Neumora Therapeutics Inc
For the period ended Dec 31, 2024. Filed Mar 3, 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 Mar 3, 2025
NMRA$0.50+3.3%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 2024-03-07.
0000950170-24-027927
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-03.
0000950170-25-030401
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 138 previous paragraphs and 119 current paragraphs.
91 unchanged; 24 reworded; 4 added; 23 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 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 (4)
Current report
change to trials;
Current report
For discussion of our 2023 results and a comparison with 2022 results please refer to “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 that was filed with the SEC on March 7, 2024.
Current report
Research and development expenses increased by $58.2 million, or 41%, to $200.9 million for the year ended December 31, 2024 from $142.7 million for the year ended December 31, 2023 as we advanced our clinical trials. Direct external program expenses increased by $62.8 million, of which $67.5 million was related to the advancement our Phase 3 and Phase 2 clinical trials for navacaprant, partially offset by a decrease of $4.8 million to preclinical program research. Internal and unallocated expenses decreased by $4.6 million, primarily attributable to decreased activities under our research and collaboration agreements with Amgen and with other vendors, which was partially offset by an increase in personnel related costs of $10.2 million, including $9.6 million related to stock-based compensation. Stock-based compensation primarily increased due to stock modification expense of $4.1 million and the increased value of stock awards issued.
Current report
Critical Accounting Policies and Estimates
Removed paragraphs (23)
Previous report
As shown in the table below, our current pipeline comprises seven programs, three of which are in clinical development and four of which are in preclinical development.
Previous report
COVID-19 Impact
Previous report
Although the World Health Organization has declared that COVID-19 no longer represents a global health emergency, the actual and perceived impact of COVID-19 and any effect on our business cannot be predicted. As a result, there can be no assurance that we will not experience additional negative impacts associated with COVID-19, which could be significant and may delay our initiation of preclinical studies and clinical trials, interrupt our supply chain, disrupt regulatory activities or have other adverse effects on our business and operations. Our focus remains on promoting measures intended to help minimize our risk of exposure to the virus for our employees, including policies that allow our employees to work remotely.
Previous report
Other Income (Expense), Net
Previous report
Other income (expense), net consists primarily of changes in the fair value of our convertible preferred stock warrant liability prior to settlement in 2022.
Previous report
Research and development expenses increased by $51.0 million, or 56%, to $142.7 million for the year ended December 31, 2023 from $91.7 million for the year ended December 31, 2022 as we ramped up our clinical and preclinical programs and related activities. Direct external program expenses increased by $39.9 million, of which $28.2 million was related to the initiation of our pivotal phase 3 clinical trials for navacaprant, $5.7 million was attributable to NMRA-511 primarily driven by our Phase 1 multiple ascending dose clinical trial and $4.9 million was attributable to NMRA-266 primarily due to activities related to our IND application and the initiation of a phase 1 single ascending dose / multiple ascending dose study in the fourth quarter of 2023. Internal and unallocated expenses increased by $11.1 million, which were primarily due to $9.3 million related to personnel related costs as we grew our headcount, including $3.8 million related to stock-based compensation, $1.0 million related to an increase in facilities expenses due the sublease of additional premises and $0.7 million related to software and related technology costs.
Previous report
Other Income (Expense), Net
Previous report
Other income (expense), net changed by $0.6 million to $0.2 million expense for the year ended December 31, 2023 from $0.4 million income for the year ended December 31, 2022, primarily due to the change in fair value of our convertible preferred stock warrant liability in 2022 prior to settlement.
Previous report
Critical Accounting Estimates
Previous report
Acquisitions
Previous report
We evaluate mergers, acquisitions and other similar transactions to assess whether the transaction should be accounted for as a business combination or an acquisition of assets. We first identify who is the acquiring entity by determining if the target is a legal entity or a group of assets or liabilities. If control over a legal entity is being evaluated, we also evaluate if the target is a variable interest or voting interest entity. For acquisitions of voting interest entities, we apply a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an acquisition of assets. If the screen is not met, further determination is required as to whether we have acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets.
Previous report
For an acquisition of assets, a cost accumulation model is used to determine the cost of the acquisition. Common stock and convertible preferred stock issued as consideration in an acquisition of assets are generally measured based on the acquisition date fair value of the equity interests issued. We also determine if any components of a transaction should be accounted for as a part of an acquisition of assets and which should be accounted for separately. Direct transaction costs are recognized as part of the cost of an acquisition of assets. We also evaluate which elements of a transaction should be accounted for as a part of an acquisition of assets and which should be accounted for separately.
Previous report
The cost of an acquisition of assets, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an acquisition of assets. Any difference between the cost of an acquisition of assets and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. Assets acquired as part of an acquisition of assets that are considered to be IPR&D are immediately expensed unless there is an alternative future use in other research and development projects.
Previous report
In addition to upfront consideration, our acquisition of assets may also include contingent consideration payments to be made for future milestone events or royalties on net sales of future products. We assess whether such contingent consideration is subject to liability classification and fair value measurement or meets the definition of a derivative. Contingent consideration payments in an acquisition of assets not required to be classified as a liability, or are accounted for as derivatives that qualify for a scope exception from derivative accounting, are recognized when the contingency is resolved, and the consideration is paid or becomes payable. Contingent consideration payments required to be classified as a liability, or accounted for as derivatives and do not qualify for a scope exception from derivative accounting, are recorded at fair value on the date of the acquisition and are subsequently remeasured to fair value at each reporting date. At the time a contingent consideration payment is made, we determine whether the payment should be expensed or capitalized as an intangible asset based on the status of the IPR&D project. Further, any future payments that are contingent upon continued services to us are treated as compensation and are recognized beginning when it is probable such amounts become payable through the date that the contingency is met.
Previous report
We measure and record expense related to all equity awards granted to employees and non-employees, including stock options and restricted stock awards, based on estimated fair values as of their grant dates. For stock-based awards with service conditions only, we recognize expense on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. For awards with performance conditions, we evaluate the probability of achieving the performance conditions at each reporting date. We recognize expense using an accelerated attribution method when it is deemed probable that the performance condition will be met. For awards with both market and service vesting conditions, we recognize expenses using the accelerated attribution method over the derived requisite service period. Stock-based compensation is classified in our consolidated statements of operations and comprehensive loss based on the function to which the related services are provided and is recognized for the portion of awards that have vested. Forfeitures are accounted for as they occur.
Previous report
The fair value of restricted stock awards is determined on the date of grant based on the estimated fair value of our common stock on that date. The fair value of stock options with service vesting conditions is determined using the Black-Scholes option pricing model, which requires inputs based on certain subjective assumptions. These assumptions include:
Previous report
Fair Value of Common Stock—Prior to our IPO, there was no public market for our common stock. As such, the estimated fair value of our common stock was determined at each grant date by our board of directors, with input from management, considering our most recently available third-party valuations of common stock and our board of directors’ assessment of additional objective and subjective factors that it believed were relevant, and factors that may have changed from the date of the most recent valuation through the date of the grant. For awards granted subsequent to our IPO, the grant date fair value of common stock was determined by using the closing price per share of common stock as reported on the Nasdaq Global Select Market.
Previous report
Expected Volatility—As there is limited trading history for our common stock, we have determined expected volatility based on the average historical stock price volatility of comparable publicly traded companies and expect to continue to do so until such time as we have adequate historical data regarding the volatility of our own traded stock price. The comparable companies are chosen based on their similar size, stage in the life cycle or area of therapeutic focus. The historical volatility is calculated based on a period of time commensurate with the expected term assumption.
Previous report
Expected Term—The expected term of our stock options is estimated using the simplified method for awards that qualify as plain-vanilla stock options. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the stock options.
Previous report
Risk-Free Interest Rate—We base the risk-free interest rate on 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.
Previous report
Expected Dividend Yield—The expected dividend yield is assumed to be zero as we have never paid and have no plans to pay dividends on our common stock in the foreseeable future.
Previous report
See Note 11 to our audited consolidated financial statements for information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted in the periods presented. Such assumptions involve inherent uncertainties and the application of significant judgment. As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our stock-based compensation expense could be materially different.
Previous report
We are also a “smaller reporting company,” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company.
Reworded paragraphs (24)
Previous wording
We are a clinical-stage biopharmaceutical company founded to confront the global brain disease crisis by taking a fundamentally different approach to the way treatments for brain diseases are developed. We have rapidly scaled our therapeutic pipeline, which currently consists of seven clinical and preclinical neuroscience programs that target novel mechanisms of action for a broad range of underserved neuropsychiatric disorders and neurodegenerative diseases. Our most advanced product candidate, navacaprant (NMRA-140), is a novel once-daily oral kappa opioid receptor (KOR) antagonist that is being developed for the treatment of major depressive disorder (MDD), which we believe has the potential to provide significant advantages relative to the standard of care, if approved. In 2023, we initiated a pivotal Phase 3 program called the KOASTAL program evaluating navacaprant monotherapy in patients with moderate to severe MDD. The KOASTAL program includes three replicate Phase 3 studies, KOASTAL-1, KOASTAL-2 and KOASTAL-3 as well as an open-label extension study, KOASTAL-LT, designed to evaluate the long-term safety of navacaprant which were all initiated in 2023. We anticipate releasing topline results from the KOASTAL-1 study in the second half of 2024 and topline results from the KOASTAL-2 and KOASTAL-3 studies in the first half of 2025. We also expect to initiate a Phase 2 study for navacaprant in bipolar depression in the first half of 2024 and anticipate releasing results from that study in 2025. In addition to Navacaprant, NMRA-266 is a positive allosteric modulator program of the M4 muscarinic receptor (M4R) for the treatment of schizophrenia. NMRA-266 is designed to be selective for the M4 receptor subtype of the muscarinic receptor family. In 2023 we initiated a Phase 1 single ascending dose / multiple ascending dose (SAD/MAD) study in healthy adult participants. We expect data from the SAD/MAD study to be available in mid-2024 and we expect to initiate a Phase 1b study with NMRA-266 in adults with SCZ in the second half of 2024.
Current wording
We are a clinical-stage biopharmaceutical company founded to confront the global brain disease crisis by taking a fundamentally different approach to the way treatments for brain diseases are developed. We have rapidly scaled our therapeutic pipeline, which currently consists of seven neuroscience programs, including two clinical programs, that target novel mechanisms of action for a broad range of underserved neuropsychiatric disorders and neurodegenerative diseases. Our most advanced product candidate, navacaprant (NMRA-140), is a novel once-daily oral kappa opioid receptor (KOR) antagonist that is being developed for the treatment of major depressive disorder (MDD), which we believe has the potential to provide significant advantages relative to the standard of care, if approved. Navacaprant is being investigated in the KOASTAL program, a pivotal Phase 3 program, evaluating navacaprant monotherapy in patients with moderate to severe MDD. Neumora expects to report topline data from KOASTAL-3 in the first quarter of 2026 and KOASTAL-2 in the second quarter of 2026. Our next most advanced product candidate is NMRA-511, a highly selective, novel antagonist of the vasopressin 1a receptor (V1aR) being developed for the treatment of agitation associated with dementia due to Alzheimer's disease (AD). We are advancing a Phase 1b signal-seeking study investigating NMRA-511 initially in healthy elderly adult participants and then people with agitation associated with dementia due to AD, and we expect to report data from this study in by the end of 2025. Our M4 positive allosteric modular (PAM) franchise comprises multiple novel compounds that each have different chemical composition but optimal pharmacological properties, which have demonstrated robust activity in preclinical efficacy models and high selectivity for the M4 receptor subtype. We expect to progress our next M4 PAM into the clinic by mid-2025.
Previous wording
In September 2023, we completed our initial public offering (IPO) pursuant to which we issued and sold an aggregate of 14,710,000 shares of our common stock at a price to the public of $17.00 per share. We received aggregate net proceeds of $226.5 million after deducting underwriting discounts and commissions of $17.5 million and other offering expenses of $6.0 million. As of December 31, 2023, we had $463.8 million in cash, cash equivalents and marketable securities. Based upon our current operating plan, we believe that our existing cash, cash equivalents and marketable securities, will enable us to fund our operating expenses and capital expenditure requirements through at least the next 12 months following the issuance of the consolidated financial statements.
Current wording
In September 2023, we completed our initial public offering (IPO) pursuant to which we issued and sold an aggregate of 14,710,000 shares of our common stock at a price to the public of $17.00 per share. We received aggregate net proceeds of $226.5 million after deducting underwriting discounts and commissions of $17.5 million and other offering expenses of $6.0 million. Since our IPO, in October 2024 we entered into a sales agreement with Leerink Partners LLC (Leerink) to sell shares of our common stock, from time to time, with aggregate gross sales proceeds of up to $300.0 million, through an at-the-market equity offering program (ATM) with Leerink as the sales agent. During the year ended December 31, 2024, we received aggregate net proceeds of $13.7 million after deducting commissions and offering expenses of $0.8 million. As of December 31, 2024, we had $307.6 million in cash, cash equivalents and marketable securities. Based upon our current operating plan, we believe that our existing cash, cash equivalents and marketable securities, will enable us to fund our operating expenses and capital expenditure requirements through at least the next 12 months following the issuance of the consolidated financial statements.
Previous wording
Since our inception, we have incurred significant net losses, which are primarily attributable to acquired intangible in-process research and development intangible asset (IPR&D) costs pursuant to our acquisitions, which occurred in 2020 and were accounted for as an acquisition of assets. We expect to continue to incur significant losses for the foreseeable future as we continue to advance the development of our product candidates and approach, and incur additional costs associated with being a public company. Our net losses were $235.9 million and $130.9 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $703.4 million. Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, and in-licensing our precision neuroscience approach and product candidates, and conducting preclinical studies and clinical trials, and to a lesser extent, general and administrative expenditures. Our net losses may fluctuate significantly from period to period, depending on the timing of our clinical trials and our expenditures on research and development activities.
Current wording
Since our inception, we have incurred significant operating losses and we expect to continue to incur significant losses for the foreseeable future as we continue to advance the development of our product candidates and approach, and incur additional costs associated with being a public company. Our net losses were $243.8 million, $235.9 million, $130.9 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, we had an accumulated deficit of $947.2 million. Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, and in-licensing our precision neuroscience approach and product candidates, and conducting preclinical studies and clinical trials, and to a lesser extent, general and administrative expenditures. Our net losses may fluctuate significantly from period to period, depending on the timing of our clinical trials and our expenditures on research and development activities.
Previous wording
Pursuant to the terms of the BlackThorn Merger Agreement, we are required to pay the former stockholders of BlackThorn contingent consideration (i) with respect to navacaprant, in the form of development and regulatory approval milestones of up to an aggregate amount of $365.0 million, which includes a milestone payment that became due in October 2023 upon dosing the first patient in the Phase 3 clinical trial for navacaprant, and sales-based milestones of up to an aggregate amount of $450.0 million and (ii) with respect to NMRA-511, in the form of development and regulatory approval milestones of up to an aggregate amount of $100.0 million, and sales-based milestones of up to an aggregate amount of $100.0 million (BlackThorn Milestones). At the Company’s sole discretion, the BlackThorn Milestone payments may be settled in cash or shares of the Company, or a combination of both, subject to the provisions of the BlackThorn Merger Agreement, other than one development milestone in the amount of $10.0 million, which must be settled in cash. In December 2023, we issued 6,072,445 shares of common stock based on the volume weighted average price per share prior to the date the milestone was met and paid $2.3 million in cash in satisfaction of the Phase 3 navacaprant milestone to the former stockholders of BlackThorn and participants in the carveout plan. As of December 31, 2023, none of the other BlackThorn Milestones have been achieved and no such related amounts were deemed due or payable.
Current wording
Pursuant to the terms of the BlackThorn Merger Agreement, we are required to pay the former stockholders of BlackThorn contingent consideration (i) with respect to navacaprant, in the form of development and regulatory approval milestones of up to an aggregate amount of $365.0 million, which includes a milestone payment that became due and was paid in the fourth quarter of 2023 upon dosing the first patient in the Phase 3 clinical trial for navacaprant, and sales-based milestones of up to an aggregate amount of $450.0 million and (ii) with respect to NMRA-511, in the form of development and regulatory approval milestones of up to an aggregate amount of $100.0 million, and sales-based milestones of up to an aggregate amount of $100.0 million (BlackThorn Milestones). At the Company’s sole discretion, the BlackThorn Milestone payments may be settled in cash or shares of the Company, or a combination of both, subject to the provisions of the BlackThorn Merger Agreement, other than one development milestone in the amount of $10.0 million, which must be settled in cash. In December 2023, we issued 6,072,445 shares of common stock based on the volume weighted average price per share prior to the date the milestone was met and paid $2.3 million in cash in satisfaction of the Phase 3 navacaprant milestone to the former stockholders of BlackThorn and participants in the carveout plan. As of December 31, 2024, none of the other BlackThorn Milestones have been achieved and no such related amounts were deemed due or payable.
Previous wording
Research and development expenses consist of external and internal expenses, and primarily relate to our discovery efforts and development of our precision neuroscience approach, programs, and product candidates. We account for acquired in-process research and development (IPR&D) expenses from our strategic acquisitions, which account for a significant portion of our operating expenses, separately from research and development expenses.
Current wording
Research and development expenses consist of external and internal expenses, and primarily relate to our discovery efforts and development of our precision neuroscience approach, programs, and product candidates. We account for acquired in-process research and development (IPR&D) expenses from our strategic acquisitions, which accounted for a significant portion of our operating expenses during the years ended December 31, 2023 and 2022, separately from research and development expenses. There was no IPR&D expense recognized during the year ended December 31, 2024.
Previous wording
We expect our research and development expenses to increase substantially for the foreseeable future as we incur costs to further develop our precision neuroscience approach and advance our programs and product candidates through clinical development and pursue regulatory approval of our product candidates. The process of conducting the necessary clinical and preclinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result of the uncertainties discussed below, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates.
Current wording
We expect to continue to incur significant research and development expenses for the foreseeable future as we further develop our precision neuroscience approach and advance our programs and product candidates through clinical development and pursue regulatory approval of our product candidates. The process of conducting the necessary clinical and preclinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result of the uncertainties discussed below, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates.
Previous wording
the impact of general economic conditions, such as rising inflation and increasing interest rates.
Current wording
the impact of general economic conditions, such as inflation. tariffs, and interest rates.
Previous wording
Acquired in-process research and development expenses increased by $50.9 million, or 392%, to $63.9 million for the year ended December 31, 2023 from $13.0 million for the year ended December 31, 2022. For the year ended December 31, 2023, acquired in-process research and development expenses consisted of $61.1 million related to achievement of the Phase 3 navacaprant development milestone and $2.8 million related to our in-license from Vanderbilt, as these assets had not yet reached technological feasibility and had no alternative future use. For the year ended December 31, 2022, acquired in-process research and development expenses consisted of costs to acquire rights to IPR&D assets upon the execution of our in-license from Vanderbilt.
Current wording
Acquired in-process research and development expenses decreased to nil for the year ended December 31, 2024 from $63.9 million for the year ended December 31, 2023. For the year ended December 31, 2023, acquired in-process research and development expenses consisted of $61.1 million related to achievement of the Phase 3 navacaprant development milestone and $2.8 million related to our in-license from Vanderbilt, as these assets had not yet reached technological feasibility and had no alternative future use.
Previous wording
General and administrative expenses increased by $14.4 million, or 46%, to $45.5 million for the year ended December 31, 2023 from $31.1 million for the year ended December 31, 2022 as we continued to expand our administrative functions to support our business. The increase was primarily attributable to $10.1 million higher personnel-related costs, including $5.1 million related to stock-based compensation, as we grew our headcount, a $2.8 million increase in professional services mainly related to recruiting, strategic planning and research, accounting and advisory, a $0.7 million increase in external services mainly related to program branding and other initiatives and a $0.5 million increase in business insurance.
Current wording
General and administrative (G&A) expenses increased by $17.1 million, or 38%, to $62.5 million for the year ended December 31, 2024 from $45.5 million for the year ended December 31, 2023. The increase was primarily attributable to higher personnel-related costs, including $13.2 million related to stock-based compensation due to the increased value of stock awards issued, a $2.6 million increase in professional services for legal, accounting and advisory services, a $1.0 million increase in business insurance, and a $1.0 million increase in facilities cost due to a higher allocation of G&A costs.
Previous wording
Interest income increased by $12.1 million to $16.6 million for the year ended December 31, 2023 from $4.6 million for the year ended December 31, 2022, which was attributable to interest earned on our higher balances in cash equivalents and marketable securities.
Current wording
Interest income increased by $3.3 million to $19.9 million for the year ended December 31, 2024 from $16.6 million for the year ended December 31, 2023, which was attributable to interest earned on our higher balances in cash equivalents and marketable securities.
Previous wording
As of December 31, 2023, we had $463.8 million of cash, cash equivalents and marketable securities. Prior to our IPO we primarily funded our operations with the net proceeds from the sale and issuance of our convertible preferred stock and convertible promissory notes and raised gross cash proceeds of over $600 million including from the sale of convertible preferred stock, borrowings pursuant to convertible promissory notes and cash acquired in our acquisitions of assets. On September 19, 2023, we completed our IPO pursuant to which we issued and sold an aggregate of 14,710,000 shares of common stock at a price to the public of $17.00 per share. We received aggregate net proceeds of $226.5 million after deducting underwriting discounts and commissions of $17.5 million and other offering expenses of $6.0 million.
Current wording
As of December 31, 2024, we had $307.6 million of cash, cash equivalents and marketable securities. Prior to our IPO we primarily funded our operations with the net proceeds from the sale and issuance of our convertible preferred stock and convertible promissory notes and raised gross cash proceeds of over $600 million including from the sale of convertible preferred stock, borrowings pursuant to convertible promissory notes and cash acquired in our acquisitions of assets. In September, 2023, we completed our IPO pursuant to which we issued and sold an aggregate of 14,710,000 shares of common stock at a price to the public of $17.00 per share. We received aggregate net proceeds of $226.5 million after deducting underwriting discounts and commissions of $17.5 million and other offering expenses of $6.0 million. Since our IPO, in October 2024 we entered into a sales agreement with Leerink to sell shares of our common stock, from time to time, with aggregate gross sales proceeds of up to $300.0 million, through an ATM with Leerink as the sales agent. We received aggregate net proceeds of $13.7 million after deducting commissions and offering expenses of $0.8 million during the three months ended December 31, 2024.
Previous wording
Since our inception, we have not generated any revenue from the sale of products and we have incurred significant net losses and negative cash flows from operations. Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, and in-licensing our precision neuroscience approach, programs, and product candidates, and conducting preclinical studies and clinical trials, and to a lesser extent, general and administrative expenditures. We have not yet commercialized any products and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever. As of December 31, 2023, we had an accumulated deficit of $703.4 million.
Current wording
Since our inception, we have not generated any revenue from the sale of products and we have incurred significant net losses and negative cash flows from operations. Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, and in-licensing our precision neuroscience approach, programs, and product candidates, and conducting preclinical studies and clinical trials, and to a lesser extent, general and administrative expenditures. We have not yet commercialized any products and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever. As of December 31, 2024, we had an accumulated deficit of $947.2 million.
Previous wording
We expect our expenses and operating losses will increase substantially over the foreseeable future as we continue our research and development efforts, advance our product candidates through clinical and preclinical development, enhance our precision neuroscience approach and programs, expand our product pipeline, seek regulatory approval, prepare for commercialization, as well as hire additional personnel and protect our intellectual property, Furthermore, as a result of the completion of our IPO on September 19, 2023, we have incurred and will continue to incur additional costs associated with being a public company. We also expect to increase the size of our administrative function to support the growth of our business. Our net losses may fluctuate significantly from period to period, depending on the factors described below. We are subject to the risks typically related to the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business. The expected increase in expenses will be driven in large part by our ongoing activities, and our future capital requirements will depend on many factors, including:
Current wording
We expect our expenses and operating losses will increase substantially over the foreseeable future as we continue our research and development efforts, advance our product candidates through clinical and preclinical development, enhance our precision neuroscience approach and programs, expand our product pipeline, seek regulatory approval, prepare for commercialization, as well as hire additional personnel and protect our intellectual property. Furthermore, we have incurred and will continue to incur additional costs associated with being a public company. We also expect to increase the size of our administrative function to support the growth of our business. Our net losses may fluctuate significantly from period to period, depending on the factors described below. We are subject to the risks typically related to the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business. The expected increase in expenses will be driven in large part by our ongoing activities, and our future capital requirements will depend on many factors, including:
Previous wording
the effect of macroeconomic trends including inflation and rising interest rates;
Current wording
the effect of macroeconomic trends including inflation, tariffs, and interest rates;
Previous wording
addressing any potential supply chain interruptions or delays, including those related to geopolitical issues or the COVID-19 pandemic;
Current wording
addressing any potential supply chain interruptions or delays, including those related to geopolitical issues;
Previous wording
Net cash used in operating activities for the year ended December 31, 2022 was $114.9 million, which consisted of a net loss of $130.9 million and a change in our net operating assets and liabilities of $6.9 million, partially offset by $10.0 million in noncash charges and $13.0 million IPR&D assets acquired from Vanderbilt that were expensed to acquired in-process research and development upon acquisition because the assets had not yet reached technological feasibility and had no alternative future use. The change in our net operating assets and liabilities primarily resulted from a decrease of $2.9 million in accounts payable and accrued liabilities due to the timing of our accounts payable, an increase of $2.3 million in prepaid expenses and other current assets and other assets primarily related to our collaboration with Amgen and a decrease of $1.8 million in operating lease liabilities. The noncash charges primarily consisted of $8.3 million of stock-based compensation, $2.1 million of noncash operating lease expense and $0.6 million of depreciation and amortization, partially offset by $0.7 million of net accretion of discounts on marketable securities and $0.6 million in change in fair value of convertible preferred stock warrants.
Current wording
Net cash used in operating activities for thetwelve months ended December 31, 2024 was $182.9 million, which consisted of a net loss of $243.8 million, partially offset by a change in our net operating assets and liabilities of $22.6 million and noncash charges of $38.2 million. The change in our net operating assets and liabilities primarily resulted from a decrease of $15.9 million in prepaid expenses and other current assets related to our clinical programs and the Amgen Collaboration Agreement and an increase of $7.2 million and $2.9 million in accrued liabilities and accounts payable, respectively, primarily related to our clinical programs and timing of our accounts payable, partially offset by a decrease in operating lease liabilities of $3.4 million. The noncash charges primarily consisted of $40.0 million of stock-based compensation and $3.3 million of noncash operating lease expense, partially offset by $5.7 million of net accretion of discounts on marketable securities.
Previous wording
Net cash used in investing activities for the year ended December 31, 2022 was $168.0 million, which consisted of $226.4 million in purchases of marketable securities, $13.0 million of cash used to acquire IPR&D assets from Vanderbilt and $0.5 million of purchases of property and equipment primarily to support our research and development activities, partially offset by proceeds of $71.9 million from sales and maturities of marketable securities.
Current wording
Net cash used in investing activities for thetwelve months ended December 31, 2024 was $70.6 million, which primarily consisted of $312.2 million in purchases of marketable securities, partially offset by $242.4 million in proceeds from sales and maturities of marketable securities.
Previous wording
Net cash provided by financing activities for the year ended December 31, 2022 was $115.7 million, which consisted of $112.2 million from the issuance and sale of our Series B convertible preferred stock and $2.7 million in proceeds from the exercise of stock options and $1.6 million of proceeds from exercise of warrants, partially offset by $0.7 million in payments for offering costs.
Current wording
Net cash provided by financing activities for thetwelve months ended December 31, 2024 was $21.6 million, which primarily consisted of proceeds from the exercise of stock options of $7.5 million and net proceeds from the ATM offering of $13.7 million.
Previous wording
Our contractual obligations and commitments relate primarily to our operating lease for our office and laboratory facilities located in Massachusetts with a noncancelable lease term expiring in June 2025. As of December 31, 2023, undiscounted future minimum lease payments of $5.6 million remain on our operating lease. See Note 7 – Commitments and Contingencies to our consolidated financial statements for further information. Additionally, as of December 31, 2023, we have amounts due to Amgen pursuant to our September 2021 research and collaboration arrangement within the next year totaling $6.3 million. See Note 8 – Strategic License and Research and Collaboration Agreements to our consolidated financial statements for further information.
Current wording
Our contractual obligations and commitments relate primarily to our operating lease for our office and laboratory facilities located in Massachusetts with a noncancelable lease term expiring in June 2025. As of December 31, 2024, undiscounted future minimum lease payments of $1.9 million remain on our operating lease. See Note 7 – Commitments and Contingencies to our consolidated financial statements for further information.
Previous wording
We have entered into a number of acquisitions of assets that are summarized in Note 6 – Acquisitions of Assets to our consolidated financial statements. As part of these acquisitions of assets, we are obligated to pay cash and/or stock for future contingent payments that are dependent upon future events, and in some cases, vesting by the recipient of the contingent payment, such as our achievement of certain development, regulatory, and commercial milestones. We have also assumed license arrangements with various third parties, primarily as a result of our acquisitions, and have entered into additional agreements that are summarized in Note 8 –Strategic License and Research and Collaboration Agreements to our consolidated financial statements. In accordance with these agreements, we are obligated to pay, among other items, future contingent payments that are uncertain and dependent upon future events such as our achievement of certain development, regulatory, and commercial milestones royalties, and sublicensing revenue in the future, as applicable. In October 2023, in connection with our acquisition of BlackThorn, a milestone became due upon dosing the first patient in the Phase 3 clinical trial for navacaprant, which was settled in stock and cash in December 2023. In October 2023, in connection with our Vanderbilt License Agreement, a development milestone of $2.0 million became due, which was paid in cash in November 2023.
Current wording
We have entered into a number of acquisitions of assets that are summarized in Note 6 – Acquisitions of Assets to our consolidated financial statements. As part of these acquisitions of assets, we are obligated to pay cash and/or stock for future contingent payments that are dependent upon future events, and in some cases, vesting by the recipient of the contingent payment, such as our achievement of certain development, regulatory, and commercial milestones. We have also assumed license arrangements with various third parties, primarily as a result of our acquisitions, and have entered into additional agreements that are summarized in Note 8 –Strategic License and Research and Collaboration Agreements to our consolidated financial statements. In accordance with these agreements, we are obligated to pay, among other items, future contingent payments that are uncertain and dependent upon future events such as our achievement of certain development, regulatory, and commercial milestones royalties, and sublicensing revenue in the future, as applicable.
Previous wording
While our significant accounting policies are described in Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
Current wording
Our significant accounting policies are described in Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Certain of these significant accounting policies are important to understanding and evaluating our reported financial results.
Previous wording
We are an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies.
Current wording
We were an “emerging growth company,” as defined in the JOBS Act until December 31, 2024. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies.
Previous wording
We have elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may or may not be comparable to companies that comply with new or revised accounting pronouncements as of public companies’ effective dates.
Current wording
We have elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the date we lost emerging growth company status. As a result, our consolidated financial statements may or may not be comparable to companies that comply with new or revised accounting pronouncements as of public companies’ effective dates.
Previous wording
We have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies, and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non- affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
Current wording
We were also a “smaller reporting company,” as defined in the Exchange Act until December 31, 2024, and we have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies.