Vaxart Inc

Previous wording

We have also created additional norovirus GI.1 and GII.4 constructs that may be more potent than the constructs being evaluated in clinical trials. Regulatory feedback from the FDA, along with the clinical data on current constructs, and preclinical data generated on new constructs will assist us in determining the best way to progress our norovirus program.

Current wording

We have also created additional norovirus GI.1 and GII.4 constructs that may be more potent than the constructs being evaluated in clinical trials. We are discussing the regulatory feedback from the FDA, clinical data on current constructs, and preclinical data generated on new constructs with certain key opinion leaders to assist us in determining the best way to progress our norovirus program.

Previous wording

We have made a COVID-19 vaccine candidate that expresses only the S protein from the SARS-CoV-2 XBB strain. Based on preclinical data, our XBB COVID-19 vaccine candidate is more potent than our prior COVID-19 vaccine constructs. In January 2024, we were awarded a contract (the “2024 ASPR-BARDA Contract”) by the Biomedical Advanced Research and Development Authority (“HHS BARDA”), a division of the Administration for Strategic Preparedness and Response (“ASPR”) within the U.S. Department of Health and Human Services, in an amount of $9.3 million to fund preparation for a Phase 2b clinical study involving 10,000 patients. In June 2024, we entered into an agreement (the “2024 ATI-RRPV Contract”) with Advanced Technology International, the Rapid Response Partnership Vehicle’s Consortium Management Firm funded by HHS BARDA. Pursuant to the 2024 ATI-RRPV Contract, we will receive funding of up to $452.9 million to conduct the Phase 2b study.

Current wording

In January 2024, we were awarded a contract (the “2024 ASPR-BARDA Contract”) by the Biomedical Advanced Research and Development Authority (“HHS BARDA”), a division of the Administration for Strategic Preparedness and Response (“ASPR”) within the U.S. Department of Health and Human Services, in an amount of $9.3 million to fund preparation for a Phase 2b clinical study involving 10,000 patients. In June 2024, we entered into an agreement (as modified, the “2024 ATI-RRPV Contract”) with Advanced Technology International, the Rapid Response Partnership Vehicle’s Consortium Management Firm funded by HHS BARDA, which was modified in September 2024 to increase funding and scope. Pursuant to the 2024 ATI-RRPV Contract, we will receive funding of up to $456.1 million to conduct the Phase 2b study and manufacture a COVID-19 vaccine candidate targeting the KP.2 strain.

Previous wording

The Phase 2b study is a double-blind, multi-center, randomized, comparator-controlled study to determine the relative efficacy, safety, and immunogenicity of Vaxart’s oral pill COVID-19 vaccine candidate against an approved mRNA COVID-19 injectable vaccine in adults previously immunized against COVID-19 infection. The study design anticipates enrolling approximately 10,000 healthy adults 18 years and older in the United States with 5,000 receiving our COVID-19 vaccine candidate and 5,000 receiving an approved mRNA comparator. At least 25% of the participants should be at least 65 years old.

Current wording

The Phase 2b study is a double-blind, multi-center, randomized, comparator-controlled study to determine the relative efficacy, safety, and immunogenicity of Vaxart’s oral pill COVID-19 vaccine candidate against an approved mRNA COVID-19 injectable vaccine in adults previously immunized against COVID-19 infection. The study design anticipates enrolling approximately 10,000 healthy adults 18 years and older in the United States with approximately 5,000 receiving our COVID-19 vaccine candidate and approximately 5,000 receiving an approved mRNA comparator. The Phase 2b study starts with a sentinel cohort of 400 individuals using the Company's XBB COVID-19 vaccine and an mRNA XBB comparator. An independent Data and Safety Monitoring Board (DSMB) and the FDA will review 30-day safety data of the sentinel cohort once enrollment is complete. The study will strive to enroll participants in line with U.S. demographics, as well as including at least 25% over the age of 65.

Previous wording

We have also initiated early-stage development on novel vaccine constructs containing our own antigens to develop a universal influenza vaccine candidate. We had previously produced a non-GMP oral vaccine candidate containing certain proprietary antigens from Janssen Vaccines & Prevention B.V. (“Janssen”) and tested the candidate in a preclinical challenge model. The preclinical study has been completed and we have submitted a report to Janssen. In August 2023, Janssen announced it would exit all vaccine and infectious disease R&D programs aside from an E. coli preventive vaccine and continuing to provide access to marketed HIV products.

Current wording

We have also initiated early-stage development on novel vaccine constructs containing our own antigens to develop a universal influenza vaccine candidate. We had previously produced a non-GMP oral vaccine candidate containing certain proprietary antigens from Janssen Vaccines & Prevention B.V. (“Janssen”) and tested the candidate in a preclinical challenge model. The preclinical study has been completed and we have submitted a report to Janssen. In August 2023, Janssen announced it would exit all vaccine and infectious disease R&D programs aside from an E. coli preventive vaccine and continuing to provide access to marketed HIV products. Vaxart is no longer pursuing a universal influenza vaccine using Janssen intellectual property.

Previous wording

In January 2024, we were awarded the 2024 ASPR-BARDA Contract by HHS BARDA, with a base and all options value of $9.3 million. Under the 2024 ASPR-BARDA Contract, we received an award to support clinical trial planning activities for a Phase 2b clinical trial that would compare our XBB vaccine candidate to an mRNA comparator to evaluate efficacy for symptomatic and asymptomatic disease, systemic and mucosal immune induction, and adverse events. Revenue from government contracts recognized on the 2024 ASPR-BARDA Contract was $6.2 million and $7.8 million for the three and six months ended June 30, 2024, based on the achievement of certain milestones under the 2024 ASPR-BARDA Contract.

Current wording

In January 2024, we were awarded the 2024 ASPR-BARDA Contract by HHS BARDA, with a base and all options value of $9.3 million. Under the 2024 ASPR-BARDA Contract, we received an award to support clinical trial planning activities for a Phase 2b clinical trial that would compare our XBB vaccine candidate to an mRNA comparator to evaluate efficacy for symptomatic and asymptomatic disease, systemic and mucosal immune induction, and adverse events. Revenue from government contracts recognized on the 2024 ASPR-BARDA Contract was $0.9 million and $8.7 million for the three and nine months ended September 30, 2024, respectively, based on the achievement of certain milestones under the 2024 ASPR-BARDA Contract.

Previous wording

In June 2024, we entered into the 2024 ATI-RRPV Contract. Pursuant to the 2024 ATI-RRPV Contract, we will receive funding of up to $452.9 million to conduct a Phase 2b comparative study evaluating our oral pill XBB COVID-19 vaccine candidate against an mRNA vaccine comparator approved by the U.S. Food and Drug Administration. The 2024 ATI-RRPV Contract provides for an initial award in the aggregate amount of up to $65.7 million, consisting of a fixed fee of $64.7 million and reimbursement of costs incurred in trial preparation activities. The 2024 ATI-RRPV Contract further contemplates additional funding up to $387.2 million if we and HHS BARDA decide to continue with the Phase 2b comparative study. Revenue from government contracts recognized on the 2024 ATI-RRPV Contract was $0.2 million for the three and six months ended June 30, 2024, based on costs incurred under the 2024 ATI-RRPV Contract. In July 2024, the Company received payment for the $64.7 million fixed fee portion of the initial award.

Current wording

In June 2024, we entered into the 2024 ATI-RRPV Contract. In September 2024, the 2024 ATI-RRPV Contract was modified to increase funding and expand the scope to include the manufacture of a vaccine candidate targeting the KP.2 strain. Pursuant to the 2024 ATI-RRPV Contract (as modified), we will receive funding of up to $456.1 million to conduct a Phase 2b comparative study evaluating our oral pill COVID-19 vaccine candidate against an mRNA vaccine comparator approved by the FDA and manufacture a COVID-19 vaccine candidate targeting the KP.2 strain. The 2024 ATI-RRPV Contract currently makes available an aggregate amount of up to $96.5 million, consisting of fixed fee amounts totaling $67.9 million and reimbursement of costs incurred in trial preparation and execution activities. The 2024 ATI-RRPV Contract further contemplates additional funding up to $359.6 million if we and HHS BARDA decide to continue with the Phase 2b comparative study. Revenue from government contracts recognized on the 2024 ATI-RRPV Contract was $4.0 million for the three months ended September 30, 2024 and $4.2 million for the nine months ended September 30, 2024, based on costs incurred and the achievement of a firm fixed-price milestone under the 2024 ATI-RRPV Contract.

Previous wording

In November 2022, we accepted a grant of $3.5 million to perform research and development work for the Bill & Melinda Gates Foundation (the “BMGF Grant”) and received $2.0 million in advance that was recorded as restricted cash and deferred revenue. We received an additional $1.5 million in July 2023 upon completion of certain milestones. We recognize revenue under research contracts only when a contract is executed and the contract price is fixed or determinable. Revenue from the BMGF Grant was recognized in the period during which the related costs were incurred and the related services rendered, as the applicable conditions under the contract were met. Costs of contract revenue were recorded as a component of operating expenses in the condensed consolidated statements of operations and comprehensive loss. We fully recognized revenue from the BMGF Grant during the year ended December 31, 2023.

Current wording

In November 2022, we accepted a grant (the “BMGF Grant”) of $3.5 million to perform research and development work for the Bill & Melinda Gates Foundation and received $2.0 million in advance that was recorded as restricted cash and deferred revenue. We received an additional $1.5 million in July 2023 upon completion of certain milestones. We recognize revenue under research contracts only when a contract is executed and the contract price is fixed or determinable. Revenue from the BMGF Grant was recognized in the period during which the related costs were incurred and the related services rendered, as the applicable conditions under the contract were met. Costs of contract revenue were recorded as a component of operating expenses in the condensed consolidated statements of operations and comprehensive loss. We fully recognized revenue from the BMGF Grant during the year ended December 31, 2023.

Previous wording

The following table shows our period-over-period research and development expenses, identifying external costs that were incurred in each of our vaccine programs and, separately, on preclinical research and process development for the three and six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table shows our period-over-period research and development expenses, identifying external costs that were incurred in each of our vaccine programs and, separately, on preclinical research and process development for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

The following table presents period-over-period changes in selected items in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024 and 2023 (in thousands, except percentages):

Current wording

The following table presents period-over-period changes in selected items in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentages):

Previous wording

The following table summarizes the period-over-period changes in our revenues for the three months and six months ended June 30, 2024 and 2023 (in thousands, except percentages):

Current wording

The following table summarizes the period-over-period changes in our revenues for the three months and nine months ended September 30, 2024 and 2023 (in thousands, except percentages):

Previous wording

For the three months ended June 30,2024 and 2023, non-cash royalty revenue related to sale of future royalties from Daiichi Sankyo was $37,000 and $30,000, respectively, and for the six months ended June 30, 2024 and 2023, was $0.6 million and $0.3 million, respectively. We continue to have non-cash royalty revenue as all royalties received for the three and six months ended June 30, 2024 and 2023, were required to be paid to HCRP.

Current wording

For the three months ended September 30,2024 and 2023, non-cash royalty revenue related to sale of future royalties from Daiichi Sankyo was $40,000 and $0.4 million, respectively, and for the nine months ended September 30, 2024 and 2023, was $0.7 million and $0.8 million, respectively. We continue to have non-cash royalty revenue as all royalties received for the three and nine months ended September 30, 2024 and 2023 were required to be paid to HCRP.

Previous wording

For the three months ended June 30, 2024 and 2023, revenue from government contracts was $6.4 million and zero, respectively, and for the six months ended June 30, 2024 and 2023, was $8.0 million and zero, respectively. The revenue from government contracts consists of the 2024 ASPR-BARDA Contract awarded to us in January 2024, which was $6.2 million for the three months ended June 30, 2024 and $7.8 million for the six months ended June 30, 2024. There was $0.2 million revenue for the three and six months ended June 30, 2024 from government contracts for the 2024 ATI-RRPV Contract awarded in June 2024.

Current wording

For the three months ended September 30, 2024 and 2023, revenue from government contracts was $4.9 million and zero, respectively, and for the nine months ended September 30, 2024 and 2023, was $12.9 million and zero, respectively. The revenue from government contracts consists of the 2024 ASPR-BARDA Contract awarded to us in January 2024 and the 2024 ATI-RRPV Contract awarded to us in June 2024. Revenue from the 2024 ASPR-BARDA Contract was $0.9 million for the three months ended September 30, 2024 and $8.7 million for the nine months ended September 30, 2024. Revenue from the ATI-RRPV Contract was $4.0 million for the three months ended September 30, 2024 and $4.2 million for the nine months ended September 30, 2024.

Previous wording

We recognized revenue from the BMGF Grant of zero and $1.3 million for the three months ended June 30, 2024 and 2023, respectively, and zero and $1.7 million for the six months ended June 30, 2024 and 2023, respectively. All research and development work under the BMGF Grant was completed during the year ended December 31, 2023.

Current wording

We recognized revenue from the BMGF Grant of zero and $1.7 million for the three months ended September 30, 2024 and 2023, respectively, and zero and $3.4 million for the nine months ended September 30, 2024 and 2023, respectively. All research and development work under the BMGF Grant was completed during the year ended December 31, 2023.

Previous wording

The following table summarizes the period-over-period changes in our operating expenses for the three and six months ended June 30, 2024 and 2023 (in thousands, except percentages):

Current wording

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

Previous wording

For the six months ended June 30, 2024, research and development expenses decreased by $1.9 million, or 5%, compared to the six months ended June 30, 2023. The decrease was primarily due to decreases in personnel-related costs and clinical trial expenses related to our norovirus vaccine candidate, partially offset by increases in clinical trial expenses, manufacturing costs and pre-clinical expenses related to our COVID-19 vaccine candidate, and general manufacturing supplies.

Current wording

For the three months ended September 30, 2024, research and development expenses increased by $64,000, or 0%, compared to the three months ended September 30, 2023. The increase was primarilydue to an increase in clinical trial expenses related to our COVID-19 vaccine candidate, an increase in preclinical expenses across multiple programs and facilities expenses, offset by a decrease in clinical trial expenses related to our norovirus vaccine candidate, a decrease in stock-based compensation expense and personnel-related costs, and a decrease in manufacturing expenses.

Previous wording

For the three months ended June 30, 2024, research and development expenses decreasedby $1.3 million, or 7%, compared to the three months ended June 30, 2023. The decrease was primarily due to decreases in clinical trial expenses related to our norovirus vaccine candidate, stock-based compensation expense and personnel-related costs, partially offset by increases in clinical trial expenses, and pre-clinical expenses related to our COVID-19 vaccine candidate.

Current wording

For the nine months ended September 30, 2024, research and development expenses decreased by $1.9 million, or 4%, compared to the nine months ended September 30, 2023. The decrease was primarily due to decreases in clinical trial expenses related to our norovirus vaccine candidate, stock-based compensation expense, severance and other personnel-related costs, offset by increases in clinical trial expenses as related to our COVID-19 vaccine candidate, manufacturing and preclinical expenses and facilities expenses.

Previous wording

For the three months ended June 30, 2024, general and admin istrative expenses decreased by $0.4 million, or 8%, compared to the three months ended June 30, 2023. The decrease was primarily due to decreases in stock-based compensation expense and personnel-related costs and directors’ and officers’ insurance costs, partially offset by increases in legal and professional fees.

Current wording

For the three months ended September 30, 2024, general and admin istrative expenses decreased by $0.6 million, or 12%, compared to the three months ended September 30, 2023. The decrease was primarily due to a decrease in stock-based compensation expense and directors’ and officers’ insurance costs, partially offset by increases in legal and other professional fees.

Previous wording

For the six months ended June 30, 2024, general and administrative expenses increased by $0.2 million, or 2%, compared to the six months ended June 30, 2023. The increase was primarily due to increased severance and legal and professional fees, partially offset by decreased personnel-related costs and directors’ and officers’ insurance costs.

Current wording

For the nine months ended September 30, 2024, general and administrative expenses decreased by $0.4 million, or 2%, compared to the nine months ended September 30, 2023. The decrease was primarily due to a decrease in personnel-related costs, including stock-based compensation expenses, and directors’ and officers’ insurance costs, offset by increases in severance costs and legal and other professional fees.

Previous wording

The following table summarizes the period-over-period changes in our non-operating income for the three and six months ended June 30, 2024 and 2023 (in thousands, except percentages):

Current wording

The following table summarizes the period-over-period changes in our non-operating income for the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentages):

Previous wording

For thethree months ended June 30,2024, we recorded interest income of $0.4 million, a 41% decrease from the $0.7 million interest income recorded in thethree months ended June 30,2023. For the six months ended June 30, 2024, we recorded interest income of $0.9 million, a 32% decrease from the $1.4 million interest income recorded in the six months ended June 30, 2023. The decrease is primarily due to the decrease in our cash, cash equivalents and investments balance.

Current wording

For thethree months ended September 30,2024, we recorded interest income of $1.0 million, a 41% increase from the $0.7 million interest income recorded in thethree months ended September 30,2023. For the nine months ended September 30, 2024, we recorded interest income of $1.9 million, a 7% decrease from the $2.1 million interest income recorded in the nine months ended September 30, 2023. The decrease is primarily due to the decrease in our cash, cash equivalents and investments balance.

Previous wording

Non-cash interest expense related to sale of future royalties representing imputed interest on the unamortized portion of the sale of future royalties liability, increased to $0.6 million for the three months ended June 30, 2024, from the $0.2 million for the three months ended June 30, 2023, and to $1.4 million for the six months ended June 30, 2024, from the $0.4 million for the six months ended June 30, 2023, due to an increase in non-cash royalty revenue payable to HCRP.

Current wording

Non-cash interest expense related to sale of future royalties representing imputed interest on the unamortized portion of the sale of future royalties liability, increased to $0.6 million for the three months ended September 30, 2024, from the $0.2 million for the three months ended September 30, 2023, and to $2.0 million for the nine months ended September 30, 2024, from the $0.6 million for the nine months ended September 30, 2023, due to an increase in non-cash royalty revenue payable to HCRP.

Previous wording

The following table summarizes the period-over-period changes in our provision for income taxes for the three and six months ended June 30, 2024 and 2023 (in thousands, except percentages):

Current wording

The following table summarizes the period-over-period changes in our provision for income taxes for the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentages):

Previous wording

The provision for income taxes was $21,000 and $19,000 for the three months ended June 30, 2024 and 2023, respectively, and $66,000 and $48,000 for the six months ended June 30, 2024 and 2023, respectively. The tax charge relates to interest on an intercompany loan from a foreign subsidiary and a 5% withholding tax on royalty revenue earned on sales of Inavir in Japan, which is potentially recoverable as a foreign tax credit but expensed because we record a 100% valuation allowance against our deferred tax assets. The amount of income tax expense recorded is directly proportional to Inavir royalties, including the portion that we pass through to HCRP.

Current wording

The provision for income taxes was $18,000 and $39,000 for the three months ended September 30, 2024 and 2023, respectively, and $84,000 and $87,000 for the nine months ended September 30, 2024 and 2023, respectively. The tax charge relates to interest on an intercompany loan from a foreign subsidiary and a 5% withholding tax on royalty revenue earned on sales of Inavir in Japan, which is potentially recoverable as a foreign tax credit but expensed because we record a 100% valuation allowance against our deferred tax assets. The amount of income tax expense recorded is directly proportional to Inavir royalties, including the portion that we pass through to HCRP.

Previous wording

In September 2021, we entered into a Controlled Equity Offering Sales Agreement (the “September 2021 ATM”), under which we may offer and sell, from time to time through sales agents, shares of our common stock having an aggregate offering price of up to $100 million. We incur direct expenses and pay sales commissions of up to 3.0% of gross proceeds from the sale of shares under the September 2021 ATM. In the six months ended June 30, 2024, 7,719,641 shares were issued and sold under the September 2021 ATM for gross proceeds of $9.1 million, which, after deducting sales commissions and expenses incurred to date, resulted in net proceeds of $8.8 million. As of June 30, 2024, there was approximately $69.3 million in net proceeds still available to us under the September 2021 ATM.

Current wording

In September 2021, we entered into a Controlled Equity Offering Sales Agreement (the “September 2021 ATM”), under which we may offer and sell, from time to time through sales agents, shares of our common stock having an aggregate offering price of up to $100 million. We incurred direct expenses and paid sales commissions of up to 3.0% of gross proceeds from the sale of shares under the September 2021 ATM. In the nine months ended September 30, 2024, 7,719,641 shares were issued and sold under the September 2021 ATM for gross proceeds of $9.1 million, which, after deducting sales commissions and expenses incurred to date, resulted in net proceeds of $8.8 million. Effective October 18, 2024, the Company terminated the September 2021 ATM and discontinued all offers and sales of common stock thereunder.

Previous wording

In June 2024, we entered into the 2024 ATI-RRPV Contract. Pursuant to the 2024 ATI-RRPV Contract, we will receive funding of up to $452.9 million to conduct a Phase 2b comparative study evaluating our oral pill XBB COVID-19 vaccine candidate against an mRNA vaccine comparator approved by the U.S. Food and Drug Administration. As of June 30, 2024, we received no cash payments under the 2024 ATI-RRPV Contract. Subsequent to June 30, 2024, through the filing date of this Quarterly Report on Form 10-Q, we have received $64.7 million under the 2024 ATI-RRPV Contract.

Current wording

In June 2024, we entered into the 2024 ATI-RRPV Contract. In September 2024, the 2024 ATI-RRPV Contract was amended to increase funding and expand the scope to include the manufacture of a vaccine candidate targeting the KP.2 strain. Pursuant to the 2024 ATI-RRPV Contract, we will receive funding of up to $456.1 million to conduct a Phase 2b comparative study evaluating our oral pill COVID-19 vaccine candidate against an mRNA vaccine comparator approved by the U.S. Food and Drug Administration and manufacture a COVID-19 vaccine candidate targeting the KP.2 strain. As of September 30, 2024, we received $65.4 million of cash payments under the 2024 ATI-RRPV Contract. Subsequent to September 30, 2024, through the filing date of this Quarterly Report on Form 10-Q, we have received $0.6 million under the 2024 ATI-RRPV Contract.

Previous wording

In June 2024, we entered into an underwriting agreement (the “Underwriting Agreement”) with Oppenheimer & Co. Inc., relating to the issuance and sale by us in an underwritten registered direct offering of 50,000,000 shares of our common stock at a price of $0.80 per share. The gross proceeds to us from such offering was $40.0 million, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, the net proceeds were $37.6 million.

Current wording

In June 2024, we entered into an underwriting agreement with Oppenheimer & Co. Inc., relating to the issuance and sale by us in an underwritten registered direct offering of 50,000,000 shares of our common stock at a price of $0.80 per share. The gross proceeds to us from such offering were $40.0 million, and after deducting the underwriting discounts and commissions and other offering expenses paid by us, the net proceeds were $37.5 million.

Previous wording

In January 2024, we were awarded the 2024 ASPR-BARDA Contract with a base and all options value of $9.3 million. Under the 2024 ASPR-BARDA Contract, we received an award to support clinical trial planning activities for a Phase 2b clinical trial that would compare our XBB vaccine candidate to an mRNA comparator to evaluate efficacy for symptomatic and asymptomatic disease, systemic and mucosal immune induction, and adverse events. The 2024 ASPR-BARDA Contract originally had a term that was set to expire in July 2024, but we entered into an amendment in July 2024 that extended the expiration date into October 2024. As of June 30, 2024, we received approximately $3.2 million of cash payments under the 2024 ASPR-BARDA Contract. Subsequent to June 30, 2024, through the filing date of this Quarterly Report on Form 10-Q, we have received $4.0 million under the 2024 ASPR-BARDA Contract.

Current wording

In January 2024, we were awarded the 2024 ASPR-BARDA Contract with a base and all options value of $9.3 million. Under the 2024 ASPR-BARDA Contract, we received an award to support clinical trial planning activities for a Phase 2b clinical trial that would compare our XBB vaccine candidate to an mRNA comparator to evaluate efficacy for symptomatic and asymptomatic disease, systemic and mucosal immune induction, and adverse events. The 2024 ASPR-BARDA Contract originally had a period of performance term that was set to expire in July 2024, but we entered into an amendment in July 2024 that extended the period of performance expiration date into October 2024. As of September 30, 2024, we received approximately $9.3 million of cash payments under the 2024 ASPR-BARDA Contract.

Previous wording

As of June 30, 2024, we had approximately $62.6 million of cash, cash equivalents and investments. We believe our existing funds are sufficient to fund us for at least one year from the date of issuance of this Quarterly Report. To continue operations thereafter, we expect that we will need to raise further capital, through the sale of additional securities or otherwise. Our future capital requirements and the adequacy of our available funds will depend on many factors, most notably our ability to successfully commercialize our products and services.

Current wording

As of September 30, 2024, we had approximately $58.7 million of cash, cash equivalents and short-term investments. We believe our existing funds are sufficient to fund us for at least one year from the date of issuance of this Quarterly Report. To continue operations thereafter, we expect that we will need to raise further capital, through the sale of additional securities or otherwise. Our future capital requirements and the adequacy of our available funds will depend on many factors, most notably our ability to successfully commercialize our products and services.

Previous wording

We experienced negative cash flow from operating activities for the six months ended June 30, 2024 and 2023, in the amounts of $33.2 million and $41.9 million, respectively. The cash used in operating activities in the six months ended June 30, 2024, was due to cash used to fund a net loss of $40.9 million and a decrease in working capital of $1.1 million, partially offset by adjustments for net non-cash income related to depreciation and amortization, amortization of discount on investments, net, stock-based compensation, non-cash interest expense related to sale of future royalties and non-cash revenue related to sale of future royalties totaling $8.7 million. The cash used in operating activities in the six months ended June 30, 2023, was due to cash used to fund a net loss of $47.7 million and a decrease in working capital of $4.9 million, partially offset by adjustments for net non-cash income related to depreciation and amortization, amortization of (discount) premium on investments, stock-based compensation, non-cash interest expense related to sale of future royalties and non-cash revenue related to sale of future royalties totaling $10.7 million.

Current wording

We experienced negative cash flow from operating activities for the nine months ended September 30, 2024 and 2023, in the amounts of $37.4 million and $56.9 million, respectively. The cash used in operating activities in the nine months ended September 30, 2024, was due to cash used to fund a net loss of $55.0 million and an increase in working capital of $3.8 million, partially offset by adjustments for net non-cash income related to depreciation and amortization, amortization of discount on investments, net, stock-based compensation, non-cash interest expense related to sale of future royalties and non-cash revenue related to sale of future royalties totaling $13.7 million. The cash used in operating activities in the nine months ended September 30, 2023, was due to cash used to fund a net loss of $65.1 million and a decrease in working capital of $8.4 million, partially offset by adjustments for net non-cash income related to depreciation and amortization, amortization of discount on investments, net, stock-based compensation, non-cash interest expense related to sale of future royalties and non-cash revenue related to sale of future royalties totaling $16.5 million.

Previous wording

In the six months ended June 30, 2024, we used $29.2 million of cash to purchase investments, net of maturities, used $0.5 million of cash to purchase property and equipment, and we received $15.0 million from maturities of marketable securities. In the six months ended June 30, 2023, we received $25.6 million from maturities of marketable securities, net of purchases, and used $1.7 million of cash to purchase property and equipment.

Current wording

In the nine months ended September 30, 2024, we used $31.2 million of cash to purchase investments, net of maturities, and used $0.5 million of cash to purchase property and equipment. In the nine months ended September 30, 2023, we received $30.7 million from maturities of marketable securities, net of purchases, and used $1.9 million to purchase property and equipment, net of disposals.

Previous wording

In the six months ended June 30, 2024, we received net proceeds of $37.6 million from the sale of our common stock under the June 2024 Offering, net proceeds of $8.8 million from the sale of our common stock under the September 2021 ATM and net proceeds of $9.9 million from the sale of our common stock under the 2024 Securities Purchase Agreement, partially offset by $0.2 million from common stock acquired to settle employee tax withholding liabilities. In the six months ended June 30, 2023, we received net proceeds of $13.6 million from the sale of 16,000,000 shares of our common stock and $1.4 million from the sale of common stock under the September 2021 ATM.

Current wording

In the nine months ended September 30, 2024, we received net proceeds of $37.5 million from the sale of our common stock under the June 2024 Offering, net proceeds of $8.8 million from the sale of our common stock under the September 2021 ATM and net proceeds of $9.9 million from the sale of our common stock under the 2024 Securities Purchase Agreement, partially offset by $0.2 million from common stock acquired to settle employee tax withholding liabilities. In the nine months ended September 30, 2023, we received net proceeds of $13.6 million from the sale of 16,000,000 shares of our common stock, $1.4 million from the sale of common stock under the September 2021 ATM and $0.3 million from the issuance of common stock under the employee stock purchase plan.

Previous wording

Share-based payment arrangements. Beginning in 2022, we shifted from awarding only options to issuing a mixture of options and restricted stock units (“RSUs”) to our employees. As of June 30, 2024, the unrecognized stock-based compensation cost related to outstanding unvested stock options and RSUs expected to vest was $18.7 million, which we expect to recognize over an estimated weighted average period of 2.4 years. See Note 10 to the Condensed Consolidated Financial Statements in Part I, Item 1 for further details on stock-based compensation expense recognized.

Current wording

Share-based payment arrangements. Beginning in 2022, we shifted from awarding only options to issuing a mixture of options and restricted stock units (“RSUs”) to our employees. As of September 30, 2024, the unrecognized stock-based compensation cost related to outstanding unvested stock options and RSUs expected to vest was $15.9 million, which we expect to recognize over an estimated weighted average period of 2.3 years. See Note 10 to the Condensed Consolidated Financial Statements in Part I, Item 1 for further details on stock-based compensation expense recognized.

Previous wording

Intangible assets acquired in the Merger were initially recorded at their estimated fair values of $20.3 million for developed technology related to Inavir which was, until it was revalued, being amortized on a straight-line basis over the estimated period of future royalties of 11.75 years. The developed technology related to Inavir was revalued at $5.0 million as of December 31, 2022, resulting in an impairment loss of $4.3 million being recorded. These valuations were prepared with the assistance of an independent third party based on discounted cash flows of estimated future revenue streams, which are highly subjective. The fair value as of June 30, 2024, is being amortized on a straight-line basis over the remaining period of 5.4 years.

Current wording

Intangible assets acquired in the Merger were initially recorded at their estimated fair values of $20.3 million for developed technology related to Inavir which was, until it was revalued, being amortized on a straight-line basis over the estimated period of future royalties of 11.75 years. The developed technology related to Inavir was revalued at $5.0 million as of December 31, 2022, resulting in an impairment loss of $4.3 million being recorded. These valuations were prepared with the assistance of an independent third party based on discounted cash flows of estimated future revenue streams, which are highly subjective. The fair value as of September 30, 2024, is being amortized on a straight-line basis over the remaining period of 5.1 years.

Previous wording

Expected term – This represents the period that our stock-based awards granted are expected to be outstanding and is determined using the simplified method (the arithmetic average of its original contractual term and its average vesting term). We have very limited historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for our stock-based awards. Based on the weighted average applied to options awarded in six months ended June 30, 2024, a notional 10% decrease in expected term would have reduced the fair value and the related compensation expense by approximately 2.1%.

Current wording

Expected term – This represents the period that our stock-based awards granted are expected to be outstanding and is determined using the simplified method (the arithmetic average of its original contractual term and its average vesting term). We have very limited historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for our stock-based awards. Based on the weighted average applied to options awarded in the nine months ended September 30, 2024, a notional 10% decrease in expected term would have reduced the fair value and the related compensation expense by approximately 2.1%.

Previous wording

Expected volatility – This is a measure of the amount by which our common stock price has fluctuated or is expected to fluctuate. Since the beginning of 2020, we have measured volatility based on the historical volatility of our own stock over the retrospective period corresponding to the expected term of the options on the measurement date. Based on the weighted average applied to options awarded in six months ended June 30, 2024, a notional 10% decrease in expected volatility (from 129.1% to 116.2%) would have reduced the fair value and the related compensation expense by approximately 4.0%.

Current wording

Expected volatility – This is a measure of the amount by which our common stock price has fluctuated or is expected to fluctuate. Since the beginning of 2020, we have measured volatility based on the historical volatility of our own stock over the retrospective period corresponding to the expected term of the options on the measurement date. Based on the weighted average applied to options awarded in the nine months ended September 30, 2024, a notional 10% decrease in expected volatility (from 129.1% to 116.2%) would have reduced the fair value and the related compensation expense by approximately 4.0%.

Previous wording

See the “Recent Accounting Pronouncements” in Note 2 to the Condensed Consolidated Financial Statements in Part I, Item 1 for information related to the issuance of new accounting standards in the first six months of 2024, which are either not applicable to its operations or their adoption is not expected to have a material impact on our condensed consolidated financial statements.

Current wording

See the “Recent Accounting Pronouncements” in Note 2 to the Condensed Consolidated Financial Statements in Part I, Item 1 for information related to the issuance of new accounting standards in the first nine months of 2024, which are either not applicable to its operations or their adoption is not expected to have a material impact on our condensed consolidated financial statements.