Aligos Therapeutics, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed in “Risk Factors” and “Special note regarding forward-looking statements.” Unless otherwise indicated, all information in this Quarterly Report on Form 10-Q gives effect to a 1-for-25 reverse stock split of our common stock that became effective on August 19, 2024, and all references to shares of common stock outstanding and per share amounts give effect to the reverse stock split.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed in “Risk Factors” and “Special note regarding forward-looking statements.”

Previous wording

We are a clinical-stage biopharmaceutical company focused on developing novel therapeutics to address unmet medical needs in liver diseases and viral infections, including in the areas of chronic hepatitis B (CHB), metabolic dysfunction associated steatohepatitis (MASH), and coronavirus infections (e.g., SARS-CoV-2, SARS-CoV, MERS-CoV, and other related infections). The Aligos team has a demonstrated track record of success in drug development and medicinal chemistry in liver and viral diseases, resulting in three potential best-in-class drug candidates, all of which are currently in clinical studies.

Current wording

We are a clinical-stage biotechnology company focused on developing novel therapeutics to address unmet medical needs in liver diseases and viral infections, including in the areas of chronic hepatitis B virus (HBV) infection, metabolic dysfunction-associated steatohepatitis (MASH), and coronavirus infections (e.g., SARS‑CoV‑2, SARS‑CoV, MERS‑CoV, and other related infections). The Aligos team has a demonstrated track record of success in drug development and medicinal chemistry in liver and viral diseases, resulting in three potential best‑in‑class drug candidates.

Previous wording

Our pipeline of drug candidates includes ALG-000184 for CHB, ALG-055009 for MASH, ALG‑097558 for coronavirus infections, and we also have a portfolio of preclinical programs. ALG-000184 is our potential best-/first-in-class Capsid Assembly Modulator (CAM-E) for CHB with enhanced pharmacologic properties vs. competitor CAM-E drugs and has demonstrated greater HBV DNA suppression compared to the standard of care, nucleos(t)ide analogs (NAs), as well as multi-log 10 reductions in viral antigens. ALG-055009 is our potential best-in-class thyroid hormone receptor beta (THR-β) agonist for MASH with enhanced pharmacologic properties vs. competitor THR-β agonists. Phase 2a topline data demonstrated that ALG-055009 dose groups met the primary endpoint with statistically significant reductions in liver fat at Week 12 as measured by Magnetic Resonance Imaging Proton Density Fat Fraction (MRI-PDFF).

Current wording

Our pipeline of drug candidates includes ALG‑000184 for chronic HBV infection, ALG‑055009 for MASH, ALG‑097558 for coronavirus infections, and a portfolio of preclinical programs. ALG‑000184 is our potential best‑/first‑in‑class Capsid Assembly Modulator (CAM‑E) for chronic HBV infection with enhanced pharmacologic properties vs. competitor CAM‑E drugs and has demonstrated greater HBV DNA suppression compared to the standard of care, nucleos(t)ide analogs (NAs), as well as multi-log 10 reductions in viral antigens in Phase 1 clinical studies conducted to date. ALG‑055009 is our potential best‑in‑class thyroid hormone receptor beta (THR‑β) agonist for MASH with enhanced pharmacologic properties vs. competitor THR-β agonists. Phase 2a topline data demonstrated that ALG‑055009 dose groups met the primary endpoint with statistically significant reductions in liver fat at Week 12 as measured by MRI-PDFF. ALG‑097558 is our potential best‑in‑class small molecule pan-coronavirus 3CL PI, which has been at least 3-fold more potent in cell-based assays of coronavirus infection than other approved CoV PIs and we believe can be dosed twice daily without the requirement for ritonavir co-dosing based on Phase 1 clinical studies conducted to date.

Previous wording

Our primary area of focus seeks to enhance the viral suppression and rate of functional cure for CHB, which often results in life-threatening conditions such as cirrhosis, end-stage liver disease, and the most common form of liver cancer, hepatocellular carcinoma (HCC). To achieve this, we are developing a portfolio of differentiated CHB drug candidates, including a small molecule Capsid Assembly Modulator that results in the production of empty viral capsids and small molecule inhibitors of the Programmed Cell Death Ligand 1 (PD‑1/PD-L1) interaction.

Current wording

Our primary area of focus seeks to enhance the viral suppression and rate of functional cure for chronic HBV infection, which often results in life-threatening conditions such as cirrhosis, end-stage liver disease, and the most common form of liver cancer, hepatocellular carcinoma (HCC). To achieve this, we are developing a portfolio of differentiated chronic HBV infection drug candidates, including a small molecule CAM that results in the production of empty viral capsids.

Previous wording

We have completed the initial Phase 1a study in healthy volunteers (HVs) for our CAM-E, ALG‑000184, and a Phase 1b dose range finding study evaluating the safety, pharmacokinetic (PK) and antiviral activity of 10-300 mg doses of ALG‑000184 for 28 days among untreated HBV e-antigen (HBeAg) positive/negative CHB subjects. For these studies, ALG‑000184 was found to be well tolerated with a favorable PK profile and demonstrated potentially best-in-class multi-log 10 HBV DNA and RNA reductions at all doses tested, as well as HBV surface antigen (HBsAg) reductions in a subset of HBeAg positive subjects receiving 300 mg ALG‑000184 (Hou et. al, AASLD 2022). Based on the favorable profile after dosing up to 300 mg ALG‑000184 x 28 days, additional Phase 1b cohorts are currently ongoing and evaluating the risk-benefit profile of up to 300 mg doses of ALG000184 with or without entecavir (ETV) therapy for up to 96 weeks in HBeAg positive and HBeAg negative CHB subjects. Preliminary data have been presented for several of these cohorts (Agarwal et al., EASL 2024, Yuen et al., EASL 2024) and indicate that ALG000184 (± ETV) dosed for up to 72 weeks was well tolerated with a favorable PK profile and potentially best-in-class antiviral activity.

Current wording

A multi-part Phase 1 study is ongoing, with the completed evaluation of the safety, tolerability, and pharmacokinetic profile of ALG-000184 in HVs. Additionally, a dose-ranging phase assessing the safety, pharmacokinetics, and antiviral activity of 10-300 mg doses of ALG-000184 administered over 28 days in untreated HBeAg+/- subjects with chronic HBV infection has also been completed. In these study phases, ALG‑000184 was found to be well tolerated with a favorable PK profile and demonstrated potentially best-in-class multi-log 10 HBV DNA and RNA reductions at all doses tested, as well as HBV surface antigen (HBsAg) reductions in a subset of HBeAg+ subjects receiving 100 mg or 300 mg of ALG-000184 (Hou et al, AASLD 2022). Based on the favorable profile observed with dosing up to 300 mg of ALG-000184 for 28 days, additional Phase 1 cohorts are currently underway to evaluate the risk-benefit profile of ALG-000184 at doses of 300 mg, with or without entecavir (ETV) therapy, for up to 96 weeks in HBeAg+and HBeAg- subjects with chronic HBV infection. Preliminary data from several of these cohorts (Agarwal et al., EASL 2024; Yuen et al., AASLD 2024, APASL 2025) have been presented, showing that ALG‑000184, administered for up to 96 weeks, was well tolerated, exhibited a favorable PK profile, and demonstrated potentially best-in-class antiviral activity.

Previous wording

Compared to Phase 3 studies with the current standard of care NAs, tenofovir disoproxil fumarate (TDF) and tenofovir alafenamide (TAF) (Buti et al., Lancet Gastro, 2016), these Phase 1b data indicate that ALG‑000184 treatment may result in a substantially higher proportion of subjects with HBV DNA levels < LLOQ (10 IU/mL) at Week 48, which is the approvable endpoint for chronic suppressive therapy in HBV (Food and Drug Administration (FDA) Guidance, Chronic Hepatitis B Virus Infection: Developing Drugs for Treatment Guidance for Industry, April 2022 – Section III.B.1.a). We recently received supportive feedback from the FDA regarding chronic suppressive therapy with ALG-000184. Subsequent clinical studies of ALG‑000184 can be conducted to show superiority to standard of care with the proportion of subjects with HBV DNA levels < LLOQ (10 IU/mL) at Week 48, as the primary approvable endpoint. Additionally, in combination with other mechanisms of action such as Amoytop’s mipeginterferon alfa-2b and those in our CHB portfolio, ALG-000184 may lead to higher rates of functional cure. Dosing of HBeAg positive and HBeAg negative subjects with ALG000184 ± ETV will continue throughout 2024 and interim safety, PK, and antiviral activity data will be presented at scientific conferences throughout the year. In October 2024, Aligos announced that the FDA cleared the Company’s investigational new drug application (IND) for a Phase 1 drug-drug interaction study, and while Phase 2 enabling activities are ongoing, we plan the submission of a new Phase 2 protocol under the existing IND in the first quarter of 2025.

Current wording

Compared to Phase 3 studies with the current standard of care nucleos(t)ide analogs (NAs), tenofovir disoproxil fumarate (TDF) and tenofovir alafenamide (TAF) (Buti et al., Lancet Gastro, 2016; Chen et al., Lancet Gastro 2016), these Phase 1 data to date suggest that ALG‑000184 treatment may be superior to NAs in HBeAg+/- subjects in achieving HBV DNA levels < LLOQ after 48 weeks on treatment, which is the approvable endpoint for chronic suppressive therapy in chronic HBV infection (Food and Drug Administration (FDA) Guidance, Chronic Hepatitis B Virus Infection: Developing Drugs for Treatment Guidance for Industry, April 2022 – Section III.B.1.a). We have received affirmative feedback from the FDA supporting chronic suppressive therapy with ALG-000184, along with the Committee for Medicinal Products for Human Use (CHMP; EU) and the National Medical Products Administration (NMPA; China). Subsequent clinical studies, including a Phase 2 study, will be conducted to show superiority to standard of care NA treatment (HBV DNA levels < LLOQ, target detected or target not detected) after 48 weeks of treatment. Furthermore, when combined with other mechanisms of action, as well as other candidates in our chronic HBV infection portfolio, ALG-000184 dosing regimens have the potential to contribute to achieving higher rates of functional cure than with currently approved agents.

Previous wording

MASH is a complex, chronic liver disease which is a leading cause of liver-related morbidity including cirrhosis, hepatocellular carcinoma, liver transplant, and end-stage liver disease. The FDA recently approved the first drug for the treatment of MASH, resmetirom, a THR-β agonist, but a need remains for better therapies due to resmetirom’s sub-optimal risk-benefit profile, particularly its likely sub-maximal efficacy. To achieve this, we have purpose-built ALG-055009 to have increased potency (~50-fold greater vs. resmetirom in head-to-head in vitro studies) and ß selectivity as well as enhanced pharmacologic properties to deliver a better PK profile; we believe all of these advantages make ALG-055009 well positioned to be a potential best-in-class THR-β agonist.

Current wording

MASH is a complex, chronic liver disease which is a leading cause of liver-related morbidity including cirrhosis, hepatocellular carcinoma, liver transplant, and end-stage liver disease. In 2024, the FDA approved resmetirom, a THR-β agonist, as the first drug for the treatment of MASH. However, additional agents in this class are needed to address remaining unmet needs, including the potential for improved efficacy and a more favorable risk-benefit profile. To achieve this, ALG-055009 has been purposefully designed to exhibit significantly greater potency (approximately 50-fold higher compared to resmetirom in head-to-head in vitro studies) and enhanced β selectivity, along with optimized pharmacologic properties to deliver an improved PK profile. We believe these advantages position ALG‑055009 as a strong candidate to become a best-in-class THR-β agonist.

Previous wording

ALG-055009 completed evaluation in a Phase 1 study in HVs (oral single ascending doses (SAD)) and in subjects with hyperlipidemia (14 oral daily doses). Clinical data after single doses up to 4 mg and multiple doses up to 1 mg showed that ALG‑055009 was well tolerated, had dose proportional PK with low intersubject variability, and demonstrated expected thyromimetic effects (i.e., generally dose proportional increases in sex hormone binding globulin and decreases in various atherogenic lipids and thyroid hormones). In this same study, we also evaluated relative bioavailability where we showed the soft gelatin capsules being used in current studies deliver similar exposures compared to the solution used in Phase 1 studies; we observed low intersubject PK variability and there was no evidence of a meaningful food effect.

Current wording

A first-in-human Phase 1 study of ALG‑055009 in HVs (oral single ascending doses (SAD)) and in subjects with hyperlipidemia (14 oral daily multiple ascending doses (MAD)) has been completed. Clinical data after single doses up to 4 mg and multiple doses up to 1 mg showed that ALG‑055009 was well tolerated, had dose proportional PK with low intersubject variability, and demonstrated expected thyromimetic effects (i.e., generally dose proportional increases in sex hormone binding globulin and decreases in various atherogenic lipids and thyroid hormones without any clinical evidence of thyroid dysfunction). We also evaluated relative bioavailability where we showed the soft gelatin capsules used in the Phase 2a study described below delivered similar exposures compared to the solution formulation used in the SAD/MAD parts of the Phase 1 study; we observed low intersubject PK variability and there was no evidence of a meaningful food effect.

Previous wording

Based on these promising Phase 1 data, we initiated the Phase 2a HERALD study (NCT06342947) at sites across the United States. The study is a 12-week randomized, placebo-controlled trial evaluating 4 doses (0.3 mg, 0.5 mg, 0.7 mg, and 0.9 mg) of ALG-055009 vs. placebo in 102 subjects with presumed liver fibrosis at stages 1-3 (F1-F3) with MASH. In addition to collecting safety and PK data, this study is also designed to assess multiple efficacy biomarkers, which include MRI-PDFF and other non-invasive tests previously shown to be impacted by treatment with THR‑ß agonists. We announced positive topline safety and 12-week MRI-PDFF data from this study in September 2024, demonstrating that ALG-055009 dose groups met the primary endpoint. Doses of 0.5 mg to 0.9 mg ALG-055009 demonstrated statistically significant reductions in liver fat at Week 12, with placebo-adjusted median relative reductions up to 46.2% as measured by MRI-PDFF. Up to 70% of subjects achieved ≥30% relative reduction in liver fat compared to baseline. ALG-055009 demonstrated a favorable tolerability profile with no evidence of clinical hyper/hypothyroidism. Incidence of gastrointestinal-related treatment emergent adverse events were similar in ALG-055009 dose groups compared to placebo. Specifically, a non-dose-related, lower incidence of diarrhea was observed in ALG-055009 dose groups compared to placebo. Significant reductions in atherogenic lipids, including LDL-C, lipoprotein (a), and apolipoprotein B were also observed. We plan to present additional data from this study at upcoming scientific conferences. Phase 2b enabling activities are underway, with expected completion in the middle of 2025. We are also assessing potential Phase 2b clinical trial study designs with key opinion leaders, and plan to consult with the FDA. Lastly, we are evaluating a variety of options to fund continued development and are in early partnering discussions.

Current wording

Based on these promising Phase 1 data, we initiated the Phase 2a HERALD study (NCT06342947) at sites across the United States. The study was a 12-week randomized, double-blind, placebo-controlled trial evaluating 4 doses (0.3 mg, 0.5 mg, 0.7 mg, and 0.9 mg) of ALG-055009 vs. placebo in 102 subjects with presumed MASH and liver fibrosis at stages 1-3 (F1-F3). The primary endpoint of this study was percent relative change in liver fat content by MRI-PDFF at Week 12. This study also evaluated the safety and PK of ALG-055009 treatment and its effect on multiple other efficacy biomarkers, including other non-invasive tests previously shown to be impacted by treatment with THR‑β agonists. We announced positive topline data from this study in 2024, demonstrating that ALG-055009 dose groups were well-tolerated and met the primary endpoint. Specifically, doses of 0.5 mg to 0.9 mg ALG-055009 demonstrated statistically significant reductions in liver fat at Week 12, with placebo-adjusted median relative reductions up to 46.2% as measured by MRI-PDFF. Up to 70% of subjects achieved ≥30% relative reduction in liver fat compared to baseline. Eighteen subjects who were on stable GLP-1 agonist therapy qualified for enrollment in the study, with liver fat content meeting the inclusion criteria of ≥10% at baseline as measured by MRI-PDFF. Notably, 11 of 14 subjects on stable GLP-1 agonists treated with ALG-055009 had liver fat decreases, whereas 4 of 4 subjects on stable GLP-1 agonists treated with placebo had increases in liver fat over the 12-week dosing period (Loomba et al, AASLD 2025).

Previous wording

Another area of focus is to develop drug candidates with pan-coronavirus antiviral activity, including against Severe Acute Respiratory Syndrome coronavirus 2 (SARS-CoV-2), the virus responsible for COVID-19. In this area of focus, we are exploring small molecule coronavirus 3CL protease inhibitors (PIs) in collaboration with the Rega Institute at Katholieke Universiteit Leuven (KU Leuven), the Center for Innovation and Stimulation of Drug Discovery (CISTIM) and the Centre for Drug Design and Discovery (CD3). This collaboration led to the discovery of ALG-097558 which has advanced into Phase 1 clinical trials.

Current wording

Another area of focus is to develop drug candidates with pan-coronavirus antiviral activity, including against Severe Acute Respiratory Syndrome coronavirus 2 (SARS-CoV-2), the virus responsible for COVID-19. In this area of focus, we are exploring small molecule coronavirus 3CL protease inhibitors (PIs) in collaboration with the Rega Institute at Katholieke Universiteit Leuven (KU Leuven), the Center for Innovation and Stimulation of Drug Discovery (CISTIM) and the Centre for Drug Design and Discovery (CD3). This collaboration led to the discovery of ALG‑097558 which has completed a Phase 1 first-in-human evaluation in healthy volunteers and advanced into a clinical trial evaluating high-risk COVID-19 patients.

Previous wording

ALG‑097558 has been shown to be at least 6-fold more potent than nirmatrelvir and other PIs in clinical development against a panel of SARS-CoV-2 variants (including Omicron). It also has demonstrated broad pan-coronavirus activity, including against SARS-CoV and MERS-CoV. In Phase 1 clinical studies, single doses up to 2000 mg and multiple doses up to 800 mg Q12 for 7 days have been well tolerated with an acceptable PK profile that indicates ritonavir boosting is not required. Based on these Phase 1 data (Wilkes et al, ESCMID, 2024), the projected efficacious dose range to treat SARS-CoV-2 is 200-600 mg ALG-097558 Q12 x 5 days.

Current wording

ALG‑097558 has been shown to be at least 3-fold more potent than nirmatrelvir and other PIs in clinical development against a panel of SARS-CoV-2 variants (including Omicron). It also has demonstrated broad pan‑coronavirus activity, including against SARS-CoV-1 and MERS-CoV. In the first-in-human Phase 1 clinical study, single doses up to 2000 mg and multiple doses up to 800 mg Q12H for 7 days were well tolerated with an acceptable PK profile that indicates ritonavir boosting is not required. Furthermore, the absence of a clinically relevant DDI with midazolam, suggests that ALG‑097558 can be co-administered with CYP3A4 substrates (NCT05840952). Based on these Phase 1 data (Wilkes et al., RespiDart, 2024), the projected efficacious dose range to treat SARS-CoV-2 is 200-600 mg ALG‑097558 Q12 x 5 days, without the need for ritonavir coadministration.

Previous wording

ALG-097558 is expected to begin three additional clinical trials in the fourth quarter of 2024. AGILE University of Liverpool, a UK government supported platform trial (MRC and Wellcome Trust funding), will sponsor and perform a study in high-risk COVID patients evaluating ALG-097558 as monotherapy or in combination with remdesivir. In addition, the NIAID will sponsor two clinical studies in special populations (renal/hepatic impairment subjects) evaluating pharmacokinetic (PK) differences. NIAID will also sponsor a drug drug interaction and relative bioavailability study in healthy volunteers. We expect that future development of ALG‑097558, including ongoing Phase 2 enabling activities, will be funded by external sources, including public funding sources as described below.

Current wording

ALG‑097558 began three additional clinical trials in 2024. AGILE University of Liverpool, a UK government supported platform trial (MRC and Wellcome Trust funding), is sponsoring and performing a study in high‑risk COVID‑19 patients evaluating ALG‑097558 as monotherapy or in combination with remdesivir (NCT04746183). Additionally, clinical studies evaluating PK in special populations (renal and hepatic impairment subjects; NIAID contract) are on-going (NCT06698549). NIAID is also sponsoring a drug‑drug interaction and relative bioavailability study in healthy volunteers expected to start dosing in the second quarter of 2025 (NCT06568861). We expect that future development of ALG‑097558, including ongoing Phase 2 enabling activities, will be funded by external sources, including public funding sources as described below.

Previous wording

Preclinical activities for our coronavirus program were partially funded through a grant from the National Institutes of Health (NIH) and the National Institute of Allergy and Infectious Diseases (NIAID) Antiviral Drug Discovery (AViDD) Centers for Pathogens of Pandemic Concern program through the Metropolitan AntiViral Drug Accelerator (MAVDA) consortium. Specific clinical and nonclinical studies for the ALG-097558 program and the follow up compound, are now also being funded with federal funds from the NIAID, NIH, Department of Health and Human Services, under Contract No. 75N93023C00052. We filed an IND in the third quarter of 2024 and clinical studies in special populations are planned to be initiated in the second half of 2024 through the end of 2025 as part of this NIAID contract. We expect to receive approximately $13.8 million in funds across these two NIH awards and contracts to support these activities. We are also seeking additional external funding (e.g., from governmental agencies) to support future studies (e.g., Phase 2) as we advance ALG-097558 for the treatment of COVID-19 and future coronavirus pandemics.

Current wording

Preclinical activities for our coronavirus program were partially funded through a grant from the National Institutes of Health (NIH) and the National Institute of Allergy and Infectious Diseases (NIAID) Antiviral Drug Discovery (AViDD) Centers for Pathogens of Pandemic Concern program through the Metropolitan AntiViral Drug Accelerator (MAVDA) consortium. Specific clinical and nonclinical studies for the ALG-097558 program and the follow up compound, are now also being funded with federal funds from the NIAID, NIH, Department of Health and Human Services, under Contract No. 75N93023C00052. We filed an IND in the third quarter of 2024 and clinical studies in special populations were initiated in the second half of 2024 as part of this NIAID contract. We expect to receive approximately $13.8 million in funds across these two NIH awards and contracts to support these activities. To date, these funds have not been impacted by any changes at the NIH or NIAID. We are also seeking additional external funding (e.g., from governmental agencies) to support future studies as we advance ALG‑097558 for the treatment of COVID‑19 and future coronavirus pandemics.

Previous wording

Collaboration revenue includes recognition of our upfront payments pursuant to the Merck Original Agreement and First Amendment. In order to record collaboration revenue, we utilize an input method to recognize revenue over time as costs are incurred.

Current wording

Collaboration revenue included recognition of our upfront payments pursuant to the Merck Original Agreement and First Amendment that were terminated in prior years. In order to record collaboration revenue, we utilized an input method to recognize revenue over time as costs were incurred.

Previous wording

We rely substantially on third parties to conduct our discovery activities, nonclinical studies, clinical trials and manufacturing. We estimate research and development expenses based on estimates of services performed, and rely on third party contractors and vendors to provide us with timely and accurate estimates of expenses of services performed to assist us in these estimates. A portion of our research and development expenses are based on contractual milestones. Research and development costs consist primarily of costs incurred for the identification and development of our drug candidates through our technology platforms, which include:

Current wording

We expect our expenses to increase substantially in connection with our ongoing clinical development activities related to our chronic HBV infection drug candidate ALG‑000184. We rely substantially on third parties to conduct our discovery activities, nonclinical studies, clinical trials and manufacturing. We estimate research and development expenses based on estimates of services performed, and rely on third party contractors and vendors to provide us with timely and accurate estimates of expenses of services performed to assist us in these estimates. A portion of our research and development expenses are based on contractual milestones. Research and development costs consist primarily of costs incurred for the identification and development of our drug candidates through our technology platforms, which include:

Previous wording

costs associated with in-process research and development, including license fees and milestones paid to third-party collaborators for technologies with no alternative use;

Current wording

costs associated with in-process research and development, including license fees and milestones paid to third-party collaborators for technologies;

Previous wording

We have incurred net losses and negative cash flows from operations in each year since our formation in February 2018. Our net losses were $49.1 million and $59.8 million for the nine months ended September 30, 2024 and 2023, respectively, and our net losses were $87.7 million for the year ended December 31, 2023. We have had no revenue from product sales. As of September 30, 2024, we had an accumulated deficit of $535.9 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. Our net operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of our clinical trials and nonclinical studies and our other research and development expenses. We have no internal manufacturing capabilities or sales force and outsource a substantial portion of our clinical trial work to third parties.

Current wording

We have incurred net losses and negative cash flows from operations in each year since our formation in February 2018. Our net income was $43.1 million for the three months ended March 31, 2025 and net loss was $34.9 million for the three months ended March 31, 2024, and our net losses were $131.2 million for the year ended December 31, 2024. We have had no revenue from product sales. As of March 31, 2025, we had an accumulated deficit of $574.9 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. Our net operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of our clinical trials and nonclinical studies and our other research and development expenses. We have no internal manufacturing capabilities or sales force and outsource a substantial portion of our clinical trial work to third parties.

Previous wording

Comparison of the three and nine months ended September 30, 2024 and 2023

Current wording

Comparison of the three months ended March 31, 2025 and 2024

Previous wording

The following table summarizes our operating expenses for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our operating expenses for the three months ended March 31, 2025 and 2024 (in thousands):

Previous wording

Revenue from customers increased by $0.2 million and decreased by $2.5 million, respectively, for the three and nine months ended September 30, 2024, when compared to the same period in 2023. The nine month decrease was due to the near completion of the original agreement with Amoytop and the start of the extension agreement. The three month increase was due to additional work completed on the extension.

Current wording

Revenue from customers decreased by $0.4 million for the three months ended March 31, 2025, when compared to the same period in 2024. The decrease was due to the near completion of the original agreement with Amoytop and the start of the extension agreement.

Previous wording

We track direct external research and development expenses on a program-specific basis (CHB, MASH, coronaviruses and early-stage programs). The following table summarizes these research and development costs, in thousands:

Current wording

We track direct external research and development expenses on a program-specific basis (chronic HBV infection, MASH, coronaviruses and early-stage programs). The following table summarizes these research and development costs (in thousands):

Previous wording

Research and development expenses increased by $0.9 million during the three months ended September 30, 2024, compared to the same period in 2023. The increase in the three-month period was primarily due to a $1.0 million increase in third party expenses due to increased clinical study costs, a $0.3 million increase in facility and other expenses, and a $0.1 million increase in travel and recruiting. This was partially offset by a $0.5 million decrease in employee-related costs including a $0.3 million decrease in stock-based compensation.

Current wording

Research and development expenses decreased by $1.9 million during the three months ended March 31, 2025, compared to the same period in 2024. The decrease in the three-month period was primarily due to a $1.1 million decrease in third-party expenses due to reduced clinical study costs as a result of the completion of the MASH Phase 1 clinical trial, partially offset by increased spend in the chronic HBV infection program. There was also a $0.6 million decrease in employee-related costs including a $0.8 million decrease in stock-based compensation, and a $0.2 million decrease in facility and other expenses.

Previous wording

General and administrative expenses decreased by $1.8 million during the three months ended September 30, 2024, compared to the same period in 2023. This was primarily due to a $0.7 million decrease in third party expenses due to reduced legal and IP spend, and a $1.1 million decrease in employee-related costs.

Current wording

General and administrative expenses decreased by $1.6 million during the three months ended March 31, 2025, compared to the same period in 2024. This was primarily due to a $0.8 million decrease in third party expenses due to reduced legal and intellectual property spend, a $0.7 million decrease in employee-related costs, and a $0.1 million decrease in facility costs.

Previous wording

The following table summarizes our interest and other income, net for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our interest and other income, net for the three months ended March 31, 2025 and 2024 (in thousands):

Previous wording

Interest income, net decreased by $0.5 million and $1.4 million for the three and nine months ended September 30, 2024 when compared to the same periods ended September 30, 2023, primarily due to a general decrease in market interest rates.

Current wording

Interest income, net increased by $0.3 million for the three months ended March 31, 2025 when compared to the same period ended March 31, 2024, primarily due to an increase in the investment balance.

Previous wording

We have incurred net losses in each year since inception. We have not generated any revenue from product sales or any other sources and have incurred significant operating losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of any drug candidates for at least several years, if ever.

Current wording

We have incurred net losses in each year since inception. Our net losses were $131.2 million for the year ended December 31, 2024 and $87.7 million for the year ended December 31, 2023. We had a net income of $43.1 million for the three months ended March 31, 2025, due to a gain resulting from the remeasurement of the 2023 Common Warrants. Without this gain, we would have a net loss. We have not generated any revenue from product sales or any other sources and have incurred significant operating losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of any drug candidates for at least several years, if ever.

Previous wording

As of September 30, 2024, we had cash, cash equivalents and investments of $74.9 million.

Current wording

As of March 31, 2025, we had cash, cash equivalents and investments of $137.9 million.

Previous wording

Our primary use of cash is to fund operating expenses, which consist primarily of research and development costs related to our drug candidates and our discovery programs, and to a lesser extent, general and administrative expenditures. We expect our expenses to increase substantially in connection with our ongoing clinical development activities related to our CHB drug candidate

Current wording

Our primary use of cash is to fund operating expenses, which consist primarily of research and development costs related to our drug candidates and our discovery programs, and to a lesser extent, general and administrative expenditures. We expect our expenses to increase substantially in connection with our ongoing clinical development activities related to our chronic HBV infection drug candidate ALG‑000184, which we have initiated clinical trials, as well as our research and development of our other drug candidates within our MASH and coronavirus programs.

Previous wording

During the nine months ended September 30, 2023, operating activities utilized $56.3 million of cash, primarily resulting from our net loss of $59.8 million and net changes in operating assets and liabilities of $9.2 million, partially offset by non-cash charges of $12.7 million. Net cash used in operating activities resulted in changes in our operating assets and liabilities of $9.2 million, consisting of a decrease of $1.8 million in accounts payable, a decrease of $3.7 million in accrued liabilities, a decrease of $1.8 million in operating lease liabilities, and a decrease of $6.7 million in deferred revenue from collaborations, partially offset by a decrease in other assets of $3.5 million and an increase of $1.2 million in deferred revenue from customers. The decrease in deferred revenue from collaborations was due to the recognition of revenue from collaborations due to progress towards the completion of the projects. The decrease in accrued liabilities was largely due to reduced manufacturing spend. The decrease in accounts payable is due to the timing of payments to vendors.

Current wording

During the three months ended March 31, 2025, operating activities utilized $20.9 million of cash, primarily resulting from our net income of $43.1 million, offset by net changes in operating assets and liabilities of $3.8 million, and non-cash charges of $60.2 million, driven by the gain as a result of remeasuring the 2023 Common Warrants. Net cash used in operating activities resulted in changes in our operating assets and liabilities of $3.8 million, consisting of a decrease of $4.8 million in accrued liabilities, a decrease of $0.5 million in operating lease liabilities, a decrease of $0.2 million in deferred revenue, an increase in other assets of $0.1 million partially offset by an increase of $1.7 million in accounts payable. The decrease in deferred revenue was due to the recognition of revenue from customers due to progress towards the completion of the projects. The decrease in accrued liabilities was largely due to the bonus payments that occurred in the first quarter of 2025. The increase in accounts payable is due to the timing of payments to vendors.

Previous wording

During the nine months ended September 30, 2024, operating activities utilized $62.3 million of cash, primarily resulting from our net loss of $49.1 million, net changes in operating assets and liabilities of $4.6 million, and non-cash charges of $8.6 million. Net cash used in operating activities resulted in changes in our operating assets and liabilities of $4.6 million, consisting of a decrease of $2.7 million in accrued liabilities, a decrease of $2.0 million in operating lease liabilities, a decrease of $0.1 million in deferred revenue from collaborations, an decrease of $0.6 million in deferred revenue from customers, partially offset by an increase of $0.2 million in accounts payable and a decrease in other assets of $0.5 million. The decrease in deferred revenue from collaborations was due to the recognition of revenue from collaborations due to progress towards the completion of the projects. The decrease in accrued liabilities was largely due to the bonus payments that occurred in the first quarter of 2024. The decrease in accounts payable is due to the timing of payments to vendors.

Current wording

During the three months ended March 31, 2024, operating activities utilized $22.7 million of cash, primarily resulting from our net loss of $34.9 million and net changes in operating assets and liabilities of $5.5 million, partially offset by non-cash charges of $17.6 million. Net cash used in operating activities resulted in changes in our operating assets and liabilities of $5.5 million, consisting of a decrease of $4.8 million in accrued liabilities, a decrease of $0.6 million in operating lease liabilities, and a decrease of $0.6 million in deferred revenue, partially offset by a decrease in other assets of $0.2 million and an increase of $0.3 million in accounts payable. The decrease in deferred revenue was due to the recognition of revenue from collaborations due to progress towards the completion of the projects. The decrease in accrued liabilities was largely due to the bonus payment that occurred in the first quarter of 2024. The decrease in accounts payable is due to the timing of payments to vendors.

Previous wording

During the nine months ended September 30, 2024, investing activities used $38.3 million of cash, primarily due to $108.1 million of purchase of short-term investments partially offset by $70.0 million related to maturities of short-term investments.

Current wording

During the three months ended March 31, 2025, investing activities used $44.1 million of cash, primarily due to $64.0 million of purchase of short-term investments partially offset by $20.0 million related to maturities of short-term investments.

Previous wording

During the nine months ended September 30, 2023, investing activities provided $45.0 million of cash, primarily due to $45.0 million of investment maturities.

Current wording

During the three months ended March 31, 2024, investing activities used $88.6 million of cash, primarily due to purchase of short-term investments.

Previous wording

During the nine months ended September 30, 2024, net cash provided by financing activities was $258.0 thousand, consisting primarily due to proceeds from the ESPP purchase.

Current wording

During the three months ended March 31, 2025, net cash provided by financing activities was $101.7 million, primarily due to proceeds from the 2025 PIPE financing.

Previous wording

During the nine months ended September 30, 2023, net cash provided by financing activities was $392 thousand, consisting primarily of proceeds from the ESPP purchase and from the exercise of stock options, partially offset by payments of our finance leases.

Current wording

During the three months ended March 31, 2024, net cash used in financing activities was $19 thousand, primarily due to payments of our finance leases.

Previous wording

For a discussion of our critical accounting estimates, see “Management’s discussion and analysis of financial condition and results of operations” and the notes to our audited financial statements in our Annual Report on Form 10-K, filed with the SEC on March 12, 2024 for the year ended December 31, 2023, and the notes to the financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. There have been no material changes to these critical accounting policies and estimates through September 30, 2024 from those discussed in our Form 10-K.

Current wording

For a discussion of our critical accounting estimates, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to our audited financial statements in our Annual Report on Form 10-K, filed with the SEC on March 10, 2025 for the year ended December 31, 2024, and the notes to the financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. There have been no material changes to these critical accounting policies and estimates through March 31, 2025 from those discussed in our Form 10-K.