Cartesian Therapeutics Inc

Previous wording

We are a clinical-stage biotechnology company developing mRNA cell therapies for the treatment of autoimmune diseases. We leverage our proprietary technology and manufacturing platform to introduce one or more mRNA molecules into cells to enhance their function. Unlike DNA, mRNA degrades naturally over time without integrating into the cell’s genetic material. Therefore, our mRNA cell therapies are distinguished by their capacity to be dosed repeatedly like conventional drugs, administered in an outpatient setting, and given without pre-treatment chemotherapy required with many conventional cell therapies. In an open-label Phase 2 clinical trial in patients with myasthenia gravis, or MG, a chronic autoimmune disease that causes disabling muscle weakness and fatigue, we observed that our lead product candidate, Descartes-08, generated a deep and durable clinical benefit.

Current wording

We are a clinical-stage biotechnology company developing mRNA cell therapies for the treatment of autoimmune diseases. We leverage our proprietary technology and manufacturing platform to introduce one or more mRNA molecules into cells to enhance their function. Unlike DNA, mRNA degrades naturally over time without integrating into the cell’s genetic material. Therefore, our mRNA cell therapies are distinguished by their capacity to be dosed repeatedly like conventional drugs, administered in an outpatient setting, and given without pre-treatment chemotherapy required with many conventional cell therapies. In an open-label Phase 2 clinical trial in patients with myasthenia gravis, or MG, a chronic autoimmune disease that causes disabling muscle weakness and fatigue, we observed that our lead product candidate, Descartes-08, generated a deep and durable clinical benefit, with all seven participants maintaining improvements in MG severity scales considered clinically meaningful by expert consensus at nine months, and five of the seven participants maintaining improvements in MG severity scales considered clinically meaningful by expert consensus at 12 months. Durability of response in MG is commonly measured over a period of 26 to 52 weeks, and maintenance of response over that period is considered durable.

Previous wording

Except for the quarter ended June 30, 2024 and the year ended December 31, 2022, we have incurred significant operating losses since our inception. We incurred a net loss of $43.0 million and $33.1 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $657.6 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we:

Current wording

Except for the year ended December 31, 2022, we have incurred significant operating losses since our inception. We incurred a net loss of $67.2 million and $42.1 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $681.8 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we:

Previous wording

We believe that our existing cash, cash equivalents, and restricted cash as of June 30, 2024, combined with net proceeds from the July 2024 Private Placement received subsequent to June 30, 2024, will support development of Descartes-08 in MG, specifically supporting anticipated manufacturing costs associated with a Phase 3 clinical trial and early commercial activities in preparation for a potential launch. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Current wording

We believe that our existing cash, cash equivalents, and restricted cash as of September 30, 2024 will support development of Descartes-08 in MG, specifically supporting anticipated manufacturing costs associated with a Phase 3 clinical trial. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Previous wording

Our research and development expenses consist of external research and development costs, which we track on a program-by-program basis and primarily include contract manufacturing organization related costs and fees paid to contract research organizations, and internal research and development costs, which are primarily compensation expenses for our research and development employees, lab supplies, analytical testing, allocated overhead costs and other related expenses. Our internal research and development costs are often devoted to expanding our programs and are not necessarily allocable to a specific target.

Current wording

Our research and development expenses consist of internal and external research and development costs, which primarily include fees paid to contract research organizations, internal manufacturing and quality related expenses, process development costs, internal research and development expenses, as well as fees paid to contract manufacturing organizations. These costs are primarily associated with compensation expenses for our research and development employees, capital equipment and supplies for our process development and manufacturing process, and other related expenses. Our internal research and development employees as well as our direct and indirect costs are shared across multiple development programs and are not solely dedicated to individual programs.

Previous wording

In January 2023, we and Audentes Therapeutics, Inc., or Astellas, entered into a License and Development Agreement, or the Astellas Agreement. Pursuant to the Astellas Agreement, Astellas agreed to reimburse us for 25% of all budgeted costs incurred to complete the development of Xork, a bacterial IgG protease licensed from Genovis AB (publ.), or Genovis, for use in Pompe disease with an Astellas gene therapy investigational or authorized product. These costs, when reimbursed, will be recognized as revenue consistent with the revenue recognition methodology disclosed in Note 13 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report. The Astellas Agreement was terminated effective June 6, 2024.

Current wording

In January 2023, we and Audentes Therapeutics, Inc., or Astellas, entered into a License and Development Agreement, or the Astellas Agreement. Pursuant to the Astellas Agreement, Astellas agreed to reimburse us for 25% of all budgeted costs incurred to complete the development of Xork, a bacterial IgG protease licensed from Genovis AB (publ.), or Genovis, for use in Pompe disease with an Astellas gene therapy investigational or authorized product. These costs, when reimbursed, were recognized as revenue consistent with the revenue recognition methodology disclosed in Note 13 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report. The Astellas Agreement was terminated effective June 6, 2024.

Previous wording

The forward contract liability associated with the delayed issuance of the Series A Preferred Stock related to the November 2023 Private Placement is remeasured quarterly at fair value, utilizing the market price of our common stock, with the change in fair value recognized as a component of earnings.

Current wording

The forward contract liabilities associated with the delayed issuance of the Series A Preferred Stock related to the November 2023 Private Placement is remeasured quarterly and upon settlement at fair value, utilizing the market price of our common stock, with the change in fair value recognized as a component of earnings.

Previous wording

During the three months ended June 30, 2024, we recognized $0.2 million of grant revenue. We received funding approval from NINDS during the three months ended June 30, 2024, and as such there was no grant revenue during the three months ended June 30, 2023.

Current wording

During the three months ended September 30, 2024, we recognized $0.4 million of grant revenue. We received funding approval from NINDS during the three months ended June 30, 2024, and as such there was no grant revenue during the three months ended September 30, 2023.

Previous wording

For the three months ended June 30, 2024, ourgeneral and administrative expenses were$7.0 million compared to$6.1 million for thethree months ended June 30, 2023, an increase of $0.9 million, or 15%. The increase in cost was primarily the result of expenses incurred for personnel expenses.

Current wording

For the three months ended September 30, 2024, ourgeneral and administrative expenses were$6.6 million compared to$6.6 million for thethree months ended September 30, 2023, remaining consistent.

Previous wording

Investment income for the three months ended June 30, 2024 was $1.2 million, compared to $1.4 million for the three months ended June 30, 2023. The decrease in investment income was due to decreased investment balance.

Current wording

Investment income for the three months ended September 30, 2024 was $2.6 million, compared to $1.3 million for the three months ended September 30, 2023. The increase in investment income was due to increased investment balance.

Previous wording

We recognized no interest expense for the three months ended June 30, 2024, compared to $0.8 million for the three months ended June 30, 2023, representing interest expense and amortization of the carrying costs of our credit facilities that were extinguished during the year ended December 31, 2023.

Current wording

We recognized no interest expense for the three months ended September 30, 2024, compared to $1.3 million for the three months ended September 30, 2023, representing interest expense and amortization of the carrying costs of our credit facilities and loss on extinguishment of debt during the three months ended September 30, 2023.

Previous wording

For the three months ended June 30, 2024, we recognized a $3.9 million charge from the increase in the fair value of warrant liabilities, compared to $6.3 million of income from the decrease in the fair value of warrant liabilities for the three months ended June 30, 2023, a decrease of $10.2 million, or 162%. Fair value of warrant liabilities was determined utilizing the Black-Scholes valuation methodology. The increase in warrant value was primarily driven by an increase in the per-share price of our common stock.

Current wording

For the three months ended September 30, 2024, we recognized $5.7 million of income from the decrease in the fair value of warrant liabilities, compared to $3.8 million of income from the decrease in the fair value of warrant liabilities for the three months ended September 30, 2023, an increase of $1.9 million, or 50%. Fair value of warrant liabilities was determined utilizing the Black-Scholes valuation methodology. The decrease in warrant value was primarily driven by a decrease in the per-share price of our common stock.

Previous wording

For the three months ended June 30, 2024, we recognized $2.5 million of income from the decrease in the fair value of the CVR liability. The fair value of the CVR liability as of June 30, 2024 was determined utilizing a Monte Carlo simulation model. The decrease in the fair value of CVR liability was primarily due to changes in the amount and timing of anticipated payments and the passage of time. There was no CVR liability prior to the Merger and as such, no change in the fair value of the CVR liability is reflected in our unaudited consolidated financial statements for the three months ended June 30, 2023.

Current wording

For the three months ended September 30, 2024, we recognized $15.1 million of expense associated with the increase in the fair value of the CVR liability. The fair value of the CVR liability as of September 30, 2024 was determined utilizing a Monte Carlo simulation model. The decrease in the fair value of CVR liability was primarily due to decrease in interest rates and the passage of time. There was no CVR liability prior to the Merger and as such, no change in the fair value of the CVR liability is reflected in our unaudited consolidated financial statements for the three months ended September 30, 2023.

Previous wording

During the three months ended June 30, 2024, we recognized other income, net of $0.3 million, compared to $0.2 million for the three months ended June 30, 2023, an increase of $0.1 million, or 50%. The increase was primarily driven by sublease income.

Current wording

During the three months ended September 30, 2024, we recognized other income, net of $0.3 million, compared to $0.3 million for the three months ended September 30, 2023.

Previous wording

Net income for the three months ended June 30, 2024 was $13.8 million as compared to net loss of $11.4 million for the three months ended June 30, 2023, an increase of $25.2 million or 221%. The change was primarily due to revenue recognized under the Sobi License and decreased research and development expenses, partially offset by expenses associated with the change in the fair value of the warrant liabilities.

Current wording

Net loss for the three months ended September 30, 2024 was $24.2 million as compared to net loss of $9.0 million for the three months ended September 30, 2023, a decrease of $15.2 million or 169%. The change was primarily due to expenses associated with the change in the fair value of the CVR liability and decreased revenue recognized under the Sobi License.

Previous wording

During the six months ended June 30, 2024, we recognized $39.1 million of collaboration and license revenue, compared to $11.2 million for the six months ended June 30, 2023, an increase of $27.9 million, or 249%. The increase was primarily due to an increase in revenue recognized under the Sobi License resulting from the $30.0 million unconstrained development milestone recognized during the three months ended June 30, 2024 and an increase for revenue recognized under the Astellas Agreement upon notice of termination during the six months ended June 30, 2024.

Current wording

During the nine months ended September 30, 2024, we recognized $39.1 million of collaboration and license revenue, compared to $17.7 million for the nine months ended September 30, 2023, an increase of $21.4 million, or 121%. The increase was primarily due to an increase in revenue recognized under the Sobi License resulting from the $30.0 million unconstrained development milestone recognized during the nine months ended September 30, 2024 and an increase for revenue recognized under the Astellas Agreement upon notice of termination during the nine months ended September 30, 2024.

Previous wording

During the six months ended June 30, 2024, we recognized $0.2 million of grant revenue. We received funding approval from NINDS during the six months ended June 30, 2024, and as such there was no grant revenue during the six months ended June 30, 2023.

Current wording

During the nine months ended September 30, 2024, we recognized $0.6 million of grant revenue. We received funding approval from NINDS during the nine months ended September 30, 2024, and as such there was no grant revenue during the nine months ended September 30, 2023.

Previous wording

For the three months ended June 30, 2024, our research and development expenses were$12.7 million compared to$17.8 million for thethree months ended June 30, 2023, a decrease of $5.1 million, or 29%. The decrease in cost primarily resulted from reductions in expenses due to a one-time cash charge to salaries and benefits as a result of our headcount reduction in April 2023 and decreased contract license and milestone payments.

Current wording

For the nine months ended September 30, 2024, our research and development expenses were$33.8 million, consisting of $9.9 million of manufacturing expenses, $9.0 million of clinical expenses and $14.9 million of research and other expenses, compared to$49.4 million for thenine months ended September 30, 2023, consisting of $5.2 million of manufacturing expenses, $16.3 million of clinical expenses and $27.9 million of research and other expenses, a decrease of $15.6 million, or 32%. The decrease in cost primarily resulted from reductions in clinical expenses, expenses due to a one-time cash charge to salaries and benefits as a result of our headcount reduction in April 2023 and decreased contract license and milestone payments.

Previous wording

For the six months ended June 30, 2024, ourgeneral and administrative expenses were$16.5 million compared to$11.8 million for thesix months ended June 30, 2023, an increase of $4.7 million, or 40%. The increase in cost was primarily the result of expenses incurred for personnel expenses and professional fees incurred in connection with the Merger.

Current wording

For the nine months ended September 30, 2024, ourgeneral and administrative expenses were$23.0 million compared to$18.4 million for thenine months ended September 30, 2023, an increase of $4.6 million, or 25%. The increase in cost was primarily the result of expenses incurred for personnel expenses and professional fees incurred in connection with the Merger.

Previous wording

Investment income for the six months ended June 30, 2024 was $2.4 million, compared to $2.7 million for the six months ended June 30, 2023. The decrease in investment income was due to decreased investment balance.

Current wording

Investment income for the nine months ended September 30, 2024 was $4.9 million, compared to $4.0 million for the nine months ended September 30, 2023. The increase in investment income was due to decreased investment balance.

Previous wording

We recognized de minimis foreign currency fluctuations during each of the six months ended June 30, 2024 and 2023, respectively.

Current wording

We recognized de minimis foreign currency fluctuations during each of the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

We recognized no interest expense for the six months ended June 30, 2024, compared to $1.6 million for the six months ended June 30, 2023, representing interest expense and amortization of the carrying costs of our credit facilities that were extinguished during the year ended December 31, 2023.

Current wording

We recognized no interest expense for the nine months ended September 30, 2024, compared to $2.8 million for the nine months ended September 30, 2023, representing interest expense and amortization of the carrying costs of our credit facilities and loss on extinguishment of debt during the nine months ended September 30, 2023.

Previous wording

For the six months ended June 30, 2024, we recognized $2.9 million charge from the increase in the fair value of warrant liabilities, compared to $2.3 million of income from the decrease in the fair value of warrant liabilities for the six months ended June 30, 2023, a decrease of $5.2 million, or 226%. Fair value of warrant liabilities was determined utilizing the Black-Scholes valuation methodology. The increase in warrant value was primarily driven by an increase in the per-share price of our common stock.

Current wording

For the nine months ended September 30, 2024, we recognized $2.8 million of income from the decrease in the fair value of warrant liabilities, compared to $6.0 million of income from the decrease in the fair value of warrant liabilities for the nine months ended September 30, 2023, a decrease of $3.2 million, or 53%. Fair value of warrant liabilities was determined utilizing the Black-Scholes valuation methodology. The decrease in warrant value was primarily driven by a decrease in the per-share price of our common stock.

Previous wording

For the six months ended June 30, 2024, we recognized $36.8 million of expense associated with the increase in the fair value of the CVR liability. The fair value of the CVR liability as of June 30, 2024 was determined utilizing a Monte Carlo simulation model. The increase in the fair value of CVR liability was primarily due to changes in the amount and timing of anticipated payments and the passage of time. There was no CVR liability prior to the Merger and as such, no change in the fair value of the CVR liability is reflected in our unaudited consolidated financial statements for the six months ended June 30, 2023.

Current wording

For the nine months ended September 30, 2024, we recognized $51.9 million of expense associated with the increase in the fair value of the CVR liability. The fair value of the CVR liability as of September 30, 2024 was determined utilizing a Monte Carlo simulation model. The increase in the fair value of CVR liability was primarily due to changes in the amount and timing of anticipated payments and the passage of time. There was no CVR liability prior to the Merger and as such, no change in the fair value of the CVR liability is reflected in our unaudited consolidated financial statements for the nine months ended September 30, 2023.

Previous wording

For the six months ended June 30, 2024, we recognized $6.9 million of expense associated with the increase in the fair value of Series A Preferred Stock forward contract liabilities. The increase in Series A Preferred Stock value was primarily driven by an increase in the per-share price of our common stock since December 31, 2023 through settlement. The remaining Series A Preferred Stock forward contract liability was settled during the six months ended June 30, 2024. There was no Series A Preferred Stock forward contract liability prior to the Merger and as such, no change in the fair value of the Series A Preferred Stock forward contract liability is reflected in our unaudited consolidated financial statements for the six months ended June 30, 2023.

Current wording

For the nine months ended September 30, 2024, we recognized $6.9 million of expense associated with the increase in the fair value of Series A Preferred Stock forward contract liabilities. The increase in Series A Preferred Stock value was primarily driven by an increase in the per-share price of our common stock since December 31, 2023 through settlement. The remaining Series A Preferred Stock forward contract liability was settled during the nine months ended September 30, 2024. There was no Series A Preferred Stock forward contract liability prior to the Merger and as such, no change in the fair value of the Series A Preferred Stock forward contract liability is reflected in our unaudited consolidated financial statements for the nine months ended September 30, 2023.

Previous wording

During the six months ended June 30, 2024, we recognized other income, net of $0.8 million, compared to $0.5 million for the six months ended June 30, 2023, an increase of $0.3 million, or 60%. The increase was primarily driven by sublease income.

Current wording

During the nine months ended September 30, 2024, we recognized other income, net of $1.1 million, compared to $0.8 million for the nine months ended September 30, 2023, an increase of $0.3 million, or 38%. The increase was primarily driven by sublease income.

Previous wording

Net loss for the six months ended June 30, 2024 was $43.0 million as compared to net loss of $33.1 million for the six months ended June 30, 2023, a decrease of $9.9 million or 30%. The change was primarily due to expenses associated with the change in the fair value of the CVR liability, Series A Preferred Stock forward contract liability, and warrant liabilities and increased general and administrative expenses, partially offset by revenue recognized under the Sobi License and decreased research and development expenses.

Current wording

Net loss for the nine months ended September 30, 2024 was $67.2 million as compared to net loss of $42.1 million for the nine months ended September 30, 2023, a decrease of $25.1 million or 60%. The change was primarily due to expenses associated with the change in the fair value of the CVR liability and Series A Preferred Stock forward contract liability, partially offset by revenue recognized under the Sobi License and decreased research and development expenses.

Previous wording

Except for net income of $13.8 million for the quarter ended June 30, 2024 and $35.4 million for the year ended December 31, 2022, we have incurred recurring net losses since our inception. We expect that we will continue to incur losses and that such losses will increase for the foreseeable future. We expect that our research and development and general and administrative expenses will continue to increase and, as a result, we will need additional capital to fund our operations, which we may raise through a combination of equity offerings, debt financings, third-party funding, potential royalty and/or milestone monetization transactions and other collaborations and strategic alliances.

Current wording

Except for net income of $35.4 million for the year ended December 31, 2022, we have incurred recurring net losses since our inception. We expect that we will continue to incur losses and that such losses will increase for the foreseeable future. We expect that our research and development and general and administrative expenses will continue to increase and, as a result, we will need additional capital to fund our operations, which we may raise through a combination of equity offerings, debt financings, third-party funding, potential royalty and/or milestone monetization transactions and other collaborations and strategic alliances.

Previous wording

As of June 30, 2024, our cash, cash equivalents, and restricted cash were $88.9 million, of which $1.7 million was restricted cash related to lease commitments and $0.2 million was held by our Russian subsidiary designated solely for use in its operations. On a pro forma basis, giving effect to the receipt of $124.4 million of net proceeds from our July 2024 Private Placement received subsequent to June 30, 2024, our cash, cash equivalents, and restricted cash were $213.3 million, as of June 30, 2024.

Current wording

As of September 30, 2024, our cash, cash equivalents, and restricted cash were $220.9 million, of which $1.7 million was restricted cash related to lease commitments and $0.2 million was held by our Russian subsidiary designated solely for use in its operations.

Previous wording

In June 2020, we entered into the Sobi License. Sobi paid us a one-time, upfront payment of $75 million, and upon the closing of a private placement of our common stock to Sobi at a price of $138.468 per share, we received an additional $25 million from Sobi. We are eligible to receive $630 million in milestone payments upon the achievement of various development and regulatory milestones and sales thresholds for annual net sales of SEL-212, and tiered royalty payments ranging from the low double digits on the lowest sales tier to the high teens on the highest sales tier. Sobi has agreed to fund the Phase 3 clinical program of SEL-212, which commenced in September 2020. In July 2022, we received $10.0 million for the completion of the enrollment of the DISSOLVE II trial. In June 2024, we recorded a $30.0 million receivable for the milestone associated with the initiation of a rolling biologics license application to the FDA for SEL-212 for the potential treatment of chronic refractory gout by Sobi. Proceeds from milestone payments and royalties on sales of SEL-212, if any, are required to be distributed, net of certain agreed deductions, to holders of the CVRs. For further description of the Sobi License, see Note 13 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report.

Current wording

In June 2020, we entered into the Sobi License. Sobi paid us a one-time, upfront payment of $75 million, and upon the closing of a private placement of our common stock to Sobi at a price of $138.468 per share, we received an additional $25 million from Sobi. We are eligible to receive $630 million in milestone payments upon the achievement of various development and regulatory milestones and sales thresholds for annual net sales of SEL-212, and tiered royalty payments ranging from the low double digits on the lowest sales tier to the high teens on the highest sales tier. Sobi has agreed to fund the Phase 3 clinical program of SEL-212, which commenced in September 2020. In July 2022, we received $10.0 million for the completion of the enrollment of the DISSOLVE II trial. In July 2024, we received $30.0 million for the milestone associated with the initiation of a rolling biologics license application to the FDA for SEL-212 for the potential treatment of chronic refractory gout by Sobi. Proceeds from milestone payments and royalties on sales of SEL-212, if any, are required to be distributed, net of certain agreed deductions, to holders of the CVRs. For further description of the Sobi License, see Note 13 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report.

Previous wording

During the six months ended June 30, 2024 and the year ended December 31, 2023, we sold no shares of our common stock pursuant to the 2021 Sales Agreement. During the year ended December 31, 2022, we sold 25,818 shares of our common stock pursuant to the 2021 Sales Agreement for aggregate net proceeds of $2.1 million, after deducting commissions and other transaction costs.

Current wording

During the nine months ended September 30, 2024 and the year ended December 31, 2023, we sold no shares of our common stock pursuant to the 2021 Sales Agreement. During the year ended December 31, 2022, we sold 25,818 shares of our common stock pursuant to the 2021 Sales Agreement for aggregate net proceeds of $2.1 million, after deducting commissions and other transaction costs.

Previous wording

On November 13, 2023, we entered into the Securities Purchase Agreement with (i) Dr. Timothy A. Springer, a member of our Board of Directors; (ii) TAS Partners LLC, an affiliate of Dr. Springer, and (iii) Seven One Eight Three Four Irrevocable Trust, a trust associated with Dr. Murat Kalayoglu, a co-founder and the former chief executive officer of Old Cartesian, who joined our Board of Directors effective immediately after the effective time of the Merger, providing for the November 2023 Private Placement. In the November 2023 Private Placement, we issued and sold an aggregate of 149,330.115 shares of Series A Preferred Stock for an aggregate purchase price of $60.25 million, of which 50,189.789 shares of Series A Preferred Stock were issued and sold in the year ended December 31, 2023 for gross proceeds of $20.25 million, and 99,140.326 shares of Series A Preferred Stock were issued and sold during the six months ended June 30, 2024 for gross proceeds of $40.0 million.

Current wording

On November 13, 2023, we entered into the Securities Purchase Agreement with (i) Dr. Timothy A. Springer, a member of our Board of Directors; (ii) TAS Partners LLC, an affiliate of Dr. Springer, and (iii) Seven One Eight Three Four Irrevocable Trust, a trust associated with Dr. Murat Kalayoglu, a co-founder and the former chief executive officer of Old Cartesian, who joined our Board of Directors effective immediately after the effective time of the Merger, providing for the November 2023 Private Placement. In the November 2023 Private Placement, we issued and sold an aggregate of 149,330.115 shares of Series A Preferred Stock for an aggregate purchase price of $60.25 million, of which 50,189.789 shares of Series A Preferred Stock were issued and sold in the year ended December 31, 2023 for gross proceeds of $20.25 million, and 99,140.326 shares of Series A Preferred Stock were issued and sold during the nine months ended September 30, 2024 for gross proceeds of $40.0 million.

Previous wording

On July 2, 2024, we entered into the July 2024 Purchase Agreement for the July 2024 Private Placement with certain institutional and accredited investors, or the Purchasers. In the July 2024 Private Placement, we issued and sold an aggregate of 3,563,247 shares of common stock and 2,937,903 shares of Series B Preferred Stock for which we generated gross proceeds of approximately $130.0 million.

Current wording

On July 2, 2024, we entered into the July 2024 Purchase Agreement for the July 2024 Private Placement with the Purchasers. In the July 2024 Private Placement, we issued and sold an aggregate of 3,563,247 shares of common stock and 2,937,903 shares of Series B Preferred Stock for which we generated gross proceeds of approximately $130.0 million.

Previous wording

As of June 30, 2024, we had an accumulated deficit of $657.6 million. We anticipate operating losses to continue for the foreseeable future due to, among other things, costs related to research, development of our product candidates, conducting preclinical studies and clinical trials, and our administrative organization. We will require substantial additional financing to fund our operations and to continue to execute our strategy, and we will pursue a range of options to secure additional capital.

Current wording

As of September 30, 2024, we had an accumulated deficit of $681.8 million. We anticipate operating losses to continue for the foreseeable future due to, among other things, costs related to research, development of our product candidates, conducting preclinical studies and clinical trials, and our administrative organization. We will require substantial additional financing to fund our operations and to continue to execute our strategy, and we will pursue a range of options to secure additional capital.

Previous wording

We believe that our existing cash, cash equivalents, and restricted cash as of June 30, 2024, combined with net proceeds from the July 2024 Private Placement received subsequent to June 30, 2024, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We may pursue additional cash resources through public or private equity or debt financings, by establishing collaborations with other companies or through the monetization of potential royalty and/or milestone payments pursuant to our existing collaboration and license arrangements. Management’s expectations with respect to our ability to fund current and long-term planned operations are based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, we may need to seek additional strategic or financing opportunities sooner than would otherwise be expected. However, there is no guarantee that any of these strategic or financing opportunities will be executed on favorable terms, and some could be dilutive to existing stockholders. If we are unable to obtain additional funding on a timely basis, we may be forced to significantly curtail, delay, or discontinue one or more of our planned research or development programs or be unable to expand our operations, meet long-term obligations or otherwise capitalize on our commercialization of our product candidates.

Current wording

We believe that our existing cash, cash equivalents, and restricted cash as of September 30, 2024, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We may pursue additional cash resources through public or private equity or debt financings, by establishing collaborations with other companies or through the monetization of potential royalty and/or milestone payments pursuant to our existing collaboration and license arrangements. Management’s expectations with respect to our ability to fund current and long-term planned operations are based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, we may need to seek additional strategic or financing opportunities sooner than would otherwise be expected. However, there is no guarantee that any of these strategic or financing opportunities will be executed on favorable terms, and some could be dilutive to existing stockholders. If we are unable to obtain additional funding on a timely basis, we may be forced to significantly curtail, delay, or discontinue one or more of our planned research or development programs or be unable to expand our operations, meet long-term obligations or otherwise capitalize on our commercialization of our product candidates.

Previous wording

We are under agreement to lease approximately 32,294 square feet of laboratory and office space in Watertown, Massachusetts through May 2028. Remaining lease payments from June 30, 2024 through the end of the lease term total approximately $11.0 million. Payments made and remaining obligations on this lease liability are subject to potential reimbursement through deductions to CVR distributions as described in Note 5 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report.

Current wording

We are under agreement to lease approximately 32,294 square feet of laboratory and office space in Watertown, Massachusetts through May 2028. Remaining lease payments from September 30, 2024 through the end of the lease term total approximately $10.3 million. Payments made and remaining obligations on this lease liability are subject to potential reimbursement through deductions to CVR distributions as described in Note 5 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report.

Previous wording

In February 2024, we entered into an agreement to lease approximately 19,199 square feet of integrated manufacturing and office space in Fredericksburg, Maryland. In May 2024, we entered into an amendment to lease an additional approximately 7,842 square feet. The leases expire coterminous in June 2031. Annualized base rent under the leases is approximately $1.2 million and is subject to annual increases in accordance with the terms of the lease agreement. The leases provide for a tenant improvement allowance of $0.8 million.

Current wording

In February 2024, we entered into an agreement to lease approximately 19,199 square feet of integrated manufacturing and office space in Fredericksburg, Maryland. In May 2024, we entered into an amendment to lease an additional approximately 7,842 square feet. In August 2024, we entered into a second amendment to lease an additional approximately 2,009 square feet. The leases expire coterminously in June 2031. Annualized base rent under the leases is approximately $1.2 million and is subject to annual increases in accordance with the terms of the lease agreement. The leases provide for a tenant improvement allowance of $0.8 million. Remaining lease payments total $8.4 million through the end of the lease term.

Previous wording

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

Current wording

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

Previous wording

Net cash used in operating activities for the six months ended June 30, 2024 was $30.4 million compared to $18.7 million for the six months ended June 30, 2023. The increase in cash used in operating activities of $11.7 million was primarily due to $8.1 million of net income, adjusted for non-cash items, and approximately $38.5 million cash used in changes in operating assets and liabilities for the six months ended June 30, 2024 compared to $27.6 million of net loss, adjusted for non-cash items, and approximately $8.9 million cash provided by changes in operating assets and liabilities for the six months ended June 30, 2023.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2024 was $16.7 million compared to $27.9 million for the nine months ended September 30, 2023. The decrease in cash used in operating activities of $11.2 million was primarily due to $4.0 million of net loss, adjusted for non-cash items, and approximately $12.7 million cash used in changes in operating assets and liabilities for the nine months ended September 30, 2024 compared to $36.8 million of net loss, adjusted for non-cash items, and approximately $8.9 million cash provided by changes in operating assets and liabilities for the nine months ended September 30, 2023.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2024 was $2.2 million compared to net cash provided by investing activities of $28.1 million for the six months ended June 30, 2023, a decrease of $30.3 million. The net cash used in investing activities for the six months ended June 30, 2024 consisted primarily of purchases of property and equipment. The net cash provided by investing activities for the six months ended June 30, 2023 was primarily proceeds from the maturities of marketable securities offset by purchases of property and equipment.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2024 was $8.4 million compared to net cash provided by investing activities of $28.1 million for the nine months ended September 30, 2023, a decrease of $36.5 million. The net cash used in investing activities for the nine months ended September 30, 2024 consisted primarily of purchases of property and equipment. The net cash provided by investing activities for the nine months ended September 30, 2023 was primarily proceeds from the maturities of marketable securities offset by purchases of property and equipment.

Previous wording

Net cash provided by financing activities for the six months ended June 30, 2024 was $43.2 million compared to net cash used in financing activities of $2.4 million for the six months ended June 30, 2023, an increase of $45.6 million. The net cash provided by financing activities in the six months ended June 30, 2024 was primarily the result of proceeds of the November 2023 Private Placement. The net cash used in financing activities in the six months ended June 30, 2023 was primarily the result of repayments of principal on outstanding debt offset by proceeds from issuance of common stock under the Employee Stock Purchase Plan.

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2024 was $167.6 million compared to net cash used in financing activities of $27.2 million for the nine months ended September 30, 2023, an increase of $194.8 million. The net cash provided by financing activities in the nine months ended September 30, 2024 was primarily the result of proceeds of the July 2024 Private Placement and the November 2023 Private Placement. The net cash used in financing activities in the nine months ended September 30, 2023 was primarily the result of repayments of principal on outstanding debt offset by proceeds from issuance of common stock under the Employee Stock Purchase Plan.