ATOSSA THERAPEUTICS, INC.
For the period ended Dec 31, 2024. Filed Mar 25, 2025.
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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 25, 2025
ATOS$2.12+5.0%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 2024-04-01.
0000950170-24-039306
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-25.
0000950170-25-044099
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 79 previous paragraphs and 79 current paragraphs.
36 unchanged; 25 reworded; 17 added; 17 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 7 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 (17)
Current report
(Z)-endoxifen for Women with Mammographic Breast Density. Mammographic breast density (MBD) is an emerging public health issue. Almost half of the women in the world over the age of 40 have dense breasts, and there are currently no approved treatments to reduce breast density. Elevated breast density can make a mammogram more difficult to interpret because dense breast tissue and some abnormal breast changes, such as calcifications and tumors, appear as white areas in a mammogram. Women with the highest density are four to six times more likely to develop breast cancer in their lifetime and more likely to develop cancer between mammograms compared to those with low breast density. The latter are sometimes referred to as "interval cancers," which are often larger, more advanced, and more difficult to treat.
Current report
The study fully enrolled in November 2023 and in September 2024, the study concluded. The data showed the potential of low-dose (Z)-endoxifen to significantly reduce MBD, a key risk factor for breast cancer, while showing a favorable safety profile.
Current report
Results showed that the 1 mg dose of (Z)-endoxifen reduced MBD by 17.3% (p<0.01), while the 2 mg dose achieved a reduction of 23.5% (p<0.01), compared to a minimal change in the placebo group of 0.27%. Plasma concentrations for (Z)-endoxifen were measured at 4.8 ng/mL and 9.7 ng/mL for the 1 mg and 2 mg arms, respectively, which showed the effectiveness of the lower dose in achieving significant reductions. Importantly, no significant differences in adverse events were observed between the 1 mg dose and the placebo. The 2 mg dose was associated with higher rates of hot flashes, night sweats and vaginal discharge.
Current report
In Part 1, a Pharmacokinetic (PK) Run-In Cohort evaluated two dosage levels. A 40 mg per day cohort was initiated in February 2023 to assess if a plasma steady state concentration (Css) of 500 to1000 ng/mL, which is required for optimal PKC-β inhibition, could be achieved. However, data showed that none of the patients in the 40 mg cohort reached the target Css. Subsequently, an 80 mg per day cohort was initiated and fully enrolled in July 2024. In this higher dose group, about 50% of patients receiving (Z)-endoxifen with goserelin and 38% of patients receiving (Z)-endoxifen alone attained the target plasma Css, with an average of 484 ng/mL.
Current report
Importantly, tumor Css levels were found to be more than double the plasma levels, exceeding 500 ng/g in 90% of patients, and 85% of patients exhibited a 4-week Ki-67 response (≤10%), indicating substantial tumor suppression. (Z)-endoxifen was generally well tolerated, with no significant Grade 3 or 4 toxicities, though four gynecologic events (including one Grade 3 hemorrhagic ovarian cyst) were noted in the 80 mg group.
Current report
In January 2025, based on the PK, efficacy, and safety data, the protocol was revised to focus on the 40 mg per day dose. Part 2 is expected to compare two treatment arms based on baseline Ki-67 levels, and the aim is to evaluate the endocrine sensitive disease rate, pathologic complete response, and other key endpoints. The initiation of the Treatment Cohort is planned for the first half of 2025.
Current report
A preliminary data analysis from this study, which included 20 women with ER+/HER2- breast cancer who received 10 mg of (Z)-endoxifen orally once daily for six cycles (each cycle = 28 days), showed that (Z)-endoxifen met the primary endpoint with 95% (19/20 patients) receiving > 75 % of planned treatment. The data also showed (Z)-endoxifen activity in rapidly reducing key biomarkers, such as Ki-67, by 69% from baseline and a 30.4% reduction in functional tumor volume (FTV) from baseline after three weeks of treatment. FTV is a quantitative measurement of tumor burden that can be used to assess treatment response for breast cancer. (Z)-endoxifen was well tolerated in this study with the most common side effects being mild, including hot flashes, insomnia, and fatigue. No dose reductions or discontinuations due to treatment related adverse events were observed in this study. Surgical Ki-67 values and 24-week imaging will be analyzed in the future.
Current report
On April 15, 2024, we announced our participation in a new study arm of the I-SPY 2 EOP which was initiated to evaluate our proprietary (Z)-endoxifen in combination with abemaciclib (VERZENIO®), a cyclin-dependent kinase (CDK) 4/6 inhibitor marketed by Eli Lilly and Company, in women with ER+/HER2- breast cancer. On June 28, 2024, we announced that the study had been expanded to include 80 women with newly diagnosed ER+ / HER2- invasive breast cancer. Currently enrolled and newly enrolled participants are expected to transition to or be initiated on 40 mg of (Z)-endoxifen (from 80 mg) once daily in combination with 150 mg of abemaciclib twice daily for a total of 24 weeks prior to surgery. The transition to the 40 mg dose from an 80 mg dose is the result of a protocol amendment approved in January 2025. Enrollment in this study is ongoing.
Current report
Clinical Trial and Preclinical Study Accruals
Current report
We make estimates of our accrued expenses for clinical trial and preclinical study activities based on the facts and circumstances known to us at the time. These accruals are based upon estimates of costs incurred and fees that may be associated with services provided by clinical trial investigational sites and CROs, CMOs and for other clinical trial-related activities. In accruing for these services, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If possible, we obtain information regarding unbilled services directly from these service providers. However, we may be required to estimate these services based on other information available to us by reviewing contracts, vendor agreements and through discussions with internal clinical and preclinical personnel and external service providers as to the progress or stage of completion of services and the agreed-upon fee to be paid for such services. If we underestimate or overestimate the activities or fees associated with a study or service at a given point in time, adjustments to research and development expenses may be necessary in future periods. Historically, our estimated accrued liabilities have approximated actual expense incurred. Subsequent changes in estimates may result in a material change in our accruals.
Current report
outreach costs. Accounting fees also increased by $0.3 million for the year ended December 31, 2024 compared to the prior year due to procedures needed from both current and former auditors related to the Registration Statement on Form S-3 and our ATM facility.
Current report
Interest Income. Interest income of $4.1 million for the year ended December 31, 2024 represented a decrease of $0.2 million compared to the prior year, and was primarily due to a decrease in funds invested in the money market account.
Current report
On June 27, 2024, our stockholders approved an amendment to our Amended and Restated Certificate of Incorporation to increase the number of authorized shares of our common stock, par value $0.18 per share, from 175,000,000 to 350,000,000. As of December 31, 2024, we are authorized to issue 350,000,000 shares of common stock, par value $0.18 per share. On November 19, 2024, we entered into an Open Market Sale Agreement SM with Jefferies LLC. We may offer, from time to time, to sell, in an "at the market offering", shares of our common stock up to an aggregate offering price of up to $100.0 million. We did not make any sales under the at the market offering facility during the year ended December 31, 2024.
Current report
During the year ended December 31, 2024, we received $3.7 million from the exercise of warrants resulting in the issuance of 3,672,500 shares of common stock.
Current report
Recently Adopted Accounting Pronouncements
Current report
Refer to Note 3 to these Consolidated Financial Statements.
Current report
Refer to Note 3 to these Consolidated Financial Statements.
Removed paragraphs (17)
Previous report
The study is expected to enroll approximately 180 patients at up to 25 sites. EVANGELINE is a two-part study consisting of a PK Run-in Cohort and a Treatment Cohort. The primary objective of the Treatment Cohort is to evaluate the endocrine sensitive disease (ESD) rate, measured by Ki-67 (a proliferation marker prognostic for disease free survival), after four weeks of treatment with (Z)-endoxifen compared to treatment with current standard of care, exemestane + goserelin. Exemestane is an aromatase inhibitor designed to block the synthesis of estrogen and slow the growth of ER+ cancers. Goserelin is a medication given to block the ovaries from making estrogen, also called ovarian function suppression.
Previous report
(Z)-endoxifen for Women with Breast Density. Mammographic breast density (MBD) is an emerging public health issue affecting over 10 million women in the U.S. alone. Dense breast tissue makes mammography less effective. When women with MBD are diagnosed with breast cancer, it is often later stage, which makes treatment outcomes suboptimal. Studies conducted by others have also shown that MBD increases the risk of developing breast cancer and that reducing MBD may reduce the incidence of breast cancer.
Previous report
Investment in CAR-T Company. In December 2022, we closed our investment in Dynamic Cell Therapies, Inc. (DCT), a privately-held, venture capital-backed, developer of CAR-T therapies. DCT is in the pre-clinical phase of developing controllable CAR-T cells to address difficult-to-treat cancers. Its platform technology of dynamic control of engineered T-cells is designed to improve the safety, efficacy, and durability of CAR-T cell therapies. While its initial focus is hematologic malignancies, its innovative approach could also have broad applicability in solid tumors and autoimmune diseases.
Previous report
Investments in Equity Securities
Previous report
Our investment in DCT Series Seed Preferred Stock does not have a readily determinable fair value, so we have elected to measure the investment at cost less impairment, adjusted to fair value if there are observable price changes in orderly transactions for an identical or similar investment of the same issuer. As part of preparing our Consolidated Financial Statements, we considered qualitative impairment factors in determining if an impairment analysis is required. Specifically, during 2023, we considered the adverse change in the general market condition of the industry in which DCT operates and concerns about the investee’s ability to continue as a going concern, due to negative cash flows from operations. Based on these impairment indicators, we performed a fair value measurement using a dynamic options approach and an adjusted book value approach, giving each a weighting of 50% probability.
Previous report
We used the dynamic options approach, which requires assumptions regarding the expected average volatility of comparable companies, the expected term of our investment, and an estimation of an appropriate risk-free interest rate over the expected term of our investment. The expected stock price volatility assumption is based upon the average historic volatility of comparable public clinical stage immunotherapy or CAR-T companies. The expected term of our investment is 3.5 years and the risk-free interest rate used is based upon prevailing short-term interest rates over the expected term of the investment.
Previous report
An adjusted book value approach was also considered due to DCT's limited cash on hand, status of current fundraising efforts and the estimated timing of a deemed liquidation event occurring. This approach requires an adjustment to each balance sheet account to estimate the value upon liquidation.
Previous report
Our resulting valuation concluded that the investment was impaired, and accordingly, an impairment charge of $3.0 million was recorded in the Consolidated Statements of Operations for the year ended December 31, 2023. No impairment was recorded for the year ended December 31, 2022.
Previous report
R&D Expenses. R&D expenses for the year ended December 31, 2023, were $17.3 million, an increase of $2.3 million from total R&D expenses for the year ended December 31, 2022 of $15.1 million. Key changes were as follows:
Previous report
threshold to be sustained under a potential ATO audit related to R&D expenditures under the Australian R&D tax incentive program as a result of recent ATO guidance (for more information, see Note 6 of the Consolidated Financial Statements).
Previous report
G&A Expenses. G&A expenses for the year ended December 31, 2023 were $14.0 million an increase of $1.4 million from total G&A expenses for year ended December 31, 2022 of $12.6 million. Key changes were as follows:
Previous report
Interest Income. Interest income was $4.3 million for the year ended December 31, 2023, an increase of $3.5 million from interest income of $0.9 million for the year ended December 31, 2022. The increase was due to the higher average balance invested in money market funds of $26.5 million and higher average interest rates for the year ended December 31, 2023 compared to the prior year.
Previous report
As of December 31, 2023, we had cash, cash equivalents and restricted cash of $88.6 million.
Previous report
Although we submitted a proposal to our stockholders to amend our amended and restated certificate of incorporation to increase the number of authorized shares of our common stock for various potential purposes, including potential capital raising transactions, our stockholders did not approve the proposal at our 2021 and 2022 annual meetings of stockholders nor did they approve it at a special meeting of stockholders held in September 2021. A lack of authorized shares may limit our ability to raise capital when needed.
Previous report
On September 26, 2023, we were notified by Nasdaq that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) because our common stock failed to maintain a minimum closing bid price of $1.00 per share for 30 consecutive business days. To regain compliance, we were required to maintain a minimum closing bid price of $1.00 per share for a minimum of 10 consecutive business days. On March 15, 2024, we received written notice from Nasdaq that we had regained compliance with the minimum closing bid price requirement under Nasdaq Listing Rule 5550(a)(2).
Previous report
In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This standard requires disclosure of significant segment expenses and other segment items by reportable segment. The ASU becomes effective for annual periods beginning in 2024 and interim periods in 2025. We are currently assessing the potential impact of this ASU.
Previous report
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This standard enhances disclosures related to income taxes, including the rate reconciliation and information on income taxes paid. The ASU becomes effective January 1, 2025. We are currently assessing the potential impact of this ASU.
Reworded paragraphs (25)
Previous wording
The following discussion of the financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and the related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements, which are based on assumptions about the future of our business. Actual results and outcomes could differ materially from those contained in the forward-looking statements. Please read “Forward-Looking Statements” included elsewhere in this Annual Report for additional information regarding forward-looking statements.
Current wording
The following discussion of our financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and the related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements, which are based on assumptions about the future of our business. Actual results, outcomes and the timing of results or outcomes could differ materially from those contained in the forward-looking statements. Please read "Note Regarding Forward-Looking Statements" included elsewhere in this Annual Report for additional information regarding forward-looking statements.
Previous wording
We are a clinical-stage biopharmaceutical company developing proprietary innovative medicines in areas of significant unmet medical need in oncology, with a focus on women’s breast cancer and other breast conditions. Our lead drug candidate under development is oral (Z)-endoxifen, which we are developing for both the prevention and treatment of breast cancer.
Current wording
We are a clinical-stage biopharmaceutical company developing proprietary innovative medicines in areas of significant unmet medical need in oncology, with a focus on women’s breast cancer and other breast conditions. Our lead drug candidate under development is oral (Z)-endoxifen, which we are developing for both the prevention and treatment of breast cancer and other therapeutic areas.
Previous wording
We have been granted three U.S. patents and one international patent covering our proprietary (Z)-endoxifen, and we have numerous applications pending in the U.S. and in other major countries. We have patent protection covering our proprietary (Z)-endoxifen through November 17, 2038.
Current wording
We have been granted four U.S. and eight international patents covering our proprietary (Z)-endoxifen, and we have numerous applications pending in the U.S. and in other major countries. We have patent protection covering our proprietary (Z)-endoxifen through at least November 17, 2038.
Previous wording
(Z)-endoxifen.(Z)-endoxifen is an active metabolite of tamoxifen, which is an FDA-approved drug to treat and prevent breast cancer in high-risk women. It is also referred to as a Selective Estrogen Receptor Modulator (SERM). We are developing a proprietary form of (Z)-endoxifen which is administered orally for the potential treatment of breast cancer and reduction of breast density. We have completed four Phase 1 clinical studies (including a study in men) and two Phase 2 clinical studies with our proprietary (Z)-endoxifen (including oral and topical formulations). We have also completed significant pre-clinical development and have developed clinical manufacturing capabilities through qualified third parties.
Current wording
(Z) endoxifen.(Z)-endoxifen is an active metabolite of tamoxifen, which is an FDA-approved drug to treat and prevent breast cancer in high-risk women. It is also referred to as a Selective Estrogen Receptor Modulator (SERM). We are developing a proprietary form of (Z)-endoxifen which is administered orally for the potential treatment of breast cancer and the reduction of breast density. We have completed four Phase 1 clinical studies, including a study in men, and two Phase 2 clinical studies with our proprietary (Z)-endoxifen, including oral and topical formulations. We have also completed significant pre-clinical development and have developed clinical manufacturing capabilities through qualified third-parties.
Previous wording
In December 2021, we commenced a Phase 2 study of our proprietary oral (Z)-endoxifen. The study, known as the Karisma-(Z)-endoxifen study, is a Phase 2, randomized, double-blind, placebo-controlled, dose-response study of our proprietary oral (Z)-endoxifen in healthy premenopausal women with measurable breast density. The primary objective of the study is to determine the dose-response relationship of daily (Z)-endoxifen on breast density reduction. Secondary endpoints will assess safety and tolerability. The study also includes an exploratory endpoint to assess durability of the breast density changes. The study is being conducted in Stockholm, Sweden and includes approximately 240 participants, at full enrollment, who receive daily doses of oral (Z)-endoxifen or placebo for six months after they enroll. The study fully enrolled in November 2023 and we expect primary data in the second half of 2024.
Current wording
In December 2021, we commenced a Phase 2 study of our proprietary oral (Z)-endoxifen. The study, known as the Karisma-(Z)-endoxifen study, was a Phase 2, randomized, double-blind, placebo-controlled, dose-response study of our proprietary oral (Z)-endoxifen in healthy premenopausal women with measurable mammographic breast density. The primary objective of the study was to determine the dose-response relationship of daily (Z)-endoxifen on breast density reduction. Secondary endpoints assessed safety and tolerability. The study was conducted in Stockholm, Sweden and included approximately 240 participants who received daily doses of oral (Z)-endoxifen or placebo for six months after enrollment, randomized to one of three arms: placebo, 1 mg, or 2 mg of (Z)-endoxifen. The study also included an exploratory endpoint to assess durability of the breast density changes.
Previous wording
(Z)-endoxifen for Ductal Carcinoma In Situ. Ductal carcinoma in situ (DCIS) is a pre-cancerous lesion of the breast. It rarely produces symptoms, or a breast lump one can feel, typically being detected through screening mammography. In some cases, DCIS may become invasive and spread to other tissues, but there is no way of determining which lesions will remain stable without treatment, and which will go on to become invasive. This uncertainty can result in aggressive and unnecessary treatment approaches that can have harmful side effects without significant benefit.
Current wording
(Z)-endoxifen for Ductal Carcinoma In Situ. Ductal carcinoma in situ (DCIS) is the presence of abnormal cells inside a milk duct in the breast. It rarely produces symptoms, or a breast lump one can feel, typically being detected through screening mammography. In some cases, DCIS may become invasive and spread to other tissues, but there is no way of determining which lesions will remain stable without treatment, and which will go on to become invasive. This uncertainty can result in aggressive and unnecessary treatment approaches that can have harmful side effects without significant benefit.
Previous wording
In October 2023, Quantum Leap Healthcare Collaborative announced the initiation of the Phase 2 DCIS: Re-Evaluating Conditions for Active Surveillance Suitability as Treatment (RECAST) study. (Z)-endoxifen is being investigated as part of this platform trial, which offers women with DCIS six months of neoadjuvant treatment with the intent of determining their suitability for long-term active surveillance without surgery. Approximately 100 patients will be treated with (Z)-endoxifen. The study incorporates both a neoadjuvant therapy phase, with patients at high risk for progression to invasive disease proceeding to surgery, followed by an extended surveillance phase for low-risk patients.
Current wording
In October 2023, Quantum Leap Healthcare Collaborative (the QLHC) announced the initiation of the Phase 2 DCIS: Re-Evaluating Conditions for Active Surveillance Suitability as Treatment (the RECAST) study. (Z)-endoxifen is being investigated as part of this platform trial, which offers women with DCIS six months of neoadjuvant treatment with the intent of determining their suitability for long-term active surveillance without surgery. Approximately 100 patients are expected to be treated with (Z)-endoxifen. The study incorporates both a neoadjuvant therapy phase, with patients at high risk for progression to invasive disease proceeding to surgery, followed by an extended surveillance phase for low-risk patients. Enrollment in this study is ongoing.
Previous wording
(Z)-endoxifen for Neoadjuvant Treatment of Breast Cancer. We are also developing (Z)-endoxifen to treat ER+ HER2- breast cancer in the neoadjuvant setting, which is the administration of a therapy before the main treatment, which is usually surgery. Although there are neoadjuvant treatments for breast cancers that are not ER+, there are few neoadjuvant treatments for ER+ breast cancer which comprises about 78% of all breast cancers.
Current wording
(Z)-endoxifen for Neoadjuvant Treatment of Breast Cancer. We are also developing (Z)-endoxifen to treat estrogen receptor positive (ER+) / human epidermal growth factor receptor 2 negative (HER2-) breast cancer in the neoadjuvant setting, which is the administration of a therapy before the main treatment, which is usually surgery. Although there are neoadjuvant treatments for breast cancers that are not ER+, there are few neoadjuvant treatments for ER+ breast cancer which comprises approximately 240,000 new cases or 78% of all breast cancers.
Previous wording
In October 2022, we received authorization from the U.S. FDA for our Investigational New Drug (IND) application for oral (Z)-endoxifen. The study, “A Randomized Phase 2 Noninferiority Trial of (Z)-endoxifen and Exemestane + Goserelin as Neoadjuvant Treatment in Premenopausal Women with ER+/HER2-Breast Cancer,” also known as “EVANGELINE.” The study is an open-label, randomized, Phase 2 study designed to investigate (Z)-endoxifen for the neoadjuvant treatment of premenopausal women ages 18 and older with early stage (Grade 1 or 2) ER+/HER2- breast cancer.
Current wording
In October 2022, we received authorization from the FDA for our Investigational New Drug (IND) application for oral (Z)-endoxifen. The study, known as "EVANGELINE" is a Phase 2 randomized study assessing (Z)-endoxifen as neoadjuvant therapy in premenopausal women with primary ER+, HER2– breast cancer. The study will enroll approximately 190 patients across up to 25 U.S. sites, and is structured in two parts.
Previous wording
In March 2023, a second Phase 2 trial investigating oral (Z)-endoxifen as a neoadjuvant treatment for women diagnosed with locally advanced ER+ breast cancer was initiated. This trial is a study arm in the ongoing I‑SPY 2 clinical trial. The I-SPY 2 TRIAL is a collaborative effort among academic investigators from major cancer research centers across the U.S., Quantum Leap Healthcare Collaborative, the U.S. FDA, and the Foundation for the National Institutes of Health (FNIH) Cancer Biomarkers Consortium. Approximately 20 patients are being treated with (Z)-endoxifen for up to 24 weeks prior to surgery. Enrollment was completed in January of 2024 for the Phase 2 I-SPY clinical trial.
Current wording
In March 2023, a second Phase 2 trial investigating oral (Z)-endoxifen as a neoadjuvant treatment for women diagnosed with locally advanced ER+ breast cancer was initiated. This trial is a study arm in the ongoing I‑SPY 2 Endocrine Optimization Pilot (I-SPY 2 EOP). The I-SPY 2 EOP is a collaborative effort among academic investigators from major cancer research centers across the U.S., QLHC, the FDA, and the Foundation for the National Institutes of Health (FNIH) Cancer Biomarkers Consortium. 20 patients were treated with (Z)-endoxifen for up to 24 weeks prior to surgery. Enrollment was completed in January 2024.
Previous wording
On November 22, 2022, we entered into an operating lease with WW 107 Spring Street LLC for office space in Seattle, Washington. We agreed to pay monthly rent of $2 thousand for a term of 12 months beginning January 1, 2023. On June 26, 2023, we terminated the existing lease without additional cost and entered a new operating lease for monthly rent of $3 thousand for a term of 12 months commencing July 1, 2023, for a larger office space at the same location.
Current wording
We had an operating lease for office space in Seattle, Washington with WW 107 Spring Street LLC. Rent was $2 thousand a month, and this lease terminated on June 30, 2024. On February 29, 2024, we entered into an operating lease with Regus International Workplace Group for office space in Seattle, Washington. The lease commencement date was June 1, 2024, and we agreed to pay monthly rent of $1 thousand per month for 12 months. On December 20, 2024, we entered into an additional operating lease with Regus International Workplace Group for additional office space in Seattle, Washington for 12 months.
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 reviewing open contracts and work orders, communicating with our applicable personnel to identify services that have been performed on our behalf, and estimating the associated cost incurred for the services, including, in some cases, when we have not yet been invoiced or otherwise notified of actual costs. R&D costs are generally expensed as incurred. R&D expenses include, for example, manufacturing expense for our drugs under development, expenses associated with preclinical studies, clinical trials and associated salaries, bonuses, stock-based compensation and benefits. R&D expenses also include an allocation of the CEO's salary and related benefits, including bonus and non-cash stock-based compensation expense, based on an estimate of his total hours spent on research and development activities.
Current wording
R&D costs are generally expensed as incurred. R&D expenses include, for example, manufacturing expense for our drugs under development, expenses associated with preclinical studies, clinical trials and associated salaries, bonuses, stock-based compensation and benefits. R&D expenses also include an allocation of the CEO's salary and related benefits, including bonus and non-cash stock-based compensation expense, based on an estimate of his total hours spent on research and development activities.
Previous wording
We have entered into various research and development contracts with CROs, contract manufacturing organizations (CMOs) and other companies. The majority of our service providers invoice us monthly for services performed, however, payments under some of these contracts may be required in advance of the services being performed, for example when a contract requires an initial payment at the outset of the contract. Payments made in advance of performance of services are reflected in the Consolidated Balance Sheets as prepaid expenses.
Current wording
We have entered into various research and development contracts with Contract Research Organizations (CROs), contract manufacturing organizations (CMOs) and other companies. The majority of our service providers invoice us monthly for services performed, however, payments under some of these contracts may be required in advance of the services being performed, for example when a contract requires an initial payment at the outset of the contract. Payments made in advance of performance of services are reflected in the Consolidated Balance Sheets as prepaid expenses.
Previous wording
We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with CROs and other companies that conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of these vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors exceed the level of services provided and result in a prepayment of the expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or prepaid expense accordingly. We estimate 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. However, additional information may become available to us, which may allow us to make a more accurate estimate in future periods. There have not been material adjustments to our estimates in the past but, if we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates.
Current wording
There may be instances in which payments made to our vendors exceed the level of services provided and result in a prepayment of the expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or prepaid expense accordingly.
Previous wording
Operating Expenses. Total operating expenses were $31.4 million for the year ended December 31, 2023, which was an increase of $3.7 million, from the year ended December 31, 2022 of $27.7 million. As (Z)-endoxifen is our only product candidate for which we currently incur R&D expense we have not further disaggregated R&D expenses. Factors contributing to the increased operating expenses in the year ended December 31, 2023 are explained below.
Current wording
Operating Expenses. Total operating expenses were $27.6 million for the year ended December 31, 2024, which was a decrease of $3.8 million, from the year ended December 31, 2023 of $31.4 million. Factors contributing to the decreased operating expenses in the year ended December 31, 2024 are explained below.
Previous wording
The following table provides a breakdown of major categories within R&D expense for the years ended December 31, 2023 and 2022, together with the dollar change in those categories (in thousands):
Current wording
Research & Development (R&D) Expenses. The following table provides a breakdown of major categories within R&D expenses for the years ended December 31, 2024 and 2023, together with the dollar change in those categories (dollars in thousands):
Previous wording
The following table provides a breakdown of major categories within General and Administrative (G&A) expenses for the years ended December 31, 2023 and 2022, together with the dollar change in those categories (in thousands):
Current wording
General and Administrative (G&A) Expenses. The following table provides a breakdown of major categories within G&A expenses for the years ended December 31, 2024 and 2023, together with the dollar change in those categories (dollars in thousands):
Previous wording
Impairment Charge on Investment in Equity Securities. For the year ended December 31, 2023, we wrote down our investment in DCT by $3.0 million due to an impairment charge. For the year ended December 31, 2022 there were no impairment charges related to our equity securities. Refer to Note 4 to the Consolidated Financial Statements in Item 8 of this Annual Report.
Current wording
Impairment Charge on Investment in Equity Securities. For the year ended December 31, 2024 and 2023, we wrote down our Investment in equity securities by $1.7 million and $3.0 million, respectively, due to impairment of our investment in DCT. Refer to Note 4 "Investment in Equity Securities" to the Consolidated Financial Statements.
Previous wording
We have incurred net losses and negative operating cash flows since inception. For the year ended December 31, 2023, we recorded a net loss of $30.1 million and used $20.9 million of cash in operating activities. As of December 31, 2023, we had $88.5 million in unrestricted cash and cash equivalents and working capital of $87.0 million. We believe we have sufficient cash on hand to fund our projected operating requirements for at least the next 12 months.
Current wording
We have incurred net losses and negative operating cash flows since inception. For the year ended December 31, 2024, we recorded a net loss of $25.5 million and used $21.0 million of cash in operating activities. As of December 31, 2024, we had $71.1 million in unrestricted cash and cash equivalents and working capital of $69.5 million. We believe we have sufficient cash on hand to fund our projected operating requirements for at least the next 12 months.
Previous wording
Net Cash Flows from Operating Activities. Net cash used in operating activities was $20.9 million for the year ended December 31, 2023, compared to net cash used of $20.8 million for the same period in 2022, an increase of $0.1 million. Cash used in operating activities for the year ended December 31, 2023 primarily related our net loss of $30.1 million, adjusted for non-cash items such as non-cash stock-based compensation expense of $4.6 million, non-cash impairment charge on investment in equity securities of $3.0 million and net cash inflows from a change in our operating assets and liabilities of $1.5 million. Cash used in operating activities for the year ended December 31, 2022 primarily related to our net loss of $27.0 million, adjusted for non-cash share-based compensation expense of $6.8 million and net cash outflows from a change in our operating assets and liabilities of $0.6 million.
Current wording
Net Cash Flows from Operating Activities. Net cash used in operating activities was $21.0 million for the year ended December 31, 2024, compared to net cash used in operating activities of $20.9 million in 2023, an increase of $0.1 million. Cash used in operating activities for the year ended December 31, 2024 primarily consisted of our net loss of $25.5 million, adjusted for non-cash items such as non-cash stock-based compensation expense of $2.3 million, non-cash impairment charge on investment in equity securities of $1.7 million and net cash inflows from a change in our operating assets and liabilities of $1.1 million. Cash used in operating activities for the year ended December 31, 2023 primarily consisted of to our net loss of $30.1 million, adjusted for non-cash items such as stock-based compensation expense of $4.6 million, non-cash impairment charge on investment in equity securities of $3.0 million and net cash outflows from a change in our operating assets and liabilities of $0.9 million.
Previous wording
Net Cash Flows from Investing Activities. Net cash used in investing activities was $14 thousand for the year ended December 31, 2023, compared to net cash used in investing activities of $4.7 million for the year ended December 31, 2022. Current period cash used in investing activities was primarily related to purchases of new computers while prior period cash used in investing activities was primarily related to the investment in equity securities of $4.7 million.
Current wording
Net Cash Flows from Investing Activities. Net cash used in investing activities was $19 thousand for the year ended December 31, 2024, compared to net cash used in investing activities of $14 thousand for the year ended December 31, 2023. Current and prior year cash used in investing activities was primarily related to purchases of new computers.
Previous wording
Net Cash Flows from Financing Activities. Net cash used in financing activities was $1.5 million for the repurchase of common stock under the Share Repurchase Program for the year ended December 31, 2023. No cash was used in financing activities during the year ended December 31, 2022.
Current wording
Net Cash Flows from Financing Activities. Net cash provided by financing activities for the year ended December 31, 2024 was $3.7 million compared to net cash used in financing activities of $1.5 million for 2023. The $3.7 million net cash provided by financing activities for the year ended December 31, 2024 primarily consisted of the receipt of proceeds from the exercise of warrants. Net cash used in financing activities for the year ended December 31, 2023 consisted of $1.5 million for the repurchase of common stock under the Share Repurchase Program.
Previous wording
Additional funding may not be available to us on acceptable terms or at all. Continued uncertain market and macroeconomic conditions, including due to inflationary pressures, high interest rates, general economic slowdown or a recession, the prospect of a shutdown of the U.S. federal government, foreign exchange rate volatility, financial institution instability, changes in monetary policy and increasing geopolitical instability, may limit our ability to access capital. In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders. For example, we may raise additional funds by issuing equity securities or by equity offerings, collaboration agreements, debt financings or licensing arrangements.
Current wording
Additional funding may not be available to us on acceptable terms or at all. Continued uncertain market and macroeconomic conditions, including due to inflationary pressures, high interest rates, general economic slowdown or a recession, foreign exchange rate volatility, financial institution instability, changes in monetary policy, changes in trade policies including tariffs and other trade restrictions or the threat of such actions, and increasing geopolitical instability, may limit our ability to access capital. In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders. For example, we may raise additional funds by issuing equity securities or by equity offerings, collaboration agreements, debt financings or licensing arrangements.
Previous wording
Our contractual obligations represent our future cash commitments and liabilities under agreements with third party clinical trial service providers. Apart from contracts with a third party clinical trial service provider, such agreements are cancellable upon written notice by us. The non-cancellable contracts expire upon completion of the clinical trial and release of the final report, or the contract may be terminated by the clinical trial service provider, by the FDA or another governmental agency. As of December 31, 2023, our estimated non-cancellable commitment was $6.1 million which will be paid over the term of the clinical trials which are expected to be complete in 2025.
Current wording
Our contractual obligations represent our future cash commitments and liabilities under agreements with third-party clinical trial service providers. Apart from contracts with one third-party clinical trial service provider, such agreements are cancellable upon written notice by us. The non-cancellable contracts expire upon completion of the clinical trial and release of the final report, or the contract may be terminated by the clinical trial service provider, by the FDA or another governmental agency. As of December 31, 2024, our estimated non-cancellable commitment was $10.2 million which will be paid over the term of the clinical trials.
Previous wording
In June 2023, our Board of Directors (the Board) authorized a program to repurchase up to $10.0 million of our common stock (the Share Repurchase Program). The Share Repurchase Program does not obligate us to acquire any specific number of shares. Under the Share Repurchase Program, shares of common stock may be repurchased using a variety of methods, including privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act, as part of accelerated share repurchases and other methods. The timing, manner, price and amount of any repurchases are determined by the Board in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. The program was originally set to expire on December 31, 2023, however, on December 18, 2023 the Board authorized an extension of the program through December 31, 2024. During the year ended December 31, 2023, 1,320,046 shares were repurchased under the Share Repurchase Program for a total cost of $1.5 million. As of December 31, 2023, $8.5 million remained available for future stock repurchases under the Share Repurchase Program.
Current wording
In June 2023, our Board of Directors (the Board) authorized a program to repurchase up to $10.0 million of our common stock (the Share Repurchase Program). The Share Repurchase Program did not obligate us to acquire any specific number of shares. Under the Share Repurchase Program, shares of common stock could have been repurchased using a variety of methods, including privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act, as part of accelerated share repurchases and other methods. The timing, manner, price and amount of any repurchases were determined by the Board in its discretion and depended on a variety of factors, including legal requirements, price and economic and market conditions. The Share Repurchase Program expired on December 31, 2024, and there were no shares repurchased under the program during the year ended December 31, 2024. During the year ended December 31, 2023, 1,320,046 shares were repurchased under the Share Repurchase Program for a total cost of $1.5 million.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
As (Z)-endoxifen is our only product candidate for which we currently incur R&D expense, we have not further disaggregated R&D expenses by product candidate:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
While assumptions used to calculate and account for the investment in non-marketable equity securities represent management’s best estimates, these estimates involve inherent uncertainties and the application of management’s judgment. If underlying assumptions and estimates change, our investment may be impaired further in future periods.