OnKure Therapeutics Inc
For the period ended Dec 31, 2024. Filed Mar 10, 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 10, 2025
OKUR$2.87+13.5%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 2024-03-28.
0000950170-24-038009
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-10.
0000950170-25-036252
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 101 previous paragraphs and 89 current paragraphs.
22 unchanged; 8 reworded; 59 added; 71 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 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 (59)
Current report
We are a clinical-stage biopharmaceutical company focused on the discovery and development of precision medicines that target biologically validated drivers of cancers underserved by available therapies. Using a structure- and computational chemistry-driven drug design platform, we are committed to improving clinical outcomes for patients by building a robust pipeline of small molecule drugs designed to selectively target specific mutations thought to be key drivers of cancer. By improving selectivity for the oncogenic and mutated form of these cancer-driver proteins, we aim to discover and develop drugs with improved safety and efficacy by sparing toxicity that arises from non-selective inhibition of the non-mutated (or wild-type) version of the protein. We work under the belief that inhibiting target proteins with specific mutations instead of wild-type variants should enable precise patient selection that will, in turn, improve the probability of clinical success. We designed our current product candidates utilizing disciplined medicinal chemistry, x-ray crystallography and computational chemistry to inhibit specified mutated versions of PI3Kα, a key mediator in cancer growth signaling. Our lead product candidate, OKI-219, is a highly selective inhibitor of PI3Kα H1047R that has a much smaller impact on PI3Kα WT. We plan to initially focus on the development of OKI-219 in patients with advanced breast cancer of genetic subtypes that are (a) both HR+ and HER2-; and (b) HER2+. We believe we can potentially expand the application of OKI-219 by conducting appropriate clinical trials in earlier lines of treatment within breast cancer, other subtypes of breast cancer, and potentially in other solid tumors. OKI-219 is currently in a first-in-human Phase 1a/1b clinical trial.
Current report
Merger
Current report
On the Closing Date, Reneo consummated the previously announced Merger pursuant to the terms of the Merger Agreement, by and among Reneo, Merger Sub I, Merger Sub II, and Legacy OnKure.
Current report
Pursuant to the Merger Agreement, on the Closing Date, (i) Reneo effected a reverse stock split of Reneo’s issued common stock at a ratio of 1:10, (ii) Reneo changed its name to “OnKure Therapeutics, Inc.”, (iii) Reneo reclassified all of its common stock as “Class A Common Stock” or “Class B Common Stock”, and (iv) Radiate Merger Sub I merged with and into Legacy OnKure, with Legacy OnKure as the surviving company in the Merger and, after giving effect to such Merger, Legacy OnKure becoming a wholly-owned subsidiary of OnKure Therapeutics, Inc..
Current report
Concurrently with the closing of the Merger, Reneo completed a private placement with certain investors (the "Concurrent Investors") to purchase 2,839,005 shares of Common Stock at a price per share of approximately $22.895 per share for an aggregate purchase price of approximately $65.0 million, including the conversion of outstanding convertible notes and accrued but unpaid interest thereon held by certain Legacy OnKure investors (the "Concurrent Financing"). In connection with the Concurrent Financing, Reneo entered into a registration rights agreement with certain investors, pursuant to which Reneo agreed to use commercially reasonably efforts to prepare and file a registration statement with the SEC within 45 calendar days after the Closing Date, registering the resale of the shares of Common Stock issued pursuant to the Concurrent Financing, which was filed in October 2024. Immediately after the effective time of the Merger, following the consummation of the Concurrent Financing, shares received by Legacy OnKure stockholders represented approximately 53.6%, pre-Merger Reneo shares outstanding represented approximately 25.1%, and the shares purchased in the Concurrent Financing represented approximately 21.3% of our outstanding Common Stock.
Current report
As of the open of trading on October 7, 2024, our Common Stock began trading on Nasdaq under the symbol “OKUR.”
Current report
We have funded our operations primarily through private placements of our common stock, preferred stock and issuance of convertible debt. As of December 31, 2024, we believe our cash resources are sufficient to fund our planned operations for at least the next 12 months from the date of issuance of these financial statements.
Current report
Research and development expenses primarily relate to expenses incurred in connection with the discovery and development of our product candidates.
Current report
Research and development expenses include:
Current report
employee-related expenses, including salaries, severance, retention, benefits, insurance, and share-based compensation expense;
Current report
the costs of acquiring, developing, and manufacturing and testing clinical and preclinical materials, including costs incurred under agreements with CMOs;
Current report
costs associated with non-clinical activities and regulatory operations; and
Current report
facilities, depreciation, market research, and other expenses, which include allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and laboratory supplies.
Current report
We make non-refundable advance payments for goods and services that will be used in future research and development activities. These payments are recorded as expenses in the period in which we receive or take ownership of the goods or when the services are performed. At any one time, we are working on multiple research or drug discovery programs and internal resources. Employees and infrastructure are not directly tied to any one program and are typically deployed across multiple programs; therefore, we do not track our research and development expenses on a program-specific basis.
Current report
Conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time-consuming. As we initiate new clinical trials, our research and development expenses may increase. Product candidates in later stages of development generally have higher development costs than those in earlier stages. As a result, we expect that our research and development expenses will increase substantially over the next several years as we advance product candidates through preclinical studies into and through clinical trials, continue to discover and develop additional product candidates, undertake activities to expand, maintain, protect and enforce our intellectual property portfolio, and hire additional research and development personnel.
Current report
Successful development of product candidates is highly uncertain and may not result in approved products. The probability of success for each product candidate may be affected by numerous factors, including clinical data, preclinical data, competition, manufacturability, and commercial viability. Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict. We anticipate that we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to our ability to enter strategic alliances with respect to each program or product candidate, the scientific and clinical success of each product candidate, and ongoing assessments as to each product candidate’s commercial potential. We will need to raise additional capital and may seek strategic alliances in the future to advance our various programs.
Current report
General and Administrative
Current report
General and administrative expenses consist primarily of salaries, bonuses and related benefits, share-based compensation, and severance and retention benefits related to our executive, finance and administrative functions, professional fees for auditing, tax, consulting and legal services, as well as insurance, board of director compensation, consulting and other administrative expenses. We recognize general and administrative expenses in the periods in which they are incurred.
Current report
We expect that our general and administrative expenses will increase over the next several years as we hire additional personnel to support the growth of our business. In addition, we will incur significant additional expenses associated with being a public company, including expenses related to accounting, audit, legal, regulatory, public company reporting and compliance, director and officer insurance, investor and public relations, and other administrative and professional services.
Current report
Interest Income
Current report
Interest income primarily consists of interest income generated from our cash equivalents in interest-bearing money market accounts.
Current report
Interest and Other Expense
Current report
Interest expense consists primarily of interest expense generated from our convertible notes payable, which were converted at the time of the Merger.
Current report
Comparison of the Year Ended December 31, 2024 and 2023
Current report
Research and development expenses were $43.8 million for the year ended December 31, 2024 compared to $32.1 million for the year ended December 31, 2023, an increase of $11.7 million. This increase was primarily due to an increase in research and development costs, consisting of a $6.3 million increase in clinical trial and manufacturing expenses and a $6.2 million increase in personnel-related costs due to an increase in headcount, and higher severance, and share-based compensation charges. These increases were partially offset by a decrease in outsourced research of $0.9 million.
Current report
We expect research and development expenses in 2025 to be higher than 2024 due to the continued efforts to advance of our clinical and preclinical programs.
Current report
General and administrative expenses were $10.6 million for the year ended December 31, 2024 and $4.8 million for the year ended December 31, 2023, an increase of $5.8 million. The increase was primarily related to increased personnel-related and consulting costs of $3.0 million, increased professional service costs, which includes legal, audit and tax services, of $2.1 million, and a $0.4 million increase related to insurance and outside director compensation during 2024.
Current report
We expect general and administrative expenses in 2025 to be higher than 2024 as we operate as a public company for the full year in 2025.
Current report
Other Income (Expense)
Current report
Other income (expense) was $1.7 million for the year ended December 31, 2024 compared to $1.6 million for the year ended December 31, 2023. The change was primarily due to an increase in interest income due to an increase in cash and cash equivalents available to invest during the year ended December 31, 2024 and increased interest expense related to convertible notes payable issued in 2024.
Current report
We expect other income (expense) in 2025 to be higher than 2024 with higher average available cash available to invest during 2025.
Current report
Since inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. We expect to continue to incur significant expenses and operating losses for 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 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 following the Closing. As a result, we will need additional capital to fund our operations, which we may seek to obtain from equity or debt financings, collaborations, licensing arrangements or other sources.
Current report
We have funded our operations primarily through private placements of equity and convertible debt. Based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our planned operations for at least the next 12 months from the date of filing this Annual Report.
Current report
Our primary uses of cash to date have been to fund our research and development activities, including with respect to our PI3Kα and other programs, business planning, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital and providing general and administrative support for these activities.
Current report
We have never generated any revenue from product sales and do not expect to generate any meaningful product revenue unless and until we obtain regulatory approval for our product candidates, and management does not know when, or if, that will occur. Until we can generate significant revenue from product sales, if ever, we will continue to require substantial additional capital to develop our product candidates and fund operations for the foreseeable future. We are subject to all the risks inherent in the development of new biopharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business.
Current report
In order to complete the development of our product candidates and to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize product candidates, if approved, we will require substantial additional capital. Accordingly, until such time that we can generate a sufficient amount of revenue from product sales or other sources, we expect to seek to raise any necessary additional capital through equity financings, debt financings or other capital sources, which could include income from collaborations, partnerships, licensing or other strategic arrangements with third parties. To the extent that we raise additional capital through equity financings or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, including restricting our operations and limiting our ability to incur liens, issue additional debt, pay dividends, repurchase our own Common Stock, make certain investments or engage in merger, consolidation, licensing or asset sale transactions. If we raise capital through collaborations, partnerships and other similar arrangements with third parties, we may be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We may be unable to raise additional capital from these sources on favorable terms, or at all.
Current report
Our ability to secure capital is dependent upon a number of factors, including our success in developing our product candidates. The failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including requiring us to delay, reduce or curtail our research, product development or future commercialization efforts. We may also be required to license rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. We cannot provide assurance that we will ever generate positive cash flow from operating activities.
Current report
Our future funding requirements will depend on many factors, including:
Current report
the scope, timing, progress, results and costs of researching and developing OKI-219, and conducting preclinical studies and clinical trials;
Current report
the scope, timing, progress, results and costs of researching and developing other product candidates that we may pursue;
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Removed paragraphs (71)
Previous report
Reneo is a pharmaceutical company historically focused on the development and commercialization of therapies for patients with rare genetic mitochondrial diseases, which are often associated with the inability of mitochondria to produce ATP. Our only product candidate, mavodelpar, is a potent and selective agonist of PPARδ. Mavodelpar has been shown to increase transcription of genes involved in mitochondrial function and increase FAO, and may increase production of new mitochondria.
Previous report
On December 14, 2023, we announced that our pivotal STRIDE study, a global, randomized, double-blind, placebo-controlled Phase 2b trial of mavodelpar in adult patients with PMM due to mtDNA defects, did not meet its primary or secondary efficacy endpoints. As a result, we suspended the development activities for mavodelpar and implemented cash preservation activities, including a substantial workforce reduction. We implemented a reduction in workforce in December 2023 and February 2024, and currently have eight full-time employees remaining.
Previous report
In January 2024, our Board of Directors retained an independent financial advisor to initiate a formal process to evaluate potential strategic alternatives focused on maximizing stockholder value, including, but not limited to, a merger, sale, other business combination, a strategic partnership with one or more parties, or the licensing, sale or divestiture of our assets. Our Board of Directors, in consultation with our independent financial and legal advisors, is evaluating a number of indications of interest we have received. If we do not successfully consummate a strategic alternative, our Board of Directors may decide to pursue a dissolution and liquidation of our company. We are no longer pursuing further clinical development of mavodelpar at this time. The disclosures throughout this Annual Report include discussion regarding our historical operations along with potential risks that could arise if we or a third party pursue further research, development or clinical trials in the future. Our evaluation of potential strategic alternatives entails numerous significant risks and uncertainties, including those set forth in Part I, Item 1A under the heading “Risk Factors” of this Annual Report.
Previous report
License Agreement
Previous report
In December 2017, we entered into the vTv License Agreement, under which we obtained an exclusive, worldwide, sublicensable license under certain vTv Therapeutics intellectual property to develop, manufacture and commercialize PPARδ agonists and products containing such PPARδ agonists, including mavodelpar, for any therapeutic, prophylactic or diagnostic application in humans. Since we have suspended all development activity related to mavodelpar, we are not currently performing any development efforts under the vTv License Agreement.
Previous report
Under the terms of the vTv License Agreement, we paid vTv Therapeutics an initial upfront license fee of $3.0 million and $2.0 million of milestone payments and issued an aggregate of 576,443 shares of our common stock to vTv Therapeutics. On October 30, 2023, we repurchased from vTv Therapeutics all 576,443 shares of our common stock previously issued to vTv Therapeutics under the vTv License Agreement for an aggregate purchase price of approximately $4.4 million in a private, non-underwritten transaction.
Previous report
Upon the achievement of certain pre-specified development and regulatory milestones, we are also required to pay vTv Therapeutics milestone payments totaling up to $64.5 million. We are also required to pay vTv Therapeutics up to $30.0 million in total sales-based milestones upon achievement of certain sales thresholds of the licensed product. As of December 31, 2023, we have paid an aggregate of $2.0 million in development and regulatory milestone payments. In addition, we are obligated to make tiered royalty payments to vTv Therapeutics at mid-single digit to low teen percentage royalty rates, based on tiers of annual net sales of licensed products, subject to certain customary reductions. There were no milestone payments achieved or recorded for the years ended December 31, 2023 and 2022.
Previous report
In January 2024, consistent with our implementation of cash preservation activities, including suspension of development activities of our only product candidate, mavodelpar, we returned to vTv Therapeutics prosecution and maintenance responsibility of the vTv Therapeutics intellectual property relating to vTv Therapeutics’ PPARδ agonist program, including mavodelpar. We continue to maintain and prosecute Reneo owned intellectual property related to mavodelpar.
Previous report
Research and Development Expenses
Previous report
Research and development expenses primarily relate to preclinical and clinical development of mavodelpar. Research and development expenses include:
Previous report
personnel expenses, including salaries, benefits, and stock-based compensation expense;
Previous report
raw materials related to manufacturing of our product candidate for clinical trials and preclinical studies, including fees paid to third-party manufacturers;
Previous report
expenses related to regulatory activities, including filing fees paid to regulatory agencies;
Previous report
expenses related to medical affairs activities, including field teams to initiate relevant disease education and publications;
Previous report
depreciation and maintenance expenses; and
Previous report
fees for maintaining licenses under our third-party licensing agreements.
Previous report
Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. Costs for certain activities, such as manufacturing and preclinical studies and clinical trials, are generally recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and collaborators. We expense amounts paid to acquire licenses associated with products under development when the ultimate recoverability of the amounts paid is uncertain and the technology has no alternative future use when acquired.
Previous report
The following table summarizes our research and development expenses for the years ended December 31, 2023 and 2022 (in thousands):
Previous report
As a result of implementing our cash preservation activities, including suspension of development activities for mavodelpar, we expect our research and development expenses to decrease for the foreseeable future. If we pursue further development of mavodelpar or any other product candidates in the future, we cannot determine with certainty the timing of initiation, the duration or the completion costs of such clinical trials due to the inherently unpredictable nature of preclinical and clinical development. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. We may need to raise substantial additional capital in the future. In addition, we cannot forecast whether any future product candidate may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
Previous report
Our research and development costs may vary significantly based on factors such as:
Previous report
the scope, rate of progress, expense and results of clinical trials and preclinical studies;
Previous report
per patient trial costs;
Previous report
the number of trials required for approval;
Previous report
the number of sites included in the trials;
Previous report
the countries in which the trials are conducted;
Previous report
the number of patients that participate in the trials;
Previous report
uncertainties in patient enrollment or drop out or discontinuation rates;
Previous report
potential additional safety monitoring requested by regulatory agencies;
Previous report
the duration of patient participation in the trials and follow-up;
Previous report
the safety and efficacy of our product candidate;
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the extent to which we establish strategic collaborations or other arrangements.
Previous report
General and administrative expenses consist primarily of salaries, benefits, and stock-based compensation expense for personnel in executive, finance and administrative functions. General and administrative expenses also include professional fees for accounting, legal, and commercial development, corporate facility costs not otherwise included in research and development expenses, and insurance. We expect our general and administrative expenses to decrease for the foreseeable future as a result of our cash preservation activities.
Previous report
Other income consists of interest income on our cash, cash equivalents and short-term investments.
Previous report
Comparison of Year Ended December 31, 2023 and 2022
Previous report
Operating Expenses
Previous report
Research and Development Expenses
Previous report
Research and development expenses increased by $18.9 million during 2023 compared to 2022. This increase was primarily due to an increase of $13.3 million related to clinical and manufacturing costs in our STRIDE and STRIDE AHEAD studies, which have now been completed and discontinued, respectively, an increase of $2.6 million in medical affairs, an increase of $1.7 million in personnel-related costs due to additional headcount and an increase of $1.7 million in severance payments related to our workforce reduction in December 2023, offset by decrease of $0.6 million in other research and development expenses.
Previous report
General and Administrative Expenses
Previous report
General and administrative expenses increased by $10.3 million during 2023 compared to 2022. This increase was primarily due to an increase of $5.7 million in commercial development activities, an increase of $1.7 million in facility and personnel-related costs due to additional headcount, an increase of $0.8 million in severance expense related to our workforce reduction in December 2023 and an increase of $0.6 million in impairment charges as a result of the suspension of our mavodelpar development program.
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Reworded paragraphs (8)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included in Item 8 “Financial Statements and Supplementary Data” and included elsewhere in this Annual Report. This discussion and analysis contains forward-looking statements based upon our current beliefs, estimates, plans and expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those contained in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or in other parts of this Annual Report.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report. This discussion and analysis contains forward-looking statements based upon our current beliefs, estimates, plans and expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those contained in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or in other parts of this Annual Report.
Previous wording
Since our inception in 2014, our operations have primarily focused on raising capital, establishing and protecting our intellectual property portfolio, organizing and staffing our company, business planning, and conducting preclinical and clinical development of and manufacturing development for mavodelpar. We do not have any product candidates approved for sale, have not generated any revenue from product sales, and do not expect to generate revenues from the commercial sale of any products for the foreseeable future, if ever. Since inception, we have incurred significant operating losses. Our net losses were $77.4 million and $52.0 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $218.5 million, and cash, cash equivalents and short-term investments of $103.0 million. We anticipate having approximately $82.0 million in cash, cash equivalents, and short-term investments as of March 31, 2024. We have funded our operations primarily through the issuance and sale of equity securities.
Current wording
Since our inception, our operations have primarily focused on raising capital, establishing and protecting our intellectual property portfolio, organizing and staffing our company, business planning, and conducting preclinical and clinical development of and manufacturing development for our product candidates. We do not have any product candidates approved for sale, have not generated any revenue from product sales, and do not expect to generate revenues from the commercial sale of any products for the foreseeable future, if ever. Since inception, we have incurred significant operating losses. Our net losses were $52.7 million and $35.3 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $154.7 million, and cash and cash equivalents of $110.8 million.
Previous wording
external expenses incurred under agreements with CROs, investigative sites and consultants to conduct and support our preclinical studies and clinical trials;
Current wording
expenses incurred under agreements with CROs, which are investigative sites that conduct our clinical trials, other clinical trial-related vendors and clinical consultants;
Previous wording
The following table summarizes our results of operations for the years ended December 31, 2023 and 2022 (in thousands):
Current wording
The following table summarizes our results of operations for the periods indicated (in thousands):
Previous wording
the cost and timing of manufacturing our product candidates; and
Current wording
the cost and timing of attracting, hiring and retaining skilled personnel to support our operations and continued growth;
Previous wording
Net cash provided by investing activities for the year ended December 31, 2023 was $10.5 million, consisting of the net proceeds from maturities of available-for-sale short-term investments.
Current wording
Net cash provided by investing activities for the year ended December 31, 2024 was $15.9 million and consisted primarily of $15.9 million of proceeds from the sale of available-for-sale securities.
Previous wording
Net cash used in investing activities for the year ended December 31, 2022 was $57.8 million, consisting of the net purchase of available-for-sale short-term investments.
Current wording
Net cash used in investing activities for the year ended December 31, 2023 was $0.2 million for the purchase of property and equipment.
Previous wording
Nonrefundable advance payments for goods and services, including fees for process development or manufacturing and distribution of clinical supplies that will be used in future research and development activities, are deferred and recognized as expense in the period that the related goods are consumed, or services are performed.
Current wording
We record research and development expenses in the period in which we receive or take ownership of the applicable goods or when the applicable services are performed. We are required to estimate our expenses resulting from our obligations under contracts with vendors, consultants, and contract research organizations, in connection with conducting research and development activities. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. We reflect research and development expenses in our financial statements by matching those expenses with the period in which services and efforts are expended. We account for these expenses according to the progress of the preclinical studies or clinical trials, as measured by the timing of various aspects of the study or related activities. We determine accrual estimates through a review of the underlying contracts along with the preparation of financial models considering discussions with research and other key personnel as to the progress of studies, trials, or other services being conducted. During a study or trial, we adjust our rate of expense recognition if actual results differ from our estimate. Nonrefundable advance payments for goods and services, including fees for process development or manufacturing and distribution of clinical supplies that will be used in future research and development activities, are deferred and recognized as an expense in the period that the related goods are consumed, or services are performed.