees was offset by an increase in external development expense related to increased clinical study and drug manufacturing activity for DISC-3405 in the year ended December 31, 2024.
Current report
Selling, General and Administrative Expenses
Current report
Other Income (Expense), Net
Current report
In addition, in January 2025 we completed an underwritten offering of shares of our common stock and pre-funded warrants. The net proceeds from the offering are expected to be approximately $243.3 million, after deducting the underwriting discount and estimated offering expenses. The underwritten offering is described in more detail in Note 18 - Subsequent Events to our consolidated financial statements.
Current report
During the year ended December 31, 2024, net cash used in investing activities was primarily due to purchases of marketable securities of $386.6 million, partially offset by maturities of marketable securities of $94.8 million.
Current report
During the year ended December 31, 2024, net cash provided by financing activities of $218.3 million consisted primarily of net proceeds of $172.5 million from the June 2024 underwritten offering, net proceeds from the issuance of long-term debt of $27.6 million, aggregate net proceeds of $14.8 million from at-the-market offerings, and proceeds from the exercise of stock options of $3.0 million.
Current report
(2) Table excludes the impact of tenant improvement allowance reimbursements of $0.8 million which are expected to be received in less than one year. Of this total, $0.5 million relates to our existing leased office space and $0.3 million relates to our forward-starting lease.
Current report
Fair value of our common stock: Prior to the merger closing, we determined the estimated fair value of our common-stock based on third-party valuations and certain other relevant objective and subjective factors. After the close of the merger, the fair value of our common stock is determined based on the quoted market price of our common stock. See Determination of the Fair Value of Common Stock below for additional details.
Current report
Risk-free interest rate. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.
Current report
Expected dividend yield: We have not paid, and do not anticipate paying, cash dividends on our common stock; therefore, the expected dividend yield is assumed to be zero.
Current report
If any assumptions used in the Black-Scholes option pricing model changed significantly, stock-based compensation expense for future awards may differ materially compared with the expense for awards granted previously. We will continue to use judgment in evaluating the assumptions related to our stock-based compensation on a prospective basis. As we continue to accumulate additional data related to our common stock, we may refine our estimates, which could materially impact our future stock-based compensation expense.
Current report
Prior to December 31, 2024, we were an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012, and a “smaller reporting company”, as defined under the Exchange Act. As such, we were eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations regarding executive compensation. As of December 31, 2024, we are no longer an emerging growth company or smaller reporting company. In accordance with SEC rules, we are availing ourselves of the exemptions from disclosure requirements, including certain of the reduced and scaled disclosure obligations, that are available to smaller reporting companies in this Annual Report on Form 10-K. However, beginning with our Quarterly Report on Form 10-Q for the quarter ending March 31, 2025, we will no longer be permitted to take advantage of the reduced reporting requirements applicable to smaller reporting companies.
Removed paragraphs (14)
Previous report
On August 9, 2022, Disc Medicine, Inc., a Delaware corporation, or Private Disc, entered into an Agreement and Plan of Merger and Reorganization, or the Merger Agreement, with Gemini Therapeutics, Inc., a Delaware corporation, or Gemini, Gemstone Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Gemini, or Merger Sub.
Previous report
On December 29, 2022, Private Disc completed the merger with Gemini, or the merger. Gemini changed its name to Disc Medicine Inc., and Private Disc changed its name to Disc Medicine Opco, Inc., a wholly-owned subsidiary of Disc Medicine, Inc. On December 30, 2022, our common stock began trading on The Nasdaq Capital Market under the ticker symbol “IRON.”
Previous report
General and Administrative Expenses
Previous report
Other Income
Previous report
Change in Fair Value of Contingent Value Right Liability
Previous report
In December 2022, we entered into the CVR Agreement, described in more detail in Notes 1 and 4 to our consolidated financial statements, which provided a CVR to Gemini’s pre-merger common stockholders to receive common stock from the Company upon its receipt of certain proceeds, calculated in accordance with the CVR Agreement, resulting from a disposition of Gemini’s pre-merger assets within one year after the closing of the merger. The disposition period ended December 29, 2023 and no dispositions of Gemini's pre-merger assets were made during the disposition period. Therefore, there were no CVR payments made to the holders and there will not be any future CVR payments to the holders. The CVR liability was measured at fair value as of each reporting date and the change in the fair value for the period was recorded in the consolidated statements of operations and comprehensive loss in the change in fair value of contingent value right liability.
Previous report
Change in Fair Value of Derivative Liability
Previous report
In May 2021, we entered into the Roche Agreement, described in more detail in Notes 4 and 8 to our consolidated financial statements, which included an obligation to issue a variable number of shares of our common stock to Roche for no additional consideration upon the completion of a Roche Qualified Transaction as defined by the Roche Agreement. The liability was measured at fair value as of each reporting date and the change in the fair value for the period was recorded in the consolidated statements of operations and comprehensive loss in the change in fair value of derivative liability. The liability was settled upon the completion of the merger on December 29, 2022.
Previous report
General and Administrative Expenses
Previous report
During the year ended December 31, 2022, net cash provided by financing activities of $149.0 million consisted primarily of $97.4 million of net cash proceeds from the completion of the merger with Gemini and $53.5 million of net cash proceeds from the pre-closing financing.
Previous report
Fair Value of Derivative Liability
Previous report
In May 2021, we entered into a license agreement (the “Roche Agreement”) with F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc. (together, “Roche”) pursuant to which Roche granted us an exclusive and sublicensable worldwide license under certain patent rights and know-how to develop, manufacture and commercialize certain compounds (the “Compounds”) as further described in Note 8. We recognized a liability in connection with the Roche Agreement which included an obligation to issue a variable number of shares of our common stock to Roche for no additional consideration upon our completion of an initial public offering or certain merger transactions (a “Roche Qualified Transaction”). Prior to settlement in Q4 2022, the fair value measurement of the derivative liability was classified as Level 3 under the fair value hierarchy as it was valued using certain unobservable inputs. These inputs included: (1) our estimated shares outstanding and fair value per share upon completion of a Roche Qualified Transaction and (2) the probability of us completing a Roche Qualified Transaction. The number of shares of common stock to be issued to Roche was estimated to be approximately 2.85% of the outstanding shares of common stock of the combined company as of immediately after the completion of a Roche Qualified Transaction, including the exercise by the underwriters thereof of any overallotment option, if applicable. We remeasured the derivative liability based on the stock price of its publicly-traded common stock on December 29, 2022. The change in the fair value for the period was recorded in the consolidated statements of operations and comprehensive loss in the change in fair value of derivative liability. Upon completion of the merger, we issued 482,313 shares of common stock to Roche, thereby settling the derivative liability, with the fair value of the common stock at the time of issuance recorded as additional paid-in capital.
Previous report
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. We may take advantage of these exemptions until we are no longer an emerging growth company under Section 107 of the JOBS Act, which provides that an emerging growth company can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. We have elected to avail ourselves of the extended transition period and, therefore, while we are an emerging growth company, we will not be subject to new or revised accounting standards at the same time that they become applicable to other public companies that are not emerging growth companies, unless we choose to early adopt a new or revised accounting standard. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our initial public offering which occurred in August 2020, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Previous report
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
Reworded paragraphs (27)
Previous wording
Bitopertin is the lead product candidate in our heme biosynthesis modulation portfolio. Bitopertin was previously evaluated by F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., or collectively, Roche, in a comprehensive clinical program in over 4,000 individuals in other indications which demonstrated the activity of bitopertin as a glycine transporter 1, or GlyT1, inhibitor and its effect on heme biosynthesis. We are initially developing bitopertin for the treatment of EPs, including EPP and XLP. In July 2022, we initiated BEACON, a Phase 2 open-label, parallel-dose clinical trial of bitopertin in EPP and XLP patients that is being conducted at sites in Australia. In October 2022, we initiated AURORA, a Phase 2, randomized, double-blind, placebo-controlled clinical trial of bitopertin in EPP patients that is being conducted at sites in the United States. We presented interim data from BEACON in June and December 2023, and we expect topline data from AURORA in March or April 2024. Additional analysis of the full population in the BEACON trial is anticipated to be presented in 2024. We entered into a collaborative research and development agreement with the National Institutes of Health, or NIH, to conduct an NIH-sponsored clinical trial of bitopertin in DBA. The FDA authorized the clinical trial to proceed and the trial began in July 2023. We are planning additional trials of bitopertin in other indications.
Current wording
Bitopertin is the lead product candidate in our heme biosynthesis modulation portfolio. Bitopertin was previously evaluated by F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., or collectively, Roche, in a comprehensive clinical program in over 4,000 individuals in other indications which demonstrated the activity of bitopertin as a glycine transporter 1, or GlyT1, inhibitor and its effect on heme biosynthesis. We are initially developing bitopertin for the treatment of EPs, including EPP and XLP, which are part of a group of severe diseases, known as porphyrias, caused by defects in the heme biosynthesis pathway that cause an accumulation of toxic metabolites referred to as porphyrins, resulting in skin hypersensitivity to sunlight and some types of artificial light. In June and December 2023, we presented interim data from BEACON, a Phase 2 open-label, parallel-dose clinical trial of bitopertin in EPP and XLP patients conducted at sites in Australia. In April 2024, we presented topline data from AURORA, a Phase 2, randomized, double-blind, placebo-controlled clinical trial of bitopertin in EPP patients conducted at sites in the United States. Additional analyses of the BEACON and AURORA trials were presented in June 2024 and in December 2024. In both trials, bitopertin significantly reduced the toxic metabolite, protoporphyrin IX, or PPIX, and was associated with improvements in measures of time spent in sunlight and quality of life, demonstrating a clear association between PPIX reduction and clinical endpoints. In addition, bitopertin was generally well-tolerated. All participants in AURORA and BEACON are eligible to participate in HELIOS, an ongoing open-label, long-term extension study of bitopertin in EPP and XLP. We are also planning APOLLO, a randomized, double-blind, placebo-controlled clinical trial of bitopertin in EPP and XLP patients. In our end-of-Phase 2 meeting, the U.S. Food & Drug Administration, or the FDA, agreed with the potential for reduction of PPIX to serve as a surrogate endpoint to support a potential accelerated approval of bitopertin in EPP and XLP. Under the FDA’s Accelerated Approval Program, we would have the potential to submit a New Drug Application, or NDA, for bitopertin in EPP and XLP based on our existing data, and we would be required to conduct a post-marketing confirmatory clinical trial. In our Type C meeting with the FDA in December 2024, we aligned with the FDA on the design of our APOLLO post-marketing confirmatory trial. We plan to initiate the APOLLO trial by mid-2025 and anticipate submitting an NDA for accelerated approval of bitopertin in EPP and XLP in the second half of 2025. We have also entered into a collaborative research and development agreement with the National Institutes of Health, or NIH, to conduct a clinical trial of bitopertin in DBA, which began in July 2023. We are planning additional trials of bitopertin in other indications.
Previous wording
DISC-0974 is the lead product candidate in our iron homeostasis portfolio and was in-licensed from AbbVie Deutschland GmbH & Co. KG, or AbbVie. DISC-0974 is designed to suppress hepcidin production and increase serum iron levels. We submitted an IND to the FDA for DISC-0974 in June 2021, received clearance in July 2021, and participants completed a Phase 1 clinical trial in healthy volunteers in the U.S. in June 2022 with results showing an acceptable tolerability profile and evidence of target engagement, iron mobilization and augmented erythropoiesis. We initiated a Phase 1b/2 clinical trial in June 2022 in patients with anemia of MF, and initiated a separate Phase 1b/2 clinical trial in February 2023 in patients with non-dialysis dependent CKD and anemia. We presented interim data from both of these trials in December 2023 and anticipate additional interim data presentations in 2024. In addition, we are developing a preclinical anti-hemojuvelin, or HJV, monoclonal antibody, DISC-0998, which also targets hepcidin suppression and was in-licensed from AbbVie. DISC-0998 is designed to increase serum iron levels and has an extended serum half-life as compared to DISC-0974. We believe this profile may be desirable in certain subsets of patients with anemia associated with inflammatory diseases.
Current wording
DISC-0974 is the lead product candidate in our iron homeostasis portfolio and was licensed from AbbVie Deutschland GmbH & Co. KG, or AbbVie. DISC-0974 is designed to suppress hepcidin production and increase serum iron levels. We completed a Phase 1 clinical trial in healthy volunteers in the U.S. in June 2022 with results showing an acceptable tolerability profile and evidence of target engagement, iron mobilization and augmented erythropoiesis. We initiated a Phase 1b/2 clinical trial in June 2022 in patients with anemia of MF, and initiated a separate Phase 1b/2 clinical trial in February 2023 in patients with non-dialysis dependent CKD and anemia. We presented interim data from both of these trials in December 2023 as well as additional interim data for anemia of MF in June 2024 and non-dialysis dependent CKD and anemia in October 2024, which additional interim data included safety data and changes in hepcidin, iron, and hemoglobin levels for additional patients, as well as longer follow-up. In December 2024, we presented additional analyses of the Phase 1b study in anemia of MF and initiated the open-label Phase 2 portion of this clinical trial in patients with anemia of MF. We expect to report initial data from this Phase 2 trial in the second half of 2025. We also expect to report data from the multiple-ascending dose, or MAD, portion of the Phase 1b trial in patients with non-dialysis dependent CKD and anemia in the second half of 2025. We are also planning additional trials of DISC-0974 in other anemias of inflammation. In addition, we are developing a preclinical anti-hemojuvelin, or HJV, monoclonal antibody, DISC-0998, which also targets hepcidin suppression and was licensed from AbbVie. DISC-0998 is designed to increase serum iron levels and has an extended serum half-life as compared to DISC-0974. We believe this profile may be desirable in certain subsets of patients with anemia associated with inflammatory diseases.
Previous wording
Lastly, we are developing DISC-3405, a monoclonal antibody against Transmembrane Serine Protease 6, or TMPRSS6, that we licensed from Mabwell Therapeutics, Inc., or Mabwell. DISC-3405 is part of our iron homeostasis portfolio and is designed to induce hepcidin production and reduce serum iron levels. An IND for DISC-3405 was cleared by the FDA, and a Phase 1 clinical trial in healthy adult volunteers was initiated in October 2023. Interim data is anticipated to be presented in the first and second halves of 2024. We expect to develop DISC-3405 for the treatment of PV and other hematologic disorders.
Current wording
Lastly, we are developing DISC-3405, a monoclonal antibody against Transmembrane Serine Protease 6, or TMPRSS6, that we licensed from Mabwell Therapeutics, Inc., or Mabwell. DISC-3405 is part of our iron homeostasis portfolio and is designed to induce hepcidin production and reduce serum iron levels. An IND for DISC-3405 was cleared by the FDA, and a Phase 1 clinical trial in healthy adult volunteers was initiated in October 2023. Interim data was presented from the single-ascending dose, or SAD, portion of the Phase 1 clinical trial of DISC-3405 in healthy volunteers in June 2024. We presented data from the MAD portion of the Phase 1 healthy volunteer study of DISC-3405 in December 2024. We expect to develop DISC-3405 for the treatment of PV and other hematologic disorders, and plan to initiate a Phase 2 clinical trial of DISC-3405 in PV in the first half of 2025.
Previous wording
expenses incurred in connection with our research and development activities, including under agreements with third parties such as consultants, contractors and CROs;
Current wording
expenses incurred in connection with our research and development activities, including under agreements with third parties such as consultants, contractors and contract research organizations, or CROs;
Previous wording
the ability to raise additional funds necessary to complete clinical development of and commercialize our product candidates;
Current wording
our ability to raise additional funds to the extent necessary to complete clinical development of and commercialize our product candidates;
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establishing agreements with third-party manufacturers for supply of product candidate components for our clinical trials;
Current wording
our ability to establish agreements with third-party manufacturers for supply of product candidate components for our clinical trials;
Previous wording
commercializing product candidates, if and when approved, whether alone or in collaboration with others; and
Current wording
our ability to commercialize product candidates, if and when approved, whether alone or in collaboration with others; and
Previous wording
obtaining and maintaining third-party insurance coverage and adequate reimbursement for any approved products.
Current wording
our ability to obtain and maintain third-party insurance coverage and adequate reimbursement for any approved products.
Previous wording
General and administrative expenses consist primarily of salaries and related costs for personnel in executive, finance, corporate and business development, and administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters, including noncapitalizable transaction costs; professional fees for accounting, auditing, tax compliance and administrative consulting services; investor and public relations expenses; director and officer insurance costs and other insurance costs; and facility related expenses including maintenance and allocated expenses for rent and other operating costs.
Current wording
Selling, general and administrative expenses consist primarily of salaries and related costs for personnel in executive, finance, commercial, corporate and business development, and administrative functions. Selling, general and administrative expenses also include legal fees relating to patent and corporate matters, including noncapitalizable transaction costs; professional fees for accounting, auditing, tax compliance and administrative consulting services; investor and public relations expenses; commercial planning and market research; director and officer insurance costs and other insurance costs; and facility related expenses including maintenance and allocated expenses for rent and other operating costs.
Previous wording
We anticipate that our general and administrative expenses will increase substantially in the future as we increase our headcount to support our continued research and development and potential commercialization of our product candidates.
Current wording
We anticipate that our selling, general and administrative expenses will increase substantially in the future as we increase our headcount to support our continued research and development and potential commercialization activities including establishing a sales, marketing and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval.
Previous wording
Interest income primarily consists of interest earned on cash equivalents, consisting of money market funds, U.S. treasury notes and certificates of deposit.
Current wording
Interest income primarily consists of interest earned on cash equivalents, consisting of money market funds, U.S. treasury securities and certificates of deposit, as well as marketable securities, consisting of U.S treasury securities and U.S. government agency securities.
Previous wording
Research and development expenses were $69.3 million for the year ended December 31, 2023, compared to $33.4 million for the year ended December 31, 2022. The increase of $35.8 million in research and development expenses was primarily due to a $20.2 million increase related to the DISC-3405 program which incurred $15.0 million in upfront and milestone license fees in 2023, a $8.5 million increase in bitopertin development expense related to increased clinical study and drug manufacturing activity, and a $6.4 million increase in personnel-related costs related to higher research and development headcount, including an increase of $1.2 million in stock-based compensation.
Current wording
Research and development expenses were $96.7 million for the year ended December 31, 2024, compared to $69.3 million for the year ended December 31, 2023. The increase of $27.4 million was primarily due to an $11.9 million increase in personnel-related costs related to higher research and development headcount, including an increase of $5.3 million in stock-based compensation driven by awards granted under our equity compensation plans. Further, external development expenses increased $10.8 million and $7.8 million related to advancing the clinical trials and drug manufacturing activity for bitopertin and DISC-0974, respectively.
Previous wording
The following table summarizes our general and administrative expenses for the years ended December 31, 2023 and 2022 (in thousands):
Current wording
The following table summarizes our selling, general and administrative expenses for the years ended December 31, 2024 and 2023 (in thousands):
Previous wording
General and administrative expenses were $21.9 million for the year ended December 31, 2023, compared to $14.0 million for the year ended December 31, 2022. The increase of $7.8 million in general and administrative expenses was primarily due to an increase of $3.5 million in personnel-related costs due to higher general and administrative headcount, including an increase of $2.3 million in stock-based compensation, and an increase of $3.1 million in other expenses related to increased costs as a public company.
Current wording
Selling, general and administrative expenses were $33.0 million for the year ended December 31, 2024, compared to $21.9 million for the year ended December 31, 2023. The increase of $11.2 million was primarily due to an increase of $8.9 million in personnel-related costs due to higher selling, general and administrative headcount, including an increase of $6.0 million in stock-based compensation driven by awards granted under our equity compensation plans.
Previous wording
Other income, net was $14.8 million for the year ended December 31, 2023, compared to other income, net of $0.6 million for the year ended December 31, 2022. The change of $14.1 million in other income (expense), net was primarily due to an increase in interest income based on a larger cash and cash equivalents balance and higher interest rates.
Current wording
Other income (expense), net was $20.7 million for the year ended December 31, 2024, compared to $14.8 million for the year ended December 31, 2023. The change of $5.9 million was primarily due to an increase in interest income based on increases in our cash, cash equivalents and marketable securities balances.
Previous wording
Income tax expense was $0.1 million for the year ended December 31, 2023, compared to no expense for the year ended December 31, 2022. The increase in expense relates to state income tax resulting from an increase in interest income.
Current wording
Income tax expense was $0.4 million for the year ended December 31, 2024, compared to $0.1 million for the year ended December 31, 2023. The expense relates to state income tax resulting from an increase in interest income.
Previous wording
Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses. We expect to continue to incur significant expenses and operating losses in the foreseeable future as we advance the clinical development of our product candidates. We expect that our research and development and general and administrative costs will continue to increase significantly, including in connection with conducting clinical trials and manufacturing for our product candidates to support commercialization and providing general and administrative support for our operations, including the costs associated with operating as a public company. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. See “Risk Factors” for additional risks associated with our substantial capital requirements.
Current wording
Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses. We expect to continue to incur significant expenses and operating losses in the foreseeable future as we advance the clinical development of our product candidates. We expect that our research and development and selling, general and administrative costs will continue to increase significantly, including in connection with conducting clinical trials and manufacturing for our product candidates to support commercialization and providing selling, general and administrative support for our operations, including the costs associated with operating as a public company. As a result, we may need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. See “Risk Factors” included within Item 1A of this Annual Report on Form 10-K for additional risks associated with our substantial capital requirements.
Previous wording
To date, we have funded our operations primarily with proceeds from the sale of our convertible preferred stock and common stock, the proceeds from the merger with Gemini, proceeds from at-the-market offerings, proceeds from a registered direct offering and proceeds from a follow-on public offering. Through December 31, 2023, we have received net proceeds of $144.5 million from sales of our Series Seed, Series A and Series B convertible preferred stock, $89.5 million from the merger with Gemini, $53.5 million from sales of common stock in a pre-closing private financing, $62.4 million from sales of common stock and pre-funded warrants in a registered direct offering, $147.9 million from sales of common stock and pre-funded warrants in a public follow-on offering and $26.4 million from at-the-market offerings. As of December 31, 2023, we had cash and cash equivalents of $360.4 million.
Current wording
To date, we have funded our operations primarily with proceeds from the sale of our convertible preferred stock and common stock, the proceeds from the merger with Gemini, proceeds from various private and public sales of our equity securities, and proceeds from borrowings under the Hercules Loan Agreement. Through December 31, 2024, we have received net proceeds of $144.5 million from sales of our Series Seed, Series A and Series B convertible preferred stock, $89.5 million from the merger with Gemini, $477.6 million from various private and public sales of our equity securities, and $27.6 million from borrowings under the Hercules Loan Agreement. As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $489.9 million.
Previous wording
We have incurred significant operating losses since inception and, as of December 31, 2023, had an accumulated deficit of $188.6 million. In addition, we expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future. We believe that our current cash resources will enable us to fund our current planned operating expense and capital expenditure requirements well into 2026. We may also pursue additional cash resources through public or private equity offerings, collaborations or debt financings.
Current wording
We have incurred significant operating losses since inception and, as of December 31, 2024, had an accumulated deficit of $298.0 million. In addition, we expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future. We believe that our cash, cash equivalents and marketable securities, including the net proceeds of our January 2025 underwritten public offering, will be sufficient to fund our current operating and capital expenditure plans and our debt service obligations into 2028, without taking into account any potential net cash inflows from bitopertin or any other marketed product, if approved during such period. We have based these estimates on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. We may also pursue additional cash resources through public or private equity offerings, collaborations or additional debt financings.
Previous wording
During the year ended December 31, 2022, net cash used in operating activities of $42.3 million was primarily due to our net loss of $46.8 million, offset by non-cash expenses of $2.4 million and changes in operating assets and liabilities of $2.1 million primarily related to accounts payable and accrued expenses assumed in the merger.
Current wording
During the year ended December 31, 2024, net cash used in operating activities of $93.9 million was primarily due to our net loss of $109.4 million, offset by changes in operating assets and liabilities of $3.2 million and non-cash expenses of $12.2 million which primarily related to stock-based compensation expense of $16.8 million, offset by amortization and accretion of investment securities of $5.3 million.
Previous wording
During the years ended December 31, 2023 and 2022, net cash used in investing activities was due to purchases of property and equipment.
Current wording
During the year ended December 31, 2023 net cash used in investing activities was due to purchases of property and equipment.
Previous wording
Identifying potential product candidates and conducting preclinical studies and clinical trials is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if ever. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives.
Current wording
Identifying potential product candidates and conducting preclinical studies and clinical trials is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that may take longer than we anticipate to become commercially available, if they become commercially available at all. Accordingly, we may need to obtain substantial additional funds to achieve our business objectives.
Previous wording
(1) Amounts reflect payments due for our leased and subleased office spaces in Watertown, Massachusetts as of December 31, 2023. The lease terms began in November 2021 and June 2023, and both end in November 2026.
Current wording
(1) Amounts reflect contractual rent payments due for our leased and subleased office spaces in Watertown, Massachusetts as of December 31, 2024 and include contractual payments due under our forward-starting lease which is expected to commence in December 2026. The term date for our existing lease is December 31, 2029 and the term date for our existing sublease is November 30, 2026.
Previous wording
Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and 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. We evaluate our estimates and assumptions on an ongoing basis. 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 is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and costs and expenses in our consolidated financial statements. We base our estimates on historical experience, known trends and events and 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. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
Previous wording
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Current wording
While our significant accounting policies are described in more detail in Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Previous wording
We measure stock-based awards granted to employees, directors, and nonemployees based on their fair value on the date of the grant and recognize compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. For stock-based awards with service-based vesting conditions, we recognize compensation expense using the straight-line method. For stock-based awards with performance-based vesting conditions, we use the accelerated attribution method to expense the awards over the implicit service period based on the probability of achieving the performance conditions. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the fair value of our common stock, the expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the expected dividend yield. Due to the lack of company-specific historical and implied volatility data, we determine the volatility for awards granted based on an analysis of reported data for a group of guideline companies that issued options with substantially similar terms. The expected volatility has been determined using a weighted average of the historical volatility measures of this group of guideline companies. We expect to continue to do so until such time that we have adequate historical data regarding the volatility of our own traded stock price. The expected term of our stock options granted to employees has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options, using the average between the vesting date and the contractual term. The fair value of each restricted common stock award is estimated on the date of grant based on the estimated fair value of our common stock on the date of grant.
Current wording
We measure stock-based awards granted to employees, directors, and nonemployees based on their fair value on the date of the grant and recognize compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. For stock-based awards with service-based vesting conditions, we recognize compensation expense using the straight-line method. For stock-based awards with performance-based vesting conditions, we use the accelerated attribution method to expense the awards over the implicit service period based on the probability of achieving the performance conditions.
Previous wording
A description of recently issued and certain recently adopted accounting pronouncements that have or may potentially impact our financial position and results of operations is included in Note 2 to our consolidated financial statements.
Current wording
A description of recently issued and certain recently adopted accounting pronouncements that have or may potentially impact our financial position and results of operations is included in Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including:
Current report — wording carried from elsewhere
Expected stock price volatility: Due to the lack of company-specific historical and implied volatility data, we determine the volatility for awards granted based on an analysis of reported data for a group of guideline companies that issued options with substantially similar terms. The expected volatility has been determined using a weighted average of the historical volatility measures of this group of guideline companies. We expect to continue to do so until such time that we have adequate historical data regarding the volatility of our own traded stock price.
Current report — wording carried from elsewhere
Expected term of the option. The expected term of our stock options granted to employees has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options, using the average between the vesting date and the contractual term.