IMMUNIC INC

Previous wording

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and notes thereto included in Item 1 “Financial Statements” in this Quarterly Report and audited Consolidated Financial Statements for the years ended December 31, 2023 and 2022 of Immunic, Inc. filed with the Securities and Exchange Commission ("SEC"), on our Annual Report on Form 10-K on February 22, 2024. As used in this report, unless the context suggests otherwise, “we,” “us,” “our,” “the Company” or “Immunic” refer to Immunic, Inc. and its subsidiaries.

Current wording

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and notes thereto included in Item 1 “Financial Statements” in this Quarterly Report and audited Consolidated Financial Statements for the years ended December 31, 2023 and 2022 of Immunic, Inc. filed with the Securities and Exchange Commission ("SEC"), in our Annual Report on Form 10-K on February 22, 2024. As used in this report, unless the context suggests otherwise, “we,” “us,” “our,” “the Company” or “Immunic” refer to Immunic, Inc. and its subsidiaries.

Previous wording

The inclusion of any forward-looking statements in this Quarterly Report should not be regarded as a representation that any of our plans will be achieved. Our actual results may differ from those anticipated in our forward-looking statements as a result of various factors, including those noted below under the caption “Part II, Item 1A-Risk Factors,” and the differences may be material. These risk factors include, but are not limited to statements relating to our two development programs and the targeted diseases; the potential for vidofludimus calcium and IMU-856 to safely and effectively target diseases; the nature, strategy and focus of the Company; expectations regarding our capitalization and financial resources; the development and commercial potential of any product candidates of the Company; and our ability to retain certain personnel important to our ongoing operations and to maintain effective internal control over financial reporting.

Current wording

The inclusion of any forward-looking statements in this Quarterly Report should not be regarded as a representation that any of our plans will be achieved. Our actual results may differ from those anticipated in our forward-looking statements as a result of various factors, including those noted below under the caption “Part II, Item 1A-Risk Factors,” and the differences may be material. These risk factors include, but are not limited to statements relating to our two development programs and the targeted diseases; the potential for vidofludimus calcium and IMU-856 to safely and effectively target diseases; the nature, strategy and focus of the Company; expectations regarding our capitalization and financial resources; the development, timing and commercial potential of any product candidates of the Company; and our ability to attract and retain certain personnel important to our ongoing operations and to maintain effective internal control over financial reporting.

Previous wording

We are pursuing clinical development of orally administered, small molecule programs, each of which has unique features intended to directly address the unmet needs of patients with serious chronic inflammatory and autoimmune diseases. These include the vidofludimus calcium (IMU-838) program, which is in Phase 3 and Phase 2 clinical development for patients with relapsing and progressive multiple sclerosis (“MS”), respectively, and which has shown therapeutic activity in Phase 2 clinical trials in patients suffering from relapsing-remitting MS, progressive MS and moderate-to-severe ulcerative colitis (“UC”); the IMU-856 program, which is targeted to regenerate bowel epithelium and restore intestinal barrier function, which could potentially be applicable in numerous gastrointestinal diseases, such as celiac disease, inflammatory bowel disease (“IBD”) and Graft-versus-Host-Disease; and the IMU-381 program, which is a next generation molecule being developed to specifically address the needs of gastrointestinal diseases.

Current wording

We are pursuing clinical development of orally administered, small molecule programs, each of which has unique features intended to directly address the unmet needs of patients with serious chronic inflammatory and autoimmune diseases. These include the vidofludimus calcium (IMU-838) program, which is in Phase 3 and Phase 2 clinical development for patients with relapsing and progressive multiple sclerosis (“MS”), respectively, and which has shown therapeutic activity in Phase 2 clinical trials in patients suffering from relapsing-remitting MS, progressive MS and moderate-to-severe ulcerative colitis (“UC”); the IMU-856 program, which is targeted to regenerate bowel epithelium and restore intestinal barrier function, which could potentially be applicable in numerous gastrointestinal diseases, such as celiac disease, inflammatory bowel disease (“IBD”) and Graft-versus-Host-Disease ("GvHD"); and the IMU-381 program, which is a next generation molecule being developed to specifically address the needs of gastrointestinal diseases.

Previous wording

Our most advanced drug candidate, vidofludimus calcium (IMU-838), is being tested in several ongoing MS trials as part of its overall clinical program in order to support a potential approval for patients with MS in major markets. The Phase 3 ENSURE program of vidofludimus calcium in relapsing multiple sclerosis (“RMS”), comprising twin studies evaluating efficacy, safety, and tolerability of vidofludimus calcium versus placebo, and the Phase 2 CALLIPER trial of vidofludimus calcium in progressive multiple sclerosis (“PMS”), designed to corroborate vidofludimus calcium’s neuroprotective potential, are ongoing. On October 9, 2023, we announced positive interim data from the CALLIPER trial, showing biomarker evidence that vidofludimus calcium’s activity extends beyond the previously observed anti-inflammatory effects, thereby further reinforcing its neuroprotective potential. Top-line data from the CALLIPER trial, for which the recruitment of in total 467 patients was completed in August 2023, is expected to be available in April 2025. Moreover, we currently expect to report an interim futility analysis of the ENSURE program in the fourth quarter of 2024. Completion of the first of the ENSURE trials is currently anticipated in the second quarter of 2026; and the second ENSURE trial in the second half of 2026. Although we currently believe that each of these goals is achievable, they are each dependent on numerous factors, most of which are not under our direct control and can be difficult to predict. We plan to periodically review this assessment and provide updates of material changes as appropriate.

Current wording

Our most advanced drug candidate, vidofludimus calcium (IMU-838), is being tested in several ongoing MS trials as part of its overall clinical program in order to support a potential approval for patients with MS in major markets. The Phase 3 ENSURE program of vidofludimus calcium in relapsing multiple sclerosis (“RMS”), comprising twin studies evaluating efficacy, safety, and tolerability of vidofludimus calcium versus placebo, and the Phase 2 CALLIPER trial of vidofludimus calcium in progressive multiple sclerosis (“PMS”), designed to corroborate vidofludimus calcium’s neuroprotective potential, are ongoing. On October 9, 2023, we announced positive interim data from the CALLIPER trial, showing biomarker evidence that vidofludimus calcium’s activity extends beyond the previously observed anti-inflammatory effects, thereby further reinforcing its neuroprotective potential. Top-line data from the CALLIPER trial, for which the recruitment of in total 467 patients was completed in August 2023, is expected to be available in April 2025. Moreover, on October 22, 2024, we announced a positive outcome of an interim analysis of the ENSURE program, with an unblinded Independent Data Monitoring Committee ("IDMC") confirming that the predetermined futility criteria have not been met and recommending that both ENSURE trials should continue without changes, including no need for a potential upsizing of the sample size. Completion of the first of the ENSURE trials is currently anticipated in the second quarter of 2026; and the second ENSURE trial in the second half of 2026. Although we currently believe that each of these goals is achievable, they are each dependent on numerous factors, most of which are not under our direct control and can be difficult to predict. We plan to periodically review this assessment and provide updates of material changes as appropriate.

Previous wording

IMU-856 is an orally available and systemically acting small molecule modulator that targets Sirtuin 6 (“SIRT6”), a protein which serves as a transcriptional regulator of intestinal barrier function and regeneration of bowel epithelium. Based on preclinical data, we believe this compound may represent a unique treatment approach, as the mechanism of action targets the restoration of the intestinal barrier function and bowel wall architecture in patients suffering from gastrointestinal diseases such as celiac disease, IBD, Graft-versus-Host-Disease and other intestinal barrier function associated diseases. Based on preclinical investigations demonstrating no suppression of immune cells, IMU-856 may have the potential to maintain immune surveillance for patients during therapy, which would be an important advantage versus immunosuppressive medications and may allow the potential for combination with available treatments in gastroenterological diseases.

Current wording

IMU-856 is an orally available and systemically acting small molecule modulator that targets Sirtuin 6 (“SIRT6”), a protein which serves as a transcriptional regulator of intestinal barrier function and regeneration of bowel epithelium. Based on preclinical data, we believe this compound may represent a unique treatment approach, as the mechanism of action targets the restoration of the intestinal barrier function and bowel wall architecture in patients suffering from gastrointestinal diseases such as celiac disease, IBD, GvHD and other intestinal barrier function associated diseases. Based on preclinical investigations demonstrating no suppression of immune cells, IMU-856 may have the potential to maintain immune surveillance for patients during therapy, which would be an important advantage versus immunosuppressive medications and may allow the potential for combination with available treatments in gastroenterological diseases.

Previous wording

We have no products approved for commercial sale and have not generated any revenue from product sales. We have never been profitable and have incurred operating losses in each year since inception in 2016. We have an accumulated deficit of approximately $461.9 million as of June 30, 2024 and $410.9 million as of December 31, 2023. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

Current wording

We have no products approved for commercial sale and have not generated any revenue from product sales. We have never been profitable and have incurred operating losses in each year since inception in 2016. We have an accumulated deficit of approximately $486.2 million as of September 30, 2024 and $410.9 million as of December 31, 2023. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

Previous wording

From inception through June 30, 2024, we have raised net cash of approximately $430.9 million from private and public offerings of preferred stock, common stock, prefunded warrants and tranche rights. As of June 30, 2024, we had cash and cash equivalents of approximately $79.7 million. With these funds, the Company does not have adequate liquidity to fund its operations for at least twelve months from the issuance of these consolidated financial statements without raising additional capital and such actions are not solely within the control of the Company. If the Company is unable to obtain additional capital, it would have a material adverse effect on the operations of the Company, its clinical development program, and the Company may have to cease operations altogether. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Current wording

From inception through September 30, 2024, we have raised net cash of approximately $430.9 million from private and public offerings of preferred stock, common stock, pre-funded warrants and tranche rights. As of September 30, 2024, we had cash and cash equivalents of approximately $59.1 million. With these funds, the Company does not have adequate liquidity to fund its operations for at least twelve months from the issuance of these consolidated financial statements without raising additional capital but, such actions are not solely within the control of the Company. If the Company is unable to obtain additional capital, it would have a material adverse effect on the operations of the Company, its clinical development program, and the Company may have to cease operations altogether. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Previous wording

As of the closing date of the transaction of January 8, 2024, the Company did not have enough authorized shares to be able to issue the potential shares for tranche 2 and tranche 3 (collectively referred to hereafter as "the tranche rights"). Therefore, the Company recorded the value associated to the tranche rights as a liability of $23.6 million and allocated the remainder of the $80 million received (or $56.4 million) with the common stock and pre-funded warrants to equity. On March 4, 2024, the stockholders voted to increase the Company's authorized common shares from 130 million to 500 million shares. As a result of the ability to issue shares in satisfaction of the tranche rights, the instrument was reclassified to stockholders' equity. The Company allocated the transaction cost across the instruments on a relative fair value basis. As a result $4.0 million was netted against the equity proceeds and $1.7 million was recorded in other expense in the Consolidated Statements of Operation for the six months ended June 30, 2024.

Current wording

As of the closing date of the transaction of January 8, 2024, the Company did not have enough authorized shares to be able to issue the potential shares for tranche 2 and tranche 3 (collectively referred to hereafter as "the tranche rights"). Therefore, the Company recorded the value associated to the tranche rights as a liability of $23.6 million and allocated the remainder of the $80 million received (or $56.4 million) from the common stock and pre-funded warrants to equity. On March 4, 2024, the stockholders voted to increase the Company's authorized common shares from 130 million to 500 million shares. As a result of the ability to issue shares in satisfaction of the tranche rights, the instrument was reclassified to stockholders' equity. The Company allocated the transaction cost across the instruments on a relative fair value basis. As a result $4.0 million was netted against the equity proceeds and $1.7 million was recorded in other expense in the Consolidated Statements of Operation for the nine months ended September 30, 2024.

Previous wording

Since our inception in March 2016, we have spent a total of approximately $335.1 million in research and development expenses through June 30, 2024.

Current wording

Since our inception in March 2016, we have spent a total of approximately $356.5 million in research and development expenses through September 30, 2024.

Previous wording

In August 2019, Immunic AG received a grant of up to approximately $726,000 from the German Federal Ministry of Education and Research, in support of the InnoMuNiCH (Innovations through Munich-Nippon Cooperation in Healthcare) project. The grant funds have been used to fund a three-year research project relating to autoimmune diseases by us and our three project partners. Since the inception of the grant, we have recorded $726,000 of income in total which was classified in Other Income in the accompanying consolidated statement of operations. No income was recorded for the periods ending June 30, 2024 and 2023. The funding of this grant is now completed.

Current wording

In August 2019, Immunic AG received a grant of up to approximately $726,000 from the German Federal Ministry of Education and Research, in support of the InnoMuNiCH (Innovations through Munich-Nippon Cooperation in Healthcare) project. The grant funds have been used to fund a three-year research project relating to autoimmune diseases by us and our three project partners. Since the inception of the grant, we have recorded $726,000 of income in total which was classified in Other Income in the accompanying consolidated statement of operations. No income was recorded for the periods ended September 30, 2024 and 2023. The funding of this grant is now completed.

Previous wording

Interest income consists of interest earned on our money market funds and bank accounts which are a portion of our cash and cash equivalents balance. Our interest income has been increasing throughout 2023 and 2024 as global interest rates have been increasing.

Current wording

Interest income consists of interest earned on our money market funds and bank accounts which are a portion of our cash and cash equivalents balance. Our interest income is expected to decrease as our money market funds balance has decreased and U.S. interest rates have started to and are expected to continue to decrease in the near future.

Previous wording

Research and development expenses decreased by $2.8 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The decrease reflects (i) a $1.8 million decrease in external development costs related to IMU-856 due to the completion of the phase 1 trial in celiac disease, (ii) a decrease of $1.0 million from deprioritizing the izumerogant program in psoriasis and castration-resistant prostate cancer and (iii) a $0.5 million decrease in related costs across numerous categories. The decreases were offset by a $0.5 million increase in external development costs related to the vidofludimus calcium programs.

Current wording

Research and development expenses increased by $1.6 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase reflects (i) a $1.4 million increase in external development costs related to the vidofludimus calcium trials, (ii) a $0.3 million increase in external development costs related to IMU-856, (iii) $0.3 million increase in personnel costs due to an increase in headcount and (iv) a $0.3 million increase related costs across numerous categories. The increases were offset by a decrease of $0.7 million from deprioritizing the izumerogant program in psoriasis and castration-resistant prostate cancer.

Previous wording

General and administrative expenses increased by $1.5 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase was primarily due to (i) a $1.1 million increase in personnel expense in general and administrative, $0.6 million of which is related to non-cash stock compensation expense and the remainder of which is related to an increase in headcount, (ii) a $0.2 million increase in legal and consultancy expenses and (iii) a $0.2 million increase related to costs across numerous categories.

Current wording

General and administrative expenses increased by $0.6 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was primarily due to a $0.6 million increase in personnel expense in general and administrative, $0.2 million of which is related to non-cash stock compensation expense and the remainder of which is related to an increase in headcount.

Previous wording

Interest income remains unchanged at $1.0 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.

Current wording

Interest income remains unchanged at $0.8 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

Previous wording

Other income increased by $0.4 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The increase was primarily attributable by a $0.7 million increase in foreign exchange gains. The increase was offset by (i) a $0.2 million decrease in other grants which we received in 2023 and (ii) a $0.1 million decrease in research and development tax incentives for clinical trials in Australia as a result of decreased spending on clinical trials in Australia.

Current wording

Other income increased by $0.5 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was primarily attributable to a $0.6 million increase in research and development tax incentives for clinical trials in Australia.

Previous wording

The following table summarizes our operating expenses for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes our operating expenses for the nine months ended September 30, 2024 and 2023:

Previous wording

Research and development expenses decreased by $7.1 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The decrease reflects (i) a decrease of $3.4 million from deprioritizing the izumerogant program in psoriasis and castration-resistant prostate cancer, (ii) a $2.9 million decrease in external development costs related to IMU-856 due to the completion of the phase 1 trial in celiac disease, (iii) a $0.9 million decrease in external development costs related to the vidofludimus calcium programs and (iv) a $0.8 million decrease in related costs across numerous categories. The decreases were offset by a $0.9 million increase in personnel costs, $0.2 million of which is related to non-cash stock compensation and the remainder of which is due to an increase in headcount.

Current wording

Research and development expenses decreased by $5.5 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The decrease reflects (i) a decrease of $4.1 million from deprioritizing the izumerogant program in psoriasis and castration-resistant prostate cancer, (ii) a $2.6 million decrease in external development costs related to IMU-856 due to the completion of the phase 1 clinical trial in celiac disease and (iii) a $0.5 million decrease related costs across numerous categories. The decreases were offset by (i) a $1.2 million increase in personnel costs, $0.2 million of which is related to non-cash stock compensation and the remainder of which is due to an increase in headcount and (ii) a $0.5 million increase in external development costs related to the vidofludimus calcium program.

Previous wording

General and administrative expenses increased by $0.6 million during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The increase was primarily due to (i) a $0.3 million increase in personnel expense in general and administrative, $0.1 million of which is related to non-cash stock compensation expense and the remainder of which is related to an increase in headcount, (ii) a $0.1 million increase in legal and consultancy expenses and (iii) a $0.2 million increase related to costs across numerous categories.

Current wording

General and administrative expenses increased by $2.1 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was primarily due to (i) a $1.7 million increase in personnel expense in general and administrative, $0.9 million of which is related to non-cash stock compensation expense and the remainder of which is related to an increase in headcount, (ii) $0.3 million in legal and consultancy expenses and (iii) a $0.1 million increase related to costs across numerous categories.

Previous wording

Interest income increased by $0.4 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023 due to higher interest rates.

Current wording

Interest income increased by $0.4 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023 due to higher interest rates.

Previous wording

The change in fair value of the tranche rights of $4.8 million is a non-cash charge related to the change in value of the tranche rights associated with the January 2024 Financing from January 8, 2024 until March 4, 2024. These tranches were initially classified as a liability but were reclassified to equity on March 4, 2024 when stockholders approved the increase in our authorized shares from 130 million to 500 million shares of common stock and therefore the tranche 2 and tranche 3 rights needed to be revalued to fair value upon the reclass to equity.

Current wording

The change in fair value of the tranche rights of $4.8 million was a non-cash charge related to the change in value of the tranche rights associated with the January 2024 Financing from January 8, 2024 until March 4, 2024. These tranches were initially classified as a liability but were reclassified to equity on March 4, 2024, when stockholders approved the increase in our authorized shares from 130 million to 500 million shares of common stock and therefore the tranche 2 and tranche 3 rights needed to be revalued to fair value upon the reclass to equity.

Previous wording

Other income (expense) decreased by $2.9 million during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The decrease was primarily attributable to (i) a $1.7 million expense related to the portion of deal costs from the January 2024 Financing related to the tranche rights that were established at the time of the deal closing, (ii) the German Federal Ministry of Finance grant of $1.1 million being recognized in the fourth quarter of 2023 which was one quarter earlier than in the prior year, when the grant was recognized in the first quarter of 2023, (iii) a $0.5 million decrease in research and development tax incentives for clinical trials in Australia as a result of decreased spending on clinical trials in Australia and (iv) a $0.4 million decrease in other grants which we received in 2023. The decrease was offset by a $0.8 million increase in foreign exchange gains.

Current wording

Other income (expense) decreased by $2.3 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The decrease was primarily attributable to (i) a $1.7 million expense related to the portion of deal costs from the January 2024 Financing related to the tranche rights that were established at the time of the deal closing, (ii) the German Federal Ministry of Finance grant of $1.1 million being recognized in the fourth quarter of 2023 which was one quarter earlier than in the prior year that was recognized in the first quarter of 2023 and (iii) a $0.4 million decrease in other grants which were received in 2023. The decrease was offset by a $0.9 million increase in foreign exchange gains.

Previous wording

We have no products approved for commercial sale and have not generated any revenue from product sales. We have never been profitable and have incurred operating losses in each year since inception in 2016. We have an accumulated deficit of approximately $461.9 million as of June 30, 2024 and $410.9 million as of December 31, 2023. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

Current wording

We have no products approved for commercial sale and have not generated any revenue from product sales. We have never been profitable and have incurred operating losses in each year since inception in 2016. We have an accumulated deficit of approximately $486.2 million as of September 30, 2024 and $410.9 million as of December 31, 2023. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

Previous wording

From inception through June 30, 2024, we have raised net cash of approximately $430.9 million from private and public offerings of preferred stock, common stock, pre-funded warrants and tranche rights. As of June 30, 2024, we had cash and cash equivalents of approximately $79.7 million. With these funds, the Company does not have adequate liquidity to fund its operations for at least twelve months from the issuance of these consolidated financial statements without raising additional capital and such actions are not solely within the control of the Company. If the Company is unable to obtain additional capital, it would have a material adverse effect on the operations of the Company, its clinical development program, and the Company may have to cease operations altogether. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Current wording

From inception through September 30, 2024, we have raised net cash of approximately $430.9 million from private and public offerings of preferred stock, common stock, pre-funded warrants and tranche rights. As of September 30, 2024, we had cash and cash equivalents of approximately $59.1 million. With these funds, the Company does not have adequate liquidity to fund its operations for at least twelve months from the issuance of these consolidated financial statements without raising additional capital and such actions are not solely within the control of the Company. If the Company is unable to obtain additional capital, it would have a material adverse effect on the operations of the Company, its clinical development program, and the Company may have to cease operations altogether. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Previous wording

In May 2022, the Company filed a Prospectus Supplement to the 2020 Shelf Registration Statement for the offering, issuance and sale of up to a maximum aggregate offering price of $80.0 million of common stock to be issued and sold under another at-the-market sales agreement ("May 2022 ATM") with Leerink Partners LLC (formerly SVB Leerink LLC) as agent. The 2020 Shelf Registration Statement expired in November 2023. The $80.0 million of unsold common stock from the May 2022 ATM was rolled-over to the May 2024 ATM through the filing in May 2024 of a Prospectus Supplement to the 2023 Shelf Registration Statement.

Current wording

In May 2022, the Company filed a Prospectus Supplement to the 2020 Shelf Registration Statement for the offering, issuance and sale of up to a maximum aggregate offering price of $80.0 million of common stock to be issued and sold under another at-the-market sales agreement ("May 2022 ATM") with Leerink Partners LLC (formerly SVB Leerink LLC) as agent. The 2020 Shelf Registration Statement expired in November 2023.

Previous wording

In May 2024, we filed a Prospectus Supplement to the 2023 Shelf Registration Statement for the offering, issuance and sale of up to a maximum aggregate offering price of $80.0 million of common stock that may be issued and sold under an at-the-market sales agreement with Leerink Partners LLC as agent ("May 2024 ATM"). We intend to use the net proceeds from the May 2024 ATM to continue to fund the ongoing clinical development of our product candidates and for other general corporate purposes, including funding existing and potential new clinical programs and product candidates. The May 2024 ATM will terminate upon the earlier of (i) the issuance and sale of all of the shares through Leerink Partners LLC on the terms and subject to the conditions set forth in the May 2024 ATM or (ii) termination of the May 2024 ATM as otherwise permitted thereby. The May 2024 ATM may be terminated at any time by either party upon ten days’ prior notice, or by Leerink Partners

Current wording

In May 2024, we filed a Prospectus Supplement to the 2023 Shelf Registration Statement for the offering, issuance and sale of up to a maximum aggregate offering price of $80.0 million of common stock that may be issued and sold under an at-the-market sales agreement with Leerink Partners LLC as agent ("May 2024 ATM"), which rolls over the $80.0 million of unsold common stock from the May 2022 ATM. We intend to use the net proceeds from the May 2024 ATM to continue to fund the ongoing clinical development of our product candidates and for other general corporate purposes, including funding existing and potential new clinical programs and product candidates. The May 2024 ATM will terminate upon the earlier of (i) the issuance and sale of all of the shares through Leerink Partners LLC on the terms and subject to the conditions set forth in the May 2024 ATM or (ii) termination of the May 2024 ATM as otherwise permitted thereby. The May 2024 ATM may be terminated at any time by either party upon ten days’ prior notice, or by Leerink Partners LLC at any time in certain circumstances, including the occurrence of a material adverse effect on us. As of September 30, 2024, $80.0 million in capacity remains under the May 2024 ATM.

Previous wording

For the six months ended June 30, 2024, we raised gross proceeds of $0.2 million pursuant to the December 2020 ATM through the sale of 150,000 shares of common stock at a weighted average price of $1.31 per share. The net proceeds from the December 2020 ATM were $0.2 million after deducting sales agent commissions of $6,000. We did not have any ATM activity for the three months ended June 30, 2024.

Current wording

For the nine months ended September 30, 2024, we raised gross proceeds of $0.2 million pursuant to the December 2020 ATM through the sale of 150,000 shares of common stock at a weighted average price of $1.31 per share. The net proceeds from the December 2020 ATM were $0.2 million after deducting sales agent commissions of $6,000. We did not have any ATM activity for the three months ended September 30, 2024.

Previous wording

The following table shows a summary of our cash flows for the six months ended June 30, 2024 and 2023:

Current wording

The following table shows a summary of our cash flows for the nine months ended September 30, 2024 and 2023:

Previous wording

During the six months ended June 30, 2024, operating activities used $41.0 million of cash. The use of cash primarily resulted from (i) our net loss of $51.0 million adjusted for non-cash charges of $9.3 million related to a $4.8 million change in the fair value of the tranche rights, $4.6 million for stock-based compensation and $0.1 million related to unrealized foreign currency loss and depreciation and amortization as well as fees expensed as part of the January 2024 Financing and (ii) a $1.1 million net decrease in our operating assets and liabilities. Changes in our operating assets and liabilities during the six months ended June 30, 2024 consisted primarily of a $1.4 million decrease in our other current liabilities partially offset by an increase in other current assets and prepaid expenses of $0.3 million.

Current wording

During the nine months ended September 30, 2024, operating activities used $61.8 million of cash. The use of cash primarily resulted from (i) our net loss of $75.3 million adjusted for non-cash charges of $6.6 million related to stock-based compensation and depreciation and amortization, $4.8 million related to a change in the fair value of the tranche rights, $1.7 million for fees expensed as part of the January 2024 financing and (ii) a net increase in operating assets and liabilities of $0.5 million. Changes in our operating assets and liabilities during the nine months ended September 30, 2024 consisted primarily of (i) a $1.5 million increase in our other current assets and prepaid expenses and (ii) a decrease of $1.0 million in our other current liabilities.

Previous wording

During the six months ended June 30, 2023, operating activities used $39.5 million of cash. The use of cash primarily resulted from (i) our net loss of $49.3 million adjusted for non-cash charges of $4.5 million related to $0.7 million for an unrealized foreign currency loss and $3.8 million related to stock-based compensation and depreciation and amortization as well as a $5.3 million net increase in our operating assets and liabilities. Changes in our operating assets and liabilities during the six months ended June 30, 2023 consisted primarily of (i) a $5.0 million increase in our current liabilities and an increase in other current assets and prepaid expenses of $0.3 million.

Current wording

During the nine months ended September 30, 2023, operating activities used $56.8 million of cash. The use of cash primarily resulted from (i) our net loss of $72.0 million adjusted for non-cash charges of $6.3 million related to $0.7 million for an unrealized foreign currency loss and $5.6 million related to stock-based compensation and depreciation and amortization and a $9.0 million net increase in operating assets and liabilities. Changes in our operating assets and liabilities during the nine months ended September 30, 2023 consisted primarily of (i) a $3.9 million increase in our other current assets and prepaid expenses and (ii) an increase of $5.1 million in our other current liabilities.

Previous wording

During the six months ended June 30, 2024, net investing activities used $0.2 million due to the purchase of property and equipment.

Current wording

During the nine months ended September 30, 2024, net investing activities used $0.3 million due to the purchase of property and equipment.

Previous wording

During the six months ended June 30, 2023, net investing activities provided $9.7 million of cash, primarily due to the sale of $9.8 million of time deposits partially offset by the purchase of $125,000 of property and equipment.

Current wording

During the nine months ended September 30, 2023, net investing activities provided $9.6 million of cash, primarily due to the sale of $9.8 million of time deposits partially offset by the purchase of $169,000 of property and equipment.

Previous wording

Net cash provided by financing activities was $74.4 million during the six months ended June 30, 2024 primarily consisting of net cash proceeds from the January 2024 Financing.

Current wording

Net cash provided by financing activities was $0.4 million during the nine months ended September 30, 2023 consisting primarily of net cash proceeds from the sale of common stock under our 2020 ATM facility.

Previous wording

As of June 30, 2024, we had non-cancelable contractual obligations under certain agreements related to our development programs for vidofludimus calcium and IMU-856 totaling approximately $1.8 million, all of which is expected to be paid in 2024 and 2025.

Current wording

As of September 30, 2024, we have non-cancelable contractual obligations under certain agreements related to our development programs IMU-838, IMU-935 and IMU-856 totaling approximately $3.2 million, all of which is expected to be paid in 2024 and 2025.