Lexeo Therapeutics, Inc.
For the period ended Dec 31, 2024. Filed Mar 24, 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 24, 2025
LXEO$2.89-0.5%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 2024-03-11.
0000950170-24-028941
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-24.
0000950170-25-043486
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 131 previous paragraphs and 117 current paragraphs.
80 unchanged; 25 reworded; 12 added; 25 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 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 (12)
Current report
Overview
Current report
We are a clinical stage genetic medicine company dedicated to reshaping heart health by applying pioneering science to fundamentally change how cardiovascular diseases are treated. We are advancing a portfolio of therapeutic candidates that take aim at the underlying genetic causes of conditions, including FA cardiomyopathy, PKP2 arrhythmogenic cardiomyopathy, and other devastating diseases with high unmet need.
Current report
Our most advanced cardiovascular product candidate, LX2006 for the treatment of FA cardiomyopathy, is currently being evaluated in SUNRISE-FA, our ongoing Phase 1/2 clinical trial and in a Cornell investigator-initiated trial. In July 2024, we provided an interim clinical update, which included baseline characteristics from the 11 treated participants across the two studies and data from the 8 participants who had reached at least 6-months of follow-up as of that time. These data showed improvements in key cardiac biomarkers including left ventricular mass index, lateral wall thickness, and high-sensitivity troponin I. Additionally, in November 2024 we reported that we observed an increase in frataxin protein expression in the hearts of four patients that had undergone cardiac biopsies (cohort 1 (n=1), cohort 2 (n=3)) as measured by LCMS and immunohistochemistry. LX2006 has been generally well-tolerated across both trials to date. One year after dosing, one participant with multiple comorbidities and a history of flu-like symptoms presented with Grade 2 asymptomatic myocarditis. Six weeks later, a biopsy was negative for myocarditis and the participant remains asymptomatic. In November 2024 we announced alignment with the FDA on key elements of a registrational development plan for LX2006, including an accelerated approval pathway with left ventricular mass index and frataxin protein expression as co-primary registrational endpoints. In February 2025, we reached further alignment with FDA that the frataxin protein expression co-primary endpoint would be evaluated for any increase from baseline in frataxin positive area as measured by immunohistochemistry as opposed to any specific numerical threshold. We expect to provide a further interim data update in mid-2025.
Current report
Our second most advanced cardiovascular product candidate, LX2020 for the treatment of ACM caused by mutations in the PKP2 gene, referred to as PKP2-ACM, is currently being evaluated in HEROIC-PKP2, an ongoing Phase 1/2 clinical trial. To date, six participants have been enrolled in this trial: three in cohort 1 and three in cohort 2. We have obtained post-treatment cardiac biopsies from two participants in cohort 1; the third cohort 1 participant elected to not undergo the post-treatment biopsy procedure. In these two participants with post-treatment samples, we have observed an increase in PKP2 protein expression in the heart quantified using western blot assay showing a 71% and 115% increase in PKP2 protein expression versus pre-treatment baseline. In addition, the first participant to reach 6 months post-treatment experienced a 67% reduction in PVCs from baseline and normalization of QRS duration. Across all participants dosed, LX2020 has been generally well-tolerated with no treatment-related serious adverse events to date. We expect to provide an interim data readout focused on clinical efficacy biomarkers in the second half of 2025.
Current report
Each of our gene therapy candidates utilizes the vector construct, dose and route of administration that we believe will result in the most favorable biodistribution and safety profile for our product candidate for each disease. Our most advanced programs use the AAVrh10 vector due to its high transduction efficiency in myocardial cells, potential for lower toxicity given the opportunity to utilize lower doses compared to other well-established AAV serotypes, and low pre-existing immunity.
Current report
Other income (expense), net
Current report
Accretion of discount on investments
Current report
Accretion of discount on investments consists of accretion of discount on our investments in U.S. Treasury securities.
Current report
The net increase of $16.3 million in general and administrative expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to increases in (i) employee compensation and stock-based compensation expenses of $7.3 million primarily due to increased headcount and equity awards granted since December 31, 2023, (ii) third-party legal fees and associated costs of $6.4 million, (iii) third-party audit, tax, investor relations, public relations and other professional service provider fees, as well as insurance expenses, of $1.2 million primarily due to our becoming a publicly traded company in November 2023, (iv) travel, software, office supplies, and dues and subscription expenses of $0.6 million, and (v) capital tax expense of $0.3 million.
Current report
During the year ended December 31, 2024, net cash used in investing activities was $94.1 million and consisted primarily of the purchase of investments in U.S. Treasury securities and lab equipment.
Current report
Emerging growth company and smaller reporting company status
Current report
We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates was less than $700.0 million as of June 30, 2024 and our annual revenue was less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (1) the market value of our stock held by non-affiliates is less than $250.0 million or (2) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million as of June 30 of such year. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited consolidated financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Removed paragraphs (25)
Previous report
We are a clinical stage genetic medicine company dedicated to transforming healthcare by applying pioneering science to fundamentally change how disease is treated. By taking aim at the underlying genetic cause of the devastating diseases we target, we seek to create substantial positive impact and reduce the overwhelming burdens placed on people receiving treatment, their caregivers, and healthcare systems. Our current pipeline consists of candidates targeting patient populations that place significant burden on society and are most amenable to our genetic medicine approach.
Previous report
Stelios acquisition
Previous report
On July 16, 2021, we purchased all of the issued and outstanding capital stock of Stelios for initial cash consideration of $7.0 million, with payments of up to an additional $20.5 million due upon the achievement of the following milestones: clinical candidate selection for either the ACM or the TNNI3-associated programs; first patient dosed in a Phase 1 clinical trial for any product in our Cx43 program; first patient dosed in a Phase 1 clinical trial for any product in our ACM program; or first patient dosed in a Phase 1 clinical trial for any candidate in our TNNI3 program. In the third quarter of 2022, a development milestone associated with a clinical candidate selection was achieved resulting in a $2.0 million payment to the selling shareholders of Stelios.
Previous report
We accounted for the acquisition of Stelios as an asset acquisition pursuant to Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Section 805, Business Combinations. We acquired in-process research and development, or IPR&D, assets from Stelios related to ACM and TNNI3-associated hypertrophic cardiomyopathy programs. Such programs relate to our development efforts for LX2020, LX2021 and LX2022. The fair value of the IPR&D acquired of $7.0 million was charged to research and development expense as it had no alternative future use at the time of the acquisition. Stelios was merged into Lexeo Therapeutics, Inc. on December 15, 2022 and ceased to exist.
Previous report
See Note 13 to the audited consolidated financial statements appearing elsewhere in this Annual Report for more information on the Stelios acquisition.
Previous report
Lease agreement
Previous report
In February 2022, we entered into a lease agreement for our New York headquarters located at 345 Park Avenue South, 6th Floor, New York, NY 10010, pursuant to which we lease a total of approximately 15,839 square feet of office and laboratory space. The lease began in April 2022 and ends in July 2029 with an additional five-year option to extend at the then prevailing effective market rental rate. We accounted for this lease pursuant to FASB ASC Topic 842, Leases. Upon commencement of this lease, we recorded operating lease right-of-use assets and operating lease liabilities of approximately $11.6 million based on the present value of payments over the lease term using an estimated incremental borrowing rate of 8.53%. In connection with this lease, we provided a security deposit to the landlord in the form of a letter of credit totaling $1.2 million.
Previous report
See Note 5 to the audited consolidated financial statements appearing elsewhere in this Annual Report for more information on this lease.
Previous report
Other income (expense)
Previous report
Grant revenue
Previous report
We did not record any grant revenue for the year ended December 31, 2023, and grant revenue was $0.7 million for the year ended December 31, 2022. The decrease in grant revenue was due to the wind-down of the underlying grants, which was completed in the third quarter of 2022.
Previous report
General and administrative expenses were $15.4 million for the year ended December 31, 2023 compared to $12.0 million for the year ended December 31, 2022. The increase of $3.4 million was primarily due to increases in (i) $1.9 million of employee compensation and stock-based compensation expenses due to increased headcount, (ii) $1.7 million of third-party legal costs, and (iii) $0.3 million of rent expense as the operating lease for our New York headquarters commenced in April 2022, which were partially offset by a decrease of $0.4 million in third-party audit, accounting service provider, and professional service fees.
Previous report
Our primary uses of cash are to fund our clinical trials, research and development activities related to our discovery programs and our preclinical and clinical product candidates, hiring personnel, raising capital and providing general and administrative support for these operations.
Previous report
Given the lack of an active public market for our common stock and other equity instruments prior to our IPO, the estimated fair value of our common stock was determined by our board of directors as of the date of each option grant, 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 which may have changed from the date of the most recent valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.
Previous report
Our common stock valuations were prepared using either an option pricing method, or OPM, or a hybrid method of OPM and probability-weighted expected return method, or PWERM. Both the OPM and hybrid methods use market approaches to estimate our enterprise value. These third-party valuations were performed at various dates, which resulted in valuations of our common stock of $14.62 as of December 17, 2021, $15.15 as of February 15, 2022, $17.59 as of February 14, 2023, and $11.02 as of June 23, 2023. In addition to considering the results of these third-party valuations, our board of directors considered various objective and subjective factors to determine the fair value of our common stock as of each grant date, including:
Previous report
the prices at which we sold shares of preferred stock and the superior rights and preferences of the preferred stock relative to our common stock at the time of each grant;
Previous report
the progress of our research and development programs, including the status and results of preclinical studies for our product candidates;
Previous report
our stage of development and our business strategy;
Previous report
external market conditions affecting the biopharmaceutical industry and trends within the biopharmaceutical industry;
Previous report
our financial position, including cash on hand, and our historical and forecasted performance and operating results;
Previous report
the lack of an active public market for our common stock and our preferred stock;
Previous report
significant changes to the key assumptions underlying the factors used could have resulted in different fair values of common stock at each valuation date; the likelihood of achieving a liquidity event, such as an initial public offering, or IPO, or sale of our company in light of prevailing market conditions; and
Previous report
the analysis of IPOs and the market performance of similar companies in the therapeutics industry.
Previous report
The following table summarizes option activity for the year ended December 31, 2023:
Previous report
Emerging growth company status
Reworded paragraphs (25)
Previous wording
We have incurred significant operating losses since the commencement of our operations. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current gene therapy candidates or any future gene therapy candidates. Our net losses for the years ended December 31, 2022 and December 31, 2023 were $59.3 million and $66.4 million, respectively, and our accumulated deficit was $181.8 million at December 31, 2023. We expect to continue to incur significant losses for the foreseeable future as we advance our current and future product candidates through preclinical and clinical development, continue to build our operations and transition to operating as a public company.
Current wording
To date, we have funded our operations primarily through proceeds from the sale of shares of our convertible preferred stock and common stock, including our Private Placement, IPO and the subsequent partial exercise of the underwriters’ 30-day option to purchase additional shares of common stock. As of December 31, 2024, we had $128.5 million of cash, cash equivalents, and investments. We have incurred significant operating losses since the commencement of our operations. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current gene therapy candidates or any future gene therapy candidates. Our net losses for the years ended December 31, 2024 and December 31, 2023 were $98.3 million and $66.4 million, respectively, and our accumulated deficit was $280.2 million at December 31, 2024. We expect to continue to incur significant losses for the foreseeable future as we advance our current and future product candidates through preclinical and clinical development, continue to build our operations and operate as a public company.
Previous wording
continue our ongoing and planned clinical trials as well as research and development of our Friedreich’s ataxia cardiomyopathy, or FA cardiomyopathy (LX2006), APOE-associated Alzheimer’s disease (LX1001), and arrhythmogenic cardiomyopathy caused by mutations in the PKP2 gene, or PKP2-ACM (LX2020) programs and other product candidates;
Current wording
continue our ongoing and planned clinical trials as well as research and development of our FA cardiomyopathy (LX2006) and arrhythmogenic cardiomyopathy caused by mutations in the PKP2 gene, or PKP2-ACM (LX2020) programs and other product candidates;
Previous wording
Our revenue to date has been comprised of grant revenue, which are amounts earned from performing contracted research and development services. These grants generally require us to meet certain research milestones in order to receive the funds. To date, we have not generated any revenue from product sales. If our development efforts for LX2006, LX1001, and LX2020 or any future product candidates, are successful and result in regulatory approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from product sales, royalties or payments from such collaboration or license agreements, or a combination of product sales and payments from such agreements.
Current wording
To date, we have not generated any revenue from product sales. If our development efforts for LX2006 and LX2020 or any future product candidates, are successful and result in regulatory approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from product sales, royalties or payments from such collaboration or license agreements, or a combination of product sales and payments from such agreements.
Previous wording
Research and development activities are central to our business model and account for a significant portion of our operating expenses. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect our research and development expenses to increase substantially in absolute dollars for the foreseeable future as we further advance LX2006, LX2020, LX1001, and any other future product candidates that we may develop, into and through preclinical studies and clinical trials and pursue regulatory approvals. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of our product candidates 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 anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future research, preclinical studies and clinical trials, regulatory developments and our assessments as to each product candidate’s commercial potential. In addition, we cannot forecast whether any of our current or future product candidates will 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. We are also unable to predict when, if ever, we will generate revenue from our product candidates to offset our expenses.
Current wording
Research and development activities are central to our business model and account for a significant portion of our operating expenses. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect our research and development expenses to increase for the foreseeable future as we further advance LX2006 and LX2020, and any other future product candidates that we may develop, into and through preclinical studies and clinical trials and pursue regulatory approvals. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of our product candidates 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 anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future research, preclinical studies and clinical trials, regulatory developments and our assessments as to each product candidate’s commercial potential. In addition, we cannot forecast whether any of our current or future product candidates will 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. We are also unable to predict when, if ever, we will generate revenue from our product candidates to offset our expenses.
Previous wording
We expect that our general and administrative expenses will increase significantly in the near-to-medium term as we incur additional expenses associated with operating as a public company, including increased expenses for insurance premiums and audit, legal, regulatory, and tax-related services associated with maintaining compliance with the rules and regulations of the SEC and standards applicable to companies listed on a national securities exchange, investor relations activities and other administrative and professional services. We also plan to increase our general and administrative headcount to support the continued research and development of our programs and the growth of our business.
Current wording
We expect that our general and administrative expenses will increase in the future as we incur additional expenses to support the continued research and development of our programs and the growth of our business, including increasing our general and administrative headcount, as well as additional costs associated with operating as a large public company, including increased expenses for audit, legal, regulatory, investor relations and tax-related services associated with maintaining compliance with the rules and regulations of the Securities and Exchange Commission, or SEC, and standards applicable to companies listed on a national securities exchange.
Previous wording
Fair value adjustment to convertible SAFE Note
Current wording
Loss on fair value adjustment to convertible SAFE Note
Previous wording
Fair value adjustment to convertible SAFE Note consists of gains (losses) on the estimated fair value of the convertible SAFE Note.
Current wording
Loss on fair value adjustment to convertible SAFE Note consists of losses on the estimated fair value of the convertible SAFE Note.
Previous wording
Other income (expense) includes net foreign exchange gains (losses).
Current wording
Other income (expense), net includes net foreign exchange gains and (losses).
Previous wording
Interest expense is primarily associated with our finance right of use asset equipment leases, as well as amortization of the discount to our convertible SAFE Note liability balance since August 2023.
Current wording
Interest expense is primarily associated with our finance right of use asset equipment leases.
Previous wording
Interest income is primarily related to interest earned from our investment in a U.S. government money market fund, as well as interest earned on interest-bearing demand deposit cash accounts.
Current wording
Interest income is primarily related to interest earned from our investment in a U.S. government money market fund and interest earned from our investments in U.S. Treasury securities, as well as interest earned on interest-bearing demand deposit cash accounts.
Previous wording
Provision for income taxes consists of U.S. federal and state income taxes in which we conduct business. Since our inception, we have not recorded any income tax benefits for the net losses we have incurred in each year or for our research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our NOL carryforwards and tax credits will not be realized. Accordingly, we have recorded a full valuation allowance against our net deferred tax assets at December 31, 2023, and December 31, 2022. As of December 31, 2023 and December 31, 2022 we had no unrecognized tax benefits.
Current wording
Provision for income taxes consists of U.S. federal and state income taxes in the jurisdictions where we conduct business. Since our inception, we have not recorded any income tax benefits for the net losses we have incurred in each year or for our research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss, or NOL, carryforwards and tax credits will not be realized. Accordingly, we have recorded a full valuation allowance against our net deferred tax assets at December 31, 2024 and December 31, 2023. As of December 31, 2024 and December 31, 2023, we had no unrecognized tax benefits.
Previous wording
The net increase of $4.0 million in total research and development expenses for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to increases in (i) clinical trial costs of $5.3 million, (ii) employee compensation and stock-based compensation expenses of $3.4 million due to increased headcount, and (iii) net milestone expense of $1.5 million that consisted of a $3.5 million milestone paid to Adverum in 2023 that was partially offset by a $2.0 million milestone payment made to the selling shareholders of Stelios during the year ended December 31, 2022. These increases were partially offset by decreases in (i) non-clinical and preclinical expenses of $5.4 million primarily related to our early stage cardiovascular and CNS disease programs, (ii) other unallocated expenses of $2.9 million, and (iii) CMC expenses of $0.9 million.
Current wording
The net increase of $21.0 million in total research and development expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to increases in (i) clinical trial costs of $8.7 million excluding an adjustment reducing estimated accrued clinical trial expenses by $2.2 million for our LX1001 program recorded during the year ended December 31, 2024, (ii) employee compensation and stock-based compensation expenses of $8.5 million primarily due to increased headcount and equity awards granted since December 31, 2023, (iii) chemistry, manufacturing and controls, or CMC, expenses of $3.8 million, (iv) net milestone expense of $2.6 million, including a $6.0 million development milestone for our LX2020 program that was achieved and paid to the selling shareholders of Stelios during the year ended December 31, 2024, which was partially offset by a $3.5 million development milestone for our LX2006 program that was achieved and paid to Adverum during the year ended December 31, 2023, (v) quality assurance and program and portfolio management expenses of $1.0 million, and (vi) license fees of $0.7 million primarily related to the Third Cornell License Agreement. These increases were partially offset by decreases in (i) non-clinical and preclinical expenses of $2.5 million primarily related to our early stage cardiovascular and CNS disease programs, and (ii) estimated accrued clinical trial expenses of $2.2 million resulting from an adjustment recorded during the year ended December 31, 2024 for our LX1001 program.
Previous wording
We recognized interest income of $2.9 million and $1.3 million for the years ended December 31, 2023 and December 31, 2022, respectively, primarily related to interest earned on our investment in a U.S. government money market fund, with increased interest rates on such money market fund investment earned over those periods.
Current wording
We recognized interest income of $7.6 million and $2.9 million for the years ended December 31, 2024 and December 31, 2023, respectively, primarily related to interest earned on our investment in a U.S. government money market fund and our investments in U.S Treasury securities with an increased average invested balance in 2024 primarily due to the net proceeds received from our IPO and the subsequent partial exercise of the underwriters' option to purchase additional shares in November 2023, as well as the net proceeds received from our Private Placement offering in March 2024.
Previous wording
Since our 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 incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates. Since our inception through December 31, 2023, we have funded our operations primarily with net proceeds from sales of our convertible preferred stock, convertible SAFE Note, and shares of common stock sold in our IPO and the subsequent partial exercise of the underwriters’ 30-day option to purchase additional shares of common stock collectively totaling $289.1 million. As of December 31, 2023, we had cash and cash equivalents of $121.5 million.
Current wording
Since our 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 incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates. Since our inception through December 31, 2024, we funded our operations primarily with total net proceeds from sales of our common stock, convertible SAFE Note and convertible equity securities of $377.9 million. As of December 31, 2024 and December 31, 2023, we had cash, cash equivalents, and investments of $128.5 million and $121.5 million, respectively.
Previous wording
Based on our current operating plans, we expect that our existing cash and cash equivalents and the gross proceeds of $95.0 million expected to be received upon the anticipated closing of our private placement equity financing in March 2024 will be sufficient to fund our planned operating expenses and capital expenditure requirements into 2027. Our total future capital requirements will depend on many factors and is subject to the risks and uncertainties set forth in the section titled “Item 1A. Risk Factors.”
Current wording
We believe that our cash, cash equivalents, and investments balances will be sufficient to fund our planned operating expenses and capital expenditure requirements into 2027. Our total future capital requirements will depend on many factors and is subject to the risks and uncertainties set forth in “Item 1A. Risk Factors.”
Previous wording
During the year ended December 31, 2022, net cash used in operating activities consisted primarily of our net loss of $59.3 million, which was partially offset by (i) $1.8 million of net cash provided by changes in operating assets and liabilities, (ii) $1.8 million of stock-based compensation expense, and (iii) $1.0 million of amortization of our right-of-use assets for our operating and finance leases.
Current wording
During the year ended December 31, 2024, net cash used in operating activities consisted primarily of our net loss of $98.3 million, which was partially offset by (i) $12.5 million of stock-based compensation expense, (ii) $2.7 million of net cash provided by changes in operating assets and liabilities, and (iii) $1.7 million of amortization of our right-of-use assets for our operating and finance leases.
Previous wording
During the years ended December 31, 2023 and 2022, net cash used in investing activities was $0.2 million and $0.9 million, respectively, and consisted of the purchase of lab equipment and internal use software.
Current wording
During the year ended December 31, 2023, net cash used in investing activities was $0.2 million and consisted primarily of the purchase of lab equipment and internal use software.
Previous wording
During the year ended December 31, 2022, net cash provided by financing activities consisted primarily of proceeds received from the exercise of stock options of $0.3 million, which was partially offset by $0.2 million of principal payments made on equipment finance leases.
Current wording
During the year ended December 31, 2024, net cash provided by financing activities consisted primarily of the net proceeds received from the Private Placement offering of $88.7 million, as well as $0.5 million of proceeds received from the exercise of stock options, which were partially offset by $0.4 million of principal payments made on equipment finance leases.
Previous wording
We expect our expenses and capital requirements to increase significantly in connection with our ongoing activities, particularly as we advance our lead product candidates and other development programs. Further, we incur costs associated with operating as a public company. Accordingly, we will require substantial additional funding to support our continuing operations.
Current wording
We expect our expenses and capital requirements to increase significantly in connection with our ongoing activities, particularly as we advance our lead product candidates and other development programs. Accordingly, we will continue to require substantial additional funding to support our continuing operations.
Previous wording
our ability to maintain our relationships with Weill Cornell Medicine, Adverum, UCSD, and any other key licensors or collaborators;
Current wording
our ability to maintain our relationships with Weill Cornell Medicine, Adverum, The Regents of UCSD, and any other key licensors or collaborators;
Previous wording
Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. 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, expenses, and the disclosure of our contingent 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 are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and the disclosure of our contingent liabilities in our 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 audited consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our audited consolidated financial statements.
Current wording
While our significant accounting policies are described in more detail in Note 2 to our audited financial statements included elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our audited financial statements.
Previous wording
As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses. This process involves estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. At each period end, we corroborate the accuracy of these estimates with the service providers and make adjustments, if necessary. Examples of estimated accrued research and development expenses include those related to fees paid to:
Current wording
As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses. This process involves estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. The majority of our service providers invoice us in arrears for services performed on a pre-determined schedule or when contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in the financial statements based on facts and circumstances known to us at that time. At each period end, we corroborate the accuracy of these estimates with the service providers and make adjustments, if necessary. Examples of estimated accrued research and development expenses include those related to fees paid to:
Previous wording
We recognize share-based compensation expense related to stock option awards granted based on the estimated fair value of the awards on the date of grant using a Black-Scholes option pricing model. The grant date fair value of the share-based awards is recognized on a straight-line basis over the requisite service period, which is the vesting period of the respective awards. Share-based payments to non-employees issued in exchange for services are based upon the fair value of the equity instruments issued. Compensation expense for stock options issued to non-employees is calculated using the Black-Scholes option pricing model and is recorded over the requisite service performance period.
Current wording
We recognize share-based compensation expense related to stock option awards granted based on the estimated fair value of the awards on the date of grant using a Black-Scholes option pricing model. The grant date fair value of the share-based awards is recognized on an accelerated basis under the graded vesting method over the requisite service period of the award, which is the vesting period of the respective awards. Share-based payments to non-employees issued in exchange for services are based upon the fair value of the equity instruments issued. Compensation expense for stock options issued to non-employees is calculated using the Black-Scholes option pricing model and is recorded over the requisite service performance period.
Previous wording
A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations and cash flows is disclosed in Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report.
Current wording
A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations and cash flows is disclosed in Note 2 to our audited financial statements included elsewhere in this Annual Report.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Since our inception, we have devoted substantially all of our efforts to organizing and staffing our company, research and development activities, business planning, raising capital, building our intellectual property portfolio and providing general and administrative support for these operations. To date, we have funded our operations primarily through proceeds from the sale of shares of our convertible preferred stock and common stock, including our IPO and the subsequent partial exercise of the underwriters’ 30-day option to purchase additional shares of common stock. As of December 31, 2023, we had $121.5 million of cash and cash equivalents, and we had raised aggregate net proceeds of $100.3 million from our IPO and the subsequent partial exercise of the underwriters’ 30-day option to purchase additional shares of common stock, as well as totals of $185.0 million and $3.9 million of net proceeds from sales of our convertible equity securities and a convertible SAFE Note, respectively.