Grace Therapeutics Inc

Previous wording

This management’s discussion and analysis (“MD&A”) is presented in order to provide the reader with an overview of the financial results and changes to our consolidated balance sheet at September 30, 2024. This MD&A also explains the material variations in our results of operations for the three and the six months ended September 30, 2024 and 2023, consolidated balance sheets as of September 30, 2024 and March 31, 2024, and cash flows for the six months ended September 30, 2024 and 2023.

Current wording

This management’s discussion and analysis (“MD&A”) is presented in order to provide the reader with an overview of the financial results and changes to our consolidated balance sheet at December 31, 2024. This MD&A also explains the material variations in our results of operations for the three and the nine months ended December 31, 2024 and 2023 and cash flows for the nine months ended December 31, 2024 and 2023.

Previous wording

Market data, and certain industry data and forecasts included in this MD&A were obtained from internal Company surveys and market research conducted by third parties hired by us, publicly available information, reports of governmental agencies and industry publications, and independent third-party surveys. We have relied upon industry publications as our primary sources for third-party industry data and forecasts. Industry surveys, publications and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information are not guaranteed. We have not independently verified any of the data from third-party sources or the underlying economic assumptions they have made. Similarly, internal surveys, industry forecasts and market research, which we believe to be reliable based upon our management’s or contracted third parties’ knowledge of our industry, have not been independently verified. Our estimates involve risks and uncertainties, including assumptions that may prove not to be accurate, and these estimates and certain industry data are subject to change based on various factors, including those discussed in this quarterly report and in our most recently filed Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on June 21, 2024 (the “Annual Report”). This MD&A contains forward-looking information. You should review our Special Note Regarding Forward-Looking Statements presented at the beginning of this quarterly report.

Current wording

Market data, and certain industry data and forecasts included in this MD&A were obtained from internal Company surveys and market research conducted by third parties hired by us, publicly available information, reports of governmental agencies and industry publications, and independent third-party surveys. We have relied upon industry publications as our primary sources for third-party industry data and forecasts. Industry surveys, publications and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information are not guaranteed. We have not independently verified any of the data from third-party sources or the underlying economic assumptions they have made. Similarly, internal surveys, industry forecasts and market research, which we believe to be reliable based upon our management’s or contracted third parties’ knowledge of our industry, have not been independently verified. Our estimates involve risks and uncertainties, including assumptions that may prove not to be accurate, and these estimates and certain industry data are subject to change based on various factors, including those discussed in this quarterly report and in our most recently filed Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on June 21, 2024 (the “Annual Report”), our Quarterly Report on Form 10-Q, filed with the SEC on August 9, 2024, and our Quarterly Report on Form 10-Q, filed with the SEC on November 13, 2024. This MD&A contains forward-looking information. You should review our Special Note Regarding Forward-Looking Statements presented at the beginning of this quarterly report.

Previous wording

This MD&A should be read in conjunction with our unaudited condensed consolidated interim financial statements for the three and the six months ended September 30, 2024 and 2023 included elsewhere in this quarterly report. Our unaudited condensed consolidated financial statements were prepared in accordance with U.S. GAAP.

Current wording

This MD&A should be read in conjunction with our unaudited condensed consolidated interim financial statements for the three and the nine months ended December 31, 2024 and 2023 included elsewhere in this quarterly report. Our unaudited condensed consolidated financial statements were prepared in accordance with U.S. GAAP.

Previous wording

We are focused on developing and commercializing products for rare and orphan diseases that have the potential to improve clinical outcomes by using our novel drug delivery technologies. We seek to apply new proprietary formulations to approved and marketed pharmaceutical compounds to achieve enhanced efficacy, faster onset of action, reduced side effects, more convenient drug delivery and increased patient compliance; all of which could result in improved patient outcomes. The active pharmaceutical ingredients used in the drug candidates under development by Grace Therapeutics may be already approved in a target indication or could be repurposed for use in new indications.

Current wording

We are focused on developing and commercializing products for rare and orphan diseases that have the potential to improve clinical outcomes by using our novel drug delivery technologies. We seek to apply new proprietary formulations to approved and marketed pharmaceutical compounds to achieve enhanced efficacy, faster onset of action, reduced side effects, more convenient drug delivery and increased patient compliance; all of which could result in improved patient outcomes. The active pharmaceutical ingredients used in the drug candidates under development by us may be already approved in a target indication or could be repurposed for use in new indications.

Previous wording

We believe that rare disorders represent an attractive area for drug development, and there remains an opportunity for us to utilize already approved drugs that have established safety profiles and clinical experience to potentially address significant unmet medical needs. A key advantage of pursuing therapies for rare disorders is the potential to receive orphan drug designation (“ODD”) from the FDA. Our three drug candidates have received ODD status, provided certain conditions are met at new drug application (“NDA”) approval. ODD provides for seven years of marketing exclusivity in the United States post-launch, provided certain conditions are met, and the potential for faster regulatory review. ODD status can also result in tax credits of up to 50% of clinical development costs conducted in the United States upon marketing approval and a waiver of the NDA fees, which we estimate can translate into savings of approximately $3.2 million for our lead drug candidate, GTx-104. Developing drugs for rare diseases can often allow for clinical trials that are more manageably scaled and may require a smaller, more targeted commercial infrastructure.

Current wording

We believe that rare disorders represent an attractive area for drug development, and there remains an opportunity for us to utilize already approved drugs that have established safety profiles and clinical experience to potentially address significant unmet medical needs. A key advantage of pursuing therapies for rare disorders is the potential to receive orphan drug designation (“ODD”) from the FDA. Our three drug candidates have received ODD status, provided certain conditions are met at new drug application (“NDA”) approval. ODD provides for seven years of marketing exclusivity in the United States post-launch, provided certain conditions are met, and the potential for faster regulatory review. ODD status can also result in tax credits of up to 50% of clinical development costs conducted in the United States upon marketing approval and a waiver of the NDA fees, which we estimate can translate into savings of approximately $4.3 million for our lead drug candidate, GTx-104. Developing drugs for rare diseases can often allow for clinical trials that are more manageably scaled and may require a smaller, more targeted commercial infrastructure.

Previous wording

Our management team possesses significant experience in drug formulation and drug delivery research and development, clinical and pharmaceutical development and manufacturing, regulatory affairs, and business development, as well as being well-versed in late-stage drug development and commercialization. Importantly, our team is comprised of industry professionals with deep expertise and knowledge, including a world-renowned practicing neurosurgeon-scientist and respected authority in aSAH, as well as product development, chemistry, manufacturing and controls (CMC”), planning, implementation, management, and execution of global Phase 2 and Phase 3 trials for GTx-104, and drug commercialization.

Current wording

Our management team possesses significant experience in drug formulation and drug delivery research and development, clinical and pharmaceutical development and manufacturing, regulatory affairs, and business development, as well as being well-versed in late-stage drug development and commercialization. Importantly, our team is comprised of industry professionals with deep expertise and knowledge, including a world-renowned practicing neurosurgeon-scientist and respected authority in aneurysmal subarachnoid hemorrhage (“aSAH”), as well as product development, chemistry, manufacturing and controls (CMC), planning, implementation, management, and execution of global Phase 2 and Phase 3 trials for GTx-104, and drug commercialization.

Previous wording

As noted above, on September 25, 2024, we announced the completion of enrollment in our Phrase 3 STRIVE-ON trial for GTx-104. We anticipate a data readout from the STRIVE-ON trial in first calendar quarter 2025 and plan to submit an NDA to the FDA in the first half of calendar year 2025.

Current wording

On September 25, 2024, we announced the completion of enrollment in our Phrase 3 STRIVE-ON trial for GTx-104. On February 10, 2025, we announced that the STRIVE-ON trial met its primary endpoint and provided evidence of clinical benefit for GTx-104 compared to orally administered nimodipine. We plan to submit an NDA to the FDA in the first half of calendar year 2025.

Previous wording

On October 1, 2024, we changed our jurisdiction of incorporation from the Province of Québec in Canada to the Province of British Columbia in Canada pursuant to a “continuance” effected in accordance with Chapter XII of the Business Corporations Act (Québec) (the “Continuance”). Subsequently on October 7, 2024, we changed our jurisdiction of incorporation from the Province of British Columbia in Canada to the State of Delaware in the United States of America pursuant to a “continuance” effected in accordance with Section 308 of the Business Corporations Act (British Columbia) and a “domestication” (the “Domestication”) under Section 388 of the General Corporation Law of the State of Delaware (the “DGCL”). Both the Continuance and the Domestication were approved by our shareholders at our Annual and Special Meeting of Shareholders held on September 30, 2024.

Current wording

On October 1, 2024, we changed our jurisdiction of incorporation from the Province of Québec in Canada to the Province of British Columbia in Canada pursuant to a “continuance” effected in accordance with Chapter XII of the Business Corporations Act (Québec) (the “Continuance”). Subsequently on October 7, 2024, we changed our jurisdiction of incorporation from the Province of British Columbia in Canada to the State of Delaware in the United States of America pursuant to a “continuance” effected in accordance with Section 308 of the Business Corporations Act (British Columbia) and a “domestication” (the “Domestication”) under Section 388 of the General Corporation Law of the State of Delaware. Both the Continuance and the Domestication were approved by our shareholders at our Annual and Special Meeting of Shareholders held on September 30, 2024.

Previous wording

Prior to the Continuance and Domestication, our Class A common shares, without par value per share were listed on The Nasdaq Stock Market LLC (“Nasdaq”) under symbol “ACST.” Upon the effectiveness of the Continuance, each of our common shares at the time of the Continuance remained issued and outstanding as a common share, without par value per share, of Acasti British Columbia. Upon effectiveness of the Domestication, each of our outstanding common shares at the time of the Domestication automatically became one outstanding share of common stock, par value $0.0001 per share, of Acasti Delaware. Our common stock continues to be listed for trading on Nasdaq.

Current wording

Prior to the Continuance and Domestication, our Class A common shares, without par value per share (“Common Shares”), were listed on The Nasdaq Stock Market LLC (“Nasdaq”) under symbol “ACST.” Upon the effectiveness of the Continuance, each of our Common Shares at the time of the Continuance remained issued and outstanding as a common share, without par value per share, of Acasti British Columbia. Upon effectiveness of the Domestication, each outstanding common share of Acasti British Columbia at the time of the Domestication automatically became one outstanding share of common stock, par value $0.0001 per share, of Acasti Delaware. Our Common Stock continues to be listed for trading on Nasdaq.

Previous wording

aSAH is bleeding over the surface of the brain in the subarachnoid space between the brain and the skull, which contains blood vessels that supply the brain. A primary cause of such bleeding is rupture of an aneurysm. The result is a relatively uncommon type of stroke (aSAH) that accounts for about 5% of all strokes and has an incidence of six per 100,000 person years.

Current wording

aSAH is bleeding over the surface of the brain in the subarachnoid space between the brain and the skull, which contains blood vessels that supply the brain. A primary cause of such bleeding is the rupture of an aneurysm in the brain. The result is a relatively uncommon type of stroke (aSAH) that accounts for about 5% of all strokes and an estimated 42,500 U.S. hospital treated patients.

Previous wording

NIMOTOP™ is an injectable form of nimodipine that is manufactured by Bayer Healthcare. It is approved in Europe and in other regulated markets (but not in the United States). It has limited utility for aSAH patients because of its high organic solvent content, namely 23.7% ethanol and 17% polyethylene glycol 400 (NIMOTOP SmPC).

Current wording

NIMOTOP™ is an injectable form of nimodipine that is manufactured by Bayer Healthcare. It is approved in the European Union, China and in other regulated markets (but not in the United States). It has limited utility for aSAH patients because of its high organic solvent content, namely 23.7% ethanol and 17% polyethylene glycol 400 (NIMOTOP SmPC).

Previous wording

GTx-104 could provide a more convenient mode of administration as compared to generic nimodipine capsules or NYMALIZE™. GTx-104 is administered as an IV infusion compared to oral administration via a nasogastric tube in unconscious patients every four hours for both nimodipine capsules and NYMALIZE™. Therefore, GTx-104 could make a major contribution to patient care by potentially reducing the dosing associated nursing burden. More convenient, continuous, and consistent dosing may also reduce the risk of medication errors. In addition, as depicted in the charts below, the GTx-140-002 PK study conducted by us has shown that GTx-104 has the potential to provide improved bioavailability and show reduced inter- and intra-subject variability compared to oral nimodipine, which is hypothesized to limit the risk of hypotension and to better achieve desired therapeutic concentration. Following the capsule administration, the variability was observed higher as compared to IV infusion administration (nimodipine exposure variability at steady state observed 37.5% following oral capsule administration versus 15.5%, following GTx-104 IV infusion). Because of its IV formulation, we also expect GTx-104 to reduce certain drug-drug interactions and food effects.

Current wording

GTx-104 could provide a more convenient mode of administration as compared to generic nimodipine capsules or NYMALIZE™. GTx-104 is administered as an IV infusion compared to oral administration via a nasogastric tube in unconscious patients every four hours for both nimodipine capsules and NYMALIZE™. Therefore, GTx-104 could make a major contribution to patient care by potentially reducing the dosing associated nursing burden. More convenient, continuous, and consistent dosing may also reduce the risk of medication errors. In addition, as depicted in the charts below, the GTx-140-002 pharmacokinetic (“PK”) study conducted by us has shown that GTx-104 has the potential to provide improved bioavailability and show reduced inter- and intra-subject variability compared to oral nimodipine, which is hypothesized to limit the risk of hypotension and to better achieve desired therapeutic concentration. Following the capsule administration, the variability was observed higher as compared to IV infusion administration (nimodipine exposure variability at steady state observed 37.5% following oral capsule administration versus 15.5%, following GTx-104 IV infusion). Because of its IV formulation, we also expect GTx-104 to reduce certain drug-drug interactions and food effects.

Previous wording

Despite the positive impact it has on recovery, physicians often must discontinue their patients from oral nimodipine, primarily as a result of hypotensive episodes that cannot be controlled by titrating the oral form of drug. Such discontinuation could potentially be avoided by administering GTx-104, which because of its IV administration, may reduce the complexity associated with the need for careful attention to the timing of nimodipine administration at least one hour before or two hours after a meal. Also, unconscious patients will likely receive more consistent concentrations of nimodipine when delivered via the IV route as compared to oral gavage or a nasogastric tube. More consistent dosing is expected to result in a reduction of vasospasm and better, more consistent management of hypotension. As summarized in the table below, we also anticipate reduced use of rescue therapies, such as vasopressors, and expensive hospital resources, such as the angiography suite, are possible by more effectively managing blood pressure with GTx-104. Reduced incidences of vasospasm could result in shorter length of stay and better outcomes.

Current wording

Despite the positive impact it has on recovery, physicians often must discontinue their patients from oral nimodipine, primarily due to hypotensive episodes that cannot be controlled by titrating the oral form of the drug. Such discontinuation could potentially be avoided by administering GTx-104, which because of its IV administration, may reduce the complexity associated with the need for careful attention to the timing of nimodipine administration at least one hour before or two hours after a meal. Also, unconscious patients will likely receive more consistent concentrations of nimodipine when delivered via the IV route as compared to oral gavage or a nasogastric tube. More consistent dosing is expected to result in better, more consistent management of hypotension. As summarized in the table below, we also anticipate that reduced use of hospital resources is possible by more effectively managing blood pressure with GTx-104, which could result in shorter length of stay and better outcomes.

Previous wording

Approximately 50,000 patients in the United States are affected by aSAH per year, based on market research. Outside of the United States, annual cases of aSAH are estimated at approximately 60,000 in the European Union, and approximately 150,000 in China.

Current wording

Approximately 42,500 patients in the United States are affected by aSAH per year, based on market research, but claims analysis suggests incidence may be as high as approximately 70,000. Outside of the United States, annual cases of aSAH are estimated at approximately 60,000 in the European Union, and approximately 150,000 in China.

Previous wording

We estimate that total addressable market for aSAH is approximately $300 million in the U.S. There are an estimated 150,000 aSAH patients each year in China and approximately 55,000 patients in the European Union. The unmet needs in the treatment of aSAH and the potential of GTx-104 to address the limitations of the current standard of care were the subject of a Key Opinion Leader (“KOL”) event we hosted on October 4, 2023 and will be discussed further at our KOL event planned for November 2024. In an independent market research survey we conducted of hospital administrators, critical and neuro intensive care physicians at institutions with Comprehensive or Advanced Stroke Center certification who are involved in purchasing decisions for their institutions/units, respondents reported 80% likelihood of adopting an IV formulation of nimodipine (GTx-104), assuming 100% bioavailability, better safety, no food effects, effective hypotension management, potential hospital value and patient value.

Current wording

We estimate that the total addressable market for aSAH is approximately $300 million in the U.S. There are an estimated 150,000 aSAH patients each year in China and approximately 60,000 patients in the European Union. The unmet needs in the treatment of aSAH and the potential of GTx-104 to address the limitations of the current standard of care were the subject of a Key Opinion Leader (“KOL”) event we hosted in November 2024. In an independent market research survey we conducted of hospital administrators, critical and neuro intensive care physicians at institutions with Comprehensive or Advanced Stroke Center certification who are involved in purchasing decisions for their institutions/units, respondents reported 80% likelihood of adopting an IV formulation of nimodipine (GTx-104), assuming 100% bioavailability, better safety, no food effects, effective hypotension management, potential hospital value and patient value.

Previous wording

The bioavailability of oral nimodipine capsules observed was only approximately 8% compared to 100% for GTx-104. Consequently, about one-twelfth the amount of nimodipine is delivered with GTx-104 to achieve the same blood levels as with the oral capsules. This data is presented in the chart below.

Current wording

The bioavailability of oral nimodipine capsules observed was only approximately 7% compared to 100% for GTx-104. Consequently, about one-twelfth the amount of nimodipine is delivered with GTx-104 to achieve comparable pharmacokinetics as with the oral capsules. This data is presented in the chart below.

Previous wording

GTx-104 has been administered in over 150 healthy volunteers and was well tolerated with significantly lower inter- and intra-subject pharmacokinetic (“PK”) variability compared to oral nimodipine.

Current wording

GTx-104 has been administered in over 150 healthy volunteers and was well tolerated with significantly lower inter- and intra-subject PK variability compared to oral nimodipine.

Previous wording

On October 23, 2023, we enrolled our first patient in the STRIVE-ON trial, and on September 25, 2024, we announced the completion of enrollment. We anticipate a data readout from the STRIVE-ON trial in first calendar quarter 2025, and plan to submit an NDA to the FDA in the first half of calendar year 2025. If approved, GTx-104 has the potential to address significant challenges with oral nimodipine administration and may transform the standard of care for patients with aSAH.

Current wording

We believe these data validate the GTx-104 value proposition and we plan to submit an NDA to the FDA in the first half of calendar year 2025. If approved, GTx-104 has the potential to address significant challenges with oral nimodipine administration and may transform the standard of care for patients with aSAH.

Previous wording

Results showed that GTx-102 betamethasone blood concentrations were highly predictable and consistent based on AUC (the area under the concentration time curve up to 72 hours post-dose, extrapolated to infinity) and Cmax (the maximum concentration occurring between 0 hour to 72 hours after trial drug administration), indicating good linearity and dose-proportionality. GTx-102 betamethasone blood concentrations were within the same range of exposure as IM betamethasone, based on AUC. This IM formulation will serve as a bridge for GTx-102 in the context of the proposed 505(b)(2) regulatory pathway. GTx-102 betamethasone blood concentrations were also within the same range of exposure as Oral Solution (“OS”), based on AUC. This OS formulation was used by Zannolli and may serve as a clinical comparator for further clinical development. Furthermore, statistically there was no significant difference (p>0.05) between GTx-102 administered at a fast rate (each spray immediately following the preceding one) vs. a slow rate (1 spray/minute), as indicated by Cmax and AUC. We believe this result is important because being able to use the fast or the slow rate of administration may provide greater flexibility for patients and caregivers. The Cmax of GTx-102 was within the same range of exposure as the OS, but the Cmax for the IM formulation was lower than both GTx-102 and the OS, as well as what has been reported previously for the IM in industry publications. It is important to note that achieving bioequivalence with the IM was not an objective of this trial, nor was it expected. Finally, of the 48 healthy adult subjects, no serious adverse events were reported, and the most frequent drug-related adverse effect was mild headache (4 cases).

Current wording

Results showed that GTx-102 betamethasone blood concentrations were highly predictable and consistent based on AUC (the area under the concentration time curve up to 72 hours post-dose, extrapolated to infinity) and Cmax (the maximum concentration occurring between 0 hour to 72 hours after trial drug administration), indicating good linearity and dose-proportionality. GTx-102 betamethasone blood concentrations were within the same range of exposure as IM betamethasone, based on AUC. This IM formulation will serve as a bridge for GTx-102 in the context of the proposed 505(b)(2) regulatory pathway. GTx-102 betamethasone blood concentrations were also within the same range of exposure as Oral Solution (“OS”), based on AUC. This OS formulation was used by Zannolli and may serve as a clinical comparator for further clinical development. Furthermore, statistically there was no significant difference (p>0.05) between GTx-102 administered at a fast rate (each spray immediately following the preceding one) versus a slow rate (1 spray/minute), as indicated by Cmax and AUC. We believe this result is important because being able to use the fast or the slow rate of administration may provide greater flexibility for patients and caregivers. The Cmax of GTx-102 was within the same range of exposure as the OS, but the Cmax for the IM formulation was lower than both GTx-102 and the OS, as well as what has been reported previously for the IM in industry publications. It is important to note that achieving bioequivalence with the IM was not an objective of this trial, nor was it expected. Finally, of the 48 healthy adult subjects, no serious adverse events were reported, and the most frequent drug-related adverse effect was mild headache (4 cases).

Previous wording

The further clinical development of GTx-102 has been deprioritized in favor of our focus on development of GTx-104. However, we plan to collaborate with clinical experts to design the Phase 3 safety and efficacy protocol for GTx-102 and gain alignment with the FDA on the development path forward. Further clinical development work will be contingent on additional funding for GTx-102 or the signing of a strategic partnership. It is also possible that we may license or sell our GTx-102 drug candidate.

Current wording

The further clinical development of GTx-102 has been deprioritized in favor of our focus on development of GTx-104. However, we received FDA’s written responses to our GTx-102 End of Phase 1 meeting request where FDA made recommendations on the path toward an NDA. They provided guidance on the design of a single pivotal efficacy and safety trial, including the neurological assessment scale for the primary endpoint, that could, with appropriate confirmatory evidence, support an NDA. We plan to collaborate with our scientific advisory board and FDA (via Type C meeting) on the design of a potential pivotal efficacy and safety trial and will determine the next steps after that time. Further clinical development work will be contingent on additional funding for GTx-102 or the signing of a strategic partnership. It is also possible that we may license or sell our GTx-102 drug candidate.

Previous wording

While the rash associated with HZ typically heals within two to four weeks, the pain may persist for months or even years, and this PHN manifestation is the most common and debilitating complication of HZ. There is currently no consensus definition for PHN, but it has been suggested by the Centers for Disease Control and Prevention (“CDC”) that PHN is best defined as pain lasting at least three months after resolution of the rash.

Current wording

While the rash associated with HZ typically heals within two to four weeks, the pain may persist for months or even years, and this PHN manifestation is the most common and debilitating complication of HZ. There is currently no consensus definition for PHN, but it has been suggested by the Centers for Disease Control and Prevention that PHN is best defined as pain lasting at least three months after resolution of the rash.

Previous wording

We have worldwide commercialization rights for all our pipeline drug candidates and plan to maximize the value of each of our drug candidates over time. Currently, we have prioritized the development of GTx-104 over that of GTx-102 and GTx-101. If we receive regulatory approval for GTx-104 in the US, we may look to out-license its commercialization or consider self-commercialization including outsourcing sales to ensure efficient commercial management and maximize market penetration and financial returns. We may further seek commercial partnerships to fully exploit the market potential of GTx-104 in territories outside the US. It is possible that we out-license or sell GTx-102 and/or GTx-101 for the US and/or global markets.

Current wording

We have worldwide commercialization rights for all our pipeline drug candidates and plan to maximize the value of each of our drug candidates over time. Currently, we have prioritized the development of GTx-104 over that of GTx-102 and GTx-101. If we receive regulatory approval for GTx-104 in the U.S., we plan to commercialize GTx-104 with a highly experienced and targeted hospital-based sales force. We may further seek commercial partnerships to fully exploit the market potential of GTx-104 in territories outside the U.S. It is possible that we out-license or sell GTx-102 and/or GTx-101 for the U.S. and/or global markets.

Previous wording

Our unaudited condensed consolidated financial statements, which include the accounts of our wholly owned subsidiaries, have been prepared in accordance with U.S. GAAP and the rules and regulations of the SEC related to quarterly reports filed on Form 10-Q. All intercompany transactions and balances are eliminated on consolidation.

Current wording

Our unaudited condensed consolidated financial statements, which include the accounts of our wholly owned subsidiary, have been prepared in accordance with U.S. GAAP and the rules and regulations of the SEC related to quarterly reports filed on Form 10-Q. All intercompany transactions and balances are eliminated on consolidation.

Previous wording

Our assets as of September 30, 2024, include cash, cash equivalents, and short-term investments totaling$15.2 million and intangible assets and goodwill totaling $49.3 million. Our current liabilities total $2.7 million as of September 30, 2024 and are comprised primarily of amounts due to or accrued for creditors. The Company believes its cash runway will be sufficient to fund the Company’s operations into the second calendar quarter of 2026.

Current wording

Our assets as of December 31, 2024, include cash and cash equivalents totaling $11.1 million and intangible assets and goodwill totaling $49.3 million. Our current liabilities total $2.0 million as of December 31, 2024 and are comprised primarily of amounts due to or accrued for creditors.

Previous wording

Results of Operations for the three and the six months ended September 30, 2024 and 2023

Current wording

Results of Operations for the three and the nine months ended December 31, 2024 and 2023

Previous wording

The net loss of $3.4 million, or $0.30 per share, for the three months ended September 30, 2024, increased by $159 from the net loss of $3.3 million, or $0.43 per share, for the three months ended September 30, 2023. The increase in net loss was primarily due to an increase in research and development expenses of $2.5 million and general and administrative expenses of $223, offset in part by a $2.2 million difference in the change in the fair value of derivative warrant liabilities and a $0.4 million increase in our income tax benefit.

Current wording

The net loss of $4.2 million, or $0.36 per share, for the three months ended December 31, 2024, increased by $1.8 million from the net loss of $2.4 million, or $0.21 per share, for the three months ended December 31, 2023. The increase in net loss was primarily due to a $1.3 million difference in the change in fair value of derivative warrant liabilities, an increase in research and development expenses of $751 and a decrease in our interest income of $178, offset in part by a $397 increase in our income tax benefit.

Previous wording

The net loss of $6.0 million, or $0.53 per share, for the six months ended September 30, 2024, decreased by $1.3 million from the net loss of $7.3 million, or $0.97 per share, for the six months ended September 30, 2023. The decrease in net loss was primarily due to a $3.6 million difference in the change in fair value of derivative warrant liabilities, an $841 increase in our income tax benefit, and a $1.5 million decrease in restructuring costs, partly offset by a $4.1 million increase in research and development expenses and a $603 increase in general and administrative expenses.

Current wording

The net loss of $10.2 million, or $0.89 per share, for the nine months ended December 31, 2024, increased by $517 from the net loss of $9.7 million, or $1.09 per share, for the nine months ended December 31, 2023. The increase in net loss was primarily due to a $4.9 million increase in research and development expenses, a $513 increase in general and administrative expenses, and a decrease in our interest income of $118, offset in part by a $2.3 million difference in the change in fair value of derivative warrant liabilities, a $1.2 million increase in our income tax benefit, and a $1.5 million decrease in restructuring costs.

Previous wording

Our research and development during the three and the six months ended September 30, 2024 and 2023 was focused primarily on our clinical development program for our GTx-104 drug candidate.

Current wording

Our research and development during the three and the nine months ended December 31, 2024 and 2023 was focused primarily on our clinical development program for our GTx-104 drug candidate.

Previous wording

Total research and development expenses for the three and the six months ended September 30, 2024 were $3.0 million and $5.7 million, respectively, compared to $460 and $1.5 million for the three months and the six months ended September 30, 2023, respectively. This increase of $2.5 million and $4.1 million for the three and the six months period then ended, respectively, was primarily due to the increase in research activities for the GTx-104 pivotal Phase 3 safety clinical trial.

Current wording

Total research and development expenses for the three and the nine months ended December 31, 2024 were $2.2 million and $7.9 million, respectively, compared to $1.4 million and $3.0 million for the three and the nine months ended December 31, 2023, respectively. The increase of $751 and $4.9 million for the three and the nine months period then ended, respectively, was primarily due to the increase in research activities for the GTx-104 pivotal Phase 3 safety clinical trial.

Previous wording

There were no government grants and tax credits for the three and the six months ended September 30, 2024, compared to $4 and $55 for the three months and the six months ended September 30, 2023, respectively. The changes within government grants and tax credits were due to adjustments of provisions regarding the estimated realizability of credits receivable after assessments and correspondence from tax authorities.

Current wording

There were no government grants and tax credits for the three and the nine months ended December 31, 2024, compared to nil and $55 for the three and the nine months ended December 31, 2023, respectively. The changes within government grants and tax credits were due to adjustments of provisions regarding the estimated realizability of credits receivable after assessments and correspondence from tax authorities.

Previous wording

Stock-based compensation of $60 for the three months ended September 30, 2024, decreased by $23 compared to $83 for the three months ended September 30, 2023. Stock-based compensation of $126 for the six months ended September 30, 2024, increased by $43 compared to $83 for the six months ended September 30, 2023. The decrease for the three months ended and the increase for the six months ended, was primarily due to the timing of the issuance of new grants.

Current wording

Stock-based compensation of $50 for the three months ended December 31, 2024, decreased by $11 compared to $61 for the three months ended December 31, 2023. Stock-based compensation of $176 for the nine months ended December 31, 2024, increased by $31 compared to $145 for the nine months ended December 31, 2023. The decrease for the three months ended and the increase for the nine months ended, were primarily due to the timing of the issuance of new grants and award vesting schedules.

Previous wording

General and administrative expenses were $1.9 million and $4.1 million for the three and the six months ended September 30, 2024, respectively, an increase of $223 and $603, respectively, from $1.6 million and $3.5 million for the three and the six months ended September 30, 2023, respectively. The increase was primarily a result of increased legal, tax, accounting, audit and other professional fees primarily related to the Continuance and the Domestication, increased salaries and benefits due to merit increases and hiring of new employee, offset by a decrease in other expenses due primarily to adjustments for claims for Canadian goods and services tax and decrease in miscellaneous expenses as a result of restructuring. Stock-based compensation of $142 and $314 for the three and the six months ended September 30, 2024, respectively, decreased by $57 and increased by $39, respectively, compared to $199 and $275 for the three and the six months ended September 30, 2023, respectively. The decrease in three months ended and the increase in the six months ended was primarily due to the timing of the issuance of new grants.

Current wording

General and administrative expenses were $1.5 million and $5.6 million for the three and the nine months ended December 31, 2024, respectively, compared to $1.6 million and $5.1 million for the three and the nine months ended December 31, 2023, respectively. The decrease of $90 for the three months ended December 31, 2024 was primarily a result of a decrease in professional fees of $246 and stock-based compensation of $155, offset in part by higher salaries and benefits. The increase of $513 for the nine months ended was primarily a result of increased legal, tax, accounting, audit and other professional fees primarily related to the Continuance and the Domestication, increased salaries and benefits due to merit increases and hiring of new employee, offset in part by a decrease in other expenses due primarily to adjustments for claims for Canadian goods and services tax and decrease in miscellaneous expenses as a result of restructuring. Stock-based compensation of $110 and $424 for the three and the nine months ended December 31, 2024, respectively, decreased by $155 and $115, respectively, compared to $265 and $539 for the three and the nine months ended December 31, 2023, respectively. The decrease for the three and nine months ended was primarily due to the timing of the issuance of new grants and award vesting schedules.

Previous wording

On May 8, 2023, we announced our decision to terminate a substantial amount of our workforce as part of a plan intended to align our organizational and management cost structure to prioritize resources to GTx-104, thereby reducing losses to improve cash flow and extend available cash resources. We incurred $1.5 million of related costs primarily consisting of employee severance costs. There were no restructuring costs during the three and the six months ended September 30, 2024.

Current wording

On May 8, 2023, we announced our decision to terminate a substantial amount of our workforce as part of a plan intended to align our organizational and management cost structure to prioritize resources to GTx-104, thereby reducing losses to improve cash flow and extend available cash resources. We incurred $1.5 million of related costs primarily consisting of employee severance costs. There were no restructuring costs during the three and the nine months ended December 31, 2024.

Previous wording

For the three months ended September 30, 2024, the decrease in the fair value of derivative warrant liabilities of $362 was a mark-to-market adjustment to the derivative warrant liabilities and primarily due to a decrease in volatility, offset by an increase in our stock price. For the three months ended September 30, 2023, the increase in the fair value of derivative warrant liabilities of $1.8 million was a mark-to-market adjustment to the derivative warrant liabilities primarily due to an increase in our stock price.

Current wording

For the three months ended December 31, 2024, the increase in the fair value of derivative warrant liabilities of $1.2 million primarily due to an increase in our stock price. For the three months ended December 31, 2023, the decrease in the fair value of derivative warrant liabilities of $125 was primarily due to a decrease in our stock price.

Previous wording

For the six months ended September 30, 2024, the decrease in the fair value of derivative warrant liabilities of $1.8 million was a mark-to-market adjustment to the derivative warrant liabilities primarily due to a decrease in our stock price. The increase in the fair value of derivative warrant liabilities of $1.8 million for the six months ended September 30, 2023, was a mark-to-market adjustment to the derivative warrant liabilities primarily attributable to an increase in our stock price.

Current wording

For the nine months ended December 31, 2024, the decrease in the fair value of derivative warrant liabilities of $578 was primarily due to a decrease in our stock price. The increase in the fair value of derivative warrant liabilities of $1.7 million for the nine months ended December 31, 2023, was primarily attributable to an increase in our stock price.

Previous wording

For the three months ended September 30, 2024, interest and other income was $172, a decrease by $40 compared to $212 for the three months ended September 30, 2023, primarily due to withdrawals of short-term investments upon their maturity used to fund operations, as well as a decrease in interest rates.

Current wording

For the three months ended December 31, 2024, interest and other income was $138, a decrease by $178 compared to $316 for the three months ended December 31, 2023, primarily due to withdrawals of short-term investments upon their maturity used to fund operations, as well as a decrease in interest rates.

Previous wording

For the three and the six months ended September 30, 2024, income tax benefit was $852 and $1.6 million, respectively, an increase of $406 and $841, respectively, from $446 and $735 for the three and the six months ended September 30, 2023, respectively, due to net losses recognized by our U.S. subsidiary, which are deemed recoverable to the Company and can be taken as a benefit over time.

Current wording

For the three and the nine months ended December 31, 2024, income tax benefit was $605 and $2.2 million, respectively, an increase of $397 and $1.2 million, respectively, from $208 and $943 for the three and the nine months ended December 31, 2023, respectively, due to net losses recognized by our subsidiary, Grace Therapeutics U.S., Inc., which are deemed to be recoverable to us and can be taken as a benefit over time.

Previous wording

Cash flows and financial condition for the six months ended September 30, 2024 and 2023

Current wording

Cash flows and financial condition for the nine months ended December 31, 2024 and 2023

Previous wording

As of September 30, 2024, cash and cash equivalents were $15.1 million, a net decrease of $7.9 million compared to cash and cash equivalents of $23.0 million at March 31, 2024. We believe our existing cash and cash equivalents will be sufficient to fund our operations into the second calendar quarter of 2026.

Current wording

As of December 31, 2024, cash and cash equivalents were $11.1 million, a net decrease of $11.9 million compared to cash and cash equivalents of $23.0 million at March 31, 2024.

Previous wording

We will require additional capital to fund our daily operating needs beyond that time. We do not expect to generate revenue from product sales unless and until we successfully complete drug development and obtain regulatory approval, which we expect will take several years and is subject to significant uncertainty. To date, we have financed our operations primarily through public offerings and private placements of our Common Shares, warrants and convertible debt and the proceeds from research tax credits. Until such time that we can generate significant revenue from drug product sales, if ever, we will require additional financing, which is expected to be sourced from a combination of public or private equity or debt financing or other non-dilutive sources, which may include fees, milestone payments and royalties from collaborations with third parties. Arrangements with collaborators or others may require us to relinquish certain rights related to our technologies or drug product candidates. Adequate additional financing may not be available to us on acceptable terms, or at all. Our inability to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategy. We plan to raise additional capital in order to maintain adequate liquidity. Negative results from studies or trials, if any, or depressed prices of our Common Shares could impact our ability to raise additional financing. Raising additional equity capital is subject to market conditions that are not within our control. If we are unable to raise additional funds, we may not be able to realize our assets and discharge our liabilities in the normal course of business.

Current wording

We will require additional capital to fund our daily operating needs beyond that time. We do not expect to generate revenue from product sales unless and until we successfully complete drug development and obtain regulatory approval, which is subject to significant uncertainty. To date, we have financed our operations primarily through public offerings and private placements of our common equity, warrants and convertible debt and the proceeds from research tax credits. Until such time that we can generate significant revenue from drug product sales, if ever, we will require additional financing, which is expected to be sourced from a combination of public or private equity or debt financing or other non-dilutive sources, which may include fees, milestone payments and royalties from collaborations with third parties. Arrangements with collaborators or others may require us to relinquish certain rights related to our technologies or drug product candidates. Adequate additional financing may not be available to us on acceptable terms, or at all. Our inability to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategy. We plan to raise additional capital in order to maintain adequate liquidity. Negative results from studies or trials, if any, or depressed prices of our Common Stock could impact our ability to raise additional financing. Raising additional equity capital is subject to market conditions that are not within our control. If we are unable to raise additional funds, we may not be able to realize our assets and discharge our liabilities in the normal course of business.